ScotRail got secret £23m bailout from the taxpayer
SCOTRAIL bosses were handed a £23million taxpayer-funded bailout amid growing concerns over performance.
Ministers were forced to bring forward payments as Dutch firm Abellio failed to make as much money on the franchise as expected – and needed extra funds to plug a spending gap.
The payments were made secretly throughout 2017 and 2018, as ScotRail’s pre-tax losses soared from £2.6million in 2016 to £17.9million last year.
It had been hoped that Abellio would increase ticket sales in 2017, but failed to do so amid complaints of delays, cancellations and overcrowding.
Bosses of the rail franchise were questioned by Holyrood’s rural economy and connectivity committee yesterday over the quality of service in Scotland.
Conservative MSP Jamie Greene questioned whether payments by the Scottish Government and Transport Scotland had been brought forward from the due date of April 2019. ScotRail Alli- ance director Alex Hynes initially said the company had not received any payments which it had not been due.
However, Mr Hynes was asked repeatedly by Liberal Democrat MSP Mike Rumbles to answer directly whether these payments had been made ahead of the agreed due date.
Mr Hynes said: ‘The subsidy payments, which are between ScotRail and Transport Scotland, are adjusted all the time to reflect changes in the contract.
‘These commercial discussions happen all the time and that includes the phasing of subsidy. But it’s not true to say that ScotRail’s received anything that it hasn’t been due under the terms of the franchise agreement.’
Mr Rumbles replied: ‘You seem to be evading answering this question, if I may say so, on the grounds of commercial confidentiality.’
He continued: ‘So just let me get it clear. Has ScotRail received taxpayers’ money that it is due, but before it is due? Yes or no?’
Mr Hynes said: ‘We have had discussions with the Scottish Government around the phasing of subsidy payments, yes.’
The exchange led committee convener Edward Mountain to urge Mr Hynes to answer directly the question of advance payments, saying it was ‘a simple yes or no answer’. Mr Hynes replied: ‘It’s true to say that ScotRail has received some revenue support payments, which it is contractually due from April next year, in advance of April next year.’
He added: ‘But that does not change the net amount of taxpayer subsidy to the franchise.’
Figures published last month revealed ScotRail’s performance had hit its lowest level since the franchise began.
A Scottish Government spokesman said: ‘Any notion ScotRail is receiving additional money is wrong.
‘This commercial arrangement presents no additional costs to taxpayers other than those contractually obliged.’