THE system of rail franchising across the UK is set to be axed as a direct consequence of the coronavirus pandemic. The system was already under review due to the many problems caused to the customer and the taxpayer by the private firms which ran the franchises. It was no surprise yesterday when Transport Secretary Grant Shapps announced that there would be a further cash bailout of franchise operators, but that franchising itself would end.

Once again Scotland was ahead of the game, because late last year it was announced by the Scottish Government that the current operator of the ScotRail franchise, Dutch company Abellio, would have its franchise removed at the first possible occasion in 2022.

Transport Secretary Michael Matheson made the announcement on December 18 after sustained complaints about the ScotRail service. There was heavy betting on the Scottish Government bringing in a new non-franchise system, possibly even re-nationalising ScotRail.


THE rail unions have demanded re-nationalisation. The franchise owners are demanding a better subsidy system but still want to be involved in running the railways. Shapps is unable to say what will happen next but he will “get Britain back on track”. That promise might come back to haunt him ...

The Scottish Government has taken a hit of £250 million on the emergency measures agreements which were brought in six months ago to compensate the two franchise operators in Scotland, ScotRail and Caledonian Sleepers. The overall bill for the coronavirus emergency payments to the whole of the British rail franchises is in excess of £3 billion.

One can only presume that Shapps contacted Matheson and asked for advice on how to run the railways. And presumably Matheson has told him that giving the Scottish Government control of the Scottish section of Network Rail, which owns and operates the actual rails on a UK-wide basis, would be a good start.


THE Tories always had British Rail in their sights during their orgy of privatisation in the 1980s under prime minister Margaret Thatcher. Yet despite many problems in the 1970s due to lack of investment and industrial action, the British public were still rather fond of British Rail, which was nationalised under Labour in 1948. Thatcher considered wholesale privatisation as going too far, although she did authorise the sale of several rail-linked operations such as Sealink Ferries, the Travellers Fare catering business and British Rail Engineering Limited (BREL) who did much of the maintenance work on the entire network.

Thatcher’s successor John Major was determined to show he could do it and made privatisation of the railways a commitment in the Tories’ 1992 General Election manifesto. He didn’t say how it would be done but by 1994 it was clear that franchising would be the way forward, effectively giving private companies control of various areas and regions and subsidising them in return for company investment to improve the railway service.

So-called “Roscos” were created to own and manage the rolling stock which was hired by the new franchisees. A rail regulator office was created to superintend the whole system.

Significantly, the Government also sold off the rail infrastructure itself to a consortium called Railtrack. The bids came in and the new franchising system came into effect in 1996, and while keeping ownership of the tracks and signalling, Railtrack let the train operating units run most of the country’s stations.


THE biggest failure was the first. Railtrack was already in serious trouble when the disastrous Hatfield rail crash in 2000 which killed four people was found to have been caused by a damaged rail, the responsibility of the company. The then Labour Government itself put Railtrack into insolvency and its assets and operations were given to a new entity, Network Rail.

Over the period of franchising there have been four controversial and high-profile collapses of franchises, the first being South Eastern in 2003 and the most newsworthy being the humiliating demise in 2009 of East Coast, operators of the franchise linking London to Edinburgh. Each collapse has seen the UK Government take the failed franchisee in-house, and many people maintain these “nationalised” services were better. The UK Government currently operates Northern Trains and London North Eastern Railway.


NATIONALISED railways work very well in many countries, but it would take a major change in policy for the Tory Government to reverse its privatisation policies. Under

Boris Johnson, it’s just not going to happen.

The end of franchising could, however, allow the Scottish Government to at least partly nationalise ScotRail. At the moment taxpayers have to shell out to keep franchises afloat. That has to end.