Sir Richard Branson responds to loss of rail contract…. (with a picture review of his visits and events)
The Department of Transport’s announcement yesterday that Virgin, in partnership with Stagecoach Group and SNCF, had been disqualified from the bidding process for the new West Coast Partnership franchise came as a blow and a complete surprise. For more details see the Blog entry dated 10thApril 2019.
Sir Richard in a posting on the Virgin Blog site says he is ‘devastated’ at the decision. Only a few days ago Virgin Trains announced that it was now carrying 39.5 million passengers a year and the West Coast operation was on target to hit 50 million passengers a year by 2026 and that is ahead of HS2. That’s a long way from the 14 million passengers a year in the first year of Virgin Trains’ tenure of West Coast operator in 1997.
Sir Richard is passionate about rail. He rode the storm in the early years of the CrossCountry and West Coast franchises. Perhaps it would have been better to have left the bright red Virgin livery and brand off the ‘old’ trains that were inherited with the franchises in the 1990s. But hindsight doesn’t make things better. That said there is no doubt that Virgin made an impact on CrossCountry and also on the West Coast route. It has operated the West Coast franchise now for 22 years - far longer than the route was operated by British Rail’s InterCity sector, although the Inter-City brand was initially introduced in 1966.
Virgin, with its Partner Stagecoach, has transformed travel on the West Coast with new trains and a much increased frequency on routes to and from London.
I met Sir Richard a few times in the early years of the franchise. The first time was when I worked at EMAP at the West Coast franchise launch and immediately afterwards following the production of a limited edition Hornby model of a Class 90 locomotive in Virgin colours. Along with then ModelRail Editor Chris Leigh one of the Class 90 models was presented to Sir Richard at his Holland Park home. I was back at Holland Park a year or so later when Virgin launched The Trainline.
Between April 2000 and November 2012 I has contact with Sir Richard through my activities as part of the Virgin Trains Communications Team. Like him or loathe him, Sir Richard ‘s visits were always welcomed by staff and he knew how to engage and motivate them. He was also there to support them through the hard times and there were several. Many of the people working for West Coast joined the business because they wanted to work for Virgin.
Reproduced below is the text from Sir Richard’s Blog:
“I received the news this morning (April 10th2019) that the Department for Transport (DfT) has decided to disqualify our bid for the West Coast Partnership. This means that Virgin Trains could be gone from the UK in November.
“I am devastated for the teams who have worked tirelessly to make Virgin Trains one of the best train companies in the UK, if not the world. Virgin Trains has led in the industry for more than 20 years and we wanted this to continue for many more years.
“Running the railway comes with many challenges and the West Coast Main Line was struggling when we took it over, but we were determined to turn it around. With new trains, new track and our incredible team, we have become renowned for the award-winning way we look after our customers.
“Virgin Trains is consistently at the top of the long distance franchised operators for customer satisfaction - receiving a 90% customer satisfaction rating in the National Rail Passenger Survey. We have almost tripled passenger journeys - from around 14m in 1997 to nearly 40m today - and introduced ground-breaking initiatives like automatic delay repay, Beam, and Alexa. Drawing on the expertise we’ve gained over the past two decades in the UK, Virgin Trains have also recently launched in the US and we are working to transform rail travel there too.
“We’re baffled why the DfT did not tell us that we would be disqualified or even discuss the issue - they have known about this qualification in our bid on pensions for months.
“Our first priority is always to look after our teams. The pensions regulator has warned that more cash will be needed in the future, but no one knows how big that bill might eventually be and no responsible company could take that risk with pensions. We can’t accept a risk we can’t manage - this would have been reckless. This is an industry-wide issue and forcing rail companies to take these risks could lead to the failure of more tail franchises".
We have scoured our archives of press and PR images issued Virgin Trains (CrossCountry and West Coast) and can present a selection showing Sir Richard Branson (and some with Sir Brian Souter) taken during events. We also have a press image taken on the first day of Virgin’s operation of the West Coast franchise. All images are © Virgin Trains.
When I switched the phone on this morning there were early morning emails from Virgin Trains and Stagecoach Group. What they contained has far reaching consequences. Effectively, an announcement from the Department for Transport spells the end for both Virgin Rail Group and Stagecoach Group in UK Rail operations.
