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Virgin Trains East Coast: Meeting with DfT Advisors

9 March 2018

A meeting took place on Wednesday 7 March with SNC-Lavalin, one of three consultants engaged by the Department for Transport to make the necessary preparations for bringing East Coast back under direct Government control if the Secretary of State for Transport decides to pursue this option. Discussions are also currently taking place between the DfT and VTEC on the alternative arrangement which would see VTEC continue to run the service between now and 2020 on a "not for profit" basis on behalf of the Government.

SNC-Lavalin explained their role was to prepare for a seamless transfer of service between VTEC and direct Government control, and that a number of experts were currently evaluating the operation and developing plans for this eventuality. They would have no involvement in any Government-run operator, and were employed as advisors only. They were unable to give us any further information on when the decision would be made by the Secretary of State, other than to suggest it would be within weeks rather than months. Their plans will include the transfer of all staff to the new Government owned Company, and their recommendation is for this to be achieved with minimum disruption to existing arrangements. Under the TUPE (Transfer of Undertakings Protection of Employment Regulations 2006) legislation, employment contracts and contractual entitlements would remain unchanged at the point of transfer, however they did explain that non-contractual benefits provided by the Virgin and Stagecoach groups would cease if you were no longer employed by VTEC.

The meeting was informative and welcome, but it does feel very much like this is contingency planning rather than a serious move to bring East Coast back under direct Government control. This week’s communication from VTEC also implies that direct control through the “Operator of Last Resort” (OLR) will only happen if the Government is unable to reach a satisfactory agreement with the Company to run the service until 2020. The Secretary of State has been very careful not to criticise VTEC for the running of the franchise, putting its failure solely down to “over-bidding”. It therefore seems highly likely that a new agreement will be reached with VTEC to continue to run the service, meaning that a clear opportunity to return the East Coast Mainline to state control will have been lost, together with millions of pounds worth of promised and much needed revenue to the exchequer. Once a decision is made by the Secretary of State we will seek an urgent meeting with whoever will be running the service to discuss their plans for the next two years. We will of course keep you updated of any further developments.

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