jCUMENT IS T H E P R O P E R T Y OF HER B R I T A N N I C M A J E S T Y ' S G O V E R N M E N T )
C(67) 138
COPY NO.
65
21st July, 1967
CABINET
R A I L W A Y POLICY:
M A I N R E P O R T OF JOINT S T E E R I N G GROUP
M e m o r a n d u m by the M i n i s t e r of T r a n s p o r t
I now attach a copy of the M a i n R e p o r t f r o m the Joint Steering
Group under John M o r r i s ' chairmanship which I and the C h a i r m a n of the
British R a i l w a y s B o a r d ( B R B ) set up to r e v i e w future r a i l w a y p o l i c y .
I
also attach a copy of the I n t e r i m R e p o r t f r o m the Group, which they
submitted to m e and the Chairman in January; it was not n e c e s s a r y
to put this to Cabinet at the t i m e .
2.
T h e Main R e p o r t makes r e c o m m e n d a t i o n s in two main f i e l d s ­
finance and m a n a g e m e n t s t r u c t u r e .
The financial r e c o m m e n d a t i o n s
have to be read in conjunction with those included in the I n t e r i m R e p o r t
which dealt s p e c i f i c a l l y with Exchequer grants for u n r e m u n e r a t i v e
passenger s e r v i c e s which B R B a r e r e q u i r e d to r e t a i n on broad s o c i a l
and e c o n o m i c grounds.
Grants for U n r e m u n e r a t i v e P a s s e n g e r S e r v i c e s
3.
T h e s e grants would c o v e r the extent to which the r e v e n u e of each
of these s e r v i c e s was l i k e l y to f a l l short of the full c o s t of p r o v i d i n g the
s e r v i c e s (including i n t e r e s t and d e p r e c i a t i o n ) .
Grants would n o r m a l l y
be f i x e d on a t h r e e - y e a r b a s i s in a d v a n c e , and would not be adjusted in
a r r e a r s to c o n f o r m with actual c o s t s ; this w i l l p r o v i d e the B R B with an
incentive to run the s e r v i c e s e c o n o m i c a l l y , and to a t t r a c t the m a x i m u m
revenue.
The e f f e c t of these grants should be that the B R B would not
be out of pocket o v e r a l l on the p a s s e n g e r s e r v i c e s which they a r e
r e q u i r e d to continue to p r o v i d e for s o c i a l r e a s o n s .
Further details
of the p r o p o s a l s for these grants a r e set out in Section 3 of the I n t e r i m
R e p o r t , p a r a g r a p h 3.21 of v/hich g i v e s details of the l e g i s l a t i v e
p r o v i s i o n s r e c o m m e n d e d by the Group,
These proposals were
approved by the M i n i s t e r i a l C o m m i t t e e on E c o n o m i c P o l i c y at t h e i r
meeting on 20th M a r c h and a r e now being i n c o r p o r a t e d in the T r a n s p o r t
Bill.
Main R e p o r t - F i n a n c e
4.
The Group have concluded that, even taking account of the
" s o c i a l " grants r e c o m m e n d e d in their L i t e r i m R e p o r t and of the grants
which they now r e c o m m e n d for t r a c k r a t i o n a l i s a t i o n , B R B would be
likely s t i l l to be in d e f i c i t in 1974 to the extent of s o m e w h e r e between
£5 m i l l i o n and £55 m i l l i o n .
T h e y a c c o r d i n g l y conclude that t h e r e
should be a substantial w r i t e - o f f of c a p i t a l so as to b r i n g the B R B
to a b r e a k - e v e n position in the e a r l y 1970s; the detailed f i g u r e s f o r
COWFIDENTSAL
this capital r e c o n s t r u c t i o n should be based on neither too o p t i m i s t i c nor
too p e s s i m i s t i c a f o r e c a s t .
The Group further r e c o m m e n d that the
valuation of the B R B ' s a s s e t s should be scaled down to what i s
r e p r e s e n t e d by the new capital debt.
A s u m m a r y of these
r e c o m m e n d a t i o n s is at p a r a g r a p h 2 . 4 2 .
5.
The e f f e c t of the r e c o m m e n d a t i o n s i s that the whole of the
"suspended d e b t " of some £700 m i l l i o n would now be f i n a l l y w r i t t e n
off (no i n t e r e s t has been paid on this debt since it was p l a c e d in suspense
by the 1962 T r a n s p o r t A c t ) ; a further s l i c e of the " l i v e " capital debt v/ould
also be w r i t t e n off, though d e t a i l e d discussions w i l l be n e c e s s a r y between
my M i n i s t r y , the T r e a s u r y and B R B o v e r the next f e w months to d e t e r ­
mine the exact amount.
6.
The w r i t i n g - o f f of this l i v e debt w i l l of c o u r s e r e d u c e the B R B ' s
interest burden.
It w i l l a l s o have the effect of reducing the d e p r e c i a t i o n
p r o v i s i o n s in the B R B ' s accounts.
T h i s w i l l m a k e the i m m e d i a t e net
revenue position e a s i e r , but it w i l l a l s o mean that the B R B v/ill in future
have a s m a l l e r cash f l o w a v a i l a b l e to finance new i n v e s t m e n t .
This
should i m p o s e a much tighter c o n t r o l on future i n v e s t m e n t , both by
the M i n i s t r y and within B R B i t s e l f ,
7.
One important e l e m e n t in the financial r e c o m m e n d a t i o n s r e l a t e s
to track r a t i o n a l i s a t i o n .
The Group r e a c h e d the conclusion that, although
the "standby c a p a c i t y " to which the Chairman had often r e f e r r e d could not
be p r o v e d to e x i s t as a permanent e l e m e n t of any f o r e s e e a b l e r a i l w a y
network, t h e r e was c e r t a i n l y surplus capacity in the s y s t e m which could
and should be e l i m i n a t e d .
This surplus capacity i s the r e s u l t not so
much of e x c e s s route m i l e a g e , but of e x c e s s t r a c k m i l e a g e and signalling
capacity.
In other w o r d s , the s y s t e m i s not n e c e s s a r i l y too long but in
many p l a c e s it may be too w i d e .
The Group concluded that some
£15 m i l l i o n a y e a r could be saved if the s y s t e m w e r e " s l i m m e d " to a
capacity p r o p e r l y r e l a t e d to the expected t r a f f i c , and they r e c o m m e n d
that this s l i m m i n g p r o c e s s (which w i l l take s e v e r a l y e a r s ) should be
encouraged by a f i x e d grant of s o m e £15 m i l l i o n in the f i r s t y e a r ,
diminishing by annual steps to z e r o at the end of the fifth y e a r .
This would compensate the B R B f o r their h i s t o r i c l i a b i l i t y r e s u l t i n g
f r o m the o v e r - p r o v i s i o n of t r a c k c a p a c i t y in the past, while giving
them an incentive to r e m o v e it as soon as p o s s i b l e .
Relevant paragraphs
of the R e p o r t a r e 2. 20 to 2, 23 i n c l u s i v e .
8.
The final effect of all these r e c o m m e n d a t i o n s , including those
in the Group's I n t e r i m R e p o r t , should be to put B R B , in the e a r l y 1970s,
in a position w h e r e (after taking account of " s o c i a l " g r a n t s ) they could
be expected to b r e a k even and to go on doing s o .
T h e r e would be no
further excuse for running into d e f i c i t and t h e r e would consequently
be a much better basis on which to judge the efficiency of the B o a r d
as a management t e a m .
T h e r e would no longer be p r o v i s i o n f o r deficit
grants f r o m the Minister ( e x c e p t , p e r h a p s , f o r a v e r y short t r a n s i t i o n a l
period).
Main R e p o r t
M a n a g e m e n t Structure
9.
The Group have concluded that the B o a r d ought t o spend f a r
m o r e t i m e than it d o e s at p r e s e n t on questions of b r o a d p o l i c y and in
particular on l o n g - t e r m planning.
T o this end they have p r o p o s e d
s e v e r a l s p e c i f i c c h a n g e s , while r e c o g n i s i n g that not a l l the changes
they suggest can n e c e s s a r i l y be brought about at once,
10.
T h e y r e c o m m e n d that ultimately the B o a r d should c o n s i s t
l a r g e l y of non-functional m e m b e r s , and should be s m a l l e r than at
present.
Although the m e m b e r s would not have s p e c i f i c D e p a r t m e n t a l
r e s p o n s i b i l i t i e s , they would have spheres of i n t e r e s t and perhaps
c o - o r d i n a t i n g r o l e s which m i g h t w e l l change f r o m t i m e t o t i m e .
This
is a pattern of o r g a n i s a t i o n which is w e l l known in the i n d u s t r i a l
w o r l d , although many nationalised industries have B o a r d m e m b e r s
with s p e c i f i c functional r e s p o n s i b i l i t i e s .
11.
T h e Group r e c o m m e n d that t h e r e should be two m e m b e r s of high
status and r e s p o n s i b i l i t y t o c o v e r the f i e l d s of financial p o l i c y and the
c o - o r d i n a t i o n of l o n g - r a n g e planning; they m a y w e l l be V i c e - C h a i r m e n .
They a l s o r e c o m m e n d that the C h a i r m a n should be r e l i e v e d of d a y - t o ­
day r e s p o n s i b i l i t y by the appointment of a " C h i e f G e n e r a l M a n a g e r " who
might w e l l a l s o be a V i c e - C h a i r m a n o r , s p e c i f i c a l l y , the Deputy t o the
Chairman.
H e would c o - o r d i n a t e c o m m e r c i a l , operating and
technical r e q u i r e m e n t s in r e s p e c t of both p a s s e n g e r and f r e i g h t
t r a f f i c , and would in g e n e r a l be r e s p o n s i b l e f o r the d a y - t o - d a y running
of the r a i l w a y s .
Although the load on such a Chief G e n e r a l M a n a g e r
would be v e r y h e a v y , he should be able t o c a r r y it with a p p r o p r i a t e
delegation t o B o a r d m e m b e r s and t o other staff,,
12.
It is not intended that the C h a i r m a n of B R B should b e c o m e
a m e r e figurehead.
H e would continue t o be r e s p o n s i b l e f o r l i a i s o n
with the G o v e r n m e n t , and he would be able t o spend much m o r e t i m e
on l o n g - t e r m planning than is possible under the p r e s e n t a r r a n g e m e n t s .
He would a l s o have m o r e t i m e t o devote t o top l e v e l m a n a g e m e n t
planning p r o b l e m s .
13.
In spite cf t h e i r g e n e r a l p r e f e r e n c e f o r non-functional B o a r d
m e m b e r s , the Group r e c o g n i s e the g r e a t i m p o r t a n c e of p e r s o n n e l and
labour r e l a t i o n s ; they r e c o m m e n d that t h e r e should be a B o a r d
m e m b e r s p e c i f i c a l l y r e s p o n s i b l e f o r the l o n g e r t e r m d e v e l o p m e n t of
labour r e l a t i o n s in the industry.
14.
T h e Group r e c o m m e n d the appointment of at l e a s t t h r e e p a r t ­
t i m e m e m b e r s of high ability and e x p e r i e n c e .
They a l s o r e c o m m e n d
that the B R B should be r e q u i r e d t o produce a g e n e r a l s c h e m e of
organisation f o r the M i n i s t e r s a p p r o v a l on the l i n e s of Section 4 of
the Iron and S t e e l A c t , 1967,
T h i s s c h e m e could deal in p a r t i c u l a r
with r e l a t i o n s b e t w e e n the B o a r d and the R e g i o n s , but in any c a s e
they r e c o m m e n d that the statutory R e g i o n a l B o a r d s set up by
Section 2 of the T r a n s p o r t A c t , 1962, should be abolished.
Their
r e c o m m e n d a t i o n s on m a n a g e m e n t structure a r e s u m m a r i s e d in
paragraphs 4. 13 t o 4, 25.
T
-3-
CONFIDEMTIAL
Other r e c o m m e n d a t i o n s
13.-, A s m y c o l l e a g u e s w i l l see f r o m the s u m m a r y of conclusions
and r e c o m m e n d a t i o n s in Section 4 the R e p o r t d e a l s with v a r i o u s
h i s t o r i c obligations on the B R B ; and in p a r t i c u l a r r e c o m m e n d s that
these should be taken into account in the capital r e c o n s t r u c t i o n which
they r e c o m m e n d .
