Roger Freeman, public transport minister, has admitted for the first time that, after privatisation, operators will be free to vary the level of off-peak services when they take over from British Rail next year. They could be 'flexible', he said. Where little use was made of services, he said, it would be unreasonable to stipulate that they should remain 'hard and fast'.
John MacGregor, the Secretary of State for Transport, had previously said that service levels would be maintained after privatisation.
Brian Wilson, the Opposition transport spokesman, said the revelation gave a licence to 'dispose of a great many services which it was assumed would be part of the franchisee's inheritance'.
Mr Freeman's admission - in a late-night session of the parliamentary committee considering the Railway Bill - came as it emerged that Department of Transport officials made a detailed and devastating critique of the franchising system as long ago as 1985.
The officials, in the economics department, were criticising plans for bus deregulation. But BR's privatisation is modelled on the system which the report rejects. The document, obtained by the Independent on Sunday, said that franchising 'appears to offer the benefits of competition without the effort of its actual practice. However, experience shows that much of this promise is illusory.'
It warned that fares were likely to rise. Costs were likely to turn out higher than expected and the franchisee would then ask for the contract to be renegotiated. The franchising director would be left with the problem of whether to allow this or to risk 'either the disruption or suspension of the franchise or a full renegotiation of the details of the service provision, which would be both time- consuming and contentious'.
The report undermines government assurances that franchisees can be kept to the terms of their contracts. It said: 'Litigation, even if successful, involves delays and expenses and the significant transition costs of rebidding and a new appointment.'
If operators failed to run services properly, the report said, it would be difficult to remove them because those responsible 'are not going to be thanked for obtaining the best bargain only after inflicting on many the discomfort of a disruption in services'.
The report suggested that comparing the quality of different bids to operate services would be difficult; 'practicality' would allow serious consideration to be given to only a few potential franchisees. The process, the report said, 'amounts to a substantial bureaucratic and regulatory task'.
As a result of the report, franchising was rejected as a way of providing subsidised bus services after deregulation in 1986.Reuse content