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Impact of rail franchises examined

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Summary

Passenger rail services are provided by train operating companies under franchise agreements which generally run for 7-10 years. Whilst responsibility for the operation and condition of the track rests with Network Rail, the Department of Transport has ultimate responsibility where it affects passengers and has taken oversight responsibility for passenger rail franchising following the abolition of the Strategic Rail Authority in 2005.

This Report from the National Audit Office (NAO), 'Letting Rail Franchises 2005-2007' (HC 1047), examines rail franchises and the impact that they have had on franchises competition, the taxpayer, the passenger and the approach to managing rail franchises in general.

The National Audit Office has set out the following recommendations in respect of rail franchises:

  • On letting franchises, regional decision making bodies should have greater involvement.
  • Where bids for rail franchises occur, alternative options should be taken into consideration, such as value for money and affordability.
  • There should be transparency on financial support for franchises with information on how fares cover the overall costs of passenger rail services and the extent of Government support.
  • There should also be greater transparency on service quality standards.
  • The Government, when negotiating extra passenger capacity, needs to adjust the contract revenue target where appropriate so that it can better engage in commercial negotiations.
  • The Department should staff the National Networks Group adequately and not rely unduly on agency staff, given the strategic importance of rail franchising and the potential to reduce direct subsidies.

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Law-Making Explained

This is a House of Commons paper (HC 1047, 2007-08). It is a Report from the National Audit Office (NAO).

Find out more about House of Commons papers.

How does it affect me?

If you are a tax payer or a regular rail passenger, this affects you.

Further Reading

Find out more about the National Audit Office (NAO)

Read more on the Department for Transport

Find out more about Network Rail

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