The ScotRail franchise is to be taken over by the Scottish Government on the expiry of the current contract with Abellio in March 2022

UK: The ScotRail franchise is to be taken over by the Scottish Government on the expiry of the current contract with Abellio in March 2022, Transport Secretary Michael Matheson has confirmed.

Services are to be operated by an arm’s length Operator of Last Resort, wholly owned and controlled by the Scottish Government, with staff transferring with their terms and conditions protected.

Cabinet Secretary for Transport, Infrastructure and Connectivity Michael Matheson MSP

Cabinet Secretary for Transport, Infrastructure and Connectivity Michael Matheson

Matheson also announced that work is underway to put in place further Emergency Measures Agreements to ensure the provision of ScotRail and Caledonian Sleeper services between April 1 and September 19 this year, at an estimated additional cost of £173·1m.

Franchise expiry

The ScotRail franchise is currently held by the Abellio subsidiary of Dutch state train operator NS. The contract which started on April 1 2015 included a minimum term of seven years, plus an option to extend it to 10 years by mutual consent after five years.

This extension was subject to a reassessment of cost and revenue assumptions, and a possible rebasing of the subsidy provided. In December 2019 the Scottish Government said the ‘significant’ increase in subsidy being proposed would not secure ‘commensurate benefits’, and it would therefore allow the franchise to expire in March 2022.

’No longer fit for purpose’

Confirming on March 17 that the Scottish Government would take over operation of the franchise, Matheson said ‘the current franchising system is no longer fit for purpose’. There was also ‘continued uncertainty about the form and timing of rail reform’ under the review of the industry structure which the UK government commissioned from Keith Williams and which was ‘now a year overdue.’

ScotRail train.

ScotRail train.

Repeating calls for further devolution of rail powers from the UK to Scottish governments, Matheson said the Scottish Government had considered ‘the full range of options available’ under the current framework. This assessment, along with the uncertainty caused by Covid-19, and the continuing delays to the UK government white paper on rail reform, had led him to decide that it would not be appropriate to award a new franchise either through a competition or a direct award.

Meanwhile, on February 7 the Welsh Government took Wales & Borders services into public ownership, saying the move which had been announced last October would provide longer-term financial stability to ‘protect services, safeguard jobs and deliver infrastructure improvements in light of the ongoing challenges of coronavirus.’


Responding to the announcement, ScotRail Chief Operating Officer Alex White said ‘customers can be reassured that we will continue to operate a reliable service for key workers and support the vaccine rollout and the opening up of the economy over the coming months as we prepare for the introduction of the changes announced by the Scottish Government. We will work closely with Transport Scotland and Network Rail to ensure a smooth transition to the new operator to deliver stability for customers and staff.’

Andy Bagnall, Director General of the Rail Delivery Group which represents train operators, said ‘despite the challenging commercial environment caused by the pandemic, the best way to encourage future train travel and support a green recovery is by empowering private operators. They have doubled journeys in 20 years because know their customers best – and will invest, innovate and run better services that attract more passengers again in the future.’

In contrast, RMT trade union General Secretary Mick Cash said ‘we have long campaigned for the Scottish Government to utilise its existing powers and take Scotland’s rail passenger services into public ownership and today’s announcement represents a clear victory for this campaign.’ The union ‘will be seeking urgent discussions with the Scottish Government to ensure that all ScotRail workers’ jobs, pay and conditions are protected’.

David Sidebottom, director at the independent watchdog Transport Focus, said ‘passengers will judge the success of the any changes on how far it meets their priorities for improvement: more punctual and reliable services, better value for money and the cleanliness of the service.’