Tom Smith, the chairman of the Association of Train Operating Companies, criticised the government for its slow progress in reforming rail franchise policy in a lecture at the Institution of Civil Engineers this week.

Smith said the industry as a whole had welcomed the government’s commitment to a less prescriptive franchising policy, but considered that since the coalition government took office, it had “barely begun to be turned into reality”.

He urged ministers to provide tangible evidence that it will deliver on the policy commitment and warned that unless the Department for Transport steps back from the day-to-day running of the railways, operators’ efforts to attract more passengers and reduce industry costs will be hindered.

Smith stressed that there is a narrow window of opportunity to implement genuine reform, with an unprecedented series of franchises due be let in the next few years. He added that for the next three rail franchises, the bidders for which were announced at the end of last month (PT029), the government must shift from micro-managing train companies, to drawing out what they will do over and above a minimum set of requirements.

“We need a new spirit in the relationship between the government and the companies enfranchised to run train services,” said Smith. “Without reform, we will continue with inflexible, overly prescribed franchises that do not unlock the full potential of the industry to achieve growth and efficiency.”

He continued: “Over the two-year period since the coalition government came to power we have heard a lot about their commitment to reforming franchises along these lines – to be longer, less prescriptive, more output-based and giving incentives to train companies to be innovative to grow their businesses in ways that meet the needs of their customers.”

But the ATOC chairman said that the commitment has barely begun to be turned into reality. “We need tangible evidence that it will be,” he said. “I call on the government to live up to its promises and make franchise reform a reality.”

Meanwhile, Smith called on politicians, regulators and watchdogs to have faith that the industry would move in the right direction and supported the government’s pledge to end inflation busting fare increases.

He also welcomed Network Rail’s move to a devolved structure and called for a “top to bottom” customer service culture in the rail industry.

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