Signs of radical industry reforms on the horizon

The rail review is turning out to be much more interesting than many commentators thought it would be when it was launched in January. At the time, there was a widespread feeling – not shared by me – that the government was just going through the motions and that the end result would be a bit of tinkering about but there would be no major change.

Indeed, the wording of the review announcement seemed to suggest that not much was going to happen. Clearly the Health and Safety Executive’s responsibility for the Railway Inspectorate was in Darling’s sights, but otherwise his ambitions looked modest. A bit messing about with the relationship between the Strategic Rail Authority and Network Rail but otherwise ‘steady as she goes’, a characteristic of his generally cautious approach.

The wording of the announcement was, indeed, a bit strange and started off with several radical statements including the admission that the present structure was ‘dysfunctional’ but then it tailed off weakly.

Actually, this was misleading. The prevailing view within the industry now is that the lopsided nature of the statement was the result of a last minute intervention by the Strategic Rail Authority chairman Richard Bowker.

It seems, however, that Bowker only managed to buy himself some time. A radical restructuring is clearly on the agenda and the role of the SRA is likely to change substantially. Indeed, it is amazing watching senior people in the industry who, for a long time, had argued that change would cause further upheaval and be counterproductive now arguing, as Darling said at a recent meeting about the review, ‘that the current structure could not deliver the railway we need’. Even Bowker, who only last November put out a press release saying that Network Rail taking maintenance in house was ‘the last piece in the privatised jigsaw’, has now agreed that change is not only desirable but inevitable.

This transformation is rather like the scene in Orwell’s 1984 when suddenly, overnight, Eurasia and Oceania, which had been allies declare war on one another. The past statements about the structure being impossible to change have been erased from the collective memory and suddenly everyone is playing to the same tune, arguing that change is inevitable. Moreover, most of the leading players now suggest that some form of vertical integration is the right way forward whereas previously they had argued that it was legally or practically impossible.

As Darling puts it, this is a once in a generation chance to sort out the railways. Let’s hope he takes it, although cynics would say that is precisely what those who privatised the railways a decade ago also suggested.

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