Posted 4th December 2024 | 6 Comments
Government reveals first three operators to be renationalised after law change
South Western Railway will be the first private passenger operator to be renationalised under the new Passenger Railway Services Act, the Government has confirmed.
The former franchise, which is currently a National Rail Contract, was to have expired on 28 May 2023 but was extended by a Notice of Variation to 25 May 2025 and will end then.
South Western Railway is owned by FirstGroup (70 per cent) and MTR (30 per cent). SWR took over from Stagecoach’s South West Trains on 20 August 2017.
The next in the queue will be Trenitalia’s c2c, where the contract ends on 20 July 2025, followed by Greater Anglia in the autumn of 2025, although no exact date has been quoted.
Greater Anglia’s National Rail Contract, owned by UK Transport Group (60 per cent) and Mitsui (40 per cent), had not been due to expire until 20 September 2026.
Chiltern Railways and Govia Thameslink Railway both have earlier break points, with core expiry dates of 1 April 2025, but they have not yet been listed for renationalisation.
The DfT told Railnews: ‘Once a core expiry date has passed, the transport secretary can end a contract by giving the operator twelve weeks’ notice. Greater Anglia’s core expiry date was 15 September 2024. We need to remain flexible about the dates when contracts actually end, so that we can manage the transition to public ownership smoothly.’
The DfT is also changing the way renationalisation is being described. DfT Operator of Last Resort Holdings Limited, previously known as DOHL, has become DfT Operator Limited, and its functions will eventually be part of Great British Railways.
The DfT said its renamed Operator ‘will continue to focus on transforming Britain’s railways into a more reliable, affordable, and accessible system’.
The Passenger Railway Services (Public Ownership) Act 2024, which makes public ownership the default option rather than the last resort, received Royal Assent on 28 November, only a few hours before transport secretary Louise Haigh resigned after it came to light that she had received a conditional discharge for fraud in 2014 in connection with a mobile phone, which she had wrongly said was stolen. She said it had been a mistake on her part, and she regretted following legal advice not to comment when she was interviewed by police.
Her successor at the DfT is Heidi Alexander, who is now responsible for continuing the Government’s railway renationalisation programme.
She said: ‘For too long, the British public have had to put up with rail services which simply don’t work. A complex system of private train operators has too often failed its users.
‘Starting with journeys on South Western Railway, we’re switching tracks by bringing services back under public control to create a reliable rail network that puts customers first.
‘Our broken railways are finally on the fast track to repair and rebuilding a system that the British public can trust and be proud of again.’
The DfT quoted Railway Industry Association chief executive Darren Caplan as saying: ‘Today’s announcement is an important milestone on the journey to a restructured railway. The UK supply chain will work with and support the Government’s plans to deliver improved rail performance and reliability, as we together develop world class rail, both track and train. There is now a real opportunity to provide more certainty and visibility over work plans, which will help a reformed railway be a catalyst for boosting growth and connectivity.’
However, the group Rail Partners, which has been campaigning on behalf of the private sector operators, remains doubtful.
Rail Partners’ chief executive Andy Bagnall said: ‘Publishing the timeline for bringing SWR, c2c and Greater Anglia into public ownership is a watershed moment that means the Government is now taking charge of fixing the railways, but has parked the big decisions about how to do that until next year.
‘Simply changing who runs the trains won’t deliver more reliable and affordable services for passengers, reduce subsidy for taxpayers, or grow rail freight.
‘The key to both improving performance and holding down fares is restoring the railway to financial sustainability. It is counter-intuitive to start removing private sector operators from the system, with their track record of delivering growth to reduce subsidy, when the question of what will replace them long-term won’t be answered until further rail legislation is introduced.’
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Steve Alston, Crewe
The usual commenters blabbing "privatisation = expansion, nationalisation = stagnation" totally miss the sevenfold cost increase in subsidy from the taxpayers magic money tree since 1996.
Indeed, under privatisation, Northern & TPE's main reason for contract loss was for abject failure, wasting cash whilst not running trains and p-coding their own grandmother if they could.
- At least under nationalisation a further level of fiscal regulation is added.
david C smith, Bletchley
As for the old "chestnut", do our railways perform better as public or private sector entities, please keep in mind the "horses for courses" approach , which have been put forward recently. Sectorisation of BR is generally seen as having been a success ; would it not be a bad idea for some of the current sectors to be open to competing private operators, whilst others ( the natural monopolies ) be kept within the public domain ? There is a good deal of diversity in the forthcoming GBR, which can't all fit well within the same model.
H. Gillies-Smith, South Milford
Well my experience with both Northern and TPE running services locally, as I've said before, privatisation = expansion, nationalisation = stagnation.
Chris Jones-Bridger, Buckley Flintshire
With SWR the wheel will have come full circle from the day when Stagecoach ran the 1st privatised service. It will be interesting how DOHL reorganises into DfT Operator Ltd as until now it has been responsible for rescuing distressed operators where it's role was short term focused on reletting to a new private operator. The task should not be underestimated especially reintegration the back office functions that have become so fragmented. Also this organisation will only be a staging point until it too is incorporated within GBR. As a priority let us hope that as DfT Operstor Ltd increases it's portfolio that DfT itself can step back from the day to day management of rail operations, a necessity of it's contract management role, and concentrate on it's strategic role.
Since day one the role of the ROSCO's has been controversial given the impression they were the beneficiaries of 'free' cash flow especially when they were leasing superannuated ex BR rolling stock. Much has changed as fleets have been been renewed and new competitors have challenged the initial creations. Leasing is currently hardwired into the known operating costs so I foresee no immediate change to the ROSCO'S role. Going forward will depend on how GBR evolves rolling stock strategy and when due if leasing is an appropriate way to cost effectively fund future replacement stock.
John B, London
This is no silver bullet for the woes of the network but it does start the process of turning around the tanker. Privatisation has been a dreadful experience and has stifled innovation and development of the rail network. The key will be how ROSCOs are removed from the equation, and whether we can redevelop a domestic rail industry with a 21st century BREL.
For the record, I don't recall a sudden improvement in rail services when franchising was rolled out. Connex South Central continued with the old tired slam door stock throughout their franchise term and it was only in 2003 that Electrostars entered service. Even with these, it was only when the platform lengthening works were completed in around 2006 that they started to make a difference. Under Southern/Govia, the Gatwick Express remains a shadow of what it was under BR.
Tony Pearce, Reading
I doubt if much will change. When the franchises were first given out, there was a burst of improvements for a while as new reliable rolling stock was ordered but then it went back to 'watching the pennies' type of management. The new Management - probably the old Managers from the Train Companies on increased salaries - will have the same financial constraints as before. Maybe the Chancellor will even say the Railways are costing the public purse too much, and cut Railway Investment (subsidy?) anyway.