I was astonished by a letter I received this week from Theresa Villiers, railway Minister. It seemed to say welcome to the EUSR, as Bob would write. It invited me as an MP to make all sorts of representations at various periods over the next two and half years, as the heavily nationalised and subsidised railway industry moves towards a detailed “Delivery Plan”. This new plan is scheduled for 31 March 2014. Perhaps they hope that the long delays in the schedule mean it will eventually arrive on time.
They have published this week their draft “Initial Industry Plan” for railway “Control Period CP5”. Maybe you missed the previous versions for other control periods, but you do need to know about this one! They are, of course, after a load of your money. Even allowing for all the efficiency gains and “cuts” being demanded by Ministers, the industry comfortably expects just under £3billion of annual subsidy in 2014-15, after years of higher levels of subsidy in the meantime.
You will be pleased to know that this Initial Plan “will inform the development of the Government’s High Level Output Specification (HLOS) and Statement of Funds available (SoFa)(sic).” This leads us seamlessly and easily into the “Periodic Review Process 2013”, another useful bureaucratic siding, which will make possible “the definition of possible CP5 enhancements”. I think that means they are looking to increase spending in due course.
All this work will be overseen by the “Planning Oversight Group”. This is not given the mnemonic POG, though the ever active Office of Rail Regulator is affectionately known throughout as ORR. All these bodies crawling through the interstices of the plan will of course be governed by the money down the sofa, as it will be the money that determines it.
Not to put too much gloss on it, we are told that “our current expectation is that the HLOS (remember that? – see above) will set outputs to be achieved, rather than listing the improvements needed to deliver them”. Just to make sure that all bureaucratic bases have been covered two HLOSs (sic) will be drawn up . We will remain in the dark about which specific new projects have the green light.
Readers will be delighted to know that after a further summer holiday all this work will lead directly to the Network Rail Strategic Business Plan. Following more consultations on the June 2013 “Draft determination”, we will get to our intermediate station, the Final determination, by 1 April 2014. There’s a bold timetable for you.
On 31 March 2014, we will be the proud possessors of a Detailed delivery Plan.
I am amazed that an intelligent Minister put her name to this nonsense. No wonder the railways lose a fortune, if that is the way they proceed to try to make a few decisions about their capital spending priorities and how they should control their costs.
The IIP does contain some revealing facts that have slipped in. Their climate bar chart shows they regard 6 winters since 2002-3 as abnormally cold. They tell us they put 3 million tonnes of CO2 into the atmosphere each year. They claim that their travellers put out 53 g of CO2 for every mile travelled, compared to 148 g by bus travellers and 127 g by car travellers. Their fuel costs are quite low because they of course get a special deal on fuel duties. They do not count this as part of their subsidy.
The plans show that if all goes well Network Rail will have a massive £30 billion of net debt by 2014-15. If we are lucky it will have added under £20 billion to the national debt for its subsidy payments 2010-2015. As the Transport Secretary has himself pointed out, high speed inter city travel is mainly used by the better off, who will benefit from this largesse.
When it comes to railway spending, different rules seem to apply. The railways will be important contributors to continuing large public sector deficits, as they speed to ever larger borrowings secured against the promise of future subsidies from taxpayers. We will look at how you could run a bigger and better railway with less subsidy in a future post.