Posted 26th February 2014 | 1 Comment

New franchising executive to be created at DfT

THE transport secretary Patrick McLoughlin is poised to reveal changes at the Department for Transport which will include the creation of a new Rail Executive to take charge of rail franchising.

The move follows the Brown Report into the collapse of the Intercity West Coast franchise competition in October 2012.

Mr McLoughln told the House of Commons transport committee that he is in the process of appointing a director general of franchising, and that he hoped to announce the identity of the new recruit shortly.

He said: "One of the things which Richard Brown did recommend in his report was that we should set up a separate group within the Department to do rail franchising. I am in a position to make more progress on this shortly, hopefully making a more detailed announcement tomorrow [26 February], but we will be setting up a Rail Executive in the central Department, and that Rail Executive will build on the existing Rail Group which has, I think, got franchising back on track."

Mr McLoughlin added that the change would "bring in some more commercial elements, which I think were needed to bolster that section".

He also told the Committee that he would remain 'involved in key consideration of franchise decisions', but would not be 'involved in detailed commercial negotiations'.

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  • david c smith, milton keynes

    The franchising concept is flawed anyway. It involves a series of private near - monopolies which in the absence of competition, have to be made accountable through extensive governmental control, rather denying the whole rationale for privatisation in the first place.

    Those operations ( eg most intercity ) where effective competition, either between TOC's or between modes , is feasible ought to be given over to open - access, whilst natural monopoly services ( eg many commuter ) could gain accountability to their stakeholders via some kind of local direct democracy such as consumer cooperatives.

    In both cases, subsidies could still be given where hidden / wider coste and benefits need representing in the marketplace, as performance - related incentive payments rather than by fixed contract.