East Coast getting the DOR?

06 Feb 2018

It looks like Virgin Trains East Coast(VTEC) will last only a few more months, due to the financial difficulties the franchise is encountering. Chris Grayling has said that nationalisation is one of the options on the table for the next two years.

The Guardian reports that the only option offered in place of nationalisation would be the provision of a “short-term, not for profit” contract to the current VTEC consortium, 90% owned by Stagecoach, 10% owned by Virgin Group.

This comes after the group has reported over £200 million in losses, that Grayling attributes to the franchise receiving too high a bid. VTEC have argued that they expected Network Rail to have completed upgrades on the route that would have allowed for improved services.

This does raise a long-term concern, though. After Directly Operated Rail Limited was created by the Department for Transport under Labour Transport Secretary (Now Lord) Andrew Adonis, it has been seen as a firm model for more state-run rail services in the UK, though the government may be loathe to return the franchise to the state when Jeremy Corbyn is supporting nationalisation.

This does nonetheless lead to a wider conundrum regarding the issue. State rail and utility ownership are strongly supported by many traditional Labour and Conservative voters, not really seen as particularly divisive. The franchising model doesn’t currently win many over, with too many failures and few successes, it is going to struggle to find a politician able to enthusiastically back it as things stand.