Uncorrected Evidence 219

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Oral Evidence

Taken before the Transport Committee

on Wednesday 5 March 2008

Members present

Mrs Gwyneth Dunwoody, in the Chair

Mr David Clelland

Clive Efford

Mrs Louise Ellman

Mr Philip Hollobone

Mr John Leech

Mr Eric Martlew

David Simpson

Graham Stringer

Mr David Wilshire

________________

Memorandum submitted by Office of Rail Regulation

Examination of Witnesses

Witnesses: Mr Chris Bolt, Chairman, Mr Bill Emery, Chief Executive, and Mr Michael Lee, Director, Access, Planning and Performance, Office of Rail Regulation (ORR), gave evidence.

Chairman: Members having an interest to declare.

Mr Martlew: A member of UNITE and a member of the GMB Union.

Clive Efford: A member of UNITE.

Graham Stringer: A member of UNITE.

Mr Clelland: A member of UNITE.

Chairman: A member of ASLEF.

Mrs Ellman: A member of UNITE.

Q495 Chairman: Good afternoon to you, gentlemen. You are very welcome. I think we might actually get very extravagant and offer you five more minutes than usual by starting now. Could I ask you whether you actually wanted to comment on anything before we begin? No? Perhaps you would give us, firstly, your names for the record, starting on my left?

Mr Lee: I am Michael Lee, the Director of Access, Planning and Performance at the ORR.

Mr Emery: I am Bill Emery, the Chief Executive of the Office of Rail Regulation.

Mr Bolt: Chris Bolt, Chairman of the Office of Rail Regulation.

Q496 Chairman: Did anybody have anything they wanted to say before we begin?

Mr Bolt: Just briefly, if I may, Chairman. When we were here before you on the last occasion we said that what happened over the New Year was unacceptable in terms of its impact on passengers and freight users, that we would carry out a thorough investigation and produce a report, which we have now done and which I know you have seen. The package of measures we announced last week are intended to go beyond the immediate causes of the issues which Network Rail was describing in its evidence to you. What we have identified are some more deep-seated weaknesses in the way Network Rail plans, manages its projects, carries out management on site and communicates with train operators. These are all important issues for it to resolve, not least because of the impact that can have on the successful delivery of the major programme of works it will have for the next five years, and indeed for the next 30 years, to meet the challenges of the White Paper. So we are determined that Network Rail takes our findings seriously and that we get them in a position where the weaknesses we have identified have been addressed.

Q497 Chairman: That is helpful, Mr Bolt, because frankly I think some of us were a bit stunned by this report, because although you have used very carefully measured language what you are really saying is that there are quite real problems with Network Rail and in these instances you looked at there were problems with planning, design, procurement, monitoring, with the use of contractors and the way they reported back. This is symptomatic of really a structural malaise, is it not?

Mr Bolt: I wouldn't say necessarily it is a structural issue. It is clearly a significant issue in terms of the management of the company and whether it is delivering best practice in managing railway assets. The issues we have identified, which go beyond some of the points we identified following the overrun at Portsmouth, do, however, raise questions about the capability of Network Rail to deliver, as I said, the significant investment programme it has got. One of the points we identified was, for example, the understanding of the capability of the supply chain. That is clearly going to be a very important issue, not only for the decisions we will be taking shortly on funding for the next five years but, as I say, for meeting the capacity challenges going forward.

Q498 Mr Martlew: Obviously, there are various criticisms, at various levels, of management. How do you think the board of Network Rail behaved?

Mr Bolt: One of the reasons we concluded that a penalty was an appropriate part of the package was to send a very clear signal to Network Rail's board as well as to the senior management that these were issues which go to the reputation and the capability of Network Rail and that they were very much issues for the board to take seriously and to ensure they were addressed.

Q499 Mr Martlew: Do you believe this particular board has the capacity to do this, and what is your view of the Chairman's action over the Christmas time?

Mr Bolt: Clearly, we do not have a role in appointing the board, nor should we. I would expect the non-executive directors, playing the role which is proper for non-executive directors, to be asking questions about the governance of Network Rail and issues of that sort.

Q500 Mr Martlew: I am not quite clear. Are you of the belief that this present board can actually make the improvements which are necessary?

Mr Bolt: We believe that if Network Rail takes the issues we have identified in this report seriously, it is capable of making the improvements needed to improve its practice on planning and management of projects, yes.

Mr Martlew: Thank you for that. Could I now go on to the West Coast Main Line programme?

Q501 Chairman: I am going to hold you there for a minute and I will come back to you on that, because we are all going to be after the West Coast Main Line. I think really the point Mr Martlew is concerned about is the governance arrangements generally. Are they going to actually function well for an organisation of this size and importance?

Mr Bolt: Network Rail clearly has an unusual governance structure in the sense that it does not have shareholders, it has members, but it operates within the framework both of the combined code and within licence conditions, for example, setting the criteria which the management incentive plan should meet and requiring at least two non-executive members to have railway experience. We have said as part of our general review of Network Rail's licence conditions that we will be consulting more broadly during the course of this year on whether those licence requirements are adequate or whether we should look at reviewing those requirements. To emphasise the point, it is not for us, nor should it be, to take decisions on the structure -

Q502 Chairman: Mr Bolt, we are not asking you to recruit, but we are saying that if part of your responsibility is to look at the way this thing works, then inevitably that must include the composition of the board and the responses of the board and the non-executive members, and a lot of people believe that this organisation is run by a group which is totally toothless and therefore cannot instigate the sorts of disciplines you ask for in your report.

Mr Bolt: If there are issues about the governance of Network Rail which are relevant to our licence conditions, then of course we will look at those. The key issue for us, as Network Rail's regulator, is to make sure that the company (that is the board and the senior management, not distinguishing between them) address the weaknesses which were identified in this report and put them right.

Q503 Graham Stringer: Is not the real point that your structural relationship with Network Rail is the structural relationship of a regulator with a private sector monopoly and that relationship, where it works, implies when thing go wrong that they are fined and that the shareholders take the consequence. In this case, when you fine them I and the rest of the Committee and the people watching us as taxpayers pay the consequence. Is that not a structural problem, because you are sending taxpayers' money around the system, are you not?

Mr Bolt: I think there is an important misconception about how fines work in a company like Network Rail. In reality, I think it is almost immaterial what the ownership structure is.

Q504 Graham Stringer: Do you really mean that?

Mr Bolt: I do. Over Christmas the additional costs which Network Rail has incurred, including compensation to the train operators, was over �20 million. If it does not put right the issues we have identified in this report, then a lot of taxpayers' money through support to Network Rail will get wasted. But if it can address those issues, then taxpayers and rail users will get a better deal because it will achieve greater efficiencies in future.

Q505 Graham Stringer: I find that extraordinary because if you fine a private sector monopoly the money comes out of the shareholders' wallets effectively in the long term, does it not? The shareholders suffer. Whose wallet does that fine come out of? Who goes to their bank balance and finds they are less well off because the management of Network Rail did not get it right over Christmas?

Mr Bolt: The policy which we have set out very clearly in our penalty statement - and this was the basis on which the board took the decision on the penalty - is that it should be the minimum level to incentivise compliance with the licence. So we are saying that we believe that fine of �40 million is necessary to focus the minds of Network Rail's management and board on these weaknesses and to address them. That will produce a lower cost to train operators and taxpayers than if Network Rail carries on with these weaknesses and with the risk that we see further overruns and further costs on Network Rail of the sort we saw over Christmas.

Mr Emery: If I can add something on this, Iain Coucher has actually said that the way the company is going to deal with this is through greater efficiencies, and that is the way I think a prudent shareholder would demand of managers for them to put their act together before they would actually stump up for any fine. We think this works quite well with Network Rail.

Q506 Graham Stringer: That is a surprise, is it not, that the chairman says, "You can't be doing something wrong, so I will put it right"? It would be very surprising if he had said, "I'll carry on doing exactly what I was doing before." I understand the integrity of your argument and the logic of your argument, but you have not dealt with the real question, which is at the back of all regulation of private monopolies, that somebody loses financially. You have not answered the point. Those �5, �10 notes, whose wallet do they come out of? What you are saying is, "We shout at Network Rail a lot. They say, 'We'll get better.'" But who financially loses?

Mr Bolt: I recognise it sounds a very complex argument -

Q507 Graham Stringer: No, it is a simple argument. It is just irrelevant, because nobody is being financially penalised?

Mr Bolt: If Network Rail does not put these problems right, then taxpayers' money will go on future failures, future overruns, more compensation for the train operators. We expect Network Rail to deliver the investment programme it has got more cheaply if it resolves the issues we have identified. So on that basis, taxpayers are not worse off, nor are the passengers.

Q508 Graham Stringer: Mr Bolt, I do not doubt that you are trying to make Network Rail more efficient. I accept that is your job and you are trying your best to do it. What I am really saying is, Network Rail has made some improvements from the days of Railtrack, but what I really doubt, apart from warm words, is the effectiveness of your correspondence with them when nobody is actually hurt in the wallet, purse or bank balance.

Mr Bolt: I think that goes back to the questions the Chairman was asking about governance issues. The real issue here is what is the mechanism for ensuring the senior managers of Network Rail put right the weaknesses we have identified. Yes, there are clearly differences in a shareholder-owned company where shareholders will bring an additional pressure to bear beyond simply the actions of the Regulator.

Q509 Graham Stringer: What I am profoundly sceptical about is that your correspondence and fining the taxpayer, or fining a public body, is as effective as fining individuals. I would be interested to see what evidence you have of that, because from the days of Railtrack to now Network Rail has improved but clearly its costs are about, in round terms, three times higher than they were ten years ago, are they not?

Mr Bolt: Costs have increased very significantly.

Q510 Graham Stringer: That figure is about right. The costs of Network Rail - I read the literature, I read the magazines - are about three times higher than they were before privatisation. You fined them, whatever it was, �15 million, or thereabouts. You are not going to have the same impact, are you, as if there were shareholders or if there was direct Secretary of State responsibility? We have got a hybrid model which does not work, does it?

Mr Bolt: We have got a structure which, as I have said, is different from one where there are shareholders also bringing pressure to bear on management. We work within that framework. We remain of the view that a fine, as part of that package, will increase the likelihood of the senior management of Network Rail, with its board, taking responsibility for their actions. We will address these issues more readily -

Q511 Chairman: Does that not depend on where you are going to take the fine from, Mr Bolt? I think that is the point that we find it difficult to get our heads around. If you fine me because I park a car in the wrong place, it comes out of my pocket. It is not something I can pass on to somebody else. Now, this lot, although they have done a lot of good things - and you have been very clear that you are very pleased with the fact that they have done a lot of good things - nevertheless they have got themselves into a major problem. We are not talking of a small inconvenience for one or two people. They have got themselves into a major difficulty over Christmas and the New Year. You set out in considerable detail what was wrong right from the summer, when they did not check even on their own contingency plans. You fined them because they are not doing the job. Now, all we want to know is, when it comes down to it, who pays that? Is it taken out of their budget, is it taken out of their overheads, is it taken out of the pay of the directors and the board? Who pays?

