Contract Re-Award and Consumer Sovereignty, the case of British Rail Privatisation.

Cowie, Jonathan

Abstract

The Railways Act 1993 divided and sold off the state owned British Rail in its entirety and introduced competitive tender into the industry. This paper reviews the industry over the period 2000 to 2015 to determine firstly if TOCs have produced outcomes consistent with stated policy objectives, namely the linking of rewards to performance and increased commercial orientation, and secondly whether this can in part be evidenced in franchise retendering. The perspective taken is through the theorem of consumer sovereignty, which if present should ensure utility maximising consumers are served by efficient, market orientated producers. Cluster analysis is used to identify groupings consistent with the theory, with five clusters identified and broadly described as consumer sovereignty (commercial), consumer sovereignty (subsidised), regional/subsidised, commercially orientated and undefined (cluster 5). The research finds that the number of TOCs performing consistent with consumer sovereignty theorem has considerably risen over the period. As regards contract re-award, whilst ‘the norm’ has been for the incumbent to be replaced in the tendering process, the paper finds limited statistical evidence that market focused TOCs had a significantly higher success rate than non-market focused TOCs.

Citation

Cowie, J. (2017, August). Contract Re-Award and Consumer Sovereignty, the case of British Rail Privatisation. Paper presented at Competition and Ownership in Land Based Public Transport (Thredbo 15), Stockholm

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: Competition and Ownership in Land Based Public Transport (Thredbo 15)
• Start Date: Aug 13, 2017
• End Date: Nov 17, 2017
• Deposit Date: Feb 1, 2018
• Keywords: consumer sovereignty, regulation, market efficiency, rail privatisation; re-award assessment
• Public URL: http://researchrepository.napier.ac.uk/Output/1007621