In what it describes as “a stark warning to train operators across the country,” the government has ordered West Midlands Trains (WMT) to spend an extra £20m on improving services for passengers after badly breaching its performance targets.

The department of transport (DfT) says that passengers across the West Midlands will benefit from the additional funding, which will be invested in delivering timetable improvements and recruiting new train drivers to tackle staff shortages. They will also continue to be offered compensation for poor service with discounts on season tickets and off-peak fares.

The DfT has also made clear that operators should consider this step a warning that poor performance impacting on passengers and the failure to meet contractual obligations will be met with a firm response.

The latest announcement follows hot on the heels of the decision to renationalise the Northern Rail franchise and the performance warning issued to South Western Railway last month, as the government acknowledged the current model of rail privatisation across the country was “struggling to deliver” and that major infrastructure investment is required to tackle the root causes of failing services.

Transport secretary Grant Shapps said: “One of my priorities is getting the trains to run on time, and as a commuter myself I understand all too well the frustration caused by endless delays and cancellations. West Midlands Trains have failed to fulfil their obligations - to their franchise agreement and, most importantly, to their passengers. The action we’re taking means they must invest in rapidly improving services, so that passengers have reliable, punctual trains they can rely on.”

Andy Street, mayor of the West Midlands, said: West Midlands Trains’ performance at the back end of last year was absolutely woeful and it is only right, as I requested, that the firm must pay the price financially. I am also pleased to see this money will be re-invested locally to help restore the reliable service that passengers want and deserve.

“Since I issued my ultimatum in December of improve or lose the franchise, WMT has got better and performance is statistically on the up. But I still have very serious concerns and, alongside the DfT, will be keeping the firm under strict review. I will not hesitate to ask for the franchise to be stripped if performance slips again.”

WMT apologised to passengers for the company’s poor performance, and said the additional £20m investment has been agreed with the DfT as part of a detailed plan to improve services, and goes over and above the company’s original £1bn franchise commitment.

Julian Edwards, managing director of WMT, said: "Our performance in the second half of last year was simply unacceptable and we apologise to all our customers for this. Passengers can be assured we have developed a robust recovery plan which builds on our recent improved reliability.

"We have held detailed discussions with the West Midlands mayor and others to ensure this extra investment, over and above our original £1bn franchise commitment, benefits all our customers and restores the reliable rail service they deserve.

"We are fully focused on achieving this as quickly as possible. Every issue cannot be solved overnight and we thank our customers for their patience while we fix their service."

The West Midlands Trains franchise started on 10 December 2017 and is currently scheduled to run until 2025/26.

The franchise is a joint venture between Abellio (70.1% share) and East Japan Railway Company / Mitsui & Co., Ltd (29.9% share in a 50:50 split). Abellio is the international passenger transport subsidiary of the Dutch national railway company, Nederlandse Spoorwegen. In the UK, Abelllio operates ScotRail and Greater Anglia train services, Merseyrail services in a joint venture with Serco and buses through Abellio London. 

The DfT says it will continue to closely monitor the performance of WMT and ensure they meet their contractual obligations.