Details of proposed Conservative reforms to Network Rail

The Sunday Telegraph this morning previewed Conservative plans to put representatives of passengers on the board of Network Rail and allow the rail regulator to deprive executives of bonuses in the case of poor performances.

Theresa Villiers has now released the following further details of the proposals:

Reforming Network Rail

• We will create a supervisory board for Network Rail by reducing the size of the existing membership body to 10 to 20 people, with a stronger voice for passengers and train operators.
• The supervisory board will have the power to hold Network Rail’s management to account, including setting the overall strategy for the company and the power to approve and remove senior executives.
• The majority of the board will be made up of independent members (with a strong background in business) and passenger representatives. The remaining members will be drawn from within the rail industry and include representatives of Open Access, Freight and Passenger Train Operators.
• The board will be appointed independently of Network Rail’s senior management.

Ensure Network Rail targets are representative of operators’ needs.

• We will work with the regulator to ensure that the targets and requirements set by the regulator are demanding and match the concerns of train operators and passengers as closely as possible.

Veto on Senior Executives’ bonuses.

• We will give the regulator enhanced powers to block bonuses to senior executives in the event of serious persistent failure, or failure to respond effectively to new tougher requirements for passenger satisfaction.
• Last year, despite the shambles of the New Year engineering overruns, Network Rail senior executives took home £835,000 in bonuses and the only sanction faced by the company was a fine which was paid by the taxpayer. The net result of the fining process was £14 million less spent on the railways.

Innovation in delivering rail improvements.

• We will free up funding for smaller scale capacity improvements, currently dealt with by Network Rail to competitive bids from other providers, including train operating companies, local authorities and Community Rail Partnerships.
• This will provide better value for money and provide a useful benchmark for Network Rail’s work. It will also help ensure that these smaller schemes – which can make such a difference to the quality of life for commuters – are carried out efficiently and in response to passenger demand.

Comments

[Passenger]

Key questions for Theresa Villiers

1. How would you improve the efficiency of Network Rail?

2. How would you reduce the massive debts of Network Rail?

3. How would you finance and deliver Crossrail?

4. How would you fund the expansion of the network's capacity, e.g. new lines for passenger and freight services?

5. Are you committed to state ownership of Network Rail?

6. Would you support local authorities increasing council tax to fund rail impriovements?

7. Do you see a role for private capital in delivering rail investment after the credit crunch?

8. How do you define community partnership? How are they to be funded?

9. Are you willing to consider privatisation of Network Rail, as a whole or in part?

10. What will you do to encourage increased competition, e.g. more open access operators like Hull Trains and Renaissance railways?

11. Why has it taken you so long to come up with such an unimaginative, statist and managerialist policy?

[David Meikle]

Could we also review Network Rail's statutory power to override Council planning and or conservation law when the organisation carries out so-called "essential vegetation management" for "health and safety" reasons?

Their idea of vegetation management in the Pollokshields conservation area equates to felling trees which were planted 100 years ago or crown raising them to the extreme! I, along with residents, have been fighting with Network Rail (Scotland) to take a more balanced approach but it seems to fall on deaf ears and the local authority won't take action because they believe the legislation as it stand basically means Network Rail can do what they like. This has to change in my view.

[StevenAdams]

Some answers and questions for Passenger:

1. Network Rail is responsible for its own efficiency as a semi-autonomous body. TV is proposing stronger governance to ENSURE that this body performs.

3. What is inadequate about the current Crossrail business plan that makes you want TV to draw up a new one?

5. What makes you think that we SHOULD be committed to state ownership??

6. Erm... not a goer. LocGov is already grossly underfunded whilst council tax increases are hitting capping limits regularly. Moreover, LocGov is not an expert here – why would it be better placed than the rail companies to identify investment needs? Furthermore, why should investment of the strategic rail network be prey to the vagaries of local political moods?

[Lindsay Jenkins]

Why vote Conservative when its MPs propose Labour Party solutions.

What happened to privatisation?

[Ian McKellar]

The one thing wrong with initial privatisation was the decision to separate the management of the track from operations.
I understand that this was to confirm from an EUSSR directive which probably wanted DB to run on SNCF lines.

We should consider allowing ceratin rail operators to capitalise by taking over the track and stations in their operating area. The obvious suggestions are Scotrail, Merseyrail and the London, Tilbury and Southend route. The role of the regulator should be strengthened to allow and arbitrate on matters such as running powers for other operators so in the case of Scotrail such as National Express (East Coast), Virgin Trains (West Coast)as welll as allowing Independent Steam and Disel Operators access for tourist and excursion traffic

[pp]

Customers should not need representation on the board - if moving their 'custom' is not an option then something more fundamental is broken and needs attention.

Equally if a 'train company' is the source of problems with tree felling - then you have to question what this has to do with train companies -- there are plenty of trees near to tracks but on private land, train co's have no direct say over these...

[Adam in London]

Ian McKellar,

I suspect that there is actually more to the issue of track and operation seperation than simply the EU directive. Seperating the track allows you to turn the operation into a franchise that has to be renewed every few years. This is already subject to criticism for discouraging investment (why make an investment on an asset that pays off over 20 years when you only have the franchise for 10 years). Including the track would, I suspect, make the franchises all but unworkable. Thus it would force the railways away from the competitive tender for franchises model (when companies have to perform well or they get their franchise taken away from them) to the pre-1940s model where keeping their customers on the railways was their only incentive to do well (because they owned the trains, tracks and stations).

Under that model it rather begs the question of why the state should pay for any part of it (implying we need to reduce expenditure on the railways rapidly and sharply - no private sector firm is in the position to get large amounts of money in the current climate), although it's worth remembering that large chunks of the old rail network were built as a sort of tax dodge...

[David Galea]

Please scrap embarrassing names like Virgin and Arriva, and replace them all with British Rail. Bring back the British rail logo too, so we can enjoy a national identity that was sadly lost when the railways were privatised.

Vast improvements to the British rail network would be welcome!

Andrew Rawnsely made constructive suggestions on this subject yesterday:

http://www.guardian.co.uk/commentisfree/2008/dec/14/recession-tax-spending-economic-politics

[Passenger]

I agree with Lindsay Jenkins. My questions, posted yesterday, highlight the huge gaps in Ms Villiers proposals. She is merely tinkering with Labour's nationalised Railtrack, a massive and expensive fraud at the taxpayers' expense.

@Steven Adams. Network Rail is owned and funded by the taxpayer. A Conservative government should take measures, preferably involving the private sector, to improve its efficiency and finances.

[Ken Stevens, NewKipper]

Passenger:
"preferably involving the private sector, to improve its efficiency and finances."

There was a time when this would have been a truism.

However, events in recent years suggest that private sector management can no longer inherently claim the necessary superiority of competence in such matters,as compared with public sector.

We're doomed, I tell you, doomed!!

[Passenger]

"However, events in recent years suggest that private sector management can no longer inherently claim the necessary superiority of competence in such matters,as compared with public sector."

Ken, Under British Rail, passenger numbers and freight traffic were falling. Following privatisation, passenger numbers are now at their highest level for over 50 years. That is due to higher investment, more and better services and innovative marketing.

@ David Galea - British Rail's Advanced Passenger Trains was an operational disaster and had to be withdrawn after a few weeks of service. Virgin's Pendalino's (made by Fiat) are a huge success. British Rail was an national joke - why do you want to bring it back?