L e g i s l a t i v e changes w i l l be r e q u i r e d to g i v e effect
to the G r o u p s detailed r e c o m m e n d a t i o n s , which a r e set out in
Appendix C , or. road b r i d g e s o v e r r a i l w a y s and museums and
historical records,
8
r
Consultation with the C h a i r m a n
16,
I have d i s c u s s e d the R e p o r t with Sir Stanley R a y m o n d , and
have told h i m that I would m y s e l f be disposed to accept a l l the m a i n
r e c o m m e n d a t i o n s of the R e p o r t ,
S i r Stanley accepts the financial
r e c o m m e n d a t i o n s , and he a l s o accepts s o m e of those on m a n a g e m e n t
s t r u c t u r e , including a l l of those involving l e g i s l a t i o n .
But he wishes
to have m o r e t i m e to consider the r e s t of the r e commendations on
management structure,, notably those in favour of a "Chief G e n e r a l
I a m confidant that further
M a n a g e r and a non-functional B o a r d ,
d i s c u s s i o n w i l l r e s u l t in acceptance of a l l the r e c o m m e n d a t i o n s ,
53
17.
It f o l l o w s that any new appointments which I m a k e t o the B o a r d
(e. g. the appointment of the finance and planning m e m b e r s which the
C h a i r m a n has a l r e a d y a c c e p t e d ) w i l l be m a d e within the f r a m e w o r k of
the new structure proposed by the Joint S t e e r i n g Group.
Viey/s of the, M m i s J e r j a l ^ C o m m i t t e e on E c o n o m i c P o l i c y
3.8.
I have now consulted the C o m m i t t e e ( S N ( 6 7 ) 21st M e e t i n g ) and
they have g e n e r a l l y endorsed these p r o p o s a l s .
F u r t h e r W o r k for the Groupj
19.
The Group w i l l be dealing in l a t e r R e p o r t s with other subjects
such as i n v e s t m e n t c o n t r o l and internal financial control,, but in
addition I shall a l s o have t o consider s e p a r a t e l y whether any further
changes a r e r e q u i r e d in the statutory r e l a t i o n s between the B o a r d and
M i n i s t e r s in the light of the new situation resulting f r o m the p r e s e n t
r e c o i m a e nda tions.
PabJ.ici.ty_
20.
The Report, is confidential and should r e m a i n so for the p r e s e n t ,
but it w i l l be n e c e s s a r y to consider the extent t o which i t , and in
particular the r e c o m m e n d a t i o n s should be made public in due c o u r s e .
The m a i n r e c o m m e n d a t i o n s should c e r t a i n l y be included in one of the
White P a p e r s on T r a n s p o r t P o l i c y which I p r o p o s e to publish in the
autumn.
I shall be c o n s i d e r i n g with the C h a i r m a n of B R B whether the
R e p o r t as a w h o l e , or an edited version., should be published, and
there w i l l be a p p r o p r i a t e consultation with m y c o l l e a g u e s on the subject,
?
Conclusion
21.
I am anxious t o obtain m y c o l l e a g u e s ' a g r e e m e n t i m m e d i a t e l y
to the i m p l e m e n t a t i o n of the m a i n r e c o m m e n d a t i o n s in the attached
R e p o r t , so that the P a r l i a m e n t a r y d r a f t s m e n can make an i m m e d i a t e
start with the drafting of the n e c e s s a r y p r o v i s i o n s f o r the T r a n s p o r t
Bill,
22,
I t h e r e f o r e s e e k m y c o l l e a g u e s comments on the R e p o r t in
g e n e r a l , and t h e i r a g r e e m e n t in p a r t i c u l a r t o the inclusion in the
f o r t h c o m i n g T r a n s p o r t B i l l of the l e g i s l a t i v e p r o v i s i o n s s u m m a r i s e d
in paragraph 4. 38 of the R e p o r t .
5
B . A , Co
M i n i s t r y of T r a n s p o r t , S. S , 1.
21st July, 1967
-5­
CONFIDENTIAL
Railway Policy Review
Joint Steering Group
Chairman
M r . John Morris M.P.
Joint Parliamentary Secretary
Ministry of Transport
!eport to the Minister of Transport
and the
Chairman, British Railways Board
July 1967
12
C O N T E N T S
1,
INTRODUCTION
.
1
2,
FINANCE
Introduction
R e v i e w of L o n g T e r m R e v e n u e
Forecasts
Effect of G r a n t s
T h e B o a r d ' s Future Financial Structure
S u m m a r y of L o n g T e r m R e v e n u e
Forecasts
Recommendations
.
9
9
3.
4.
AND
SUMMARY
.
.
.
.
22
28
BOARD S T R U C T U R E AND ORGANISATION
P r e s e n t Position
Method of W o r k b y the G r o u p
. . . .
T h e P r o p o s e d future S t r u c t u r e and
Organisation
Legislation
SUMMARY OF CONCLUSIONS
AND
RECOMMENDATIONS
Finance
S t r u c t u r e and O r g a n i s a t i o n
T r a d e Union V i e w s
" S t a n d b y " and " S u r p l u s " I n f r a s t r u c t u r e
Capacity
O t h e r O b l i g a t i o n s D e r i v i n g from the P a s t
Legislation
Appreciation
10
14
21
31
31
31
33
46
47
47
49
52
. ­
52
53
55
56
A P P E N D I C E S
A, V i e w s of the R a i l w a y T r a d e U n i o n s on M a t t e r s
other than F i n a n c e and M a n a g e m e n t S t r u c t u r e
Blue
B. Standby and S u r p l u s I n f r a s t r u c t u r e
Light
Capacity
Pink
G. Other O b l i g a t i o n s D e r i v i n g
D. U n r e m u n e r a t i v e
Passenger
from the P a s t
Services
Grey
Yellow
E l . L o n g - T e r m Revenue Forecasts
S u m m a r y of E c o n o m i c a s s u m p t i o n s on w h i c h
forecasts w e r e prepared.
E 2 . British R a i l w a y s B o a r d L o n g - T e r m R e v e n u e
r orecasts.
F i n a n c i a l Statement
F.
C o m p o s i t i o n of Joint
Steering
Group
Dark
P\nk
­
p.
SECTION 1
INTRODUCTION
1,1
AND
T h e full t e r m s of r e f e r e n c e
railway i n d u s t r y ,
In our Interim R e p o r t w e
1.2
this Joint R e v i e w
on T r a n s p o r t
said that w e
meeting extending o v e r
in all,
Policy
contained
(Cmnd.3057).
summer.
nineteen t i m e s as a full G r o u p
two d a y s )
Sub-Committees
are
of the
intended to submit t h i s ,
during the c o u r s e of the
We have met,
been done b y
for
and the m e m b e r s h i p of the G r o u p ,
in the A n n e x to the White P a p e r
our main r e p o r t ,
SUMMARY
and a g r e a t deal of w o r k
and individual m e m b e r s ,
has
which
particular h a s i n v o l v e d the independent m e m b e r s of this
(one
in
Group
giving up v e r y m a n y d a y s of their time to the w o r k of the
Inquiry.
As
an e x a m p l e o n l y ,
the S u b - G r o u p
which r e v i e w e d
B o a r d ' s financial e s t i m a t e s met five times in nine
1.3
W e much r e g r e t t e d the t e m p o r a r y
leave of M r .
James,
and the fact that M r .
for s e v e r a l m o n t h s ,
glad that M r .
H.
Johnson,
formerly
Manager of the L o n d o n Midland R e g i o n ,
of the B o a r d ,
Mr. W .
place of M r .
1.4
Chief O f f i c e r
sick
M a r g e t t s h a s b e e n ill
duty.
We
C h a i r m a n and
were
General
and n o w a V i c e
w a s able to attend in p l a c e of M r .
I. W i n c h e s t e r ,
days.
a b s e n c e on
and h a s only just r e s u m e d
C.
Chairman
Margetts
and
(Financial R e s e a r c h ) ,
in
James.
T h e present Report c o v e r s
the o v e r a l l financial
our recommendations
s t r u c t u r e of the r a i l w a y s ,
management s t r u c t u r e and o r g a n i s a t i o n
appropriate for the future.
and on the
on
overall
w h i c h w e think m o s t
W e should m a k e
it c l e a r that on both
issues the G r o u p h a v e c o n c e n t r a t e d on the m a t t e r s likely to
require l e g i s l a t i o n ;
a g r e a t deal of further
detailed w o r k
will
involved.
1-5
the
S e c t i o n 2 of this R e p o r t
s e t s out o u r
financial
recommendations and is b a s e d on w o r k b y the B o a r d and b y
Cooper B r o t h e r s .
O u r main r e c o m m e n d a t i o n s
are:­
be
1.5.1
that the aim should b e for the B o a r d to " b r e a k
b y the e a r l y
1.5.2
that,
1970s;
in addition to the specific g r a n t s f o r
passenger
services
recommended
in o u r
t h e r e should b e a s p e c i f i c g r a n t ,
reducing
even"
over
a period,
unremunerative
Interim
Report,
limited in time and
t o w a r d s the rationalisation of
track;
1.5.3
that the capital debt of the B o a r d
written
1.5.4
should b e
drastically
down;
that this writing d o w n
should take account of the
continuing obligations of the B o a r d
in r e s p e c t of
m a t t e r s a s b r i d g e s and l e v e l c r o s s i n g s and
superannuation
1.5.5
1.5.6
that t h e r e should no l o n g e r b e p r o v i s i o n for
e x c e p t on a transitional
deficit
basis.
S e c t i o n 3 of the R e p o r t contains o u r r e c o m m e n d a t i o n s on
management
structure.
the benefit of a v e r y
the
written
and
grants,
1.6
certain
liabilities;
that the value of the a s s e t s should a l s o b e
down;
such
Senior
Partner
by i n t e r v i e w i n g
paper
As
w e make clear
in' that S e c t i o n , w e had
full s u b m i s s i o n by the B o a r d ,
in C o o p e r
Brothers,
and M r .
g a v e us g r e a t
e a c h m e m b e r of o u r G r o u p ,
assistance
and p r e p a r i n g
w h i c h s u m m a r i s e d and collated o u r individual v i e w s .
g r e a t l y e a s e d the c o u r s e of o u r d i s c u s s i o n s ,
p a p e r by M r .
Pears
which w e make
that S e c t i o n 2 of the A c t ,
The
are:­
that S e c t i o n 1 of the T r a n s p o r t
setting up of R e g i o n a l
1.6.3
This
a s a l s o did a further
Act,
a m e n d e d to p r o v i d e f o r a s o m e w h a t
1.6.2
a
giving us the benefit of his o w n v i e w s .
main r e c o m m e n d a t i o n s
1.6.1.
Pears,
1962, should be
smaller
w h i c h p r o v i d e s for
Boards,
should be
Board;
the
repealed;
that p r o v i s i o n should b e m a d e r e q u i r i n g the B o a r d to
put f o r w a r d
Minister's
a general
s c h e m e of o r g a n i s a t i o n for the
a p p r o v a l within a s p e c i f i e d
period;
that the C h a i r m a n should b e g i v e n s o m e relief
1.6.4
the appointment of a " C h i e f
would h a v e
of the
by
General Manager
who
responsibility for the d a y - t o - d a y
running
railway;
that two s e n i o r m e m b e r s of the B o a r d
( w h o might b e
made V i c e
specific
1.6.5
Chairmen)
should b e g i v e n
r e s p o n s i b i l i t i e s for the b r o a d a r e a s of planning
finance;
1.6.6
and
that a p a r t from
this,
one m e m b e r for
members
1.7
and
and the s p e c i a l r e s p o n s i b i l i t y of
labour relations,
the o t h e r
should be f r e e of functional
W e consulted the T r a d e
Board
responsibilities.
U n i o n s and the v i e w s
expressed on finance and m a n a g e m e n t
into account in the r e c o m m e n d a t i o n s
they
s t r u c t u r e h a v e b e e n taken
in S e c t i o n s 2 and 3 .
There
were a n u m b e r of o t h e r m a t t e r s on w h i c h the U n i o n s c o m m e n t e d ,
which s e e m to us w o r t h y of mention,
our further
1.8
comments in A p p e n d i x
Paragraph
"to a s s e s s w h e t h e r
and,
railway i n f r a s t r u c t u r e
We have t h e r e f o r e
which w e a c c e p t ,
this matter.
