Darling announces radical review of rail system to prevent 'further suffering' for passengers

The Government has ordered the most radical review of the rail network since privatisation in a desperate attempt to improve services before the next election.

Making the announcement yesterday, the Transport Secretary, Alistair Darling, said he wanted to prevent "further suffering" for passengers.

The Strategic Rail Authority (SRA) - created by the Labour administration in an effort to get a grip on the industry - is to undergo the most detailed examination. It is known that MrDarling is keen to strip the authority of many of its powers in order to to shorten the chain of command and he indicated his readiness to introduce legislation if necessary.

Amid speculation about the future of the SRA chairman, Richard Bowker, Mr Darling said the former Virgin director would be assessing industry responses to the review.

In a statement to the Commons Mr Darling also confirmed there would be a fundamental examination of safety management on the network, currently the responsibility of the Health and Safety Executive (HSE) and the Railway Safety Standards Board. It is expected that when the review is completed the rail regulator's office will take over the functions of the HSE.

In a forthright denunciation of the present safety regime, Mr Darling said: "There is a plethora of industry standards some of which are over-cautious or are being applied in an over-cautious way. Safety regulation needs to be focused on the real risks to passengers and employees and should not be an obstacle to providing reliable services. We need the right organisation to do that."

Mr Darling said the way rail was privatised had led to "fragmentation, excessive complication and dysfunctionality". The time had come to streamline rail organisations otherwise passengers would continue to suffer.

But the Secretary of State failed to take any firm decisions on the future of the system and it was felt that press and industry speculation had forced him into making an early statement.

He made clear that the state-backed infrastructure company Network Rail, which took over from the private sector Railtrack, would remain untouched. He claimed that it had been the first stage in a process of reform. There was no question of renationalising the network.

Mr Darling's statement means, however, that the Government's 10-year plan for rail, announced in 2000, will in effect be superseded by the Chancellor of the Exchequer's spending review due to be completed in the summer. Mr Darling said there would be no new projects until the railways established greater cost control.

Some senior industry sources detected a significant shift away from independent economic regulation of the network. The Transport Secretary said it should be for the Government to decide how much money is spent on the railways and to determine priorities. That cuts across the duties of the present rail regulator who is supposed to protect private companies involved in the industry from the whims of ministers.

One senior figure said: "This is a major assault on the regulatory regime and the contractual protection afforded train operators. This amounts to breathtaking incompetence and incoherence in government thinking on the railways. There's going to be a very severe adverse reaction in the financial markets."

Bill Callaghan, chairman of the Health and Safety Commission which oversees the work of the HSE, also registered his concern that safety regulation might become less independent. He said that the Cullen reports into the Paddington disaster and rail safety recommended that the HSE's role should be maintained. "I do reject criticisms that we are a risk-averse organisation," Mr Callaghan said.

Mr Darling left open the prospect of devolving more power over public transport and rail to the Welsh and Scottish parliaments and at regional level to passenger transport executives.

Ministers have already allowed Merseytravel, the regional transport authority in the Liverpool area, to take over the functions of the SRA. Merseytravel has since applied to perform the functions of Network Rail.

Mr Darling indicated that there might be a case for integrating responsibility for track with the management of train services in some areas, but pointed out that on some routes, such as the west coast main line, there was a large number of operators.

The shadow Transport Secretary, Theresa May, said the review was "about increasing centralisation and political control" and she feared for independent economic regulation.

Bob Crow, general secretary of the biggest rail union, the RMT, said: "The Transport Secretary is ignoring what every rail passenger and railway worker in Britain knows only too well. The only sensible future for a well-planned national railway service is within the public sector."

MAIN LINES

* Drive to streamline a "fragmented and excessively complicated" network

* Investigation of the role of the SRA

* Inquiry into the management of safety on the network

* Transport Secretary hints at a plan to rein in the power of the rail regulator who protects train companies from arbitrary government decisions

* No new projects until there is "proper control" over costs

* Possibility of more local and regional control over network

* State-backed infrastructure organisation Network Rail to remain untouched