Mr Bolt: I have no doubt that when the bonuses of the senior management are decided, the fact that Network Rail has been found in breach of its licence will affect those bonuses. In the first stage, the cheque which will be sent to the Secretary of State for Transport for �14 million will come out of Network Rail funding. The key question then is, what do they do to react to that? If the consequence is that -

Q512 Chairman: You are starting all sorts of interesting hares running here, Mr Bolt.

Mr Bolt: If the consequence is that Network Rail deals with the problems, it has got a better chance of delivering -

Chairman: Yes, I think we have understood what the effect of responding to the fine will be, but we have not quite got there yet. We will come to you, Mr Emery.

Q513 Graham Stringer: You are putting forward a view that this model can work. Can you point us to a similar model anywhere in the public sector where a body with members who have very little powers and no shareholders works? Is there a model where you can say, "This has worked effectively," a monopoly provider on this model that works?

Mr Bolt: I think it is fair to say there is no company that looks quite like Network Rail, but there are other examples, including publicly owned regulated companies like the Post Office where similar action by regulators has been taken to enforce improvement and delivery.

Chairman: The Post Office might not be a very good example just at the moment, Mr Bolt, since they are closing down so many we shall almost finish up with nothing!

Q514 Chairman: One final question on this. There is no direct comparator. Is it within your remit to recommend to Government a different structural arrangement or a different governance of Network Rail?

Mr Bolt: Clearly the governance of Network Rail is a matter for its members as owners of the company, subject to the restrictions, which include the Secretary of State having the final say on some of the changes to the Memorandum and Articles of the company.

Q515 Graham Stringer: I am sure you are trying very hard to answer my question, but you did not. Is it within your remit to make a recommendation on the governance and the structure?

Mr Bolt: If we believed that the only way of Network Rail addressing the weaknesses we have identified was to look at the structure, we would do that, but as I said in answer to a previous question, we believe the company as it is currently structured is capable of delivering the improvements we are looking for.

Q516 Mrs Ellman: How many times has Network Rail breached its conditions?

Mr Emery: There is a number of instances where we have found it in breach of its conditions. Six or seven, I think it is, I am not quite certain of the total list of them. Basically, on timetabling, on information, we had it on Portsmouth and we have had it again here on two counts on this one. So it has breached it, but that has, of course, got to be set in the context that the overall performance of the company is marginally ahead of the expectations the Regulator set it.

Q517 Mrs Ellman: Yes, but I do not think all those passengers inconvenienced over the New Year were interested in that. We are looking at the problems here. What would you say Network Rail has learnt from the overrunning in Portsmouth last year?

Mr Emery: It has certainly addressed a number of issues around its approach to signalling and signalling contractors, and put in place a whole series of steps. My colleague, Michael Lee, is in a position to go into some detail on these matters, having looked at it, as to what they did in the light of Portsmouth on the signalling side of their business. We did not take it wider.

Q518 Mrs Ellman: Were any of the problems which arose over Christmas and the New Year related to what went wrong at Portsmouth?

Mr Emery: Yes.

Q519 Mrs Ellman: So it had not learnt them?

Mr Emery: It had not learnt them as fully as expected. That is one of the reasons why we took this as quite a serious breach and took the action we have taken, because the signals were there - the expectation from the Regulator and the expectation we had, that Network Rail told us they were taking this in a wider context and a narrow context, and it did not do that and that aggravated the position, in our terms.

Q520 Mrs Ellman: In the written evidence you have given to this Committee, paragraph 13, you say that you endeavour to align incentives so that the industry works in partnership to deliver. That has failed significantly on seven occasions in relation to Network Rail, and we are looking at specifically what happened over the Christmas period. So was this partly your failing as well? Was it that you did not exercise your powers, or is it that you need new powers?

Mr Bolt: I do not think it is a matter of powers. There are clearly issues around the incentive structure on Network Rail which do not align incentives in the sense of delivering performance, giving the same incentives to Network Rail to respond to growth in demand, and those are some of the issues we are addressing as part of the current periodic review and we will be publishing our draft decisions in June, which will include changes to the charging and incentive structure to improve that alignment of incentives.

Q521 Mrs Ellman: So you are saying that you do not need any additional powers to do your job more effectively?

Mr Bolt: I do not believe this is a matter of powers. Of course, all of us learn from experience and unfortunately it is when things go wrong that you get often the best learning.

Q522 Mrs Ellman: So what would you say you have learnt from these seven major errors, and particularly the error that happened over the New Year?

Mr Bolt: I think on these issues the lessons as set out in this report are that the failings which we identified at Portsmouth, where we took the initiative to look at that, not as a result of complaints by train operators, is that the issues go broader than Network Rail itself had thought, as Michael Lee could describe, if that would be helpful. The different examples over the New Year showed a wide range of failings. They were different in the different cases and that actually goes to the heart of the way Network Rail plans and manages its capital investment programme.

Q523 Mrs Ellman: In looking at the way Network Rail is addressing completing the West Coast Main Line organisation, are you satisfied with the plans they have put forward to date?

Mr Bolt: I will ask Michael Lee to answer that, because he has been talking to Network Rail and the train operators.

Q524 Chairman: Mr Lee, could you answer that very briefly in perhaps two minutes on the differences and then go on to the West Coast Main Line?

Mr Lee: Certainly, Chairman. At Portsmouth what we saw were specific weaknesses in the risk assessment of a job that was a signalling job, a job where if they ran into technical difficulties halfway through it was likely to be a long time before those difficulties could be properly resolved, which indeed is what we saw and services ran at a reduced level for months. We saw problems with reliance on a new supplier in the UK signalling market. Network Rail, we believe, recognised the specific problems which had caused the trouble at Portsmouth and responded to those, but it interpreted this in a relatively narrow sense. It changed its contracting strategy in the signalling supply market in particular, with the supplier in particular, who it still wants to work with but will work with in a different way, and it made sure that it was conducting better risk assessments for that particular sort of project. What we say in the New Year was on a project which was essentially about re-wiring, overhead electrification, no signalling content at Liverpool Street, the risk assessment again there was poor. The dependence upon the suppliers was too great and Network Rail, therefore, was unable to identify when things began going wrong and put them right quickly and communicate with its customers. In Glasgow, we found a project which was primarily a track project but which had a key signalling element. The risk assessment of that was poor because the project had not been identified as primarily a signalling project. So what we were seeing was that quite generic weaknesses had been dealt with by Network Rail in the response to Portsmouth as if they were very specific, and that is one of the reasons why this time around -

Q525 Chairman: So have you got the message, Mr Lee? Now come to the West Coast Main Line.

Mr Lee: On the West Coast Main Line, Network Rail itself has acknowledged that it does not believe the programme as it was in place at the turn of this year is any longer sufficiently robust to work to and to deliver the improvements by December.

Q526 Chairman: I am glad they caught up with that, because one or two of us got that view some time ago. Never mind, do carry on.

Mr Lee: So they have now been looking very hard at a number of alternatives to that programme but they have not yet announced to anybody or come to us and said which is their preferred way forward to make sure that they can go ahead on the basis that that is robust and that it will deliver.

Q527 Chairman: How many weeks have we got until Easter?

Mr Lee: The work at Easter they have taken specific measures on. They have de-scoped their plans for Easter. They have increased the time -

Q528 Chairman: De-scoped. Do you mean they have cut various things out of it?

Mr Lee: They have cut various things out of it to reduce the risk of an overrun at Easter. We have held a review with Network Rail and with all of the operators who are affected by the West Coast works over Easter and they have all told us, as has our reporter, that to the best of anyone's knowledge at the moment the plans for work at Easter look robust. We do know there is more work to be done and Network Rail and the operators are meeting today to do this, to make sure there are proper arrangements in place for handling passengers who are going to be affected by the engineering over Easter. But all the steps that could be taken at this stage are being taken to make sure there is no repetition over Easter of the New Year experience.

Q529 Mrs Ellman: In the report you have produced about what happened you identify a shortage of certain areas of skilled workers and also major management problems. What is the balance of those two things? Is there a genuine shortage of the overhead line workers and other sectors?

Mr Lee: I think it is very clear that the number of overhead line workers available is a constraint on the amount of this work which Network Rail can do simultaneously across the network. They identified this before Christmas. They de-scoped again. They took elements of work out of their Christmas programme because they could see there were not going to be enough electrical engineers to do it all. What then caught them up was that despite having had the names of all the people who were supposed to turn up at the key sites, fewer than 100% turned up and the ones who did turn up worked for a lot less than the hours they had been expected to work for, and that caught them right out. It would have caught, I think, anybody out without the benefit of 20:20 hindsight.

Q530 Chairman: I am sorry, that is not quite right, is it? Your report does not say that, actually. It says that early on it asked for lists of names and asked for the numbers of their passes, but it did not do anything else after that. It did not check the contractors. The contractors did not have enough supervisors on site. So it was not quite as simple as that, was it?

Mr Lee: That is absolutely right. They took more steps before Christmas -

Q531 Chairman: I have read it. It is a very good report, Mr Lee! I approve of it. I have read it. You will find me quoting it!

Mr Lee: Thank you. They took more steps before Christmas than they had taken before. In the light of what happened at Christmas, they are going further again.

Chairman: I do not find that a very good comparison, really.

Mrs Ellman: It has also been suggested that management was deficient in many ways, including a failure to report significant problems in time for remedial action to be undertaken. What is happening to deal with that?

Q532 Chairman: Mr Lee, do you have the solution?

Mr Lee: I am quite sure that Network Rail's management presence will be very much heavier and very much more on top of what is happening at Easter. They are fully aware of the consequences if there were to be a repeat.

Q533 Chairman: That is good, because the chairman was not available for four days at all over Christmas, so anything is an advance on that, is it not?

Mr Lee: What we have asked them to do as part of the order we had made, the enforcement order, is to pick this issue up amongst all of the others we have identified - the risk assessment, the communication to operators - and to come up with a really good plan to make sure this is dealt with consistently across the company on all of their engineering projects. We are not pretending that is something which can be put right overnight, but we want the plan by the end of May.

Q534 Mrs Ellman: You said they have a lot of managers, but it is not just to do with numbers, is it? Is it not competence as well?

Mr Lee: Competence is necessary to do that work. Enough managers is necessary to know what is going on and to act in response to it when it happens.

Mr Bolt: If I could briefly just add to this? I think it is clear that Network Rail has taken additional steps to minimise the chances of any problems at Easter. What we are saying in this report is that as well as dealing with the failings from last time, it needs to do more to look ahead and anticipate through better risk assessment things which might go wrong in future, and our concern is that their response should be a broad one rather than simply dealing with particular problems, which was the experience at Portsmouth, which they viewed too narrowly. We do not want them to view the failings over the New Year simply as a problem of insufficient overhead line engineers.

Q535 Mrs Ellman: What about the issue of informing the train operators when there is going to be a problem? There was a great reluctance to do that, was there not, again identified in your report?

