Rail campaign group threatens legal action against Chris Grayling over beleaguered East Coast franchise
Transport secretary Chris Grayling is being threatened with legal action by a campaigning group over the controversy surrounding the Virgin Trains East Coast mainline.
Bring Back British Rail has instructed law firm Leigh Day to seek a judicial review of Grayling’s handling of the franchise, after it was announced that Virgin and Stagecoach’s joint contract would end three years early in 2020 following a run into financial difficulties.
The East Coast route, which links London to Edinburgh, was state run from 2009 until Stagecoach and Virgin signed a deal in 2015 to run the franchise until 2023. It said the deal would grant the government £3.3bn in revenue, but Stagecoach admitted last year that it had overbid for the contract and had recorded losses of around £200m, citing factors such as Brexit and terrorism.
The amount Stagecoach, which owns 90 per cent of the joint venture, had to guarantee to pay in losses was capped at £165m if performance did not meet expectations.
Bring Back British Rail said on its website: “We’re now working with public law experts Leigh Day to bring Chris Grayling to court to account for these decisions. We expect this to be a landmark judicial review case; exposing the farce of rail franchising for the shameful waste of public money that it is, and paving the way to a re-unified national rail network run in the public’s interest once again.”
Read more: MPs plan to scrutinise East Coast rail franchise as DfT denies bailout
The group said it wanted to ban the operator from bidding for future contracts.
A spokesperson for the Department for Transport said: “There is no basis for legal action. Virgin Stagecoach have met all of their financial commitments as set out in the East Coast franchise agreements.”
The Transport Select Committee announced in February that it was launching an inquiry into the troubles, saying there were “serious questions” to be asked of ministers as well as the train operator.
The committee said this marked the third collapse of a commercial franchise agreement on that part of the railway in just over 10 years. MPs are currently assessing the best options for keeping services going in a way that suits both passengers and taxpayers.
Read more: Stagecoach chief exec hits back as firm loses East Coast contract