Serco’s sleeper nods off

Sunday 9th October 2022

Last week’s announcement that Serco will be ending their franchise for the Caledonian Sleeper next June came as no great surprise. I won’t be shedding any tears at the company’s departure. Unlike Merseyrail where this giant global monolith of an outsourcing business seems to be doing a good job running the trains on behalf of Merseytravel, albeit that concession is run jointly with Abellio, I never felt Serco found the right business model for the Lowland and Highland Scottish sleeper trains.

There was much hype surrounding the new CAF built Mark 5 coaches introduced way behind schedule in May 2019 particularly surrounding the en-suite facilities including a shower in some of the cabins (branded as ‘Club’ class) with talk of taking the whole overnight travel experience upmarket referring to passengers as ‘guests’ and promising a top hotel quality service.

My experiences of using the service always fell well short of that. It was a definite case of the company over promising and under performing for me. I never had hot water let alone a shower that worked on the journeys I took. On one occasion I didn’t have any water at all. After my first journey in May 2019 was bedevilled with a whole host of teething problems I tried on other occasions but every time something wasn’t right.

In May 2021 I blogged about the comparison between Serco’s supposed upmarket Caledonian Sleeper experience and First’s Great Western Railway’s Night Riviera with the latter coming out on top by every measure for quality, value for money and overall experience.

I just don’t know how Serco can justify the exorbitant prices it charges. For example, looking last night at prices for a journey from London to Fort William in a month’s time on 9th November, a Caledonian Double en-suite berth costs £405; a Club en-suite room is £315; a Classic £205 and a seat £55. The first three prices increase to £480, £375 and £245 for two people travelling together and sharing.

An off-peak daytime fare from London to Fort William is £134.90 single and £192.80 return meaning a return journey on the Sleeper in a Classic berth at £410 is more than double the daytime price giving a value of the berth and an overnight journey (which admittedly can be convenient) at £217.20. The comparison with an en-suite Club room is even more stark at £437.30 for the privilege of having a very narrow bed and a questionable shower placed over a toilet. You could enjoy far superior facilities in a hotel for that kind of money.

Compare this to GWR’s Night Riviera where on the same date, 9th November, you can book an advance single from Paddington to Penzance for £40.70 and a £45 supplement for a refurbished berth, albeit without any en-suite, making for a bargain price of £85.70.

Even with a super off-peak single at £74.60 the overall price would be £119.60.

GWR’s refurbished lounge coach (above) is also far superior both in terms of comfort and layout than Serco’s hyped up Mark 5 version (below) which has ridiculous (and uncomfortable) bar stools as well as seating around tables.

Serco’s contract with the Scottish Government signed in 2014 included a ‘rebase clause’ enabling the company to present “alternative financial arrangements for the remaining years of the franchise” after the first seven years.

It’s interesting to read that the Government and Serco have been unable to reach agreement on the revised terms Serco desire so unless other arrangements are agreed Serco will hand back the management of the Sleeper to the Scottish Government in June 2023.

As the Government has already taken back control of the ScotRail franchise it seems likely the Sleeper services will once again be merged back under Scotrail’s management as it was before Serco won the franchise. That arrangement works well for GWR and the Night Riviera and worked before for the Caledonian Sleeper run by First Group.

Serco Caledonian Sleepers Ltd’s Annual Accounts for March 2021 show the company made a ‘profit’ of £10.5 million but this is complicated by payments made under the Emergency Measures Agreement due to Covid as well as “exceptional’ settlements to compensate for losses incurred when the new trains were introduced. Perhaps a more realistic figure is the financial result for the year ended March 2020 (pre Covid) which was a loss of £4.3 million. Ticket sales had been £25.4 million and Transport Scotland had handed over £15 million in subsidy payments.

Which is an interesting ratio as it means when a passenger shells out £315 for a single Club en-suite room, the Scottish Government also pays a subsidy of £186 and even then the service is loss making.

Incidentally the four new trains which entered service in 2019 reportedly cost £150 million paid for by £60 million from the Scottish Government, £50 million from the UK Government and £40 million from Serco.

We are where we are with these so called ‘hotels on wheels’ offering supposed quality accommodation that just doesn’t match the prices charged to ‘guests’ in my opinion. From next June it looks like this’ll be the Scottish Government’s problem rather than Serco’s. Good luck with that.

In Serco’s announcement on Wednesday, Caledonian Sleeper’s managing director John Whitehurst was in upbeat form stating “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.”

Not in my experience.