(d)
and t h e s e a r e
A.
includes an element of
"standby
of a s p e c i a l
Committee w h i c h w e
set up to study
c a m e in the light
commercial g r o u n d s ,
network.
and ( b )
highly
e x i s t s a s a p e r m a n e n t element of
( W e a r e using " s t a n d b y
to mean capacity w h i c h is additional to that r e q u i r e d
other w o r d s ,
the v i e w s ,
detailed investigations w a s that it w a s
railway
us
capacity'".
set out at s o m e length in A p p e n d i x B
unlikely that " s t a n d b y c a p a c i t y "
any f o r e s e e a b l e
required
to what extent the c o s t of the
T h e main conclusion to w h i c h w e
of the C o m m i t t e e ' s
set out with
of o u r t e r m s of r e f e r e n c e
if s o ,
and
(a)
f o r the s o c i a l s e r v i c e s .
capacity"
on
In
it is s u r p l u s capacity which is additional to that
which the r a i l w a y s
need for
sound c o m m e r c i a l
reasons
(e.g.
to
cope with p r e d i c t a b l e p e a k s o r to assist o p e r a t i o n a l e f f i c i e n c y ) ) .
We are satisfied that a s a l e g a c y from
the past t h e r e is
considerable
surplus capacity,
recommended,
actual and potential,
and w e
b e settled to identify
out a p r o g r a m m e
specific
agree,
that a p r o g r a m m e
this s u r p l u s ,
for
to a s s e s
its elimination.
g r a n t should b e a g r e e d ,
aim of a s s i s t i n g ,
in the s y s t e m .
and hastening,
its c o s t s ,
and to work
with the
the elimination of this surplus and
T h i s g r a n t would pay for
both existing
a p e r i o d during w h i c h it should b e p r a c t i c a b l e f o r the
the w o r k
should
Appendix
B
the
and
in 1969 and w o u l d r e d u c e to z e r o
to rid t h e m s e l v e s of it.
Committee
W e a l s o r e c o m m e n d that a
estimated m a i n t e n a n c e c o s t of the s u r p l u s ,
in the s y s t e m
of w o r k
on a diminishing b a s i s ,
the rationalisation of the s y s t e m .
potential,
The
over
railways
a l s o includes an account of
n o w in hand to implement t h e s e r e c o m m e n d a t i o n s .
A
p r o v i s i o n a l f i g u r e f o r the c o s t of this s u r p l u s is included in the
calculations and r e c o m m e n d a t i o n s
1.9
Paragraph
(f)
in S e c t i o n 2 of this
of o u r t e r m s of r e f e r e n c e
Report.
r e q u i r e d the
G r o u p to look at the o t h e r continuing obligations r e s t i n g on the Board,
A
progress
r e p o r t on the w o r k
of the Joint T e a m s
whom w e
up to look at the v a r i o u s obligations w a s included in o u r
Report
(Part
I V of A n n e x
A).
We have now reached
on virtually all of t h e s e m a t t e r s ,
our recommendations
will b e s e e n ,
we
are
and the financial
set
Interim
conclusions
implications of
included in S e c t i o n 2 of this R e p o r t .
As
c o n c l u d e that t o g e t h e r they amount to a sum of
approximately £ 8 m .
p e r annum,
and that the most a p p r o p r i a t e
way
of r e c o g n i s i n g this is b y taking account of it in the capital
reconstruction,
paragraph
greater
1.5
w h i c h w e h a v e a l r e a d y b r i e f l y mentioned in
above.
The
length in A p p e n d i x
r e s u l t s of these studies a r e
C,
which
includes those of
set out at
our
r e c o m m e n d a t i o n s w h i c h do not d i r e c t l y r e l a t e to f i n a n c e .
1.10
which w e
services.
payments
We set out in o u r
Interim
R e p o r t the
recommendations
m a d e in r e s p e c t of s u b s i d i e s for u n r e m u n e r a t i v e
W e n o w think that it is better to call t h e s e
" g r a n t s " , and w e
refer
passenger
money
to them u n d e r this title henceforward
Our Interim
Report
(Annex
that the Consultants w e r e
A
paragraphs
proceeding
explained
with the p r e p a r a t i o n of a
form of q u e s t i o n n a i r e w h i c h the B o a r d
applications for g r a n t s .
9 and 10)
Considerable
w o u l d u s e in submitting
p r o g r e s s has been
made
with this, and the Consultants h a v e n o w p r e p a r e d a f o r m of
questionnaire w h i c h is being u s e d on a s a m p l e of s o m e
unremunerative p a s s e n g e r
services.
They
have also
25
produced
information about the likely o v e r a l l
s i z e of the g r a n t r e q u i r e d
this type of
r e c o r d s the w o r k
service.
Appendix
done since o u r Interim
make c l e a r
Report,
in that A p p e n d i x ,
D
the extent to w h i c h it is p r o p o s e d
our r e c o m m e n d a t i o n s
We have
concluded
need
this R e p o r t a l s o includes
A p p e n d i x D to
services,
grants a r e terminated,
from the allocation of t r a c k
lor bus s e r v i c e s p r o v i d e d
and
financially
about the t r e a t m e n t of i n t e r e s t in the
of capital l o s s e s w h e r e
1.11
Authorities,
not m a t t e r s on w h i c h w e
of grants f o r u n r e m u n e r a t i v e p a s s e n g e r
we
about
that they should b e c o m e
in c o n u r b a t i o n s .
that the detailed implications a r e
make r e c o m m e n d a t i o n s .
Transport
been
As
h a v e b e e n kept informed
the p r o g r e s s of thinking on P a s s e n g e r
responsible for local s e r v i c e s
that h a s
and the c u r r e n t p o s i t i o n .
we
for
the treatment
problems
c o s t s and the p r o b l e m
in lieu of w i t h d r a w n
calculation
of
resulting
subventions
railway
services.
T h e M i n i s t e r and the C h a i r m a n m a y a l s o find it helpful
to know the extent of the further
and the likely t i m e t a b l e .
For
work
w h i c h w e h a v e in m i n d ,
c o n v e n i e n c e this can b e set out
under the six r e m i t s w h i c h w e o r i g i n a l l y a g r e e d with the
Consultants,
and w h i c h w e r e
reported
in A n n e x D to o u r
Interim
Report.
Remits
1-12
W e set up a Costing
by the R a i l w a y s
Progress
C o m m i t t e e to r e v i e w
in d e v e l o p i n g and implementing the
progress
recommendations
concerning costing contained in the o r i g i n a l r e p o r t b y the
Consultants to w h i c h w e
Q
referred
in o u r Interim
i this is being maintained b y the B o a r d ,
Report.
and a small
Progress
research
section h a s b e e n e s t a b l i s h e d .
recommendations
satisfied that t h e r e a r e no
c a p a b l e of immediate adoption w h i c h a r e
being d e v e l o p e d .
reconsideration
We a r e
Some
recommendations
in the light of the further
Brothers which,
will p r o b a b l y
r e p o r t from
a s set out u n d e r r e m i t 4 b e l o w ,
r e c e i v e b y the end of July.
m a t t e r s on w h i c h w e
There
are clearly
we
not
require
Cooper
h o p e to
a n u m b e r of
shall w i s h to e x p r e s s a definite v i e w ,
but
w e a r e unlikely to b e in a position to do this b e f o r e the autumn.
Remit 2
1.13
The
sample
w e have r e f e r r e d
in p a r a g r a p h
jointly b y the B o a r d
Cooper
study of 25 u n r e m u n e r a t i v e
1.10 a b o v e is n o w being
and the M i n i s t r y ,
Brothers.
in c o - o p e r a t i o n
conducted
with
W e hope that the r e s u l t s of this will b e
available in the autumn,
and p r o p o s e to include the main
in a subsequent r e p o r t to the M i n i s t e r and the
Remit
s e r v i c e s to which
results
Chairman.
3.1
1.14
Martech
a r e undertaking
the r e s u l t s of w h i c h
a study on train load
should b e available
a r e undertaking a s e p a r a t e e x e r c i s e
hope that w e
shortly,
the r e s u l t s of
We
these
paper.
Remit 3.2 Marketing
Organisation
Remit 3 . 3 P r i c i n g
Policy
1.15
Brothers
Cooper
Board
on w a g b n - l o a d t r a f f i c s .
shall b e able to i n c o r p o r a t e
studies in a l a t e r
and the
traffics,
)
^
h o p e to submit their initial r e p o r t to us
shortly to be f o l l o w e d by a further
report
in the autumn on pricing
policy.
Remit 4.
Review
of B u d g e t a r y
Management
1.16
July,
Cooper
and F i n a n c i a l
Control
and
Information
Brothers
1967, with a further
h o p e to r e p o r t to us b y the end of
r e p o r t b y the end of
with p r o c e d u r e s f o r the c o n t r o l of capital
September
expenditure.
dealing
RemJLJ)..
Procedures
1 17
We
referred
which
Remit 6 . M a n a g e m e n t
1,18
Preparing
Long-Term
shall h a v e to c o n s i d e r
light of the r e p o r t s
additional w o r k
for
and w e
their further
1,19
to a b o v e ,
whether there
n e e d s to b e done u n d e r this
in the
is any-
remit.
Structure
work
will b e r e q u i r e d
under
p r o p o s e to d i s c u s s this with the Consultants
reports are
We
Estimates
with the C o n s u l t a n t s ,
It is c l e a r that s o m e further
this r e m i t ,
Financial
available.
shall a l s o be making
of our t e r m s of r e f e r e n c e
when
which
recommendations
under
r e q u i r e s us to e x a m i n e
B o a r d ' s investment p r o g r a m m e s
and the c r i t e r i a f o r
(e)
the
investment
appraisal.
1.20
A c c o r d i n g l y w e shall c e r t a i n l y
report in the autumn,
and it m a y b e a p p r o p r i a t e ,
develop, to put in s h o r t s e p a r a t e
comprehensive o n e .
w i s h to submit a
reports,
as
1.21
W e will k e e p in c l o s e touch with
officials
timetable.
o u r aim has b e e n to p r o v i d e the gist of
recommendations a s shortly a s p o s s i b l e ,
A l l o u r detailed p a p e r s ,
Consultants,
are
the B o a r d .
We have again,
already
and the r e p o r t s from
a v a i l a b l e both in the M i n i s t r y
therefore,
with the minimum of supporting
Our
report.
our
readable
the
and in
confined o u r s e l v e s
as
far
recommendations,
material.
c o n c l u s i o n s and r e c o m m e n d a t i o n s
Section 4 of this
a s in the
and in the most
as possible to a statement of o u r main findings and
1.22
further
W e c o n c l u d e this S e c t i o n by e m p h a s i s i n g that,
Interim R e p o r t ,
form.
circumstances
r a t h e r than a
from the M i n i s t r y and the B o a r d on the n e c e s s a r y
further
are
s u m m a r i s e d in
SECTION
2
FINANCE
INTRODUCTION
2,1
Paragraph
Transport P o l i c y
3 of the A n n e x to the White P a p e r
(Cmnd.3057)
said that the s o c i a l
on
and o t h e r
considerations w h i c h had l e d to the d e c i s i o n to stabilise the
railway n e t w o r k
also m a d e it n e c e s s a r y
financial f r a m e w o r k
1962.
The
for
to substitute a n e w
that i m p o s e d by the T r a n s p o r t
Act,
r e q u i r e m e n t contained in that A c t f o r the B o a r d
"pay its w a y "
b y the beginning of 1968 w a s
unrealistic and w o u l d ,
if p u r s u e d ,
now
entirely
f o r c e it into action w h i c h in
many c a s e s w o u l d b e against the interest of the community
inconsistent with the G o v e r n m e n t s
necessary for this f r a m e w o r k
plans.
It w a s
2.2
and
therefore
to b e amended to p r o v i d e
realistic and a p p r o p r i a t e financial o b j e c t i v e s
framework
to
more
and a n e w
financial
and d i s c i p l i n e .
