Railtrack accounting methods under scrutiny
A clearer explanation of the accounting treatment of Railtrack debt guarantees has been requested by the Statistics Commission.
Successor company Network Rail is classified as a private enterprise. Under European accounting rules, if its £9bn debt guarantees are ‘not likely’ to be exercised, they can be removed from the government’s balance sheet, leading to criticism of ‘Enron-style accounting’.
In a document titled Network Rail: the story must be told, the Commission calls for more information on how the classification decision was reached, questions the possible scale of the government’s guarantees and the likelihood of them being called in, and asks when and where the final figures will be made public.’The information should be brought together in one straightforward document so that the ordinary traveller and taxpayer can see what is going on,’ states the Commission.’We will continue the process of scrutiny to check that as the situation develops the effects of new information are taken into account and relayed to the public.’