Recommendations & Conclusions
8 items
5
Recommendation
Thirty-Eighth Report - Rail reform: The…
Acknowledged
Six years since the Department started work on rail reform, it has failed to resolve fundamental disagreements and clarify key aspects of reform. The Department acknowledges that, while its white paper set the broad direction and detail for some areas of reform, there were still disagreements with HM Treasury and …
Read more
Six years since the Department started work on rail reform, it has failed to resolve fundamental disagreements and clarify key aspects of reform. The Department acknowledges that, while its white paper set the broad direction and detail for some areas of reform, there were still disagreements with HM Treasury and other stakeholders in some important areas. Unresolved issues remain regarding the extent of GBR’s role and responsibilities including the level of independence and ability it will have to be a “guiding mind” for the railways; the future commercial model between GBR and commercial operators; and how fares would be set. While it may be quite common in complex policy areas for there to be some areas of disagreement, it is surprising that the reform programme got underway without the Department and HM Treasury agreeing on such core elements. It remains to be seen how, in practice, GBR will balance providing a “guiding mind” with stepping in and directing stakeholders to a specific course of action when required. Rail reform: The rail transformation programme 7 Recommendation 5: The Department should urgently resolve disagreements ahead of taking forward reform in the next Parliament. Its Treasury Minute response should set out what areas remain to be agreed and how it and HMT plan to resolve these.
Show less
Government response AI summary
The government agrees to resolve disagreements regarding Great British Railways' role, function, and oversight to ensure financial sustainability, stating that further information on legislative plans will be provided as soon as practical.
Read full response →
HM Treasury
6
Recommendation
Thirty-Eighth Report - Rail reform: The…
Acknowledged
The Department has failed to engage with the workforce to successfully deliver its reform ambitions. Good policymaking relies on effective stakeholder engagement. The Williams Rail Review involved extensive consultation with trade unions and workers across the railway to understand their perspectives. However, while the Department expects to implement significant reforms …
Read more
The Department has failed to engage with the workforce to successfully deliver its reform ambitions. Good policymaking relies on effective stakeholder engagement. The Williams Rail Review involved extensive consultation with trade unions and workers across the railway to understand their perspectives. However, while the Department expects to implement significant reforms through the workforce, officials have had little engagement with the workforce on rail reform. The absence of such engagement means that the Department risks not having a full understanding of the challenges and practical realities faced by the staff on the ground responsible for implementing the reforms. Network Rail notes that it improved productivity through engaging with its workforce, reaching agreement on modernisation measures and changes in terms and conditions, saving around £775 million. Recommendation 6: The Department should meaningfully engage with the workforce in order to implement its reforms successfully. In its Treasury Minute response it should set out how it plans to engage with the workforce as part of implementing its reforms. 8 Rail reform: The rail transformation programme 1 Implementing rail reform
Show less
Government response AI summary
The government agrees to meaningfully engage with the workforce, citing a recent pay proposal to the ASLEF trade union, and reiterates its belief that partnership with workforce representatives is essential for reform.
Read full response →
HM Treasury
9
Conclusion
Thirty-Eighth Report - Rail reform: The…
Acknowledged
Delays to reform have added pressure to the Department’s finances and higher costs to the taxpayer for longer. The Department’s costs now exceed the revenue it receives and at a level that the Department views as unsustainable – the Department spent £3.1 billion subsidising train services in 2022–23.19 We asked …
Read more
Delays to reform have added pressure to the Department’s finances and higher costs to the taxpayer for longer. The Department’s costs now exceed the revenue it receives and at a level that the Department views as unsustainable – the Department spent £3.1 billion subsidising train services in 2022–23.19 We asked the Department about the level of government subsidy for the railways and what is sustainable. The Department told us that there is no one level it could identify as sustainable but that the level of funding and subsidy for the railway is not at a sustainable level and that it needs to do two things: increase revenues and reduce costs.20
Show less
Government response AI summary
The government agrees the level of funding and subsidy for the railway is not sustainable and says it needs to increase revenues and reduce costs. They are committed to delivering a unified and simplified governance structure for the railways, alongside passenger train services under public …
Read full response →
HM Treasury
10
Conclusion
Thirty-Eighth Report - Rail reform: The…
Acknowledged
The Department told us that the pandemic presented a fundamental challenge to sustainably funding the railways and that the financial pressures have driven a stronger focus to look at the whole system and improve performance, both financially and for passengers.21 The pandemic also exposed the scale of challenge on costs. …
Read more
The Department told us that the pandemic presented a fundamental challenge to sustainably funding the railways and that the financial pressures have driven a stronger focus to look at the whole system and improve performance, both financially and for passengers.21 The pandemic also exposed the scale of challenge on costs. Network Rail told us that, in previous years, despite excessive costs in the system “the top revenue line was growing. It took the imperative out of the system [to focus on costs] because the numbers were still balancing themselves.”22 The interim financial framework for the railways put in place in response to the pandemic means that HM Treasury carries the risk of any shortfalls in revenue, as it was uncertain how passenger demand would recover. The separation of cost and revenue risk has meant that the Department, HM Treasury, and train operating companies have different priorities when making decisions which impact revenue.23
Show less
Government response AI summary
The government agrees with the Committee’s recommendation. They are committed to delivering a unified and simplified governance structure for the railways, alongside passenger train services under public ownership, with the objective of providing improved services for passengers and better value for money for taxpayers.
