Exclusive: Taxpayers footed bill to rebrand ailing rail franchise

TRANSPORT ministers are under fire today after a Yorkshire Post investigation revealed that taxpayers footed a bill for hundreds of thousands of pounds for rebranding the East Coast rail franchise.

The flagship London to Edinburgh service was taken back into public hands late last year after private firm National Express, which took on the contract in 2007, said it could not sustain the business.

Department for Transport officials were then left with the headache of rebranding locomotives and rolling stock, stations, literature and uniforms, running up a bill of around 635,000.

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Last night, two separate rail user groups said those costs were not acceptable, and spoke of worries that they would later be passed on to the travelling public in fare increases.

Concerns were also voiced about the use of public money on rebranding exercises, at a time when parts of the rail network were currently under strain because of under-investment.

Figures released to the Yorkshire Post under the Freedom of Information act revealed that the largest cost to the taxpayer was for rebranding carriages and trains, at around 255,000.

Other major costs included 137,590 for the debranding and rebranding of information technology systems, almost 98,000 for rebranding station signage and more than 60,000 for new stationery and leaflets.

Staff uniform changes cost almost 45,000, changes to parking tickets to remove references to National Express cost 4,500 and some 2,750 was even spent on replacing seat headrest covers.

According to the Department for Transport, National Express was forced to pay a 295,000 share of the costs as part of its obligation as an "outgoing franchisee", leaving the public to pay 340,000.

The Department said the cost to the taxpayer could have been much higher and claimed only a "minimalistic" debranding and rebranding exercise had taken place.

But national pressure group Railfuture, which speaks for rail users across the country, criticised rail franchise handovers, saying they had the potential to cost the public dear.

Spokesman Bruce Williamson said the Government had become the third holder of the franchise after GNER had also failed to run the service and added: "Rapidly changing franchisees are very bad for the public and passenger.

"If the franchise is taken back into public hands then the costs are initially borne by the taxpayer and possibly again later by the passenger. If it happens every few years those costs are going to build up.

"The East Coast operation is hugely profitable, that's why National Express paid 1.4bn for it, but passengers are seeing very little coming back in the way of investment."

The East Coast rail operation carries 17 million passengers a year and employs around 3,100 staff.

The Government has said it plans to find a new franchisee within two years.

The Tories have been consistently critical of the way the Government handled the franchise collapse last year and warned it would result in significant costs to the public purse.

Conservative Shadow Transport Secretary Theresa Villiers claimed Ministers had forced National Express to pay over the odds for the franchise and said the combined cost of its collapse was likely to be as much as 700m.