Scrap rail franchises and bring in competition, says markets regulator

Britain's current rail franchise system should be reformed or scrapped altogether to allow rival firms to run services on the same routes, according to the competition watchdog.

Delivering its long-awaited verdict on how to improve rail services across the country, the Competition and Markets Authority (CMA) said more direct competition could lead to lower fares, greater efficiency and a more effective use of capacity.

"The need to attract passengers who have a choice can mean lower fares, new routes and destinations, more innovations and flexible ticketing," chief executive Alex Chisholm said.

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As a first measure, the watchdog suggests the government allows more "open-access operators" to provide competition to the main franchise companies on most routes. A more radical option, it adds, would be to scrap the franchise system for intercity routes such as the East and West Coast main lines to Scotland in favour of multiple licenced operators.

At present, most routes are tendered as single contracts for ten-year periods to individual companies, notes the Financial Times, with a small number of open-access operators granted the right to run services not covered under the main contract. Network Rail, which owns and maintains the railway network infrastructure, is publicly owned.

The proposals were met with hostility from rail unions, with the drivers' representative Aslef calling them "risible". The Rail Delivery Group, which represents train operators, and Network Rail gave similarly "lukewarm" responses, according to The Guardian. Transport lobby group the Campaign for Better Transport, meanwhile, said passengers would benefit far more from a "joined-up network rather than greater competition".

The CMA's proposals were within a policy paper and so are merely recommendations that it has no formal power to enforce.

Its report comes ahead of the publication of a government review into the future structure and financing of Network Rail, due out alongside the Budget next week.