Latest Public Sector News

09.08.12

FirstGroup win could lead to rail fare increases

Train operator FirstGroup is set to win the west coast rail franchise, with a higher bid than competitor Virgin Rail, reports indicate. 

This could lead to fare rises from 2020, insiders fear. 

The Department for Transport has highlighted Tuesday as the provisional date for declaring the winner of the West Coast Main Line franchise. FirstGroup has bid an estimated £6.5-7bn for the 14-year contract, and rival bidders Abellio, Keolis/SNCF and Virgin Rail are no longer in the running, it has been speculated. 

Virgin Rail currently owns the franchise and pays around £160m to the DfT in premium payments each year. FirstGroup’s bid would see payments of around £500m a year. 

Industry insiders believe that as the line will be at capacity by 2020, it will no longer be possible to increase revenue by carrying more passengers. This could mean significant fare rises.

Founder of Virgin Rail, Richard Branson said in a recent letter to the transport secretary, Justine Greening that the only way FirstGroup can meet the premium payments is to “drastically cut the quality of services”.

Unions fear that the deal could lead to job cuts and other changes to staff terms. 

The DfT is said to be considering a cross-default clause in the contract, which would see FirstGroup lose its other rail contracts if it were to renege on the West Coast deal. 

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

Comments

There are no comments. Why not be the first?

Add your comment

 

public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >

interviews

Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >

the raven's daily blog

Utilising data to best deliver meaningful public services

14/11/2019Utilising data to best deliver meaningful public services

Public Sector Executive’s Matt Roberts explains how living in a modern, interconnected world, as we do, means public sector organisations cannot afford to ignore the rol... more >
read more blog posts from 'the raven' >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >