Updated 13.43 and 15.55, and 18 June 09.30

STAGECOACH has lost its battle for compensation against the Department for Transport after its bids for three franchises were ruled ‘non-compliant’ in April 2019 because they attempted to reduce pension risks. The High Court has rejected the Group’s claims against the DfT.

Stagecoach said: ‘We believe there were important issues which needed to be determined by the court to help secure the future of the country’s rail system and our view remains that we were right not to accept the risks in these contracts. Nevertheless, while we are disappointed at today's ruling, we accept the decision and move on. The country is facing a huge challenge in fighting the Covid-19 pandemic, and all of our energies are focused on ensuring our transport networks help the national effort at this critical time.’

Although a consortium of FirstGroup and Trenitalia won the West Coast Partnership franchise last year, after Stagecoach and Virgin’s bid had been ruled ‘non-compliant’, it was a different story in 2012, when First won the franchise but the competition was then cancelled after the Department for Transport’s calculations had been challenged successfully by Virgin and Stagecoach. One result was that they continued to operate the Intercity West Coast franchise until last December, when First and Trenitalia’s Avanti West Coast took over.

After the High Court had rejected Stagecoach’s claim for damages, FirstGroup responded: ‘We welcome today’s ruling and the clarity it brings. We considered all aspects of our successful West Coast Partnership bid carefully and with a sensible and responsible approach to risk. Our current focus is on supporting our communities through the current pandemic, and we are working hard to deliver a future, cleaner, greener railway for our West Coast customers and partners who will see improvements including a fleet of new and refurbished trains, more routes and services and an improved onboard experience.’

The Rail Delivery Group’s director of policy John Thomas said: ‘The priority for rail companies is to continue to support communities and businesses through the Coronavirus pandemic. Today’s judgment on previous franchise bids has been accepted by both parties and the industry wants to work with government to ensure a reformed railway, which we have been calling for, can harness the best of both the public and private sectors so that we can deliver for Britain.

‘We continue to work with the Pensions Regulator, DfT and the unions with a view to agreeing a sustainable pensions framework for the train operator sections of the Railway Pensions Scheme.’

After the case, RMT general secretary Mick Cash called for urgent reform of the railway pensions scheme.

‘This ruling completely exposes how broken the failed privatised rail franchising system is. The Government must now act quickly and work with the unions and industry to secure the future of the Railways Pension Scheme which has been questioned not because of the actual funding position of the scheme but due to the privatised ownership model. It’s vital the Government now does the right thing and brings our railways into public ownership and ends this 25 year old free-market farce once and for all,’ he said.