F17: Emergency motion: Fixing Rail Franchising
Mover: Baroness Randerson (Spokesperson on Transport).
Summation: Christine Jardine MP.
Conference notes with concern that:
- On 5 February, the Government announced that Virgin Trains East Coast had broken its financial covenant and will cease operating within months.
- This is the third time in 11 years that the company operating the InterCity East Coast franchise has collapsed due to financial difficulties.
- Passengers on the Southern, Thameslink and Great Northern lines continue to face disruption, with the National Audit Office in January describing the franchise as having "the worst performance on the rail network".
Conference believes that:
- Railways are run as a service to passengers, not as a cash cow for the Government.
- Virgin Trains East Coast vastly overbid for the contract, as was recognised in the commercial press at the time.
- Network Rail failed to deliver on its commitments to improve the unreliable infrastructure on the East Coast Main Line.
- The fact that parent company Stagecoach has lost £200 million is of little compensation to passengers who will view the early termination of the contract as a bailout.
- It is absurd that the Government has no legal basis to sanction Stagecoach for failing to meet the terms of its contract.
- The repeated failures of the InterCity East Coast and Thameslink, Southern and Great Northern franchises reveal weaknesses in the franchising system that need to be urgently addressed.
Conference believes that the failures at Virgin Trains East Coast and at Govia Thameslink Railway rise to the level of breach of contract and calls on the Government to pass control of both franchises to the Government-run 'operator of last resort' as an interim measure.
Conference calls on the Government to reform the franchising system more widely by:
- Awarding future franchises on a rolling basis, using the quality of previous franchises a company has held as part of the evaluation of future bids.
- Banning companies that substantially breach the terms of their contract from bidding for future franchises for a period of time.
- Allowing public sector bodies to bid for franchises and supporting mutual groups involving staff and passengers to make bids in the near future.
- Giving local authorities and city regions a greater role in commissioning or operating franchises in their area, for example, by giving Transport for London responsibility for London suburban rail services.