Mr Bolt: Yes, and that is why we have highlighted that issue. I think there was a problem. Even within Network Rail senior management were unaware of the scale of the problem early enough. So it is the reporting from people on the site to the senior management, and then the communication onwards to train operators. That is, as Michael has described, one of the areas where we think Network Rail has put better steps in place for Easter. We need to make sure that is carried across all of its projects.

Q536 Mr Martlew: On the modernisation of the West Coast Main Line and looking towards the future, the "de-scoping" (which I think is the term you used) means they are doing less work, does it not? Now, we have a timetable - and we have all suffered trying to get it right, or not getting it right - which is due to come in at the end of this year. If you keep on de-scoping, that means you are going to have more massive disruption of the West Coast Main Line between now and December, or somebody has got to take a decision that the programme will not be completed by December of this year and give us another date. What is your view on whether this can be completed by then?

Mr Emery: We have asked Network Rail to come forward with a coherent plan by the end of this month. Our discussions with Network Rail and discussions with Mr Coucher indicate that he is well on the way towards coming forward with a plan which provides for additional time during already booked weekend possessions, some three or four days extra work, and they are working with the train operators and the freight operators to find a way in which they can get to December 2008 in a robust way. It is quite important. The train operators want it, Network Rail wants it, the Department wants it. There is a huge stream of passenger benefits which come out of getting the new timetable running.

Q537 Mr Martlew: If that happens, there is going to be more disruption this year, and if you accept that plan and it does not work will you accept some of the responsibility for it?

Mr Emery: Certainly. In a sense we are, as a regulator, looking at these things and if a plan comes to us and we broadly endorse that plan and accept that plan as the plan and have no change to the regulatory output, then of course as part and parcel of the whole railway network our reputation will suffer. But the responsibility, of course, on delivery of this rests with the infrastructure manager, Network Rail, to do the job properly.

Q538 Mr Martlew: Just finally, would it not be better to give some leeway on this one and postpone that timetable for perhaps six months?

Mr Emery: I think you just have to look at the implications of that. Mr Coucher tells me that if that happens, that will have a knock-on effect on a whole series of work elsewhere and it will have a knock-on effect on the loss of revenues elsewhere, and those things. So this is not a simple delay, it has an effect, and I think that is the point. There is quite a lot of commitment across the whole rail industry to get the West Coast modernisation programme delivered in December.

Q539 Mr Clelland: I just want to come back to the point which was being made earlier about who feels the pain when a fine is imposed on Network Rail. Mr Bolt seemed to want to avoid the obvious answer and said something about how it might affect end-of-year bonuses. I assume he is talking about bonuses to directors and senior management. Who is it who decides whether bonuses will be paid and what the level of those bonuses will be? Does your office have any influence over that whatsoever?

Mr Bolt: The decisions are taken by Network Rail's remuneration committee. The management incentive plan which they operate has to meet certain criteria which are set out in the licence, including reflecting regulatory targets. So that has got to be a key part of what determines bonuses. We do not get involved in taking the decisions, but we do draw the attention of the remuneration committee, we write to the chairman of the remuneration committee every year and meet him to set out our view of Network Rail's performance, and clearly where there have been licence breaches - and we have said there has been a serious licence breach on this occasion - that is a factor we will make very clear to the remuneration committee and we expect them to take account of that.

Q540 Mr Clelland: So we will all just have to wait with bated breath to see just how seriously Network Rail takes this problem?

Mr Bolt: We believe they will take it seriously. I am not going to predict what effect that will have on bonuses, but I would expect a serious breach of licence to have an impact on the bonuses paid to Network Rail's senior managers.

Q541 Clive Efford: Just to follow on, on that, because I think anybody listening to you would be astonished that there is an assumption that there will be bonuses. Can you explain just how this process works and, if you know the criteria by which their bonuses are set, whether they have already breached it so far that you can be confident there will not be any, because I do not think the public is going to accept that?

Mr Bolt: I think what we have to recognise is that Network Rail is outperforming some of the regulatory targets. The target for delays on the railway, which was set at the last charges review in 2003, Network Rail is outperforming that, and within the management incentive plan that would point towards a certain level of bonus. Where there has been a serious licence breach, we would expect that to result in a reduction, a significant reduction, in the bonuses which would otherwise be payable, but the precise decision is for the remuneration committee.

Q542 Mr Clelland: But how do we know what the bonuses were in the first place to know whether they have been considerably reduced?

Mr Bolt: I think there are questions about the transparency of that process, and that may be one of the issues which we want to pursue as part of the review of the licence conditions relating to governance which I referred to earlier.

Chairman: It may very well be one of the things we shall encourage you to review, Mr Bolt!

Q543 Clive Efford: Could I just clarify something, Mr Lee? The Easter programme of work: you said that the failure of engineers to turn up would have hit anyone who was in that position, yet you have said that you think the management is in a position now which is robust enough to actually make sure the same problems are not repeated at Easter. But if it is true, as you say, that no one could have withstood the problems which occurred, how can you make that statement? Have you spoken to the engineers who did not turn up?

Mr Lee: No, I think the point I was making was that in the run-up to Christmas Network Rail was taking steps it had not taken previously in terms of getting names for overhead electrification engineers, and I think it could reasonably have expected that to be sufficient to ensure the resources would turn up. In the light of Christmas, they know it is not sufficient, so at Easter they are going further. They are getting PTS sentinel card numbers, they are getting telephone contact numbers, and they will be seeking an altogether greater degree of assurance that they have got more than the name.

Q544 Chairman: We will come on to side management. We may have to leave you quite soon. Just before we continue, Mr Emery, you talked about the plan being produced by the end of this month. The proposed order says Network Rail has to produce a plan by 31 May 2008.

Mr Emery: There are two plans, two requirements. There is a requirement for Network Rail to come forward with a robust programme to complete the West Coast modernisation project by the end of this month and there is a plan which will require Network Rail by the end of May to come forward with a way in which it is going to address all the points and weaknesses and shortcomings we have identified, and then implement that plan by December.

Q545 Chairman: So the first one is the restricted one, the second one is the basis of your report?

Mr Emery: Yes.

Q546 Mr Hollobone: On the wider plan, the Office of Rail Regulation is going to monitor Network Rail's performance against that wider plan and you are going to ask your reporter, Halcrow, to undertake a fuller audit of Network Rail's progress by this time next year. What are the key milestones you would expect Network Rail to have achieved when Halcrow goes into audit progress in a year's time?

Mr Bolt: Clearly, the detail in the plan is for Network Rail to propose in the first place. What we are not going to do is simply to receive a plan in May, wait until December and then see whether everything is working. So I would expect our involvement to be a more continuous one, taking a view in May as to whether the actions look reasonable and are likely to address the weaknesses we have identified, to see some staged implementation of that, and then the audit after December is on whether not only have they done what they said they would do but have those changes had the effect they expected them to have.

Q547 Mr Hollobone: So if the plan, when submitted at the end of May, is not satisfactory what would you do?

Mr Bolt: Then they will not have complied with the terms of the enforcement order, and without predicting exactly what action we would take that is a very serious failing for a company, not to meet the terms of the enforcement order.

Q548 Mr Hollobone: Okay. Let us say they knocked together a reasonable plan at the end of May, you are happy with it and you then begin to monitor progress. What action will you then take if Network Rail cannot demonstrate sufficient improvement against that plan by this time next year?

Mr Emery: There is the step, of course, that we require Network Rail to report completion of this plan at the end of the year, so there is a requirement for it to have made its assessment of compliance, that it has delivered the plan. Clearly, if it has not addressed these matters and our audit shows there are weaknesses, then we would take that as a serious failure by Network Rail and address the matter if that happens. But we do not anticipate that that will happen. Network Rail has a very good reputation, when it is set a tight target and expectation, of delivering to it.

Q549 Mr Hollobone: If in the meantime there are more serious overruns, what will you do?

Mr Bolt: We have said in announcing the penalty that each of the failings was capable of being considered as a licence breach individually. We actually looked at them together and said that there is a continuing breach. If there is another failing, we will have to look at that, as to whether individually it reflects a licence breach or whether it is simply that some of the weaknesses we have identified are still being put right. I would not want to predict what action we would take, but clearly we will be looking for an assurance that the problems this report identifies are being taken seriously, that the plans for individual programmes of work are being assessed much more thoroughly on the lines of the Easter programme which Michael Lee has described and that the chances of that sort of overrun are reduced. Clearly, Network Rail has recognised that it does not want to be in that position and so, as we have said before, I think their senior management are seised of the need to address the weaknesses.

Q550 Mr Hollobone: So you would be prepared to notify a further licence breach during the plan implementation period if you felt the overrun was sufficiently severe?

Mr Bolt: That is a possibility, yes.

Q551 Mr Hollobone: You have acknowledged in the report that the current rate of investment in rail infrastructure, as we all know, is unprecedented, but combining the successful delivery of such large volumes of engineering across the network whilst retaining continuity of service for rail users is clearly a challenge for Network Rail, one which it clearly has not met. What steps do you expect Network Rail to take to better balance the need to ensure continuity of service, whilst increasing the volume of project work which needs to be completed?

Mr Bolt: That is clearly one of the key issues for us looking at the next five year programme, the deliverability of that programme of works - it picks up some of the points earlier on the West Coast - in a way which allows trains to operate, albeit sometimes at a reduced frequency, and the detail -

Mr Emery: One of the changes we are proposing in the requirements for Network Rail for the next control period (which starts in 2009 and which is what we are working on through the rest of this year) is for there to be a network availability measure, which in simple terms is how long the railway is open for business. Having addressed, say, the issue about possessions and their overruns and got that right, then the question is, how many possessions have you got and how much is the railway going to be open progressively more and more? So that is going to be the regulatory mechanism, at a national level and at a local level, as to what Network Rail should work to so that it does not take an ever great amount of possessions and so that it does the work to distraction or not allowing trains to run. That is the key mechanism we are going to be using as a metric to drive Network Rail to keep the railway open progressively more through the period and deliver the work within the time it has available for its possessions.

Q552 Mr Hollobone: My last question is, have you written to the chairman of the remuneration committee enclosing your report and have you said to him what you have just told this Committee, that you would expect future bonus payments to be affected by the findings you have discovered?

Mr Bolt: The general points we have made to the chairman of the remuneration committee before. We will be writing at the end of the year with a summary of our view of performance over the whole of the year, but clearly including all of the findings in this report.

Q553 Mr Clelland: Gentlemen, your office welcomed the longer term strategy for the railways which was contained in the White Paper, but do you think this White Paper is visionary enough? It takes a long time to plan and build rail infrastructure. Does the White Paper provide the kind of long-term vision which will be necessary to develop a railway fit for the middle of the twenty-first century?

