Rail firms urge 'rigorous' spending review

Train companies called today for a "swift and rigorous" review of rail spending ahead of expected cuts.

Close study of projects is needed to ensure investment is made in the best interests of taxpayers, according to the Association of Train Operating Companies (Atoc).

Atoc said it accepts a review of planned projects, including £8 billion due to be invested in the network over the next four years, is necessary because of the "unprecedented situation in the public finances".

But it suggested train companies should work with the Department for Transport and Network Rail to assess infrastructure investment before the autumn spending review.

In a letter to transport minister Theresa Villiers, Atoc proposed judging projects more closely to decide whether they will improve services for customers and increase revenue, thereby reducing the cost to the taxpayer.

Long-term reforms of the way the railways are run are also necessary, according to Atoc, such as adopting a more commercially minded approach to drive down costs.

Michael Roberts, chief executive of Atoc, said: "Investment in Britain's growing railway is vital if the current record levels of performance and customer satisfaction are to keep pace with demand, which is expected to double in the next 20 years.

"But the cost of the railways to the taxpayer is too high, particularly at a time when public spending is under such severe pressure.

"It is our shared responsibility, across the industry and with the Government, to put rail on a more stable and sustainable footing.

"Train companies still believe firmly that the system of planning rail finance and projects over multiple-year periods is vital to sound long-term planning. But the unprecedented situation in the public finances means that, on balance, a swift and rigorous review is in the best interests of taxpayers, passengers and the railway.

"Train companies believe that they can work with their partners to give greater priority to projects with strong commercial justification and to review the scope of projects to improve their rate of return.

"Schemes that cannot demonstrate significant benefits to passengers and taxpayers should be the first in line for deferral or cuts.

"Longer and more flexible franchises would support these proposals, allowing train companies a greater role in determining the right investment priorities and making rail a more attractive sector for private investment."

A Department for Transport spokesman said: "The spending review will look at all areas of departmental expenditure in terms of affordability and value for money with this process expected to be completed by October 2010.

"We welcome input from all relevant stakeholders, including Atoc."