£17m paid to Avanti West Coast is ‘reward for failure’, says Labour

The under-fire rail operator Avanti West Coast has been “rewarded for failure”, Labour said, after the company was paid more than £17m in taxpayers’ money by ministers for performance and management fees in just two years, despite being the worst-performing operator on the rail network.

The figures from 2019-20 and 2020-21 include almost £4m in bonuses to Avanti for “operational performance”, “customer experience” and “acting as a good and efficient operator”.

At the same time, the firm raised prices, with an open return from Manchester to London – barely a two-hour journey – costing £369.40.

The performance-related fees, signed off by transport ministers, came despite Avanti being the worst-performing operator in the country, with almost half of its services arriving late. In the past two years alone the firm received more than 50,000 complaints, the most of any operator and almost double that of the parallel east coast mainline operator, LNER.

Avanti, co-owned by the Italian national railways, has come under renewed criticism for slashing services between major cities by up to two-thirds on the west coast mainline, and earlier this week passengers were forced to climb a fence at Oxenholme station in Cumbria after being locked in as their train arrived 100 minutes late.

Avanti West Coast, whose contract is due for renewal in October, already has the lowest passenger satisfaction rating possible, a figure the transport minister Charlotte Vere said last month was “terrible”.

Despite this, the Department for Transport (DfT) confirmed it would continue to hand over millions of pounds in management fees, after ruling out fining the operator for the failing service.

The shadow transport secretary, Louise Haigh, has warned her counterpart, Grant Shapps, that the government “cannot continue to wash their hands of responsibility, nor reward failure” as the damage to the economy from the ongoing failure of the private operator mounts.

She has renewed calls for ministers to urgently demand a plan from Avanti for the full restoration of services, recover taxpayers’ money for services that are not running and, if an urgent plan to restore services is not put in place, strip the company of the contract.

“This fiasco is causing real damage to the regional economy, passengers and the public,” said Hague.

“This government has willingly sat back and rewarded failure, handing over millions of pounds of taxpayers’ money for an abysmal service. Under the absurd system they have created, passengers always come last. It’s time for ministers to wake up, do their job and hold this failing operator to account.

“They should demand a plan from the operator to urgently restore these services, claw back taxpayers’ money being handed over for services that aren’t running, and if they do not act, they have no business holding the contract.”

A spokesperson for Avanti blamed the reduction in service on “the current industrial relations climate which has resulted in severe staff shortages”.

He apologised to customers for the “enormous frustration and inconvenience this will cause”.

The company is considering a request from Andy Burnham, the mayor of Greater Manchester, to scrap first-class restrictions while the reduced timetable is in operation, to fit more people on trains.

The Department for Transport said: “The department’s performance-related pay to train operating companies is independently evaluated through a scorecard criteria based on factors such as operational performance, efficiency and customer satisfaction.

“We are meeting Avanti West Coast regularly to discuss its performance and delivery for passengers. This includes ensuring effective plans are developed to improve its services, including mitigating issues outside of its control.”