The Transport Select Committee announced today it is launching an inquiry into the East Coast rail franchise troubles, saying there were "serious questions" to be asked of ministers as well as the train operator.
It comes after the government confirmed earlier this month the franchise, run by a joint venture between Stagecoach and Virgin, will end earlier than expected after Stagecoach "got its numbers wrong".
It was now likely to fail within a very small number of months, with the Committee noting this marked the third collapse of a commercial franchise agreement on that part of the railway in just over 10 years. MPs now want to assess the best options for keeping services going in a way that suits both passengers and taxpayers.
Lilian Greenwood, chair of the Committee, said:
This failure – not once, but three times – has drawn criticism from all corners.
There are serious questions to be asked of the train operator, Network Rail and ministers and the Transport Committee intends to ask them.
The failure of the East Coast franchise has wider implications for rail franchising and the competitiveness of the current system. Lessons need to be learned by all concerned.
Greenwood added: "In the meantime, the Department for Transport must take the right steps to protect passengers and taxpayers. Safeguards must be put in place to restore public confidence in the sustainability of our railways."
In November, the DfT said Stagecoach and Virgin would withdraw from running the service three years early in 2020, after facing difficulties as anticipated growth in passenger numbers had failed to emerge.
But this month, Grayling told the House of Commons, the situation was "much more urgent" and it was now clear the franchise could only continue in its current form for a very small number of months "and no more".
Today, a DfT spokesperson said:
The Transport Secretary has been clear over the issues facing the East Coast rail franchise and the next steps we will take to protect services for passengers.
We will work with the Transport Select Committee on this inquiry.
Lord Adonis, who resigned as chair of the National Infrastructure Commission in December, has been a vocal critic of Grayling's decision for the East Coast, branding it "a bailout".
Good to see the Transport Select Committee of the House of Commons is to inquire into Grayling’s £2bn Branson Bailout of East Coast Rail. I’m happy to give evidence on the growing scandal & I hope Sir Richard Branson & Sir Brian Souter are summoned @CommonsTrans— Andrew Adonis (@Andrew_Adonis) February 9, 2018
Stagecoach previously said that an unprecedented combination of circumstances had meant its financial plans had not worked out.
Today, a Stagecoach Group spokesman said: "Virgin Trains East Coast is a well-run, profitable railway and we are continuing to meet our contractual commitments, as we have done throughout the past 21 years in operating train services on behalf of the government.
We are progressing our £140m investment plans, topping franchise league tables for customer satisfaction and delivering 30 per cent higher payments to the taxpayer than when the route was in public ownership, and we are happy to assist the work of the Transport Committee.
David Sidebottom, director at independent watchdog Transport Focus, said: "Passengers on the East Coast mainline want a punctual, reliable service where they are able to get a seat and delivers good value for money. As the watchdog for rail passengers, we would hope that any inquiry into this franchise will lead to an improved service for the consumer."