Minister strips rail firms of their double payment

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The Government is to axe the “crazy” arrangement where some rail companies get paid twice for replacing trains with buses.

In some cases, bus companies running rail replacement services are owned by the same parent company as the train operators.

This means that some are claiming the bus service operators grant (BSOG) for running rail replacement services as well as receiving compensation from Network Rail.

Now, Transport Minister Norman Baker said, bus companies will no longer be able to claim the extra BSOG subsidy for running replacement services.

Mr Baker said: “Rail replacement services are quite obviously not a local bus service and I am proposing to put a stop to the highly questionable arrangements where some train operators can get paid twice over for running buses that replace their trains.

“When rail passengers buy a ticket they want to get on a train, not a bus. It is crazy for the public purse to subsidise these so-called rail replacement buses.

“I have been pushing train operating companies to reduce their reliance on decanting all their passengers on to buses at the weekend – I hope this will act as an extra push to make them think again.”

This proposal is one of the first conclusions of a major review into how bus subsidy is paid. It is estimated that this change will save the Government around £2m a year in bus subsidy.

BSOG is intended to help bus companies operating certain local services to keep their fares down.

But neither emergency nor planned rail replacement services are local bus services in the true sense as the public will be unaware that rail replacement services are running unless they were intending to travel by train in the first instance. In addition, the general public will not be able to travel on rail replacement services if all seats are given as priority to displaced rail ticket holders.

The reviews findings will be announced in the coming months.

Bob Crow, general secretary of the RMT transport union, said: “It’s good news that one of the money-making rackets of the private train operators is to be closed down and we hope they don’t just look to recover this nice little earner by exploiting other loopholes elsewhere in the fragmented and opaque rail system.”

A spokesman for the Association of Train Operating Companies (Atoc) said: “The primary focus for train companies and Network Rail is keeping passengers on trains as much as we can because we know that is what customers want.

“A significant amount of time and effort goes into making sure that disruption for passengers is kept to an absolute minimum during essential improvement works, including reducing the number of rail replacement buses used as much as possible.”

Atoc added that the use of rail replacement buses had fallen by a third over the past three years.

It added that over Christmas 2011, the number of replacement buses was halved compared with the previous Christmas.