Posted 3rd March 2023 | 3 Comments

Mixed reaction to Caledonian Sleeper nationalisation

The Scottish Government’s decision to end Serco’s Caledonian Sleeper franchise on 25 June has been praised by some, but criticised by others.

Scottish transport minister Jenny Gilruth told the Scottish Parliament yesterday afternoon that Serco’s contract, which began in 2015, was being terminated, because the company had tried to renegotiate the deal on new terms which the government said ‘did not represent the best value for money’.

She also said the decision not to continue the Serco franchise was ‘in no way a reflection on the quality of the product that has been developed, nor on the commitment of the staff who deliver this service every day’, and promised that the rights of the Sleeper employees would be protected when they moved to a new government-owned ‘arms-length’ company.

Serco said it was ‘disappointed’. The managing director of its transport business John Whitehurst said a renewed award would have ‘allowed Scotland to benefit from the expertise of our Serco Transport senior management team who understand this complex and unique hospitality-focused train operation like no-one else, while also enabling Scottish ministers to be in complete control of the contract’.

He continued: ‘Most importantly, this would have allowed the Scottish government to compare the price of such an award with that of their arm’s length operator of last resort company.’

He went to claim that Serco’s management had brought ‘massive improvements to every aspect of the service for our employees, our passengers and for Scotland, despite having made significant losses on the contract’.

Scottish Conservatives were also critical, pointing to the deft recovery Caledonian Sleeper had made since the pandemic. Their spokesman Graham Simpson concluded: ‘There can be no conclusion other than that this is an ideological decision. Jenny Gilruth said nothing about how this world class service can be improved under the Scottish Government.’

Rail unions are in favour of the change. The RMT said it would provide an opportunity to ‘ensure this sustainable, low carbon route between Scotland and London can be run for passengers' interests, not private profit’.

The drivers’ union ASLEF also supported the move but regretted that the Sleeper had not been recombined with ScotRail, which has already been nationalised since April last year.

The Caledonian Sleeper was also the last privatised rail operating contract in Britain to be described as a ‘franchise’. When Grant Shapps was transport secretary he formally abolished all the English franchises in September 2020, replacing them with alternative contracts.

Reader Comments:

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  • david C Smith, Bletchley

    I guess we could discuss the "ins and outs"of this topic at length ; the BTC held the bulk of public transport , including British Road Services (freight and parcels ) and BR,, which were, it seems only making it feasible to pay interest on government bonds, which resulted from compensation payments to former shareholders, because of the controls that were put onto many things after 1945,Not that this was wrong - we were after all recovering from WW2.

    I am not wanting to be some kind of political idealogue , though. As I've mentioned in the past, I see different components of the railway needing different approaches ( "horses for courses", rather than "one size fits all").
    This seemed to bear good fruit in the "Sectorisation" of late BR.

    My impression in this is that nationalisation produces organisations that are too large to be effectively accountable and are not good in non- monopoly situations. Some form of public ownership is indeed good for some parts of the railway, but let it be "public", rather than "state".

  • david C Smith, Bletchley

    It was similar back when British Railways emerged after WW2 ; the people were promised they would share the profits, but ended up having to keep "bailing out" annual losses through their taxes. Going back to "the big four" or nationalisation or franchising / contracting isn't likely to be "the answer" for the future.
    [It was more complicated than that, David. BR's owner, the British Transport Commission, was saddled with paying the annual 3% interest on a billion pounds-worth of British Transport Stock, while BR ceased to be profitable after 1955 because the Conservative 1953 Transport Act had lifted restrictions on road haulage. Meanwhile, BRís fares and charges continued to be controlled. What is the answer for the future? You seem to have ruled everything out!--Ed.]

  • Neil Palmer, Waterloo

    The RMT said it would provide an opportunity to ‘ensure this sustainable, low carbon route between Scotland and London can be run for passengers' interests, not private profit’.

    What profit? Serco lost money on the deal.