Written statement to Parliament

Rail franchising

Railway plan puts new focus on passengers.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Sir Patrick McLoughlin MP

This morning I have announced to the stock market our long-term plans for rail franchising. This plan is designed to drive improvements to rail services, deliver on major infrastructure projects, and put passengers at the heart of a revitalised rail franchising system.

In addition to publishing a detailed timetable for all rail franchises over the next 8 years, I am announcing the immediate start of the competition for the East Coast franchise, currently directly operated, with the expectation the new franchisee will carry its first passengers by February 2015.

The new programme will provide long-term certainty to the market and support the delivery of the government’s £9.4 billion rail investment strategy for 2014 to 2019. The future competitions will also place passengers in the driving seat by ensuring that their views and satisfaction levels are taken into account when deciding which companies run our railway services.

In rolling out the programme the Department for Transport will work closely with the industry to negotiate further new services and more capacity in all franchising contracts while delivering the best deal for both passengers and tax payers.

Delivering on Brown review recommendations, the new programme will provide a more sustainable schedule for rail franchising by delivering no more than 3 to 4 competitions per year, and staggering the 2 principal Intercity franchises, West Coast and East Coast, so they will not be let at the same point in the economic cycle.

In order to roll out the programme and stagger future competitions, it will be necessary to exercise a number of contractual extensions with current operators and to negotiate a series of direct awards with current operators. During these discussions the department will look to negotiate further passenger benefits, which will ensure the best deal for tax payers. As a result, I will later today be serving notice on First Capital Connect and Southeastern to call 7 period extensions available in their contracts.

The new franchise programme is set out below.

In my statement of 31 January I announced that the Thameslink, Southern and Great Northern would be a management style contract due to the level of investment and change on the route. For Great Western, our plan is to put to market a competed management contract in 2016. We will further develop this proposition in the light of experience with the Thameslink competition, which has similar infrastructure challenges, and will give consideration to the capacity in the market closer to the date.

In order to oversee this ambitious programme the government is also establishing the Franchise Advisory Panel, headed by Richard Brown, which will provide independent advice to support the department’s work on rail franchising.

In addition, following an industry consultation, I will today, publish a revised policy statement under section 26 of the Railways Act. This has been updated to reflect current franchising policy and completes a Brown review recommendation.

All the relevant documents will be published on the Department for Transport website. Copies will be made available in the libraries of the House.

The new franchise programme

</th> </table>
Franchise (Operator) Owning Group Current franchise Expiry Date Duration of franchise extension and/ or Direct Award Start date of new franchise
Essex Thameside (c2c) National Express May 13 16 months Sep 14
Thameslink (First Capital Connect) and Southern (Merge to become Thameslink, Southern and Great Northern) FirstGroup Govia Sep 13 (FCC) and Jul 15 (Southern) 12 months (FCC) and n/a (Southern) Sep 14 (FCC) and July 15 (Southern)
East Coast Directly Operated Railways n/a n/a Feb 15
Northern Abellio/Serco Apr 14 22 months Feb 16
TransPennine (TransPennine Express) FirstGroup/Keolis Apr 15 10 months Feb 16
Great Western (First GreatWestern) FirstGroup Oct 13 33 months July 16
Greater Anglia Abellio Jul 14 27 months Oct 16
InterCity West Coast (Virgin Trains) Virgin/Stagecoach Nov 14 29 months April 17
London Midland Govia Sep 15 21 months June 17
East Midlands (East Midlands Trains) Stagecoach Apr 15 30 months Oct 17
South Eastern (Southeastern) Govia April 14 50 months June 18
Wales and Borders (Arriva Trains Wales) Arriva Oct 18 n/a Oct 18
South West (South West Trains) Stagecoach Feb 17 26 months April 19
Cross Country Arriva Apr 16 43 months Nov 19
Chiltern Arriva Dec 21 n/a Dec 21
Published 26 March 2013