Rail review : No need, says GS

15 June 2010

‘There’s a simple solution to keeping down costs,’ Keith says. ‘Stop money pouring out of our industry into the hands of private speculators. Stop paying fortunes to lawyers, consultants and accountants to negotiate franchises. Keep rail profits in the industry rather than seeing them disappear into investors’ profits. Reinvest in rail and the problem’s solved - and the review’s not needed.’

The review by Sir Roy McNulty is intended to be a rapid job that will report its findings to inform government decisions on public spending in the autumn. It begins on the back of a ‘scoping study’ that says

  • International benchmarking carried out by ORR suggested that Network Rail is 30% to 50% less efficient in terms of maintenance and renewals expenditure than comparable European railways.
  • The recent HS2 study found that civil engineering costs in the UK were typically up to double those in Europe.
  • Franchising of trains in countries such as Germany and Sweden has reportedly led to cost reductions of between 20 to 40%, while train operating costs in Great Britain are still above their level in 1996-7.

The study will focus on eight broad themes: industry objectives, strategy and outputs; industry leadership, planning and decision-making; interfaces, incentives and structure; revenue; asset management; supply chain management; innovation, standards and safety; and people.

The review was launched by the previous government last December.

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