FACT CHECK

The Record, in conjunction with Ferret Fact Service, is running the rule over the truthfulness of bold claims made by politicians of all hues. In the age of fake news, we will look, impartially, at all the available evidence to find out if politicians are

A ROW has broken out between Transport Minister Humza Yousaf and the UK Government over funding arrangements for Scotland’s railways.

The Treasury announced the rail network in Scotland would get about £3.6billion, describing it as a “generous settlement”.

But Yousaf argued it amounted to a £600million shortfall.

In a statement, he accused the UK Government of ignoring the established calculation for rail funding in Scotland. CLAIM “The UK Government have departed from our agreed funding formula, leaving Scotland’s railways £600million short.” Humza Yousaf EVIDENCE Funding for Scotland’s railway network is provided via grants from the UK Government, as well as through revenue from passengers and via the Barnett formula, which distributes wealth to the devolved nations based on changes to UK spending.

The settlement announced by the UK Government last Friday is for £3.6billion over the course of the next funding period, which runs from 2019-20.

The Transport Minister suggested this is a “real terms” cut of about £600million and that £4.2billion is required to continue funding at the same level, after inflation.

But the Treasury claimed the new funding figure is a £600million increase on the previous period.

Yousaf said the £4.2billion “represents £1.9billion for required renewal activity as per advice from the independent Office of the Rail Regulator and £2.3billion for enhancement activity”.

This is in line with usage of the railways in Scotland, which has significantly increased over the last decade.

Spending in Scotland during the 2014-2019 period is expected to be up to £3.6billion not including inflation, according to Yousaf.

Transport Scotland, the government agency covering rail issues in Scotland, said the shortfall was compared to the 2014-19 figure and added costs due to debt repayment and inflation.

However, the analysis which led to this figure hasn’t been published, so it is unclear what a “real terms” cut means in this context.

Central to Yousaf ’s claim is that the UK Government have not fulfilled the “agreed funding formula”.

This refers to the proportion of money going to Scotland in each five-year period, which was initially calculated using the relative size of Scotland’s rail network compared to the UK and was found to be 11.17 per cent.

This figure was put forward by the Office for Road and Rail (ORR), the independent rail body, as part of the original settlement when spending power on rail networks was devolved in 2005. In 2014, when Network Rail were reclassified as a public sector body, previous arrangements for allocating funding were replaced by UK Government grant funding. This means Westminster has more control over the funding allocated to Scotland’s rail network. It appears that the formula based on the size and usage of the network, which was agreed at the devolution settlement, has been replaced with a broader grant, which takes into account population proportion and the devolution settlement. The grant was announced after consultation with the rail regulator. The £3.6billion handed to Scotland is less than the 11.17 per cent of UK Network Rail funding the old formula would have resulted in.

It is correct to say that this formula had been the one used to calculate funding, and it was certainly agreed by all parties during the devolution settlement in 2005. However, it is not clear whether this has been used as the only methodology for deciding Scotland’s rail funding settlement.

The Treasury denied using the 11.17 per cent proportion as the basis for the Network Rail grant. The figure has not been reproduced subsequently, according to the ORR.

It is important to note also that the original ORR calculation doesn’t account for changes to devolution since 2005, most notably Scotland’s new tax-raising powers.

Therefore the amount that the Scottish Government can spend on the rail network is not entirely reliant on the settlement.

It should also be considered that there are additional infrastructure projects that are funded outwith the grant – and that the historic Network Rail debt was taken on by the UK Government.

The UK Government say Scotland benefits from additional funding through the Barnett formula and raised the potential Barnett consequentials of spending on the HS2 rail link.