RMT calls for forensic inquiry into rail franchising

RMT calls for forensic inquiry into rail franchising

8 December 2017

RMT Press Office:

RMT calls for forensic inquiry into sustainability of the Government’s rail franchising programme.

RAIL UNION RMT today called for an immediate forensic inquiry into the sustainability of the government’s rail franchising programme as the former Transport Minister, Lord Adonis, warned that First group was losing “big money” on the Transpennine Express franchise and was consulting its lawyers. The warning came only days after the government was forced to announce the early termination of the East Coast franchise.

The Transpennine Express franchise requires it to increase its premium payments from £6.8 million in 2017/18 to a massive £178.9 million by 2024/25.

 

RMT also believes that other franchises will be at risk due to over optimistic projection of passenger growth. For example, as well as the Transpennine franchise  the Northern franchise assumes a 25% increase in passenger demand over the duration of the franchise. On this basis there will be a staggering 85% cut in public funding from £275 million to £39 million by 2025/26. The charts below show that both the Transpennine Express and the Northern franchise are on course for huge cuts in public funding which, combined with slower than expected passenger growth, suggest the rail funding crisis in the north can only get worse.

 

RMT General Secretary Mick Cash said,

 

“Far from a Northern Powerhouse there is now a real danger of a full blown Northern rail crisis. First we have the East Coast franchise being terminated early and now it emerges that the Transpennine Express could follow suit and the sustainability of the Northern franchise is built on sand.

 

The government is engaged in fantasy franchising where over ambitious projections of passenger growth, combined with the reality of falling passenger numbers, is a toxic combination that is likely to torpedo the government’s whole franchising programme leaving passenger services vulnerable to cuts and the taxpayer left to pick up the bill.

 

Instead of swallowing its ideological pride and taking services into the public sector the government is lurching from crisis to crisis. We are calling or a full inquiry into the sustainability of the government’s rail franchising programme.”

 

ENDS

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RMT analysis of the projected subsidy profile for Northern and TPE franchises:
 
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Tagged with: rail franchising, privatisation, tory government, lord adonis