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ORR is ineffective regulator says PAC

Ineffective regulation of Network Rail is the main cause of inefficiency in the operation of Britain’s railways, the influential House of Commons Public Accounts Committee (PAC) has warned.

Committee chairman Margaret Hodge said the relationship between Network Rail, the Office of Rail Regulation (ORR) and their advisors was “too cosy” with a number of firms hired by the regulator often also providing advice to Network Rail as well.

PAC has investigated the relationship between Network Rail and the ORR in the wake of the McNulty rail review which found that Britain’s railways cost up to 40% more to run than in Europe.

It found that a key issue was the rail regulator’s lack of power to impose effective sanctions on Network Rail.
“We doubt whether the ORR can put effective pressure on Network Rail to improve its performance. Fines simply reduce the amount of investment in the railways,” said Hodge.

“Britain needs a regulator with teeth, who can ensure proper value for money for both the taxpayer and fare-payer,” she said.

Speaking at NCE’s London Rail conference late last month, Network Rail director of planning and regulation Charles Robarts admitted it did need to be more efficient and said benchmarking of its performance was crucial.

Robarts told the conference that Network Rail was eager to bring in a concessionaire to operate one of its routes allowing it to benchmark costs.

“We know we are too expensive,” said Robarts. “We are a monopoly so it is difficult to benchmark. Forming a concession is the idea, and we have ideas where that might be,” he said.

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