Rail devolution would increase productivity - ORR boss

The Office for Rail and Road (ORR) now oversees and regulates the performance of the UK's strategic road and rail networks. Chief executive Richard Price gives his thoughts on George Osborne's latest Budget commitments to the sectors. Handing control of delivery to front line route managers would create competition within the Network Rail monopoly he suggests. 

Richard Price, chief executive, ORR

Interview by Antony Oliver

George Osborne highlights in his Budget statement that as “problems at Network Rail have become clear, the government has acted to put the rail investment programme back on track”. Do you see these problems as being down to over ambition or underperformance?

ORR has highlighted specific areas for improvement to Network Rail such as improving the data quality the business relies upon to make management decisions; delivering the right volumes of maintenance and renewals work needed to preserve the safety and sustainability of the network; and improving its planning capabilities on delivering big projects. If Network Rail can address these capability issues, it can recover its performance and deliver real benefits for passengers by 2019.

As Osborne pointed out in the Budget, former London Transport Commissioner Sir Peter Hendy will “report by autumn 2015 with a plan to get the rail investment programme back onto a sustainable footing” – what do you hope to see in this report?

We hope that the report will directly address the the areas of weakness identified by ORR and set out a plan to deliver the performance and outputs that Network Rail are required to deliver by the end of CP5. 

"Building on PR13, and reflecting the direction of travel set out in our long-term regulatory statement in 2013, we intend to look at the scope for taking an enhanced route-based approach to regulation in PR18". Richard Price, ORR

The Chancellor also announced that government has asked Nicola Shaw, Chief Executive of High Speed 1, to advise on “how it should approach the longer-term future shape and financing of Network Rail”. What do you expect this to achieve? How will this affect Sir Peter Hendy role?

In ORR’s Long Term Regulatory Statement (July 2013) we presented analysis that highlighted that the current arrangements for the funding and delivery of rail infrastructure were unlikely to be sustainable in the medium term. We therefore welcome the work that Nicola Shaw has been asked to do and are ready to assist in whatever way we can.

The Budget statement also states Network Rail should continue to “devolve more power to route managers closer to the front line” – why do you think that will boost performance?

This is a welcome move from Government. The reforms have significant potential to improve the way that the rail network operates and reflect decisions that we took in PR13 to increasingly scrutinise Network Rail at a route level. 

Building on PR13, and reflecting the direction of travel set out in our long-term regulatory statement in 2013, we intend to look at the scope for taking an enhanced route-based approach to regulation in PR18. 

Comparative benchmarking of individual routes will help route managers to learn from the best-performing routes, driving up the quality of services and value for the railway's customers and taxpayers.

"ORR has always created incentives for Network Rail to develop its commercial portfolio." Richard Price, ORR

Osborne stated that government will change the way it “channels public money through the industry, directing it through the train operating companies, so that Network Rail focuses firmly on the needs of train operators, and, through them, passengers” – what will be the major benefits from this measure in terms of boosting value for public money?

This is a new approach which channels government financial support for the railways closer to passengers will allow better decisions with a greater focus on the needs of rail users. 

It also encourages better commercial arrangements between train companies and Network Rail to help improve the way the whole system delivers efficient and reliable services for its customers. 

Government will also “establish a dedicated body to focus on pursuing opportunities to realise value from public land and property assets” – what has stopped this from happening in the past and what impact will this have on the operation and planning of the railway

ORR has always created incentives for Network Rail to develop its commercial portfolio and we set stretching assumptions in PR13 for the increased volume of income that we wanted the company to earn from its property portfolio in order to support the delivery of core rail services. We are waiting to see the details of the government’s proposals, but expect to continue to regulate stations in the interests of customers and passengers such that the operation and planning of the railway can be efficient and effective. 

On roads the chancellor stated that “government will publish a second Road Investment Strategy by the end of this Parliament, building on the first published in December 2014”. What role will ORR have in producing/shaping this strategy?

Our role is summarised from page 21 of our first consultation. In short, when it comes to the RIS our role is to:

  • Monitor HE’s performance and efficiency during the current road period, including how it is delivering the RIS
  • To assess whether the next RIS is deliverable and challenging, which will involve reporting to SoS/DfT on lessons learnt from the current RIS, e.g. what our benchmarking and monitoring work says about how efficient it has been and can become, the reasons for any missed deliverables, what intelligence from road users suggest HE should focus on in the next RIS etc
  • To monitor and enforce HE’s compliance with this and subsequent RIS’s
  • To provide the Secretary of State with any advice he requests

We therefore expect to have a significant role in the discussions that will result in the next RIS being set.

Read Infrastructure Intelligence on  Is it shake up or break up for Network Rail

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