Commentary on provisions of Act
Section 1: Prohibition on franchise extensions and new franchises
- Subsection (2) removes sections 25 to 26ZA of RA93 and introduces a new section 25A. This new section prohibits appropriate franchising authorities from extending existing franchise agreements or entering into new franchise agreements.
- The only exception is that, where the Secretary of State is the appropriate franchising authority, the Secretary of State may extend an existing franchise agreement or directly award a new franchise agreement to an existing franchisee under section 30A of RA93 where satisfied that it will not be reasonably practicable to provide, or secure the provision of, railway passenger services under s30(1) of RA93 by way of awarding a contract to a public sector company. This power may only be exercised in accordance with section 30B of RA93. These sections are discussed in more detail in paragraphs 21 to 26 below.
- Subsection (3) amends section 23 of RA93 to provide a duty for the appropriate designating authority to designate such railway passenger services it considers "ought to be provided under section 30 to section 30C." The amendment replaces the previous duty to designate such services as ones which "ought to be provided under franchise agreements". It removes the presumption that such services will be provided by private sector franchisees and creates the new presumption that they will be provided by public sector companies. Services previously designated under section 23(1) of RA93 are treated as services designated under the section as amended.
Section 2: Future provision of services
- Subsection (2)(a) amends section 30(1) of RA93 such that the Secretary of State, Welsh Ministers and Scottish Ministers (as the relevant franchising authorities) have a duty to provide or secure the provision of railway passenger services where a franchise agreement in respect of the services is terminated or otherwise comes to an end.
- Subsection (2)(b) inserts a new section 30(1A) of RA93 which provides that the relevant franchising authority may fulfil the duty to provide, or secure the provision of, railway passenger services only by making a direct award of a public service contract to a public sector company in accordance with regulation 17 of the 2023 Regulations. New section 30(1B) of RA93 disapplies the obligation under regulation 22 of the 2023 Regulations (for the competent authority to publish notice of a direct award at least 12 months in advance) in these circumstances.
- Subsection (2)(b) also inserts a new section 30(1C) of RA93 which provides that the duty in section 30(1) does not apply in respect of services being provided under the new section 30A.
- Subsection (3) inserts new sections 30A to 30C of RA93. Section 30A of RA93 introduces a new, narrower power for the Secretary of State to extend existing franchise agreements or make direct awards to incumbent private sector operators to ensure continuity of passenger services only where satisfied that it will not be reasonably practicable to provide, or secure the provision of, the relevant services under section 30(1).
- Direct awards made under section 30A are exempted from the 12-month notice requirement which would otherwise apply under regulation 22 of the 2023 Regulations, and the contract duration is limited to a maximum of 2 years by virtue of regulation 9(1)(b) of the 2023 Regulations.
- The section 30A power is not exercisable by the Welsh Ministers or the Scottish Ministers as it is only relevant to services for which the Secretary of State is the appropriate franchising authority (these being the only services which are currently operated under franchise agreements with private sector operators).
- Limitations in section 30A on the power to enter into a new franchise agreement include that the Secretary of State may only do so where the term in the new agreement begins immediately after the term of the existing agreement and the franchisee in the new agreement is the same person as the franchisee in the existing agreement. Section 30B provides that the power to extend or enter into a new franchise agreement must be exercised by means of formal agreement to extend, or by making a direct award of a public service contract, in accordance with regulation 16 of the 2023 Regulations. For the purposes of section 30B, the Secretary of State is to be treated as entitled to take emergency measures under regulation 16 regardless of whether the requirements in regulation 16(1) (that there is a disruption of services or immediate threat of the same) are met.
- The Secretary of State is empowered, under section 30A(4) of RA93 to repeal sections 30A and 30B by regulations. The Secretary of State has no intention of exercising this power to repeal sections 30A and 30B until all the existing private sector franchise agreements have come to an end.
- Section 30C of RA93 provides the definition of "public sector company" for the purposes of sections 30 to 30B. The definition covers companies which are: wholly owned by the Secretary of State, the Welsh Ministers or the Scottish Ministers; jointly owned by the Secretary of State and the Welsh Ministers; jointly owned by the Secretary of State and the Scottish Minister; and wholly owned subsidiaries of the same (by virtue of the definition in section 58 of the Railways Act 2005).
Section 3: Application of public sector equality duty
- Section 3 amends Schedule 19 to the Equality Act 2010 ("EA10") by inserting into it, "a public sector company providing services for the carriage of passengers by railway under a public sector contract awarded under section 30 of the Railways Act 1993". Schedule 19 lists persons who are considered public authorities for the purpose of section 149(1) of EA10 (the public sector equality duty).
- This duty requires public authorities, in the exercise of their functions, to have due regard to the need to (a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under EA10, (b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it, and (c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it. The protected characteristics include age, disability gender reassignment, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.
- Although it is the Government’s view that the public sector equality duty already applies to publicly owned train operating companies by virtue of section 149(2) of EA10, the effect of section 3 is that it makes the application as clear as possible.
Section 4: Consequential Provision
- Subsections (2) to (7) concern consequential amendments made by regulations. The Secretary of State may, by regulations, make provision that is consequential on the Act. Regulations must be made by statutory instrument. Where such regulations amend primary legislation, they are subject to the affirmative procedure. In all other cases, they are subject to the negative procedure.
Section 5: Extent, commencement and short title
- The Act extends to England and Wales and Scotland and comes into force on the day it is passed.
Schedule: Consequential amendments
- The concept of franchising is referenced throughout RA93. As the Act implements a shift away from private sector franchising, towards operation of designated railway passenger services by public sector companies, the Schedule includes amendments to RA93 consequential on the Act.