Mr Bolt: The White Paper, for example, talks about a possible doubling of the number of passengers over the next 30 years and says "but the growth may be more". I think what we do not have at the moment is a clear view of how that sort of increase in passenger numbers could most effectively be handled. What we are expecting - and this is a point we reflected in our evidence and which we have discussed with both Network Rail and the chief executives of the franchise-owning groups - is how the industry can look at those challenges, and that is Network Rail with operators representing the interests of passengers with the supply industry running stock companies and others, to come up with its own plan which can be delivered so that for the next five year period the next time the Government produces a high level output specification it is doing that on the basis of a proposal from the industry as to what is achievable, and then it can take the view about whether it wants to spend money on railways to deliver that capacity or some other mode. That, I think, is the right role of Government. It is not for Government to say what should be done in detail. The industry needs to take more responsibility. There is not enough detail there at the moment. The industry is starting to work on issues like infill electrification and it is entirely right that they should take the lead and put proposals to Government of that sort.

Q554 Mr Clelland: But should ministers, who are responsible for drawing up these White Papers, not be more proactive in shaping developments rather than just reacting to them?

Mr Bolt: It is the role of ministers of government to set out the strategy. It is not, in our view, the role of a government department to say what investment should be carried out to deliver that sort of strategy. That is what the industry needs to come together and propose, and we have not yet had an industry plan for the longer term. Network Rail's plan for the next five years is, for the first time, more of an industry plan. We required them to work closely with train operators to validate the proposals there, so it is not just an engineering plan. We need to extend that looking at the longer term.

Q555 Mr Clelland: Is Network Rail best placed to be innovative and come up with exciting new ideas, or are they just managing what they have got?

Mr Bolt: What is clearly important is, as you say, that there are new ideas which are looked at as part of that longer term planning. We have certainly taken a review as part of this price-setting round on some of the things which are done elsewhere in the world which allow railways to operate more efficiently which Network Rail could adopt. Network Rail itself, working with its train operator partners, with the supply industry, are best placed to -

Q556 Chairman: Mr Bolt, I am going to stop you there, because I am going to ask some quick questions and then, with any luck, we will allow you to escape. Is it ever going to be acceptable for Network Rail to rely on its suppliers and contractors to self-certify?

Mr Bolt: In the context we have identified in this report, we are saying self-certification cannot be relied on to the extent Network Rail has.

Q557 Chairman: So you are recommending to them very specifically that they should not proceed along those lines?

Mr Bolt: We will expect that to be one of the issues they address in the plan at the end of May.

Q558 Chairman: Are Network Rail's own on-site managers sufficiently well-trained and experienced to handle projects of this magnitude?

Mr Bolt: That, again, is one of the issues we will expect Network Rail to come back to us on. The practice has clearly not been what train operators and passengers need.

Q559 Chairman: You seem to be suggesting that they should be looking at a kind of consensual model rather like that which was used for building Terminal 5, but is there not one major difference? If Terminal 5 had got behind, it would not actually have stopped British Airways running flights, whereas if in fact Network Rail fails to get itself organised then they do actually stop the railway system working.

Mr Bolt: Absolutely, and that is why Network Rail needs the targets for network availability which Bill Emery has described and why it needs to be clear that it has got the procedures which will enable it to deliver that.

Q560 Chairman: But when things are going wrong, you have said yourself they do not want to tell one another. They certainly do not want to tell their bosses. Did this affect Bechtel's project management staff as well as Network Rail's own project managers?

Mr Bolt: Clearly Network Rail's senior management were not getting an early enough indication of the problems at Rugby and Liverpool Street, for example.

Q561 Chairman: Then would it not have been better for them to have someone senior on site at both of those sites?

Mr Bolt: I think that will be part of what we expect to see in the future.

Mr Emery: I think actually from my discussions with Iain Coucher just recently he is asking, particularly on the Easter shutdown, that the area general managers will be involved in this so that when they are working on projects and there is a wish to complete on time that does not overtake reality and that there is a reality check built in from a senior manager at Network Rail as to whether what they are hearing is realistic or whether they should start to plan for some contingencies. That is what he is saying.

Q562 Chairman: It is not just him, is it? There was the shambles of the train operating companies not telling the passengers. The information systems did not work. Nobody knew what information they were putting in. If they got correct information, they had nobody who could put it on the machines. It is not just Network Rail, is it? It is a series of quite massive failures, and this in an industry which is getting really massive investment. So are you convinced that by the end of this month you are going to be given clear answers?

Mr Bolt: By the end of May we are expecting clear answers on how the weaknesses here will be addressed. We will then take a view on whether that is adequate to deal with all the issues, including obviously the ones you have identified, to make sure that passengers get trains when they expect them and if, unfortunately, things go wrong that they have timely information on what the alternatives are in a way which did not happen over the New Year.

Mr Emery: One of the things we have not picked up here is that we are requiring Network Rail to develop these plans in consultation with its train operating partners, so that they are aware of how it is going to work in terms of the information flows from the possession sites to the train operators, so that they do get it. We want them to actually work with them, so that it is a plan which both the train operators understand -

Q563 Chairman: But they have been working, presumably, together for some considerable time because Network Rail was not created yesterday, so why do you think they are going to behave any differently now?

Mr Bolt: We certainly expect that the action we have taken will focus Network Rail's mind on these issues and we will continue to have dialogue with train operators to get their views on whether the changes Network Rail is making are addressing those issues, primarily to make sure there are not overruns, but recognising that unfortunately things do go wrong unexpectedly on occasions and if that may happen that there are proper contingency plans and effective arrangements for communicating with passengers.

Q564 Chairman: All of this depends upon your ability to enforce the terms and conditions of the licence. Have you looked at clauses 68 and 69 of the Regulatory Enforcement and Sanctions Bill?

Mr Bolt: We have looked at the Regulatory Enforcement and Sanctions Bill, yes.

Q565 Chairman: How is it going to affect you?

Mr Bolt: We operate clearly within a whole set of statutory functions and duties. I think, from memory, those are the clauses about not imposing unnecessary burdens.

Q566 Chairman: That is exactly right, with a duty not to impose or maintain unnecessary burdens.

Mr Bolt: We already have a duty to impose the minimum restrictions on licence-holders consistent with them delivering their duties and we obviously look at whether the actions we take are proportionate to the delivery of, in this case, Network Rail's obligations. We do not think we are imposing any unnecessary restrictions, any unnecessary burdens, and indeed if we think the only way of getting Network Rail to deliver what train operators and passengers expect of it is to impose additional burdens we will do that because they will not be unnecessary.

Q567 Chairman: When you came before us last time you said that some questions remain about "the appropriate investment for the longer term" to allow for a doubling in passenger numbers of the next 30 years. What specific areas did you have in mind?

Mr Bolt: I have alluded to one of them already, the potential for additional electrification, but Bill is closer to the detail of the planning.

Mr Emery: Certainly, I think there is a limitation on where you can go to on the current network and removing all the pinch-points or addressing pinch-points tends to be the strategy for the next five years. Then you do start to look at when you get to line duplications or other lines and electrification. Those are the issues which need to be addressed by the industry, in our terms, as a lead up to decisions which will be expected from ministers in 2012/13.

Q568 Chairman: Do you think you have got five years to do that planning? Given the time it takes to develop extra capacity, do you think five years is enough to play around with the pinch-points while we run out of capacity in the future?

Mr Bolt: We have clearly got from ministers the high level specification of the outputs they are looking for over the next five years and we will make sure that Network Rail's plans deliver that.

Q569 Chairman: That is not very exciting really, is it? Many of us would think they were fairly minimal expectations.

Mr Bolt: Well, I think there are two additional points. One is, we are looking as part of the incentives on Network Rail to increase the incentive on them to work with train operators even within the next five years to accommodate a growth in traffic, but the key point is that because of the lead time in railway investment projects the industry needs to start now to plan for the next high level output specification. If that planning starts now, then we can hit the ground running in five years' time. If we wait five years, then I would certainly agree that we will find real problems.

Q570 Chairman: Mr Bolt, this is my final question because I want to allow you to escape. A lot of the things you highlight in your report are really fairly clear instances of an industry which is totally fragmented still, where people do not routinely work together. I cannot imagine a major engineering scheme where you run out of materials because people cannot deliver them on time although you have had months to order them, where you do not know how many people are actually going to turn up, where you do not have sufficient supervisors, where the supervisors who are there only seem to be working 50% of the time and where your contractors seem to be cheerfully inured to any criticism which may be directed to them. Can you really tell me that this is an industry which is working together, because it seems to me that what you are highlighting is an industry which has forgotten how to work as an integrated railway industry whose first commitment is to keep trains running and passengers carried? In all the discussion of this there has been no clear indication that the train operating companies, the information services or anyone involved in this even considered the ways in which they should really genuinely keep the railway running for the passengers. Everything else came first.

Mr Bolt: We are making it absolutely clear to Network Rail that it is there as part of the supply chain to deliver services to train operators to allow train operators to run trains. That is the key point. The failings we have identified in this report, with the one exception of information timely being provided to passengers, are wholly Network Rail failings -

Q571 Chairman: Well, the train operating companies do not come out covered in roses, do they?

Mr Bolt: They were unable over the New Year to tell passengers what trains were running because they were not being told by Network Rail when the network was -

Q572 Chairman: And when they got the information they did not know how to get it out?

Mr Bolt: As we took action a few years ago on the advanced provision of timetable information, there may be questions about how information is passed from Network Rail to train operators, and we will be encouraging them to look at those issues as well.

Chairman: There may indeed! Gentlemen, you have been, as always, very interesting and helpful. Doubtless we shall be discussing these things again, so do not go too far! Thank you very much for coming.

Memoranda submitted by Passenger Focus, London TravelWatch, Unite, and

The Guide Dogs for the Blind Association

Examination of Witnesses

Witnesses: Mr Colin Foxall, Chairman, Passenger Focus, Mr Brian Cooke, Chairman, London TravelWatch, Mr Roger Turner, General Secretary, Unite - The National Federation of Royal Mail and BT Pensioners, Ms Sue Sharp, Head of Public Policy and Campaign at The Guide Dogs for the Blind Association, gave evidence.

Q573 Chairman: Good afternoon to you, madam and gentlemen. I do apologise for keeping you waiting. You can understand we did have quite a few important questions to ask. Would you be kind enough to identify yourselves, from my left?

Ms Sharp: I am Sue Sharp, Head of Public Policy and Campaigns at Guide Dogs.

Mr Turner: I am Roger Turner, General Secretary of Unite, that is The National Federation of Royal Mail and BT Pensioners and not UNITE the union.

Mr Cooke: Good afternoon. I am Brian Cooke. I am the Chairman of London TravelWatch.

Mr Foxall: Colin Foxall, Chairman of Passenger Focus.

Q574 Chairman: Thank you. Did any of you have anything you wanted to say briefly? No? Then you will forgive us if we go to our first question. Is it sensible that the travelling public should bear more of the cost of rail investment?

Mr Turner: Ultimately they bear the cost anyway, whether it is through tax payable or through a private company through fares, but of course in the past the rail network that a lot of my members remember was private, then nationalisation, then Beeching, then private again, and I guess they do not know what is happening. But as far as going forward and fares are concerned, if there is a drive towards placing more emphasis on raising money through fares then that sort of goes away from the policy the Government has through other transport such as buses, certainly for the elderly section where free transport is available, and that is through the taxpayer. So I wonder where the joined-up thinking might be in terms of charging people, particularly pensioners, more to use one form of transport and yet providing another form of transport free.

