Virgin Trains East Coast franchise should have been removed much sooner, says Lord Adonis

Virgin Trains East Coast (VTEC) should have been stripped of its franchise months earlier, Lord Adonis has claimed.

The Labour peer said he would have brought services into public control "much sooner" than Transport Secretary Chris Grayling.

Delaying the decision may have cost taxpayers' money due to the resulting "bonanza" for government consultants, he said.

VTEC - a joint venture between Stagecoach (90 per cent) and Virgin (10 per cent) - was due to run the franchise until 2023, but, after Stagecoach reported losses on the line, Mr Grayling announced in October last year that the agreement would end in 2020.

It was revealed last week that the Department for Transport will take over control of the East Coast Main Line from VTEC on June 24.

Lord Adonis, who was transport secretary when National Express withdrew from its franchise agreement on the route in 2009, told the Commons' Transport Select Committee: "It was abundantly clear when Stagecoach and Virgin said they intended to hand back the keys that this needed to be resolved quickly."

He accused Mr Grayling of "spinning it out and assessing a whole range of different options" because he "wanted to continue some form of private operation for ideological reasons".

He went on: "This has been a bonanza for lawyers, accountants and consultants, the last five months, including very, very highly paid lawyers who have been advising on state aids and the legality of handing a further contract to companies that had defaulted on the previous contract."

Mr Grayling said an Operator of Last Resort (OLR) controlled by the DfT will run services until a previously-announced public-private partnership takes responsibility for both trains and track operations in 2020.

This will act as a "constant sentence of death" over the OLR, while the public-private partnership is a "back of the envelope plan", Lord Adonis added.