25.06.15
McLoughlin scraps role of Network Rail public members in governance overhaul
Patrick McLoughlin has announced that none of Network Rail’s executive directors will receive a bonus for the past year, the role of public members will end and a special director has been appointed with immediate effect.
During the transport secretary’s speech on Network Rail performance, which saw Richard Parry-Jones being replaced as chairman by Sir Peter Hendy, McLoughlin stated that he intends to “simplify” Network Rail’s governance by ending the role of the public members.
Public members are recruited on an annual basis, and their role is to hold the board to account for its management of Network Rail by monitoring the board’s management of the performance of Network Rail against:
- high standards of corporate governance
- government operational output specifications
- its regulatory operational and financial targets
“I thank them for their commitment,” he said. “But the reclassification of Network Rail has changed the organisation’s accountability.”
Richard Brown has been appointed as the special director of Network Rail and he will update the secretary of state directly on progress made at the company.
McLoughlin also noted that it is important we “understand what can be done better in future investment programmes” and that Dame Colette Bowe, an experienced economist and regulator, looks at lessons learned.
She will make recommendations for better investment planning in future and here report will be published in the autumn.
“I know members on all sides of the House value the improvements that are planned to the railway in their area,” said McLoughlin.
Commenting on today’s announcement by the transport secretary, Michael Roberts, director general of the Rail Delivery Group, said: “In delivering a better railway, Network Rail signed up to some highly ambitious targets and improvement plans which we now know have proved too optimistic.
“People and businesses rely on rail and some will be disappointed by the news that certain planned improvements will be delayed. The majority of proposed enhancements will still go ahead, and it is important that the industry, government and regulator learn from this situation to ensure we do better in delivering the future improvements the railway needs.”
See also our other stories from today's announcement:
Parry-Jones pushed out at Network Rail; Peter Hendy takes over
Midland Main Line electrification 'paused'