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Railways: Public Service Obligations

Question for Department for Transport

UIN 118173, tabled on 7 December 2017

To ask the Secretary of State for Transport, when his Department plans to publish its response to the passenger rail public service obligation levy consultation, which closed on 21 April 2017.

Answered on

12 December 2017

As the Secretary of State for Transport set in his November 2017 document A Strategic Vision for Rail, through the use of the Department’s franchising powers public procurement through competition will continue to be our central policy for train service operations, reflecting the significant benefits it has brought for passengers.

However, whilst it is for individual operators to consider potential applications, we have made clear that we welcome new open access applications where these do not significantly impact on affordability or the value for money from public investment in the rail network, and where they complement franchised services. Ultimately these applications are for the Office of Rail and Road (ORR) to determine and government has no contractual relationship with open access operators.

As the Competition and Markets Authority made clear, a pre-condition for greater open access under their preferred Option 1 is that open access makes an appropriate contribution towards the costs of the railway. We are taking forward consideration of this option, both through working with the ORR on charging reform and the public service obligation (PSO) levy. We are therefore pleased that the ORR is taking forward reforms to the track access charging framework as part of its Periodic Review 2018 process.

We are considering the responses to the public service obligation levy consultation, and will continue discussions with the ORR on the potential links between charging reform and the PSO proposals. We intend to our response early next year.