The Government has confirmed that emergency measures are being brought in to protect the rail network. The current franchise agreements will be suspended and instead the Government will pay companies an operating fee to run the network. Rail usage has already fallen by 70% in recent weeks, with further falls possible. The Government is also introducing measures to allow all ticket holders to reclaim a refund, with customers being told to contact the company who they purchased their ticket from.
Grant Shapps, the Secretary of State for Transport, said in a statement:
“This is not a new model, it is a temporary solution, taking the steps necessary to protect services now in a cost-efficient way, and ensuring current events have as little impact as possible on the railway in the longer term. Allowing operators to enter insolvency would cause significantly more disruption to passengers and higher costs to the taxpayer.
Fees will be set at a maximum of 2% of the cost base of the franchise before the COVID-19 pandemic began, intended to incentivise operators to meet reliability, punctuality and other targets. The maximum fee attainable will be far less than recent profits earned by train operators. In the event that an operator does not wish to accept an Emergency Measures Agreement, the Government’s Operator of Last Resort stands ready to step in.”