UPDATED 14.23
CHANCELLOR George Osborne has announced a new franchise for Great Western. The news came during his Budget speech, in which he also signalled more transport investment in London and other regions, including the North and South West.
He said: "Today we confirm: new investment in transport; regeneration from Brent Cross to Croydon; new powers for the Mayor over skills and planning; and new funding for the London Land Commission to help address the acute housing shortage in the capital.
"For we don’t pull the rest of the country up, by pulling London down. Instead we will build on London’s success by building the Northern Powerhouse.
"Working across party lines, and in partnership with the councils of the north, we are this week publishing a comprehensive Transport Strategy for the North.
"We’re also connecting up the South West, with over £7 billion of transport investment, better roads, support for air links, and – I can confirm today – a new rail franchise which will bring new intercity express trains and greatly improved rail services."
The Budget document says: "The secretary of state for transport will shortly set out details of the new franchise for the Great Western Route, which will introduce the new £3 billion Intercity Express trains, more frequent services and faster journey times.
"The Government has asked the South West Peninsula Task Force on rail to consider improvements to the Exeter to Salisbury line as part of its work. The government also encourages the relevant local authorities and Local Enterprise Partnership to develop a business case for investment in the North Devon Link road, to form the basis of a future application to the Local Growth Fund."
Talks have been underway for many months between FirstGroup and the Department for Transport, and there is speculation that First has won a further direct award of four years or so, which would extend the present franchise to 2020.