ScotRail being in public ownership ‘could allow for 6.5% average fare cut’

SCOTRAIL could be taken into public ownership by 2020, a new report has said, claiming the move could lead to average fare cuts of 6.5% across the service.

A study produced for the TSSA union said if the rail service was nationalised “there is every reason to believe a publicly-run ScotRail could achieve a greater level of service than its predecessors”.

It also said having a publicly operated rail service could be a “powerful symbol of the sort of country Scotland aims to become in the 21st century”.

The report, which was produced by the Common Weal think tank, was published ahead of a meeting between TSSA general secretary Manuel Cortes and Transport Secretary Humza Yousaf.

Scottish rail passenger services have been run by train operating companies for the past two decades, the report said, adding the operators of the ScotRail franchise have made “consistent annual operating profits of £10-20 million”.

ScotRail was described as being “one of the most highly subsidised franchises in the UK”, with Abellio Scotrail receiving £293 million in direct government funding in 2015-16 – with the report stating this amounted to just over 45% of its total income.

And it said the “overall picture that emerges” of the operating company making profits “obtained on the basis of vast public subsidy and limited amounts of at-risk investment” appears to be “hard to justify”.

Nationalising the service would allow operating profits to be reinvested to create a “new, fairer fares regime”, with the report suggesting this could “allow for a 6.5% average fare cut, while retaining present funding levels”.

It recommended ScotRail “should be taken over by a public-sector body at the earliest available opportunity”.

This could be as soon as 2020 with the new operator beginning in 2022 – if the current operator Abellio is judged to be failing to meet its contractual obligations, the report said.

As well as bringing ScotRail into the public sector, it called on the Scottish Government to “seek the power to abolish the franchise system, and instead allow ScotRail to be operated permanently on a public-sector basis”.

Such a move would help “eliminate non-productive costs… and ensure a publicly-run ScotRail retains its transformative potential by providing a permanent break with decades of market-oriented rail policy”, the report said.

It also suggested the Scottish Government buy rolling stock direct – instead of the rail operator having to lease trains at “excessive rates” – saying this could result in millions of pounds of savings a year.

The report added: “The presence of well-funded, affordable and publicly-run railways would prove a powerful symbol of the sort of country Scotland aims to become in the 21st century.

“At present, while most similar European countries have efficient publicly-owned national rail companies operating most or all passenger services, Scotland’s trains are run by the Dutch state rail operator.

“A new, publicly-owned ScotRail has the potential to be a source of collective pride in the same way the National Health Service is today, and its presence would send a potent signal that Scotland’s society is one in which the infrastructure and services we have collectively built up contribute to shared rather than private prosperity, ultimately answering to and serving the common good.”

Mr Cortes said the report was “proposing nothing less than a Scottish People’s Railway as the most viable way of running Scotland’s railways”.

He added: “Transport Minister, Humza Yousaf has suggested a move to public ownership by 2020 is too ambitious. But this report shows it just a matter of political will to make it happen.

“Up here, this report shows there is nothing to stop the SNP now but themselves from taking a lead in this no-brainer, common good direction.”

Robin McAlpine, Common Weal director, said: “It’s time to be honest about what the current arrangements for trains in Scotland means.

“Passengers pay a very large sum of money to pay for unnecessary tendering and shareholder profits to create the impression that there is a market in rail fares which is pushing down costs.

“But there isn’t a market in rail fares reducing costs, just one private monopoly for ten years then another private monopoly for ten years.

“Every time you spend ten pounds to go by train in Scotland you’ve paid 65p purely to make a private profit for a private company which is already receiving the highest rail subsidy in Britain. It makes no sense whatsoever, unless you are a shareholder or a political ideologue.”

He added: “This report is a case study of political obsession being put before the interests of taxpayers or passengers.”

“Our view is the franchise system should be replaced with a national rail service that aligns operations with network infrastructure, creating a coherent public rail system that brings Scotland more into line with European norms.

“But at the earliest available opportunity, ScotRail must be brought back into public hands.”

A ScotRail spokesman said: “The independent National Rail Passenger Survey by Transport Focus found that nine out of ten customers are satisfied with ScotRail, equalling our best ever score. We’re also the best performing large operator in the UK.

“But we aren’t complacent, and we’ll keep working hard every single day to build the best railway Scotland has ever had.”

A spokesman for Mr Yousaf: “It was the SNP government which secured the right for a public sector operator to bid for the franchise, after being repeatedly denied that right by successive Labour and Tory governments.

“We are taking steps to ensure that a public sector operator is able to bid for a future rail contract, and that there is a public sector body able to do so.

“This will enable us to ensure the delivery of rail services in Scotland that deliver maximum economic and social benefit.

“TSSA are involved in cross party discussions with the unions on a public sector bidder and we look forward to receiving a copy of their report.”