Transport Minister Jenny Gilruth is terminating Serco’s contract to operate the Caledonian Sleeper rail service, claiming that is too costly.

The Scottish Government said the decision came after Serco failed to negotiate a suitable proposal to continue to run the service.

The franchise deal will end on 25 June next year and Transport Scotland said work is under way to secure a new operator. There are indications it will follow ScotRail into public ownership.

In an answer to Parliament Ms Gilruth said: “I can confirm that today Serco Caledonian Sleepers Limited has been advised that its proposal to rebase the Franchise Agreement with Scottish Ministers for the provision of Caledonian Sleeper rail services has been rejected on the grounds of not representing value for money to the public.

“Additionally, I can confirm that a notice was served today which confirms that the Scottish Ministers will terminate the Franchise Agreement with Serco Caledonian Sleepers Limited on 25 June 2023.

“Work is underway to determine arrangements for the continued provision of Caledonian Sleeper rail services beyond 25 June 2023 and this will be updated to parliament once determined.

“It is worth noting that Serco Caledonian Sleepers Limited has, broadly, delivered well and significantly improved Caledonian Sleeper services over the last 7 years.”

The decision follows the removal of the ScotRail franchise from Netherlands state-owned company Abellio.

There has been no indication that the Sleeper franchise was in danger, despite a number of service failures during Serco’s tenure. The company has invested in new rolling stock.

The SNP said the decision presented an opportunity to bring the service under public control.

Scottish Greens transport spokesperson Mark Ruskell said: “This would seem to be a logical opportunity to look again at the potential to bring the Caledonian Sleeper operations into public ownership.

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