Taxpayers left with £ 3.5bn bill as railway franchises end after 24 years of chaos
RAIL franchises ended yesterday after 24 controversial years of growing passengers numbers and rising fares combined with overcrowded trains and timetable chaos.
Transport Secretary Grant Shapps admitted that the system introduced under rail privatisation in the mid 1990s “is no longer working”.
Instead rail firms are to be given taxpayer- funded “transitional contracts” where they are paid a fee to run the trains.
The Department for Transport effectively took over running the network in March under Emergency Measures Agreements to ensure trains operated during the coronavirus crisis.
They expired on Sunday and have cost taxpayers at least £ 3.5billion.
Investment
Mr Shapps 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.” The move was welcomed by passenger groups and industry chiefs but slammed by unions who want renationalisation. Frances Barber, the TUC General secretary, said:“The Government’s rescue of rail must end the chaotic era of rail privatisation.
“Any form of privatisation costs passengers by sucking out money for shareholders, so the next step should be to bring rail back into public hands.”
Transport Salaried Staffs’ Association general secretary Manuel Cortes added: “The system was broken well before coronavirus arrived, but the pandemic has exposed its many weaknesses.
“Heads or tails the privateers always win.
“Frankly, it’s a national scandal that our money – taxpayers’ hardearned cash – has been stuffed into the mouths of greedy shareholders at a time of national emergency.” The franchising system saw private sector companies bid to win the right to run a regional network, usually paying a fee to the Government but keeping any profits.
But Northern Trains and the East Coast Main Line had to be taken back under state control.