Recommendation 6

HM Government Acknowledged

The Government notes this recommendation. The Government welcomes the Committee’s support for an aligned set of duties across key industry bodies within the Railways Bill. However, as the ORR explained to the Committee, the Railways Bill deliberately does not provide for a hierarchy between the general duties. They are legal requirements and none of them can be ignored or sidelined. The Government therefore disagrees with the need for the Secretary of State to provide statutory guidance as it will be the responsibility of the bodies subject to the duties to ensure that their decision-making demonstrates consideration of competing requirements and seeks to strike an appropriate balance in making trade-offs. As long as the bodies bound by the duties are all aiming to achieve the same outcomes, then we can be confident that they will be pulling in the same direction. If they differ slightly on how to get there, then that is constructive challenge in action. The system is set up so that the bodies can provide checks and balances on each other, ultimately making sure that the outcomes we all want are achieved in the best possible way through cooperation and challenge. It is normal for public bodies to balance a range of regulatory requirements and legal duties when making decisions. Indeed, this has long been the case for rail legislation, with both the ORR and Ministers already being required to balance their duties in section 4 of the Railways Act 1993 in decision making. This should continue to be the case for GBR, which should be empowered to make decisions as the ‘directing mind’ of the railways accountable not only to its customers but also to a democratically elected Secretary of State, who is in turn responsible to Parliament. That intention would be significantly undermined if the Secretary of State prescribes how to take every decision and did not allow GBR to make evidence-based policies. The way that the process will work in practice is as follows: GBR will publish and consult on its draft Business Plan during the Funding Period Review process. This will provide transparency about what and how GBR will be delivering. It will be a clear articulation of how GBR proposes to balance its duties and establish its objectives, including how these will be achieved. In response to this, the ORR will provide the Secretary of State with, and publish, advice on GBR’s business plan. This will mean that there is an independent expert body weighing up the effectiveness of GBR’s plans in achieving government’s overall objectives, including commentary if necessary, on how it has balanced its duties, therefore ensuring transparency. The Secretary of State then approves the business plan only if she is content that the way GBR proposes to balance its duties within the plan works well according to her own sense of the duties and to the ORR’s advice. This process is deliberately designed to provide effective constructive challenge and ensure the duties are balanced appropriately, according to all three key actors in the railway. The business planning process, and the inherent checks and balances within it, is already set out in legislation. Therefore, adequate scrutiny of how GBR intends to balance its duties already exists within the legislation. This is achieved without the need for statutory guidance provided by the Secretary of State, and in a way which preserves GBR’s ability to act as an empowered body and present its own initial proposal for how its duties should be balanced.