The announcement from Virgin Trains was brief and gave no background to the DfT’s actions which had resulted in it being disqualified from bidding for the new West Coast Partnership rail franchise.
The Virgin statement merely read:
"We’re very disappointed by the DfT’s unexpected decision. We’ve led the industry for more than twenty years with our ground-breaking innovations, such as automatic delay repay, and award-winning customer service.
"We’re studying the DfT’s decision carefully to understand why they’ve taken this action and would like to reassure all our customers that they can still book and travel as normal.
So to the Stagecoach statement and it contains dynamite. Stagecoach Group says the current franchising model is not fit for purpose and is damaging to investor confidence. Stagecoach has been disqualified from all three franchises that it was bidding for over it stance on pensions funding which meant it submitted ‘non-compliant’ bids. But what has really angered the Perth-based Group is “both the DfT’s decision and its timing”. Stagecoach says The Department (DfT) has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns.
It will now play no part in the South Eastern and West Coast Partnership franchise bidding and has lost out on the East Midlands franchise, which has been awarded to Abellio.
The issue centres around pension funding requirements and the financial risk that franchisees could be exposed to. There are still large numbers of staff employed in UK railway operations who are on final salary pension scheme that go back to British Rail and the early years of rail privatisation.
The full Stagecoach Statement is below:
Stagecoach Group plc ("Stagecoach") has been informed by the Department for Transport ("DfT") that it has been disqualified from the current three UK rail franchise competitions.
Stagecoach was shortlisted in the following franchise competitions:
• East Midlands where it was bidding independently
• South Eastern where it was bidding with support from its intended partner Alstom
• West Coast Partnership where it was part of a joint bid with Virgin Group and SNCF
A senior DfT official has verbally informed Stagecoach that it has been excluded from all three competitions for submitting non-compliant bids principally in respect of pensions risk.
Bidders for these franchises were asked to bear full long-term funding risk on relevant sections of the Railways Pension Scheme. This is at a time when The Pensions Regulator is seeking additional funding because of serious doubts over the Government's ongoing support for the industry-wide scheme.
Stagecoach Group Chief Executive Martin Griffiths said: "We are extremely concerned at both the DfT's decision and its timing. The Department has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns.
"We have drawn on more than two decades of rail experience and worked in partnership with local stakeholders to develop high quality proposals to improve each of these rail networks.
"We bid consistent with industry guidance issued by the Rail Delivery Group and shared with the DfT. Without ongoing Government support for the long-term funding of railway pensions, The Pensions Regulator has indicated that an additional £5billion to £6billion would be needed to plug the gap in train company pensions.
"In contrast, the rail industry proposed solution would have delivered an additional £500million to £600million into the scheme. This would have provided better stability and security for members and much better value for taxpayers. We are shocked that the Government has rejected this for a higher risk approach. We would urge that a full independent value for money review is undertaken into this issue without delay.
"Along with many other train companies, we believe strongly that the private sector should not be expected to accept material risks it cannot control and manage. In fact, this was a key finding of the Brown review into rail franchising more than six years ago. We are therefore extremely surprised that the Government still expects private operators to take risks they are not best placed to manage, despite the recent difficulties experienced by a number of operators of outsourced public sector contracts.
"Forcing rail companies to take these risks could lead to the failure of more rail franchises and cannot be in the best long-term interests of either customers, employees, taxpayers or the investors the railway needs for it to prosper.
"This is more evidence that the current franchising model is not fit for purpose, a view which has already been expressed by Keith Williams, who is leading the independent review of the rail system.
"It also further damages the already fragile investor confidence in the UK rail market and it undermines the involvement of two of the last British transport groups who are part of running Britain's railway.
"Over more than 20 years, we have delivered industry-leading performance, record passenger growth, excellent industrial relations, and the highest levels of customer satisfaction in the sector. We will continue to focus on delivering high quality services for our customers at our existing rail businesses."
A DfT spokesperson reported in The Independentsaid:
“Stagecoach is an experienced bidder and fully aware of the rules of franchise competitions. It is regrettable that they submitted non-compliant bids for all current competitions which breached established rules and, in doing so, they are responsible for their own disqualification.
“We have total confidence in our process. We have awarded the East Midlands franchise to Abellio after they presented a strong, compliant bid.
