Source · Select Committees · Public Accounts Committee
Recommendation 19
19
We were concerned that the short-term nature of these new contracts could fail to incentivise...
Conclusion
We were concerned that the short-term nature of these new contracts could fail to incentivise operators to make cost savings and improve performance, and asked the Department to explain how operators would be incentivised to keep costs down. The Department said that the annual business planning approach will help identify where cost reductions are needed and that its quarterly reviews will increase the levers available to control costs over the life of the contracts. In addition, the contracts will contain a small fixed element, but the majority of the fee paid to operators will be related to performance, including efficiency.48 The Department said it expects to put details of the new contracts into the public domain.49 Rail network electrification