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Thursday, February 13, 2025

Concerns raised over weakening competition for rail franchises

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A government committee has raised concerns about an apparent decline in competition within the Department for Transport’s franchising programme.

The Public Accounts Committee (PAC) has published a report looking at what progress the UK’s rail franchising programme has made since the cancellation of the West Coast franchise competition in 2012.

Although the committee said it was “encouraged” by some of the steps taken by the DfT, it believed there were still “gaps in its ability” to manage the contracts.

MP Meg Hillier, chair of the PAC, said the committee was particularly concerned about declining competition in the latest cycle of franchise competitions. Last week, the DfT announced that only two operators had been shortlist for the next South Western franchise.

Hillier said: “We are particularly concerned about the effects of declining competition within the programme.

“Our report states that by its own measure, the department requires at least three bids per competition to increase the likelihood of receiving high quality bids. Yet last week it was announced that only two companies will compete to run the South Western franchise from June next year.

“This hardly inspires confidence and highlights the urgent need for the department to develop new approaches it can draw on when there is a risk competition will not deliver the result rail users and the wider public deserve.

“All of this must be considered as part of the wider challenge facing the department—that of setting out and implementing a clear strategic plan for what is a crucial element of our national transport network.”

She went on to say the DfT, which has awarded five franchises and 11 direct award contracts since the revised programme was introduced, needed to show “strong leadership and vision”.

A DfT spokesman said: “We are clear that competition for rail franchises is the best way to secure a high quality service for passengers at good value for the taxpayer.

“Since the launch of the franchising programme in March 2013, the department has introduced a series of measures which has brought new companies to the market.

“We have 11 owning groups already able to bid for franchises, and we are working to actively seek further new entrants to the market.”

5 COMMENTS

  1. I assume that First Group still wants to win the Great Western franchise when it’ finally renewed. If they win South West Trains as well, they will have a virtual monopoly on services to the South West. Perhaps the PAC has a point…

  2. Any low competition should also be supplemented by a public sector entrant – similar to east coast

    They provided a good service with all profits being handed back to the public

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