Operator of last resort

An operator of last resort is a business in the United Kingdom that operates a railway franchise, on behalf of the government, when a train operating company is no longer able to do so. Since May 2023, there are six such operators in England, Wales and Scotland.

Purpose

Under the Railways Act 1993, which privatised passenger operations in the United Kingdom, the government is required to maintain continuity of passenger rail services if a franchise is terminated. In some instances, the government has been able to negotiate for the existing franchisee to continue to operate the franchise on a management contract until it can be relet, as happened when GNER defaulted on the InterCity East Coast franchise in 2007.^[1]

Should this not be possible, the Department for Transport (DfT) in England (through DfT OLR Holdings), or the Scottish Government (through Scottish Rail Holdings) for the ScotRail franchise in Scotland, and the Welsh Government for the Wales & Borders franchise in Wales, is required to step in as the operator of last resort.

Structure

In July 2009, the DfT established Directly Operated Railways (DOR) as its operator of last resort for England.^[2] In November 2015, the DfT wound up DOR and appointed a partnership of Arup Group, Ernst & Young and SNC-Lavalin Rail & Transit.^[3]

Utilisation

Since privatisation in the mid-1990s there have been nine occasions when an operator of last resort has been appointed.

Current

• London North Eastern Railway has operated the InterCity East Coast franchise since 2018, after Virgin Trains East Coast defaulted.^[4]
• Northern Trains has operated the Northern franchise since 1 March 2020, after the Arriva Rail North franchise was terminated by the Department for Transport.^[5]
• Transport for Wales Rail has been the Welsh Government's operator of last resort since 7 February 2021, after the Wales & Borders franchise operated by KeolisAmey Wales became unviable as a result of the COVID-19 pandemic.^[6]
• SE Trains has operated the South Eastern franchise since 17 October 2021, after the previous Govia-owned operator Southeastern (legally London & South Eastern Railway) was stripped of the franchise for not declaring £25 million of revenue.^[7] The new operator has continued to use the Southeastern brand.
• ScotRail, controlled by Scottish Rail Holdings for Transport Scotland, has run the ScotRail franchise since 1 April 2022, after the previous operator Abellio ScotRail 7 year contract ended.^[8]
• TransPennine Trains Ltd took over from First TransPennine Express Limited on 28 May 2023 after the DfT terminated the contract on the grounds of poor service.^[9][10]
• Scottish Rail Holdings took over Caledonian Sleeper from incumbent operator Serco on 25 June 2023.^[11]

Past

• South Eastern Trains operated the South Eastern franchise from 2003 until 2006, after the Connex South Eastern franchise was terminated by the Strategic Rail Authority.^[12]
• East Coast operated the InterCity East Coast franchise from 2009 until 2015, after National Express East Coast defaulted.^[13]

References

1. "East Coast to be re-franchised". Railway Gazette International. January 2007. p. 6.
2. . Directly Operated Railways. 2009. Archived from the original on 27 October 2010.
3. Leftly, Mark (18 January 2016). "Government accused of 'contracting out' emergency train franchises to private firms". The Independent. Archived from the original on 24 May 2022.
4. "East Coast train line to be put into public control". BBC News. 16 May 2018.
5. "Troubled rail firm Northern brought under government control". BBC News. 29 January 2020.
6. "Welsh Government takes control of franchise". The Railway Magazine. No. 1436. November 2020. p. 6.
7. "Southeastern: Government takes over services after serious breach". BBC News. 28 September 2021.
8. "ScotRail goes back into public ownership". BBC News. 1 April 2022. Retrieved 1 April 2022.
9. "Transpennine Express to be brought into operator of last resort". GOV.UK. Retrieved 11 May 2023.
10. "TransPennine Express loses contract over poor service". BBC News. 11 May 2023. Retrieved 11 May 2023.
11. "Serco bids a fond farewell to the Caledonian Sleeper". RailBusinessDaily. 23 June 2023. Retrieved 25 June 2023.
12. "Connex sacked from South-east franchise". The Railway Magazine. No. 1229. September 2003. p. 10.
13. "East Coast rail change confirmed". BBC News. 5 November 2009.