Govt could re-nationalise East Coast line after £200m loss

 

Ministers are considering taking the struggling East Coast rail franchise back under public control in the next few months after the existing franchise holder ‘got its sums wrong’.

Transport secretary Chris Grayling told MPs that Stagecoach, which is in partnership with Virgin, had lost around £200m running the franchise, which ‘will only be able to continue in its current form for a matter of a very small number of months’.

Stagecoach owns 90% of the franchise, while Virgin has a 10% stake. 

”Local
East Coast services run under the Virgin brand

He said he would need ‘in the very near future’ to end the contract and put in place a successor arrangement.

Mr Grayling said one option ‘currently on the table’ would be for the East Coast franchise to be directly operated by the Department for Transport (DfT) through an Operator of Last Resort.

This option will be selected if it is assessed that it offers a better deal for passengers and taxpayers than the alternative – for Stagecoach to continue to operate services on the East Coast ‘under a very strictly designed and short-term arrangement’, on a not-for-profit basis.

He added: ‘The company cannot be allowed to continue running this franchise and making a profit given what has happened. They got their sums wrong and they will pay the price for that – not the taxpayer.’

Mr Grayling said that either way, the franchise is expected to deliver substantial revenue to the taxpayer and would continue to make premium payments to the Government once the East Coast Partnership is in place from 2020.

He added that DfT officials had found ‘no adequate legal grounds’ to bar Stagecoach from bidding on current and future franchise competitions on this basis and confirmed that the Government had agreed a direct award with Virgin Trains West Coast, to run the West Coast franchise until the West Coast Partnership, which will include HS2 services, is set up.

Mr Grayling stressed that the West Coast franchise ‘has a completely different corporate structure, where Virgin Trains is the majority shareholder’.

Andy McDonald MP, Labour’s shadow transport secretary, repeated Labour’s pledge to take the entire railway network back into public ownership.

‘That Chris Grayling awarded a profitable contract to Virgin and Stagecoach on the West Coast while simultaneously confirming the same companies have collapsed on the East Coast shows Government policy is in chaos,’ he said.

 

Also see

Register now for full access


Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

 
comments powered by Disqus
 
 
highways jobs

Contracts Manager - Core Service

Liverpool City Council
37.849 - 42.683 per year
The successful candidate will manage and maintain Highways partnerships and contractual arrangements to ensure effective, quality and value for... Liverpool, Merseyside
Recuriter: Liverpool City Council

Transport Inspectors – Land & Maritime Security

Department for Transport
£33,990
Looking for Transport Security Inspectors to join our team to focus on direct monitoring and assessing of industry compliance against... London (Greater)
Recuriter: Department for Transport

Lead Engineer [Development]

Knowsley Metropolitan Borough Council
£40,760 - £41,675 per annum
Looking for an exciting new opportunity? Join us in Knowsley’s Major Development Team! Knowsley (Metropolitan borough), Merseyside
Recuriter: Knowsley Metropolitan Borough Council

Principal Engineer [Development]

Knowsley Metropolitan Borough Council
£34,788 - £35,934 per annum
Looking for an exciting new opportunity? Join us in Knowsley’s Major Development Team! Knowsley (Metropolitan borough), Merseyside
Recuriter: Knowsley Metropolitan Borough Council

Project Officer - Air Quality

Camden London Borough Council
£33,122 - £38,423
The successful candidate will ideally have a relevant degree or professional qualification. Camden, London (Greater)
Recuriter: Camden London Borough Council

Arborist

Royal Borough of Greenwich
£24.462 - £25.809
Seeking an experienced Climbing Arborist who has NPTC / LANTRA qualifications in chainsaw use and climbing operation units for an... Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Environmental Enforcement Patrol Officer

Brent Council
£31,548 - £33,291 p.a. inc.
Looking for a person who has experience in undertaking enforcement work, carrying out awareness raising/promotional work.  Wembley, London (Greater)
Recuriter: Brent Council

Traffic Management Operative/Foreman

Balfour Beatty
Competitive
Are you a Traffic Management Operative/Foreman with Highspeed (12AB) Qualifications, looking for a new and exciting opportunity? If so read on..... Leatherhead, Surrey
Recuriter: Balfour Beatty

Principal Economic Growth Officer

Essex County Council
Up to £45,000 per annum
It is an exciting time to be joining the Economic Growth team at Essex County Council. Essex
Recuriter: Essex County Council

Economic Infrastructure Manager

Essex County Council
Up to £57,000 per annum
It is an exciting time to be joining the Economic Growth team at Essex County Council Essex
Recuriter: Essex County Council

Head of Service - Highways

Sheffield City Council
£69,091 - £74,137
Looking for someone dynamic, with vision, energy, and an outward focus who can build strong relationships with all key partners, stakeholders with... Sheffield, South Yorkshire
Recuriter: Sheffield City Council

Senior Transport Officer

Kirklees Metropolitan Council
£33,799 - £35,934
You will be responsible for assisting the Team Manager with the day to day operational management and delivery of the transport service.  Kirklees, West Yorkshire
Recuriter: Kirklees Metropolitan Council

PCN Appeals Officer

Brent Council
£26,745 - £30,711 p.a. inc.
Looking for an experienced parking professional to join the Notice Processing Team. Wembley, London (Greater)
Recuriter: Brent Council

Environmental Protection Officer

London Borough of Sutton & The Royal Borough of Kingston Upon Thames
£25,809 to £33,291 (Grade F-G) / £33,291 to £42,684 (Grade H-I)
As an Environmental Protection Officer, you will be part of a small multidisciplinary team delivering a range of statutory environmental functions... Kingston Upon Thames (City/Town), London (Greater)
Recuriter: London Borough of Sutton & The Royal Borough of Kingston Upon Thames

Environmental Protection Team Manager

Royal Borough of Greenwich
£44.607 - £47.511
We would like to hear from exceptional candidates with broad pollution control experience and a can-do attitude who... Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Highways Gang Leader

Sandwell Metropolitan Borough Council
£24,313 - £28,785 per annum
An exciting opportunity for a Highways Gang Leader has arose based at Taylors Lane, Oldbury. Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Road Agreements Team Leader OCC5803

Oxfordshire County Council
£49,522 - £56,481 per annum
Take the next step in your career - click here to find out more information. Oxford, Oxfordshire
Recuriter: Oxfordshire County Council

Highways and Street Lighting Manager

London Borough of Bromley
Circa £43,000 per annum
Seeking an experienced professional with experience in highway, street lighting and traffic engineering. Bromley (City/Town), London (Greater)
Recuriter: London Borough of Bromley

Principal Transport Planner

Brent Council
£48,492 - £51,450 p.a. inc.
The post holder will play a key role in implementing the Mayor’s Transport Strategy at a borough level through... Wembley, London (Greater)
Recuriter: Brent Council

Traffic Engineer

Telford & Wrekin Council
£29,636 - £31,371 per annum
The post-holder will be supporting the design, management and maintenance of traffic signals, signs, bollards and... Telford, Shropshire
Recuriter: Telford & Wrekin Council