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Proposal for public sector bidders in Scotland

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47271

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Off we go...

End of the line for Scotrail? SNP plans radical shake-up of Scottish railways

http://www.heraldscotland.com/news/..._plans_radical_shake_up_of_Scottish_railways/

TRANSPORT minister Humza Yousaf is to unveil the biggest shake-up to Scottish rail in decades.

Campaigners believe the planned reforms will lead to nationalisation of the troubled ScotRail service.

Public bodies such as Calmac Ferries, the Transport for Edinburgh group, which includes Lothian Buses, and Strathclyde Partnership for Transport, which runs the Glasgow subway system, are all in the running to take over the train franchise.

Yousaf is preparing a public sector bid to take over Scotland’s railways, when the contract held by Dutch firm Abellio ends.

Last night, rail unions hailed the plan as "a form of nationalisation" and said it was "breaking with decades of privatisation dogma".

Among the Scottish government's other options is the creation of a government-owned company or a public-private sector partnership to take over the ScotRail franchise.

Yousaf will rule on which plan he will sign off after MSPs come back to parliament following the summer recess.

The shift came after Yousaf was forced to apologise to passengers following widespread disruption on ScotRail services last winter. The company was also fined £483,000 for failing to meet required standards for trains and stations.

Yousaf's officials will look at which of the five public sector options would best deal with issues such as service delivery, finance, staffing and industrial relations.

Ministers have faced calls to strip Abellio of the ScotRail franchise it took over in 2015 in a 10-year deal worth up to £6bn but with the option to cancel it at the halfway point.

Last night, Yousaf insisted the SNP was delivering on its 2016 manifesto pledge to ensure a public sector bidder is in place when Abellio's ScotRail contract expires in 2025.

Speaking exclusively to the Sunday Herald, Yousaf said: "We have narrowed down the possible vehicles that could potentially take forward a public sector bid.

"Transport Scotland are now working on gathering further evidence and I will narrow down the options further once that exercise is complete.

"The Scottish Government is committed to creating a level playing field for rail franchising in the future."

A favoured option is likely to be CalMac Ferries, which describes itself as a “wholly-owned subsidiary of David MacBrayne Ltd, which is wholly owned by Scottish Ministers”.

However, a publicly owned company could be created to help oversee the service alongside Calmac, which has experience of ferry ticketing and delivering transport services.

SNP MP Chris Stephens welcomed what he said was a "radical and bold programme" for ending rail privatisation.

He said: "Public ownership of public services will always be more efficient and leads to better delivery of services."

Putting together any bid is likely to cost between £3 million and £5 million, and would pit public sector bodies against firms such as Abellio for the contract.

Yousaf has repeatedly claimed Holyrood does not have the power to fully renationalise rail and that the service has to go out to bidders for tender.

However, rail unions said Yousaf's announcement, made at private talks with them at Holyrood, was a major step towards nationalisation.

The transport union TSSA's national political officer Sam Tarry said: "The public argument for stopping foreign companies owned by the governments of other countries has clearly been accepted by the Scottish Government.

"They have recognised that the sole beneficiaries of ScotRail and any profits it makes should be the Scottish people.

"Now there is the exciting prospect of a breaking with decades of privatisation dogma - and instead looking at modern publicly owned and operated ways of running Scotland's railways.

"We are looking forward to working with the Scottish Government every step of the way; this has the potential to be a beacon of progressive alternatives to the rest of Britain - a railway for the many not the few."

Kevin Lindsay, Scottish secretary of train drivers' union ASLEF, also welcomed the shake-up, but called for full nationalisation of ScotRail.

Lindsay said: "If [one of the public bodies] won the bid it would mean a form of nationalisation. There are a lot of pitfalls with this system, but it's a step in the right direction. Our view is that we should look at a way of taking the railways back into full public ownership."

Mick Hogg, Scottish organiser of the transport union RMT, said that Yousaf's plan would be a "stepping stone" for full nationalisation of rail.

He said: "We want to see the renationalisation of the railways. We have a strong sense that Humza Yousaf is speaking our language and is ticking the right boxes. This Scottish model could be a stepping stone for the railways being taken back into public ownership."

Labour MSP Neil Findlay, echoing the comments, said: "I welcome these talks as a move in the right direction however I don't want the public sector or a public-private partnership just to be able to bid for the franchise I want the railways renationalised so they are owned by the public and run in our interest and not in the interest of shareholders."

However, an Abellio spokesman insisted rail services were improving in Scotland. A company spokesman said: "Performance on Scotland’s railway continues to improve. Latest performance figures show that 92 per cent of services ran on time in the four weeks up to 24 June 2017.

"This compares to 90 per cent for the same period last year – an increase of two percentage points in just twelve months. As we have indicated previously we have no problem competing with a public sector bid should that be what the Scottish Government decides to do.”
 
