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SRA future in doubt as NAO deals another blow

News

FURTHER QUESTIONS have been raised over the future of the Strategic Rail Authority (SRA) this week, following a critical report from the government's spending watchdog.

A report by the National Audit Office (NAO) into Network Rail has identified 'serious challenges' in Network Rail's structure and in the rail industry in general.

The NAO highlighted problems with Network Rail's broadbased accountability and in particular its relationship with the Strategic Rail Authority.

Given that SRA 'has few direct levers', it questioned how it can manage its exposure to credit risk arising out of its support for Network Rail's longterm debt finance; and how it provides the rail industry with a strategic lead.

And on a more fundamental level it questioned how the SRA's role sits with 'the desire for it [Network Rail] to be classified as a private sector business.'

The NAO verdict comes after rail regulator Tom Winsor and the SRA itself recommended that the agency be axed in submissions to Alistair Darling's rail review (News last week).

In contrast the NAO found that Network Rail was following 'a prudent and realistic accounting treatment of operation, maintenance and renewal expenditure'. It added that 'it is also improving its business planning to prioritise and control the unit costs of work that will provide long-term benefits.'

NAO believes further improvements are achievable and says Network Rail's management should develop longer term output-based efficiency and financial measures, such as bringing down the network cost per kilometre per passenger carried.

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