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Train upgrade on hold as promised £50m diverted

MINISTERS have been accused of backsliding on plans to upgrade the famous overnight rail service from London to the Highlands after diverting £50million earmarked for the project to Scottish Water.

The Treasury gave an extra £50m to the Scottish Government to improve the ageing Caledonian Sleeper fleet this year, on condition it was matched by £50m from Edinburgh.

The SNP welcomed the funding, while insisting the Treasury had to "keep its promise". Dave Thompson, SNP MSP for Skye & Lochaber, claimed the arrangement showed "the SNP is dedicated to improving Caledonian Sleeper services".

However, the Scottish Government has rerouted the money elsewhere "in the short term", with no firm timetable for fixing the trains.

A report by Holyrood's information centre, which goes before MSPs this week, reveals Finance Secretary John Swinney moved the cash to Scottish Water's investment programme last month as part of the 2011-12 Spring Budget Revision.

The revision, issued at the end of January, stated an additional £50m would go to Scottish Water "to accelerate capital expenditure", but did not identify the source of the money. Ministers made no public statement.

The parliament's report explains, for the first time, that there was "a transfer of the funding allocated to the Caledonian Sleeper service, which was given a "ring-fenced" £50m in the UK Government's Autumn Statement in November 2011.

The report added: "After discussions the Scottish Government and HM Treasury agreed a programme for future investment in the Caledonian Sleeper and the £50m, received in 2011-12 for this purpose, will be utilised in the short term by Scottish Water to reprioritise its investment programme.

"The Caledonian Sleeper service money has essentially been borrowed by Scottish Water. Information regarding the time-frame for spending on the Caledonian Sleeper has yet to be detailed."

Just last week, Transport Minister Keith Brown tabled a parliamentary amendment urging MSPs to recognise the SNP Government's "commitment to invest a minimum of £50m in new sleeper trains".

Operated by ScotRail, the sleeper is one of only two overnight services in the UK. It leaves London twice daily six days a week, with one service going to Glasgow and one to Edinburgh. The Edinburgh train splits into three parts which go to Inverness, Aberdeen and Fort William.

The Government admits accommodation on the 1970s rolling stock "falls short of the expectations of today's passenger" and needs upgrading.

Permanent Secretary Sir Peter Housden, Scotland's top civil servant, recently likened it to "a ghost train at a fair, with shrieks and lurches and terrible scraping across the track".

Labour MSP Richard Baker denounced the lack of transparency on the funding switch and called on Mr Brown to make a statement to parliament.

He said: "It's not good enough to say this is a short-term measure without saying when the long-term funding will kick in. This is another example of the Government's lack of transparency and gives rise to more concerns about the future of this vital service."

Alex Johnston, the Tory transport spokesman, said: "This is robbing Peter to pay Paul. The Scottish Government has been found wanting."

A Scottish Government spokesman said parliamentary officials had been informed of the change, and added the service would be enhanced using £50m from London and £50m from Edinburgh "over the coming years".

He added: "We have agreed with HM Treasury that, whilst the improvements process is underway, the £50m received in 2011-12 will be utilised in the short-term by Scottish Water with funding to Scottish Water adjusted in future years to fund the Caledonian Sleeper service improvement programme."

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