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Can the government avoid another rail fiasco before 2015?

25 March 2014

There’s some exciting train news today, and no, it’s not related to HS2. The Transport Secretary has announced that the franchise for the East Coast Mainline has gone out to tender. Britain’s second busiest railway marked a low point for rail privatisation, when National Express bombed out of the franchise and Labour nationalised the line. Since then it has been under government control and the coalition has delayed throwing it back into the private sector several times.

How have each of the operators fared on the line? Since British Rail was privatised in the early 1990s, the ECML has been run by Great North Eastern Railways (1996 to 2007), National Express East Coast (2007 to 2009) and the government-owned East Coast (2009 to present). According to the Office of Rail Regulation, this is how passengers have rated their services:


GNER suffered two major accidents under its tenure — the Hatfield crash in October 2000 and the Great Heck crash in February 2001 — which gravely affected their services and customer reputation. As you can see, it took GNER a long time to recover, and when another operated started competing them they got into financial trouble and the government withdrew their franchise.

National Express took over the line and managed to improve passenger satisfaction – but they also entered into financial difficulties and quit the franchise. The government’s East Coast has been a financial success, returning £238 million to the Treasury last year, but has had a mixed record with customers as you can see above.

Now that the line is being privatised again, can passengers expect great improvements? Patrick McLoughlin has said the new operator will be handed brand new trains and more infrastructure investment in return for operating 32 services a day from March 2015, increasing to 45 in May 2020.

Shadow transport secretary Mary Creagh disagrees, believing that privatising is the wrong priority for the government:

‘East Coast is working well and will have returned £800m to the taxpayer by the end of this financial year. David Cameron should tackle his Government’s cost-of-living crisis and cap rail-fare rises for struggling commuters instead of obsessing about handing East Coast over to the private sector.’

But Creagh does have a point — this is the first major franchising operation since the West Coast Mainline fiasco two years ago. As Labour are keen to point out, the cancelled tendering of the West Coast line cost the taxpayer £50 million, along with some very bad publicity for the government.

The government will therefore want to tread carefully. Three companies — Virgin/Stagecoach, First Group and Keolis/Eurostar — have bid for the East Coast franchise, all of them with previous records in the UK. The winner will be announced in November this year, just six months before the general election. The last thing the coalition wants is another row about running the railways.

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  • itdoesntaddup

    According to these data, East Coast is subsidised to the tune of 0.5p per passenger mile:

    The idea that it is profitable seems to be incorrect, even if it is not as subsidised as some of the other TOCs. The only TOCs that are not subsidised overall are SWT and Southern – soaking commuters – and First Capital Connect.

  • Mark McIntyre

    BR PLC – the only sensible solution.
    Signed, Aging Anorak !

  • Mynydd

    Twice private operators have failed on the ECML, the state operator has been a success, yet the government has stopped the state operator from bidding. It just a joke.

  • chris_xxxx

    Each rail franchise offers to pay amounts to the DfT and/or receive amounts from the DfT during the life of the franchise.

    From 2009 to 2013, the West Coast Main Line (WCML) gave £282 million to the government, while the government run Directly Operated Railways (DOR) returned £602 million.

    Or before DOR took over the ECML, it was run by National Express. During the period from 2007 to 2011, they returned £370 million to the tax payer. Again, compared to £602 by DOR.

    So why does the government want to have a private company run the ECML, which will obviously take a cut to pay its shareholders? The Tories can’t admit that privatisation of the railways has not been a success; it has nearly destroyed British train manufacturing with three out of the four factories closed.

  • rtj1211

    The real question is why it has to be re-privatised at all, as it is doing rather well under State ownership.

    • andagain

      How can you call it privatisation when the government is still controlling it? Electricity was privatised, rail was just contracted out.

      Roll on open access rail…

  • realfish

    ‘East Coast is working well and will have returned £800m to the taxpayer by the end of this financial year’

    According to some in the industry, that’s because East Coast are not paying the track access charges that other Train Operating Companies (TOCs) are required to.
    Anyone who remembers the disaster that British Rail became would be mad to go for renationalisation. Does anyone believe that the investments that have been made in recent years, the new vehicles that carry twice as many passengers as BR did on privatisation, would have been bought ahead of schools and hospitals?

    I am really happy with the privatised railway that I use on the West Coast – I use Virgin and London Midland, fast (largely) reliable services, excellent fares. Virgin in particular broke the mould, their approach is light years ahead of what we had.

    And incidentally, I always take time to talk to staff about their work and the railway. The older railway men and women that I chat to, say that they would never want to go back a nationalised industry (despite what Labour and their Unions say).

    • Frank

      Do you work for Virgin by any chance?

      • realfish

        No, just use their trains from time to time

    • Mark McIntyre

      Do you mean ‘Virgin on the ridiculous’ ? !

  • HookesLaw

    On a turnover of £694 million it actually made a profit of £6 million.
    Comparing rail franchises is difficult because they are all having to fund differlent levels of investment.
    Where is the evidence that a private operator would not return more to the govt?

  • Jupiter


  • Frank

    Totally agree with labour on this one!

  • Alexsandr

    the new trains, the IEP, have been designed by a committee. Whoever thought it was a good idea ragging a big diesel from London to Edinburgh just so they can get to Aberdeen?

  • Fergus Pickering

    Oh I doubt it can go pear shaped in six months.

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