Serco given £110m of taxpayers’ cash for Caledonian Sleeper upgrade

Serco only had to pay £40m for their upgrade

The UK and Scottish governments have been criticised for spending £110m of taxpayer’s money on upgrading a private company’s trains.

Outsourcing giant Serco has just launched four new trains on its Caledonian Sleeper line from London to Scotland.

Unlike the previous ones, these trains are equipped with wifi, double beds and ensuite bathrooms

These trains were made in Spain and cost £150m. Of that, the UK government paid £50m, the Scottish government paid £60m and Serco will pay just £40m.

Ellen Lees, Campaigns Officer at We Own It said: “That the new luxury sleeper trains have received over £110m in funding from both the UK and Scottish governments shows just how farcical rail privatisation has become.”

“Private rail operators are propped up by government subsidy in order to make the investment our railways so desperately need. All the while, they’re raking in massive profits and funnelling away cash to shareholders.”

“Trains like these have the potential to get people out of planes and cars, but we can’t get the network we need without public ownership.

It’s high time we ended this corporate subsidisation and brought our railways into public ownership, so they can benefit everyone, not just the shareholders.”

The TSSA transport union has also criticised the subsidies given to Serco as well as the decision to hand the contract to Serco in the first place.

In 2014, TSSA general secretary Manuel Cortes said: “Quite frankly, with their appalling list of failures in the UK and globally they should never have even been considered as contenders for the Scottish sleeper service. The logical option of public ownership was not even looked at.”

Commenting on this story, a Serco spokesman said: “The new £150m Caledonian Sleeper fleet is set to transform rail travel and the reality is it would not exist without private sector investment.”

“We were delighted to receive additional funding of £60m from the UK Government and Scottish Ministers to support the build and rollout of these trains, with the balance funded by Serco and our finance partner.”

While this Serco spokesman claimed the company has received just £60m from the UK and Scottish governments together, this figure is contradicted by other sources which put this figure at £110m.

The Caledonian Sleeper website says it received a £60m capital grant from Scottish ministers and the UK’s Scottish Secretary David Mundell is quoted in The Northern Echo as saying the UK government has invested £50m in the fleet.

When asked to explain these contradictions, the Serco spokesperson did not reply.

Joe Lo is a freelance journalist and a reporter for Left Foot Forward

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7 Responses to “Serco given £110m of taxpayers’ cash for Caledonian Sleeper upgrade”

  1. Tom Sacold

    The whole transport system needs to be renationalised so that effective investment can take place.

    Subsidies to travellers should based on need. Why are middle-class commuters journeys to work in the South-East, particularly into London, subsidised by working-class taxpayers?

    Commuters into the City of London should pay the full cost and then more !!!

  2. nshgp

    Subsidies – great when you get other peoples’ money
    Bad when other people get you money.

    We have Tom above, demanding that other people pay sol he doesn’t.

    It’s simple. Tickets fund the rail. If tickets don’t fund the rail costs, then you increase the costs. There should be no subsidies.

  3. Kettering Rob

    Yet again private companies are getting trains provided for them out of the taxpayers purse. Both GWR & VTEC (when announced) got given new fleets of IET’s to replace the HST’s that have served well, at a significant cost to the taxpayer. Now Serco has got yet more funding from the taxpayer, on trains which 99% of the UK population will never use or need to use. If British Rail was given this funding back in the day where would we be now?

  4. NMac

    Bring Back British Rail – ASAP. Give it the same subsidies that these so-called private operators get and I am sure it would provide a much better service – for people and not for a few wealthy shareholders.

  5. Patrick Newman

    The case for re-nationalisation is overwhelming and would be popular. Privatisation is a corrupt system – trying to introduce a market operation into a natural monopoly. The same could be said about energy and water etc. Serco will mop up the subsidy and if it does not pay they will, like Stagecoach/Virgin, just walk away with little probability that they will suffer. Arguably Stagecoach/Virgin owe the government the balance of the franchise they pulled out of – about £2bn. It cost them a mere £200m. With 20+ train operators privatisation ensures both duplication and inefficiencies. The separation of the maintenance, management and development of the infrastructure (permanent way) from train operation introduces additional fragmentation and inefficiencies.

  6. Gjh

    I read an article saying that Flying Scotsman will now be able to work to Fort William due to work done on bridges, etc to enable these Spanish built carriages to work through. Where is this extra cost quantified….? We now have little ability to build our own Locos and stock thanks to privatisation. Where are these costs quantified….?

  7. Henry Peacock

    3.1.3. The Coaches shall be fully compatible with the infrastructure over which they are to operate (including potential diversionary routes) and neighbouring railway operations.

    Locomotives are much heavier than the coaches that they pull. And, whilst rolling stock manufacturers have suffered under privatisation, the damage was done by the long pause before new stock was ordered.

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