We've seen the new Northern and Transpennine Express franchise start with the promise of new trains but cynicism as its announced it'll be a couple of years before they appear. Similar occurred when VTEC took over East Coast where it's business as usual timetable and stock wise.
Therefore should franchises be awarded much earlier before they start, so new trains and improvements like timetable changes can start closer to the start of the franchise? What would be standing in the way of this?
It always seems odd that once all the improvements are in place the franchise is half over, and they only have a couple of years before they invariably lose the franchise again.
You can only have one company operating a franchise at any time. The issue is not about transfer dates, mobilisation periods or such like. The issue is the DfT's requirements and risk transfer. The DfT clearly pays for the key investment in new or improved assets even if the actual procurement / introduction / operation is handled by the TOC. By seeking to transfer the risk around revenues, costs and performance this forces TOCs to spend heavy at the start and to have nothing planned at the end. The impetus is always to get costs under control quickly and get more bums on seats / shove prices up as soon as is allowed by the timing of fare changes. No one is going to put themselves at risk of spending large sums of money in advance of taking on a business - no one would finance that type of deal anyway. You might secure agreement from funders in advance but no money will move until the new company has their hands on the business.
The only way round this "up front" spending and change is to adopt the TfL concession model where the revenue risk sits with the organisation that procures the service. TfL also now control all large scale investment decisions so they can take place at any point in the concession term because the risk doesn't sit with the operator. Clearly in the TfL model the TOC has no incentive to do anything clever with pricing - they just do what TfL says.
The DfT is loathe to move away from risk bearing franchises regardless of whether the nature of specific franchises is such that it would make vastly more sense to do so. If you have burgeoning demand on urban rail networks - be they in London or Manchester or Glasgow or Cardiff - then to my mind it's far more sensible to have a defined programme of investment in capacity and service quality that is divorced from franchise terms. The TOC can be responsible for implementing the work but they wouldn't act as a proxy funder. The funding should come from the DfT or national / regional government directly at a time when it makes most sense even if the works straddle a franchise change. We're seeing that with the Overground right now - station works on West Anglia, new rolling stock on order across a change of operator and major electrification works on Barking - Gospel Oak. Regardless of who had won the new contract their preparations and takeover would have to pick up the reigns of all of these works and their impacts.
I think having a mobilisation period of around 6-7 months is about as fast as anyone can expect for NR franchises. The need to appoint senior staff, prepare all the legal and procurement stuff, effect staff transfers and ensure all the requisite safety and regulatory compliance is in place is no small task and clearly involves some expenditure by the incoming business but it's relatively low risk once there are signatures on the new contract. I suspect the big groups who own the TOCs would be very reluctant to see long lead in times - it costs enough to bid anyway and having to fund a 1 year mobilisation period for no great gain doesn't make sense. If you want to keep funding, cost and revenue risk with the TOCs then I fear you're lumbered with front ended investment.