Network Rail makes tracks for the regions

Network Rail is decentralising operations in favour of regional HQs. Sounds nice - but will it make the trains run better?

by Dave Waller
Last Updated: 25 May 2011

The rail infrastructure giant is planning to reduce its 2,000-strong HQ staff and shunt authority down the line to new regional directors – each of whom will apparently handle 3,000 staff and an £800m annual budget. According to the Telegraph, these regional bosses will be rewarded for their trouble with a six-figure salary – quite a chunk of change for a not-for-profit organisation. The argument is that it will make the operator more responsive to local needs - but is this one area where central control actually pays off?

New chief executive David Higgins announced his reorganisation plans for the company as a response to the criticism it has faced recently over costs and performance. Higgins says Network Rail needs to ‘increase responsiveness at a local level’; the idea is that the new-look company will be better placed to deliver the kind of improvements passengers really want, while also cutting costs. All of which will come as a warm choo-choo to the ears of most rail users - if it actually works. (It's also very much in keeping with the Government's current localism agenda.)

Higgins has only been in the job full-time for three weeks, but he’s wasted no time in showing that he’s prepared to make radical changes. Each new regional boss will, he says, 'in effect be running their own infrastructure railway business, with significant annual turnover and resources’ (It's not dissimilar to the plan put forward by ex-regulator Tom Winser last August).

And arguably he needed to come up with something: although the operator's punctuality performance has been solid enough, problems with flawed infrastructure, overcrowding and rising ticket prices has led passengers to moan that service and cost aren’t really matching up these days.

That said, we can’t help wondering whether this model is asking for trouble. Given we have a national rail network, and the various regions need to be be meticulously integrated, is it a risky move to devolve so much control out to the regions? It's already confusing enough to have an army of separate private operators running their trains on the network...

Transport Secretary Philip Hammond has already given the organisation a good kick in the sidings for dishing out £2.25m in bonuses last year. Higgins will be hoping for a success that justifies both the juicy wages he’s reportedly proposing to give his new MDs – and his own £550k-a-year pay packet. Let's hope for all our sakes he manages it.

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