TRANSPORT union RMT has accused bosses of “laughing all the way to the bank” after it was revealed that rail companies collected £1.3 billion from the government to compensate commuters but passed little of the money on.

The union said today that most money awarded to rail franchises from publicly owned Network Rail stayed in the companies’ coffers.

Over the past six years, train franchises in Britain have gained approximately £1.3bn for allotted compensation money. However, of this sum, only £260 million has been given out to passengers.

This is despite last summer’s rail crisis, where thousands of commuters were stranded across Britain for months by cancellations and delays.

RMT general secretary Mick Cash said: “Fare fiddling is rife on Britain’s railways and the biggest exponents are the private rail companies who have trousered over a billion pounds of public money as part of this extortion racket.

“It is a national disgrace and once again [Transport Secretary] Chris Grayling is right at the centre of it, handing out taxpayer money to failing train operators in a grotesque display of corporate welfare.

“It is a scandal that publicly owned Network Rail is being bled dry in this cynical fashion while our railways are being starved of desperately needed investment in upgrades and maintenance.

“Meanwhile, the train companies are laughing all the way to the bank with the bulk of this cash shipped abroad to subsidise domestic operations across the continent and beyond.”

Labour MP and transport select committee chairwoman Lilian Greenwood said that rail companies have been “playing the system” and must be held to account.