Government on wrong track with Network Rail fine

The regulator has hit Network Rail with a record £14m fine. So get ready for the whip-round...

Last Updated: 31 Aug 2010

The fine, imposed by the Office of Rail Regulation, relates to delayed engineering work that closed three of its most popular lines for days over the Christmas and New Year period – not exactly the most convenient time of the year for the public transport network to grind to a halt. Apparently the technicians who were supposed to be fixing the line just didn’t show up – perhaps they’d over-indulged on the Christmas turkey.

And there’s more pain to come – the rail operator says it will need to do further engineering work over the summer (meaning more delays) if it’s going to have any hope of hitting its December deadline for the upgrade of the West Coast Main Line. And since the regulator was scathing about Network Rail’s planning and project management skills, frankly we wouldn’t put any money on them hitting it.

But there’s only one problem. Network Rail is, to all intents and purposes, a nationalised company (although the government doesn’t technically class it as such, or it would have to take its enormous debts onto the public balance sheet). It’s not run for profit, and it doesn’t have any shareholders. So where exactly is this £14m – a record fine for a rail company – going to come from?

The only possible answer is that either the government hands over £14m of taxpayers’ money to pay the fine (which would basically amount to robbing Peter to pay Paul), or the money is taken from the pot that Network Rail is using to upgrade the railways. And as punishments go, this seems a bit self-defeating – how is it going to do an under-invested rail network any good if the Chancellor confiscates £14m from the network operator for the Treasury coffers?

Network Rail has been suitably penitent today, accepting the report’s findings and promising to raise its game. It also said that it’s been taking steps to resolve some of the issues since the New Year and improved its planning process. But it plans to appeal against the fine, on the grounds that the money would be better spent on rail passengers.

It’s not often we can muster much sympathy for the management at Network Rail – but on this occasion we can't help feeling that they’ve got a fare point.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Public failure can be the best thing that happens to you

But too often businesses stigmatise it.

Andrew Strauss: Leadership lessons from an international cricket captain

"It's more important to make the decision right than make the right decision."

Ranked: Britain's best-run companies

These are the businesses rated top by their peers for their quality of management.

Unconscious bias in action

Would you dislike someone just because they’re from the Forest of Dean?

I ran Iceland's central bank in 2009. Here's what I learned about crisis ...

And you thought your turnaround was tricky.

"It's easy to write a cheque you don't have to cash for 30 ...

But BP's new CEO has staked his legacy on going green.