We are never going to have system free of government interference for the simply reason that significant state subsidy will always be re
We've got fairly close to the day to day running of the railway being subsidy free a could of times. The large account of subsidy is mostly down to the enhancements being made to the network (which isn't too dissimilar to the road building which happens).
If there was less state interference (with the state accepting that they would have to fund, say, up to £300 million a year for the day to day running) then chances are that they wouldn't actually have to put in that much money as the companies would look at what they could do to limit their late payments (such as fewer longer trains and/or running less frequent direct services but more frequent connecting services and/or funding small infrastructure changes to remove problems from the network).
They would also look at things like, could we fund up to 10 miles of electrification to bring a new town onto the rail network which otherwise could mostly not need any extra rolling stock (services may get turned back early during disruption).
There's lots which could be done, but the problem is that the franchise system isn't flexible enough as it's too controlled by the government. Nationalising it would likely make this worse not better.
There would still need to be a need for payments to be made from "profitable" sections of the network to fund other sections, however if a good service was provided (i.e. not short trains, not infrequent trains, few strikes, etc.) then chances are the profitable via would be more profitable and the bits that need subsidies would need less subsidy.
I think that there should be a baseline service with franchises won or lost on the quality of the extra bits that they would add. Whilst there would be a need for an estimate of "earnings" for the DfT, this would only make up part of the choice and if the extra bits did better than expected then the extra profits would be split between the DfT and the company.
If suggest that the split would favour the company to begin with but as the profits increased the split shifted more towards the DfT.
As an example of a company was expected to earn £100 million of profits (with an agreed split of that amount) then anything extra could be split as follows:
- the first £15 million would be 75:25 to the company
- the next £35 million would be 50:50
- the next £50 million being 25:75 to the DfT
- anything over £100 million of extra income would be 15:85 to the DfT
Obviously it would be in the company's interest to keep on making more money, even though they'll have less incentive the more money that they make. Whilst they would probably limit the amount of work that they did to try and earn more than a certain amount they aren't going to go out of their way to not earn anything extra.
There should also be measures to withdraw things so long as the company could justify that they were making the service better overall.
For instance, taking an example from GWR, removing through trains to London from the Henley Branch but providing more longer trains on the mainline and increasing the frequency on the branch line. In doing so the risk of a long delay due to a missed connection is reduced but any losses from any reduction in through travel is offset by the fact that train services are more reliable and more frequent.
If your delay from missing the "perfect" connection is 15 minutes then of is an hour long journey it's not going to be that big a deal, especially if you have a choice of more trains to get to that connection point.
As an example you need to be at work at 9am it takes an hour and the train is direct, however there's only one train an hour and it gets you to work for 8:30, the next service didn't get you to work until 9:30. There's then a time table change which requires a change of trains, you know have the choice of the 7:30 train which gets you there at 8:40 or the 7:45 which gets you there at 8:55 and a train at 8:00 which gets you to work at 9:10.
You can then aim to get the 7:45, safe in the knowledge that if your 10 minutes late a few times then so be it. However since will still aim for the 7:30 knowing that things could go quite wrong and you'll still only be 10 minutes late. Compare this with the original 7:30 train where of it was cancelled you'll be 30 minutes late. (Yes I know it's unlikely to go from hourly to every 15 minutes, but it would be the same whatever the increase in frequency was, although the benefits are less pronounced).
You may even find that if there was a problem on the branch line that you could fairly easily get to the main line by getting a lift with someone else or a fairly short taxi trip.
However that's only part of the story, as the branch line is self contained anyone heading to the junction town would find that they were less prone to delays further away. As such the local passenger numbers would also likely increase.
