Progress against the programme schedule

1.14 The Brown review recommended that the Department should limit the number of franchises it awards in any one year and provide operators with a clear programme of competitions to allow them to plan effectively. The Department's previous approach was characterised by peaks and troughs of demand. A programme in which franchise competitions are staggered also helps the Department to manage its resources. The Department has published such a programme, which it updates periodically to reflect delays, changes or risks. This has been well received by operators and has helped to build confidence in the programme.

1.15 In order to establish the staggered programme schedule, the Department decided to issue a series of direct awards (single tender actions) of varying duration to incumbent operating companies. This avoided having to run more franchise competitions at one time than the market or the Department could manage. The Department's management of direct awards is discussed in more detail in Part Two of this report.

1.16 The Department reviews and adjusts its programme schedule periodically. The main adjustments it has made to the programme so far have been to:

•  delay the TransPennine Express and Northern franchise competitions by two months from December 2014 to February 2015;

•  bring forward the start of the competition for the South Western franchise by two years from September 2017 to November 2015;

•  put back the competition for the Great Western franchise for at least three and a half years;

•  put back the start of the InterCity West Coast competition by a total of 10 months from August 2015 to June 2016; and

•  put back the competition for the East Midlands franchise by four months from March 2016 to July 2016.

1.17 The specific causes and consequences of these adjustments are discussed in more detail in Part Four of this report, which looks at the Department's management of programme interdependencies. Figure 3 shows the current programme schedule.

1.18 As a result of these changes the Department is now planning to begin the South Western, InterCity West Coast, West Midlands and East Midlands franchise competitions during an eight month period, and to award all four franchises between February and November 2017. This remains in line with the Brown Review, which recommended around three or four franchise awards in any one calendar year. The changes have been communicated early to operators to give them time to plan their resources. However, the schedule for 2016 and 2017 is tight and the Department's resources could be stretched. There is a risk that the Department will receive fewer expressions of interest than it might have, had the schedule remained more staggered.

1.19 The rest of this report examines three key aspects of the Department's programme management:

•  its use of single-tender contracts known as direct awards;

•  its commercial approach to getting value for money from the rail operator market; and

•  its management of interdependencies between franchises and other plans affecting the rail network.