ScotRail has handed a £2 million contract to its former private owner – claiming the deal will provide “value for taxpayers”.
The state-owned rail firm has contracted out its finance and payroll functions to Solvd, a company set up by former owner Abellio – which the Scottish Government stripped of its franchise in 2022 after concerns over poor performance.
ScotRail bosses awarded a two-year extension to Solvd on January 29 without putting the contract out to tender. They believe the move, valued at £1.9 million in the official paperwork, will buy time to work out whether these functions should be carried out in house.
But Scottish Labour transport spokeswoman Claire Baker said private firms were “cashing in on the SNP’s incompetence”.
She told The Ferret: “Scotland deserves a reliable, affordable rail service but the SNP is squandering the opportunities of public ownership and contracting out its responsibilities.”
Just two days after the new contract was confirmed, SNP ministers announced fares would go up by 3.8 per cent this year – following an 8.7 per cent rise a year ago and the reintroduction of peak fares last autumn.
Scotland deserves a reliable, affordable rail service but the SNP is squandering the opportunities of public ownership and contracting out its responsibilities.
Claire Baker, Scottish Labour
Abellio’s UK arm is now known as Transport UK, after it was sold by the Dutch state in a management buy-out led by chief executive Dominic Booth. He was ScotRail’s ultimate boss before nationalisation.
The contract describes Solvd as a “small to medium-sized enterprise”, even though Transport UK’s website boasts that it employs 15,000 employees across Britain.
Train drivers’ union Aslef, which campaigned for ScotRail to be brought into public ownership, called on ScotRail to “come clean” over continued “profiteering” in the railways since nationalisation.
“Despite its chronic failure to run ScotRail effectively, this revelation shows that in its new guise Abellio is going to still profit from the now publicly owned ScotRail,” the union’s Scottish organiser Kevin Lindsay said.
He added: “For ScotRail to be truly public it needs to in-source its operations and end – not extend – these contracts and this type of outsourcing that incredibly allows this failed company to continue to profit from ScotRail, taking money that should be reinvested back into services, and still turning it into shareholder dividends.”
Scottish Conservative MSP Sue Webber said: “Nationalisation of ScotRail was justified by the SNP on the basis that they could do a better job than Abellio. So it’s humiliating that they are now having to lavish public money on the company in return for supposedly expert advice.
At a time when passengers are paying through the roof for chronically unreliable services, SNP ministers should explain why they think it is acceptable to hand this contract to ScotRail’s former owners.
Sue Webber MSP, Scottish Conservatives
She added: “At a time when passengers are paying through the roof for chronically unreliable services, SNP ministers should explain why they think it is acceptable to hand this contract to ScotRail’s former owners.”
Justifying the decision not to put the contract out to tender, ScotRail said it was introducing a new rostering system that would “take a period of 12-18 months” to implement. It said the “full impact of this change will not be known until the implementation is complete”, and that “to tender these services now will result in duplication of resource and cost”.
Finance director Derek Marchant said: “In 2023/24, ScotRail built on the successful transition into public ownership with year-on-year growth in passenger numbers and revenue, and with nine out of ten services meeting their punctuality targets.
“All of this has been achieved thanks to our dedicated and highly-skilled workforce that deliver for our customers every single day.
“We recognise that, as part of the public sector, we must ensure that we provide value for taxpayers. We continue to work hard to ensure this happens while delivering a safe, reliable, and green railway.”
Transport UK and the government agency Transport Scotland both declined to comment, saying it was a matter for ScotRail.
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Main image: fotomem/iStock
