Cabinet Secretary for Transport, Infrastructure and Connectivity Michael Matheson has announced that ScotRail train services will move to Scottish Government ownership, from the expiry of the current franchise – currently expected in March 2022.
This is the full statement, to the Scottish Parliament, on Scotland’s Railway:
Presiding Officer, I wish to update the Parliament about arrangements for Scotland’s rail services, both over the coming period and as we look to the future.
In doing so, I look to provide certainty to rail staff, rail users and the businesses and communities served by our railway.
Covid 19 has impacted all parts of Scottish society. And rail services are no different.
I want to thank rail workers across Scotland for their efforts in ensuring passenger and freight rail services continue to run throughout the pandemic.
But we must recognise the fundamental impact that our difficult but necessary decision to restrict travel have had on the financial position of passenger rail services with revenue dropping to less than 10% of the pre-pandemic levels.
Throughout these restrictions, the Scottish Government has provided essential funding to ensure the continuation of passenger rail services and to provide security of employment to rail staff.
This funding has been provided through Emergency Measures Agreements, which temporarily vary both the ScotRail and Caledonian Sleeper franchise agreements.
The current Agreements are due to end on the 31st March 2021. And I can now confirm that we will seek to put in place further Agreements until 19th of September 2021. Any further Agreement beyond that date will be subject to approval by Ministers and additional consequential funding being made available to the Scottish Government.
While it is right that we focus our collective efforts at this time in tackling this horrendous virus, we should take a moment to reflect upon a time in the future when circumstances allow passengers to return to our railway.
Looking to the future, I want to see a commuter offer matching modern working patterns.
I want to see our railway play a central role in tourism and railway heritage, enabling our visitors and railway enthusiasts to explore all that is great about Scotland.
I want our railway to support businesses through connectivity, innovation in technology and railway manufacturing.
And I want to see our rail freight sector continue to deliver the goods for Scotland.
It remains my strongly held view that a public sector controlled, integrated passenger railway is the model that will best deliver that for Scotland.
It would enable a more cohesive, fleet of foot, strategic decision making structure between rail infrastructure and services, with full accountability to the Scottish Government.
However, that model cannot be delivered under the existing legislative framework, which is reserved.
That is why we have repeatedly sought the full devolution of rail powers to this Parliament, but our requests to the UK Government have so far been rejected.
On more immediate matters, the current ScotRail franchise is expected to end in March 2022.
I am therefore required at this time to make decisions on what will come after the current ScotRail contract.
As I have stated many times, I believe that the current franchising system is no longer fit for purpose.
Keith Williams, who led the UK Rail Review process, has said publicly that and I quote ‘franchising cannot continue in the way that it is today.’
He also expressed this to me when I met him back in June 2019.
And despite UK Ministers stating on the 9th December 2020 that the White Paper will be and I quote “out within six weeks”, still we wait.
The impact of the pandemic and the continued uncertainty about pending reform makes any franchise competition especially unwise at this time.
The costs and risks involved would be significant, and I will not divert scarce time and resources to pursue a competition which risks failing.
I can therefore confirm that we will not hold a franchise procurement competition to secure successor arrangements for the ScotRail franchise.
In December 2019, Scottish Ministers decided not to rebase and continue the current ScotRail franchise beyond the scheduled break point expected in March 2022.
I know Abellio was disappointed by that outcome; but its response has been professional, particularly in dealing with the impact of the pandemic. I wish to place on record my thanks to Abellio and its staff.
I have carefully considered the possibility of a directly awarded contract to Abellio to continue to run services beyond March 2022. In particular, how that option would align with our recently published revised Franchising Policy Statement.
Based on those considerations, I have concluded that a Direct Award to Abellio would not be conducive to the fulfilment of our policy objectives.
My officials have been working closely with rail industry partners over time to explore the potential for greater integration of rail services and the benefits that this may bring.
We have the energy and commitment to progress this with pace, but the continued UK Government delay in concluding its rail review has hampered our progress.
Following detailed consideration of all options against the background of the current legislation, the revised Franchising Policy Statement and the continuing uncertainty arising from the Covid 19 pandemic and the delayed UK White Paper, I consider that the award of a franchise agreement to any party at this time would be detrimental to the fulfilment of our rail policy objectives.
Over the last year my officials at Transport Scotland have been making preparations to ensure that Operator of Last Resort arrangements are ready to be deployed.
I can therefore confirm that the Operator of Last Resort will run ScotRail services after the end of the current franchise contract.
This means that from the expiry of the current franchise, ScotRail services will be provided within the public sector, by an arm’s length company owned and controlled by the Scottish Government.
This will provide stability and certainty for passengers and staff and place the operation of ScotRail services in public hands from the end of the current contract.
ScotRail staff will transfer to the new Scottish Government owned company, with their terms and conditions protected.
This period of stability will provide a platform whereby we can assess the scale and pace of recovery from Covid 19 and progress options for reform, in particular my preferred model of an integrated, public sector controlled railway.
Standing the lack of clarity in relation to rail reform proposals, I am not able at this stage to confirm how long I expect Operator of Last Resort arrangements to be in place. This is something that will be considered further as the shape and pace of reform becomes clearer.
Presiding Officer, the rail industry has faced unprecedented challenge throughout COVID-19 pandemic and I again offer my thanks to rail workers across our country for their efforts.
As we look to a period of necessary and overdue reform, it is my duty to secure the continued operation of stable and efficient rail services within the existing legislative framework.
In taking the approach I’ve announced today, we will secure stable delivery of rail services within public hands and under Scottish Government control, providing certainty for passengers and rail staff.
Presiding Officer, I firmly believe that this approach will best serve the interests of passengers and the taxpayer in the future.