‘Free Money’: Executives at Failing Train Company Joke About Making Money at the Taxpayer’s Expense

“Roll-up, roll-up get your free money here” is how one of the UK’s worst train operators privately described taxpayer money.

Leaked slides from an internal Avanti West Coast presentation, whose services are notorious for disruption, delays, short-notice cancellations and overcrowding, show senior management at the operator calling taxpayer money “too good to be true”.

The slides, seen by Novara Media, are from a presentation given at an all-managers meeting on 12 January. Novara Media understands that the presentation was given to the company’s executive team, including the managing director.

The slides mockingly describe how Avanti West Coast is given performance-based bonuses by the Treasury for achieving a less-than-perfect service.

A slide entitled, “Roll-up, roll-up get your free money here!” sets out how the Treasury, via the Department for Transport (DfT), expects Avanti to “provide resources to deliver high-quality levels of customer service.”

In return, the Treasury will support the company to deliver new assets, customer service improvement projects and initiatives, as well as to find maintenance and third-party supplier contracts.

The slide then reads: “then they pay for it! …nearly all of it!… But that’s not the end of the matter …”

Whereas previously train operating companies were fined for their failure to comply with standards, they will now be rewarded for meeting their targets. The slides tell how Avanti gets performance-related bonuses for a service that the Treasury has already paid it to provide, even if it scores seven out of 10 for compliance.

“So, to re-cap – they scope our BAU [business as usual] activities – pay for them and pay to check them – how good is that?!” read the slides.

“But wait … do they want 100% compliance?”, the presentation continues. “No! 7,8 or 9 out of 10 is asked for across the different areas of our customer experience portfolio…

“And here’s the fantastic thing! – if we achieve those figures, they pay us some more money – which is ours to keep – in the form of a performance-based fee!! Sounds too good to be true?! Well on this occasion – it isn’t – it’s the absolute truth!”

The RMT union described the slides as a “disgrace,” and has written to Avanti West Coast to request an explanation.

Avanti West Coast, a joint venture between UK-based FirstGroup and Italian train operator Trenitalia, dramatically reduced its timetable in 2022, citing staff shortages as the reason for widespread disruption. However, unions rejected this claim, instead arguing that Avanti had long been operating by expecting staff to work on their rest days.

Despite routinely reduced services and delays, in September 2023 DfT awarded Avanti West Cost a nine-year contract on the west coast mainline, with transport secretary Mark Harper claiming the operator was “back on track”.

Yet only two months after the contract was renewed, devolved statutory body Transport for the North (TfN) asked transport secretary Mark Harper to conduct a review into Avanti’s operation, after the operator reduced the number of services offered to passengers over the Christmas period.

TfN described the “underlying operational resilience” of Avanti West Coast as “fundamentally flawed,” and called for the operator to declassify all first-class seating to create more seating.

RMT general secretary Mick Lynch said: “Avanti is one of the worst rail companies in terms of performance and how it treats rail staff. For senior management to produce a PowerPoint slide bragging about the government paying them public money is a disgrace.

“The government has the mandate over Avanti and should never have given them a long-term nine-year contract award.

“The fact that the company feels emboldened to boast that they get ‘free money’ is down to the ridiculous system of rail ownership in this country.

“Ultimately profit-driven companies who receive huge public subsidies have failed to deliver for railway workers and passengers alike. And that’s why we need public ownership of the entire network.”

Mayor of Greater Manchester Andy Burnham said: “It beggars belief that a company responsible for vital national infrastructure would show such contempt for taxpayers.

“It is yet another line on the charge sheet for an operator that has consistently failed to deliver. The cancellations, delays, and chaos blighting the country’s most important rail link are enough of an insult as it is, without knowing that some senior managers within Avanti are laughing all the way to the bank.”

The slides are in response to the rollout of Service Quality Regimes (SQR), developed by DfT. SQRs are a set of standards introduced to measure the quality of customer experience on the railways, with trains, stations, and customer service audited by independent inspection teams, paid for by DfT.

In October 2022, DfT handed Avanti West Coast a bonus pay-out of £4.1m, despite the operator being then Britain’s worst train operator for punctuality, with only 60.1% of stops by Avanti trains arriving and departing within one minute of their scheduled time.

Labour’s shadow transport secretary Louise Haigh said the bonus “rewarded abject failure,” calling the pay-out a “scandalous waste of taxpayers’ money.”

An Avanti West Coast spokesperson said: “These slides were an attempt to explain how the Service Quality Regime works to some of our colleagues, but the language used was regrettable.

“The Service Quality Regime is a robust and independent audit which we take very seriously. It has been demonstrated to hold us to account to drive up standards as we strive to continually improve our customer service.”

DfT and the Treasury both declined to comment.

Update, 16 January 2024: This article was updated with Mayor of Greater Manchester Andy Burnham’s comments.