Millions are wasted on rail franchises

The rail franchising system could be costing the industry over £25 million a year.

Between 2005 and 2009, the Department for Transport spent £33.8 million to “design and tender” rail franchises, according to a parliamentary answer. This was made up of £15.3 million for departmental staff, administration and advisers to “review documentation” and £18.5 million in fees paid to "external advisors".

In addition to this, each company bidding for a franchise spends between £1million and £4 million. Given that eight franchises were let and that each franchise attracted three or four bidders, franchise expenditure rockets to over £100 million.

Money that could have been used to improve our railways has been utterly wasted and lost to the industry forever by rail franchising, said Keith Norman, general secretary of rail union ASLEF.

“It is incredible that anyone still clings to this profligate and discredited system. Franchising might be good for accountants and consultants — but it is a disaster for passengers and staff.”

www.aslef.org.uk/information/117586/franchises__cost_uk_railways__25_million_a_year/

www.publications.parliament.uk/pa/cm200910/cmhansrd/cm100203/text/100203w0024.htm#100203111000039