Source · Select Committees · Public Accounts Committee
Recommendation 3
3
Published information from the Department and the Office of Rail and Road on whole-system costs...
Conclusion
Published information from the Department and the Office of Rail and Road on whole-system costs and revenues is not sufficient to inform proper oversight of the rail system, given the extent of taxpayer exposure. The arrangements for delivering rail services in England involve complex financial flows and contractual obligations between a range of private and public sector bodies. The lack of a complete set of public data makes it difficult for Parliament and taxpayers to understand the overall financial position of the system, and the impact of government’s choices. In addition, the taxpayer has borne the brunt of the financial burden of supporting the rail system through the COVID-19 pandemic. Until recovery is more certain, the Department has said that financial risk will remain with government and the taxpayer. Given this, the Department must improve transparency over the costs across the whole industry and use whole-system financial and management information to oversee its financial contributions and ensure value for money. On operator contracts specifically, through its proposed quarterly monitoring, the Department now has an opportunity to develop its reporting to inform its oversight and improve the transparency of decisions made in passenger operations. Recommendation: The Department should write to the Committee by December setting out its plans to improve transparency. As a minimum these should include: • the regular publication of ‘whole-system’ financial data, further developed to assist meaningful oversight; and • regular reporting to Parliament on the progress and implementation of the Rail white paper.
Government Response
Not Addressed
HM Government
Not Addressed
3.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2021 3.2 The government will write to the Committee in December 2021. The government’s financial support for the railway has increased sharply since the start of the COVID-19 pandemic, and it now bears direct and immediate financial risk on most costs and revenues of train operators. As a consequence, these operators have been reclassified to the public sector in the National Accounts.3.3 In these circumstances, the government recognises the value that greater financial transparency can bring to the industry. Steps have already been taken in this direction. In July 2020, the government began publishing data on the operational support payments made to operators under the COVID-19 emergency agreements. 3.4 This material has been updated on several occasions since initial publication and extended to include data on management and performance fees payable to operators. There was no equivalent publication under the pre-COVID-19 commercial arrangements. 3.5 Initial work has already begun to develop ‘whole-system’ financial reporting and analysis capability, as part of the implementation of the Williams-Shapps Plan for Rail reforms. In the first instance, this information will be used within the sector to improve decision-making. Government will consider options for publishing a version of this material once complete, albeit noting that some commercial and regulatory constraints may apply. Specifically, in certain contexts the release of specific financial information may adversely affect the government’s commercial position in negotiations with suppliers. Furthermore, some train operators are subsidiaries of publicly listed companies. As such, certain information about