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Campaign for Better Transport comments on franchising announcement

26 March 2013
Campaign for Better Transport has responded to the Department for Transport's announcement of a new programme for the letting of rail franchises.

Richard Hebditch, Campaigns Director, Campaign for Better Transport said

"Up to now, every franchise has been let simply to the company offering the most money or least subsidy. The rail industry wants to rush back to business as usual when what we need are franchises that put passengers at the heart of decisions about our railways. Today’s announcement takes some positive steps but more radical change is needed to put communities in control and reward companies for improving services rather than squeezing passengers.”

ENDS

Notes to Editors

1. The Department for Transport has announced details of a new programme for the letting of rail franchises. Details of the announcement are available from the Department for Transport's website.

2. In February, Campaign for Better Transport launched its Going Local report which offers a new direction for rail franchising drawing on the successes of Merseyrail and London Overground. The press release and report can be accessed here.

3. The Brown Review of Franchising made the following observation concerning how franchising decisions are made:

“Up until now the Department and its predecessor authorities have let franchises purely on the price offered by bidders, as measured in the Net Present Value (NPV) of the premia or franchise support payments offered. In theory quality is also evaluated by a ‘funnel’ mechanism, when NPVs of leading bids are sufficiently close together for quality scores to come into play. In practice, however, the winning NPV has always been far enough apart from the next placed bidder, so that the funnel has never been used and quality has never been a determining factor in selecting the winning bid.” (Para 5.21)