“It is entirely for Stagecoach and their bidding partners to explain why they decided to repeatedly ignore established rules by rejecting the commercial terms on offer.”
I’m sure that the coming days and weeks will see Stagecoach and Virgin instruct their lawyers to pour over the fine minutiae of franchise bidding requirements and on past experience I would expect the words Judicial Review to be mentioned before too long.
What the DfT has achieved is to create confusion and uncertainty. I really hope that both Stagecoach and Virgin have a system in place to support their staff. I clearly remember the morning in August 2012 when the DfT announced that Virgin Trains had lost the West Coast franchise - a decision subsequently reversed. That morning at Euston staff were in tears. But they continued to provide the service to passengers with professionalism.
The time between Christmas and the New Year can be a quiet time for news, which means that it can be easier for companies to get their message into print.
For some businesses a Press Release is written to capture the attention of news editors and ensure their brand receives what in effect is free publicity. The wackier the Press Release the more chance that it would get picked up and used.
So a story about a bra down a train toilet is one way to get that attention!
So over to Virgin Trains to take up the story.
“Virgin Trains is urging customers to follow the 3Ps of flushing after a lady’s bra was found to be the latest cause of a blocked toilet onboard one of its Pendolino trains.
“The undergarment joins a list of strange items that include glasses, wedding rings, nappies and even a football scarf to have been flushed down the pan.
“On a typical day around four toilets are taken out of service as a result of inappropriate use. This equates to over 18,000 lost toilet hours per year, and a repair bill in excess of £182,000.
“By far the biggest culprit however is the ‘wet wipe’, accounting for over 90% of blockages. Even wipes labelled as ‘flushable’ can lead to problems, the woven material clogging the internal pipes leading to the onboard effluent tanks.
“It did make us smile when we found the bra as it’s not something you would expect to find,” explained Michael Jacks, Head of Fleet and Engineering at Virgin Trains.
“But it does highlight a very serious issue, and one that greatly impacts on our customers. Bins are provided, and we would remind everyone to follow the 3Ps of flushing. Only pee, poo and paper should be flushed down any toilet.”
• Virgin Trains has 484 toilets in service on its trains each day.
• On average a toilet is flushed eight times per hour.
• Talking toilets, along with tongue in cheek signage, have been used onboard Virgin Trains to promote
responsible toilet use.
The toilet message
“Please don’t flush nappies, sanitary towels, paper towels, gum, old phones, unpaid bills, junk mail, your ex’s sweater, hopes, dreams or goldfish down this toilet.
EuroBusExpo showcases the latest in bus and coach technology............ and a couple of historic buses
We visited EuroBusExpo 2018 this week at the NEC in Birmingham and caught up with the great and the good from the bus and coach industry and their suppliers. We were impressed by the advances in passenger facilities on several of the buses on display. Where once phone charging facilities were seen as a major step forward - albeit using three-pin plugs, now its USB sockets and even wireless charging, WiFi and seat back lighting. And let's not forget bell pushes on each row of seats.
But amongst the modern buses and coaches were two buses which themselves were state of the art many decades ago and gave visitors a real visual comparison of how far passenger comfort has improved.
For now here is a selection of images from the show.
During my 12 years with Virgin Trains the one thing station and onboard staff came to dread was the Friday evening rush to head out of London’s Euston station.
Passengers would hang around for hours on a Friday evening waiting for the digital station clocks to tick over to 19:00 and signal the end of peak time travel restrictions.
Cue an ungainly and brutal rush as passengers tried to clamber on board the first of the evening trains on which off peak tickets were valid.
Despite extra trains operating it was a case of crush loading. But those passengers who had been on the station waiting for the end of peak travel restrictions could not have failed to notice that many of the peak time trains left Euston with empty seats.
At the busiest point of the journey the first few trains after 19:00 on a Friday were loaded to a capacity of more than 110%.
Now after a 12-week trial period, Virgin Trains has adopted an easy fix. Scrap afternoon peak travel restrictions on a Friday.
It was a risk. A risk that could have seen massive abstraction in revenues. But that has to be considered alongside passenger satisfaction, improved working conditions for station and onboard staff, and the potential for generating new business.
