23 January 2004
The rail industry review announced this week has been hailed as a much-needed dose of common sense by stakeholders and commentators, in spite of an absence of detail.
A Department for Transport spokesman told Public Finance that the terms of reference of the review were still being worked on but that most options were open.
In a Commons statement on January 19, Transport Secretary Alistair Darling ruled out renationalisation but acknowledged that privatisation had resulted in 'disastrous and far-reaching' consequences for the railways.
'There are too many organisations, some with overlapping responsibilities,' he said. 'It has become increasingly clear that this gets in the way of effective decision-making and frequently leads to unnecessary wrangling and disputes.'
David Begg, chair of the Commission for Integrated Transport, called for a simplified structure that united the regulatory, safety, operational and contractual frameworks.
Darling has promised that a more streamlined structure will be put in place to take the rail industry through the next three decades. Strategic Rail Authority chair Richard Bowker has been charged with evaluating ideas put to the review, which is to report in the summer.
Darling said it was important that the railways operated in the public interest, and therefore it must be for the government to decide spending levels and priorities. But he added that no government department could or should manage the railways.
The DfT spokesman dismissed reports that Darling had ruled out vertical integration of track and train operators. But he added that, in some cases – such as the West Coast Main Line, used by 16 operators – vertical integration would not be practical.
The review will concentrate on three areas: structural and organisational change; ways of better controlling costs; and safety regulation. The Health and Safety Executive, which has overseen rail safety since 1990, has been criticised for being overcautious in the safety standards it sets.
But Bill Callaghan, chair of the Health and Safety Commission, which sets policy for the HSE, said whoever takes on the job of rail safety regulation should remain independent of economic and industry pressures and be given the power to enforce health and safety measures.
Ian McAllister, chair of Network Rail, lent his support to the review. He said: 'It is particularly pleasing that this consultation exercise includes rail safety arrangements. It is imperative that rail safety is treated in a rational and proportionate manner.'
PFjan2004
