Coronavirus: Government temporarily suspends rail franchise agreements
The Department of Transport is taking emergency measures to help the rail network survive a 70 per cent drop in passenger numbers as coronavirus prevents travel across the UK.
Rail franchise agreements have been suspended temporarily to avoid collapse, and the government will instead pay train companies a small fee to keep operating some services.
The Department of Transport said the fee will “allow operators to act in the national interest” in tackling the coronavirus outbreak in the UK.
“Allowing operators to enter insolvency would cause significantly more disruption to passengers and higher costs to the taxpayer.”
The emergency measures will initially be taken for six months to ensure that trains can continue to operate for key workers and essential travel.
Secretary of state for transport Grant Shapps said: “We are taking this action to protect the key workers who depend on our railways to carry on their vital roles, the hardworking commuters who have radically altered their lives to combat the spread of coronavirus, and the frontline rail staff who are keeping the country moving.”
“People deserve certainty that the services they need will run or that their job is not at risk in these unprecedented times. We are also helping passengers get refunds on Advance tickets to ensure no-one is unfairly out of pocket for doing the right thing.”
Fees will be set at a maximum of two per cent of the cost base of the franchise before the pandemic began.
The government also announced that season ticket holders and anyone holding an advance ticket are entitled to a refund free of charge.
Paul Plummer, chief executive of the Rail Delivery Group, which represents train operators and Network Rail, said: “The industry strongly welcomes the Department for Transport’s offer of temporary support and while we need to finalise the details, this will ensure that train companies can focus all their efforts on delivering a vital service at a time of national need.”
Transport union RMT’s general secretary Mick Cash said: “It is absolutely essential that the rail workforce get the same sort of guarantees and assurances that the Government are offering the train operators.”
“The union wants absolute and cast iron guarantees from the government, the train companies and the contractors that wages, jobs and pensions will be protected across the board for both directly employed and contracted staff with no exceptions.”
Transport companies Go Ahead, First Group and Stagecoach have all said they cannot forecast profits this year as a move to working from home, as part of social distancing measures, meant people had stopped travelling on trains and buses.