‘Free money!’ Avanti West Coast bosses caught joking about UK government handouts

Avanti West Coast managers joked about receiving “free money” from government and performance-related payments being “too good to be true” in an internal presentation at the notoriously unreliable train operator, it has emerged.

One slide, entitled “Roll up, roll-up get your free money here!” described how the Treasury and Department for Transport supported the firm with taxpayers’ money, provided third-party suppliers and inspections, and then paid Avanti fees on top.

The RMT union labelled the presentation, made last week by senior managers, a “disgrace”.

The firm, a joint venture between First Group and TrenItalia, was awarded a new long-term contract last year by the government to run Britain’s major intercity service despite a poor record of cancelled and late-running trains. It slashed timetables in December and has seen punctuality decline and cancellations worsen in recent months.

Avanti confirmed the contents of the presentation but described the wording, in slides seen by the Guardian and first reported in Novara Media, as “regrettable”.

The meeting was attended and partially addressed by Avanti’s directors, including its managing director, Andy Mellors, but it is understood he did not present the “free money” slides.

Since the end of franchising, train operators are paid a management fee by the government to run services and do not rely on selling more tickets – or running trains during strikes – for profits, and can earn higher contractual payments by meeting performance targets.

The presentation was describing the Service Quality Regime (SQR), which inspects station and train functioning, and cleanliness as well as customer service.

It concluded that, even with only partial compliance: “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!! Sound too good to be true?! Well on this occasion it isn’t – it’s the absolute truth!”

Under current performance, Avanti was on course to get payouts for customer service but not for its running of trains or stations.

An Avanti West Coast spokesperson said: “This does not represent Avanti West Coast’s view of the Service Quality Regime and was an isolated incident. These slides were an attempt to explain how the SQR works to some of our colleagues, but the language used in this was regrettable and we apologise.

“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.”

The latest embarrassment for Avanti comes amid continuing strikes and plummeting staff morale. The presentation showed fewer than one in five employees felt positive about working for Avanti. A fuller version of the employee survey, seen by the Guardian in December, showed only 3% said they felt valued, and only one in five agreed that the firm was “committed to delivering good service for its customers”.

The 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 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.”