Rail services on the East Coast Mainline returned to government control on Sunday (24 June) as Stagecoach and Virgin Trains handed over the reins.
The firms, which owned a 90 per cent and 10 per cent stake respectively, were allowed to duck out of their contract to run the franchise after claiming they would face financial difficulties owing to delays to infrastructure projects by Network Rail.
The Department for Transport’s decision was criticised by former transport minister Lord Adonis, who said it could end up costing taxpayers ‘billions’.
Transport secretary Chris Grayling originally agreed to allow the firms to leave the franchise in 2020 – three years earlier than their contract stated – but later said the situation was “much more urgent” than thought.
After deliberating between the options of renationalising the line or setting up a not-for-profit arrangement with Stagecoach and Virgin Trains, Grayling decided to take back control of the franchise.
The line runs from London to the north of Scotland and includes several major stops including York, Leeds, Aberdeen, Edinburgh, Glasgow and Inverness. It will now operate as the London North Eastern Railway (LNER), which was the name of the line in the 1940s.
Staff from Virgin Trains East Coast will transfer to LNER and former MD David Horne will remain in the same role with the new franchise.
According to LNER, £8 million will have to be spent on marketing, rebranding, IT systems and staffing.