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Rail Franchising in Britain: The End in Sight?

This analysis explores the five phases of rail franchising and the impact on welfare and competition. Despite calls for more competition and questions about its effectiveness, franchising has proven to be positive overall. Are we nearing the end of rail franchising in Britain?

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Rail Franchising in Britain: The End in Sight?

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  1. The Wheels Keep on Turning.Is the end of rail franchising in Britain in sight?John Preston, University of Southampton.

  2. The Five Phases of Rail Franchising

  3. The Three Phases of Open Access

  4. Key Trends: 1995/6 to 2014/15 (% change)

  5. Changes in welfare as a result of rail franchising (£ billion PV, 2014 prices)

  6. Private value auction – winning bid increases with the number of bidders. Common value auction – winning bid decreases with the number of bidders. Number of bidders has reduced from over 5 in the first phase to around 2 in the current phase. But prices have increased: net premium payments up from £316 million in 2010/11 to £622 million in 2015/16. Franchising in Britain a common value auction? (but note large size). Competition, Costs and Contracts

  7. CMA (2016) calling for more competition but benefits seem modest (£2 billion over 20 years). Network Rail ‘nationalised’ in 2014 but DOR ‘privatised’ in 2015. TSC (2017) questions whether franchising is fit for purpose. This analysis indicates that, although franchising has been a muddle, on its own terms it has been positive. The wheels will keep on turning … Conclusion: Is the end in sight?

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