Network Rail Fined £4m

[snooky]

Terrible accident, and from reading the report, there may have been faults on all sides.

http://www.bbc.co.uk/news/uk-england-suffolk-37428393

One question that has always bothered me with this and any other kind of fine, by the courts or any authority, where does the money go? In this case, who is £4m better off and what happens to the money? Just curious because at the end of the day it's Joe & Josephine Public who pay all the fines, indirectly.

[RyeSloan]

Network rail is a nationalised company so the fine is paid by the government to the government...


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[snooky]

Network rail is a nationalised company so the fine is paid by the government to the government...


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That's a big deterent, eh? :rolleyes:

[CropleyWasGod]

That's a big deterent, eh? :rolleyes:
It is, in that it's a company whose budget has just lost 4m.

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[snooky]

It is, in that it's a company whose budget has just lost 4m.

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Fair enough, so who in the government gets the £4m?

[CropleyWasGod]

Fair enough, so who in the government gets the £4m?

Pretty sure it's the Treasury.

[snooky]

Thanks, CWG.
So it's a bit like me fining myself for some misdemeanour, withdrawing the money from my current account and depositing it into my savings account.

Brilliant government strategy as usual :greengrin

[CropleyWasGod]

Thanks, CWG.
So it's a bit like me fining myself for some misdemeanour, withdrawing the money from my current account and depositing it into my savings account.

Brilliant government strategy as usual :greengrin

Almost. It's more like taking money from your account, and giving it to someone else in your family, but on the proviso that they don't spend it on you. And you get told "don't do it again".

The problem, though, is that UK plc, in order to prosecute and defend both sides, pays megabucks to the private sector in legal fees.

[Jack]

I'm sure court fines go to HM Treasury.

Local Authorities parking fines and some speeding fines are kept by the local authority.

[Hibs Class]

So the main consequence is that regardless of who is £4m better off, there is £4m less for network rail to spend on the rail network.

[snooky]

Almost. It's more like taking money from your account, and giving it to someone else in your family, but on the proviso that they don't spend it on you. And you get told "don't do it again".

The problem, though, is that UK plc, in order to prosecute and defend both sides, pays megabucks to the private sector in legal fees.

A-ha! We have the answer right there.

[CropleyWasGod]

So the main consequence is that regardless of who is £4m better off, there is £4m less for network rail to spend on the rail network.

:agree:

Indeed, probably a lot more than that, given my comment about the legal fees.

[NYHibby]

Almost. It's more like taking money from your account, and giving it to someone else in your family, but on the proviso that they don't spend it on you. And you get told "don't do it again".

The problem, though, is that UK plc, in order to prosecute and defend both sides, pays megabucks to the private sector in legal fees.

This is overly simplifying things to the point where it is misleading. Network Rail still has to met it's regulatory settlement. The ORR just doesn't agree to cut things due to fines or legal costs.

[CropleyWasGod]

This is overly simplifying things to the point where it is misleading. Network Rail still has to met it's regulatory settlement. The ORR just doesn't agree to cut things due to fines or legal costs.

Where does the money come from?

[NYHibby]

Where does the money come from?

I know you like to present yourself as this site's financial expert, but I'm guessing you are out of your depth when it comes to economic regulation if you are asking that question. Network Rail doesn't get to collect an extra £4m from the TOCs.

[CropleyWasGod]

I know you like to present yourself as this site's financial expert, but I'm guessing you are out of your depth when it comes to economic regulation if you are asking that question. Network Rail doesn't get to collect an extra £4m from the TOCs.

I don't like to present myself as anything. :wink:

The question was genuine. If the money has to be paid, it has to come from somewhere.

[Future17]

I know you like to present yourself as this site's financial expert, but I'm guessing you are out of your depth when it comes to economic regulation if you are asking that question. Network Rail doesn't get to collect an extra £4m from the TOCs.

I'm confused. Are you saying Network Rail pays the fine from its budget but is still expected to provide the same service as it would have done with the higher budget?

[CropleyWasGod]

I'm confused. Are you saying Network Rail pays the fine from its budget but is still expected to provide the same service as it would have done with the higher budget?
Something has to suffer from the payment of the fine. Either running costs have to be cut, or profits fall. NR's profits are reinvested in the rail infrastructure.

Therefore it's overheads or capital costs that take the hit.



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[snooky]

Something has to suffer from the payment of the fine. Either running costs have to be cut, or profits fall. NR's profits are reinvested in the rail infrastructure.

Therefore it's overheads or capital costs that take the hit.

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Therefore, as I suggested earlier, Joe & Josie Public end up (indirectly) taking the hit for Net Rail's failings?

[CropleyWasGod]

Therefore, as I suggested earlier, Joe & Josie Public end up (indirectly) taking the hit for Net Rail's failings?
Only if you are a rail user.....

Or, as in this case, a user of level crossings ....:(


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[snooky]

Merlin, operators of Alton Towers, are reported to expect "a very large fine" as a result of the June 2015 accident.
Like with the Netrail case, is this another "ka-ching ka-ching" for the treasury and the paras.... em, lawyers?

[CropleyWasGod]

Merlin, operators of Alton Towers, are reported to expect "a very large fine" as a result of the June 2015 accident.
Like with the Netrail case, is this another "ka-ching ka-ching" for the treasury and the paras.... em, lawyers?
The difference is that AT are run by a private company. Shareholders, and possibly staff, will bear the costs of any fines.

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[snooky]

The difference is that AT are run by a private company. Shareholders, and possibly staff, will bear the costs of any fines.

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I appreciate that, CWG - but it's still more dosh (£ms they're saying on the Beeb) for the Treasury.

What is that money spent on? Safety research? Buying food for the many foodbanks? Lawyers? Quangos?

[Hibs Class]

I appreciate that, CWG - but it's still more dosh (£ms they're saying on the Beeb) for the Treasury.

What is that money spent on? Safety research? Buying food for the many foodbanks? Lawyers? Quangos?

The fine on Merlin will presumably be treated exactly the same as any other fine in any other criminal case?