Passengers paying the price for broken model of rail franchising

27 April 2018

The Public Accounts Committee report says Government's management of two of its most important franchises 'completely inadequate'.

Management of two most important franchises "completely inadequate"

We are deeply concerned that the Department for Transport's management of two of its most important franchises has been completely inadequate and could be indicative of wider weaknesses in its contract management capability.

Passengers on the Thameslink, Southern and Great Northern franchise have suffered an appalling level of delays and cancellations since the franchise started in 2014. At one point, less than two thirds of trains arrived on time.

This totally unacceptable state of affairs which caused misery for passengers was due to a catalogue of failures by the Department, Network Rail and the operator, Govia Thameslink.

Department ambivalent about risk of industrial action

The Department was too ambitious about what could be achieved, and it overlooked the poor condition of the infrastructure of the rail network. The Department was also ambivalent about the risk of industrial action and neglected to engage constructively with rail unions.

The Department failed to see, or chose not to see, the perfect storm of an ambitious upgrade programme coupled with plans to increase driver controlled operation of trains.

While there has been some improvement recently and there are signs that Network Rail and Govia Thameslink are now working together more effectively, we remain sceptical that this will address the serious and deep-rooted problems we have identified.

Department failed to learn from previous east coast franchise failures

On the East Coast franchise, the Department has failed to learn the lessons from previous failures of the franchise, and has again allowed the operator to promise more than it could deliver. The Department will have to put in place new arrangements for running train services.

We are concerned that the Department could terminate its contract with VTEC yet still give the operator the opportunity to run the franchise again in the future.

The issues we have found with the East Coast and TSGN, and the small pool of potential bidders in the market, highlight the broken model of franchising.

Chair's comments

Comment from Committee Chair, Meg Hillier MP:

"The operation of the Thameslink, Southern and Great Northern franchise has been a multi-faceted shambles causing untold misery for passengers.
Meanwhile, the East Coast franchise has failed for a third time because of wildly inaccurate passenger growth forecasts.
In both cases the Government appears to have seen its task as simply to contract out the service, with wholly inadequate consideration given to passengers' best interests and behaviour.
This imbalance cannot continue. The franchising model is broken and passengers are paying the price.
If taxpayers are to have any faith in Government's ability to deliver an effective passenger rail network then it must conduct and act on a thorough review before any further franchises are awarded.
At its heart should be new measures to embed the protection of passengers' interests at a contractual level – and to ensure taxpayers' interests are properly protected should franchisee performance break down.
Govia Thameslink's new train timetables kick in next month. This will be a critical test for the operator and we will be watching closely."

Further information

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