Emergency measures to help train firms survive extended

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The government has agreed new emergency deals with train companies.

Under the arrangement, taxpayers will continue to cover any losses on the railways, caused by low passenger numbers, for another 18 months.

Throughout that period ministers hope to carry out broader reforms to Britain’s railways.

They will consider adopting a concessions-based system in the longer term, whereby train companies are paid a fixed fee to run services.

It marks the end of rail franchises, which have been in place since the 1990s.

When the country went into lockdown, the government agreed to pay the losses of train companies which had been hit by falling ticket revenue.

It meant trains were still able to run, even with very few passengers.

Since then, passenger numbers have slowly risen but they are still less than half their pre-pandemic levels.

So far, the bill for carrying the losses of train companies has run to at least £3.5bn and the Department for Transport has said “significant taxpayer support will still be needed” under the new agreements. But it has reduced the fees that train companies will receive for running services.

In a statement, Transport Secretary, Grant Shapps said: “The model of privatisation adopted 25 years ago has seen significant rises in passenger numbers, but this pandemic has proven that it is no longer working.”

He said the move to a new system would end “uncertainty and confusion about whether you are using the right ticket or the right train company”.

System

Train companies have welcomed the plans to replace Britain’s often-criticised system of rail franchising.

Paul Plummer, the boss of the Rail Delivery Group, which represents train firms, called for a simpler-to-use fare system.

He said: “These transitional contracts should be a stepping-stone to a better railway.”

But rail expert Sir Michael Holden, who used to run South West Trains, said: The big issue is, what is that something else to look like?”

He told the BBC’s Today programme that the current emergency measures were “the worst possible arrangement to run the railways”.

“We’ve got the dead hand of the government on the helm… controlling all of the detailed decisions of the railway.”

“And yet, they’re still paying for public sector operators to run the railway for them.”