Latest Rail News

01.09.14

Network Rail officially re-classified as a government body

Network Rail’s re-classification as a central government body comes into effect today, with its debt of around £34bn transferred to the national balance sheet.

Even though the company has become public, it will remain a not-for-dividend company, limited by guarantee, with members rather than shareholders.

RTM has been told that the business will continue to act and operate in the same way; delivering a “safe and reliable railway”.

A Network Rail spokesperson said: “For passengers and station users, this statistical change will mean little to their daily journeys.

“We recognise that, for Network Rail, it will mean greater accountability and transparency to Parliament, taxpayers and fare payers, who rightly deserve to better understand the value of their significant investment in Britain's booming railway.”

However, unions and campaigners are staging a protest outside Network Rail headquarters.

Although they believe the change is an important moment in their campaign for the “renationalisation” of the country's railways, they hope the demonstration will highlight the "contempt" the government has shown to millions of rail passengers by its decision to exclude Network Rail from being covered by the Freedom of Information Act.

Mick Whelan, general secretary of train drivers' union Aslef, stated that the government has been to avoid the ‘n’ word, preferring to refer to it as a ‘statistical decision’ to make NR a ‘public sector organisation’.

He added: ‘Semantics notwithstanding, we’re delighted that Network Rail has been brought back onto the books as a public body. We have consistently called for Britain’s railways to be brought back into public ownership so we think it’s great that half of our railway system – the steel if not the wheels – have now been brought back into public ownership.

“And, if I can be permitted a smile, we think it’s ironic that such a big chunk of the railway has been renationalised by a Tory government! Privatisation has failed this country.”

Following a ruling by the Office for National Statistics, Network Rail's net debt will be transferred to the government’s books. However, a few weeks ago, RTM reported that ministers and officials are exploring ways to get around the accounting changes that would see the £34bn total added to the public’s balance sheet.

A DfT spokesperson said: “The classification of Network Rail is an independent statistical decision by the Office of National Statistics (ONS). It does not change the industry structure or affect the day-to-day operations of the rail network. The ONS decision has no effect on fares, performance, punctuality, safety or timetables.”

But Mick Cash, RMT acting general secretary, stated that the recognition of Network Rail as a fully-fledged public body, under public control and ownership, should be seen as the spring-board for taking the entire rail network back into the public fold.

“Any attempt by the right to use this as an opportunity to argue for dragging us back to the lethal days of privatised rail infrastructure under Railtrack will be fiercely resisted,” he said.

On 29 August, at a general meeting, 97.3% of Network Rail's 41 members voted to change the company's articles of association. The main changes to the articles give the company's ‘special member’ – the Secretary of State for Transport – additional powers over the appointment of the company's chair, its remuneration policy and the selection of its members.

Commenting on the vote, Michael Roberts, director general of the Rail Delivery Group, said: “Network Rail’s ability to be flexible and self-determining has enabled it to make vital decisions to maintain and invest in Britain’s railway.

“The rail industry is keen to make sure that Network Rail’s operational independence is preserved while also ensuring that, at a time of record investment in the railway, the company is accountable to passengers and taxpayers. Rail passengers will see no change to the operational running of the railway as a result of this reclassification.”

(Image: c. Stefan Rousseau)

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