Written statement to Parliament

Rail review update

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Outlines recommendations from the recent rail review.

As recommended by Richard Brown in his review into franchising and as part of June 2013’s national infrastructure plan Investing in Britain’s Future, my department undertook to review government rail functions in order to identify what actions were required to deliver those functions in the most effective and efficient way. The review has now submitted its recommendations to me. I have agreed its recommendations and implementation will begin shortly.

The review recognised that much has already been achieved since the department’s rail functions were brought together into a single rail group in January 2013. A clear, professional franchise programme is underway, implementing Richard Brown’s review of franchising, along with the government’s ambitious rail investment programme. Building on this progress, the review recommends further developing the department’s rail functions as a new rail executive.

Creation of the rail executive will support the drive to strengthen our focus on passengers; build an enhanced culture of commercial expertise and innovation; and ensure greater coordination of improvements to track and trains. A single team will manage the interdependencies between rolling stock, track, stations, freight and passenger services; and between existing services and HS2. It will also develop an effective framework agreement for Network Rail, for September 2014, when it will be classified as public sector. A new approach to recruitment, reward and career development for commercial rail skills will allow the rail executive to increase capability at all levels and bolster commercial experience in the management team. This will reduce the department’s dependency upon consultants and increase its ability to negotiate the best deal for passengers and the taxpayer.

The review recommended that there should be a clear focus on rail passenger services within the rail executive. This will be provided by a new Office of Rail Passenger Services, forming part of the rail executive, with responsibilities including delivery of the franchise programme and the management of existing franchises. It will be led by an externally recruited managing director and supported by non-executive board members.

The review has also recommended we consider a longer term option of a new, more arms-length body with responsibility for rail delivery functions. The creation of the rail executive provides a strong foundation for such future evolution and the government will consider moving to a more arms-length body in 2016.