The proposals provide for franchises to run for 15 years as standard, so long as performance levels are maintained.
The reforms will also set tough requirements for train operators to deliver on passenger satisfaction. Operators could face being stripped of their contracts if they fail to meet those requirements.
Villiers said: ’The existing franchise system is too complicated, with too much micromanagement from Whitehall. We need a system that sets the private-sector operators tough requirements on passenger outcomes and satisfaction, but gives them more scope for enterprise and innovation in working out the best way to deliver them.’
A review of the industry by Sir Roy McNulty is currently studying ways of reducing the long-term cost of the industry to taxpayers and fare payers.
’His preliminary work will be delivered in September and will feed into our further thinking on franchise reform. We are clear that, if the railways are to be made more efficient and cost effective, early changes to the franchising system are essential,’ added Villiers.
The proposals were set out in a public consultation that seeks views from across the rail industry, passengers and the general public on the government’s approach to rail franchising and the benefits that longer franchises and increased private-sector investment in the railways would offer.
The UK Department for Transport will publish its conclusions towards the end of the year and will begin re-letting franchises under a new model soon after.