Scottish transport secretary Michael Matheson has announced that the Abellio ScotRail franchise will end in 2022 – three years earlier than it was due to finish.

Dutch rail operator Abellio has been running the services since 2015, but has recently faced criticism for cancellations and performance levels. Ministers had reportedly been under pressure to act over the service, but Matheson told the Scottish Parliament today that a proposed increase in government subsidy would not provide sufficient benefits to passengers.

As such, Matheson said a ‘break clause’ in the ScotRail contract would allow Abellio to leave the franchise early, currently expected to be March 2022.

Delivering the news at Holyrood, Matheson said: “Our rail network is of significant social, economic and environmental value to the people of Scotland, and ministers must ensure that the services we secure are high-performing, financially sustainable and offer value for money.

“We currently provide around two-thirds of the running costs for our railway and it is essential that this is sustainable going forward. Our record investment in rail is already delivering more seats, more trains and more stations.

“Any changes to the level of subsidy paid by the government must deliver new benefits for passengers and taxpayers and whilst there have been improvements in recent years, the proposed changes were not sufficient to justify additional subsidy.”

Matheson also pointed out that the Scottish government believes rail franchising has failed and “that the rail industry, as a whole, must embrace reform”.

Matheson said he is now looking at other options for the ScotRail services, including bringing them into the public sector.

Abellio UK MD Dominic Booth commented: “We are hugely disappointed by this decision and believe it’s the wrong choice for Scotland’s Railway [ScotRail] and its customers.

“Abellio has invested more than £475 million in new and upgraded trains, added 23 per cent more seats for customers and created more than 500 extra jobs in Scotland since the start of the franchise in 2015 – the biggest investment in trains and stations in over 150 years. Our offer to Transport Scotland would have delivered an improved service for our customers at a reduced cost to the taxpayer.

“We will remain fully committed to running a safe and reliable service until the end of the contract in 2022. While this decision creates unnecessary uncertainty for more than 5,200 staff and our customers, we will maintain our focus on delivering vital projects for Scotland’s Railway and seeing through the delivery of significant customer benefits until 2022.”

The UK government is awaiting the outcome of the Williams Review, which was launched after Stagecoach and Virgin Trains were allowed to end the East Coast Mainline franchise early to avoid financial instability. A final report was due this autumn, but it has now been delayed owing to the snap general election that took place last week.

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