The man in charge of a government review examining how to cut rail industry costs has warned that lines may close if savings cannot be made.
Sir Roy McNulty, who is leading a value for money review, which is being jointly sponsored by the Department for Transport (DfT) and the Office of Rail Regulation, said that network closures represented “Plan B” to reduce costs.
Stressing that he was concentrating on Plan A – to reduce costs through greater efficiency – he denied that a list of possible closures had already prepared.
Speaking at the Derby and Derbyshire Rail Forum last week Sir Roy said that his research had uncovered more issues than he had expected, adding that the industry was suffering from poor cost control and was being hindered by a lack of clear objectives from government.
“There is also very little innovation, which surprised me in an industry where a substantial part is run by the private sector,” he said.
“We are investigating whether the present structure of the industry is stifling new ideas.”
A scoping study from Sir Roy, a former chairman of the Civil Aviation Authority, published in July, stated that total taxpayer contribution to the railways was £5.2bn in 2008/09, compared to £2.3bn, in today’s prices, in 1993/94.
Sir Roy has already produced preliminary findings for the DfT to inform its decisions in the Comprehensive Spending Review, and he confirmed this will be made public this month.
His final report is expected in April next year.
This will be followed by the DfT outlining “detailed proposals on delivering a sustainable railway including reform of Network Rail” in November 2011.