In S e c t i o n 4 of o u r Interim
Report w e
said that o n e
of the most important t a s k s implicit in o u r t e r m s of
was to r e v i e w
reference
the financial p r o s p e c t s of the B o a r d in the light
of current d e v e l o p m e n t s
and the n e w p o l i c i e s indiciated in the
White P a p e r .
2.3.
Whilst it had not b e e n p o s s i b l e f o r us at the time
submitted the Interim
we
R e p o r t to a s s e s s the reduction in future
deficits w h i c h w o u l d b e brought about by d i r e c t g r a n t s of the
various kinds w e had in mind,
m respect of specific
o r by p a y m e n t s b y o t h e r
loss-making passenger
services,
it clear that t h e r e w o u l d still be
a gap - p o s s i b l y
between the total of the B o a r d ' s
revenue,
grants, and their total
2*4
authorities
we
a large
including t h e s e
thought
one
­
various
costs.
We e x p l a i n e d in o u r Interim R e p o r t that w e had set
ourselves the aim of v i e w i n g the w h o l e of the B o a r d ' s
as it would be in future y e a r s
in the light of the
business
Government's
policies,taking
account of future i n c r e a s e s
in e f f i c i e n c y ,
t h o s e w h i c h should result f r o m o u r c u r r e n t
now completed
an e x e r c i s e
make recommendations
White P a p e r
very
review.
on t h e s e l i n e s ,
can best be a c h i e v e d .
on
2.5
and include s o m e details of o u r w o r k
i m p o s s i b l e to put f o r w a r d
we
B o a r d but
could b e of
at the
problems
passenger
in A p p e n d i x
a tentative e s t i m a t e ,
has b e e n d o n e ,
(paragraph
as a result of the w o r k
a rough o r d e r
2.16).
services,
D.
It will be
a firm f i g u r e f o r the total of
g r a n t s until a g r e a t deal m o r e w o r k
put f o r w a r d
Docks
railways.
i n v o l v e d in paying g r a n t s f o r u n r e m u n e r a t i v e
a position,
set out in the
w h i c h they f o r e s e e
We h a v e l o o k e d in g r e a t detail
agreed
therefore
"Containerisation"
which they p r e p a r e d f o r the B r i t i s h T r a n s p o r t
g r e a t i m p o r t a n c e f o r the
have
W e h a v e only just s e e n the
recent report by M c K i n s e y & C o .
it is c l e a r that the d e v e l o p m e n t s
We
and can
as to h o w the o b j e c t i v e s
including
these
but w e
We a r e
also in
d e s c r i b e d in A p p e n d i x B ,
rationalisation
(paragraph
W e e x p l a i n e d in o u r Interim R e p o r t that a number of Joint
of o u r t e r m s of r e f e r e n c e ,
reference
to put an a p p r o x i m a t e f i g u r e to the c o s t of t h e s e
we
on
w a s m a d e in p a r a g r a p h
and w e h a v e n o w b e e n able
But as w e indicated in J a n u a r y ,
2.23),
Teams
at the v a r i o u s continuing obligations
the B o a r d to w h i c h s p e c i f i c
2.18)
to
of magnitude f i g u r e for the g r a n t that
r e c o m m e n d in r e s p e c t of t r a c k
had b e e n set up to look
have
have
(f)
(paragraph
obligations.
c o m e to r e a l i s e that there
is no possibility that t h e s e subventions could suffice to take the
British
Railways
REVIEW
2.6
produce
that w e
OF
Board
LONG
out of its c u r r e n t
TERM
REVENUE
deficit
position.
FORECASTS
W e t h e r e f o r e thought it right to ask the B o a r d to
detailed financial f o r e c a s t s
could look
f o r 1969 and 1974 in
order
at the w h o l e financial position as it w a s
to b e on the best assumptions that could b e m a d e .
The
likely
Board
discussed and a g r e e d with the Ministry of T r a n s p o r t ,
Government D e p a r t m e n t s ,
the e c o n o m i c
this study should be c a r r i e d out,
Appendix E . l .
these y e a r s ,
assumptions on which
and t h e s e
a r e set out in
T h e B o a r d p r o d u c e d detailed f o r e c a s t s
c o m p a r i n g likely l e v e l s of r e v e n u e
ignoring i n t e r e s t ,
and c o s t s ,
T h e s e forecasts
s h o w e d that in the
view, on the b a s i s of the assumptions to w h i c h w e
and assuming
and depreciation p o l i c y ,
a continuance of p r e s e n t
they w o u l d r e a c h
deficit to the extent of about £ 3 0 m .
and would b e likely to b r e a k
But, as w e
both
but
earning sufficient,
on o p e r a t i n g
e v e n on o p e r a t i n g
e v e n taking
Board's
have
asset
already
values
a position of being in
m a k e c l e a r in l a t e r p a r a g r a p h s ,
into account,
for
and their detailed tabulations a r e set out in
Appendix E . 2 .
referred,
and o t h e r
account in 1969,
account in 1974.
they w o u l d not b e
all the v a r i o u s t y p e s of
grant
to pay interest on the w h o l e of the existing
capital
debt.
2.7
These
by a F i n a n c e
f o r e c a s t s h a v e b e e n e x a m i n e d in s o m e
Sub-Group.
Whilst B o a r d
all the m e e t i n g s of the S u b - G r o u p
assistance as w a s
be r e g a r d e d
2.8
as
required,
it w a s
detail
representatives
and g a v e
attended
such information
and
a g r e e d that they should not
members.
It is c l e a r from this w o r k that looking ahead as far
1974 i n v o l v e s
a considerable
speculation.
The
attention on those
degree
Sub-Group
of j u d g e m e n t ,
therefore
outcome a p p e a r e d to b e p a r t i c u l a r l y
the basic assumptions u s e d .
and e v e n
concentrated
a s p e c t s of the f o r e c a s t s
w h e r e the
On the c o s t s i d e ,
overall
the most
important
performance,
and the extent to w h i c h it would in p r a c t i c e
Possible to run d o w n their m a n p o w e r .
Other key
concerned the national e c o n o m i c e n v i r o n m e n t ,
for rail s e r v i c e s
their
s e n s i t i v e to v a r i a t i o n s in
assumptions m a d e by the B o a r d c o n c e r n e d o p e r a t i n g
the w a g e s l e v e l ,
The
Sub-Group
prove
assumptions
and thus
demand
and the p r i c e s w h i c h it w o u l d b e p o s s i b l e
the B o a r d to c h a r g e .
as
also thought it
for
necessary
to m a k e
a provisional
by these f o r e c a s t s ,
that the B o a r d ' s
examination of the l e v e l of investment implied
as it is o b v i o u s l y e x t r e m e l y
forecasts
r e l e v a n t to remeber
d e p e n d upon the assumption that
investment will b e available
at the r a t e of about £100m. p e r
2.9
were
The
Sub-Group
the p o s s i b l e effects
the B o a r d
of inflation.
w o r k e d on an a g r e e d
inflation,
and that w a g e s
annum.
This
As
c o n c e r n e d about
will b e c l e a r from
Appendix El,
assumption that t h e r e would be no
would rise
at a r a t e of 3 p e r - c e n t
is in line with the assumptions u s e d f o r
G o v e r n m e n t planning.
if,
also p a r t i c u l a r l y
But the r a i l w a y s
in the e v e n t t h e r e w a s
annum.
current
might b e s e r i o u s l y
s o m e d e g r e e of inflation,
per
affected
(particularly if
their c o s t s w e r e inflated m o r e than t h o s e of their c o m p e t i t o r s or the
economy
as a w h o l e )
forward
detailed f i g u r e s
done on this o v e r
2.10
follows
and whilst it i s not y e t p o s s i b l e f o r us to put
we
are
the next f e w
Our views
a r r a n g i n g f o r further
w o r k to be
months.
on the B o a r d ' s
figures
can b e summarised as
:­
2.10.1
While the B o a r d
and a n s w e r e d
h a v e g i v e n us e v e r y
all o u r questions
in the time a v a i l a b l e ,
forecasts
of further
hand,
possible
as fully
many of the most
a r e still subject to refinement
work
w h i c h the B o a r d
help,
as p o s s i b l e
important
as a result
a r e putting in
but w h i c h cannot b e c o m p l e t e d b e f o r e
the
autumn.
2.10.2
Subject to this qualification,
w e feel that in g e n e r a l
t h e r e may be m o r e optimism than p e s s i m i s m
forecasts.
The
following
factors
into account in putting f o r w a r d
of results
:­
2.10.2.1
The
reservations
and inflation m a d e
in the
n e e d to be taken
a possible
regarding
above.
bracket
investment
2.10.2.2
The
forecasts
a s s u m e that t h e r e
will
a s t e a d y expansion in the e c o n o m y
about 3 p e r - c e n t
a year;
slower
o r fluctuation could d a m a g e the
2.10.2.3
The
r e s u l t s may
growth
itself
the 1967
n o w b e s o m e £10m.
worse
than t h o s e of 1966 .
It is unlikely in
these circumstances
that 1969 could
the i m p r o v e m e n t indicated in the
which
the B o a r d h a v e p r o p o s e d to the
Postulated improvements
crew
utilisation,
might p r o v e
realise;
and m o r e
and
working,
difficult to
this would w o r s e n the r e s u l t s
several
2.10.2.5
Minister.
in l o c o m o t i v e
and in w a g o n
slower
show
forecast,
despite the i n c r e a s e s in c h a r g e s
2.10.2.4
at
railways.
u s e of 1966 as a b a s e m a y
apply a d e g r e e of o p t i m i s m ;
be
by
£millions.
It may p r o v e
difficult, e v e n with the
special
help w h i c h will c e r t a i n l y be n e c e s s a r y , to
reduce manpower
at the r a t e implied in the
forecast.
2.10.2.6
There
must b e a d a n g e r
particularly
of s o m e
coal, falling s h o r t of
traffics,
expectations;
on the o t h e r hand t h e r e is p r o b a b l y
for increasing
r e c e i p t s through
scope
higher
charges.
2.10.2.7
Freightliners
a r e still at such an e a r l y
of their d e v e l o p m e n t that e s t i m a t e s
ahead as 1974 must be r e g a r d e d
as
as
stage
far
somewhat
speculative.
Whilst different m e m b e r s
may
various f a c t o r s they a r e
a g r e e d on the b r o a d c o n c l u s i o n s
'n the next p a r a g r a p h .
attribute different
w e i g h t s to t h e s e
set out
2.11
D r a w i n g these various threads together,
reasonable
a l l o w a n c e f o r the f a c t o r s
combination,
major
we
w h i c h might o c c u r in
h a v e r e a c h e d the c o n c l u s i o n that, u n l e s s t h e r e
c h a n g e s in p o l i c i e s ,
taking any account of i n t e r e s t .
worse
than
forecast,
On the o t h e r h a n d ,
end of the b r a c k e t s e e m s unlikely to be m o r e than £10m.
the top
better.
Both t h e s e f i g u r e s t a k e no account of the v a r i o u s subventions
the G o v e r n m e n t w h i c h w e
recommend
should b e a v a i l a b l e .
b e noted that the r a n g e of £ 5 0 m .
suggested
about 5 p e r - c e n t of the c o m b i n e d
revenue
undertaking,
are
The
ahead;
thus,
s e n s i b l e f o r planning p u r p o s e s
while we
it is not
range.
r a n g e quoted in the p r e v i o u s p a r a g r a p h is g i v e n simply
in o r d e r to p r o v i d e
considering
It should
a b o v e is equivalent to
i m p o s s i b l e that the r e s u l t s might fall right outside this
2.12
from
and e x p e n s e s of the
and this is looking s e v e n y e a r s
think t h e s e f i g u r e s
are
the bottom end of the b r a c k e t of likely­
r e s u l t s in 1974 might w e l l b e up to £ 4 0 m .
before
and making a
a guide to the M i n i s t e r
and the C h a i r m a n
the question of the extent to w h i c h capital
reconstruction
will b e r e q u i r e d .
