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Budget 2016 | Shaw urges Network Rail devolution

Network Rail should create a new ‘route’ for the North and devolve more power to this and its other regions, according to a government-commissioned report.

High Speed 1 chief executive Nicola Shaw told ministers that each of Network Rail’s routes should have more autonomy to deliver for passengers and freight shippers.

Shaw: more devolution

Shaw: More devolution

The Shaw report has called for more devolution to the regions

Chancellor George Osborne announced last summer that Shaw had been asked to advise on the future of Network Rail after a rocky start to its £38bn control period 5 programme.

The Shaw Report, published alongside Osborne’s Budget, held back from recommending privatisation or large-scale break-up but said the organisation had become too big and unwieldy.

“There is a lack of local flexibility and autonomy in what has become a very large and complex system with a monopoly provider of rail infrastructure at its heart.

“This inflexibility and the lack of competitive pressure means that there is limited responsiveness (and accountability) to customer and end-user needs.”

The report said that the northern sections of the London North East and London North West routes should be merged to form a new route for the North. This would give Network Rail nine regions to devolve power to.

“Decentralisation and route autonomy should be pushed further,” said the report.

“Routes should be empowered to operate as independent divisions within the overall business and assessed individually against their ability to meet customer needs and expectations.”

Shaw also called for the Department for Transport to develop a long-term strategy for rail travel.

She urged exploration of ways to attract private finance; and demanded plans to boost skills and diversity in the rail sector.

Network Rail chief executive Mark Carne welcomed the report.

“I’m pleased that [Shaw] has concluded that the reforms we are introducing in Network Rail are the right ones,” he said. “We are committed to putting passengers and customers at the heart of what we do and our devolved business model will put decisions in the routes, closer to the passengers and train companies.

“I also endorse her desire to see more private finance coming into the railways. We have been successful with this in the past and I consider that more private money and funding from the people who will benefit from railway improvements is a sensible way to deliver a bigger and better railway for the nation.

“We’ll work with the Department for Transport as it now considers these recommendations and we look forward to a future which I genuinely believe is bright for the railways and for the ever growing number of passengers.”

Civils firms also backed the study.

Civil Engineering Contractors Association chief executive Alasdair Reisner said: “It is clear that there is a need to ensure that Network Rail looks at all opportunities to deliver outstanding results for its customers.

“The Shaw Review was set up to establish why its current funding and operational model was failing to achieve this. Our members want to support these efforts, but with previous experience of major restructuring to industry customers leading to a slowdown of work, had concerns that any change at Network Rail must be managed sensitively to ensure that the current programme of investment is not pushed off course.

“We welcome today’s report, which should deliver the vital reform needed, while allowing existing programmes of work to continue.

“We are also pleased to see Shaw call for greater efforts to plan skills for the sector.

This was another area where our members wanted a better approach, and we look forward to working with other industry stakeholders to achieve this, following the government’s response to the report later this year.”

A report published in November revealed that Network Rail was to sell £1.8bn of assets, borrow £700M and delay certain projects beyond 2019 as it sought to get through its troubled current investment programme.

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