Schedule 8 debate

RAIL’s verdict: The RMT union has once again taken aim at Britain’s train operating companies (TOCs), by highlighting a £500 million gap in the amount of Schedule 8 compensations paid out by Network Rail between 2011-17 (£712m), and the amount passed on by TOCs to passengers (£187m) during the same period.

RMT General Secretary Mick Cash calls this “financial chicanery”.

But according to independent regulator the Office of Rail and Road, the principle behind the Schedule 8 payment regime is to compensate TOCs for unscheduled disruption caused by infrastructure failure.

It is designed to cover not just compensation to passengers, but also loss of business and other costs borne by TOCs - such as providing rail replacement buses.

Payments are not made on an event-by-event basis, but reflect the impact to performance over a longer period.

No TOCs should be better or worse off as a result of Network Rail performance, and if performance is better than expected then TOCs actually end up paying NR.

The provision of Schedule 8 payments also enables franchise bidders to avoid building in the unknown costs of disruption over the length of franchises being tendered, which lowers both the potential commercial risk to them and to taxpayers.