In o u r c o l l e c t i v e j u d g e m e n t ,
on p r e s e n t t r e n d s
and p o l i c i e s m a y w e l l b e s o m e w h a t m o r e
than the B o a r d p r e d i c t in the f i g u r e s
when
the m o s t likely outcome
quoted in A p p e n d i x
E2.
unfavourabl
But we
do not w i s h to g i v e the i m p r e s s i o n that nothing b e t t e r than this is
possible,
and c e r t a i n l y it w o u l d b e e n t i r e l y w r o n g f o r the B o a r d to
feel that it w o u l d b e s a t i s f a c t o r y
m e a n point of the f i g u r e s
h o p e to do b e t t e r ,
if they do no b e t t e r than a c h i e v e the
quoted a b o v e .
of t h e s e
h a v e said that they
and should s e t t h e m s e l v e s the t a r g e t of doing so,
p r o v i d e d the t r e n d of the e c o n o m y
control w o r k
They
out as f a v o u r a b l y
and o t h e r m a t t e r s outside their
as has b e e n
a s s u m e d f o r the purpose
forecasts.
EFFECT
OF
2.13
Before
be d e s i r a b l e ,
GRANTS
we
c o n s i d e r i n g the d e g r e e of recapitalisation that may
h a v e had to c o n s i d e r the nature and s c a l e of the
v a r i o u s t y p e s of g r a n t that m a y b e available to the B o a r d
:­
Social G r a n t s f o r
2,14
Unremunerative
Passenger
Services
W e explain in A p p e n d i x D to this R e p o r t the
that has b e e n m a d e s i n c e o u r Interim
we have r e a c h e d .
Report,
and the s t a g e that
It will not b e p o s s i b l e to put f o r w a r d
like an a c c u r a t e total f o r t h e s e g r a n t s until at least
asked C o o p e r
Board's officers,
Brothers,
order of magnitude f o r the total of t h e s e g r a n t s .
could of the likely
In v i e w of the
time available f o r the p r e p a r a t i o n of the estimate it w a s
which w a s
already
available.
In the
in a s s o c i a t i o n with the
to m a k e the b e s t estimate they
to use information on the e a r n i n g s
anything
a considerable
number of s e r v i c e s h a v e b e e n l o o k e d at in g r e a t detail.
meantime, w e
progress
and d i r e c t c o s t s of
Much of this w a s
necessary
services
s o m e w h a t out of
date and had to b e adjusted to take account of c h a n g e s in p r i c e
levels and f a i r l y b r o a d
and signalling c o s t s .
assumptions had to b e m a d e
O n this b a s i s ,
about t r a c k
the Consultants s a i d that
the total deficit on all l o s s - m a k i n g p a s s e n g e r
services
was
£83m.
But to make the f i g u r e
quoted in A p p e n d i x
p . a.
compatible with t h o s e
E 2 it is n e c e s s a r y
to
exclude
S e r v i c e s on " g r e y " o r " thin b l a c k "
which it w a s
assumed would be
lines
withdrawn
by 1969
£14m.
Interest r e l a t e d to the r e m a i n i n g s e r v i c e s
£17m.
On this b a s i s the adjusted deficit is
2.15
A
broad
analysis is
London
Other
£52m.
:-
Suburban
£10m.
Suburban
£
Stopping
Principal
£31m.
8m.
£21m.
and S e c o n d a r y
Total
£13m.
£52m.
p . a.
p . a.
2.16
It is likely that c e r t a i n of the s e r v i c e s
included in the a b o v e f i g u r e s
g r a n t b y the B o a r d ,
services
which
are
w o u l d not in fact b e submitted
e i t h e r b e c a u s e they c o n s i d e r e d that the
could be m a d e v i a b l e by m a n a g e m e n t
action o r
they w i s h e d to retain them f o r sound c o m m e r c i a l
because
reasons.
is also c l e a r that if t h e r e w e r e to b e a s o m e w h a t g r e a t e r
of
aggregation
smaller,
of s e r v i c e s ,
because
the total deficit quoted w o u l d
the s u r p l u s on o t h e r s e r v i c e s
b a l a n c e the l o s s on the s e r v i c e s
would
included a b o v e .
hand it may b e that on investigation it will p r o v e
s u b - d i v i d e s o m e of the s e r v i c e s
the l o s s e s
ranking f o r g r a n t .
is likely to b e
Suburban
The
be
O n the o t h e r
right further to
particularly for
and s e c o n d a r y
services:
qualifications
London
in relation to the
g r o u n d s might often not be
A f t e r taking all t h e s e points into account,
e s t i m a t e that the total g r a n t s
degree
counter­
net effect of t h e s e
a reduction in c l a i m s ,
and principal
It
with a c o n s e q u e n t i n c r e a s e in
latter the c a s e f o r a g r a n t on s o c i a l
strong.
for
(excluding interest)
the
Board
w h i c h they might
actually e x p e c t to r e c e i v e in 1969 and 1974 will not e x c e e d the
figures
of £ 4 0 m .
if efficiency
and £ 3 5 m .
can b e i m p r o v e d ,
n o w s e e m s likely;
rejected,
or
Board's
over-estimates
o r the s e r v i c e s p r u n e d ,
m o r e than
as a result of applications f o r g r a n t being
in question w o u l d
In t h e s e c i r c u m s t a n c e s
would be similarly
2.17
may p r o v e to b e
in w h i c h c a s e the s e r v i c e s
be withdrawn.
The
These
affected
the B o a r d s
presumably
basic
!
figures
and the net result w o u l d b e the s a m e .
Continuing Obligations
Deriving
from
the
Past
W e h a v e d e s c r i b e d in s o m e detail in A p p e n d i x
C the work
that h a s b e e n done on t h e s e continuing obligations b y the v a r i o u s
Joint T e a m s
are
whom
we
set up at the time of o u r
appointment.
We
a g r e e d that t h e r e is no n e e d f o r specific financial treatment in
r e s p e c t of M u s e u m s
the B o a r d ' s
and H i s t o r i c a l
responsibilities
D e p a r t m e n t of Education
Records,
where
w e hope that
can l a r g e l y b e handed o v e r to the
and S c i e n c e .
As
regards
the
Savings^Bas!
there is no s h o r t - t e r m
deposits,
problem,
but the i n t e r e s t on
and also on the S u p e r a n n u a t i o n funds,
taken into account w h e n w e
c o m e to a s s e s s
of interest b u r d e n w h i c h it w o u l d b e
to c a r r y f o r
2.18
the
The
at this s t a g e
specific
are
the total
Level
2.18.3
The
a sum of about £ l ^ m .
Crossings,
mentioned
£f-m . p e r
Board's
Police
as a w h o l e )
say
and
Superannuation
obligations
resulting
whether
however,
such g r a n t s ,
the type of specific
grant which w e
passenger
services.
to
grant.
difficulties
and a g r e e i n g
nature of the g r a n t s w o u l d m o r e o v e r
in r e s p e c t of u n r e m u n e r a t i v e
therefore
or general
be considerable practical
involved in a r r a n g i n g f o r
different f r o m
about
it w o u l d b e a p p r o p r i a t e
meet t h e s e obligations b y s o m e kind of s p e c i f i c
The g e n e r a l
­
annum.
We considered
There w o u l d ,
annum.
(in r e s p e c t of
f r o m the d e c i s i o n s of their p r e d e c e s s o r s
per
annum.
e
to the public
annum
per
a sum of about £ l m . p r
British T r a n s p o r t
their s e r v i c e s
2.19
Board
:­
2.18.2
£5m.
amount
a p p r o p r i a t e f o r the
obligations w h i c h should b e
Road Bridges,
The
h a s to b e
future.
2.18.1
2.18.4
these
the
be
amounts.
quite
are
recommending
We
c o m e to the c o n c l u s i o n that the s e n s i b l e w a y
have
in w h i c h
to deal with t h e s e r e l a t i v e l y small s u m s is to take account of
them in the recapitalisation w h i c h w e
Xpack
d i s c u s s l a t e r in this
Section.
Rationalisation
2.20
to assess
Paragraph
"whether
"if restructure
(d)
of o u r t e r m s of
reference
required
and if s o to what extent the cost of
includes an e l e m e n t of " s t a n d b y c a p a c i t y " " .
us
railway
We
have
in fact m a d e intensive e n q u i r i e s into the remifications
subject,
and a brief
A p p e n d i x 33.
"Standby
W e h a v e concluded that,
reasons
o r f o r operational
as a p e r m a n e n t f e a t u r e ,
of s u r p l u s
strictly
capacity,
eliminated.
of
actual o r potential,
route m i l e s .
in the s h a p e of e x c e s s t r a c k
t w o w o u l d suffice to c a r r y
in the s y s t e m ,
the cost
deficit until it can be
r e l a t e d to the route mileag
mileage
(e.g.
the traffic) .
The
four t r a c k s ,
where
T h i s is one of the
which,
r e c o m m e n d f o r the future,
as p o s s i b l e .
a basic
It is almost w h o l l y to b e found
inherited liabilities of the r a i l w a y
which w e
d o e s not
o r to the decision to retain and d e v e l o p
11,000
for
but t h e r e is a c o n s i d e r a b l e measure
T h i s s u r p l u s is not mainly
of the s y s t e m
quickly
speaking,
convenience,
of w h i c h i s bound to s w e l l the B o a r d ' s
network
is included in
c a p a c i t y " o t h e r than that r e q u i r e d b y the r a i l w a y
commercial
exist
s u m m a r y of o u r w o r k
of this
in the light of the policies
should b e eliminated as
amount of the s u r p l u s is not static and
additional s u r p l u s should b e continuously c r e a t e d with changes in
equipment and o p e r a t i o n a l m e t h o d s .
this g r a n t ,
however,
F o r the p u r p o s e
it is p r o p o s e d to confine c o n s i d e r a t i o n to
surplus which exists
n o w o r can b e c r e a t e d b e f o r e 1974.
hope that it will b e p o s s i b l e for the B o a r d to identify
all this s u r p l u s capacity within the next 18 m o n t h s .
have
why
explained that,
and cost
But they
reasons
much of this s u r p l u s cannot b e eliminated as s o o n
as it is
routes,
even s o ,
We
t h e r e a r e g o o d technical
identified.
In many c a s e s
it will i n v o l v e alterations to alternative
the rationalisation of s e r v i c e s ,
signalling
ones.
out,
the B o a r d
of old stations o r the
W h e r e these steps
w e l l take a n u m b e r of y e a r s .
carried
the installation of improved
and p o s s i b l y e v e n the r e m o v a l
building of n e w
may
of settling
But,
will h a v e to c a r r y
a r e n e c e s s a r y they
until they c a n be
the c o s t of this surplus
-19
We are t h e r e f o r e
satisfied that t h e r e is a c a s e ,
(or the M i n i s t r y paying
be to a s s i s t ,
137
-
a specific
and h a s t e n ,
grant w h o s e purpose
Whether this g r a n t
should
W e h a v e a l r e a d y e x p l a i n e d w h y the o t h e r
suffer
can most
historic
conveniently
be dealt with b y m e a n s of a capital r e c o n s t r u c t i o n .
that this i n f r a s t r u c t u r e
from the finance
angle,
but tapering s u b s i d y ,
of this s u r p l u s ,
at an a g r e e d
a p e r i o d of a f e w y e a r s
r a t h e r than capital r e c o n s t r u c t i o n .
s o that it r e a c h e s
zero
period should b e fixed
W e think w e
we
at the
cost
reduced
earliest
could b e e x p e c t e d to h a v e
at least the g r e a t e r p a r t of this s u r p l u s .
removed
W e s u g g e s t that this
at 5 y e a r s .
should e m p h a s i s e that in
r e g a r d it e s s e n t i a l l y
the most r a p i d p o s s i b l e rationalisation
the B o a r d g e t s no benefit f r o m
capacity, w e
We
that the B o a r d should be p a i d ,
but that the g r a n t should t h e r e a f t e r b e
period by w h i c h the B o a r d
such a g r a n t ,
m e a n s that,
a g r a n t w h i c h should meet the a s s e s s e d
rate,
fact
the a p p r o p r i a t e treatment is a s p e c i f i c
recommending
in the first y e a r ,
The
s u r p l u s is a liability w h i c h can b e
substantially r e d u c e d o v e r
are t h e r e f o r e
surplus
considered.
liabilities u n d e r w h i c h the B o a r d
2.22
and
any part of the capital c o s t of r e m o v i n g the
has still to b e
2.21
should
the elimination of this s u r p l u s
the rationalisation of the s y s t e m .
also c o v e r
exceptionally,
recommending
as a tool f o r
securing
of the s y s t e m .
the retention of
Although
uncessary
think they w o u l d b e helped by an incentive to get
rid of ft r a p i d l y .
