Rail shake-up as franchises are scrapped

RAIL franchising has been axed by the government as it announced it would create a ‘simpler and more effective structure’ for Britain’s rail network.

Transport secretary Grant Shapps said the coronavirus pandemic had ‘proven’ the franchising model – introduced in the mid-1990s – ‘is no longer working’.

Crisis measures were introduced in March to ensure services kept running despite the collapse in demand, costing taxpayers at least £3.5billion.

Franchises have now been replaced by Emergency Recovery Management Agreements (ERMAs), which set out tougher performance targets for operators and lower management fees.

Mr Shapps did not spell out how rail services would be controlled once ERMAs expire but said the new system would ‘keep the best elements of the private sector’ such as competition and investment. ‘Passengers will have reliable, safe services on a network totally built around them,’ he added.

Matthew Gregory, chief executive of FirstGroup, which owns four franchises, called for ‘a more appropriate balance of risk and reward for all parties’. He added: ‘We have long advocated for a more sustainable long-term approach to the railway. We look forward to working constructively with the Department for Transport to make this a reality.’

But Labour’s shadow rail minister Tan Dhesi said: ‘These agreements paper over the cracks of a broken rail system. It’s time to put passengers before profit and bring our rail franchises back into full public ownership.’