When ministers have digested the excellent Laidlaw report into the West Coast franchising fiasco, (at http://assets.dft.gov.uk/publications/laidlaw-report/laidlaw-report.pdf), there will be an awful grinding of teeth. It really does not seem to give a way out of the franchising dilemma and the question of ‘what the hell do we do now’ must hang in the air
Laidlaw identifies a variety of factors that led to the collapse of the deal. He cites complexity, lack of planning and shortage of resources – exacerbated by cuts in both in house and consultant numbers – as contributory factors. Crucially the problem arose because of the desire of ministers to get rid of the relatively crude cap and collar arrangements and replace them with a more complex set of criteria designed to ensure that companies did not make super profits merely because of a buoyant economy or went bust in the event of a recession. As I have written in this week’s Rail magazine, it seems that either long term franchises are dead or passing on revenue risk is dead. It seems impossible to keep both and have a coherent franchising process. Given that the Richard Brown review will be allowed to make any suggestions apart from renationalisation, I suspect that concessions like the London Overground deal for at least some franchises will be suggested, but this will greatly displease my friends at ATOC who like the idea of possibly making unlimited profits out of their contracts.