Scottish sleeper service safeguard plan announced

Transport Scotland has published a consultation document on the future of rail services

Chancellor George Osborne has announced plans to safeguard the future of cross-border sleeper train services in his Autumn Statement.

The possibility of reducing the London to Scotland service was made by Transport Scotland earlier this month.

The UK government also said the Scots budget would be boosted with £433m for capital projects over four years.

But Scots Finance Secretary John Swinney said the move fell far short of what was needed to boost the economy.

The UK government is making available £50m to enable the replacement of the cross-border Caledonian Sleeper fleet to improve on-train facilities, on the condition Holyrood ministers agree to co-fund the replacement programme.

The Treasury said the £433m funding, delivered under the Barnett funding formula to deliver infrastructure and other building projects, came on top of a £100m package for boosting green energy.

Scottish Secretary Michael Moore said: "This Autumn Statement comes at a difficult economic time.

"By sticking to our deficit reduction plan the UK has avoided the problems facing some Eurozone countries."

He added: "The job of growing our economy falls to Scotland's two governments.

"The UK has announced wide ranging measures to help Scottish companies access credit, to delay increases in fuel duty and to help the young unemployed in Scotland. We are also investing in broadband and increasing the state pension."

In the middle of this month, the Scottish government's Transport Scotland body published a consultation document looking at the way the country's rail services were run.

Among a series of options, it suggested reducing the lowland route connecting Edinburgh and Glasgow with Euston to an Edinburgh only service.

It also suggested closing the Highland service linking Inverness, Aberdeen and Fort William with Euston.

A Scottish government spokesman said ministers were "committed" to a continuing and improving sleeper service in the next franchise from 2014.

Treasury sources said the offer was designed to improve cross-border rail services and not directly linked to Transport Scotland's concerns about the cost of the service.

The chancellor's cash would be designed to help buy new sleeper carriages to replace the stock which is coming to the end of its life.

It is understood the funding would be withdrawn if a deal between ministers in London and Edinburgh is not reached before the end of the year.

Mr Swinney welcomed the offer to boost sleeper services, but said the UK's Office for Budget Responsibility demonstrated that the Westminster coalition's Plan A on the economy was "an abject failure, with a swingeing cut of well over two thirds in the growth forecast for 2012".

He said: "The Chancellor has proposed a limited increase in capital budgets, but the Treasury are so far unable to tell us by how much our revenue budget is going to fall. We need a complete picture to judge these announcements, and I am writing to the Chancellor seeking this information urgently.

"The Scottish Government has called for a targeted, expanded programme of some £2bn for capital infrastructure investments in Scotland to stimulate demand - which has not been delivered."

The Scottish government said it was using all the powers it had to stimulate growth, in the face of a 36% real terms cut to its capital budget, put in place by the previous UK government.