Railways set for biggest shake-up since privatisation

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Transport Secretary Grant Shapps passing a Northern train while visiting Leeds railway station - PA
Transport Secretary Grant Shapps passing a Northern train while visiting Leeds railway station - PA

Ministers are set to announce the biggest shake-up of the railways since privatisation on the three-year anniversary of a bungled timetable overhaul that provoked nationwide fury among commuters.

Flexible season tickets will be formally unveiled as Grant Shapps, the Transport Secretary, lays the groundwork for a series of radical changes on Thursday.

As the railways adjust to changing working patterns, French-style "carnet" tickets will be offered to commuters who come to the office for one or two days a week.

Mr Shapps is also expected to signal the end of orange and green tickets with investment in “digital” ticketing that could be stored on mobile phones or smart cards.

The rail industry attempted the biggest timetable change in a generation on May 20, 2018. But the overhaul spectacularly backfired, leading to widespread disruption and hundreds of cancellations every day.

Regulators later said following an investigation that “no-one took charge”. Chris Grayling, Mr Shapps predecessor (pictured below), said in the wake of the crisis:

Chris Grayling - PA
Chris Grayling - PA

Mr Grayling commissioned a “root and branch” review four months after the timetable chaos. After a long delay - in part a result of the Covid pandemic - the review will be published this week to kickstart a slew of reforms.

Led by Keith Williams, the former British Airways boss, but now dubbed the “Williams-Shapps Review”, a decision to axe rail franchising will be rubber-stamped.

Rail operators will be paid a fee by taxpayers to run services with the Government collecting fares instead. Mr Shapps previously announced the end of franchising last September, prompting accusations that he was nationalising the railways by stealth.

An independent body dubbed the “Fat Controller” - named after the cantankerous station manager who starred alongside Thomas the Tank Engine in Reverend Wilbert Awdry’s The Railway Series - will also be formally unveiled.

The body will oversee the operation of the railways in order to keep Government officials at arms length from day-to-day decisions. It is expected to be led by Network Rail bosses Andrew Haines and Sir Peter Hendy, the organisation’s chairman and one of Boris Johnson’s key advisers.

The role that the private sector will play will be closely monitored by the rail industry amid fears that the proposed changes will stifle competition and lack incentives.

Rail bosses are worried that more radical changes could be watered down. “This could be a really big story or a complete catastrophe,” said one senior industry figure. “It all depends on the execution.”

Andrew Gilligan, the Prime Minister’s transport adviser, is understood to have rewritten large parts of the review in recent weeks.

The review has led to mounting tensions between the Department for Transport and the Treasury after a number of initial proposals were rejected because they were too expensive.

The coronavirus pandemic forced the Government to move rail operators onto emergency contracts that are similar to those being proposed by Mr Williams. Because taxpayers are exposed to “revenue risk”, the Government subsidy increases when passenger numbers are low.

The cost of propping up the railways and bailouts to London mayor Sadiq Khan to keep the Tube and bus services running topped £11bn, according to figures released by the Department for Transport last week.

The Telegraph revealed the Government’s plans for French-style “carnet” tickets to entice workers back to the office earlier this year. Carnet tickets will allow passengers to complete five return journeys in any single month at a discount of 15pc to peak fares.