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Local future proposed for rail franchises

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Local authorities should take over franchising of some urban and rural rail lines, a major study has said.

Sir Roy McNulty said in his value-for-money review for the Office of Rail Regulation that passenger transport executives and groups of local authorities would be well-placed to take over groups of lines in conurbations – as has the Merseytravel PTE around Liverpool – and also some rural branch lines.

Under the franchising system, service routes, fares, frequencies and rolling stock standards are set and operators bid to run them, in most cases receiving government subsidy.

Sir Roy’s proposal would see PTEs and councils, rather than the Department for Transport, setting some franchises.

He argued this could give better value for money by allowing services to meet local needs.

“Timetabling driven by local needs could offer more flexibility with services better reflecting the peaks and troughs of patronage,” he said.

Obstacles to localism on the railways included conflict over money between central and local government, and whether councils could organise themselves around rail routes.

“A resolution of these issues would open the way for greater localism, with more involvement in England of local authorities and/or PTEs and with local decision-making brought more closely together with budget responsibility and accountability,” the report said.

His localism proposal was part of a package of reforms that cover all aspects of the rail system. Transport secretary Philip Hammond said: “Sir Roy warns that unless we get a grip and cut the costs of our railways, passengers could see services cut and fares rise.

“But, if we seize this opportunity, work together, and push through real reform in our railways we will be able to make savings for both taxpayers and fare payers.”

The Merseytravel franchise is the only one of its kind so far. The PTE sets service specifications for lines that link Liverpool to the Wirral and Sefton, and has awarded a 25-year contract to run the trains to a consortium of Serco and Abelio.

Merseytravel has used its franchises powers to cut fare increases to RPI+1%, rather than +3% in the government’s franchises.

Sir Roy said longer franchise such as this could give operators greater certainty to invest in improvements. Most at present last only for seven years.

Passenger Transport Executive Group chair Geoff Inskip said: “We are delighted that the McNulty report recognises the benefits that devolving more powers over local rail can bring.”

He said rail has been devolved in different ways in Merseyside, Scotland and on Transport for London’s London Overground network of suburban lines, but each showed “devolved transport authorities are in a better position to make the right calls on investment and cost control than remote civil servants in Whitehall”.

“We need a seat at the table to consider how the benefits of devolution can be fully integrated as the wider value-for-money process unfolds.”

In a report section on rail related business, Sir Roy said councils were too restrictive in granting planning permission when operators wanted to run new station car parks, because they feared these increase road traffic.

“Consideration should be given to the benefits that increased station parking could bring in terms of a modal shift onto rail, even at the expense of more local journeys,” he said.

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