Network Rail should be broken up and sold-off in order to get Britain’s ailing infrastructure back on track and ease the burden on the taxpayer, a high profile think tank said today.
The Adam Smith Institute (ASI) predicted that £8bn could be raised for the public purse from the sale of what it referred to as an “unwieldy beast”.
The government should seek to replicate the success of the privatisation of the National Grid power network that raised £35bn for taxpayers, the ASI said.
“Network Rail is a historical fudge anyway. It was never intended to exist, it is doing an OK job but there are ways we can get it improve in the future.
“It would be better that the companies that worry about the infrastructure were also running the infrastructure," said Ben Southwood of the ASI.
Unions accepted some of the failings in the report but criticised the overall conclusion of the report.
“We know Network Rail isn’t perfect. Its governance needs to be improved and it needs to understand its asset base better but every rail professional knows it’s the only show in town for the future of Britain’s railway," said Mick Whelan of train drivers union Aslef.
Not content with advocating of the break-up of Britain’s rail infrastructure company, the ASI proposed a crackdown on poorly performing rail franchises, urging the DfT to toughen-up on under performing operators.
“The problem is the way the franchising system is set up. [There] should be very harsh punishments for failing to meet goals. The goals should be broad, not specific and they should crack down on franchises if they don’t meet them,” said Southwood.
One operator under considerable fire is Southern Rail, which has been plagued by a long-running industrial dispute with the RMT union over the role of guards on trains.
Southwood said that he didn’t think that Southern ought to be stripped of the franchise, as has been advocated by the London Assembly today. This is because of the way the franchise agreement is structured as a management contract.
He said the fact that Department for Transport tells Southern Rail exactly how to operate and then pays it a management fee for doing so undermines the whole process.
“If you tell them everything to do then you are not really running a private company,” he said.