Rail industry 'out of effective control' warn MPs

The rail industry is "out of effective control" with "flaws in the main pillar of railway governance", a devastating report from MPs said today.

The current structure would not lead to significant service improvements and needed to be changed, said the report from the House of Commons Transport Committee.

MPs found fault with all the main bodies involved in the railways, but added that the "fundamental failure of the railway is one of Government policy".

The committee's report went on: "It (the Government) has had six years to construct a policy and structure for the railway that works well, but our report shows that is has failed to do so."

Fragmentation in the railways was getting worse, industry costs were increasing, performance remained "in the doldrums" and the Strategic Rail Authority (SRA) appeared "utterly incapable of managing significant improvements", the report said.

There was a confusion and a lack of co-ordination between major rail bodies; Rail Regulator Tom Winsor (correct) had acted in a "high handed" way and was over-powerful, Network Rail (NR) chiefs seemed not be in full control of their company, and the industry had lost confidence in the Health and Safety Executive (HSE).

The committee listed cases of "intra-industry squabbling" and "buck-passing", the setting of "nonsensical targets", the inability of rail leaders to provide a vision of the way forward, and "divided leadership and powerlessness".

MPs expressed themselves "outraged" that £58 million of taxpayers' money was used to prop up Connex's South Eastern franchise only for the franchise to be taken over by the SRA which had shown "woefully poor management" over the Connex problem.

The committee added that it was "appalled" to see so profound a disagreement between NR and the HSE over the fitting of the Train Protection Warning System.

Also, the present structure had allowed Mr Winsor "to write off astonishingly large sums of public money, apparently on his own authority".

Even the Rail Passengers Council failed to escape from the committee's condemnation, being seen as too low-profile.

The committee recommended that a new public sector body - a "Railway Agency" - be be set up to combine the present functions of the SRA and NR.

Launching the report today, the Transport Committee's chairman Gwyneth Dunwoody (Lab: Crewe and Nantwich) said: "What our extensive inquiry has confirmed is the extent of the failure of the railways, as presently structured, to control costs and to deliver the improvements in performance required by the travelling public.

"The chronic fragmentation in all parts of the industry....means that the railway as a whole is incapable of providing an excellent service."

She went on: "The Government has had years to address the problems of the railway but has failed to take effective action. What is required is a single public sector body - a Railway Agency combining responsibility for rail outputs and rail infrastructure - with clear responsibility to deliver substantial improvements for the passenger to replace the present muddled organisations."

The report said that the Government has been unable to exert control on the extra costs of the railway system or to identify the root causes of the extra costs.

The Government had also been unable to produce "a Government structure that has clear lines of accountability for public money and ensures appropriate transfer of risk to the private sector".

The report went on: "It is vital that the recent surge in costs for the railway is checked. The Government has told us that it is in control of the industry. But the swelling subsidy figures of recent years tell the real story of an industry that is out of effective control."

Transport Secretary Alistair Darling is due to publish a report on the structure of the railways this summer.

Today's report said: "The Government has the responsibility to sort out the current mess."

The Rail Maritime and Transport union welcomed the report and said it had always argued that the fragmented, privatised structure of the rail network had "failed abysmally,"

General secretary Bob Crow said: "Re-integration in the public sector is the only serious way to tackle the problems of fragmentation and spiralling costs that have dogged the industry since privatisation.

"The call to abolish the Strategic Rail Authority and Network Rail and replace them with a public-sector railway agency is therefore one that RMT endorses whole-heartedly.

"Separation of track from train was always the single most fatal flaw in the privatisation of British Rail.

"A single railways agency should therefore ultimately re-unite infrastructure and passenger, freight and rolling-stock companies in a coherent, publicly owned structure in which the interests of all are represented, bringing democratic as well as financial accountability."

Mr Darling said in a statement: "I welcome the conclusions of the Transport Select Committee report, we will consider them fully.

"They are an important contribution to the Government's review of the railways and point to many of the problems I have already recognised.

"When I announced the review on January 19 I said that the industry is suffering from the consequences of a botched privatisation.

"There are too many organisations with overlapping responsibilities. The fragmented and dysfunctional nature of the industry gets in the way of effective decision making and frequently leads to dispute.

"Just as the committee concludes, I agree that there needs to be a streamlined structure with clear direction from a single guiding mind.

"The regulation of safety should be improved, the industry must get better control of costs and the service to passengers must improve. This is what the review will achieve.

"But let's be clear, the changes we will make to the industry's structure will be based on a railway that is improving. This is something the report ignores.

"Investment in the railway is increasing and is beginning to deliver results.

"The West Coast mainline is being modernised, commuter lines south of the Thames upgraded, over a third of all trains and carriages replaced, the Channel Tunnel Rail link opened and safety is improving.

"None of this would have happened without that increased investment. The important thing is that we now create an industry structure that is fit for the next two or three decades, one that continues to deliver improvements - as passengers rightly expect."