The Rail Minister, Theresa Villiers, has set out proposals for passenger rail franchises to be ‘longer, more flexible and more responsive to the needs of passengers, and provide better value for taxpayers’.

Franchises would run for 15 years as standard, so long as performance levels were maintained. In return for more private investment in the railways, operators would get greater commercial freedom to innovate in the way they deliver services, according to the minister. The reforms would also set ‘tough requirements for train operators to deliver on passenger satisfaction’, and operators could face being stripped of their contracts if they fail to meet those requirements.

The proposals are set out in a public consultation which seeks views from across the rail industry, passengers and the general public on the Government’s approach to rail franchising ‘and the benefits that longer franchises and increased private sector investment in the railways would be able to offer.’

Other proposed changes include:

• Changes to the current financial risk-sharing provisions, known as ‘cap and collar’, which could include a link to GDP or employment levels.

• Making it easier for operators to invest their own money during the life of the franchise, and receiving part of the value of that investment once the franchise ends.

The outcome of the consultation will be considered alongside the emerging findings of the Rail Value for Money study, chaired by Sir Roy McNulty, and the conclusions of the government’s Spending Review.

The Department for Transport says it will publish its conclusions towards the end of the year and will begin re-letting franchises under a new model soon after.