- new ‘recovery’ contracts deliver government
commitment to end the complicated franchising model and
deliver a simpler, effective model to reform Britain’s
railways
- agreements focused on high performance targets and
simplifying journeys are first steps to a network that
puts passengers back in control
Ministers today ended rail franchising after 24 years as
the first step in bringing Britain’s fragmented network
back together.
The new system will create a simpler, more effective
structure and will take shape over the coming months. The
first stage, today, is moving operators onto transitional
contracts to prepare the ground for the new railway.
From this morning, franchising is replaced with more
demanding Emergency Recovery Management Agreements
(ERMAs).
These address the continuing impact of the pandemic on the
railway and delivers on a government commitment to replace
the current franchising system.
These management agreements have tougher performance
targets and lower management fees. The new contracts allow
us to make an early start on key reforms, including
requiring operators to co-ordinate better with each other
and driving down the railways’ excessive capital costs.
Management fees will now be a maximum of 1.5% of the cost
base of the franchise before the pandemic began. The
ERMAs are
a transitional stage to the new system, the biggest change
to the railways in a quarter of a century.
Under current public health guidance, the intention is also
for operators to run an almost full service to ensure there
is space to help passengers travel safely.
ERMAs
pave the way for wider rail industry reform that
prioritises the passenger. In 2018 Keith Williams, the
chairman of Royal Mail, was asked to review the railways
after a chaotic timetable change and the failure of some
franchises.
Today’s announcement, which has his full support, is the
prelude to a white paper which will respond to his
recommendations. The white paper will be published when the
course of the pandemic becomes clearer.
The Transport Secretary, , said:
The model of privatisation adopted 25 years ago has seen
significant rises in passenger numbers, but this pandemic
has proven that it is no longer working.
Our new deal for rail demands more for passengers. It
will simplify people’s journeys, ending the uncertainty
and confusion about whether you are using the right
ticket or the right train company.
It will keep the best elements of the private sector,
including competition and investment, that have helped to
drive growth, but deliver strategic direction, leadership
and accountability.
Passengers will have reliable, safe services on a network
totally built around them. It is time to get Britain back
on track.
Until passenger numbers return, significant taxpayer
support will still be needed, including under the
transitional contracts announced today. But the reforms
will enable substantial medium and longer-term savings for
taxpayers.
Keith Williams, chair of the Williams Review, said:
These new agreements represent the end of the complicated
franchising system, demand more from the expertise and
skills of the private sector, and ensure passengers
return to a more punctual and co-ordinated railway.
I am ensuring the recommendations I propose are fit for a
post-COVID world, but these contracts kickstart a process
of reform that will ensure our railways are entirely
focused on the passenger, with a simpler, more effective
system that works in their best interest.