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47271

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Whatever the question, SPT will never be the answer....
If you look at the front page of the print edition of the Sunday Herald another claimed option is the long forgotten absurdity that was TIE. That's one that's even more unlikely than SPT...

To be fair I think it might just be a typo.
 

Carntyne

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There's still 5 years of the franchise to go anyway so file under nonsense.
 

Blindtraveler

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Nowhere near enough to a Pacer :(
More sNP Headline grabbing wibble and badly timed IMO. Whilst I have 101 reasons to hate Abellio and would bring back First in an instant things havnt been to bad of late and this all seams like stirring of the brown stuff to me.
 

LNW-GW Joint

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Does SG have the powers to let Scotrail to a public body?
And saying he will allow a bid isn't the same as a decision to award it.
I believe any tender will have to be competitive, and he can't exclude non-Scottish bids.
 

signallerscot

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Does SG have the powers to let Scotrail to a public body?
Yes, Section 57 of the Scotland Act 2016 modified the Railways Act 1993 to allow public sector bodies to bid for the ScotRail franchise. Specifically it inserts the phrase "Subsection (1) does not prevent a public sector operator from being a franchisee in relation to a Scottish franchise agreement.” Subsection (1) is the bit where it specifically prohibits public sector bids.

And saying he will allow a bid isn't the same as a decision to award it.
It would be strange if the Scottish Ministers went to the trouble of creating a company to bid then didn't award it to themselves...

I believe any tender will have to be competitive, and he can't exclude non-Scottish bids.
Indeed, but they can make the conditions so exacting, arcane or onerous that only their bid is able to meet them.

Personally I'm all for it but they absolutely must take Network Rail Scotland under their ownership as well for it to stand any chance of working.
 
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DarloRich

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Interesting if unlikely. I have long said there should be an open, transparent and equal real world comparison between public and private ownership models to determine, once and for all, which is best.
 

Blindtraveler

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Nowhere near enough to a Pacer :(
I think 1 very important point is raised here, that being about Network Rail Scotland. Totally agree that should this be the path they go down it will only work if NR hitch a ride on the same bandwagon.
 

LNW-GW Joint

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It would be strange if the Scottish Ministers went to the trouble of creating a company to bid then didn't award it to themselves...

Indeed, but they can make the conditions so exacting, arcane or onerous that only their bid is able to meet them.

Personally I'm all for it but they absolutely must take Network Rail Scotland under their ownership as well for it to stand any chance of working.

In which case it's a stitch-up, nothing to do with running the railway better.

NR won't be devolved fully, the DfT intends to keep it at UK level (along with ORR, RSSB and all the regulatory stuff).
Until independence, of course. ;)
 

tspaul26

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From Chris Stephens MP in the quoted article:

Public ownership of public services will always be more efficient and leads to better delivery of services.

Is that a fact?

At a risk of being accused of stealing ideas from Thomas Sowell, I have three questions for Mr Stephens:
  1. Compared to what?
  2. At what cost?
  3. Do you have any hard evidence for that?
 

Simon11

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So lets ditch a company with experience in the rail industry for a public organisation that has no experience in rail. Great idea!
 

tspaul26

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So lets ditch a company with experience in the rail industry for a public organisation that has no experience in rail. Great idea!

But they do operate ferries, which are exactly the same in every way.
 

WatcherZero

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Calmac the ferry company leading candidate for the public bid.

Carried 5m passengers and 1m cars
Turnover £187m (£55m from fare revenue, £122m from public subsidy, £9.30m other)
Expenditure £165.4m on services, £25.5m on administration
Operating loss £3.80m, final loss £3.55m


Yep sounds just right candidate to launch a £3-£5m bid to run a rail franchise.

You could probably say they were similar to a rail franchise in that Calmac leases and doesn't own any of its buildings and ferries.
 
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overthewater

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SPT only in the running because it used to operate the largest rail network outside London, but that those are well and truly gone. SPT is awful and has been making major cut backs over the past five years. Lets not forget the amount of money it wastes all over the place.
 

Railsigns

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If the Scottish Government awards the ScotRail franchise to a public sector operator, then it'll be a massive step in the right direction for Scotland's railways. A real victory for common sense. Hopefully, the rest of Britain would follow Scotland's lead.

The pro-privatisation ideologues won't like it, and I can already see some of them starting to foam at the mouth, but they've had it all their own way for the last twenty years, so they'll just have to suck it up.
 

Railsigns

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So lets ditch a company with experience in the rail industry for a public organisation that has no experience in rail. Great idea!

I take it you voiced similar concerns twenty years ago at the prospect of various bus companies taking over from BR?
 

