Railways: Franchises

(asked on 4th September 2019) - View Source

Question to the Department for Transport:

To ask the Secretary of State for Transport, what inflationary measure his Department has specified in the new (a) East Midlands Trains and (b) West Coast Partnership franchises for the duration of those contracts.


Answered by
Chris Heaton-Harris Portrait
Chris Heaton-Harris
Secretary of State for Northern Ireland
This question was answered on 9th September 2019

The Retail Prices Index (RPI) inflationary measure has been used for Annual Franchise Payments in both East Midlands Railway and West Coast Partnership franchises. This follows well-established rail industry practice which uses the RPI as the basis for franchise payment indexation, and for constraining annual increases to regulated passenger fares.

The franchise payment allows for indexation of staff costs by RPI. However, in the last 12 months of the franchise the Average Weekly Earnings (AWE) measure maybe used where a variation is proposed to the franchise employees’ terms and conditions.

The contracts also recognise that certain Network Rail charges are indexed by the Consumer Prices Index in Control Period 6.

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