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Network Rail debt should be on government balance sheet, say MPs

The Public Account Committee has called for Network Rail’s massive £28bn debt to be added to the government’s balance sheet.

The Public Account Committee has called for Network Rail’s massive £28bn debt to be added to the government’s balance sheet.

Public Accounts Committee chairman Margaret Hodge issued the call while cross-examining permanent secretary to the Treasury Sir Nicholas Macpherson over the government’s accounts for 2010/11.

The rail operator’s strategic business plan covering the CP5 control period from 2014 to 2019, published this month, would see that debt skyrocket to £49bn by the end of the control period. Increasing its debt would allow it spend £37.5bn financing and expanding the railway.

But concerns have been raised over the level of freedom from public scrutiny that Network Rail enjoys, given the level of its annual taxpayer subsidy. In 2010/11 this was £3.9bn. The CP5 business plan would see this fall to between £2.6bn to £2.9bn.

Hodge was backed up by National Audit Office comptroller and auditor general Amyas Morse, who said the current approach was not in line with standard accounting practice.

“Network Rail is a long story,” Macpherson told the committee. “There is a policy element to this. Successive Governments don’t seem to have been in any great hurry to instruct us to incorporate Network Rail,” he said.

In response, Morse said he didn’t “disagree with the decision”, but that he didn’t think it “in line with standard accounting practice”.

Hodge said she thought the issue needed to be resolved. “Network Rail should be on the books,” she said. “We want to see a resolution to this issue.”

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