The Transport Secretary is set to announce the end of rail franchising, with service provision facilitated by “concession” agreements that are similar to outsourcing contracts widely used by the NHS and schools.
The Telegraph says it has seen papers showing that franchises launched under John Major in the mid-Nineties will be replaced by fixed-fee contracts from April.
The report explains that train operators such as South Western Railway and c2c, serving commuters in the South East, have been supported with more than £3.5bn in taxpayer funding since the Government’s Covid lockdown triggered a collapse in passenger numbers of as much as 95%.
Emergency measures, implemented in March and due to expire next Sunday, have guaranteed the franchises a fixed profit but is deemed “unsustainable going forwards given the economic position and significant pressure on public finances”, official documents seen by the Telegraph say.
Therefore Government will bear ultimate responsibility for operations. Fares will be collected by the Exchequer, which will pay train firms a fee.