Vision for future of rail industry calls for 'greater transparency'
AN influential panel of MPs has called for "greater transparency" into the finances of the rail industry.
In a report published today, the Transport Select Committee said it embraced the Government's quest to make the industry more efficient – something which, on the whole, has been welcomed by Derby's rail industry.
But the report, which sets out the committee's vision for the railway by 2020, has called on Ministers to give up financial information that could reassure taxpayers they were getting value for money.
The Government currently provides a £4 billion subsidy to the UK railway.
An example of its support came last year, when Derby train-operator East Midlands Trains received a £46 million bail-out after making losses which, under the terms of its franchise agreement with the Department for Transport (DfT), made it eligible for taxpayer-funded "revenue support".
On Wednesday East Midlands Trains' passengers were hit by an average fare increase of 4% – above the current rate of inflation.
Unions say this is a "kick in the teeth" to rail users.
Bob Crow, general secretary the RMT union, said: "These inflation-busting fare increases will do nothing other than fatten the profits of the greedy train operators."
Committee chairman Louise Ellman MP said: "There are good economic, social and environmental reasons for the Government to provide a £4 billion subsidy to the railway.
"But to drive efficiency savings across the sector the Government and the regulator must shine a light on complacent management, waste and profiteering by ensuring greater transparency in the finances of the rail industry.
"It is vital we know far more about how public money is spent so that there is confidence it does not leak out of the system in the form of unjustified profits.
"The Government should publish and consult on a clear statement of what the subsidy is for and where it should be targeted. Commercial confidentiality should not be used to block legitimate requirements for information."
Campaigners for Derby train-maker Bombardier would welcome the same clarity when it comes to rolling stock contracts.
When the DfT decided to award the £1.4 billion Thameslink contract to German manufacturer Siemens, instead of Bombardier, the Government defended the decision, saying the Siemens' bid was better value.
But when faced with calls to release figures, the Government said it could not disclose the sums due to "commercial confidentiality".
Also in its report, the committee said it saw "merit" in longer rail franchises – something that suits train-makers like Bombardier as they increase the likelihood of train companies ordering more rolling stock as they would see them as a more long-term investment.
But following the West Coast Main Line debacle, the committee recommends that the letting and management of rail franchises be left to an "arms-length body with more commercial expertise that the Department for Transport".
Last year, Transport Secretary Patrick McLoughlin, who is also MP for Derbyshire Dales, halted the West Coast franchise competition after "fundamental flaws" were identified in the way bids had been assessed.
The cancellation of the competition will cost taxpayers millions of pounds.
Mrs Ellman said: "A new arms-length franchising body could employ staff with the appropriate specialist and commercial skills required to let and manage effective franchise contracts.
"However, ministers must remain fully accountable to Parliament for the railway."
Meanwhile, Bombardier has secured a £140 million order to supply Germany's Abellio Rail with 35 Talent 2 trains. But the trains will be built at its factory in Hennigsdorf, Germany – not its Derby site.