Serco’s Caledonian Sleeper contract to be axed subsequent yr

The Scottish authorities has cancelled Serco’s contract to run the Caledonian Sleeper seven years sooner than deliberate, after failing to agree new monetary phrases for the historic but unprofitable in a single day rail service.

Scotland’s transport minister Jenny Gilruth on Wednesday stated the devolved authorities had exercised an choice to terminate the franchise settlement with outsourcing firm Serco in June subsequent yr.

The Caledonian Sleeper runs trains between London and Scotland, with companies operating to and from locations together with Edinburgh, Glasgow and the Highlands.

The change of contract raises the prospect of the Scottish authorities stepping in and nationalising the sleeper practice service subsequent yr, and follows a call to take practice operator ScotRail into public possession throughout the pandemic.

Mark Ruskell, transport spokesperson for the Inexperienced celebration, which governs with the Scottish Nationwide celebration in Edinburgh, stated the removing of Serco needs to be the “first step in the direction of nationalisation”.

Serco started a 15-year contract to offer the service in 2015, promising to boost the standard of the expertise as a part of £100mn of enhancements, half of which had been funded by the Scottish authorities.

The modifications included changing ageing Nineteen Seventies carriages with new rolling inventory, a few of which included en-suite bogs and double beds.

Serco stated the franchise had been “lossmaking over the lifetime of the contract” after the brand new trains had been closely delayed and initially extraordinarily unreliable, whereas the coronavirus pandemic left the corporate coping with sharply decreased passenger numbers.

The corporate has misplaced a cumulative £65mn because it took over the operating of the trains eight years in the past.

Serco stated the 2014 settlement included an possibility for the corporate to current the Scottish authorities with new monetary preparations half means by way of the franchise.

It stated the 2 sides “weren’t capable of attain settlement on these revised phrases”, which might have put the Caledonian Sleeper on a “extra sustainable monetary footing”.

However the Holyrood authorities stated no choices had been made on nationalisation. Serco raised the potential of returning beneath a brand new monetary association, saying it might “proceed to work with Transport Scotland round choices for the long run administration of the service”.

The service was championed by outgoing Serco chief government Rupert Soames, who used it to journey to his Scottish residence close to Fort William. He introduced final month that he would step down from the corporate on the finish of this yr.

In a single day trains within the UK can hint their historical past again to the center of the nineteenth century, however the Caledonian Sleeper is certainly one of solely two remaining, together with a service linking London and Cornwall.

The 12-hour lengthy “Highlander” service to Fort William is especially fashionable with vacationers and rail lovers. The sleeper service was historically utilized by Scottish MPs and friends commuting to and from Westminster.

John Whitehurst, managing director of Serco’s transport enterprise, stated the corporate had “fully reworked the service” because it received the contract.

“The service that Serco supplies at present is extensively recognised as being excellent, offering hotel-standard service and lodging that’s famend and admired around the globe,” he stated.

Gilruth stated Serco had “broadly delivered nicely and considerably improved Caledonian Sleeper companies over the previous seven years”.