THE transport secretary Patrick McLoughlin has confirmed that franchising is back on track, following the collapse of the West Coast franchise competition last October and the two critical reports which followed.

His statement has come just 24 hours since the Association of Train Operating Companies published data which sets out how much franchising has contributed to the success of the rail industry since privatisation began 20 years ago.

The second of the DfT reports was prepared by Richard Brown, who has just stepped down as chairman of Eurostar and now heads the Department for Transport’s Franchising Advisory Panel.

The transport secretary said the government had made ‘significant progress’ strengthening its rail franchising programme after it had accepted key recommendations outlined by the Brown Review.

Mr McLoughlin added: “The independent Brown review was clear that franchising is the best way to secure services for passengers. It provided a sensible approach to strengthen a process that has contributed significantly to the success of our railways.

“Since the review was published, the Department has worked hard to implement its recommendations. Good progress has been made and we are on course to deliver a franchising programme that promotes a thriving rail industry and secures the best deal for passengers and taxpayers.“

However, some critics – including the rail unions –  have been less confident about the franchising timetable, following the confirmation of an extension to the c2c franchise which was announced in May with just ten days to spare. And although discussions have been taking place over the First Great Western franchise, so far no agreement has been reached about the terms of a proposed extension which would take the present contract on to 2016. It is known that the Department’s own operating division Directly Operated Railways is standing in the wings and has been applying for Safety Cases as a contingency measure.

First Great Western is only one of a number of franchises about which uncertainty continues, although the government has remained firm about its intention to return the presently state-run East Coast franchise to the private sector in February 2015, three months before the next General Election.

Meanwhile ATOC has published a report which claims that franchising has delivered increasingly good value since the first contracts began in 1996.

It includes a compilation of data carried out by KPMG, which suggests that train operators are now paying four times as much to the state as they were 15 years ago.

Passenger figures have risen dramatically in the same period – from 801 million in 1996 to 1,500 million in 2012-13 – although industry observers are divided about the underlying causes.

ATOC chief executive Michael Roberts said: “The railway has been transformed in the past 20 years. Unprecedented growth in passenger journey numbers is creating a virtuous circle by generating record levels of revenue to pay for better services in turn encouraging greater rail use.

“Government commitment to significant investment in rail and competition among train companies to win and run franchises have driven improvements, as operators are incentivised to attract more passengers and contain costs. Rail franchising is a partnership between the public and private sectors that is delivering for passengers, taxpayers and the country.”

The comparison is complicated by the fact that the track access charges regime has changed as well, with significant amounts of government support now being paid directly to Network Rail. The resulting fall in direct track access charges means that premiums due from operators have been increased – or TOC subsidies reduced.