THE SNP are considering nationalising the Caledonian Sleeper service after the Government decided to terminate the current contract.

Transport minister Jenny Gilruth said outsourcing firm Serco, which has run the service since 2015, no longer provided “value for money” and the contract would be terminated on June 25 next year.

Former SNP minister Fiona Hyslop said the move represented an “opportunity” to bring the service into public ownership.

The overnight service ferries around 300,000 passengers between Scotland and England every year.

If it was taken under national ownership, it would join ScotRail and CalMac in the Scottish Government’s portfolio of transport services.

Hyslop said: “The Caledonian Sleeper has been well-served by Serco over the seven years it has run the service and it has broadly improved it over that time.

READ MORE: King Charles allowed to vet Rent Freeze Bill

“It is unfortunate that a deal has not been reached to continue the contract with Serco, but these contracts need to deliver value for money for the Scottish public.

“Its termination presents an opportunity for the Scottish Government to consider bringing the iconic service into public hands.

“The Scottish Government has already successfully brought ScotRail under public ownership and doing the same with the Caledonian Sleeper presents an opportunity to continue to improve the service provided to those travelling overnight between Edinburgh and London.

“There will be a formal process that will need to take place, but this presents another opportunity to bring Scotland’s railways into Scotland’s hands.”

Gilruth added: “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 June 25, 2023.

“Work is underway to determine arrangements for the continued provision of Caledonian Sleeper rail services beyond June 25, 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 seven years.”

The Scottish Greens, who are in government with the SNP, have called for the service to be nationalised. 

READ MORE: Band 'livid' after Liz Truss uses their song at Conservative conference

Mark Ruskell, the party's transport spokesperson, said: "We have already seen a warm and encouraging reception to ScotRail services being brought under public control. 

“Improving Scotland’s railways and its connections to the UK and beyond, is vital in both bringing people together and climate proofing our transport services, with people at the very heart of the decision making process. 

“With an experienced, dedicated workforce and a strong customer base it is time that our railways service the needs of passengers, not the bank balances of shareholders.

“I will be contacting the Transport Secretary to see how this can be explored and actioned further.”

John Whitehurst, the managing director of Serco's transport business, said the company had "completely transformed the service" and that the firm had made a loss running the franchise. 

He added: "The contract that was signed in 2014 included a ‘rebase clause’ that meant that, after seven years of the 15-year franchise, Serco could present to the Scottish Government alternative financial arrangements for the remaining years of the franchise.

"The Government and Serco were not able to reach agreement on these revised terms, and accordingly the franchise will now end in June 2023, at which point, unless other arrangements can be agreed, Serco will hand back the management of the Sleeper to the Scottish Government.

“We note that the Government’s decision not to accept our proposals has not been made due to any performance issues; from Serco’s point of view the service has been loss-making over the life of the contract and the proposals that we made to Transport Scotland were to put it on a more sustainable financial footing. 

"We will continue to work with Transport Scotland around options for the future management of the service and in the meantime will continue to deliver a world-class service for our guests.”