Transport secretary Louise Haigh has confirmed that the last private sector train operating contract will end in October 2027, with the new ‘directing mind’ Great British Railways expected to be functioning by late 2026 ‘at the earliest’ after the forthcoming Railways Bill has been passed.
There are ten former franchises still running at the moment under National Rail Contracts awarded in the wake of the Covid pandemic.
Ms Haigh was making her first appearance before the newly-formed Commons Transport Committee yesterday. As with other Parliamentary Select Committees, its membership was revised after the general election.
Another Bill, currently going through the House of Lords, will authorise the Department for Transport to take control of the former franchises at the next ‘break point’, or else when the core contract expires. The DfT will also be able to take back any contract at an earlier date if it has been breached.
The Passenger Railway Services (Public Ownership) Bill, which makes public ownership the default rather than the last resort, has already passed its Commons stages and received its Third Reading in the Lords yesterday. It is expected to receive Royal Assent soon.
Two former franchises reached their core expiry dates on 15 September, but the Government did not take action because its Bill had not yet become law. As a result, West Midlands Trains may now run until April 2026, and Greater Anglia until September 2026.
The next two are Chiltern Railways and Govia Thameslink Railway, which both have core expiry dates of 1 April 2025, and it seems likely that they will be the first to be renationalised using the powers of the new Passenger Railway Services (Public Ownership) Act.
The last former franchise is set to be CrossCountry, which has a core term expiring on 17 October 2027.
The Government is waiting for legitimate break points in contracts before taking action, to avoid potentially major claims for compensation.
Louise Haigh was questioned about a number of railway issues by the Committee, which also heard that the Railways Bill is expected to be introduced next summer.
She said: ‘I don’t want anybody to underestimate the scale of the reform challenge that we are undertaking.’
She continued that the Government has ‘to massively reduce and simplify the mass of regulation that has been built up over the last 30 years of privatisation’ because it ‘stifles a huge amount of innovation and progress’ and there are presently ‘dozens and dozens of competing and conflicting interests’.
When a train is delayed, she explained, ‘Rather than work together to see how we can fix it and make sure it doesn’t happen again, instead we have dozens and dozens of lawyers that argue over whose fault the delay was and how to attribute the blame and who pays for the faults.’
Meanwhile, half-yearly results published by FirstGroup this morning show that its revenues from DfT contracts were ‘in line with expectations’, while open access recorded revenue growth of £5.6 million, or 12 per cent, which was also as expected.
As the DfT contracts wind down, operators like First are concentrating increasingly on the prospects of more open access. First reported that it has acquired track access rights for new open access services between London and Stirling, while applications for the extension of Hull Trains to Sheffield and Lumo to Glasgow have been submitted, along with a new service between Rochdale and London. Consultations are ‘progressing’.