The current system of rail franchising is not fit for purpose and should be reformed, MPs have said.
In a new report, the Transport Select Committee recommends that the Department for Transport (DfT) should commission an independent review of its own franchising functions, including possibly transferring enforcement powers to regulator the Office of Rail and Road.
London Bridge station
The report finds that the current model ‘fails to deliver for passengers, to drive industry efficiencies, promote competition, reduce the taxpayer subsidy or transfer financial risk to the private sector’.
It concludes that without changes, franchising is not likely to be sustainable in the long term.
Committee chair Louise Ellman MP, said: ‘While franchising enabled passenger growth and service improvements when it was first rolled out, passenger satisfaction with the railways is falling.
‘Our report explores why the current model is no longer fit for purpose. But this will not be solved overnight. There is no one-size-fits all approach and the Government should work with other agencies to introduce steady, strategic reform to secure improvement.’
The report points out that while franchising delivers most where there is robust competition between bidders, this core policy objective is not being met and ‘genuine competition has been restricted to a limited number of franchises’.
MPs suggest that open access, where operators who do not hold a franchise run services, could promote greater competition on intercity long distance routes, although reform is urgently required to equalise track charging structures, ‘which create an uneven playing field between open access and franchised operators’.
Ms Ellman also criticized ministers for their management of the franchise that includes Southern rail and again called for the franchise to be restructured if operator GTR is officially found to be in breach of contract.
A DfT spokesperson said: ‘Franchising has brought major investment to our railways and helped to create one of the safest and fastest growing networks in Europe. But we can make improvements and the transport secretary has been clear that it will take new ways of working, more investment and better collaboration across the industry to tackle the challenges ahead.’