John Whitehurst, Managing Director of Serco’s Transport business, said: “When Serco took over the Caledonian Sleeper service in April 2015, we inherited an unreliable and outdated fleet of carriages dating back to the 1970s.

“We are extremely proud that under our leadership and management we have introduced new rolling stock and other significant innovations that have completely transformed the service. The service that Serco provides today is widely recognised as being outstanding, providing hotel standard service and accommodation that is renowned and admired around the world and loved by the people who travel on it.  We thank the Minister for her warm words recognising the achievements of the Serco Caledonian Sleeper team.

The contract that was signed in 2014 included a ‘rebase clause’ that meant that, after seven years of the 15-year Franchise, Serco could present to the Scottish Government alternative financial arrangements for the remaining years of the Franchise.  The Government and Serco were not able to reach agreement on these revised terms, and accordingly the Franchise will now end in June 2023, at which point, unless other arrangements can be agreed, Serco will hand back the management of the Sleeper to the Scottish Government.

“We note that the Government’s decision not to accept our proposals has not been made due to any performance issues; from Serco’s point of view the service has been loss-making over the life of the contract and the proposals that we made to Transport Scotland were to put it on a more sustainable financial footing.  We will continue to work with Transport Scotland around options for the future management of the service and in the meantime will continue to deliver a world-class service for our guests.”