DISCLAIMER: articles in the blog section represent the views of the poster only and not the Save East Coast Rewards campaign as a whole
Wrapped up in todays announcement about rail investment was the mention that from 2020 the East Coast franchise will become a partnership franchise where the main franchise holder and infrastructure operator (currently Network Rail) will work together as one. As a result of this the current Virgin Trains East Coast franchise will terminate in 2020, rather than 2023 which was the original end date.
This means there's been some negotiation going on, it's no secret that Stagecoach (the 90% partner in the franchise) overbid for the franchise and were making massive losses. This had resulted in massive cutbacks on-board with fewer staff on many trains mostly obtained through a voluntary redundancy scheme. As the number of services that were unable to offer the advertised catering were increasing we called it the catering lottery.
They have realised their mistake (even though they won't publicly admit it) and have now hired some extra people who should all have completed training by December. Hopefully this will mean the catering in future is back to the standards we expect.
So what does this franchise renegotiation mean? We don't know the details yet but presumably it means more affordable payments for Stagecoach, which means less money for the treasury. One of the supposed advantages of the Stagecoach bid was they'd be paying more in premiums to the government than the profitable nationalised East Coast service was making. Now it looks like this will no longer be the case.
The deal was a face saving move - it would look bad for the government if yet another East Coast franchise failed after the nationalised East Coast franchise showed it could be run at a decent profit and it would also be embarrassing for Virgin (who although only own 10% are the company associated with the franchise). We were effectively sold a lie, that privatising the line would increase the amount of money going to the government, in the end it turned out costly.
I care more about the service than the politics though. I'll be happy with this renegotiation if the lower franchise payments means we can have a well run service with no more attempts at cost cutting. Hopefully we're already on the way to restoring the decent on-board service, if this can continue I will be happy. Now the financial pressures are off they need to offer a good service, show what they're capable of and put in a more realistic bid for 2020. If renegotiation is still happening it would also be good to see Nectar removed from the franchise agreement so they have more flexibility in how they can reward passengers.
There's plenty of scope for genuine innovation as long as they get the basics right first. Unfortunately most of the innovations that were visible to the public this year have been disappointing such as the unreliable ticket machines, apps that constantly crash and a website that takes us back to 2007 in terms of features.
Most importantly they also need to restore confidence with the on-board teams. Morale dropped this year and the management now need to get back the respect from their teams.
There's also a possibility that they do the bare minimum for the next two years and just try and make as much money as possible for as little outlay as possible, but let's see what the future brings, it may be positive or disappointing. Whatever happens we need to keep holding them to account.