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Is the UK rail network next to be nationalised?

There are serious concerns in the UK rail transport sector that the government's insistence regarding the pricing formula for franchises around the country will see many operators pushed towards the financial abyss. As we covered in one of our recent posts, the formula is linked to inflation and if inflation turns negative then we will see train operators forced to reduce their prices at a time when income is paramount and businesses are struggling.

The UK government seems intent on ensuring that each and every franchise across the country does not receive any more taxpayer funding and is obliged to follow the original pricing agreement passed in 2007. When we see the likes of National Express suggesting that it will cut back on some train services and call a halt to its loss-making catering service, we know that the system is just not working and train operators are under severe pressure. There is even a suggestion in the city that many of the companies awarded franchises back when the network was carved up would actually be better off without their franchises.

Quite how the system would be improved under public ownership remains to be seen as prior to the privatisation of the industry British Rail was seen by many as a complete shambles.

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