THE man who has been given the task of assessing rail's value for money for the government has warned that continued taxpayer support of more than £5 billion a year cannot be sustained, and that closures are inevitable unless the industry can trim its costs.

Sir Roy McNulty was speaking at the annual conference of the Derby and Derbyshire Rail Forum, whose delegates were told that costs must come down. If not, there will be less investment and a 'smaller network'.

Sir Roy was appointed by the last government to carry out a review of rail spending, and his full report is due early next year. However, since the election the new transport secretary Philip Hammond has asked him to provide an interim report, which should be published later this month.

However, although Sir Roy warned that closures were possible, he said that was still Plan B, and that he was working on Plan A, which involves maintaining the momentum but reducing the amount the industry spends.

But he did deny reports that a list of possible closures had already been prepared. "That's not true," he insisted. "That would be Plan B, and we are concentrating on Plan A."

He also questioned whether the industry was perhaps too obsessed with 'standards', and whether there are too many bodies responsible for developing and maintaining them.

He revealed that his research this year had uncovered more issues than had been expected, and these were now being investigated in detail.

He had found that the industry was suffering from poor control of its costs, and was being hindered by a lack of clear objectives from government.

"There is also very little innovation," he added, "which surprised me in an industry where a substantial part is run by the private sector.  We are investigating whether the present structure of the industry is stifling new ideas."

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