HS2

04.01.19

Northern under fire over £31m government subsidy ‘secret payments’

The RMT union has criticised “secret extra payments” funded by taxpayers given to Northern Rail after it was found that the government paid the train operator a total of £31m more than previously announced since the franchise began.

The figures come from the new Arriva North annual financial statement, showing that it received an extra £11m than originally announced back in 2016 when the franchise began— as well as revealing a fall in profits for the company.

The accounts revealed that the German state-owned company was given an extra £31m of taxpayer-funded payments since April 2016, allowing the company to make profits of £33.7m over the same period.

This is based on the previous figures from rail minister Andrew Jones, who told MPs in a written parliamentary answer in 2016 that Arriva Rail North were to receive £537m in real terms; compared to the £568m that was actually received.

The DfT strongly deny the claims, with a spokesperson stating: “The RMT claims are completely misleading and erroneous and show a total misunderstanding of the figures.

“Their needless strikes have nothing to do with jobs or safety, and are deliberately causing maximum disruption for passengers and damaging local economies.

“We urge them to stop putting out inaccurate stories such as this, put passengers first, call off strikes, and get around the table.”

Northern slammed the criticism from the RMT, saying that the union ignored inflation, adding that the extra payments were for changes to services.

Richard Allan, the deputy managing director of Northern, said: “It is wrong to say these additional franchise payments are 'secret' and subsidise profits for Northern.

“The additional franchise payments are due to changes in services and other policy areas that Northern has been asked to deliver on behalf of Transport for the North and DfT since its bid for the franchise was submitted in 2015.

“The payments are based on the additional costs or lower revenue for Northern arising from these changes.”

Allan also stated that last year Northern had lower than anticipated passenger revenue growth, which was largely due to delays preventing the introduction of new services and the RMT’s strike action.

RMT general secretary Mick Cash commented: “As well as bailing out Northern Rail on strike days these new official company figures reveal that ministers have misled MPs about the extent of taxpayer support the company is receiving.

“Without informing parliament, ministers have authorised secret extra payments of £31m, which have only just come to light and which have been used to subsidise profits of £33.7m. That is nothing short of a scandal.”     

All this follows a long and bitter dispute between Northern and the RMT over the future role of the second person on Northern train services, with the latest update coming when the train operator called for a formal independent ACAS inquiry to help resolve the issue.

In the wake of the DfT and Transport for the North publicly confirming that a second person would be retained on Northern services, the RMT has said that strike action will continue as it prepares for the 43rd day of strike action.

Image credit - Danny Lawson

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

Maritime Transport launch new rail services

17/07/2019Maritime Transport launch new rail services

Maritime Transport has launched two new rail services from DP World London Gateway to its rail terminals in Trafford Park and Wakefield. It ... more >
Campaign for Windsor Link Railway to be revived

17/07/2019Campaign for Windsor Link Railway to be revived

A campaign for a rail link between Windsor and Heathrow Airport is to be revived, after the scheme was turned down by the Department for Transpor... more >
Conwy Valley Line to partly reopen tomorrow

17/07/2019Conwy Valley Line to partly reopen tomorrow

The Conwy Valley line is set to reopen for passengers ahead of the National Eisteddfod in Llanrwst, Network Rail has announced. Llandud... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the... more > more last word articles >

'the sleepers' daily blog

Apprentice to Co-leading the Rail Sector Deal

05/06/2019Apprentice to Co-leading the Rail Sector Deal

In a series of Q&A’s with key speakers on the run up to TransCityRail Midlands, we caught up with TransCityRail panellist and Amey’s commercial account director, Anna Delvecchio, for her insight into what the Rail Sector Deal means for the rail industry and its supply chain. Anna started her career as an apprentice at the age o... more >
read more blog posts from 'the sleeper' >

comment

The challenge of completing Crossrail

05/07/2019The challenge of completing Crossrail

With a new plan now in place to deliver Crossrail, Hedley Ayres, National Audit Office manager, major projects and programmes, takes a look at ho... more >
Preparing the industry to deliver trains for the future

04/07/2019Preparing the industry to deliver trains for the future

The move to decarbonise the rail network involves shifting to cleaner modes of traction by 2050. David Clarke, technical director at the Railway ... more >
Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

02/07/2019Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

Smart electrification is the way to boost clean energy resources, argues Leo Murray, director at 10:10 Climate Action. Contractors are clear... more >
Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

02/07/2019Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

The TCR Midlands conference is only days away and tickets are going fast for the sector event of the year at the Vox Conference Centre in Birming... more >

rail industry focus

View all News

interviews

Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

24/06/2019Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

By Ewan Quayle, Rail Technology Magazine Reporter Andrew Haines, the Chief Executive of Network Rail, has told the Today programme on R... more >