Government steps in to provide stability and certainty on key services and to rail staff during Covid-19 outbreak
All train operators presented with opportunity to temporarily transition onto Emergency Measures Agreements, enabling greater flexibility and transferring revenue and cost risk to the government
Offer includes measures to provide fee-free refund of all Advance tickets as passengers follow Government advice and work from home
The Government is taking emergency measures to support and sustain necessary rail services as operators face significant drops in their income.
The Department for Transport will temporarily suspend normal franchise agreements and transfer all revenue and cost risk to the government for a limited period, initially six months. Operators will continue to run services day-to-day for a small predetermined management fee.
This will allow us to ensure that trains necessary for key workers and essential travel continue to operate. No other passengers should travel. As we have already announced, services will be reduced from today.
Anyone holding an Advance ticket will be able to refund it free of charge. All season ticket holders can claim a refund for time unused on their tickets free of administrative charges. Ticket holders should contact their operator for details.
The railways have already seen up to a 70% drop in passenger numbers. Rail fares revenue has also reduced as people increasingly work from home and adopt social distancing, with total ticket sales down by two-thirds from the equivalent date in 2019.
The Government has provided today’s offer to minimise disruption to the rail sector, vital to the wider UK economy, through these difficult times. Allowing operators to enter insolvency would cause significantly more disruption to passengers and higher costs to the taxpayer. The management fee will allow operators to act in the national interest in tackling Covid-19.
Fees will be set at a maximum of 2 per cent 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.