Q575 Chairman: So do you think that the section of the market which is going to respond most to price sensitivity would be particularly the elderly?

Mr Turner: It is the elderly and clearly the younger end as well, who are, like the elderly, potentially on fixed income such as students and single mothers with children, so I guess it is across the board. It is really the people with low incomes or fixed incomes.

Q576 Chairman: Do you think, Mr Foxall, it is sensible that the travelling public should bear more of the costs of rail investment?

Mr Foxall: The problem here is that we have got a kind of decision, I think, which has sort of existed in a way with cross-governance, that transport users are going to pay more or less the cost of what they are using. Clearly, passengers will always prefer to have a lower fare and there are lots of comparisons made with more highly subsidised railways operating in Europe. It is really difficult for us, as a passenger organisation, to say, "Yes, there should be more subsidy," because if you say that then by implication that probably means there may be less money for our schools and less money for education. What I am concerned to see for passengers is that once you have a settled policy, settled in this place, about how much you spend on subsidising transport or supporting transport, those fares are clear and transparent and the consumers understand what they are getting and there is no chicanery or interesting things happening which makes passengers feel that somehow they are not getting value for money.

Q577 Chairman: Do you think there are specific bits which can reduce costs? What is the scope for reducing costs?

Mr Foxall: Reducing costs on the railways? Well, clearly everybody has looked very hard and commented on the costs of infrastructure provision and the costs of Network Rail. Those costs can come down significantly. At the end of the day, I suspect the train operators need the encouragement to earn a decent return, perhaps without having to pay quite so much to Government in the way of a high premium for running franchises in the system we have got. I deal with the system as we have got it now, not with the system as it might be, as you might choose another one.

Q578 Mr Hollobone: Are the Department for Transport's rail growth forecasts accurate?

Mr Foxall: Can I start on that? I think it is a tough question. Certainly in the stages of the discussions around the beginnings of the White Paper, when the Department's team was putting this together, we certainly asked them about those forecasts. They believe them to be so, but we have to bear in mind that the track record on forecasting has not been that great in the not very recent past. If we look at the SRA's forecasts in the last few years of the SRA's existence for certain franchises, they were certainly clearly away from what is actually being realised. I think there is considerable doubt about whether there will be enough capacity, and I think that is a fact the Department is aware of. It accepts it. It knows that it may not be the right figure.

Q579 Mr Hollobone: Is it true to say that the Government's method of demand forecasting fails to take into account areas of strong housing growth and industrial development?

Mr Foxall: I cannot comment on the detail of how they look at, for example, planning assessments and things of that kind.

Q580 Chairman: Has anybody got a view on that? Mr Turner?

Mr Turner: No, I do not.

Mr Cooke: Not really, Chairman, but I think there is some evidence that some of those things have not been taken into account. One other thing I would like to comment upon is that the White Paper talks about returning the balance of subsidy and fares to historical levels, but in fact there has been 80 years of a balance between that and it does not define which part of those 80 years is the historical level, and one could read that in any number of ways.

Q581 Mr Hollobone: Based on the demand forecast the Department has, the White Paper specifies that 1300 new carriages will be purchased to relieve congestion, predominantly on urban services. Will these 1300 new rail carriages promised in the High Level Output Statement be enough to relieve overcrowding?

Mr Cooke: We believe that in London and the South East - and since the White Paper and since our submission we have now seen a broad brush outline of where those additional vehicles might go, but in fact at best it will only cope with the increase in demand. The increase in demand at the moment is going at about 6% and these carriages are only due to come on-stream between now and 2014, and we do not believe they will relieve any overcrowding. At best, they will only cope with the increase in demand.

Q582 Mr Hollobone: Moving on to high-speed rail, the White Paper accepts the conclusions of the Eddington Transport Study that high-speed rail will represent poor value for money in the UK. To what extent was Eddington's assessment of the suitability of high-speed rail to the UK correct?

Mr Foxall: We certainly contributed to his review and gave him a certain amount of oral and written evidence. The principle of high-speed rail we support and believe indeed it is a good thing, but there are certain concerns we have about it. One is accessibility. What are you going to charge for it? In other words, what is it going to mean to the travelling public? Is it going to be a premium service? That may be taken care of, perhaps, by competition with the airlines in terms of the actual price which you have to pay. The other main concern we have is that it does not detract from taking care of, as it were, the day job, looking after the rail network as it stands at the present time, in other words its true additionality. We have a slight concern at Passenger Focus that that is a risk. So whilst we support the principle of high-speed rail, we want to be clear that it is not going to impinge adversely on expenditure you might make elsewhere. So you could look at it in the sense that we are saying if Eddington is right, then you do need to take care, but it is very difficult for us to make a judgment about whether Eddington is right or not, frankly.

Q583 Mr Hollobone: What is your view, if I can just try and pin you down a bit more? Would rail passengers like to see investment in high-speed lines even if it was a premium service?

Mr Foxall: Research on it does not leap out and grab you by the throat and convince you that that is the case, I am afraid. I suspect you could research this subject and produce the kind of results you would like to produce, but the best results we have around do not show a great correlation between passengers' desire to travel a bit faster and being prepared to pay more. What they are primarily interested in are the things they have been interested in for quite some time, that is that trains should leave on time, arrive on time, that the journey should be uneventful, that they should get a seat and that the train should basically be clean. These are not rocket science issues.

Q584 Chairman: It sounds terribly revolutionary to me!

Mr Foxall: It is very revolutionary, and that is basically all that we want, subject to one other thing, and that is that they get value for money.

Chairman: That is also revolutionary!

Q585 Mrs Ellman: Do you have concerns about the future of Saver fares?

Mr Foxall: We have had discussions, which I think is fairly well known, with the Department about the future of Saver fares and we have said that we believe Saver is a very important fare and we think it should continue. We recognise that there are issues surrounding Saver fares and the current Saver regulation because it is not perfect, it is not universal and maybe you need to change things, they cannot be frozen in aspic. But what matters is that there should be a walk-up discount fare which allows people access to the railways at a reasonable price, and it is essential that whatever the Department has in mind for Saver fares takes that into account and ensures that happens. So yes, we have some concern. We do not have the concern that they are going to disappear tomorrow, but we are concerned to always make sure the Department understands that passengers value those fares highly and that they continue.

Q586 Mrs Ellman: Do you feel that you have sufficient access to Government to put your views?

Mr Foxall: Yes. I think it is one of the few things that I would not criticise the Government about. Passenger Focus has very good access, it is seen regularly by ministers and that is useful. It is an important thing that we are able to do, because we are able really to present the passenger view which otherwise, I suspect, might not get presented when the Department is looking at issues and making passenger specifications, for example, on franchising.

Q587 Chairman: Can I ask Mr Turner the same question.

Mr Turner: Yes, we have good access to Government. We have access through our stakeholder group, which has been established for over two years, where we have an MP, in fact your Chairman attended a meeting last year and the minister has come twice. It is a very informative group, and I think that is very valuable for passengers, users, disabled groups, old people and younger people to come together to speak with the train operating companies to inform the Government of the issues in a way in which you can get consensus, which I think is important so that we understand the issues.

Q588 Chairman: What about you, Ms Sharp? Are you satisfied that you can get the Government when you need to say something?

Ms Sharp: Yes. I think as individual disability organisations we have reasonable access, certainly from the other organisation's evidence which we submitted, our evidence from the joint committee, we have regular annual meetings with ministers, but of course through the Disabled Persons Transport Advisory Committee as well we are able to make sure that disability organisations' voices are heard regularly by ministers.

Mr Cooke: Yes, we are happy with the level of access we get to Government, both on our own and through working with Passenger Focus. Can I comment on one aspect of the Saver fares? I wholly agree with what Mr Foxall said, but what we also believe is necessary in a walk-up low price fare is that there is some regulation of precisely how many hours per day that is available for. One of the problems at the moment is that whilst train operators are obliged to have the Saver fare, they can tinker with the restrictions in such a way that it almost, in some cases, makes it next to useless. We believe there should be some control not only of the fare levels but indeed the rules which apply to that fare.

Q589 Mrs Ellman: Do you think your representations are listened to and acted upon?

Mr Cooke: I think our representations, certainly on these issues around fares, have been listened to by Government very well indeed, yes.

Q590 Mrs Ellman: What about issues to do with access to trains by elderly and disabled people? Have any of you raised concerns about that?

Mr Cooke: We certainly have raised concerns about that. We welcome some of the work which is being done on the access rule. We would like more work to be done. We have one concern, though, which does not yet seem to be seriously enough addressed. Whilst a lot of work is going on about access to stations, what is also equally important is a level access from platform to train, and with one or two exceptions that is still a huge obstacle sometimes for disabled people to get from the platform to the train and that needs seriously looking at.

Q591 Chairman: Is there anything you want to add to that, Mr Turner?

Mr Turner: Yes. We have a very interesting meeting with Gary Tordoff from Network Rail recently on the issues of level access and to me it was blindingly obvious. You have a platform and you have a train and you make them meet, but it is not that simple, is it, with the network -

Q592 Chairman: Do you talk to the train manufacturers?

Mr Turner: ATOC were there, but not the train manufacturers, no. We have not involved them.

Q593 Chairman: Because ATOC nowadays actually do not commission the trains, they do not pay for the trains, in fact they have a very tangential relationship with them altogether.

Mr Turner: That is a good point. On that, we shall make sure that we do, but access for our members is a big issue, access starting from the home.

Q594 Chairman: The same thing for you, Ms Sharp? Tell us about your guide dogs.

Ms Sharp: Well, the people we are more concerned about, visually impaired people. I think in terms of access we have been disappointed at the lack of progress with implementing the Disability Discrimination Act 2005 provisions, which would have seen much greater enforcement. One of the big problems we have in representing blind and partially sighted people is that we have requirements for there to be passenger information systems on trains which are both audible and visual, and yet very often blind and partially sighted people are sitting on trains and the information is not provided. Now, if the train had doors which were not operable, it would be taken out of service. Train operating companies do not put as much emphasis on the fact that the passenger information is not operating, and yet that has huge implications for blind and partially sighted people both in terms of their confidence in actually travelling, knowing when to get off, and then when they are at the station knowing that they are at the right station. Getting off at the wrong station can have serious consequences. So we wanted to see more enforcement and we are very pleased that in the last few days the Government has begun two consultations, one on the Rail Vehicle Accessibility Interoperable Rail System Regulations, which is another mouthful from Government, and another one which I have not yet seen, which is the Code of Practice consultation on stations. On that particular one, again a slight concern: in the White Paper it suggests that perhaps the Code of Practice has been stifling innovation and that it is seen as the absolute standard rather than the minimum. I have to say that that has not been our experience, that train operating companies have interpreted it as such. I think that needs some further investigation and we will certainly be looking at the consultation and the Code of Practice to ensure that where there are standards which are absolutely essential in terms of dimensions, et cetera, that those are retained. They are not meant to stifle innovation; they are meant to make sure that what we end up with is fit for purpose and accessible to disabled people.

