Private train operating companies are to be awarded longer franchises, up to fifteen years in length.
These franchises will allow the train company to have much more freedom to make their own commercial decisions about the service they provide.
With train operators expected to make £700m savings a year as well as deliver profits and dividends to their shareholders, greater commercial freedom will inevitably lead to:
- reductions in unprofitable routes and services
- cuts in staff costs and other ‘quick fixes’
- maximising fair revenue by raising ticket prices and increasing ‘train utilisation’, putting more passengers on fewer trains
The government assumes that longer franchises and more freedom will allow train operators to innovate and invest more in their services. But this is an assumption based on no evidence. We were promised the same from privatisation but the private train operators have failed to provide promised investment and innovation.
Private sector investment accounts for around just 1% of all investment in UK rail. And the amount of money that train operators are putting into rail has decreased sharply in the last five years.
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