This article is more than 2 years old

This article is more than 2 years old

The government is considering a full review of how Britain’s railways are run, after a succession of crises in the industry and growing commuter discontent.

The transport secretary, Chris Grayling, has pushed for an overarching inquiry after the collapse of the Virgin Trains East Coast franchise and the recent rail timetabling chaos concerning Northern Rail, Southern and Thameslink services.

According to a report in the Financial Times, Downing Street now backs Grayling’s view. However, sources said that no firm decision had been taken and there was some opposition to the idea.

Labour’s leader, Jeremy Corbyn, has stepped up his party’s campaign to overhaul rail franchising, with nationalisation popular among voters, and Conservatives believe they need a strong response but fear further antagonising commuters angered by poor services and rising fares.

Grayling wants to restate the case for privatised rail, and is drawing up plans for a new East Coast Partnership to run trains and infrastructure on the London-to-Aberdeen mainline, which is now in state hands.

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A Department for Transport spokesperson said: “We are absolutely committed to improving journeys and are always examining ways to improve how the railway serves passengers.”

The shadow transport secretary, Andy McDonald, said: “Long-suffering rail passengers don’t need a review to explain to them that the franchising system is broken beyond repair.”

The news came as Network Rail said it would start the transformation of the national network into a so-called digital railway by upgrading the southern end of the East Coast mainline. A £1.8bn, 30-year, contract to install and maintain the digital system along a 100-mile stretch of the line was to be awarded in the spring.

The digital railway is intended to enhance track capacity with new computerised signalling, allowing trains to run closer together safely, guided automatically to their optimum speeds.

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Network Rail said the investment would start on the southern section of the line, which runs from London to Scotland, as that had the highest concentration of new trains compatible with the system. The existing infrastructure was due for renewal.

The digital signalling system has already been implemented in the core of the Thameslink route through London and in TfL rail trains to Heathrow, but this will be the first inter-city route.

The line as far north as Peterborough, starting with the branch into London Moorgate, could be transformed as early as 2024 under Network Rail’s plans, with a section running up to Doncaster following by 2029. Trains could potentially run faster along sections of the mainline, at speeds of up to 140mph.

Toufic Machnouk, the route programme director at Network Rail, said the work would be “a huge catalyst for change” throughout the system, and would transform how rail was run. He said it would be a fundamentally different approach, with long contracts that would “create a marriage between technology providers and operators of the railway” to ensure value for money.

Network Rail has had huge cost overruns on recent rail upgrades, and its borrowing is now constrained.