Rail franchising is failing and without major reform is unsustainable - MPs

Rail franchising has failed to provide the benefits stated in the 1990s of increased efficiency, reduced taxpayer subsidy and lower fares and without reform it is "unsustainable," according to the cross-party transport select committee.

The MPs say in a report that there is no incentive in franchises to improve efficiency, given the low level of financial risk in operating them, and recommend franchises covering smaller geographical areas so that they "present less risk to the taxpayer, are not unnecessarily complex, and are focused on the market they serve". Meanwhile, they say open access could provide greater competition on intercity long-distance routes, but caution that operational risks need to be better understood.

The committee also highlights "shortcomings with [the DfT's] capability and capacity" to manage franchises, and recommend a review of its franchising functions - pointing out the £38m loss incurred because of the Thameslink, Southern and Great Northern franchise.

"If GTR is officially found to be in breach of its contract" - a question the MPs are still pushing for an answer to - "the Department should consider restructuring the franchise and determine who is best placed to operate it... to rectify the contractual shortcomings of the current franchise, realigning the incentives and focus of the operator back to the passenger".