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Government considers running East Coast Mainline after rail firm 'got its sums wrong'

The future of the East Coast Mainline has been debated. Credit: PA

The Government is considering directly operating the East Coast Mainline after the Transport Secretary announced the existing operator is due to "run out of money".

Chris Grayling told the Commons that the Stagecoach-led franchise will be unable to continue to operate the Leeds-London route for the duration of its contract.

He told the Commons that Stagecoach had "got its sums wrong" over the East Coast franchise and was set to lose almost £200 million.

He said he has not made a decision on a successor, and could either let Stagecoach continue "under a very strictly designed short term arrangement" or Government will step in on a "short-term, not-for-profit" basis as a last resort.

I have already informed the House that the franchise will in due course run out of money and will not last until 2020 but it has now been confirmed that the situation is much more urgent.

It is now clear that this franchise will only be able to continue in its current form for a matter of a very small number of months and no more."

– Transport Secretary Chris Grayling

In response to calls to renationalise the East Coast Mainline, Mr Grayling acknowledged the finances of the current operator have been "disastrous" despite claiming day-to-day operations have "proved very successful".

We have delivered far more than was ever the case when the East Coast route was operated in the public sector.

When private companies deliver public services, it is absolutely right that they meet the obligations in their contract. All parties to contracts should do that.

"The reality is that we've neither walked away from the East Coast franchise nor have we received or asked for any special treatment.

Stagecoach has run trains on behalf of the Government for the past 21 years. We take that responsibility very seriously.

– Stagecoach Group chief executive Martin Griffiths