Read full response →
HM Treasury
20
Conclusion
Thirty-Eighth Report - Rail reform: The…
Acknowledged
We asked the Department for its views on the current commentary around GBR and the balance between it acting as a guiding or directing mind. The Department said it is important to find the right balance between the guiding mind who is guiding but also who is prepared to stand …
Read more
We asked the Department for its views on the current commentary around GBR and the balance between it acting as a guiding or directing mind. The Department said it is important to find the right balance between the guiding mind who is guiding but also who is prepared to stand up and take the accountability to fix those things. Network Rail’s view was that, in an increasingly devolved United Kingdom, the idea of a central, directing mind telling people in Scotland, Wales, London and other mayoral authorities what sort of rail service they can have would not be acceptable.44
Show less
Government response AI summary
The government states its ambition is to set the long-term strategy and priorities for the railway, with Great British Railways (GBR) acting as a “directing mind” focused on improving the rail network and the passenger experience.
Read full response →
HM Treasury
21
Conclusion
Thirty-Eighth Report - Rail reform: The…
Acknowledged
Reviews by the IPA and the Department in early 2023 found that the Rail Transformation Board’s governance was confused, accountabilities unclear, and there was not agreement across stakeholders on the scope and delivery approach of the Programme. The Department recognises that there will be a challenge in getting stakeholders to …
Read more
Reviews by the IPA and the Department in early 2023 found that the Rail Transformation Board’s governance was confused, accountabilities unclear, and there was not agreement across stakeholders on the scope and delivery approach of the Programme. The Department recognises that there will be a challenge in getting stakeholders to prioritise work intended to improve rail before the timing of future reform is clearer.45 It told us that it has created a rail reform board which has the right people around the table, with very clear accountabilities, both for individual projects and within its wider departmental governance.46 39 Q 49–52 40 C&AG’s Report, para 2 41 Q 36; C&AG’s Report, para 9, para 2.8 42 Q 28–20 43 Q 36 44 Q 79 45 C&AG’s Report, paras 9, 3.9 46 Q 19 14 Rail reform: The rail transformation programme Engaging with the workforce
Show less
Government response AI summary
The department is preparing for the mobilisation of shadow GBR which will facilitate closer working between the senior leaders of Rail Services Group (RSG) in Department for Transport, Department for Transport Operator of Last Resort Holdings Limited (DOHL) and Network Rail (NR) to drive improvements. …
Read full response →
HM Treasury
22
Conclusion
Thirty-Eighth Report - Rail reform: The…
Acknowledged
The Department agreed with HM Treasury that it would deliver £2.6 billion in savings from rail reform by 2024–25, with most savings expected to come from workforce reform plans including modernising ways of working within train stations, improving control and deployment of drivers, and reductions in staff numbers.47 The Department …
Read more
The Department agreed with HM Treasury that it would deliver £2.6 billion in savings from rail reform by 2024–25, with most savings expected to come from workforce reform plans including modernising ways of working within train stations, improving control and deployment of drivers, and reductions in staff numbers.47 The Department recognised achieving workforce reforms was particularly high risk as they would be subject to negotiations with trade unions.48 The Department told us that it has achieved savings of £2 billion but some elements of workforce reform have been challenging to deliver.49
Show less
Government response AI summary
The government is resetting the relationship with the trade unions as part of its overall approach to reforming the railways and has recently made a proposal to the ASLEF trade union to settle the existing national pay dispute.
Read full response →
HM Treasury
24
Conclusion
Thirty-Eighth Report - Rail reform: The…
Acknowledged
Network Rail told us about its good, constructive relationships with trade unions which have allowed it to achieve workforce efficiency and productivity savings of around £775 million.53 They provided examples of headcount reductions from losing around 2,500 managers, work reductions whereby technology means they no longer use people for certain …
Read more
Network Rail told us about its good, constructive relationships with trade unions which have allowed it to achieve workforce efficiency and productivity savings of around £775 million.53 They provided examples of headcount reductions from losing around 2,500 managers, work reductions whereby technology means they no longer use people for certain tasks, and improvements in productivity through changes to terms and conditions.54 47 C&AG’s Report, para 2.5 48 C&AG’s Report, para 8 49 Q 43 50 Qq 65, 95, 98 51 Correspondence from Department for Transport, 7 May 2024 52 RTP0002 53 Q 80–83 54 Qq 82, 84, 87 Rail reform: The rail transformation programme 15
Show less
Government response AI summary
The Committee notes Network Rail's good relationship with unions and associated savings.
Read full response →
HM Treasury