Rail bosses keep millions in “massive scam” of Milton Keynes commuters

Photo courtesy of London Midland � 2008.
Photo courtesy of London Midland � 2008.

Virgin and London Midland Trains chiefs have been accused of acting like “Robin Hood in reverse” and making millions from a controversial passenger refund scheme.

Railway operators across the UK were paid over £167million in compensation last year, thanks to the ‘Schedule 8 Performance Regime’ were they are reimbursed if their trains are more than five minutes late.

But passengers can only claim compensation if the train is at least half an hour late - and received only £22million compensation in that same period.

Manuel Cortes, general secretary of the TSSA trade union, said: “These firms are acting like modern day Robin Hoods in reverse.

“For every eight pounds they got from the taxpayer, they only paid out £1 to passengers. They take from the poor traveller to make themselves even richer. Its the economics of the madhouse.

“The firms automatically get compensation if a train is five minutes late while passengers can only claim a partial refund if a train is 30 minutes late and a full refund if it is one hour late.

“If the likes of billionaires like Sir Richard Branson at Virgin get compensation when his trains run five minutes late, then so should their passengers.”

Andrew Pakes, Labour’s prospective parliamentary candidate for Milton Keynes South, described the scheme as a “massive scam” at the taxpayers’ expense.

He said: “This looks suspiciously like another scam whereby the train companies end up benefiting more from delays than passengers.

“The government have just handed both our train operators another two-year extension, thanks to the botched £50million re-franchising of the West Coast Mainline, with no public safeguards for passengers or taxpayers.

“The reality is that rail privatisation has not delivered the benefits we were promised or value for money for passengers. We need transparency about all these hidden charges facing passengers and a proper plan to make the railways work for the public good.”

A spokesperson for the Rail Delivery Group, which represents operators and Network Rail, said that it was not fair to compare the two figures.

They said: “The rail industry wants to provide an even more reliable and efficient service. Despite more journeys being made punctually, compensation paid to passengers under the Delay Repay scheme has increased by £10million in the last year. Payments are increasingly generous and easy to apply for and are made regardless of the cause of a delay.

“Passenger compensation is completely unrelated to the rail regulator’s scheme where payments between Network Rail and operators are designed to discourage delays and encourage punctuality.

“When delays occur it disrupts people’s journeys and can put them off travelling altogether, hitting train company revenues and the amount operators pay back to government for investment in the railway. Payments between operators and Network Rail reflect this.”

>News focus

How much compensation did rail firms serving Milton Keynes provide to customers for delayed trains in 2013?

Virgin Trains £6,797,000

London Midland £409,000

How much compensation did rail firms serving Milton Keynes receive for delayed trains in 2013?

Figures not made publicly available by Network Rail.