I wanted to provide an update on the position regarding our contractual discussions with the Department for Transport (DfT) about the future operation of the East Coast rail franchise.
As you will recall, in recent months the Government has been conducting a detailed appraisal of two options for the future of the East Coast franchise to ensure continuity of service until the start of the planned East Coast Partnership on the route from 2020.
The options were either a "short-term, not-for-profit" Direct Award franchise to Stagecoach-Virgin or direct operation of the route by the Department for Transport through its “Operator of Last Resort”.
I’m disappointed that Transport Secretary, Chris Grayling, confirmed in the House of Commons today that the Department for Transport has chosen not to proceed with our proposals.
I firmly believe our plans offered a positive, value-for-money way forward for passengers, taxpayers and local communities. The team at Virgin Trains East Coast were best placed to continue the exciting transformation already underway on East Coast and would have ensured a smooth transition to the Government’s new East Coast Partnership.
As I’ve said before, East Coast is a well-run, profitable railway. A variety of external factors have meant the original franchise did not turn out as envisaged, but we have met or exceeded all of our commitments to customers since taking over the East Coast line in 2015.
Most importantly, we have never lost sight of our focus on customers, achieving industry leading passenger satisfaction. We’ve also delivered more passengers, increased investment, and 30 per cent higher payments to the taxpayer than when the East Coast route was in public ownership.
Today's decision is not the one we'd either hoped for or expected. Our priority now, though, is to work constructively and professionally with the DfT to ensure a professional transfer to the Operator of Last Resort.
I appreciate there has been much uncertainty for our people as we’ve awaited the Government decision and today’s news is very disappointing for all of us. Naturally, there will be many questions our people at Virgin Trains East Coast have about what today’s decision means for them personally - and we will make sure we answer these as the transition to the new arrangements progresses in the weeks ahead.
However, one thing is very clear: we must make sure we bring the same energy, customer focus and one team spirit in the months ahead as we have shown on East Coast over the past three years. And I have every confidence in our people to make that happen.
We know that there will be voices who will welcome today’s news, who will continue to criticise our company and who will seek to undermine the achievements that the partnership railway has delivered. That will not divert us from our focus on our customers, in whichever part of the Group we work.
Stagecoach Group has operated trains on behalf of the government for more than 20 years. Over that time, we’ve delivered a better railway for customers and the country. Today, as before, we believe that we can continue to make a positive contribution to the UK rail market. We will continue to be a high quality partner for the DfT focused on delivering long-term customer benefits, and sustainable returns for taxpayers and investors.
Whether you work for Virgin Trains East Coast or for another of our great transport businesses, thank you for your continued hard work and commitment. We’ve a fantastic team of people and you are what drives our success.