Speaking in a statement to parliament on 2 March 2023, Minister for transport Jenny Gilruth announced that from 25 June 2023, Caledonian Sleeper services will be provided by an arm’s length company owned and controlled by the Scottish Government in line with the Government’s statutory Operator of Last Resort duty.

Ms Gilruth said: “Having stated in October that the existing Caledonian Sleeper franchise would come to an end in June 2023, I want to give rail staff and passengers as much certainty as I can about the future.

“With the Sleeper franchise ending on 25 June 2023, we have carefully assessed the options for successor arrangements in accordance with the current legislative framework and our Franchising Policy Statement.

“This decision has been taken following a detailed analysis of the options available, and in accordance with the current UK legislative framework and the Scottish Ministers’ Franchising Policy Statement.

“Having regard to continuing uncertainty regarding market conditions, travel behaviours and ongoing UK rail reform, it was decided that a Direct Award was not viable and that Sleeper services should instead be provided by the Scottish Government in line with their Operator of Last Resort duty

“That is why I have confirmed that, from the expiry of the current franchise, Caledonian Sleeper services will be provided through Scottish Rail Holdings, a company wholly-owned and controlled by the Scottish Government. This is in line with our Operator of Last Resort duty.

“Caledonian Sleeper staff will transfer to the new Scottish Government owned entity, with their terms and conditions protected.

“This approach will provide a stable platform for Sleeper services and certainty for passengers and staff.”