Rail cuts fear as firms set to share in savings

A coalition of 50 organisations has written to the Government raising concern over proposals, aired in an informal consultation document.

The coalition, including passenger groups, fear the Department for Transport (DfT) is trying to pave the way for rail cuts, and fear less well used local and regional services could be first in the firing line.

The Campaign for Better Transport (CBT) says that a DfT consultation document – The Future Of Rail Franchising – states "under the current process there is no incentive for operators to make sensible changes to services that are no longer justified".

It goes on: "The Department is therefore considering amending the current franchise agreement so that, where operators propose sensible measures to reduce costs during their franchise term, they will be rewarded by receiving a proportion of these savings."

Spokeswoman Cat Hobbs said: "If what they are trying to achieve is getting cuts under the radar it's bad news for passengers. It shouldn't be an informal consultation; it should be upfront and open.

"If the Government is giving train companies a financial incentive to cut services from the train companies' point of view it will make them think differently...possibly encourage them to run services down or say not many people are using them." The CBT has asked why the proposal is not subject to formal consultation but has not yet received a reply.

Chairman of Better Trains for Chepstow Jim Jenkins said: "We are strongly opposed to the move to reduce the protection of passenger franchises. Our experience is that the management of the franchises needs to be firmer. Our elected representatives and local communities need to have more control over our services, not less."

Denis Fryer, of the South Hampshire Rail User Group, said: "Lots of medium-sized towns could have their services cut. This would make rail a much less attractive option for people. It could have a big impact on people who take the train to work."

The fears over train operators being rewarded for cutting costs follows criticism from the drivers union, Aslef, that the rail franchise system sees millions of pounds taken out of the industry for shareholder profits.

Last month it mounted a surprise bid to run the East Coast Main Line in a move it said aimed to test Labour's manifesto pledge of allowing not-for-profit organisations to compete for contracts.

In the past three years two companies running the East Coast franchise have been forced to hand it back to the Government.

The line, which links Leeds and York with London, will be state-run until next summer, when a new operator is expected to be announced.

A formal invitation for tenders is expected this autumn and the Department for Transport (DfT) has said the line will definitely not remain in public ownership.

The failure of National Express, who had won the contract in 2007 after it was surrendered by GNER, sparked widespread calls for the system to be overhauled.