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Is the UK rail franchise system a model railway?

  • January 2015
  • 24 pages
  • MarketLine
Report ID: 3662144


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Critics of the current UK rail franchise system lambaste the subsidies given to Train Operating Companies, and point to annual fare rises in excess of inflation, a lack of genuine competition on individual routes and overcrowded commuter trains. This case study examines the successes and limitations of the UK rail franchise system introduced in 1993, and potential future reforms to the system.

Features and benefits

* Assesses the performance of the rail franchise system from the perspective of both passengers and the UK Government.
* Considers potential reforms to the UK rail franchise model.


Rising passenger volumes are a notable success of the privatized passenger rail sector, however it is difficult to attribute this solely to privatization.
A combination of rail fares rising faster than average earnings growth and ageing rolling stock in some geographical areas has weakened the case for privatization.
Further reforms such as changing the structure of franchise agreements to give operators sole responsibility for rolling stock and removing government intervention on fares would make operators directly accountable to passengers.

Your key questions answered

* What are the respective successes and failures of the UK rail franchise system?
* Have passengers benefited from privatization?
* Could the UK model be replicated in other countries?

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