The Future of Rail - Summary CM 6233

The railways White Paper, The Future of Rail, sets out the conclusion of the rail review announced by the Secretary of State for Transport in January 2004. The key priorities for the rail industry are to improve performance and get a grip on costs, whilst maintaining a high standard of safety.

The changes set out in the White Paper will enable the different sides of the industry to work together more effectively to provide a better, more reliable service for passengers. And they will ensure that each sector concentrates on what it does best: Government setting the strategic direction, and the private sector taking charge of delivery.

The structure and organisation of the railway will be streamlined, and bureaucracy reduced. There will be simple, unambiguous lines of responsibility. Network Rail will be clearly accountable for the network's performance, and front-line staff from train and track companies will be able to work in partnership to meet their customers' needs.

What we are going to do

This White Paper outlines a new blueprint for the railways, which the Government has worked closely with the industry to develop. The diagram below shows how it will operate for passenger services:

It is built on the principle of public and private partnership, and it recognises rail's status as a public service, specified by Government and delivered by the private sector. This new structure will be based on six key changes:

• The Government will take charge of setting the strategy for the railways

It must be for Ministers, accountable to Parliament and the electorate, to set the national strategy for the railways, but in the current industry structure this is not the case. Under the new arrangements, the Government will set the level of public expenditure, and take the strategic decisions on what this should buy. This means that the SRA will be wound up, and its strategic responsibilities and financial obligations will pass to the Secretary of State. There will continue to be a crucial role for the independent economic regulator, who will protect the rights of investors and customers, and ensure the Government pays the proper price for what it is buying. New regulatory and contractual arrangements will be put in place between Network Rail and Government, to run alongside, and provide the context for, the franchise contracts with train companies. Combined with more robust information, this will enable the Government to act as a strong client to the private sector industry, protecting the interests of taxpayers and farepayers alike.

• Network Rail will be given clear responsibility for operating the network and for its performance

With no one organisation clearly in charge, improvements in reliability have been sluggish, and the railway has not delivered the performance that passengers expect. Network Rail will be given a strengthened role as operator of the network, with overall responsibility for its performance. Government will set out what Network Rail it is expected to deliver for the public money it receives, and on that basis Network Rail will lead industry planning, set timetables and direct service recovery. Too often under the current system, companies have been able to pass the buck for poor performance. Under the new structure, Network Rail will be held accountable for ensuring that the network delivers a reliable service for its customers through an
agreement with Government.

• Track and train companies will work more closely together

The new structure will deliver more efficient working between Network Rail and the train companies at the front line, bringing track and train closer together operationally. The roles and responsibilities of each part of the industry will be clarified through new local agreements, and their incentives brought into line with one another. The number of franchises will be reduced and they will be aligned more closely with Network Rail's regional structure. The industry has made it clear that it is committed to ensuring that these new arrangements drive more effective working between Network Rail and the train companies in the interests of passengers. They will replace the current confrontational relationship with one based on aligned interests - and will create the scope for even closer working in future where all parties agree to it.

• There will be an increased role for the Scottish Executive, the Welsh Assembly Government and the London Mayor, and more local decision-making in England

Central Government is not always best placed to take decisions on the transport needs of different communities. In future, the devolved administrations will take on increased responsibilities for passenger services and, where appropriate, infrastructure. In England, the Passenger Transport Authorities (which manage transport provision in some of the main metropolitan areas) will be able to buy additional services, and to transfer funding between rail and other transport modes. Transport for London will also have an increased role with regard to rail services in the capital. And the Government will promote the role of Community Rail Partnerships in improving the management of local branch lines.

• The Office of Rail Regulation will cover safety, performance and cost

Bringing regulation of all aspects of the rail industry - safety, reliability and efficiency - together under a single public regulator will streamline the regulatory system, reduce bureaucracy, and ensure that these issues are looked at as a whole, and not in isolation from one another. This means responsibility for safety regulation will pass from the Health and Safety Executive to the Office of Rail Regulation, and will remain independent of Government and the industry.

• A better deal for freight will enable the industry and its customers to invest for the long-term

Because of the high up-front investment costs for rail freight, businesses using these services need to be sure about their access to the network. But this has to be balanced with the fact that freight users only pay for the cost of operating their services and not for the costs of the underlying infrastructure. Freight operators will be given greater certainty about their rights on the national network, and a group of key routes will be identified on which freight will enjoy and pay for more assured rights of access.

The importance of rail

The railways are a vital part of the country's transport infrastructure. As the economy grows, demand for good transport services increases, and the rail industry has an important role to play in meeting this need. The industry is carrying more passengers, as well as increasing its share of the freight market, and improving its customer focus and its levels of performance and safety. The Government wants to see this continue and accelerate.

But the railways are suffering from historic under-investment stretching back for decades, and from a flawed structure put in place at the time of privatisation. The Government is determined to tackle these problems.

The process of reform has already begun. There is now record investment being put into the industry. Network Rail - a private sector company operating in the public interest - is making progress in reducing delays and getting a grip on costs. And the train companies are driving up their performance, and engaging with Network Rail in setting up joint control centres to manage services better.

But more still needs to be done. The next step is to simplify the relationships within the industry, and put in place a structure fit for the future which will deliver better value and drive up performance, as passengers and taxpayers demand. The White Paper sets out how this will be done.

You can find out more at www.dft.gov.uk/railways/whitepaper.

Published by DfT. © Crown copyright 2004. Printed in the UK, July 04 on paper comprising of 80% post consumer waste and 20% ECF pulp. 45 TSRLM 02252