Ministers today have abrubtly ended rail franchising with rail operators being moved onto more demanding Emergency Recovery Management Agreements (ERMAs), which will also deliver lower profits for their shareholders. Although Island Line services are protected in the short term it is unclear what impact, if any the announcement will have on Island Line in the longer term as the railway industry undergoes fundamental changes.
The new ERMA system is the precursor to far wider reforms of the rail industry that were being drawn up before the pandemic by Keith Williams, the chairman of Royal Mail.
Transport Secretary Grant Shapps said: “The model of privatisation adopted 25 years ago has seen significant rises in passenger numbers, but this pandemic has proven that it is no longer working. It will keep the best elements of the private sector, including competition and investment, that have helped to drive growth, but deliver strategic direction, leadership and accountability.
“Until passenger numbers return, significant taxpayer support will still be needed, including under the transitional contracts announced today. But the reforms will enable substantial medium and longer-term savings for taxpayers.”
A spokesman for the Department of Transport confirmed that an ERMA has been signed with South Western Railways who run Island Line and the transitional agreement will ensure services are protected and continue.
For many years Island Line has needed large public subsidies to run their services and despite the delivery of new trains it is expected they would continue to require considerable levels of taxpaper support.
Bob Seely MP said that the capital investment already announced would remain unchanged. He said: “This announcement is welcome. It provides a clear direction for the future of the UK’s rail network, of which Island Line is an integral part. I have been assured that the current £46 million investment in Island Line is unaffected by either these interim or longer-term changes. The introduction of fully refurbished rolling stock and track improvements will continue, ahead of completion next Spring. And Railway Ryde Pier remains on course to be upgraded.
“In many ways, the Island Line operating model – with the trains and signalling both being run by the operator, which is currently unique to the Isle of Wight – provides a good example of a joined-up approach which could now be applied elsewhere. Once again, the Island is leading the way.”
Mr Seely said he saw no need to seek separate assurances about future subsidies for Island Line as the Government is committed to continuing to support the entirety of the national rail network, including services on the Isle of Wight. He highlighted that he had been working closely with Keep Island Line in the Franchise (KILF) a campaign group set up by former council leader David Pugh and the Isle of Wight Council on the issue.