In an announcement to the House of Commons on Monday, Transport Secretary Chris Grayling said that the Stagecoach/Virgin East Coast trains franchise would be ending far earlier than originally expected. Back in November, Mr Grayling had said that the franchise would be ending three years early, in 2020, however he has now said that they will only be running the line for “a small number of months and no more”. The explanation given was that “Stagecoach got its numbers wrong”, meaning that the situation was now “much more urgent” and that new arrangements were needed “in the very near future”.
The Transport Secretary has said that no decision has yet been made on who will run the line for the next two years, although he has outlined two clear options. The first is that Stagecoach could continue to operate trains on what he called a “short-term, not-for-profit” basis. The alternative option would be that the East Coast franchise would be “directly operated by the Department for Transport through an Operator of Last Resort”, effectively renationalising the line. This would be the second time in 10 years that the line would be run by the Department for Transport, after National Express were relieved of their contract back in 2009. Mr Grayling has ruled out any long-term renationalisation.
At the same time as announcing Stagecoach’s failure on the East Coast line, Mr Grayling also took the opportunity to announce another joint venture between Stagecoach and Virgin had won an extension to operate the West Coast Mainline rail service. He made clear that “West Coast franchise has a completely different corporate structure” to the East Coast line. The decision has come under heavy criticism politicians and stakeholders alike.
The timing of the announcement coincides with the collapse of Carillion, which has faced accusations that it underbid for Government projects. At the weekend former deputy Prime Minister John Prescott penned an article in The Mirror, in which he links the East Coast collapse and that of Carillion to make the case for mutualising train franchises. It was also announced this week that Network Rail chief executive, Mark Carne, has announced his resignation. This came a month after The Telegraph suggested that the Government wanted him to step down, following frustration at the “slow pace of change” and criticism of his £820,000 pay package.
Also in the news is Government investment in buses. In November 2016 the Department for Transport announced a further £100 million to support low emission buses. Of this, £40m was put towards the Clean Bus Technology Fund, and £60m was dedicated to new low emission buses. At the UK Bus Summit at London’s QEII Centre on 8 February, buses minister Nusrat Ghani set out how £20m of this will be invested. The money has been set aside to enable older vehicles to meet minimum emissions standards “and contribute to better air quality”. Transport for London and Transport for Greater Manchester will both receive £1.5m.