Serco Caledonian Sleeper contract will NOT be extended

[realemil]

https://twitter.com/transcotland/status/1577624020652007424?s=46&t=PQgh7bv8yB3Wz-OIiiNxUg

Serco Caledonian Sleeper’s current agreement will come to an end on 25 June 2023.

@JennyGilruth says that the decision has been taken to ensure the Sleeper service represents value for money.

Read more ➡️ bit.ly/3V5mq3K

On the TransportScotland site it says this:

“I can confirm that today Serco Caledonian Sleepers Limited has been advised that its proposal to rebase the Franchise Agreement with Scottish Ministers for the provision of Caledonian Sleeper rail services has been rejected on the grounds of not representing value for money to the public.

“Additionally, I can confirm that a notice was served today which confirms that the Scottish Ministers will terminate the Franchise Agreement with Serco Caledonian Sleepers Limited on 25 June 2023.

 

[trebor79]

Back to bargain berths or further into the "luxury travel experience" market for tourists such that less/no subsidy is required. Depends on your definition of "value for money" I guess.
Or is it The End?

 

[DarloRich]

I assume that, translated into English that means taking the sleeper operation "in house"?

 

[realemil]

I assume that, translated into English that means taking the sleeper operation "in house"?

That’s what they appear to be saying, in simple words.

 

[DarloRich]

That’s what they appear to be saying, in simple words.

why cant they just say that ( drives me round the bend when i read official communications that use 12000 words of world salad to say one simply phrase!)

 

[Bertie the bus]

I wish them luck if they think changing operator will make the CS financially viable. It never was and never will be. Its existence is purely down to politics.

 

[hexagon789]

According to an FOI someone posted on Twitter, the sleeper is to be remerged with ScotRail to ensure its longterm financial viability.

 

[swt_passenger]

According to an FOI someone posted on Twitter, the sleeper is to be remerged with ScotRail to ensure it's financial viability.

Financial viability presumably being shorthand for massive cross subsidy.

 

[hexagon789]

Financial viability presumably being shorthand for massive cross subsidy.

Sounds about right!

 

[zwk500]

I wish them luck if they think changing operator will make the CS financially viable. It never was and never will be. Its existence is purely down to politics.

Important part of the release is 'Serco have been jnformed that *its* proposal has been rejected'
Sounds like Serco wanted more money and the Scottish government was not willing to go up high enough.

 

[Royston Vasey]

"Proposal to rebase the Franchise Agreement"

Does that mean "they asked for more money"?

 

[Bertie the bus]

Financial viability presumably being shorthand for massive cross subsidy.

It wouldn't really be a cross subsidy because ScotRail also requires a massive subsidy. More hiding a large number in an even bigger one so people can't determine just how little value for money it represents.

 

[Iskra]

Better value for money for who, the taxpayers or the passengers paying eye-watering fares?

 

[realemil]

Better value for money for who, the taxpayers or the passengers paying eye-watering fares?

The government!

Hopefully more value for money for both, the fares are extortionate, I can’t find anything cheaper than £150~ for a berth

 

[Flying Snail]

Better value for money for who, the taxpayers or the passengers paying eye-watering fares?

The fares don't come close to covering it's costs so eye-watering or not their "luxury hotel experience" is being funded by taxpayers.

 

[Clansman]

Fantastic news.

Looking forward to seeing teal coloured ScotRail logos on the doors this time next year.

Bring back bargain berths and revamp the god awful lounge car.

 

[Tetchytyke]

Financial viability presumably being shorthand for massive cross subsidy.

Or saving money by not paying for two lots of management?

Moving the sleeper out of Scotrail never made any sense.

 

[cf111]

If it is coming "in house" then please, please, please run it as a Scotrail operation. Call it and brand it whatever you want but just let Scotrail run it so that Scotrail staff can help customers when they need it.

I've no idea how viable the sleeper is in the long term. Of. Course I can't answer for anyone else, but I used to use the sleeper quite a bit but I can fly to and from Inverness for a relative pittance now.

 

[Iskra]

The fares don't come close to covering it's costs so eye-watering or not their "luxury hotel experience" is being funded by taxpayers.

Well, so is most rail travel... and it's not particularly luxurious for the price.