!t should r e p r e s e n t
If a g r a n t is a g r e e d on the lines w e
propose,
a c h a l l e n g e to the B o a r d to deal with the
situation as d r a s t i c a l l y
available
resources
2.23
As
produced
set out in A p p e n d i x
a precise
an o r d e r
B,
of magnitude f i g u r e
to £ 1 7 m .
represent
and w e
s u g g e s t that f o r the c u r r e n t
per
annum.
longer be payable) ,
o v e r a l l financial
will h a v e
and w e
(even
as a Condition of the W i t h d r a w a l
2.24
at a rate of
then it is fair to assum
although the g r a n t will no
have therefore
of B u s
assumed
S e r v i c e s , provided
of R a i l
Services
(paragraph
w o u l d h a v e to c o n s i d e r h o w to deal with t h e s e
in 1966,
actually c o s t the B o a r d £ 5 0 0 , 0 0 0
the total l o s s e s b e c a u s e
Transport
Holding
T h i s figure
are
some
Company
will c e r t a i n l y
operators,
Groups,
increase,
still unable to m a k e s p e c i f i c
this financial
responsibility
as any n e w
arrangements
a £15m,
years.
W e said in o u r Interim R e p o r t
which,
exercise
r e d u c e d their c o s t s by
i m p r o v e m e n t in their finance f o r both
S u b v e n t i o n s to O p e r a t o r s
and w e
something of an underestimate,
If this is a c c e p t e d ,
something n e a r to this amount
have
f o r the y e a r 196
should a s s u m e that the g r a n t in 1969 will b e
that by 1974 rationalisation
We
which,
they
They believe,
that this m a y
we
the B o a r d will not be
In the m e a n t i m e ,
accept,
£15m.
and the
f i g u r e f o r the c o s t of this surplu
the end of 1968.
is a b r a c k e t f r o m £ 1 1 m .
we
as c i r c u m s t a n c e s
permit.
able to put f o r w a r d
until t o w a r d s
and as r a p i d l y
3.23) thi
subventions
- l e s s than
and p a r t i c u l a r l y the
claim l e s s than they migt
at least in the short term,
recommendations
as to hoi
can best b e r e m o v e d from
the Boar
should fit in with the g e n e r a l structu
of the p o l i c i e s for the bus industry g e n e r a l l y
which
a r e currentl
being d e v e l o p e d within the M i n i s t r y .
as part of the o v e r a l l financial
recommending,
burdens,
But w e
reconstruction
which w e
that,
are
these
a s s u m e in the following p a r a g r a p h s that a
way will b e found to a c h i e v e
this.
THE B O A R D ' S
FINANCIAL
The
agreed
the B o a r d should b e r e l e a s e d f r o m
and w e
2.25
are
FUTURE
Board's
current interest-bearing
out in their 1966 A n n u a l R e p o r t
Interest-Bearing
Capital
to Minister of
Transport
Savings Bank
Deposits
Superannuation,
etc
STRUCTURE
and A c c o u n t s ,
debt,
is as
as
set
follows: ­
Liabilities
£912m.
£
Deposits
36m.
and
Provisions
£275m .
£ 1 , 223m.
In addition,
the s u s p e n d e d debt
no interest is p a y a b l e )
but the capital deficit
totalled
(on
which
- - - - -
arising from
£705m.
adjustment
of book v a l u e s of v e s t e d net a s s e t s could b e
offset against this - - -
- -
- -
- -
- -
-
leaving a total of
2.26
£390m.
T h e following table s e t s out the likely f i g u r e s
B o a r d ' s financial position in 1969 and 1974 including the
of the p r o p o s e d
£315m.
grants.
f o r the
effect
-
SUMMARY
OF
22
-
LONG-TERM
REVENUE
/Deficit/ / S u r p l u s b e f o r e calculation
of g r a n t s and i n t e r e s t
P e r Appendix E 2
Adjustment in a c c o r d a n c e
with p a r a g r a p h 2.11 - say-
FORECASTS
1966
£m.
1969
£m.
/72/
/30/
1974
£m,
-
0-/25/*
G r a n t s , e x c l u d i n g i n t e r e s t , in r e s p e c t
of u n r e m u n e r a t i v e p a s s e n g e r s e r v i c e s
-
40
35
Track
Track
-
15
15
25-0
60-
64
70
80
-
15
15
64
55
65
Rationalisation
reductions
Grants
and
/Deficit/ / S u r p l u s b e f o r e interest
p a y m e n t s ( o r i n t e r e s t r e c e i p t s in
r e s p e c t of g r a n t s )
/72/
lO-/40i
I n t e r e s t a s s u m i n g no c h a n g e in
p r e s e n t b a s i s of capital obligations
Payments
Less
: Grant
receipts
Net
/ D e f i c i t / / S u r p l u s after
interest ( 2 less 3)
No
specific
Report,
Grants
and
/136/
m a d e in this s e c t i o n of the
estimate f o r 1969 is
but the a b o v e f i g u r e s
f o r 1969 than f o r 1974.
/30/-/55/
assume a n a r r o w e r
A t the u p p e r end of th e
bracket
bracket,
it is a s s u m e d that the d e t e r i o r a t i o n in 1967 will b e offset by
the i n c r e a s e
in c h a r g e s
recently
sought b y the B o a r d .
/17-/J
2,27
These
figures
d e m o n s t r a t e that,
policy set out in the White P a p e r
a considerable w r i t e - o f f
is inevitable.
if the
Government
is to b e c a r r i e d into
of existing capital debt to the Minister
T h e White P a p e r
said that after the
had a s s u m e d responsibility f o r l o s s e s on s e r v i c e s
social r e a s o n s ,
effect,
the B o a r d
should then b e g i v e n
objectives to a s s i s t them to m o v e
economic b a s i s of o p e r a t i o n .
Government
retained
realistic
for
financial
as s o o n as p o s s i b l e to a fully
E v e n on the most
optimistic
assumptions, the B o a r d cannot b e e x p e c t e d to do this on the
basis of their p r e s e n t
2.28
We a r e
realistic b a s i s ,
debit.
a g r e e d that recapitalisation
and must not look too f a r
the uncertainties b e c o m e g r e a t .
capital r e c o n s t r u c t i o n
not f o r e s e e
Board ' s
must be on a
ahead to a p e r i o d
We recommend therefore
should be c a r r i e d
where
that the
out on a b a s i s which
quite such a r a t e of r e c o v e r y
does
as is s u g g e s t e d by the
r e v e n u e f o r e c a s t s , and that the aim should be to put the
Board in a position of b r e a k
even,
including i n t e r e s t p a y m e n t s ,
in
the early 1970s.
2.29
We r e g a r d it as o b v i o u s that the B o a r d
must b e put in
a position w h e r e they can continue to honour their obligations in
respect of the i n t e r e s t - b e a r i n g
Savings B a n k s
deposits
and S u p e r a n n u a t i o n
and p r o v i s i o n s f o r
and R e t i r e m e n t
the
Funds,
etc.
Any recapitalisation which is c o n s i d e r e d can r e l a t e only to the
Board's debt to the
2.30
in the y e a r
Minister.
S u b j e c t to the f i g u r e s
not being d r a s t i c a l l y
which the B o a r d p r o d u c e
different,
we
s e e no r e a s o n
should not b e p o s s i b l e to put the B o a r d in a b r e a k
about 1971.
Whilst this w o u l d c e r t a i n l y i n v o l v e
of their capital debt w e
bounds of acceptability.
later
w h y it
e v e n position
a drastic
writing
by
down
do not b e l i e v e that this n e e d g o b e y o n g the
Transitional
be needed to c o v e r the p e r i o d f r o m
deficit g r a n t p o w e r s
may
well
1969 to 1971, but it is an important
p a r t of the s c h e m e w h i c h w e
grant p o w e r s
words,
break
r e c o m m e n d that no future
deficit
n e e d b e e n v i s a g e d f o r the p e r i o d after 1971. In other
w e think it essential that the B o a r d
e v e n position at an e a r l y d a t e ,
should b e put in a
and that they should then be
s e e n to b e in a s i m i l a r position to other nationalised
industries,
with no n e e d f o r the M i n i s t e r to h a v e p o w e r s to m a k e g r a n t s to
m e e t any deficit that they might i n c u r in an individual
2.31
year.
It is c o n s i d e r e d that the capital r e c o n s t r u c t i o n
envisaged
should b e matched b y an equivalent w r i t i n g d o w n of a s s e t values.
Such
a w r i t i n g d o w n w o u l d h a v e the c o n s e q u e n c e
amount of d e p r e c i a t i o n
year,
which the B o a r d
of reducing the
w o u l d h a v e to p r o v i d e each
and w o u l d thus i n c r e a s e the m a r g i n of r e v e n u e it had
available f o r
figures,
servicing
however,
capital d e b t .
consideration
In w o r k i n g out the
should b e g i v e n to shortening the
d e p r e c i a t i o n l i v e s of c e r t a i n
assets,
of technical
obsolescence.
2.32
and c o m m e r c i a l
If in any y e a r the B o a r d
to m e e t all their liabilities,
detailed
f o r i n s t a n c e , b e c a u s e of the risk
did in fact fail to e a r n enough
including i n t e r e s t ,
the main effect would
b e that they w o u l d not h a v e e a r n e d their d e p r e c i a t i o n in full.
Depreciation
(including
amortisation)
is a p r o v i s i o n in r e s p e c t of
the consumption of fixed a s s e t s w h i c h i n v o l v e s no c a s h
y e a r by y e a r .
The
to b e r e p l a c e d .
expenditure
Nonetheless,
expenditure
a r i s e s only w h e n the assets have
u n d e r the p r e s e n t s y s t e m ,
g r a n t is i s s u e d in r e s p e c t of the d e p r e c i a t i o n p r o v i s i o n ,
Board
and the
a r e p r o v i d e d with c a s h in e x c e s s of that n e e d e d to meet
operating l o s s e s ;
requirements.
this c a s h is available t o w a r d s t h e i r current capital
Under
our p r o p o s e d s c h e m e ,
l o n g e r h a v e the c a s h from
it.
Exchequer
They
deficiency.
the B o a r d would no
d e p r e c i a t i o n u n l e s s they actually earned
w o u l d h a v e to b o r r o w
the sum r e q u i r e d
to make up any
But g i v e n the e s t i m a t e s w h i c h the B o a r d
m a k e of the position up to 1974,
and the Ministr
and on the b a s i s of the degree of
recapitalisation w h i c h w e
h a v e in mind,
present an i n t o l e r a b l e b u r d e n .
the following f e w y e a r s ,
this situation should not
W e do not think that e v e n
it n e e d b e c o m e u n m a n a g e a b l e ,
we r e c o g n i s e that t h e r e
will b e
a need for
over
though
a continuing
financial
improvement after 1974 if investment is to be sustained at its
present l e v e l .
2.33
There
a r e t w o further
c o m m e n t s which w e
should
make : ­
2.33.1
We are
recommending
the p r o b l e m .
A
a very
drastic approach
p o s s i b l e c o n s e q u e n c e might be that
m o r e capital i s w r i t t e n off than p r o v e s to h a v e
been
necessary.
Board
If this should p r o v e to be s o ,
might w e l l e a r n
a considerable
18 of the 1962 A c t
of a g e n e r a l
we
suggest,
as a c h a r g e
control.
need a p o w e r ,
establishment
on r e v e n u e ,
of the A i r
r e c o n s t r u c t i o n of
amount s u r p l u s to the B o a r d ' s
basis,
internal financial
BOAC,
should b e
financial s t r u c t u r e
and to r e m o v e the " s a f e t y - n e t "
should r e - i n f o r c e
the
on
of
Board's
discipline.
W e do not think that it w o u l d b e right for us to
precisely h o w much the w r i t e - o f f
available,
should b e .