Now Virgin Trains has announced that having analysed the results of the trial it has banished Friday afternoon restrictions for good (or, I suspect, at least whilst it operates the West Coast route).
The move is great news for passengers. It is just a pity that it took Virgin so long to do it.
And during the trial the number of passengers crammed onto the first off peak service to Manchester fell by 61% with a 75% reduction in passengers on the 19:03 to Birmingham.
Virgin Trains confirmed that over the course of the trial in excess of 3,500 additional journeys were made each Friday, as visitors flocked to major cities such as Manchester, Birmingham and Glasgow for a weekend break. But despite driving up numbers travelling, the promotion has also led to a reduction in congestion by spreading passenger demand more evenly throughout the day.
“Rather than everyone waiting for the first off-peak train on Friday evening, people can now travel whenever it is convenient for them,” explained Sarah Copley, Commercial Director at Virgin Trains. “This change means we’ve been able to reduce congestion, whilst helping people save money and make an earlier start to their weekends.”
While the cheapest tickets are always available in advance, those who decide to travel on the spur of the moment can now secure a cheaper off-peak ticket any time after 09:30 on a Friday, instead of waiting until 19:00. A customer arriving at Euston Station at 16:00 and buying a ticket for the next train to Manchester will see their fare reduced by £125.55.
The decision has been welcomed by both staff and passengers, with positive comments on Virgin Trains internal communications channels and social media feeds.
For as many years as I can recall bus companies around the country have retained vehicles of historic significance in their fleet. The majority of these buses saw use on a regular basis and were maintained in excellent condition.
Then there were the vehicles that were in regular service but regarded as ‘show condition’ vehicles by depots. A knock-on benefit of depot ‘show condition’ vehicles is that a number were bought by company staff when they were retired from service and still exist in preservation.
Throughout the 1980s, 1990s, 2000s and the first part of the 2010s there was a real willingness on the part of bus companies to use their heritage buses in normal service. In many instances this small act allowed the companies to interact with the local community.
But with the move to low floor vehicles there has been a real reluctance to use ‘heritage’ buses either in normal service on a limited number of occasions a year or on special running days. What we are ending up with is vehicle of historic significant that are effectively ‘stuffed and mounted’.
One operator which supports running days is family-owned, Lincolnshire-based Delaine Buses. Here to protect the heritage of the business the Directors formed the Delaine Heritage Trust which looks after five-owned buses and has just taken on the custodianship of a sixth as part on a three year loan. A purpose-built facility houses the buses along with artefacts and publications.
This year marked the 25th anniversary of the first Delaine Running Day and the full opening of the Delaine Heritage Trust Museum is planned for the Spring of next year.
Anthony Delaine-Smith, Chairman of the Delaine Heritage Trust, told Steven Knight Media that his preference “has always been to see the Trust’s vehicles doing what they were intended to do which gives enthusiasts and the wider public the opportunity to ride on and savour the experience of the public transport of yesteryear”.
The latest Delaine running day took place on September 29thand celebrated the 90thanniversary of coachbuilder Yeates of Loughborough.
Delaine retains one of only two Yeates-bodied double decks built. A half-hourly service using the heritage fleet operated between Bourne and Stamford throughout the day with other Yeates-bodied coaches being used on a free tour from the Bourne depot to Rippingdale.
At the event Anthony Delaine-Smith announced that Yeates Europa-bodied Leyland Tiger Club MTL750 (Delaine 47) had joined the Delaine Heritage Trust collection on a three year loan from the Leicester Arts & Museum Service.
The five vehicles owned by the Delaine Heritage Trust are:
45 KTL780 Leyland PD2/Willowbrook
50 RCT3 Leyland PD3/Yeates
72 ACT540L Leyland Atlantean/Northern Counties
100 E100AFW Leyland Tiger/Duple
116 M1OCT Volvo Olympian/East Lancs
As far back as I can recall most bus companies allocated specific vehicle types to routes, either based on their type, or at least on their capacity (minibus/single deck/double deck).
This system of vehicle allocation requires discipline on the part of the vehicle allocation staff at the depot. This is a job that can be made more complex where vehicles carry route branding - but with the right mindset even extensive route branding can be made to work – TrentBarton, Nottingham, Reading Go North East are some examples of companies that can manage allocation of branded buses to routes well.
