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Another rejig for rail?

Comment - Shadow transport secretary Chris Grayling explains why the Conservatives are re-examining rail privatisation.

Talk to business groups and Chambers of Commerce around the country, and you will hear one common theme.

Our transport infrastructure just isn't up to the job they will say.

Yet over the next 25 years, Britain's infrastructure will face further almost unprecedented pressures. The forecasts for growth in the number of cars, are far greater than we can possibly just provide for through building more roads.

That means we will need efcient, modern public transport to help meet the needs of future generations. Railways will be an essential part of that.

Today our trains carry more passengers than they did before the Beeching cuts of the 1960s. By 2014, official forecasts show over 30% more passengers, but no increase in capacity. Overcrowding is set to get much worse and fares rises are set to beat ination.

The knock-on effect on our competitiveness could be dramatic - let alone the impact on quality of life. This is why we launched our review of the rail industry last week.

Public subsidy to rail has gone up from just over £1bn a year in 2001 to a record of over £5bn today. Fare revenues are also at record levels. But despite this, nothing signicant is being done to tackle capacity problems.

And costs remain at much higher levels than in many other countries. There's no one single reason for this.

The intense focus on safety in recent years has played its part - mostly essential, but sometimes bringing with it excessive levels of regulation and expenditure.

Rapid infiation across the civil engineering sector has also played a part.

Network Rail has worked hard to bring down costs, though many in the industry think there is much further to go. But I think that the biggest remaining barrier to lower costs is the structure of the industry today - a structure that mitigates against essential rapid decision making.

The central issue is the decision, by my predecessors a decade ago, to separate track and train into separate organisations. This has helped push up the cost of running the railways and slowed decisions about capacity improvements.

Too many people and organisations are now involved in getting things done - so nothing happens. Too often the focus is on detailed contractual discussions, on complex performance levers - and not on simple, quick management decisions.

What our rail industry most urgently needs is rapid action to bring down costs and to release funds that can be spent anticipating the capacity problems that lie ahead. To do that it needs management simplicity, and a framework that can deliver long term - often commercial - investment.

We think the current system of division between track and train, combined with the short term focus of seven year franchises, simply does not deliver that - and almost everyone in the industry that we have spoken to seems to agree.

That's why no change is not an option, and why we will spend the next few months working with the industry to try to find a better way forward.

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