The UK government has brought the country’s rail franchising
practice to an end after agreeing emergency measures to support operators
through a downturn in passenger journeys caused by the coronavirus pandemic,
with taxpayer money to be used to make up for a shortfall in revenues.
The Department for Transport put emergency measures in place
earlier this year as lockdown restrictions forced most citizens to abandon
public transportation in favour of working from home or travelling by car.
According to the BBC, these temporary agreements have so far cost the
government £3.5 billion, and the new Emergency Recovery Measures Agreements (ERMAs)
will be in place for the next 18 months.
Under the ERMAs, the fees that can be earned by rail
companies will be reduced, but they will also ensure that services can continue
to run while passenger numbers remain low.
The ERMAs have been designed as a stop gap before a new
system with new contracts can be put in place, and the DfT said the management
agreements will have “tougher performance targets and lower management fees”.
This includes 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 per cent of the cost base of the franchise before the
pandemic began.
According to the DfT, the intention is to bring operators up
to an almost full service to allow for social distancing on trains for
passenger safety.
The start of reforms come after an independent review of the
UK’s railways led by former British Airways boss Keith Williams recommended
sweeping changes to the way the system was operated. The railways were
privatised nearly 25 years ago and 2018 saw months of chaos for passengers following the chaotic introduction of a new
timetable. Multiple franchises, including the East Coast Mainline and Northern Rail, have been ended early in the years since.
A white paper response to the Williams review will now not
be published until “the course of the pandemic becomes clearer”, according to
the DfT.
Transport secretary Grant Shapps promised the new system
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”.