I have spent a considerable time travelling around by bus and also observing operations this year. In certain areas of the country I get the impression that controllers and vehicle allocation staff have ‘thrown in the towel’. Branded buses on the wrong route and frequently single decks are being allocated to double deck routes with the resultant heavy loadings and overcrowding whilst the double decks appear on routes where they carry fresh air around for much of the day.
Then there are routes for which a business case must have been made for investment in new buses but those new buses are used elsewhere.
I accept that in order to provide a service the allocation staff may take the view that ‘a bus is a bus’ but if a route is allocated double decks then that must be for a reason.
Whilst we were busy finishing off the Stagecoach South East Fleet Handbook quite a lot has happened, so we thought it time to catch up.
Firstly we had the introduction of new rail timetables for Northern and GTR (Great Northern and Thameslink). Oh dear, what a fiasco. Lack of clarity and delays in the planning process was accompanied by a delay to and a lack of preparation. Result = chaos. Trains were cancelled or heavily delayed without warning. The timetable was a work of fiction.
There was an attempt to return to normality. It didn’t work and despite pre-planned cancellations the temporary timetable seemed unworkable. Now we are promised another temporary timetable from GTR.
Over at Northern the decision was taken to suspend Windermere branch trains. At least with the support of the Department for Transport private operator West Coast Trains pulled a rabbit out of a hat and ran a shuttle service on the branch to supplement the slower rail replacement service.
This is not the first time a new timetable has failed to deliver, and I doubt it will be the last. I remember all too well the changes that were made, on the DfT’s instructions, to the Virgin CrossCountry ‘Operation Princess’ timetable less than six months after its introduction. It was too ambitious given the train fleet and train crew availability. For the most the extremities were cut from the CrossCountry network.
We have also said goodbye to Virgin Trains East Coast. Now operated under the LNER banner by an Operator of Last Resort appointed by the DfT. Lots of pre-handover activity saw station signage replaced and a start has been made replacing the Virgin logos on the trains with LNER ones. And presumably tonnes of Virgin-branded print (including many thousands of timetable books) will be pulped as LNER quickly issued its own branded material.
Stagecoach East has put its six Wrightbus Gemini-bodied open top Volvo B5TLs into service on the Cambridge City Sightseeing route, where they have replaced former London Dennis Tridents which were themselves converted to open top for the work.
Further north at Stagecoach East Midlands a fleet of Enviro 400MMC double decks have been put to work on the Pronto service and are based at Mansfield. The first time that double decks have been used on the Pronto network.
We have to say that we didn’t see it coming, and as we understand neither did the staff at East Yorkshire Motor Services. In mid-June the family-owned bus company was sold to Go Ahead, becoming part of Go North East.
A major rail replacement operation takes place this summer whilst Network Rail undertakes re-modelling work at Derby station. Stagecoach Yorkshire is one of the contractors who will be providing rail replacement services during the work.
The start of July has been relatively quiet, but we have been able to obtain details of Stagecoach’s new bus order for the current year, which you can find over on our Fleet Ramblings page.
We will now start work on new editions of our Stagecoach East Midlands and Stagecoach East Fleet Handbooks.
To London yesterday for SKM for a family day out and our first experience on Megabus Sid’s open top London MegaSightseeing tour.
This is a tour that differs from most others. No Hop-on/Hop-off, it’s a non-stop tour advertised to take around two hours and pass 50 points of interest in the Capital. Buses leave from three separate locations - Tower Hill, London Eye and Park Lane with tickets, which must be booked online starting at £1, plus the booking fee.
We paid under £5 for two tickets - not quite the entry level fare of £1 each but extremely reasonable.
To our stop for ten minutes before departure. The driver was also waiting for his bus having returned from a lunch break and was informative and a real credit to the business. But we did wait and wait with departure almost 35 minutes late.
The tour itself if good, vehicles well presented, and clear audio commentary, which is in English only and triggered using GPS technology.
The commentary is provided by a blue badge guide, although Sid does offer some additional information in his own style at times.
We had read mixed reviews on the tour including how some tours had missed out part of the route, but we wanted to sample it for ourselves.
