Tuesday 26 February 2019 11:57 pm | Updated: Monday 03 June 2019 1:46 am

Government told to publish Govia’s profit cap amid concerns over taxpayers’ money

The public spending watchdog has urged the government to publish details of Govia's profit cap, citing fears taxpayers' money is not being "adequately protected" after last year's rail chaos.

The Public Accounts Committee (PAC), chaired by MP Meg Hillier, said there was a lack of transparency around the profit rate that Govia earns from its franchise, Govia Thameslink Railway (GTR).

The franchise was at the heart of last May's botched timetable upgrade, which led to widespread delays, cancellations and overcrowding for passengers.

Following last year's episode, transport secretary Chris Grayling stopped short of terminating the GTR franchise but capped the amount of profit the operator was able to make for the remainder of the franchise, which will come to an end in September 2021.

It also forced Govia to set aside £15m towards improvements for passengers, in addition to the £15m the operator already contributed towards passenger compensation. GTR has so far not made a profit.

The Department for Transport (DfT) also commissioned a review by the Office of Rail and Road (ORR) chairman Stephen Glaister, which found that DfT, Network Rail and the ORR itself all missed opportunities to prevent the weeks of delays and cancellations, and that "nobody took charge".

Grayling, who faced repeated calls to resign over the saga, announced a wide-ranging review into reforming the rail system led by former British Airways chief executive Keith Williams, which is due to report later this year.

The PAC said it remained concerned that DfT was "still not adequately protecting taxpayer's money in its management of Govia Thameslink Railway" and urged it to provide details of the cap in the next three months, along with how the £15m passenger improvement fund will be spent and what improvements passengers can expect.

The PAC also warned that passengers face another "difficult year" in 2019, due to more planned timetable changes, increased amounts of maintenance work and the rolling out of large improvement projects.

It said the DfT's strategic management of the railways was "not evolving quickly enough" to carry out programmes such as Crossrail, the £17.6bn railway that has been delayed indefinitely and received a £1.4bn bailout from the DfT.

Hillier said: “2018 was a year from hell for many rail users and unless the government gets a grip there is every chance that passengers will suffer in 2019 as well.

"The ‘root and branch’ review will report later in 2019 and must then be implemented, so passengers have some time to wait for any improvements arising from its recommendations.

“The DfT must set out clear governance and accountability structures for the rail system, and move swiftly to provide other important information."

“We don’t know what level of profit the operator, GTR, can expect to earn – nor what tangible benefits passengers can expect to see from the £15m GTR must spend on improvements," she added. "The department must provide clarity on this."

A DfT spokesperson said: “The disruption passengers experienced last summer was unacceptable. The initial findings of the Glaister report and the lessons learned helped to deliver the December timetable changes.

“The independently chaired root-and-branch review of our railway is considering all parts of the rail industry to ensure the focus is on putting passengers first. The government and rail industry are committed to working together to ensure improvements are made.”

Robert Nisbet, regional director at the Rail Delivery Group, which represents train operators and Network Rail, said train operators and Network Rail are learning the lessons from last year’s disruption.

"Improvements being made today will not go far enough to ensure Britain has the railway it needs to prosper in the decades ahead, which is why we support the on-going root and branch review into how the industry is structured," he added.

"We are looking out to the rest of the world and listening to people across the country to inform our proposals for how the railway can deliver more for passengers, communities and the country.”