The government has recently announced plans that a new state-owned body called Great British Railways is proposed to replace Network Rail in what is being called the biggest shakeup in the rail sector for almost 25 years.
Under the Williams-Shapps Plan for Rail, from 2023, Great British Railways would oversee all train operations in England including ticket prices, infrastructure spending, and timetables.
The reform means that private companies would still be allowed to run services, but they would be working under a more prescriptive management contract. Great British Railways would pay train operators to run regional or intercity operations to a timetable and structure created by the new body. This system would free operators from looking to achieve financial targets under the current franchise system.
The ultimate aim of this reform is to reduce the number of barriers that new bidders face in the current franchise system where 66% of contracts are being awarded to operators without any competition. Therefore, train operators are struggling to meet their financial targets resulting in government intervention.
The government has said that this reform will make the rail system more unified and will increase the quality and consistency of our rail services.
What changes can we expect to see?
- More pay as you go journeys
- Greater investment in online and mobile tickets
- New simplified fares system
- Flexible season tickets
- Increased space for bicycles
- Simplified compensation scheme
Paul Wormald, Transport and Logistics Partner comments:
Even before the recent and ongoing Covid-19 pandemic, the current structure of the country’s railways was being questioned, with major franchises covering the East Coast Main Line and service across the North of England ending up back in the government’s hands. The need for reform has only been amplified since with passenger numbers falling sharply in 2020.
Whether the Williams-Shapps Plan for Rail is the ultimate answer remains to be seen and no doubt there will be more twists and turns to come in the next two years.
Businesses in the rail supply chain need to keep an eye on developments and how this may affect their strategies for the coming years.
If you would like to find out further details about the new reform please read the governments white paper here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/987752/gbr-williams-shapps-plan-for-rail.pdf
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