Including ourselves there were just three passengers on the tour, but it is still early days. Despite the dull, fairly chilly and windy weather conditions we opted to sit in the open at the rear of the bus. The commentary was informative and the journey enjoyable. Top marks to Sid for arranging Tower Bridge to be raised in front of us as we headed for the end of the tour.
But we cannot forgive Sid for axing two parts of our tour to try and get the bus back on schedule for its next run. It is a real challenge for Stagecoach and the Megabus team to offer the advertised tours given the vagaries of London’s traffic and the congestion.
It does seem that there is a contingency plan in place to miss parts of the tour to recover from late running. If that is the case then it should be advertised. If it is not the case them Sid should hang his head in shame or he could be banished to the Tower.
After months of speculation, Transport Secretary Chris Grayling MP made his announcement on the East Coast rail franchise yesterday (May 16th).
Journalists were expecting an announcement on Tuesday, but it came on the afternoon of May 16thin a statement to the House of Commons.
The Virgin Trains’ East Coast franchise, whose shareholders are Stagecoach Group (90%) and Virgin Rail (10%) are being stripped of the franchise that they took over in 2015.
The Transport Secretary has opted to put in an Operator of Last Resort (OLR). Publicly-owned London North Eastern Railway will take over operating the route on June 24th 2018.
It would appear that the (OLR) option has been a serious consideration for Grayling since February 14ththis year when Government-owned company DfT OLR1 Limited was renamed to London North Eastern Railway Limited.
Since privatisation of the route in 1996 staff have worked for Great North Eastern Railway, National Express, Directly Operated Railways and currently Virgin Trains East Coast. They will transfer over to LNER under TUPE regulations.
Virgin Trains East Coast has been using its own financial reserves to meet its franchise obligations following a shortfall in revenues. There is no suggestion that the route is failing or that Stagecoach Group and Virgin Rail have failed to meet the terms of the franchise.
Chris Grayling told the House of Commons that following his statement in February 2018 that “the franchise would run out of money within months”. He added “This is not because the route is failing. It continues and will continue to generate substantial returns for the government, and the most recent figures show passenger satisfaction at 92%. The route has its challenges, but it is not a failing railway.
“However, as I explained in February, Stagecoach and Virgin Trains got their bid wrong and they are now paying a price. They will have lost nearly £200 million meeting their contracted commitments.
Grayling said that the analysis carried out by his team suggested the case for the future of the East Coast route was very finely balanced, with some elements favouring a contract with Virgin Trains and others favouring the Operator of Last Resort. He concluded “When judging against my key principles, neither option was obviously superior”.
“There is, though, another factor that I have taken into account. I want to make the smoothest possible transition to the creation of the new East Coast Partnership. So given the finely balanced judgement, I have taken into account broader considerations and decided to use the current difficulties to drive our long-term plans for the East Coast Partnership.” The Partnership approach will align the operation of trains and management of infrastructure.This is the second time the East Coast rail route has been taken into Government control. The last time was following the failure of National Express management on the route.
Stagecoach Group Chief Executive, Martin Griffiths, said: "We are surprised and disappointed that the Department for Transport has chosen not to proceed with our proposals. We believe our plans offered a positive, value-for-money way forward for passengers, taxpayers and local communities, ensuring the continuation of the exciting transformation already underway on East Coast and a smooth transition to the Government's new East Coast Partnership.
"However, we respect the Government's decision. We will work constructively with the DfT and the OLR in the weeks ahead to ensure a professional transfer to the new arrangements, supporting our employees and maintaining the same clear focus on our customers as we have over the past three years.
"Today's decision should not detract from the hard work and dedication of our people at Virgin Trains East Coast, who have been central to the transformation we have been delivering for our customers over the past three years. During that time, we have attracted more passengers, greatly increased investment, achieved industry leading customer satisfaction and made significant payments to the taxpayer to reinvest in public services.
"Despite today's news, we believe that we can continue to make a positive contribution to the UK rail market, delivering long-term customer benefits and sustainable returns for taxpayers and investors."
There is a key question, however, that still needs be asked. If Stagecoach/Virgin got it’s sums wrong and over-bid, why was it not picked up at the bidding stage by the DfT? That said I am aware that the East Coast rail franchise is seen as a jewel of rail operations and maybe, just maybe, there has been a case of train operators wanting East Coast within their portfolio ‘at any cost’!