Pensions row: Stagecoach loses franchise court case

STAGECOACH has lost its High Court action against the Department for Transport’s decision to disqualify it from bidding for the East Midlands, South Eastern and West Coast Partnership franchises.

The company argued that the DfT acted unlawfully in disqualifying its bids. It believed the DfT’s approach to evaluating pensions aspects of the bids were “unfair, unequal and non-transparent”.

However, the High Court announced on June 17 that it found the terms of the franchise competitions and the Department’s approach to be fair and transparent, rejecting all challenges. It also found that the disqualification decision was proportionate.

In response, Stagecoach said: “We believe there were important issues which needed to be determined by the court to help secure the future of the country’s rail system, and our view remains that we were right not to accept the risks in these contracts.

“Nevertheless, while we are disappointed at today’s ruling, we accept the decision and move on. The country is facing a huge challenge in fighting the COVID19 pandemic, and all of our energies are focused on ensuring our transport networks help the national effort at this critical time.”

FirstGroup, the successful bidder for the WCP franchise, said: “We welcome today’s ruling and the clarity it brings. We considered all aspects of our successful West Coast Partnership bid carefully and with a sensible and responsible approach to risk.

“Our current focus is on supporting our communities through the current pandemic, and we are working hard to deliver a future, cleaner, greener railway for our West Coast customers and partners, who will see improvements including a fleet of new and refurbished trains, more routes and services, and an improved onboard experience.”

RMT General Secretary Mick Cash said: “The fact that Stagecoach Group plc wanted all the lashings and profits of the railway without any of the risk of the Railways Pension Scheme is one more nail in the coffin of the privatised system.”

He called for the Government to work with the rail industry and unions to secure the future of the Railways Pension Scheme. The TSSA also welcomed the decision.

The Rail Delivery Group’s Director of Policy John Thomas said: “The priority for rail companies right now is to continue to support communities and businesses through the Coronavirus pandemic. Today’s judgment on previous franchise bids has been accepted by both parties and the industry wants to work with government to ensure a reformed railway, which we have been calling for, that can harness the best of both the public and private sectors so that we can deliver for Britain.

“We continue to work with the Pensions Regulator, DfT and the unions with a view to agreeing a sustainable pensions framework for the train operator sections of the Railways Pension Scheme.”