n 21 September 2020, Minister for Transport Grant Schapps announced the end to franchising with rail operators moved onto transitional contracts in preparation for an unknown future.
While it is true that the old rail franchises are unlikely to be mourned by many, there is a lack of clarity over what happens next. There will be a clamour to once again explore the full nationalisation of the railways, which given the recent difficulties of running the network during the pandemic may be seen as an attractive option.
However, before we take this plunge we will have to ensure that a public sector rail network is truly capable of introducing the reforms and investing in modernisation of the network, that will allow it to thrive in a post-pandemic future and fully play its part in a zero carbon transport system.
Consideration should also to be given to how passenger habits have changed during the pandemic. It has been well documented that more of us are working from home, and that the previous fare structure based around full-time season tickets and expensive last minute purchasing no longer works. The tariff structure should reflect the way we live now and look ahead to the future. Now is the time to consider a single ticketing system across the network, continental-style carnets, part-time season tickets and, frankly, simplifying the options.
The interim agreements have tougher performance targets and lower management fees than previously and allow a start on rail reform. These include a requirement that operators coordinate better with each other to lower their capital costs and management fees will be capped at 1.5% of the cost base of the franchise, prior to the pandemic.
Despite the current uncertainties, the fundamentals remain strong for rail and it still has a crucial role to play in helping the UK meet it’s Net Zero goals by 2050. Whether we are looking at a new public-private partnerships, or full nationalisation, the industry will need new investment to help it move forward and meet our ambitious targets.
With work on HS2 continuing apace despite the pandemic, the opportunity to completely reshape and remodel our railway is still in reach. By alleviating capacity constraints across the network, and taking express services away from existing routes, options for new services across the country become possible. ACE members will play a key role in shaping our future railway network in the decades to come.
Mike Brown is Commercial Director at Geo-Environmental Services Ltd and is vice chair of ACE’s transport group.