Karen Boswell comes to York as managing director of East Coast as it takes over rail franchise from National Express

Among its first pronouncements on taking over the East Coast rail franchise from National Express a couple of weeks ago was the scrapping of controversial plans for ticket barriers at York Railway Station.

The company also promised to end unpopular seat reservation fees on trains, and pledged that improvements costing £12 million pounds would transform stations along the East Coast route, including York.

Welcome, with a bang, to the new age of the train – one in which, it seems, a public company can do just as well, if not better, than a private sector firm.

Except that, as The Press reveals today, the Government isn’t exactly operating a level playing field when it comes to the East Coast franchise.

The previous two operators of East Coast Main Line franchises – GNER and National Express East Coast (NXEC) – pulled out because they could no longer afford the huge premiums imposed by Whitehall.

Between now and 2012, NXEC, had it retained the franchise, would have been expected to pay £766 million in premium payments to the Government. Over the same period, publicly owned East Coast, will pay ‘only’ £433 million – £333 million less.

No wonder East Coast can afford to scrap seat reservation fees; but isn’t it all a little unfair?

Karen Boswell, East Coast’s York-based managing director, will not be drawn on that. She admits East Coast is paying about one third less in premium payments than NXEC (it’s actually considerably less than that).

“But the Department for Transport (DfT) entered into an agreement with them [NXEC]. The level of premium payment is a matter for DfT and those individual organisations.”

It may well be a matter for the DfT and private companies bidding for rail franchises, but premium payments matter a great deal to ordinary people who use the trains, as well as railway employees.

The Government has a history of trying to wring as much cash as possible out of the private sector in return for the right to operate services. We saw it with mobile phone companies; and we are seeing it again with rail routes.

You might see it as a case of the Government getting the best deal for the public purse and hence the taxpayer. But by forcing rail companies to pay through the nose for the right to operate trains, isn’t the Government also effectively forcing them to charge us more to use trains?

And there is another problem. Two successive rail companies have now pulled out of the East Coast franchise on the grounds of cost. The 3,000 people who work for what is now East Coast – 300 of them here in York – have twice faced huge upheaval and uncertainty. Potentially, this even puts at risk York’s status as a rail headquarters.

East Coast only has temporary stewardship. In two years, another private operator will take over the franchise and there are no guarantees a new company will continue to keep its HQ in York.

Ms Boswell won’t be drawn on whether the Government is too greedy over rail franchises. Since NXEC agreed its franchise, the UK has entered recession, she points out. “I don’t think you can lay that entirely at the Government’s door. Commercial businesses, that’s the risk you take.”

And what about the future franchise cost? Once East Coast hands over to a private company, will the Government still seek to wring as much cash out of the deal as it can?

Ms Boswell pauses. “How franchises are structured and put together is being considered,” she says carefully. But again, she adds, it is a matter for the DfT.

She is keen, however, to lay to rest the issue of York’s status as a rail HQ. For the two years in which the East Coast route will be in public hands, there is no intention of moving out of York.

“I can’t comment on what will happen beyond that,” she says. “But I think it is a non issue.”

Why? “York seems a very sensible place to support what is a 920-mile rail route. It is under two hours to King’s Cross, just under three hours to Edinburgh. I can’t see why anybody would make a change.”

City Council boss Andrew Waller has already told The Press he is pushing for ‘urgent’ talks with East Coast over the York rail HQ. Will Ms Boswell be seeing him?

“I would welcome the opportunity to sit and talk with the local council,” she says. “I haven’t had a request yet to meet with them. But I can be very, very clear there is no intention to take the HQ from York for the next couple of years. Clearly, I cannot talk about what will happen in a couple of years’ time.”

We are sitting in the boardroom at East Coast House, in Skeldergate, as we talk. Outside the window, the River Ouse is in flood. It seems almost as though the boardroom is floating.

Karen, a 47-year-old mother of two grown-up children, has only been in York for a couple of weeks. She moved here from London with her husband, Mark, and they have rented a house on The Mount.

“It’s a beautiful city. And I’m very much looking forward to getting to know what is a wonderful rail route, going through some of the most beautiful spots in the country.”

She is also looking forward to getting to know some of the 3,000 or so staff who work for East Coast – the entire staff of NXEC, who transferred across to East Coast on the same terms and conditions.

In her first two weeks, she has already met 300 or so managers; she makes it clear she is keen to hear from staff about how to make the trains run better.

“I’m really interested in getting information flowing up and for everyone to be able to influence service decisions. One of my mantras in management is communications, communications, communications,” she says.

Improving services is her priority, she says. There is a great base to build on, thanks to GNER and NXEC. “But my job in the next two years is to leave the place better than when I started.”

She will focus on the basics, she says: not only punctuality, but also cleanliness of trains and stations, and customer service. There will be more late-night trains from King’s Cross to York, more Sunday services, improved Wi-fi on board, improvements to catering, and £12 million of improvements to stations along the route.

These sound like substantial benefits – although, given that East Coast is paying so much less in premiums to the Government than NXEC, it is perhaps no less than we should expect.

There are two years to put all of this in place – public control of the route is expected to end in November 2011, when whoever gets the new franchise is likely to take over.

Ms Boswell does not know what she will do after that. She came to York from London, where she was deputy managing director of First Capital Connect, the London train operator owned by the First Group.

And in two years’ time, when East Coast ceases to exist? “I’m a firm believer that you get on with the job in hand, and that the future takes care of itself,” she says.

Which may or may not be a comfort to the staff working under her.

What is East Coast?

East Coast is the only subsidiary of Directly Operated Railways, the public company set up by Whitehall to run publicly owned rail routes.

The company employs about 3,000 staff, all transferred directly across from National Express East Coast on the same terms and conditions two weeks ago. Almost 300 of those staff are based here in York – some at the railway station (including the train control centre) and others at East Coast HQ in Skeldergate.

The company is responsible for 920 miles of railway line between King’s Cross and Edinburgh, and 12 stations: Peterborough, Grantham, Newark Northgate, Retford, Doncaster, Wakefield Westgate, York, Darlington, Durham, Newcastle, Berwick-upon-Tweed and Dunbar. Leeds, Edinburgh and King’s Cross stations are all managed by Network Rail.

Karen Boswell on…

• Improvements to York Station

Of the planned £12 million in improvements to stations along the East Coast main Line, how much will come to York?

Ms Boswell can’t say, yet. “I’m only two weeks in!” she protests.

Peterborough will receive about £2.2 million, but how much other stations will get has yet to be decided.

But what kind of improvements is York likely to see? There will be a cycle hub, Ms Boswell says. There may well be some changes to access. And there have been some talks with retailers who might want to come to the station. And what about rumours of a multi-storey car park? Any truth to those? “At the moment, there are no plans to put a multi-deck car park in York. But you never say never. Car parking is one of those really critical areas.”

• Nationalisation

If Ms Boswell succeeds in her stated aim of improving the East Coast service in her two years in charge, won’t that be a proof that a publicly owned railway works better than one in private hands? And would there be a case for keeping the East Coast route in public hands, and even re-nationalising some other routes?

“Clearly, it is not within my gift to make that decision,” Ms Boswell says. “I’m here to run a commercial business. The Secretary of State [for Transport] has a commitment to put the route back into the private sector. That’s a decision for the Secretary of State.”

• Rail fares

From January, East Coast rail fares will go up by an average of about 0.75 per cent – as had been planned by National Express East Coast.

That is slightly under the average 1.1 per cent increase in rail fares that will happen across the country as a whole, Ms Boswell points out.

Good news for passengers, then: but so it should be, considering how much less East Coast is paying in premiums.