We h a v e ,
and the p r e c i s e f i g u r e s
recommend
as y e t ,
the light of the position that will e m e r g e
only
for
recapitalisation will n e e d to b e d e t e r m i ned o v e r the next f e w
ln
Act,
Exchequer.
a deficit g r a n t p o w e r ,
fairly rough f i g u r e s
will,
that any
requirements
W e b e l i e v e that to put the B o a r d ' s
a break-even
under
Corporations
after consultation with the B o a r d ,
paid into the
Section
on the analogy of that
1966, p r o v i d i n g f o r the capital
2.34
But
In addition the M i n i s t e r
contained in S e c t i o n 3 ( 9 )
to d i r e c t ,
surplus.
the
a l r e a d y p r o v i d e s f o r the
reserve
the M i n i s t e r ' s
2.33.2
to
as the B o a r d ' s
months
own
financial f o r e c a s t s
a r e further
e c o n o m i c outlook b e c o m e s
refined
clearer.
and,
it is h o p e d ,
the
C e r t a i n l y t h e r e will be
a n e e d f o r the f i g u r e s to b e d i s c u s s e d in detail b e t w e e n the
Board,
the M i n i s t r y
Minister
But,
clearly,
the
and the C h a i r m a n w o u l d e x p e c t us to r e c o m m e n d the
principles which
2.35
we
and the T r e a s u r y .
As
any recapitalisation
follow.
an indication of o r d e r s of magnitude,
might m a k e the following
2.35.1
should
points
: ­
If the r e m a i n i n g s u s p e n d e d debt w e r e
and a s s e t v a l u e s w r i t t e n d o w n
depreciation
however,
written
accordingly,
the
a l l o w a n c e s to b e p r o v i d e d in the Board's
accounts could b e r e d u c e d b y s o m e £15m.
There
off,
- £20m.
w o u l d b e no i m m e d i a t e effect on the interest
burden.
2.35.2
If,
say,
were
£100m.
of the " l i v e " capital debt to the Minister
w r i t t e n off,
correspondingly,
by £ 6 m .
per
and a s s e t v a l u e s w e r e
the i n t e r e s t b u r d e n w o u l d be reduced
annum and the d e p r e c i a t i o n
could b e r e d u c e d by £ 5 m .
2.36
Recapitalisation
recommendations
essential)
per
on the s c a l e
provisions
annum.
r e q u i r e d to meet the
s u m m a r i s e d in p a r a g r a p h
a matter of r e a l g r a v i t y ,
written down
2 . 4 2 is recognised as
and r e p r e s e n t s the a c c e p t a n c e
of the fact that B r i t i s h
Railways'
(which is
e a r n i n g s simply are
not sufficient to s u p p o r t the total a s s e t s n o w e m p l o y e d in the busine
e v e n w h e n a l l o w a n c e is m a d e f o r s p e c i f i c
social,
etc.,
grants,
is thus a step in line with the aims set out in the White Paper of
p r o v i d i n g B r i t i s h R a i l w a y s with r e a l i s t i c b u r d e n s
will e n a b l e their efficiency
and assets and
to b e j u d g e d by n o r m a l financial criteria
2,37
Nevertheless
it is also r e c o g n i s e d that
recapitalisation
is merely an accounting d e v i c e to align the b o o k v a l u e of
Railways' existing
a s s e t s with B r i t i s h
of itself d o e s nothing to r e n d e r
viable in the future
of such a s s e t s
when
British
Railways'
at that, t i m e .
The
earnings
Railways more
a s s e t s will be r e p l a c e d
commercially
future
ensure that the quantity
in the future
2,38
assets
Railways'
of aligning the actual
with future
earnings,
and t y p e of a s s e t s that a r e
it is not e n v i s a g e d
involve a r e l a x a t i o n of financial
actually
Railways a v e r y c o n s i d e r a b l e
earnings.
on the c o n t r a r y
is m a d e
will
it should
and thus i m p o s e on
responsibility.
British R a i l w a y s this r e s p o n s i b i l i t y
replaced
that the recapitalisation
discipline;
enable it to b e e x e r c i s e d m o r e c l e a r l y
value
that i s ,
a r e only such a s c a n b e s u p p o r t e d b y future
Moreover
cost
however
recommended in the expectation that it will help B r i t i s h
of British R a i l w a y s '
and
at the full
recapitalisation is
management to s o l v e the b a s i c p r o b l e m
British
British
In the opinion of
all the m o r e
serious
because of the fact that their capitalisation is w h o l l y on the
basis
fixed i n t e r e s t .
I'39
T h e w h o l e of this s e c t i o n is b a s e d on o u r
hat, apart from
the u n r e m u n e r a t i v e
social g r o u n d s ,
the R a i l w a y s
services
Board
linage their activities on a c o m m e r c i a l
-40
One member
of the S t e e r i n g
assumption
to be g r a n t
aided
will h a v e f r e e d o m
to
basis.
G r o u p feels
strongly
ie present method of financing the nationalised industries b y
iterest capital is w r o n g ,
at l e a s t as r e g a r d s
the r a i l w a y s ,
J a t the introduction of an " e q u i t y " w o u l d b e p a r t i c u l a r l y
tithe c i r c u m s t a n c e s of that i n d u s t r y .
en informed that the G o v e r n m e n t
e
;0c
Since,
however,
further.
fixed
and
suitable
we
w o u l d b e m o s t unlikely to
ept this, w e h a v e not p u r s u e d the matter
that
have
Treasury
Representatives'
2.41
Steering
The
Group
the f i g u r e s
Treasury
Position
has b e e n
and h a s t h e r e f o r e
and a r g u m e n t s
represented
taken p a r t in
and p r o s p e c t s .
wider view
covering
the E x c h e q u e r
other
formulating
i n c o r p o r a t e d in the r e p o r t .
h a v e of c o u r s e b e e n p r e p a r e d in the context of
operations
on the Joint
It will t h e r e f o r e
aspects,
These
railway
b e c l e a r that any
which the C h a n c e l l o r of
might subsequently w i s h to take is in no way­
p r e j u d i c e d by such
participation.
RECOMMENDATIONS
2.42
following
2.42.1
In the light of all t h e s e c o n s i d e r a t i o n s
recommendations
make the
:­
the capital debt of the B o a r d
to a l e v e l
we
should b e written down
at w h i c h it c a n r e a s o n a b l y b e
expected
that the i n t e r e s t p a y m e n t s c a n b e found out of
prospective
2.42.2
the " b r e a k
revenue
e a r l y in the 1970s;
e v e n " thus e n v i s a g e d
should b e based on
neither too optimistic n o r too p e s s i m i s t i c
of the B o a r d ' s
2.42.3
a forecast
r e v e n u e s in the e a r l y 1970s;
the capital w r i t e - o f f
i n v o l v e d w o u l d in p a r t be
justified by taking account of the continuing obligations
of the B o a r d in r e s p e c t of r a i l w a y
level c r o s s i n g s ,
superannuation,
d e s c r i b e d in p a r a g r a p h
2.42.4
the
road
and the P o l i c e , as
2.18;
capital r e c o n s t r u c t i o n
e n v i s a g e d should be matchel
b y an equivalent w r i t i n g d o w n of a s s e t
2.42.5
appropriate
arrangements
account in c a s e ,
the p r e v i o u s
cutting d o w n the capital debt,
necessary
has been
values.
should b e m a d e for dealing
with any s u r p l u s on r e v e n u e
result of following
bridges,
as a
r e c o m m e n d a t i o n s for
the amount of write-off
overestimated;
2.42.6
t h e r e should no l o n g e r b e p r o v i s i o n f o r
grants from
the M i n i s t e r
(except perhaps
deficit
for
the transitional p e r i o d 1969 to 1 9 7 1 ) : and in
particular,
no deficit g r a n t should b e
in r e s p e c t of d e p r e c i a t i o n
provision.
payable
-
BOARD
31 -
STRUCTURE
SECTION
AND
3
ORGANISATION
Part I
PRESENT
3.1
POSITION
Section 1(3)
of the T r a n s p o r t
shall consist of a C h a i r m a n ,
A c t 1962 p r o v i d e s that the
one o r t w o V i c e
Chairmen,
more than sixteen n o r l e s s than ten o t h e r M e m b e r s .
that B o a r d M e m b e r s
are
capacity in, t r a n s p o r t ,
administration,
At p r e s e n t ,
industrial,
applied s c i e n c e ,
there a r e
of,
commercial,
3.2
o r the o r g a n i s a t i o n of
a Chairman,
two V i c e
h a v e functional
S e c t i o n 2 of,
and the F i r s t
between them responsibility
Subsection
vary the number
for
Boards
as a r e
matters,
workers.
Chairmen,
seven
A l l the
full-time
appointed
Schedule to,
Railway
the 1962 A c t
Boards
all p a r t s of the national
g i v e s the Minister p o w e r ,
of B o a r d s .
Regional R a i l w a y
Railways B o a r d
2(2)
Subsection 2 ( 4 )
shall e x e r c i s e
to
share
railway
by o r d e r ,
such functions of the
d e l e g a t e d to them b y the B o a r d ,
to time with the a p p r o v a l of the M i n i s t e r .
5 Regional R a i l w a y
and the
time
A t the p r e s e n t t i m e ,
m a d e by the Minister in 1966, t h e r e a r e
as
only
Boards.
Part
WORK
BY
THE
II
METHOD
OF
3.3
W e h a v e had the benefit of a submission by the
Board in which the B o a r d ' s
follows:­
GROUP
o w n p r o p o s a l s for the future
2nd organisation of the r a i l w a y s
their p r o p o s a l s a s
to
p r o v i d e s that the
Board h a v e to d e t e r m i n e t h e s e functions on lines settled from
a result of an o r d e r
among
responsibilities.
provide f o r the setting up of 6 R e g i o n a l
system.
provides
shown
o r financial
other than the C h a i r m a n and the n e w l y
Vice C h a i r m a n ,
It a l s o
and w h o h a v e
full-time M e m b e r s and four p a r t - t i m e M e m b e r s .
Members,
and not
to b e appointed by the M i n i s t e r from
persons w h o h a v e had w i d e e x p e r i e n c e
Board
are
set out.
The
Board
Railways
structure
summarise
3.3.1
In the forthcoming
for a B o a r d
than t h r e e
Bill,
provision
should be
consisting of a C h a i r m a n , not m o r e
Vice
Chairmen,
and not l e s s than ten
and not m o r e than fourteen o t h e r
members.
Initially they would e n v i s a g e t w o V i c e
one i n w a r d l o o k i n g ,
maintaining an
audit upon the w o r k i n g
operating
of the r a i l w a y
over-seeing
investment b u d g e t s ,
at least s e v e n full-time
would h a v e functional
Board
Board
would
be
and all of
these
responsibilities.
Regional
Boards
set
abolished.
should be r e q u i r e d within 18 months
to the M i n i s t e r a " g e n e r a l
3.3.4
and
general
of the p a s s i n g of the A c t to p r e p a r e and
for the
policy
in addition to
Chairmen,
statutory p r o v i s i o n s for
should b e
There
members
the C h a i r m a n and V i c e
The
other,
of the
and the
c o n c e p t of b u s i n e s s planning.
3.3.3
the
of finance
representation
on important national b o d i e s ,
out a b o v e
in both its
dealing with c o m m e r c i a l
at the highest l e v e l ,
The
Chairmen,
efficiency
and its technical a s p e c t s ;
outward looking,
3.3.2
made
s c h e m e of
submit
organisation"
undertaking.
T h e Minister would have p o w e r
scheme,
to a p p r o v e
and any subsequent modifications
the s c h e m e
the
of
w h i c h might be submitted by the
Board.
3.4
We w e r e
w h o is the
who
Senior
fortunate
Partner
in obtaining the s e r v i c e s
in C o o p e r
Brothers
and
(in o r d e r to a v o i d difficult and time consuming
of o u r p e r s o n a l
to i n t e r v i e w
views
separately
collated these v i e w s
and p r e f e r e n c e s
of M r .
Company,
discussions
in o p e n s e s s i o n )
undertook
e a c h of the m e m b e r s of the G r o u p
in a r e p o r t to the G r o u p .
s a w the C h a i r m a n of the B o a r d .
Mr.
Pears,
Pears
and
also
In addition to the collation of the
G r o u p ' s individual v i e w s ,
Mr.
Pears
provided a separate
paper
giving an indication of his o w n v i e w s w h i c h he had f o r m e d
course of this
3.5
The
assignment.
