Latest Rail News

20.04.18

Grayling threatened with legal action over East Coast rail franchise failings

Campaigners are threatening to take transport secretary Chris Grayling to court over his failure to stop the companies behind the failed Virgin Trains East Coast (VTEC) from bidding for other franchises in future.

Bring Back British Rail has teamed up with public law expert Leigh Day to hold Grayling to account for his decision to allow Stagecoach and Virgin to “simply walk away” and run other franchises. For example, the two transport giants were recently awarded a two-year extension on the West Coast contract.

The VTEC fiasco has been gathering much attention since last year, when the transport secretary confirmed that the franchise was going to end in 2020 – three years earlier than planned – at which point a new operator would run the service under a public-private agreement.

In response, Virgin boss Sir Richard Branson hit out at Network Rail early this year, blaming the organisation for failing to live up to major promises it had made on vital infrastructure improvements.

Later on, in early February, Grayling admitted that the franchise could be only a “small number of months” from collapsing. He told ministers at the Commons that the government might have to take control of the failing operation and revealed that the operators had breached a “key financial covenant.”

Since then, a formal inquiry has been launched by the Transport Committee into the fiasco, which would mark the third time the East Coast franchise has collapsed in just over 10 years.

Now, campaigners are arguing that the service should never have been re-privatised in 2015 and have hired lawyers to take Grayling to court. Leigh Day has written to the secretary of state requesting him to confirm whether he will revoke the Franchise Passports granted to Stagecoach and Virgin, and whether the costs of terminating the franchise “have in fact been met or could be expected to be met by the fulfilment of Stagecoach’s obligations.”

While they expect this to be a “landmark judicial review case” that will expose the “farce of rail franchising for the shameful waste of public money that it is,” the DfT thinks differently. Grayling’s office said in a statement that there “is no basis for legal action.”

“Virgin Stagecoach have met all of their financial commitments as set out in the East Coast franchise agreements,” a spokesman claimed.

Campaigners are hoping to raise £15,000 to pay for the initial costs of taking this action, but want to raise another £15,000 to cover all potential cost liability in case of a full legal challenge. At time of publication, almost 400 people had already pledged over £7,500.

(Top image c. Dominic Lipinski, PA Wire)

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