Or saving money by not paying for two lots of management?

Moving the sleeper out of Scotrail never made any sense.

Agreed. I'm glad they've seen sense.

 

[DelayRepay]

I've no idea how viable the sleeper is in the long term. Of. Course I can't answer for anyone else, but I used to use the sleeper quite a bit but I can fly to and from Inverness for a relative pittance now.

I don't think it will ever cover its costs through fare and cabin revenue.

So the question is what degree of subsidy is justified, both to connect remote parts of the UK with London, and to avoid people flying (from a climate perspective)? I think any subsidy becomes less justified as the product moves from a means of transport to an 'experience'.

 

[Flying Snail]

Well, so is most rail travel... and it's not particularly luxurious for the price.

Most travel is within the budget of most taxpayers, CS isn't, it is essentially taxpayer funding of the wealthy (and rail staff).

 

[Speed43125]

I don't think it will ever cover its costs through fare and cabin revenue.

So the question is what degree of subsidy is justified, both to connect remote parts of the UK with London, and to avoid people flying (from a climate perspective)? I think any subsidy becomes less justified as the product moves from a means of transport to an 'experience'.

Conversely, providing an 'experience' that gets the tourists with rich pockets to remote parts of Scotland is likely (seen as) good for the local economy and providing jobs etc.

 

[Watershed]

I've always thought there was a quite unnecessary degree of inefficiency by splitting it out of ScotRail. Not to mention all the First Class lounges (or whatever they're called this week) that only see use for a couple of hours a day!

 

[Bertie the bus]

Hopefully more value for money for both, the fares are extortionate, I can’t find anything cheaper than £150~ for a berth

Which isn't extortionate for a 400 mile journey and saving the cost of a night's hotel that isn't rat infested or full or druggies in London. The fact people consider £150 to be extortionate and eye-watering just shows how financially unviable the sleeper operation is.

 

[HSTEd]

According to an FOI someone posted on Twitter, the sleeper is to be remerged with ScotRail to ensure its longterm financial viability.

So they will hide the subsidy in the wider Scotrail budget to avoid having a discussion about the economics (or lack thereof) of sleeper services?

 

[XAM2175]

Conversely, providing an 'experience' that gets the tourists with rich pockets to remote parts of Scotland is likely (seen as) good for the local economy and providing jobs etc.

Yes, and the loadings seem to suggest that it's having some success at enticing people to pay the fares - though we obviously can't be sure how many of them are in fact distress purchases by people who'd otherwise not pay that much, and nor can we know how many come back for a second time.

All the same, I can't help but detect a certain vein of commentary here to the effect that the service is only laudable and worthwhile at such times as it's offering cheap tickets to rail enthusiasts.

 

[realemil]

Which isn't extortionate for a 400 mile journey and saving the cost of a night's hotel that isn't rat infested or full or druggies in London. The fact people consider £150 to be extortionate and eye-watering just shows how financially unviable the sleeper operation is.

When you put it into perspective, no, it’s not too expensive.

But when you can get a £30~ advance London - wherever & a £50 hotel just outside of London, that’s nearly half the price of a sleeper.

When you suddenly start adding people to the equation, it all adds up so much more vice getting a hotel, where it’s charged by the room.

 

[skyhigh]

Important part of the release is 'Serco have been jnformed that *its* proposal has been rejected'
Sounds like Serco wanted more money and the Scottish government was not willing to go up high enough.

From what I've heard elsewhere Serco are losing money on the current contract. For them to be willing to extend it, they wanted more funding. Clearly Transport Scotland were not in favour of this plan (and I wouldn't be totally surprised if Serco deliberately priced themselves out if there was a contractual requirement for them to submit a bid for a potential contract extension).

 

[hexagon789]

So they will hide the subsidy in the wider Scotrail budget to avoid having a discussion about the economics (or lack thereof) of sleeper services?

Isn't that basically what they were doing before it was split?

 

[zwk500]

From what I've heard elsewhere Serco are losing money on the current contract. For them to be willing to extend it, they wanted more funding. Clearly Transport Scotland were not in favour of this plan (and I wouldn't be totally surprised if Serco deliberately priced themselves out if there was a contractual requirement for them to submit a bid for a potential contract extension).

This would not surprise me at all.