The rail industry has called for a new system that ditches franchising in favour of multiple operators on long-distance routes and devolved commuter networks in major cities.

The Rail Delivery Group, which speaks for train operating companies, Network Rail and HS2, said its plans would provide a “step-change in accountability and customer focus”. Proposals include a new fares system and transferring direct control away from government to a new independent body.

The proposals come in the RDG’s submission to the Williams review, which was commissioned by the transport secretary, Chris Grayling, after the collapse of the East Coast franchise and is expected to make recommendations for reform in the autumn.

A new organising body should be put in charge of the industry, the RDG said, independent of government and able to issue penalties for poor performance by rail companies.

The body would oversee various types of rail operation. The proposal echoes the view of the review chair, the former BA chief executive Keith Williams, that there was no “one-size-fits-all” solution for the rail industry.

The RDG suggests that mass commuter routes for major cities are let as concessions, with control devolved to a local transport body with more direct supervision of contracted rail companies.

Long-distance routes could have more than one company provide services to compete for passengers – a proposal that nods to plans set out last week by Virgin, the operator of the West Coast mainline service.

On other routes, franchising could evolve into what the RDG calls “customer-focused, public service contracts”. These would be based on targets and incentives rather than the detailed specifications contained in current franchises, which operators and Williams have criticised as being too prescriptive and deterring innovation.

The RDG said the ticketing system should have more flexible fares and could include Oyster-style pay-as-you-go fares with a price cap, helping flexible workers who do not benefit from current season tickets.

Paul Plummer, the chief executive of the RDG, said the system would be more focused on customers and responsive to local communities.

The CBI backed the plans as “a necessary break from the status quo”, while the mayor of Greater Manchester, Andy Burnham, also welcomed the proposals.

He said: “The time has come for radical change in the way transport is organised in city regions like Greater Manchester. People here deserve a London-style system which makes public transport more convenient and affordable.”

However, unions decried the RDG visions as pointing to a “new era of wholesale deregulation” and removing political accountability to the taxpayer.

Mick Cash, the general secretary of the RMT union, said it would “give the racketeering train companies an absolute free run to milk the system and the passenger”, adding that the plans were “a version of the broken rail franchising model pumped up on steroids”.