Byers underspent by £350m in the wake of Hatfield

Transport

The Prime Minister came under renewed pressure to sack Stephen Byers after the Transport Secretary disclosed that his department had underspent by £350m.

At a time when Britain's rail network was undergoing the worst disruption experienced in peacetime, the Department for Transport, Local Government and the Regions failed to spend more than 5.5 per cent of the money allotted to it.

The Tory leader Iain Duncan Smith renewed his calls for Mr Byers to be dismissed, rounding on Mr Blair in the Commons. Mr Byers disclosed the substantial "underspend" – for the year up to last March – to MPs on the transport committee who argued the money could have been spent on boosting the rail network in the wake of the Hatfield disaster.

Sitting alongside Mr Byers, his department's permanent secretary, Sir Richard Mottram, acknowledged the amount spent should have matched the budget to a greater degree.

"We are required not to overspend, so there will always be a propensity to underspend. But it should have been lower," said Sir Richard.

One committee member, Labour MP Helen Jackson, put it to Mr Byers that 40 per cent of the gap had been earmarked for transport "at a time when the infrastructure desperately needs capital investment".

The Tories' transport spokesman, Theresa May, said: "Given his department's record of underspending, what hope can rail passengers and motorists have that Mr Byers will be able to fulfil the spending requirements of the 10-year transport plan?"

The Transport Secretary told MPs that, when he was Chief Secretary to the Treasury, it had been decided ministries could "roll over" unspent money to the next financial year, to prevent it being spent in a rush on projects that did not constitute value for money.

A Transport Department spokesman said Mr Byers regarded the failure to spend the budget as unacceptable.

As a result of measures taken by the Transport Secretary, a lower underspend for the year ending March 2002 was expected – around £180m.

It also emerged Government spending on railways has fallen substantially since Labour came to power, according to figures published yesterday.

Don Foster, the Liberal Democrat's Transport spokesman, told MPs that public investment in the railways had fallen from £14bn between 1991 and 1996 to £8.7bn in the past five years.

Opening an opposition day debate on the state of the rail system, Mr Foster attacked the Government for presiding over a deteriorating rail service.

He called for Mr Byers to have his pay docked in line with increasing delays and cancellations and told Mr Byers: "We accept that past under-investment, privatisation and some poor management have undoubtedly all played a part in the current rail crisis but we have had a Labour government for nearly five years. It is reasonable to question what the Labour government has done to rectify the problems on our railways."

* Mr Byers betrayed his irritation with Lord Birt who, as part of the Forward Strategy Unit, has been advising the Prime Minister on long term policy including transport strategy. Asked whether the former BBC director general was making a useful contribution, Mr Byers, to guffaws from MPs, said: "It keeps him occupied."