Transport Minister Demands Full Devolution Of Network Rail

Calls come in light of recent independent report criticising industry performance
“Scotland must have full devolution of rail powers to reverse the current unacceptable industry performance.”
Transport Minister Humza Yousaf made the calls during an appearance at the Rural Economy and Connectivity Committee in Edinburgh today where he also outlined the findings of an independent review undertaken into Network Rail’s corporate governance of major rail infrastructure projects.
The EY review has exposed fundamental weaknesses in Network Rail’s project governance, controls and performance reporting, as well as weak and inconsistent cost forecasting and significantly higher costs to comply with national standards.
Mr Yousaf said:
“Scottish Ministers and indeed passengers up and down the country quite rightly have high expectations of our railway. At the heart of our £5bn programme of improvements is an underlying need to provide best value for the public purse while delivering a first class service.
“This service has clearly not been delivered and that is why the Scottish Government rejected initial projected cost increases and schedule revisions from Network Rail. Instead, we instigated a full and urgent review into all of our major rail projects to fully understand the implications of the ORR report.
“The Scottish Government has warned repeatedly that there needs to be fundamental changes in how our railways are run. Time and time again we have set out a full and compelling case to the UK Government for the full devolution of Network Rail to Scotland. Time and time again these requests have been rejected, most recently in March this year yet this review adds weight to our calls for transformation.
“We know passengers are already frustrated, not least as this review comes hot on the heels of the need for ScotRail to implement a Performance Improvement Plan – something we are closely monitoring. While we are doing what we can to address the issues at hand, our powers are limited.
“That is why I have made clear to Network Rail’s Chair, Sir Peter Hendy, and Chief Executive Mark Carne, my expectation that they will increase the scale and pace of their decentralisation agenda. As a minimum I expect this to include the full transfer of responsibilities for the development, design and delivery of infrastructure projects to their Scotland route.
“I have also raised the matter of full devolution of rail powers with the UK Railways Minister Paul Maynard and I will continue to press the issue as only with full powers can the Scottish Ministers consider the full range of options for structuring our railways in order to meet Scotland’s needs. Until we achieve that I am constrained to working within the limited powers at my disposal but I can confirm we will continue to deliver our full committed portfolio of rail infrastructure improvements.
“In acknowledging performance is not where it should be, we also appreciate the efforts of front line staff across the railway who are committed to delivering services for all their customers. It is important their efforts ensuring rail in Scotland continues to enjoy its current popularity are recognised
Notes to Editors
The full EY report will be available on the Transport Scotland website later today (Wednesday 26 October 2016)
The Executive Summary of the report can be found on the Parliament website
Background
The key findings identified as part of the EY review include: –
• Cost estimation – the Network Rail cost estimating in the scheme development has proven to be unreliable. Whilst issues have been encountered on each scheme which has increased the costs systemic causes across the portfolio have been observed. It was also identified that Network Rail do not adopt a consistent approach to cost reporting with costs presented in a range of cost bases (outturn prices, Q4 2012 prices etc).
• Governance – there is an inconsistent framework environment governing the relationship between Transport Scotland and Network Rail projects. Following reclassification of Network Rail, Transport Scotland’s liability and exposure has increased and should necessitate a more robust flow of information from Network Rail with Transport Scotland having a tighter level of control over change.
• Project controls – it was identified that there is no dedicated project control system used to control, analyse, forecast and report cost and for integration of progress, schedule and risk information. In addition there was significant evidence of the use of uncontrolled spreadsheets across the portfolio.
• Schedule integrity – Project schedules were found to be lacking in robustness and lack sufficient detail to provide a comprehensive schedule for the portfolio.
• Performance reporting – the quality of reporting was found to be poor and in some cases lacking in transparency to enable a confidence level to be gained on a projects status and performance. There was also evidence found whereby Network Rail were aware of expected cost increases but had not reported these promptly to Transport Scotland.