Ministers must come clean on true cost to taxpayers of rail franchising collapse – Maria Eagle

31 January 2013

Maria EagleMaria Eagle MP, Shadow Transport Secretary, responding to the Government’s announcement on the future of stalled rail franchises, said:
 
"Ministers must come clean and admit the full scale of the costs facing taxpayers as a result of the collapse of rail franchising. As even more of the rail network is dragged into the chaos caused by the West Coast franchise fiasco, taxpayers deserve straight answers on the final bill they face as a direct result of Ministerial decisions ruled irresponsible by a key parliamentary committee. There will be now be significant additional costs from having to rerun yet another major franchise competition from scratch as well as the costs of restarting the other two stalled competitions and a huge bill for keeping the Government’s own rail company on standby. What is increasingly clear is that the final bill will far exceed the £40 million initially admitted by Ministers.
 
"Since First Group are to continue running services on the Great Western Mainline for a period for which they previously declined the option to extend their contract to avoid more than £800million of premium payments, Ministers must ensure that taxpayers are to now receive payments in full from the company for this period. Having now handed lucrative contracts without competition to both companies involved in the West Coast franchise dispute, Ministers must be clear that this is not simply some quid pro quo arrangement to prevent legal challenge and get the Department off the hook using taxpayers money. Ministers must also explain why they have ignored a key recommendation from the Brown review and propose to stick dogmatically to longer fifteen year franchises despite the greater risks to taxpayers. This deeply worrying decision suggests that Ministers have learnt nothing from this fiasco and are intent on putting their ideological obsession with this failed policy ahead of protecting public money. Passengers will also be disappointed that Ministers have failed to take the opportunity to abandon the planned privatisation of services on the East Coast Mainline, particularly when it has delivered more than £350 million to taxpayers in just two years of being run on a not for private profit basis."