The existing management contracts pre-COVID19 (primarily London Overground and the Thameslink, Southern and Great Northern railway (yes, that's all one company!

The existing management contracts pre-COVID19 (primarily London Overground and the Thameslink, Southern and Great Northern railway (yes, that's all one company!)) _did_ have penalties for late running, partial cancellations, or full cancellations. One can argue whether increasing the fines would lead to better service, or whether it would just increase the cost they bid for the concession to cover those costs, effectively resulting in increased subsidy. There's also the fact that in many cases there's limitations to what the concession can do: the existing ones have had much decided by the body granting the concession (such as rolling stock, thus limiting their ability to procure more reliable rolling stock if needed), and they don't have any control over infrastructure (and e.g. signal failures or flooding).