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National Rail Contracts

In ‘Great British Railways’, the Williams-Shapps Plan for Rail, the government states that the franchising system will be replaced by new Passenger Service Contracts. Under this system, Great British Railways will specify the timetables, branding, most fares, and other aspects of the service, and agree a fee with the competitively-procured passenger service operator to provide the service to these specifications.

Prior to this being implemented, National Rail Contracts (NRCs) will succeed the current emergency agreements (set to end in 2022) and act as ‘stepping stones’ towards the new Passenger Service Contracts. The plan states that Passenger Service Contracts will ‘focus operators on meeting passengers’ priorities and will incentivise them to grow rail usage.’ Each contract will be different, to reflect local markets and needs, and will be designed to support the needs of passengers and the whole network, as part of an integrated system.

We have been liaising with the Department for Transport regarding the content of NRCs and the support included for community rail. This process remains ongoing, but we are able to provide the following brief summary for members:

  • In relation to community rail, the NRCs contain substantially the same contractual obligations on operators as pre-NRC baseline franchise agreements;
  • As previously, the ‘template’ NRC terms include an obligation to provide core funding to community rail partnerships (the “CRP Amount”), with each contract spelling out the value of this amount in each year of the contract term;
  • The ‘template’ NRC terms also allow for the provision of additional project funding (a “CRP Project Amount”). Decisions on whether to include such funding will need to be taken on a case-by-case basis as part of the negotiation of each NRC. Where additional project funding cannot be provided in a particular NRC at the outset, it would still be possible to introduce it at a later date, if conditions allowed;
  • The NRCs also introduce the concept of an Annual Business Plan, which needs to be agreed between operators and the Department for Transport. As part of the specification for these plans, the department will ask operators to set out the support they will provide to community rail organisations (in addition to funding) – e.g. access to expert support, skills development, training, sharing of best practice, etc.

We will provide further updates on the contracts when appropriate. In the meantime, members should speak to their usual contact should you have any queries.