Shaw report: Department for Transport must clarify its role in management of railways

Review says Department for Transport must do more to shape the future development of the nation's rail infrastructure


By Jim Dunton

17 Mar 2016

The Department for Transport (DfT) needs to spearhead a long-term vision for the future of the nation’s railways and more clearly define its role in relation to infrastructure operator Network Rail according to a new report.

Nicola Shaw’s government-commissioned review of the future shape and financing of Network Rail said the organisation's financial control, incentives, accountability and governance were “no longer fit for purpose” following its reclassification as a public sector wholly-owned arm’s-length body last year.

Shaw, who is chief executive of HS1 – which holds the concession to operate the high-speed rail line between London’s St Pancras Station and the Channel Tunnel, rejected the idea of breaking up and privatising the network further. However her report calls for the exploration of new ways to bring private-sector investment into the national railway infrastructure.


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Shaw said that a long-term “DfT-owned” vision for the railway over the next three decades needed to be established, based on the views of the National Infrastructure Commission (NIC), train operating companies, freight operating companies, unions, local government, and Network Rail itself.

“The strategic vision should consider all aspects of the government’s involvement in the railway, bringing together different areas of rail policy such as franchising, regulation and enhancements,” she said.

“Inevitably, given the long-term horizons, it will need to major on infrastructure planning, delivery and management, as it may not be possible to specify a clear vision for some of these issues to the same 30 year time horizon.

“Extending this logic one step further, the primary focus of the long-term vision will most likely be on enhancements, given these represent long-term changes to the status quo.

“But there is no reason why the strategy could not describe a nested set of priorities ranging from the shorter to the longer term as appropriate, in line with route-based scorecards and action plans.

“The strategic vision should be relatively high level, focussing on outcomes rather than specific projects, and should be for a considerable length of time – around 30 years, although it should be updated periodically.”

Shaw said DfT could not deliver such a vision in a “vacuum”, adding that it would be particularly important for the department to align its strategic vision with the fledgling National Infrastructure Commission.

Elsewhere, she said the government needed to “clarify” its role in the management of Network Rail. Shaw said UK Government Investments, the HM Treasury-owned company to be formed next month, should manage the government’s owner relationship with Network Rail jointly with DfT’s corporate finance team.

She added that DfT’s position as client for enhancements should be strengthened, in line with the recommendations of Colette Bowe’s review into the planning of Network Rail’s enhancements programme, published in November.

Shaw’s team also advocated re-aligning rail investment decisions with standard public sector timetables, and moving away from fixed five-year spending periods which the report said were “often unsuitable” for rail enhancement projects.

“Meeting these aims will mean fully separating enhancements planning from the settlement process for operations, maintenance and renewals,” the report said.

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