On 19th January 2004, the Secretary of State for Transport announced a review of the rail industry, to consider structural and organisational changes, safety regulation and issues relating to improving performance and controlling costs.
The Secretary of State published his conclusions in a White Paper entitled ‘The Future of Rail’ on 15th July 2004 (available at www.dft.gov.uk/railways/whitepaper).
The Railways Act 2005, which was enacted on 7th April 2005, provides the legislative framework for some of the changes. The Act has not yet been brought into force; it is likely to come into force later in the year.
The main decisions arising out of the rail review reflect the following themes:
- it is for Government to determine the amount of public funding available to the rail industry, to decide on the outputs it wants to buy and to allocate funds between rail and other modes of transport
- the rail industry needs to control costs and live within the level of public funding available to it. Regional and local transport authorities need to bear the cost implications of their decisions when buying additional services
- the current industry structure creates a false customer/client relationship. As primary buyer of services from the rail industry, Government needs direct commercial relationships with Network Rail and the train operating companies
- economic and safety regulation need to be streamlined and need to work within Government specifications of required outputs and funding levels
- a single point of responsibility and control is needed for operational management and planning. Decisions to run additional services or invest in the network should be made only when the costs and other implications are understood
- joint working between Network Rail and train operating companies is needed and should focus on improving performance not on assigning blame.
Some of the changes highlighted in the White Paper have been introduced in the Railways Act 2005, and the other changes will need to be addressed through changes to numerous contracts and codes throughout the rail industry. When these have been fully implemented, they will result in a fundamental restructuring of the regulatory and commercial structure for the rail industry, with the Government having the primary commercial relationship with the providers of infrastructure (through Network Rail) and passenger services (through the train operating companies) and regaining control over the overall level of funding made available to the sector.
For a summary of how the conclusions from the UK rail review have been, or are being, implemented, please click on or copy/paste the link below:
http://www.law-now.com/media/pdfs/en/secured/railwaysact2005.pdf
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Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 09/06/2005.