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INFORMED SOURCES December 2005

Darling disowns railway support target

Correction – DfT and the Treasury don't have the first idea of how much the railways should cost – official

Back in June the Department for Transport's Director of Projects Graham Dalton told a conference that current levels of support for the railway had left the Chancellor of the Exchequer a ‘slightly aggrieved man'. As a result, DfT hadn't ‘got quite so many friends in the Treasury as we had'.

Asked how much subsidy the industry could expect in future Mr Dalton thought that ‘in the mind of the Treasury something between £3 billion and £3.5 billion would calm them down'. And I used this figure in the analysis of how much the railway should cost in the October column.

At the DfT press briefing on the remapping of the Central trains franchise on 18 October, I thought the chance of checking Mr Dalton's numbers too good to miss and asked Transport Secretary Alistair Darling the IKEA question.

Under the new process for the Periodic Review of track access charges the DfT has to tell the Office of Rail Regulation what sort of railway it wants (the High Level Output Specification or HLOS) and how much it is prepared to pay for it (the Statement of Funds available or SoFA.

So the IKEA question is ‘how big is the SoFA'. Well I thought it was amusing.

And Mr Darling replied that the £3-3.5 billion figure ‘has absolutely no foundation in fact' and that such decisions ‘are for ministers not civil servants'. He added ‘neither ourselves or the Treasury have got anywhere near fixing this department's budget or even changing this department's budget in the Spending Review which will not take place until 2007'.

Not only that, ‘what is the case is that railway's transport spending is set to rise'. Hang on, I replied, the railway needs £6.5 billion support this year, are you saying it needs more?

Well, no. While getting costs ‘down and under control in relation to not paying too much' for operations, maintenance and renewal is important I should avoid ‘somehow running that into the idea that we want to have a very small railway'. ‘That's nonsense', he told me, adding ‘I'm quite clear that the railways are an essential part of our transport needs for the future'.

Now I can understand the DfT and the Treasury waiting for December, when ORR is to present its ‘best guess' of what a well-functioning industry could deliver over time before pencilling in a figurew for the SoFA, but I find it incredible that there is not an aspirational numbver floating around Whitehall. And, indeed there is, because the £3-3.5 billion figure has also come from non-DfT sources.

Confused

But I am also concerned that Mr Darling seemed a mite confused over the Periodic Review 2008 process at the press conference. He told me that DfT would give the High Level Output Specification to ORR to cost in 2006. ORR would then price the HLOS and an iterative process would follow.

Readers who slogged though the October column's guide to PR2008 will know that under the Railways Act 2005 the Secretary of state also has to specify the funding available. ORR certainly costs the HLOS but the iterative process is all about reconciling the costed HLOS with the SoFa the DfT first thought of.

And, all through 2006, DfT, the Treasury, the ORR and Network Rail will be number crunching like mad with the aim of producing a compatible HLOS and SoFA for formal presentation to ORR in June/July 2007, not 2006.

Now I know I could represent earth in the intergalactic boring championship on PR2008, but that is because I believe it will play a crucial part in determining the future of our industry. And the fact that the Secretary of State for Transport is palpably not up to speed is distinctly worrying.

Of course, you could argue that I am being unfair to Alistair who is responsible for all transport – except rail freight, and that I should aim my policy wonk questions at the Director General Rail, Dr Mike Mitchell. Or that Dr Mike should step in and field the tricky ones anyway.

Well the DG Rail was at that press conference. He walked in, sat down, and, to quote a reference to Gwynneth Dunwoody the same day, looked at us with all the animation of a Mount Rushmore statue without its nervous tic. At the end he got up and processed out having said not a word, not even good morning or good bye.

When a fellow railway trade and technical editor queried this silence with the DfT press office he was told that it was not the DG's job to act as spokesman for the Transport Secretary. Well no, but it is his job to give serious answers to professional questions which are apparently too detailed for his leader. So something else to worry about.

Continues.........