Q595 Mrs Ellman: There is a programme of station refurbishments. Are you consulted on what criteria are to be used in selecting those stations, for example, the issue of accessibility?

Mr Foxall: Yes, we are consulted on the stations, we are consulted on the priority, we are consulted on how the money, such as it is, should be spent. We are members of the Department Advisory Committee. I have two board members who are nominated to look after, as it were, a bunch of those issues. We also carry out mystery shopping exercises in relation to disability and access issues in general and we have completed one this year on the assisted persons scheme to see how that worked and we have submitted that back to the train operators and to Government. So we are consulted and we input. What we rely on is working with the organisations which represent other groups and drawing on them, because we are trying to represent a whole bundle of people and what we need to do is to work with the groups who have the expertise, and that is what we try to do.

Q596 Mrs Ellman: The Government's plan says it adopts a pragmatic approach to implementing the Disability Discrimination Act in relation to accessibility issues. How long would it take to achieve accessibility everywhere at the present rate?

Mr Foxall: I could not venture a guess. Clearly, it is going to take a long time to refurbish every station if you look at the numbers of stations involved. If you applied the modular station plan to every station, ignoring just for the moment access issues alone, you would be talking about something like 25 years to actually run through the whole thing. How long it would take you to meet the access criteria, I do not have a view on that.

Mrs Ellman: What about the training of staff in relation to elderly and disabled people?

Q597 Chairman: Let us ask Mr Turner and Ms Sharp. Mr Turner, what about the training of staff?

Mr Turner: From the experience of my members, it is patchy. I think it is certainly good in some areas, but there are always the horror stories that members come up with, "We were left alone on a platform with nowhere to go, no staff and no help," and when they did ask for help they didn't know. Again, we hear of the bad bits, but obviously there are quite a lot of good bits because a lot of people do travel. But training, particularly in the areas of help with ticketing and the pricing structure - what is the best fare, and if I want to go through various different train operating company areas what are the problems of interchange and are there different numbers - I think people in different areas need to know the full route to be able to help somebody starting in a particular area to end up where they are getting to and training will be an ongoing for issue, I think. It is something we should never forget.

Ms Sharp: I think the whole issue of training and staffing is at the centre of accessibility for disabled and elderly people. It was interesting with the Passenger Focus research that one of the findings was that the needs of visually impaired people were particularly under-represented in terms of understanding compared with those with physical disabilities, and I think that is probably true for a lot of people who have what we would term as "invisible disabilities" which are not obvious by dint of being in a wheelchair or having a walking stick. So getting that understanding is absolutely critical and arguably, too, if you have got good customer service for disabled people then you are going to have good customer service for all other passengers as well, so there is a win, win here. In terms of training, we have been particularly pleased to work with ATOC recently on their new video programme for the industry on disability awareness. Things have improved over the recent years, but there is still a long way to go and it is patchy. We need to get consistency, because it is that consistency that will breed confidence, which will make people travel.

Q598 Chairman: Has anybody ever done an audit of all the stations which do not have suitable lifts, for example? Some of the overground railway lifts are pretty Victorian, but they do still work and they are quite large. Has anybody ever done a proper audit of the availability of things like lifts?

Mr Cooke: I believe Network Rail has done that. Ultimately, Network Rail own all those stations, although they may be leased to train operators, and Network Rail does have that information, yes.

Chairman: Thank you.

Q599 Mr Clelland: Do you think the White Paper provides the kind of long-term vision necessary to develop rail infrastructure which would be suitable for the middle of the twenty-first century?

Mr Cooke: I think the simple answer to that question is, no. The vision talks about it being a vision for 30 years, but in fact there is very little in the White Paper beyond the next control period or looking at the control period after that. We believe, and in fact in some of the responses we have recently made to other documents, particularly the South London Utilisation Strategy, is that there needs to be a much more longer term view because some of the problems, particularly over longer trains and where those trains can stop, can only be undertaken if you did have a much longer term view about it. That may apply for high speed rail as well.

Q600 Mr Clelland: If you were given the responsibility for developing the 30 year plan for the railways, tell us what would be in it.

Mr Cooke: I think we are looking at capacity on the higher end of the predictions people are making. I say that on the basis of history because, as Mr Foxall said earlier, every time it has been predicted in the past it has been way out. I am looking at it probably over a 30 or 50 year timeframe for those predictions and looking at capacity in that way, fully accepting that capacity does not necessarily equate to seats, because certainly in London we actually understand that it is an unrealistic ambition for everybody to have a seat on the quarter past eight train, but there is a difference between having a seat and being crammed in like sardines.

Mr Foxall: Can I just join in the comment on that, because I think when you are looking at the White Paper clearly it is light on the kind of strategy you are talking about. However, when we were talking to the Department and making representations to them, we did not want them to produce a paper which was all strategy and no action. A 30 year strategy is great, but 30 years to wait for a train is a long time and you cannot ride to work on a strategy. So the strategy is important given the time the railway takes and given the slowness of the railway actually to react to some of the issues the other witnesses earlier today have been remarking on. We wanted to press on them the need to get on and do things. There are passengers waiting on platforms who need to get onto trains. Trains need to run on time now, not in 20 years' time, and we need, therefore, to see that action taken. So I am in some senses less disappointed than some people, because frankly if I go and talk to passengers on platforms they do not really want to discuss what it is going to be like in 30 years' time. They want to know that they can actually complete their journey today, not in 30 years. It is not a reason for not planning, but I want to put that in context. It is important we keep the railway focused on passengers' needs now as well as on doing these great and important things which no doubt deserve doing on a longer timescale.

Mr Turner: I agree with Mr Foxall. It is very brave of any government to forecast for the next 30 years, because we do not know what is going to happen to the economy in the next five years, and a lot of it will be driven by the economic circumstances. We have seen it with pensions. But I think what is important is to put a platform in and an understanding of the needs so that you can move that platform forward as time goes on, but everybody knows the direction in which you are going.

Q601 Chairman: Do you have a view on which stations ought to be upgraded? How do we select which ought to be upgraded?

Mr Turner: That is a very difficult one. Because the money was relatively restricted this time, because for the number of stations you need a lot of money and the Government decided on footfall, if you like. I think that is important because there is a lot of passengers going through, but do we have an understanding of the number of people who currently cannot even start a rail journey? Because they are just as important and should be looked at as well as success criteria.

Q602 Chairman: So how do you think the selection criteria should work?

Mr Turner: I think the selection criteria should be looking at the base analysis, which is probably there, on the number of disabled people, the number of elderly people or young mothers and children who want to travel, to see those who either cannot actually get to a railway station or get access to the rail network and target that you want to see in 30 years all those people having access.

Q603 Chairman: The difficulty about that, Mr Turner, of course - and Ms Sharp made the point - if you improve stations and station access, it is not just the elderly and the young who benefit, it is everybody. It is easier to get in and out, it is more comfortable and every benefits.

Mr Turner: Indeed. Then it is a matter of capacity, which Mr Cooke was saying.

Q604 Chairman: Therefore, I am saying to you again, how do you select what the procedure should be?

Mr Turner: That is a good question, which I cannot answer.

Chairman: Good. There is a nice honest man! What about ticket machines? Can we ask you? I am sorry, Mr Efford.

Q605 Clive Efford: Can I just go back very briefly on the issue about accessibility and the design of carriages? The new carriages that we have on South Eastern seem to have gone backwards in terms of accessibility for people with mobility problems. There is no handle inside the door, the step has been made narrower and people who are partially sighted, who have mobility problems, find it very difficult to get up that step into those carriages. Are you consulted in any way by the manufacturers about the designs and are you comfortable about the way the design of these carriages is going?

Ms Sharp: We are reliant upon the application of, at the moment, the Rail Vehicle Accessibility Regulations and ultimately, from the middle of this year, the Interoperability Directive from Europe, which set the access standards. Clearly, as organisations representing disabled people, we were consulted on those standards around issues like the use of colour contrast on steps. It does go back to the point Mr Cooke made, though, in terms of the interface between train and platform and that cannot, we recognise, be regulated through the vehicle regulation but we do need to find a way of marrying the two things.

Chairman: Since we are a little short on time, could we move forwards rather than backwards about the railway.

Q606 Clive Efford: Are the repeated engineering overruns and the failure to learn lessons of Network Rail symptomatic of a deeper structural malaise within the organisation?

Mr Foxall: They are unacceptable to passengers and I think Network Rail have to understand that that is not a repeatable experience, what happened over Christmas. Disruption is one of the things passengers find the least satisfactory and importantly unplanned disruption is a great deal worse. It is very important that Network Rail get to grips with their problem. I think it is important that they focus on passengers. It is very easy to talk about service suppliers, but unless they have a vision that they are actually supporting passengers too, I think they will fail to deliver what it is they are supposed to deliver.

Q607 Chairman: Unless anybody has got a disagreement, I would rather move on. Is that a commonly held view?

Mr Cooke: In your questioning you talked about the implications of the fine on Network Rail. I think there is another implication of the fine. The �14 million will just go to the Treasury and we would like to see Network Rail be made to spend that �14 million on improvements for passengers that they would not otherwise spend so that they would get some benefit out of it, maybe better information systems, maybe more carriages, maybe all sorts of things, but rather than it actually going to the Treasury.

Q608 Chairman: We will certainly record that, Mr Cooke, but I did not know you were an optimist!

Mr Foxall: Chairman, if I could just add very briefly, I hope that is going to happen because indeed there is a meeting on Friday. Passenger Focus, along with London TravelWatch, have proposed that to the Regulator and there is a meeting on this Friday, as I understand it, with Network Rail.

Chairman: Well, pray for us all!

Q609 Clive Efford: Do you think there are any problems with the governance arrangements within Network Rail? Do you think they are adequate, well-functioning for an organisation of their size and importance? Do you have any comment on the fact that the information we have suggests that Network Rail's board is made up of about 100 or so people?

Mr Foxall: I think with the structure you have it is very difficult to convince yourself that the structure which exists is effective in the light of everything that has happened at maintaining the sort of governance you would look for. If we do not change the structure, it seems to me the role of non-executives becomes very important in exercising the kind of governance you would expect to see in another company. If you stay with that structure, they have the key role and they must be encouraged, urged to use that role critically inside the company.

Q610 Mr Martlew: Just on that point, if you look at what we had before we had the shareholders' group structure in Railtrack. You would not think that was a success, would you? Is Network Rail better than Railtrack?

Mr Foxall: In my personal opinion, I think Network Rail have achieved a great deal. There are considerable faults and there are considerable reservations, but you have to look at it on a balance sheet basis and I think they have achieved a great deal, and that must not be lost. But that does not mean that they cannot do much, much better. The issue we were talking about earlier must not be repeated.

Q611 Clive Efford: Moving on, how important are environmental concerns to the average rail passenger?

