Operator of last resort explained
An operator of last resort is a business in the United Kingdom that operates a railway franchise, on behalf of the government, when a train operating company (TOC) is no longer able to do so, and are nationalised on an interim basis. Since the last appointment in June 2023, there are now six such operators of seven rail services in England, Wales and Scotland. In December 2024, following new legislation in November, it was announced that the first of the remaining contracted TOCs would be taken back into public ownership in May 2025.
Purpose
Under the Railways Act 1993, which privatised passenger operations in the United Kingdom, the government is required to maintain continuity of passenger rail services if a franchise is terminated. In some instances, the government has been able to negotiate for the existing franchisee to continue to operate the franchise on a management contract until it can be relet, as happened when GNER defaulted on the InterCity East Coast franchise in 2007.[1]
Should this not be possible, the Department for Transport (DfT) in England (through DfT OLR Holdings), or the Scottish Government (through Scottish Rail Holdings) for the ScotRail franchise in Scotland, and the Welsh Government for the Wales & Borders franchise in Wales, is required to step in as the operator of last resort.
Structure
In July 2009, the DfT established Directly Operated Railways (DOR) as its operator of last resort for England.[2] In November 2015, the DfT wound up DOR and appointed a partnership of Arup Group, Ernst & Young and SNC-Lavalin Rail & Transit.[3]
Utilisation
Since privatisation in the mid-1990s there have been nine occasions when an operator of last resort has been appointed., one franchise area is planned to be taken back into public ownership under the operator of last resort.
Current
Future
- South Western franchise area in December 2024, as part of the Starmer ministry's plans to re-nationalise passenger railways in Great Britain, the government announced that when South Western Railway's contract expires in May 2025, the service would be taken back into public ownership under the operator of last resort.[12] The South Western area will be the first under legislation approved in November 2024.[12]
Past
Notes and References
- East Coast to be re-franchised . January 2007 . . 6.
- Web site: About DOR . 2009 . Directly Operated Railways . dead . https://web.archive.org/web/20101027065002/http://www.directlyoperatedrailways.co.uk/html/about-DOR.php . 27 October 2010.
- News: Government accused of 'contracting out' emergency train franchises to private firms . https://ghostarchive.org/archive/20220524/https://www.independent.co.uk/news/business/news/government-accused-of-contracting-out-emergency-train-franchises-to-private-firms-a6818436.html . 24 May 2022 . subscription . live . Mark . Leftly . 18 January 2016 . The Independent.
- Web site: East Coast train line to be put into public control . 16 May 2018 . BBC News.
- Web site: Troubled rail firm Northern brought under government control . 29 January 2020 . BBC News.
- Welsh Government takes control of franchise . November 2020 . . 1436 . 6.
- Web site: Southeastern: Government takes over services after serious breach . 28 September 2021 . BBC News.
- News: ScotRail goes back into public ownership. . 1 April 2022 . 1 April 2022 .
- Web site: Transpennine Express to be brought into operator of last resort . 2023-05-11 . GOV.UK . en.
- News: 2023-05-11 . TransPennine Express loses contract over poor service . en-GB . BBC News . 2023-05-11.
- Web site: 2023-06-23 . Serco bids a fond farewell to the Caledonian Sleeper . 2023-06-25 . RailBusinessDaily . en-US.
- News: South Western Railway to be renationalised by Labour . BBC News . Tom . Espiner . 3 December 2024 . 3 December 2024.
- Connex sacked from South-east franchise . September 2003 . The Railway Magazine . 1229 . 10.
- Web site: East Coast rail change confirmed . 5 November 2009 . BBC News.