So much for competition and letting the market decide then.
We are going back to the days when the SRA micromanaged franchises.
Part of the scenario was the SRA was short of money after railway finances went out of control because of Railtrack's collapse, WCRM, and all the safety work needed (TPWS etc).
So several franchise deals were cut back, including the "no growth" franchises of Northern, ATW etc.
SWT's share of this was to have its upgrade plans cancelled (infrastructure as well as new trains).
That allowed the SRA to divert the last batch of 450s for SWT to Silverlink/LM (as 350s), to avoid having to buy another fleet of new trains for the WCML.
The DfT was severely criticised by the CMA for "fixing" the rolling stock market, so they have decided to let the TOCs get on with it, except for mega-procurements like IEP, Thameslink and HS2 stock to come.
Meanwhile TfL (LO, Crossrail) and Transport Scotland, also Merseyrail, still do their own procurement separate from the local TOC, who simply run the trains.