Abstract
Centro (The West Midlands Passenger Transport Executive) specifies and subsidises local rail services in the West Midlands Metropolitan Area. Centro has been concerned for many years that the Section 20 agreement with British Rail (Regional Railways Central for providing rail services) was simply based on cost recovery and offered no incentive to BR to offer a quality of service for the financial support given. Following discussion at national level, it was agreed to develop a Rewards and Penalties scheme in order to try and incentivise good performance. A scheme was jointly developed which offered rewards for performance above the agreed target and gave penalties for poor performance below target.