Legal background
- The Act amends RA93 and, in limited circumstances, modifies the application of certain provisions in the 2023 Regulations. The purpose of the Act is outlined in the policy background section of these Notes. The amendments to RA93 and modified application of the regulatory requirements effected by this Act are outlined in the commentary on provisions of Act section of these Notes.
- Prior to the Act, there was a duty on the Secretary of State, Welsh Ministers and Scottish Ministers as the relevant franchising authorities under RA93 to provide, or secure the provision of, railway passenger services where a franchise agreement delivering such services was terminated or otherwise came to an end, but no further franchise agreement had been entered into in respect of the services. Under section 30(1) of RA93, this duty arises in circumstances where the relevant franchise agreement is terminated for any reason whatsoever, including when it is terminated by the Secretary of State, Welsh Ministers or Scottish Ministers.
- The Act amends section 30(1) of RA93 such that this duty arises simply where a franchise agreement delivering such services is terminated or otherwise comes to an end. A new section 30(1A) of RA93 provides that the Secretary of State, Welsh Ministers and Scottish Ministers may secure the provision of services for the purposes of fulfilling this duty only by making a direct award of a public service contract to a public sector company in accordance with regulation 17 of the 2023 Regulations. They are prohibited from entering into agreements with private sector franchisees under a new section 25A of RA93.
- However, in a new in section 30A(2) of RA93, the Act provides an exception to the duty in section 30(1) where the Secretary of State is satisfied that it will not be reasonably practicable to provide, or secure the provision of, the franchised services under section 30(1) by making a direct award to a public sector company. In this case, the Secretary of State may extend an existing franchising agreement or enter into a new franchise agreement.
- The power to enter into a new franchise agreement is limited in a new section 30A(3) of RA93 such that the franchisee in relation to the new agreement must be the same person as in the existing agreement, and the term in the new agreement must begin immediately after the term of the existing agreement. Section 30A does not apply to services in respect of which Scottish Ministers and Welsh Ministers are the appropriate franchising authority as there are no current Scottish or Welsh franchise agreements with private sector franchisees.
- The result of the Act is that there is now a presumption in favour of public sector companies providing railway passenger services when existing franchise agreements are terminated or come to an end, with private sector operators only engaged should the Secretary of State be satisfied that it will not be reasonably practicable to provide, or secure the provision of, the franchised services under section 30(1) of RA93 when the existing agreement comes to an end.