Roger French

Blogging timetable: 06:00 TThS

14 thoughts on “Serco’s sleeper nods off

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  1. The economics of this service seem to make little sense. If the reports are correct the rolling stock cost a £150M. Assume a 20 year life and that’s about £7.5M a year alone. As it is a sleeper service the rolling stock does just on journey in 24 hours and must be just left in sidings after it has been serviced

    It seems to make even less sense running it beyond Glasgow as the passenger numbers I would assume to be quite low

    Looking at the train times it takes just over 5 hours to Glasgow by a standard train which would be a lot cheaper

    The only real benefit of the sleeper is for those traveling beyond Glasgow, but the losses must be very high

    It may be a nice to have but can the cost of it be justified?

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    1. The Scottish sleepers have always been political service rather than public service. Ignore the costs; the politicians do.

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  2. It might be remerged into Scot Rail or it might continue to run separately as it’s quite a different set up from Scot Rail in going to England for one thing!At the moment the only Scot Rail service to England is the Glasgow/Dumfries to Carlisle.Some of these use to go on to Newcastle and the timetables showed them as Scot Rail but Northern crews took over at Carlisle.Basically the MD/CEO of SERCO PLC,Lord Soames , turned the Caledonian Sleeper into a hotel rather than a means of public transport with upmarket hotel prices to boot but what upmarket hotel makes their guests get up at 0630?As I recall the sleeping trains went from BR regions,to Inter City,then Scot Rail,then Scot Rail run by National Express and then First: Transforming Travel ending up at the Caledonian Sleeper.It was only with the CS that any major changes and price increases occurred.

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    1. With the old BR MkI and MkII rolling stock (Compartments with side corridor) you could get a decent nights sleep just lying on the seats ( They had pull down blinds as well)

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    2. The northbound Highlander will stop serving Watford Junction from December (https://www.realtimetrains.co.uk/search/detailed/gb-nr:WFJ/2022-12-13/0000-2359?stp=WVS&show=all&order=wtt&toc=CS); I can see the absurdity of it calling there when the southbound Highlander already doesn’t, but on a seven-plus-hour journey I wouldn’t have thought that four or five minutes would have made a massive difference.

      Maybe part of the reason’s pathing; within the six minutes following the southbound service there’s trains from Northampton and Liverpool due to pass through the same platform, and two from the West Midlands in the fourteen preceeding minutes, with either the Sleeper or the other services having too high a risk of delays if the Highlander kept calling at Watford.

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      1. I’ve got on at Watford on to the Highland Sleeper I think going to Inverness and Tyndrum Upper.As I lived in Oxford at the time it doesn’t seem very sensible but there was method in my madness as at the time they had shared cabins and if you got on at Watford the chance of sharing was close to zero.I’ve done it with the Lowland loads of times going north and hardly anyone ever gets on there.I have never got off at Watford so can’t say how many get off the Lowland there.

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      2. Would not have thought that there would be much trouble pathing the train at that time of night

        The night sleepers as well have a very leisurely schedule so time should not be an issue

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    1. CrossCountry do not serve London and have no corporate interest in doing so, not to mention that the sleeper would be a distraction from their core business.

      The franchise that the sleepers make most geographic sense being attached to is InterCity West Coast (currently Avanti), but again it would be a distraction from their core business and I doubt they’d be interested.

      The financing model for the sleeper (wholly subsidised by the Scottish government) also makes it a bad fit with any “English” franchise. I suspect that we’ll see it being reintegrated into ScotRail, if only because that will allow shared use of maintenance facilities and staff meaning a nominal reduction in the cost base and allowing the politicians to crow about “nationalisation” being cheaper.

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  3. One of my favourite railway journeys used to be the sleeper to Fort William as I could have breakfast in the lounge bar and sit watching the glorious scenery. Last time I did it, because I was a lone traveller, I was told I had to sit on one of the stools. After a few minutes, it was so uncomfortable, I had to finish my breakfast quickly and return to my cabin for the rest of the journey, where it was nothing like as easy to watch the scenery. Now unfortunately that’s one journey I won’t be making again in a hurry,
    Lawrie

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  4. They need to look at cutting costs and making better use of the rolling stock

    May be only run it as far as Glasgow where they can change to a connecting train if they want to go further North

    Maybe do away with the sleeping compartments and have aircraft type reclining seats

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    1. Why do they need to do any of that, Bob?
      It’s a political train service wholly funded by the Scottish government. The costs are irrelevant; always have been and always will be.

      All passenger railway provision in the UK is based on political value much more than on economic value, but the Scottish sleepers really do take it to the absolute extreme.

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  5. The Scottish sleepers should never have been split from Scotrail [i do know Scotrail have their own issues but nevertheless] the sleeper was never going to make a profit as a stand alone franchise.

    There’s been a load self inflicted issues, like staff shortages, food is not available for the entire journey, passengers on the Aberdeen portion being turfed out at Perth around 04.20 a few times, for a rail replacement to continue to Aberdeen

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