MPs blast rail funding system flaws

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KEY figures used by successive Governments as the basis for raising rail fares and holding back investment in Yorkshire and across the North were based on assumptions with “no real basis” in reality, MPs have heard.

Transport experts told a Parliamentary select committee that data used by the Department for Transport (DfT) suggesting regional railways are far more expensive to operate than inter-city services or those in the South East do not paint a true picture.

“There has been quite a lot of criticism around the high cost of regional railways,” said Geoff Inskip, chairman of the Passenger Transport Executive Group.

“I’m not sure anybody knows what the real cost of running regional railways is.

“I think the allocation of costs can be done on a number of parameters, and I’m not sure the way it’s done currently actually give the right result.”

Regional railways were picked out in the 2011 McNulty report on the cost of the railways as being particularly expensive.

The issue is vital because Ministers have in the past suggested that as regional railways are already receiving a higher subsidy than other parts of the country, they may not qualify for new investment.

North West MP Graham Stringer revealed former Transport Secretary – Philip Hammond – had told him that rail fares across the North would have to rise if the DfT was to agree to fund the £560m Northern Hub package of regional rail improvements.

“The previous Secretary of State said when we were asking for investment in the Northern Hub that the subsidy for passengers was so high that fares would have to go up, or we wouldn’t get the investment,” Mr Stringer said.

“What you seem to be saying is that there is no real basis to these figures – they are just arbitrary. If that’s the case, that’s very serious.”

The Yorkshire Post is campaigning for improved transport funding for the region as part of its Give us a Fair Deal campaign, starting with approval for the Northern Hub package.

It emerged on Saturday that the present Transport Secretary, Justine Greening, hopes to approve the Northern Hub in the coming days. The Treasury, however, has yet to sign off the deal.

Professor Chris Nash from the Institute for Transport Studies at the University of Leeds confirmed the Government’s system of working out the cost of different parts of the railways was “highly arbitrary”.

“Currently all assessments of the costs... rely heavily on some more or less arbitrary allocation of the fixed costs of the system,” Professor Nash said.

“If we really want to know what are the economics of regional services... then we need to look at the additional costs of adding regional services on to the network.

“In some cases, that actually needs infrastructure, and the whole of the cost of that should be added to the regional services.

“But in other cases it’s simply making use of the capacity of the existing system, and there’s a low cost involved in that.”

Mr Inskip added that one reason railways in the North might be more expensive to operate than those in the South East is because they have not received the same investment in the past.

He highlighted the electrification measures included in the proposed Northern Hub package which would make trains cheaper to run and more reliable.

“The South East has had a lot of investment that’s actually reduced the costs of their railways,” he said. “In the North and Midlands we haven’t had that investment.

“Something like the Northern Hub will actually improve the performance of the railways… and the running costs as well.”