Labour's public option for railways 'will cost £85m to establish'

 

Labour’s plans to allow a public sector train operator to challenge rail companies in franchise bids could cost the taxpayer more than £85m to put into effect according to Treasury officials.

The analysis released today from Whitehall does not look at whether a public or private sector train operation will generate a better return to government, but at the costs of putting the policy in place – estimated to be £85.45m.

Potential Labour candidate for the London mayoral election and rail expert, Christian Wolmar, described the figures as 'nonsense' and accused the Conservatives of overstepping the line and wasting public money by asking the Treasury to work on the analysis.

'This is just playing with numbers, the parameters can vary so much it all becomes nonsense. The Conservatives set the questions to Whitehall and are trying to put a precise figure on something that has not happened. This looks like a misuse of public money,' he told Transport Network.

'Also if the public option does win even one contract it will save a lot more than these costs,' Mr Wolmar said. 

The costs of establishing the Labour policy could be off-set by any surplus generated from operating the railway services. The publicly-owned East Coast Main Line operator has returned more than £1bn to the Treasury over the past five years although the franchise will return to private sector hands this March.

The largest initial expense of Labour's policy would be the actual bidding process for rail franchises –the costs of preparing bids for both the pre-qualification and invitation to tender (ITT) stages.

'Based on recent competitions, and the scale of bid costs incurred for the West Coast franchise, the pre-qualification stage is expected to cost £1m per bid and the ITT stage around £10m per bid,’ the analysis states.

This means that if a public body bids for all six franchises let over the next five years and is successful in pre-qualifying for all, the costs would be more than £66m.

Treasury officials suggest the costs of maintaining a public sector holding company to bid for franchises would reach about £2m a year over five years - based on the current annual cost of Directly Operated Railways which is the public holding company for the East Coast franchise and costs around £1m a year.

A body bidding for many different contracts across the full five years could incur additional costs of another £1m a year Treasury officials suggest.

With the Northern and TransPennine Express Franchises due to be awarded over the summer of 2015 these would likely have to be cancelled, meaning the procurements for these franchises would have to begin again to enable a public sector body to bid.

A cost of £8m is assumed for each competition to conduct that procurement development work again.

Around £1.3m is assumed for the extra work needed to ensure a fair and transparent evaluation process under the circumstances and finally £150,000 would be needed in legal and policy resources to make the necessary legislative changes.

 
comments powered by Disqus
 
 
highways jobs

Highways Estimator

Ringway
Competitive Salary
As the Highways Estimator you will join a busy environment and become an integral part of the team. Hounslow (London Borough), London (Greater)
Recuriter: Ringway

County Highways Manager

Lincolnshire County Council
£55,503 - £60,578
Seeking a highly motivated leader and an excellent communicator, who has a proven ability to build relationships and trust, leading by example. Lincolnshire
Recuriter: Lincolnshire County Council

Local Highways Manager (East) - Lincolnshire County Council

Lincolnshire County Council
G12 £43,662 - £50,430
Seeking someone who combines excellent technical knowledge with a dedication to the customer. Lincolnshire
Recuriter: Lincolnshire County Council

Assistant Director (Planning, Regeneration & Transport)

Rotherham Metropolitan Borough Council
£87,791 per annum  
This is an exciting time to join Rotherham and make a real difference. We are looking for an outstanding Assistant Director who will bring... Rotherham, South Yorkshire
Recuriter: Rotherham Metropolitan Borough Council

Corporate Director

Islington London Borough Council
Up to £135k
You will share our values and be passionate about helping us shape the Islington of the future. Islington, London (Greater)
Recuriter: Islington London Borough Council

Assistant Engineer

Cambridgeshire County Council
£21,074 - £30,756
Looking for strong team players interested in working with a variety of professional and community partners across Cambridgeshire. Cambridgeshire
Recuriter: Cambridgeshire County Council

Junior Energy Manager Apprentice

Brent Council
£15,000 p.a. inc.
The right person for this job will be pro-active and innovative in finding a way forward. Wembley, London (Greater)
Recuriter: Brent Council

Career Grade Drainage Engineer

Swindon Borough Council
£19,092 to £40,680 p.a
Working in the asset management team, you’ll support the work of the Lead Local Flood Authority (LLFA) and Highways Authority. Swindon, Wiltshire
Recuriter: Swindon Borough Council

Highway Construction Project Manager

Brent Council
£50,442 - £53,526 p.a. inc.
We are looking for an accomplished highway construction project manager to support the delivery of two high priority highway schemes. Brent, London (Greater)
Recuriter: Brent Council

Traffic Signals & UTMC Manager

Bristol City Council
£42,683 - £45,591
Looking for someone with proven management experience, enthusiasm, creativity, vision and good communication skills. City of Bristol
Recuriter: Bristol City Council

Principal Highways Project Engineer

Knowsley Metropolitan Borough Council
£34,106 - £35,229 per annum
The post holder will be responsible for project managing the delivery of two highway projects on the Key Route Network. Knowsley (Metropolitan borough), Merseyside
Recuriter: Knowsley Metropolitan Borough Council

Traffic Schemes Officer

Oxfordshire County Council
£22,021 - £29,636 per annum
An exciting opportunity has arisen to play a central role with the Traffic Team in the maintenance of the highway network... Kidlington, Oxfordshire
Recuriter: Oxfordshire County Council

Traffic Engineer

Telford & Wrekin Council
£29,055 to £30,756
This is an exciting opportunity to join Telford & Wrekin Council’s Traffic Management Team! Telford, Shropshire
Recuriter: Telford & Wrekin Council

Assistant Engineer – Traffic Regulation

Telford & Wrekin Council
£23,866 to £25,463
This is an exciting opportunity to join Telford & Wrekin Council’s Traffic Management Team. Telford, Shropshire
Recuriter: Telford & Wrekin Council

Environment Officer

Kirklees Metropolitan Council
£29,909 – £32,233 Grade 11 - £33,136 - £35,229
All Environment Officers lead, project manage and/or co-ordinate large environmental projects... Huddersfield, West Yorkshire
Recuriter: Kirklees Metropolitan Council

Highways Quantity Surveyor

Leicester City Council
£30,756 - £33,136 pro-rata per annum
Working in the Highways Maintenance Group, you will be responsible for the operational highway maintenance activities Leicester, Leicestershire
Recuriter: Leicester City Council

Highways Engineer/Inspector

Royal Borough of Greenwich
£22956 - £32637 per annum
Highways Engineer/Inspector - PermanentThere are plenty of reasons to take a closer look at Royal Greenwich.Royal Greenwich is undergoing a huge trans England, London, Woolwich
Recuriter: Royal Borough of Greenwich

Engineer - Bridges

Cambridgeshire County Council
£32,825 - £35,401
We have a vacancy for a Structures Engineer working within the Bridge’s team! Cambridgeshire
Recuriter: Cambridgeshire County Council

Engineer

Cambridgeshire County Council
£32,825 - £35,401
You will be required to lead the delivery of a wide range of highway improvements and maintenance projects... Cambridgeshire
Recuriter: Cambridgeshire County Council

Assistant Director, Highways Operations

Hertfordshire County Council
Competitive Salary
Ensuring the transport infrastructure reflects the pace of our developments and growth agenda... Hertford, Hertfordshire
Recuriter: Hertfordshire County Council