Spending watchdog hits out at Network Rail
Parliament's public spending watchdog has attacked Network Rail, branding it a "fictional" private sector company and demanding its accounts be opened to full scrutiny.
The Public Accounts Committee of MPs, charged with determining whether government spending is effective and transparent, said Network Rail is enjoying the benefits of being a public company while behaving like a private enterprise.
The Department of Transport hands Network Rail more than £3bn a year and underwrites its debts of more than £25bn, but its costs are not subject to direct scrutiny from Parliament or the National Audit Office, claimed Margaret Hodge, PAC's chairwoman.
"It is unacceptable that Network Rail is still not fully transparent to Parliament or the taxpayer," she said. "The National Audit Office (NAO) must be allowed full audit access as quickly as possible to this organisation which is essentially kept afloat through public funds."
"The Department of Transport could not offer any convincing evidence as to what characteristics Network Rail shares with a private company [and] international accounting conventions show that it should be considered as part of the public sector."
Ms Hodge accused the Department of hiding behind the Office for National Statistics classification of Network Rail as a private company, which keeps Network Rail's debt off the public balance sheet and its spending away from direct scrutiny by the NAO.
PAC made its comments after investigating the Department of Transport's spending plans for the next three years.
That review also raised concerns about proposed cuts to spending on road maintenance.
"My committee is concerned that short-term budget cutting could prove counter-productive, costing more in the long term as a result of increased vehicle damage and the higher cost of repairing more severe road damage," Ms Hodge said.
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