The Solent Transport Users Group (STUG) has strongly condemned the potential acquisition of Red Funnel by private equity firm Northleaf Capital, warning that further private ownership threatens the reliability and affordability of cross-Solent ferry travel.
STUG has raised concerns that private equity involvement has consistently prioritised profit over public service, leading to what it describes as a ‘marked and damaging decline’ in ferry service standards. The group has highlighted that high fares, frequent cancellations, and unreliable services have worsened under the current ownership structure of Red Funnel.
In a statement, the group said the reported interest of Northleaf Capital in purchasing the ferry operator was a ‘cynical and opportunistic move’ that could have lasting negative consequences for the Isle of Wight community.
STUG, which represents around 11,000 supporters including both Isle of Wight MPs, the Leader of the Isle of Wight Council, and members of the Cross-Solent Transport Group, has vowed to oppose the sale.
The group has urged residents, passengers, and supporters to voice their objections directly to the potential investors by contacting [email protected].
A letter sent by STUG to Northleaf Capital sets out their concerns in strong terms. It warns that private equity ownership has already proven incompatible with essential public services and has had a ‘deeply negative effect’ on ferry links that are a vital economic and social lifeline for the Isle of Wight.
The committee wrote:
“We urge you in the strongest terms to reconsider. Private equity ownership has proven incompatible with the delivery of essential public services.
Article continues below this advertisement “For an island such as ours, where ferry services are a vital economic and social lifeline, the involvement of private equity has had a deeply negative effect. The consequences are not abstract – they are felt daily by residents, businesses, and visitors.
“Should Northleaf Capital proceed with this acquisition, you can expect continued and robust opposition from STUG. We will not cease in raising awareness of the consequences of such ownership, and, as has already been demonstrated, this has national political reach.
“Let us be clear: just like the current owners, you may stand to lose your entire investment.”
Perhaps stug should buy it theirselves..oh no, they haven’t the cash…it will be sold, it is a for profit enterprise..
Deal with it commies
What a curious statement,..
Someone who calls themselves ‘Islander’, but is 100% in favour of the Isle of Wight residents being ripped off, to the sole benefit of the rich shareholders of yet another private equity firm.
And to finish with the comment “Deal with it commies”, just highlights that the commenter doesn’t have the mental capacity to understand the monumental difference between ‘Communism’ & socially responsible management of public services…
Couldn’t have put it better myself.
It may be that the words used by a previous contributor are ill chosen but you are more than a supposed socially responsible pressure group, you are in fact advocating state ownership by virtue of the fact you do not like private owners of any description, which makes you at best sociallist and very close to the principles of communism. There has never been and never will be a state run entity of any description that is cost effective., they employ and cost more to the tax payer than any private equivalvant.
Ah barnie, you also seem to be misinformed, or misunderstanding, or deliberately twisting the reality of the situation.
Firstly, I am not a member of, or in any way affiliated with the Solent Transport Users Group.
What I am, is thoroughly pissed of with the concept of everything us ‘normal’ people have to do in life, being hijacked to make massive profits for already rich people.
Whether this is the ferry companies, or the water companies, or dentistry, or whatever else…
It seems that virtually everything is getting relatively more, and more expensive, and underlying almost all of it is someone (or some people), almost exclusively already what would be classified as ‘rich’, making unnecessarily large profits from it.
I accept, in part, your statement that ‘there never will be a state run entity of any description that is cost effective… compared with privately owned companies…’
It is true that a publicly owned business won’t have the inherent drive for efficiency of a profit driven one… Where improvements in efficiency drive down operating costs, and thereby increase profitability.
However, it is not, in reality, true that ‘they cost more to the tax payer than a private equivalent.’
If you consider that the vast majority of the customers of the business, are also tax payers… then the total cost to the customer and taxpayer combined will be less for a publicly owned company, as there are not the massive profits being taken out of the revenue produced.
As an example (not real figures)
For a publicly owned company
Basic cost to operate the service (wages, fuel, amortised cost of assets etc) £15 million
Total cost to customers and taxpayers £15 million
For a privately owned company
Basic cost to operate the service (wages, fuel, amortised cost of assets etc) £10 million
(cheaper because of better efficiencies, driven by requirement to maximise profits)
Profit to owners / shareholders £10 million
Total cost to customers and taxpayers £20 million
In reality, of course, the ratio of profit to turnover would likely be much higher.
I would be interested to hear your reasoning as to how, a privately owned service (like the ferries), making massive profits for their shareholders, somehow makes it cheaper, and better, for me, the user…..
i keep hearing about being ripped off, so how much would you charge for a boat sailing.
Wightlink – it is a for profit ferry operation – it is not a public service run by the state, funded by your taxes. If it was run by the state and funded by taxpayers, you can be assured that anyone with an isle of wight address would be subject to a ferry tax component levied somewhere.
the state won’t miss that opportunity to fleece taxpayers more
Yes, I think we all know very well that it’s a ‘for profit’ eoperation,..
That’s the problem…
the massive profits that are made to feed the shareholders, make the service much more expensive than it should be, or needs to be..
IMO, as an essential service, it should (preferably be state owned, and) be run as a non-profit organisation.
Other than the initial purchase, there is no need for any state (taxpayer) funding, as all costs would be covered by the (much more reasonable) fares charged…
Most people seem to agree that having fares much higher than necessary,(to pay profits to shareholders) is not reasonable. very few, I’m sure, would expect it to be entirely free & fully funded by the taxpayer.
Strangely, the only people who seem to be talking about the tax-payer subsidising the day to day operations, are the (current) ferry companies themselves, who have stated that the only way they will lower fares, or improve services, is if the government gives them tax-payers money, so they can lower fares but not reduce their profits.
so here’s an idea…
WL, was originally state owned…
so, government buys it back, for the same price it was sold for, all those year ago (obviously adjusted for inflation).. therefore, no net cost to the taxpayer.
service is then run as a non-profit, with the revenue from the (reduced cost) ticket sales used to pay the operating costs, and on-going investment.
with the profits made by the current owners removed from the equation, ticket costs could be significantly reduced.
AFAIK, RF never was publicly owned, so the govt would need to put in some money to buy them out,.. but as (allegedly) they are on the verge of bankruptcy, that should be quite a small sum.
There would be so many postivies,..
& the only negative would be the rich (foreign ?) shareholders who would have to find some other mugs to make money from…
No win situation , Red Funnel is in trouble
Its called capitalism
No Shit…
it was capitlaism…
now, 40 years on from the Thatcherite policies of selling off (virtually) all public utilities to people with deep pockets and even deeper apetites to make unlimited profits, and the deregulation the finincial sector allowing greedy ‘bankers’ to pay themselves massive bonuses, for more & more risky trades,.. (ultimately leaving the taxpayer to pick up the tab when it all went tits-up in 2008)….
What was capitalism, (where investors could make a reasonable, but sustainable return on investment) has morphed into something that in a lot of cases is pure and unadulterated GREED…