A bit of history here.
The first franchise holder post privatization was a company called GNER. I think they belonged directly or indirectly to Sea Containers, the same people who at that time ran the Orient Express.
GNER went in with a lot of good ideas and was clearly priming to grow business. They did some good marketing. They upgraded the trains. They added services. And it worked. Passenger numbers grew and grew and GNER was held up as example of the way trains should be run.
The problem was that the contract saw a transition from governmnet subsidy in the first years to break even and then to a negative subsidy. In other words GNER had to pay the government every year. And the sum grew year by year.
So the first couple of years they did extremely well, and a lot of the surplus did not go into the pockets of shareholders by the way, but was invested back into the service. They added extra cars to make the trains longer. They added extra trains.
But as the surplus got thinner and thinner, they lost the muscle to do that.Corners had to be cut. At the same time the people who owned the franchise grew impatient. They saw the business case becoming less attarctive. Finally they bailed and gave it back to the government.
Then Virgin was brought in. And the same hapapned again only much quicker.