Mr Foxall: Research does not show it as being huge. It is an area where we have done some research and where we will do more research. I think you start off from the position, probably, that the average rail passenger assumes they have made the green choice in the first place by travelling by rail. I think there is an appetite for more obvious support of issues around rail usage in terms of green recycling of waste and things of that sort on trains. It is moving up the agenda, but it is not right at the top. The things right at the top are the things I talked about earlier.

Q612 Clive Efford: Is the White Paper's approach sufficiently proactive in encouraging a modal shift to the railways?

Mr Cooke: I do think believe anything in the White Paper really does encourage modal shift, frankly, particularly the implication that by moving the pricing structure more to the passenger rather than the taxpayer it actually discourages modal shift.

Q613 Chairman: That is the point which was made earlier. I just want to go on to one or two things which are very practical. There are more and more ticket machines, and that usually is accompanied by a reduction in staff. Has that got an implication for disabled and other passengers?

Ms Sharp: Absolutely. The first thing, of course, is the accessibility of the ticket machines themselves. Many of them are not accessible, particularly to blind and partially sighted people, who then rely on staff in the ticket hall either to sell them the ticket or to assist them in using the machine. So there is an equality issue there.

Q614 Chairman: Have you seen the Japanese system, because this Committee was quite impressed with the routine machines for purchasing at stations. They are very specifically designed, as far as we can see, to make it possible for people to use them easily, not only in terms of colour coding but in terms of four languages, which I think is a bit of a start.

Ms Sharp: One of the things we called on in our evidence was for the Government to look at that with the manufacturers so that we can get audible output and we can get more functionality in there. But there is also the concern, too, that staff will not be there. The White Paper suggests that staff will be deployed into other services and we know that in the past there has been a reluctance for staff from ticket offices to go down and help on platforms. Unless that problem has been resolved, we are not sure that is going to happen. There also then is a link to how, if you arrive at the ticket hall faced with a ticket machine and no one then to assist you down onto the platform, you summon that assistance and how you find assistance.

Q615 Chairman: You do talk about the assisted travel management system as being a failure?

Ms Sharp: Yes, I think that was picked up in some of the research from Passenger Focus. It certainly is feeling the inconsistency in the delivery of the service. People book it and then find that it is not delivered on the day. That does not just have implications for that particular journey, it has implications for people in terms of their confidence to go back and use that system again. It does strike us that there is scope there for perhaps some of the Access for All funding to have been used to strengthen that, because ultimately I think we would probably all agree that staffing the customer service side of the rail industry is absolutely vital to passenger satisfaction.

Mr Turner: I agree with that on staffing and the ticket machines I think is an interesting point because of technology. I have used ticket machines often, but if you have to go any further than "Do you use a railcard?" and then try and find it, you might just as well queue up if there is somebody there. So if you want a very complicated ticket, forget it, and I think that needs to be addressed. I think the overall issue of access on the internet and other things needs seriously looking at so as not to exclude the whole group of people who do not have access, for whatever reason, and of course a lot of my members are in that category and they would be excluded from the railways if internet was the main way of doing things.

Mr Foxall: I have already commented on the assisted passenger support scheme because this was our research. I am not sure I would use the word "failure". The point is, it is patchy, it is not consistent and it is unreliable in that sense, that is the important thing.

Q616 Chairman: So would you go along with this idea of the single phone number?

Mr Foxall: I think it is people, people turning up on time and doing, so when you make a reservation the person is actually there. I would very much agree with the other comment about "invisible disabilities". It is the training that is needed, and I think that is the key thing. So if you need to put funding in to do the training, that is good, but it seems to me that training ought to be kind of endemic, basic to looking after customers.

Q617 Chairman: Is it correct to say the rail industry is getting the basics right? If it was a re-nationalised industry would it be an improvement for the passengers?

Mr Foxall: What passengers are interested in is, does the train run on time? Some of the things we have been talking about today they are not really rivetingly interested in. They are interested in whether the train runs on time. Are they getting the basics right? Clearly, there is a significant improvement in reliability and has been, with some significant exceptions which we both know very well, and those are chaotic and things which have to be put right if confidence in the rail industry is going to return. That is where you are going to get, I think, the modal shift. It is having a better perception of reliability of the railway industry and confidence from the travelling public.

Q618 Chairman: Are people clear about who does what and where, and how they can get to somebody?

Mr Cooke: No, most passengers do not have a clue. A lot of passengers, our research shows, particularly in the London area, could not even name the train operator they travel with on a regular basis. They would also say they do not care or need to know that information, but certainly I do not believe there is as much awareness there.

Q619 Chairman: Are passengers sufficiently represented amongst Network Rail's members, for example?

Mr Cooke: I believe they are not. I think there are some major failings, going back to Mr Efford's question, in the structure of that 100 membership of Network Rail. I do not think they have enough teeth and I certainly do not believe real passengers are represented in the way they should be. For instance, we at London TravelWatch have never been asked to nominate a member of that organisation.

Chairman: Well, gentlemen and madam, you have been very helpful indeed and we have taken note, and we shall do our best to assist in any way we can. Thank you for coming.

Memoranda submitted by Campaign for Better Transport, Transport-Watch

and Sustrans

Examination of Witnesses

Witnesses: Mr Stephen Joseph, Executive Director, Campaign for Better Transport; Mr Paul Withrington, Director, and Mr Jim Russell, Transport-Watch; Mr Don Mathew, Policy Adviser, and Mr Martin Bright, Rail Liaison Officer, Sustrans, gave evidence.

Q620 Chairman: Good afternoon. I am sorry we are a little late starting, but I know you will forgive us. Can you identify yourselves for the record, please, gentlemen?

Mr Joseph: I am Stephen Joseph, Director of the Campaign for Better Transport.

Mr Withrington: I am Paul Withrington, Director of Transport-Watch.

Mr Russell: I am Jim Russell. I am a scientist. I have had a long career in most aspects of transport. I am the author of recent articles on the relative impact of transport modes on climate change and as a consequence of that have been asked to advise Transport-Watch.

Mr Mathew: Don Mathew, Policy Adviser to Sustrans.

Mr Bright: Martin Bright, Rail Liaison with Sustrans.

Q621 Chairman: Am I to take it that you are quite prepared to go to questions? Right. I am going to ask you before we start about your organisations. Who are your members, who do you represent (if anybody), how are you funded and what are your objectives, and briefly, please? Mr Joseph?

Mr Joseph: Campaign for Better Transport is a coalition of a wide range of something like 40 organisations and a number of local groups which works for sustainable transport policies and measures.

Q622 Chairman: How many members do you think you represent?

Mr Joseph: That total membership of the 40 affiliates runs into millions, but we do not claim to represent them all individually. We also have a small number of individual supporters.

Q623 Chairman: How are you funded?

Mr Joseph: We are funded by a number of those affiliates and a number of charitable trusts.

Q624 Chairman: What are your objectives?

Mr Joseph: Our objectives are to work for sustainable transport policies which give less emphasis to the private car, to road building and airport expansion, and more emphasis to public transport, walking and cycling.

Mr Withrington: We are funded by a private Jersey trust to a small measure.

Q625 Chairman: Jersey? That is very fashionable, yes!

Mr Withrington: We are not rich. We have a number of supporters, but I would not class them as members. Our objective is to make the best use of transport land in the interests of the community as a whole.

Q626 Chairman: It sounds a little bit exclusive. Approximately how many members who are not members do you have?

Mr Withrington: I would say around 50.

Q627 Chairman: 50, funded by a private fund in Jersey. Who do you think you represent?

Mr Withrington: Well, we would say we represent the community at large.

Q628 Chairman: With 50 people?

Mr Withrington: We make very little out of this personally. It is done for altruistic reasons. We believe we have got an extremely important message which should be heard.

Q629 Chairman: What exactly are your objectives?

Mr Withrington: To make the best use of transport land in the interests of the community as a whole.

Q630 Chairman: How do you, for example, convey that impression or that information if you only have 50 members?

Mr Withrington: I find that rather difficult to deal with.

Q631 Chairman: To whom do you convey this information?

Mr Russell: May I assist? I am an individual. I have been working with a number of academics for some time to deal with the misrepresentation, particularly of transport, the relative climate change impact of modes. I have found Transport-Watch's information, which they put on the internet, to be the most accurate information and to lack the misinformation and misuse, particularly of averages, which has characterised many other -

Q632 Chairman: You will understand, Mr Russell, it does not seem to be a very large organisation. Its funding seems to be a little bit interesting, and your objectives seem to be the best use of transport land. It is rather an exclusive bunch, is it not?

Mr Russell: Chairman, a great many very influential groups have been very exclusively dedicated -

Q633 Chairman: Oh, I am aware of that, Mr Russell, after many years in politics. You do not need to tell me how little groups can influence things, particularly if they are not very transparent. You are talking about statistics. Your figures comparing road and rail transport deaths, do they include trespassers on the railway?

Mr Russell: They do indeed in that particular case.

Q634 Chairman: And do they compare rail passengers with express coach passengers?

Mr Russell: Indeed, but may I just give another example to you? The White Paper into which you are inquiring quotes as evidence for the relative merits of different modes a report. That report actually says something completely different from the quotation.

Q635 Chairman: Yes, but for the moment I am being very boring, Mr Russell, I am asking about you. Do you compare all rail deaths with all motorway deaths?

Mr Withrington: There are two constituencies. There are passengers - and when we are talking about passengers we compare passenger deaths by rail, or should I say the death rate, deaths per passenger mile by rail, with the death rate per passenger mile by express bus and coach on motorways and trunk roads.

Q636 Chairman: So we are ever so slightly selective?

Mr Withrington: Well, it is very important to compare like with like.

Q637 Chairman: I agree with you and it does not seem to me you are quite doing that.

Mr Withrington: There is no point at all in comparing deaths to passengers in train accidents with deaths on the road network as a whole, because the two are different.

Q638 Chairman: Well, trains are basically different from motorcars, yes.

Mr Withrington: So we have one constituency, which is passengers, and the other constituency is system-wide. Now, if you are looking at the thing system-wide you have passengers, railway staff, people on railway business, postal workers and in our case we have included system-wide trespassers but not suicides. That would be the system and we have compared -

Q639 Chairman: Yes. I think, Mr Withrington, it is a very interesting system but I do not find it altogether persuasive.

Mr Withrington: We have compared the death rate on that system with a comparable system by roads.

Q640 Chairman: Yes. Well, I think it is an interesting way of doing it and I am sure it is a very interesting academic exercise. Mr Mathew, tell me about yourself.

Mr Mathew: Thank you, Chairman. Sustrans is short for Sustainable Transport. We are actually a charity. We are a practical charity which delivers projects. Our aim is as per the first page of our evidence, but it is to change the UK's transport system and culture so that firstly transport emissions, which cause climate change, are significantly reduced. Secondly, so that people can choose to travel in ways which benefit their health and the environment. Thirdly, so that everyone has good access to local facilities, and fourthly, that local streets and public spaces become places for people to enjoy. Our funding is complex. We have 40,000 supporters. We have officers in each English region. We have officers in Cardiff, Belfast -

Q641 Chairman: Officers, not offices?

