Virgin Trains East Coast (VTEC) is a joint venture, 90 per cent owned by Stagecoach. Recent challenges to the franchise have arisen because Stagecoach overbid for the franchise, and as a result, the franchise can only continue in its current form for a very limited period of time. The Secretary of State for Transport, Chris Grayling, has therefore announced he will need to end the contract and establish a successor arrangement to operate the line.
 
However, the day-to-day operation of the line will continue as normal and services and staff on the East Coast will be unaffected. Stagecoach have not and will not receive a bailout. The nature of the competitive franchise system means that businesses in the private sector risk substantial capital and when things go wrong, the business not the taxpayer foots the bill. Stagecoach will lose around £200million.
 
Despite the challenges it is important to remember that since 2015, the franchise has returned nearly £1 billion to the public purse and has also achieved some of the highest passenger satisfaction scores in the country. It is also very welcome that new state of the art trains are being prepared to operate along the line. Since 2015 VTEC has on average contributed more per rail period to the tax payer than when the line was operated by Directly Operated Railways.
 
I understand the Secretary of State will now assess the options to ensure passenger's interests are protected and the services continue until the new East Coast Partnership on the line is implemented in 2020. I have been assured by Ministers that this assessment will be published and validated in a transparent manner. The Partnership between the public and private sector will operate under one management and a single brand, overseen by a single leader. 

Privatisation brought a revolution to our railways, with passenger journeys on the rail network more than doubling from 735 million in 1994-95 to 1.69 billion in 2015-16, and now is the time for evolution to build on that success, joining up track and train and modernising the customer experience.