There are few things that unite the People’s Assembly more than the campaign to keep East Cost public. The government’s decision to award the franchise to First Capital Connect should concern us all – both in terms of public ownership of the railways, the fairness of the tendering process and the possible effect of all of this on many other of the things we hold most dear. Here is the full story…
Rail unions TSSA, Aslef and RMT have begun a Judicial Review of the coalition’s decision to re-privatise the East Coast line from Edinburgh to London. The East Coast line was privatised on 14 November 2009 following National Express’s refusal to support their subsidiary National Express East Coast’s request for further funding resulting in the renationalisation of the line. This was intended to be a temporary solution with planned re-privatisation initially planned for December 2013, later extended to February 2015.
The coalition have now pronounced plans to award the line to First Capital Connect (a subsidiary of the First Group) cutting out the tendering process and the recommended 24 month process as suggested by the Brown Review. The Brown Review, undertaken in late 2012, found that the franchising process ought to run for 24 months in order to allow vigorous testing of the tender and ensure the best outcome for tax payers. When a line is franchised out by the DfT franchise holders are paid by the local authority to take on the service with any excess profits being paid back to the government, although the definition of excess is not publicly defined.
East Coast, whilst under public ownership, has paid £600m back to the treasury since it was taken back under public ownership in 2009, while comparable figures are not available for privatised lines this remains a significant sum at just over £100m a year.
Judicial Review is the process by which a governing body’s decisions may be called into question, this predominantly concerns the processes rather than the end result. Should the review be successful this could change the landscape of the tendering process in the future. The most concerning issue brought to light is the coalition’s intention to award the franchise to First without the tendering process effectively making the offer a closed process and not allowing for alternatives or competition.
While the long term plan would ideally be for East Coast to remain nationalised the review poses important and valid questions which are even more concerning for other public services under threat of privatisation. Should the coalition be able to tender contracts on such a closed basis and for fixed terms it may not be a wild leap to believe this may be undertaken for NHS contracts. Of course the unions will be funding the legal action as there is no longer public funding for such Judicial Review cases.