ScotRail handed taxpayer funding early despite performance concerns

The rail operator’s managing director Alex Hynes was questioned at length by a Holyrood committee.

Press Association
Last updated: 14 November 2018 - 1.11pm

ScotRail was handed an advance payment of taxpayer funding despite concerns over falling performance levels, it has emerged.

Bosses of the rail franchise were questioned by a Holyrood’s Rural Economy and Connectivity Committee on Wednesday over the quality of service in Scotland.

It comes ahead of a vote in Parliament on whether to exercise the break clause in the ScotRail franchise contract.

Scottish Conservative MSP Jamie Greene raised the question of whether payments by the Scottish Government and Transport Scotland had been brought forward from the due date of April 2019.

ScotRail Alliance director Alex Hynes said the company had not received any payments which it had not been due.

However, Mr Hynes was then asked repeatedly by Liberal Democrat MSP Mike Rumbles to answer specifically whether these payments had been made ahead of the agreed due date.

Mr Hynes said: “The subsidy payments, which are between ScotRail and Transport Scotland, are adjusted all the time to reflect changes in the contract.

“These commercial discussions happen all the time and that includes the phasing of subsidy. But it’s not true to say that ScotRail’s received anything that it hasn’t been due under the terms of the franchise agreement.”

Mr Rumbles replied: “You seem to be evading answering this question, if I may say so, on the grounds of commercial confidentiality.

“It’s a very simple question – Jamie Greene tried to pursue it and didn’t, from my perspective, get a clear answer, I’m trying to pursue this, so just let me get it clear – has ScotRail received taxpayers’ money that it is due, but before it is due? Yes or no?”

Mr Hynes said: “We have had discussions with the Scottish Government around the phasing of subsidy payments, yes.”

Scottish Parliament’s Rural Economy and Connectivity Committee
Alex Hynes appeared before a Scottish Parliament committee (Andrew Cowan/PA)

The exchange led committee convener Edward Mountain to urge Mr Hynes to answer directly the question of advance payments.

Mr Mountain said: “I think you’re going to have to answer the question because you’re being pushed quite clearly on this. There must be a date that the subsidy is normally paid, that would be the due date.

“What you are being asked, and have been asked by two committee members, is have you received that money in advance of the due date?

“To me, it’s a simple yes or no answer and it would be helpful to end this line of questioning and move on, but we can’t do it until you give me a yes or no answer.

“So have you received a payment in advance of the due date?”

Mr Hynes answered: “It’s true to say that ScotRail has received some revenue support payments, which it is contractually due from April next year in advance of April next year.

“But that does not change the net amount of taxpayer subsidy to the franchise and it’s worth saying that these commercial discussions happen all the time between ScotRail and the Scottish Government and those changes are just one of the changes we discuss at regular intervals with Transport Scotland officials.”

Figures published last month revealed ScotRail’s performance hit its lowest level since the franchise began.

A Scottish Government spokeswoman said: “Any notion ScotRail is receiving additional money is wrong –  this commercial arrangement presents no additional costs to taxpayers other than those contractually obliged.

“The re-phasing, less than 10% of the total due in year five, is appropriate under the terms of this contract which is vital to the fabric of Scotland’s transport network.

“The re-phasing reflects the delays in revenue growth caused by the late delivery of Network Rail electrification, as well as the extended impact of the Queen Street tunnel closure period.”

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