Wednesday, 17 October 2012

RDG publishes initial thoughts on Franchise Review

This from the minutes of the 9th October meeting of the Rail Delivery Group...

Independent review of franchising

This item had been placed on the agenda of the meeting at short notice in the light of the events of the previous week. It was felt that RDG should take a lead on this issue and express the industry’s views to both Government and the independent review of franchising
Points made during discussions included:

  • It was essential that the franchising process was restarted as soon as possible;
  • There were many changes that would be desirable but there needed to be realism about what was achievable and changes must not get in the way of restarting the franchising process;
  • RDG should consider what had been said before on the subject but should not be constrained by previously expressed views;
  • RDG‘s views on the key principles of franchising should be expressed succinctly;
  • Owning groups were still considering the changes they would seek and the input that they would make; and
  • RDG should identify where there was common ground between the owning groups.
During further discussion the Group suggested that some of the issues that could be lodged with the independent review could include:
  • The cost, complexity and risk associated with bidding;
  • The size, length and risks of franchises;
  • That a significant proportion of the savings and efficiencies presumed in the Statement of Funds Available and assumed in the Initial Industry Plan were dependent on the rapid reinstatement of the franchising process enabling franchises to work with Network Rail;
  • Mechanisms used in other transport industries and other countries including the use of framework agreements should be considered; and
  • There was a paramount need for flexibility in franchising.
The Group agreed that the issue should be progressed by the creation of a working group. The working group should:
  • Review previous work on franchising;
  • Recognise that significant change could delay the restarting of the franchise process;
  • Be distinct from work done by ATOC and other groups;
  • Produce a straw man for further discussion; and
  • Be responsible for producing RDG’s submission to the independent review of franchising.
Whilst this is a helpful starting point there are one or two gaps in the information that the RDG has published in its minutes.

For instance: 
  • Who will be on the new Working Group?
  • When is it due to report back?
  • Will the Working Group's findings be made public? and;
  • Will the Industry Forum be invited to comment on the findings of the Working Group before they are submitted to DfT/Richard Brown?

Now that the ORR has given its blessing to formalising the role of the RDG the group needs to become a lot more transparent and be much more proactive in its engagement with the wider industry.

UPDATE: This from Messrs S Ply & Chain...

Whilst much of the focus on the InterCity West Coast fiasco has been on the impact that it will have on bidders the knock on effect within the supply chain appears not to be given voice.

Significant investment in rolling stock usually follows new franchise awards and with so many franchises now on hold there is a real risk of the supply chain stagnating and shrinking in the short term and overheating in the long.

As McNulty made clear these peaks and troughs need levelling out for the good of the whole industry as well as for tax and fare payers.

RDG needs to broaden its reach and engage with members of the Supply Chain to ensure that conversations on the future of franchising are not restricted to a narrow clique of Owner Groups.