Mr Mathew: Well, in a sense both. We are a UK organisation. One of our strengths has been in putting together packages of policy and money to deliver the projects I have mentioned.

Q642 Chairman: You presumably communicate with your members, the 40,000, what you are doing, how you are doing it and when you are doing it?

Mr Mathew: We indeed have a regular newsletter. I should say we communicate with most other NGOs, including CBT and the CTC, the national cyclists' organisation. Lastly, of course, we did actually win the lottery with our Connect2 bid, so we have used that to again part-fund a whole series of projects about increased accessibility throughout the UK.

Q643 Chairman: You are not going to tell me that you are actually an NGO with money, because I will feel that this entire session is becoming more Alice in Wonderland by the moment!

Mr Mathew: We have some money. I should, for the record, say that we have a series of working projects with the Department for Transport including things like maintenance of the National Cycle Network, Safe Routes to School and Links to School, and particularly Links to School has scored very well in terms of value for money and links to wider policy objectives.

Q644 Chairman: I just want to ask you one other factual question, Mr Withrington. Did you in 2005 put a series of advertisements in The New Statesman and other publications and have them rejected by the Advertising Standards Authority?

Mr Withrington: Yes. It took them nine months to do that and when -

Q645 Chairman: The length of time is not quite the point, it is the content. Did they reject the content of your advertisement?

Mr Withrington: No, they did not. They said it was overwritten.

Q646 Chairman: Overwritten? Okay. Well, life is full of interesting designations! Semantics is, after all, something we know about. Anybody can come in, but please, if you agree with one another do not repeat what somebody else has said. Does the White Paper provide the long-term vision that is required to develop infrastructure for the middle of the twenty-first century?

Mr Russell: No, the paper is based on a misunderstanding of the data and it will not achieve its objectives.

Q647 Chairman: Mr Russell, I have the greatest of respect for you. I am not going to follow you down this argument about specifics. If you have a problem, I think you should set it out, and presumably you have, in various advertisements, but we want to know is it a vision?

Mr Russell: Chairman, it is not a vision.

Mr Mathew: I am rather chary of visions in this day and age. If you consider the way in which our views of climate change, public obesity, social inclusion and peak oil have altered only over the last three to four years -

Q648 Chairman: This Committee does not support campaigns on public obesity! Please continue.

Mr Mathew: I would simply say that the costs of public obesity actually are a major drain on the public purse, including the transport sector, Chairman.

Q649 Chairman: All right, one to you!

Mr Mathew: One thing I was furtively looking through the White Paper for and could not find it - I do not know if you can help me with it - what the price a barrel of oil was, the assumed figure, because until very recently I know the Government was, for some of its full projections, using the price of $23 and I think that is a kind of warning. Sustrans' overall vision is now placed within the parameters of the demands of peak oil and climate change, and basically there are two things, I think, modal shift and possibly the fact that in the longer term we will have to get use to travelling less.

Q650 Chairman: Then let us ask you the other question: is the White Paper sufficiently encouraging a modal shift?

Mr Mathew: I think to some extent it actually is, in that it takes the view of Rod Eddington - and by the way since the terms of the inquiry we have had the Government's response to Stern and Eddington in Towards a Sustainable Transport System, which is helping to shape the debate. Eddington was wary of what he called - I will not try to pronounce it in French - grand projects and he did say that basically we needed to address bottlenecks, constraints on the system and concentrate on the networks we had already got rather than bringing forward great visionary projects. We think that is the right attention and that probably big visions need further examination. I would simply support some of the comments made earlier by Passenger Focus, that perhaps it is a little lacking in terms of population growth, housing growth and industrial growth, and I have to say that Sustrans is now on the DCLG Advisory Group for eco towns and there are obviously new areas to come in there. Again, I think this is possibly one where the railways still have not thought far enough ahead, particularly eco towns and the very large housing projections.

Q651 Chairman: Mr Joseph, presumably you do not disagree with that?

Mr Joseph: I do not disagree with that at all. I would comment in answer to your original question that we are concerned that the White Paper lacks a vision, which is about joining up rail with the rest of Government policy, with planning in particular, on which we would argue that Britain has been almost uniquely terrible in the European context, and that we would want to see rail much more part of overall planning and development and that the White Paper does not really do that, in particular by rejecting any kinds of re-openings of railways, stations and lines it misses an opportunity to fit rail out for a role in the twenty-first century.

Q652 Chairman: So the bases are all right, but it does not encourage modal shift and it does not go forward in the way you say. It is a restricted vision, if anything?

Mr Joseph: That is correct, and a lot of the decisions which need to be taken now about what happens beyond 2014 are ducked in the White Paper, notably about electrification and longer term capacity issues. Our submission to the Committee particularly refers to the issue of safeguarding alignments for future use.

Chairman: I think actually we might come to capacity increases. Are they inclined to do more than allow the railways to stand still? I will come to Mrs Ellman.

Q653 Mrs Ellman: Do you support electrification?

Mr Joseph: We think there is a strong case to be made for further electrification and that the way in which the White Paper deals with future power supplies for the railways, indeed for transport as a whole, implies a ducking of the issue. It talks about hydrogen fuel cells. Well, it is not clear what those fuel cells will be powered by and how that will be delivered. There is an increasing consensus within the railway industry, we understand, for infill electrification in the short-term and more electrification in the longer term.

Mr Russell: There is a difficulty with electrification in that it involves more coal-burning power stations, and coal-burning power stations are the most polluting form of energy for railways. It has the effect, effectively, of making railways about twice as bad as cars.

Mr Joseph: I should have said that our support for electrification is partly because we see the case for using electrification to encourage more renewable energy provision and therefore support the market for wind power and other renewables, which we think will make the railways greener. Obviously, if electrification brings the railways into being powered by coal-fired power stations that would be a backward step for climate change and we would not support that.

Q654 Mrs Ellman: What about the growth forecasts in the White Paper? Do you think those are accurate?

Mr Withrington: I have no quarrel with the growth forecasts. We just feel that the policy as a whole has driven the evidence and that therefore you have evidence which is a fairy story. That is where we stand.

Q655 Mrs Ellman: Do you agree with the forecasts or do you not?

Mr Withrington: I have no quarrel with the forecasts as such, it is the enormous expenditure which is proposed.

Q656 Mrs Ellman: But you agree with the forecasts?

Mr Withrington: Yes, I have said that.

Mr Joseph: We think that the forecasts could be underestimates for the reason Mr Mathew gave earlier, that in common with all other transport documents they are based on low crude oil prices which are well below current levels and below where most analysts think they will be in the future. If you take those forward, it is likely to change the level of demand for rail substantially. If you add to that issues such as congestion charging and other issues, and particularly the changes in land use I referred to earlier, we think that the forecasts could be underestimates, and I understand that is shared by a large number of people in the rail industry.

Q657 Mrs Ellman: What are your views on preserving strategic rights of way and disused rail lines? Does anyone have any views on that?

Mr Mathew: Very briefly the history of this is that after the Beeching cuts there was the Appleton review for, I think, the Countryside Commission in those days, saying what an important national asset disused lines were. Absolutely nothing happened from the report coming out in 1967 until Sustrans was commissioned by a young Conservative Transport Minister, slim at the time, called Mr Kenneth Clarke, and our report showed that in fact these were incredibly important on several grounds. Firstly, at some time they might be re-used for public transport. Secondly, that they were an incredibly vital wildlife and recreation resource. Thirdly, that with the appropriate infrastructure they could be the basis of a national cycle network, and indeed that is what Sustrans has worked towards.

Mr Joseph: We would say that lightly used railway lines should be preserved in transport use and never closed. They are almost always wide enough for roads. If they were so converted, countless lorries and cars would divert from the unsuitable rural roads and city streets which they clog. New access would be developed to the great benefit of the nation. One of the great tragedies of the past was the loss of about 10,000 miles of right of way under the Beeching cuts. If the present Government or a subsequent government is to cut the railways because of lack of use, then they could be brought into the most effective use imaginable by being converted to roads. They should never be lost to transport.

Mr Mathew: Could I just add, in route continuity the preservation of bridges is absolutely vital and one of the reasons we have lost so many networks, for whatever purpose, has been the premature removal of bridges. That is why Sustrans has taken over ownership or guardianship of a large number of bridges and viaducts.

Mrs Ellman: Do you think sufficient note is taken of bridges?

Q658 Chairman: What do you mean by that, Mr Mathew? Bridges are very expensive things to maintain.

Mr Mathew: They are indeed, Chairman, but if they go then your route is -

Q659 Chairman: No, I am not arguing with the principle, I am arguing about what you mean by "We have taken control of bridges". Have you suddenly become one of the bridge builders of the world? If so, you would be very welcome in Crewe. I will give you four! I have got Victorian ones, so maybe they are not cheap.

Mr Mathew: What I am saying is that we actually have a separate arm's length company called Railway Paths Limited and a number of bridges, particularly of historic worth, have been made over to us for nominal sums to care for. At the same time, as I have already said, we have been slightly more successful at attracting money from a differing variety of sources, which enables us to safeguard the principle of the routes.

Chairman: Oh, I am taking notes! Thank you very much.

Q660 Mrs Ellman: Would you say the environmental potential of rail has been maximised in the White Paper?

Mr Russell: No, the potential of rail would be maximised by providing other forms of transport in the current state of the art.

Q661 Mrs Ellman: What do you mean by "other forms of transport"?

Mr Russell: The issues there effectively are that the Government's strategy for transport does not see any growth in the efficiency of rail. It does see quite large growth in the efficiency of road. Those growths by 2022, according to the paper which the White Paper relies on, will make the car more efficient than rail and in the period of 30 years the car will become much more efficient than rail is likely to be.

Q662 Mrs Ellman: My question is actually about rail, whether the plans in the White Paper for rail maximise the environmental potential of rail?

Mr Russell: All I can say to that, if I may, is that insofar as they involve building additional bits of railway and they do not take into account the embodied carbon - which is very, very substantial, we are talking about tonnes per kilometre of carbon emissions in order to put down rails - there is a doubt which has not been addressed.

Mr Withrington: It goes further than that. If the rail is electrified it will extend the life of coal-fired power stations -

Q663 Chairman: I think we are getting a bit hung up on this. We have not discussed nuclear power stations. If we are going to have fun, we could have windmills, we could have offshore wind. I think this would take a considerable time. Mr Joseph, can you get us off coal?

Mr Joseph: Yes. I think the environmental benefits of rail have not been fully spelt out in the White Paper. In particular, we were pleased to see the Government accept the principle of station travel plans, but really the issue - and I am sure we and Sustrans are on the same line on this - is about door-to-door journey capacity. At the moment it is sometimes, compared with other countries, quite difficult to access the railway by any means, but particularly by means other than the car. Therefore, by not integrating rail sufficiently with other forms of transport they have not maximised the environmental benefits. More important