Following the expiry on 20 September of the initial Emergency Measures Agreements (EMAs) between the UK government and franchisees, the government has announced it is abolishing franchising and replacing it with a “simpler, effective model”.
The EMAs, which were put in place because of the coronavirus pandemic, have been replaced by Emergency Recovery Measures Agreements (ERMAs) as the effect of the crisis on passenger numbers remains. These new agreements have “tougher” performance targets and lower management fees – 1.5 percent down from the original 2 percent. These ERMAs remain a transitional solution. The government wants to reform how the railways work, for example by requiring operators to co-ordinate better with each other and by driving down the railways’ “excessive” capital costs.
In order to allow people to use the railways without undue crowding, the government wants train operators to run almost all of their services.
Today’s announcement comes in advance of a white paper that will address the recommendations in the Williams Review. According to the DfT, this white paper will be published “when the course of the pandemic becomes clearer”.
“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.
“Passengers will have reliable, safe services on a network totally built around them. It is time to get Britain back on track.”
These ERMAs will remain in place for an initial period of 18 months. The government has not yet provided information about what kind of model it envisages instead of franchising.
“These new agreements represent the end of the complicated franchising system, demand more from the expertise and skills of the private sector, and ensure passengers return to a more punctual and co-ordinated railway.
“I am ensuring the recommendations I propose are fit for a post-COVID world, but these contracts kickstart a process of reform that will ensure our railways are entirely focused on the passenger, with a simpler, more effective system that works in their best interest.”
Read our in-depth interview with railway engineer Gareth Dennis where we address the problems with franchising that have preceded this pandemic and what should come next here.
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