47271

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If Calmac did take it on it would be an unlikely full circle story, given that one half of the ferry company's origins lie in the Caledonian Steam Packet Company, which was effectively part of the Caledonian Railway, and then the LMS.

https://en.m.wikipedia.org/wiki/Caledonian_Steam_Packet_Company

After years of fierce competition between all the fleets, the CR and GSWR amalgamated with several other railways at the start of 1923 to form the London, Midland and Scottish Railway (LMS) and their fleets amalgamated into the Caledonian Steam Packet Company, their funnels being painted yellow with a black top. At the same time the NBR (and its shipping fleet) also amalgamated with other railways to create the London and North Eastern Railway (LNER), which built the PS Waverley in 1947.

Anyway, back in the present day, I'm quite interested to see what happens with this over the next few years. A lot of it is hot air, a Humza speciality as we know from the past nine months or so, and I agree that it's largely pointless without control of the infrastructure. However, there's absolutely no harm in doing some solid work on it ahead of the next franchise round.

For instance, on a stupidity scale of 1 to 10, as an idea it ranks well below the 11 that we can award to the merger of BTP with Police Scotland.

By the way, I was mistaken earlier about the front page of today's print edition of the Sunday Herald. It didn't say that the long dead 'TIE' was one of the possibles to run Scotrail. It said the very much alive 'TfE'. My dad didn't have his specs on when he read it to me on the phone.
 
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AlexNL

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So for the next franchise, the Scottish public sector would be competing against private sector bids for a franchise let by the Scottish government?

I can only see one outcome of that... lengthy lawsuits.
 

Highland37

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So lets ditch a company with experience in the rail industry for a public organisation that has no experience in rail. Great idea!

Presumably it will be the same staff? As it was with Calmac, for example. Calmac is an excellent service model to follow by the way. It works.
 

XC90

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Nobody I know at scotrail wants to return to nationalisation. It's a threat by unions to private companies and they do seem to be winning the propaganda challenge. How would it work when they cap train drivers wages at 1%?

Will ASLEF and RMT accept that it's just part of nationalisation?
 

Clansman

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Nobody I know at scotrail wants to return to nationalisation. It's a threat by unions to private companies and they do seem to be winning the propaganda challenge. How would it work when they cap train drivers wages at 1%?

Will ASLEF and RMT accept that it's just part of nationalisation?

Really? Scotrail staff have been slagging their operators for years - nationalisation is the talking point nowadays whenever Scotrail staff talk about the railways in general.
 

mde

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If you look at the front page of the print edition of the Sunday Herald another claimed option is the long forgotten absurdity that was TIE. That's one that's even more unlikely than SPT...

To be fair I think it might just be a typo.
It probably is, the digital copy shows it as 'TfE'.

In fairness to them, Lothian run a pretty decent service and have high standards so injecting some of that could be the relief ScotRail need - they get more abuse than is necessarily warranted…
 

Altnabreac

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So for the next franchise, the Scottish public sector would be competing against private sector bids for a franchise let by the Scottish government?

I can only see one outcome of that... lengthy lawsuits.

Well that is exactly what has happened in the past with Calmac. It also happens in other countries where public sector bids compete with private sector ones in the rail sector.

There are of course 2 things to bear in mind:
Nothing is likely to happen until either 2022 (Franchise ends) or 2025 (Franchise ends if extended).

The Scottish Government have expressed a strong desire to ensure that any Scotrail entity is vertically integrated. This already happens more in Scotrail than other Franchises (the Scotrail Alliance) but there is certainly a desire for more integration. There are broadly 3 things preventing this from happening:
  1. EU Law which requires separate accounting of infrastructure and operations. This would not absolutely prevent a single organisation from running rail but accounting would need to be kept separate. This would anyway be required assuming that cross border operators, sleeper, FOCs etc would remain as private sector organisations who would need access to Scotrail infrastructure.
  2. Railways Act 1993 which keeps the operators of services and infrastructure separate. This would need altering again to allow Scotrail to operate in a different way to English franchises.
  3. Network Rail ownership. Although Scottish Ministers specify the outputs for Network Rail in Scotland, Network Rail remains a unitary GB wide organisation and the regulation and operation of Network Rail is in the control of DfT in London, not Scottish Ministers.

So to fully implement the vision of Scottish Ministers for a vertically integrated, public sector owned and run Scotrail there would need to be further changes to the Railways Act 1993 to devolve Network Rail ownership and supervision to Scotland and allow vertical franchise integration beyond what current legislation allows. Expect further discussion in this direction from Scottish Ministers.
 

LNW-GW Joint

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Point 1 on that list may also become largely non existant post Brexit.

Not unless it finds its way into the Great Repeal Bill, and I doubt that is a gov priority.
You still have to satisfy the competition regulator (CMA), and maintain a level playing field for other TOCs.
 
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