Between the Lines November 2020

The Government has around six months before the first of the new Emergency Recovery Measures Agreements (ERMAs) come to an end, and it’s to be hoped that by then the future structure and governance of the industry will become clearer. However, this will be challenging, not least because the extraordinary current cost of maintaining the existing level of service on the passenger network is inevitably going to create enormous tension between the Department for Transport (DfT) and the Treasury. Even before the pandemic, there were persistent rumours that the long overdue reform of the fares structure, expected to be a key recommendation of the Williams review, was being held up because of its likely cost, together with the publication of the review itself.

It’s now quite clear private sector involvement in the passenger railway will be based on a concession model, with fares and service specifications set by national or regional government. Competition for the concessions will be based on cost and quality, with incentives and penalties based on performance metrics. Performance regimes may well be quite intrusive, with armies of inspectors armed with clipboards counting, for example, the number and size of pieces of litter on trains and station platforms. Or monitoring may be more output-based, using metrics such as punctuality and reliability, customer satisfaction surveys and measurement of ticketless travel.

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