Virgin and Stagecoach win East Coast rail franchise. Here’s what it means for York

27 Nov 2014 @ 10.56 am
| Transport
On the way out… East Coast trains. Photograph: East Coast / Nick Small

Goodbye East Coast, hello Inter City Railways. The Government announced on Thursday (November 27) the new private company to run the East Coast Main Line between York, London and Edinburgh

What is Inter City Railways?

Inter City Railways is a consortium – 90% is owned by Stagecoach and 10% by Virgin, but trains will be branded Virgin Trains East Coast.

Inter City Railways will run the franchise from March 2015 to March 2023, with the option of a one-year extension at the discretion of the Department For Transport.

The current train operating company, East Coast, is publicly owned.

How much have they paid?

Inter City Railways will pay the government around £3.3 billion to operate the franchise.

In its turn, the Department For Transport is promising to spend £38 billion improving and maintaining the national rail network.

What are the promises on trains and fares?

According to Stagecoach the consortium’s £140 million investment will see…

  • More trains between York and London – three trains an hour between York and London from May 2019, with an extra train every two hours from May 2020
  • Improved ticket office at York station
  • New trains: 65 new ‘Super Express’ trains from 2018 with £140 million-pound train refresh programme for existing fleet
  • More services – a 50% increase in capacity by 2020 with total fleet capacity increased by 12,200 seats
  • Better value fares – a 10% cut in Standard Anytime fares on long-distance journeys to and from London

Any other promises?

There will be a technology upgrade, with a new website, smartphone apps, interactive touchscreen information points at major stations and free WiFi on trains and stations.

Passengers will be able to order food from their seats and benefit from a “new Nectar loyalty programme“.

Stagecoach also promises better “community engagement”, which means apprenticeships for young people, graduate and ex-offenders programmes, dedicated communities fund and support for small businesses.

Where will the new trains be built?

Well not in York obviously, as previous governments systematically destroyed the city’s carriage building industry.

The new Intercity Express trains will be assembled at Hitachi’s factory in Newton Aycliffe, County Durham.

Heading our way. Photograph © Mikey on Flickr

Where will the HQ be located?

We’re not sure yet. The East Coast company has its headquarters in York, and the council want the new consortium to follow suit.

“York already has over 5,000 people in rail related industries and we see this as a potential area for growth that Stagecoach and Virgin Group can support by locating their headquarters in the city, following on from the precedent set by previous operators of Inter City East Coast services.

“This will help underline the point that York is a place where the rail industry can do business, with ready access to skilled people and other rail organisations.”

– Cllr David Levene, Cabinet member for transport

What does it mean for staff?

Watch this space… East Coast employs hundreds of people in York. This is what their future boss says:

“We will be investing in the committed East Coast people who will be joining our team, as well as delivering major programmes to help young people, communities and small businesses along one of Britain’s most important routes.

– Martin Griffiths, chief executive of Stagecoach Group

What are people saying?

This is the best day ever for York travellers, according to the Government…

“This is a fantastic deal for passengers and for staff on this vital route. It gives passengers more seats, more services and new trains.

“We are putting passengers at the centre of the service. I believe Stagecoach and Virgin will not only deliver for customers but also for the British taxpayer.”

– Patrick McLoughlin, transport secretary

…and the winning bosses:

“Our long term partnership with Stagecoach has seen a revolution in customer service standards, great product innovation, reduced journey times and improved timetables on the West Coast mainline.

“We plan to deliver similar success on the East Coast and are looking forward to working with the team there to build on their achievements.”

– Patrick McCall, senior partner, Virgin Group

Or a disaster for travellers and the public purse, according to rail union the RMT:

“It is a national disgrace and an act of utter betrayal that the government has confirmed that it is bulldozing ahead with the re-privatisation of the East Coast Main Line despite all the figures showing that the current public sector operator is handing over a billion pounds back to the British people while delivering huge improvements in service and customer satisfaction.”

– Mick Cash, RMT general secretary

While the outgoing York leader, who is also chair of the Consortium of East Coast Main Line Authorities, said this…

“We welcome Stagecoach and Virgin Group as the new operator of the Inter City East Coast Franchise and look forward to working together to discuss how best to improve the service to benefit east coast rail users.

“When I met all the bidders for the franchise earlier this year, they were agreeable to the case for further investment.”

– Coun James Alexander, City of York Council leader

What’s the legacy of East Coast trains?

The East Coast Mainline has been run by Directly Operated Railways since 2009. It is a publicly owned rail company set up after National Express walked out on their franchise contract.

Since then it has…

  • Carried 18 million passengers a year
  • Launched the biggest timetable change to the route in over 20 years
  • Added 19 new train services per day and three million additional seats
  • Received a 91 per cent satisfaction rating from passengers.

It has also delivered excellent value for money.

Since being placed in public hands, East Coast has received £0.46 of government funding per passenger mile, compared to £4.57 on West Coast.

At the same time, East Coast returns the highest level of premium back to the Government. Since 2009, it has returned more than £1 billion to the taxpayer.