Group
Brothers w h i c h
received
a separate
included r e c o m m e n d a t i o n s
the e x p e r i e n c e of the C o o p e r
Brothers'
whole of the r a i l w a y s o r g a n i s a t i o n
r e p o r t from
which w e r e
Team
Board
in a d v a n c e ,
and w e
Brothers
seemed a p p r o p r i a t e
in the light of o t h e r
Group have
considered
h a v e not
We h a v e ,
only taken account of their r e c o m m e n d a t i o n s
in s o f a r
conclusions a r e
set out in the following
Part
THE P R O P O S E D
Factors Affecting
FUTURE
Overall
T h e British
many b u s i n e s s e s .
is to be e n s u r e d ,
carefully
As
therefore,
a s this
all the v i e w s
r e p o r t s and o u r
AND
ORGANISATION
c o n t r o l a c o m p l e x of
it is e s s e n t i a l ,
to match production and s a l e s ,
if
but the
such a w a y
including m a n p o w e r .
In many
long r a n g e
forward planning
when
in the long
planning.
It f o l l o w s
run,
assessed.
on
therefore
is r e q u i r e d at the c e n t r e to e n s u r e that all
activities a r e
'thin the f r a m e w o r k
depend,
It
cases,
t y p e s of s e r v i c e h a v e to be
all such d e c i s i o n s
that g e n e r a l m a n a g e m e n t
transport
a s to m a x i m i s e
this i n v o l v e s d e c i s i o n s about the allocation of r e s o u r c e s ,
adequate c o - o r d i n a t e d
profitability
that t r a n s p o r t cannot b e s t o r e d .
s e r v i c e s in
the p r i o r i t i e s b e t w e e n different
which
Organisation
Board
in any b u s i n e s s
utilisation of all the a s s e t s ,
subsequently
III
STRUCTURE
Railways
is also vital to plan r a i l w a y
w
had
paragraphs.'
S t r u c t u r e and
industry h a s the c h a r a c t e r i s t i c
Furthermore,
the
evidence.
have b e e n put f o r w a r d to them in t h e s e s e v e r a l
3.7
on
extending o v e r
Cooper
been able to h a v e a d i s c u s s i o n with t h e m .
The
based
d i s c u s s e d their r e c o m m e n d a t i o n s with the
British R a i l w a y s
3.6
Cooper
since the beginning of their
appointment a s Consultants to the G r o u p .
not, h o w e v e r ,
in the
properly
co-ordinated
of a g r e e d o b j e c t i v e s and o v e r a l l
and c a r r i e d
strategies.
out
3.8
O n the o t h e r hand t h e r e is a need for
management.
geographical
with authority
Both the s c a l e of
dispersion
to m a k e
railway
of the s y s t e m
d o w n by g e n e r a l m a n a g e m e n t
The
railways
require
at the
The
r e q u i r e m e n t s of the
(track,
the m o r e
3.9.3
the continuing
3.9.4
the trend t o w a r d s a m o r e o r d e r e d
will m a k e
intensive u s e of the d e v e l o p e d
reduction in the labour
passenger
it e v e n m o r e
and c o n t r o l t e c h n i q u e s ,
to day c o n t r o l and for
3.10
and freight
by the
yards,
required;
3.9.2
both for
system;
force;
pattern of
operation
services.
vital to d e v e l o p
sophisticated
including the u s e of c o m p u t e r s ,
model
more
are:­
marshalling
no l o n g e r
which
likely to b e c o m e
rationalisation of the s y s t e m
terminals) which a r e
planning
both for day
building.
A l l these considerations
suggest
an i n c r e a s i n g
trend
the centralisation of the planning of r a i l w a y o p e r a t i o n s with
at least the main trunk
d i r e c t e d from
services,
the c e n t r e .
This
passenger
and f r e i g h t ,
will a l s o b e r e q u i r e d
a r e to d e v e l o p their r e l a t i o n s h i p s with the n e w
Transport
Organisations
c o n t r o l will a l s o be r e q u i r e d
S e c t i o n 2 of this R e p o r t .
These
it e v e n m o r e
the B o a r d
important for
comprehensive plans,
covering
the a c h i e v e m e n t of these
if the B o a r d
have
being
if the
National and
w h i c h a r e to be set u p .
a c h i e v e the financial t a r g e t s w h i c h w e
for
This
p o l i c y lines laid
most important of t h e s e
elimination of facilities
financial
managements
centre.
b e c o m e evident but which a r e
the continuing
towards
local
within g e n e r a l
future m a n a g e m e n t s t r u c t u r e
in the future.
3.9.1
These
and the
will c l e a r l y b e influenced b y a n u m b e r of f a c t o r s
have already
marked
operations,
d e c i s i o n s on day to day m a t t e r s .
local m a n a g e m e n t must o p e r a t e
3.9
dispersed
Strong
are
Regional
central
to
recommended
financial o b j e c t i v e s
Board
will
to e n s u r e that t h e r e
in
make
are
e a c h main section of their business,
objectives.
3,11
At p r e s e n t ,
the B o a r d ' s
Headquarters
functional d e p a r t m e n t s h e a d e d by Chief
to B o a r d m e m b e r s .
As
members,
the C h a i r m a n ,
e x c e p t for
Officers
indicated a b o v e ,
functional r e s p o n s i b i l i t i e s .
is o r g a n i s e d
who
all the full-time
and o n e V i c e
should be without the d i r e c t
line responsibility that they h a v e under the p r e s e n t
R e l a t i o n s b e t w e e n the B o a r d
report
Board
Chairman
It is the c o n s e n s u s of opinion
us that full-time m e m b e r s
3.12
in turn
into
have
amongst
executive
arrangements.
and the R e g i o n s m a y h a v e
been
complicated by the R e g i o n s having a s t a t u t o r y status u n d e r the
1962 A c t ,
and b y the p h i l o s o p h y of that A c t being that the
were to h a v e the main r e s p o n s i b i l i t y
railways" .
W e doubt w h e t h e r
for
the " m a n a g e m e n t of the
a split statutory r e s p o n s i b i l i t y
the management of the r a i l w a y s ,
and the p r e s e n t
statutory position of the G e n e r a l M a n a g e r s ,
to ideal r e l a t i o n s b e t w e e n the B o a r d
Scope of o u r
3.13
Regions
and the
for
independent
can b e
conducive
Regions.
Recommendations
Railway
p r o b l e m s a r e unique,
both b e c a u s e of the s i z e
and
geographical s p r e a d of the industry and the nature of its o p e r a t i o n s
and c o m m e r c i a l a c t i v i t i e s .
M a n y of us a r e
without d i r e c t
of the industry and c a n only b a s e o u r opinions on
with its p r o b l e m s
the last y e a r .
Authorities,
acquaintanceship
and the limited study that has b e e n p o s s i b l e
We a r e
National F r e i g h t
Organisation,
will o b v i o u s l y
and a number of
influence the s h a p e of
the R a i l w a y s
Board.
Passenger
are leading to a g r e a t e r
Furthermore,
e l e m e n t of c e n t r a l d i r e c t i o n .
claim to b e in a position to m a k e
Transport
management
have pointed out that t h e r e a r e a number of d e v e l o p m e n t s
ot, t h e r e f o r e ,
over
a l s o c o n s c i o u s that the setting up of the
structure a p p r o p r i a t e for
n
experience
We
which
could
specific
recommendations about all the details that will b e i n v o l v e d in the
organisation.
But w e
feel confident in putting f o r w a r d
Principles w h i c h should b e o b s e r v e d
structure .
in any n e w
we
some
new
general
organisational
Timescale
3.14
W e think it best to f r a m e
our
recommendations
light of the ultimate s h a p e and s t r u c t u r e for
think will b e a p p r o p r i a t e
is in e x i s t e n c e .
a different
in a f e w y e a r s
We a r e ,
type of B o a r d
likely to e x i s t ,
geographical
the industry which
time w h e n the " n e w
in the following
paragraphs,
and this will affect the o v e r a l l
none of the c h a n g e s w h i c h w e
propose
structure
and
It m a y w e l l be that
can b e implemented
p e r i o d during w h i c h t h e s e c h a n g e s can b e e f f e c t e d .
that the determination of the p r e c i s e p r o v i s i o n a l
These
quickly.
a transitional
We
accept
arrangements
during this transitional p e r i o d must b e
the M i n i s t r y and the B o a r d .
arrangements
for
will h a v e to
take account of the inevitable p r a c t i c a l and human p r o b l e m s
W e do not think that it would be a p p r o p r i a t e f o r u s ,
Report,
r e c o g n i s e that they will be difficult,
should be the ultimate
Proposals
for the N e w
Board
3.15
In o u r v i e w ,
the B o a r d
free
involved.
in this
to attempt to deal with these transitional p r o b l e m s .
w e believe
railway"
recommending
e m p h a s i s e that t h e r e will be a need for
which will o p e r a t e
we
d e s i g n e d to m e e t the situation then
o r g a n i s a t i o n of the r a i l w a y s .
We a c c o r d i n g l y
in the
but w e
We
a r e concentrating
on what
objectives.
should a s far
as possible
be
to c o n c e n t r a t e on p o l i c y questions and in p a r t i c u l a r on the
p r o b l e m s of future planning,
and the individual m e m b e r s
not be tied d o w n by day to day r e s p o n s i b i l i t i e s for
We a r e therefore
generally
ultimately the B o a r d
should
specific
functions.
a g r e e d that it w o u l d b e s e n s i b l e that
should consist l a r g e l y of non-functional
members
and should be s m a l l e r than at p r e s e n t .
Top
M a n a g e m e n t and R e s p o n s i b i l i t y for
The
Chairman
3.16
W e a c c e p t the v i e w put f o r w a r d
C h a i r m a n must be g i v e n
day-to-day
Co-ordination
responsibility.
some
He
relief
from
b y the B o a r d that the
his p r e s e n t h e a v y load of
inevitably h a s many
commitments
of a m o r e g e n e r a l
be f r e e f r o m
nature,
day-to-day
and it is t h e r e f o r e
m a t t e r s a s much a s p o s s i b l e
be able to c o n c e n t r a t e on the m a j o r
the B o a r d ' s
d e s i r a b l e that he
should
in o r d e r
i s s u e s of p o l i c y and to
to
project
i m a g e both within the o r g a n i s a t i o n and to the public
at l a r g e .
3.17
Clearly
it is the B o a r d
ultimate r e s p o n s i b i l i t y for
whom w e
below,
of the u n d e r t a k i n g .
responsibility
relations with the M i n i s t e r
of the B o a r d ,
for
these matters,
and with P a r l i a m e n t .
including those with e x e c u t i v e
refer
the
p o l i c y and d i r e c t i o n of the r a i l w a y s
for the o v e r a l l p e r f o r m a n c e
has a p a r t i c u l a r
itself w h i c h will c a r r y
in p a r a g r a p h s
will r e g a r d t h e m s e l v e s
3.19
to
But the
Chairman
not least in his
A l l the
Members
responsibilities
3.29
and
to
inclusive and
3.31
as r e s p o n s i b l e to the B o a r d
as a
whole.
3.18
We consider
that the C h a i r m a n must h a v e time to d e v o t e
to top l e v e l m a n a g e m e n t planning p r o b l e m s .
Officer
issues,
would be responsible for
and w e think that,
the m a j o r
exceptionally,
N o doubt,
personnel
a
Chief
planning
such a Chief
Officer
report d i r e c t to the C h a i r m a n on q u e s t i o n s of m a n a g e m e n t
Need for
a "Chief
3.19
General Manager"
If the C h a i r m a n
responsibilities,
is to b e r e l i e v e d of his
and the B o a r d
above, the g r e a t majority
for the R a i l w a y s
ultimately b e d e s i r a b l e to h a v e
as w e
a single p e r s o n to c o n t r o l
the r a i l w a y
as a w h o l e ,
person b e l o w
Chief
and f o r
suggest
running of the
and
railway.
d o not w i s h to a s s i g n a specific title to such a
we e n v i s a g e him a s a kind of
3.20
as a Whole
of the v i e w that it will
co-ordinate all a s p e c t s of the d a y - t o - d a y
Whilst w e
development.
day-to-day
is to b e reconstituted
of u s a r e
should
General Manager,
convenience
we
refer
person,
responsible
for
to such a
u n d e r this title.
W e e n v i s a g e that the Chief
General Manager
would
Provide l e a d e r s h i p and d i r e c t i o n to the R e g i o n s a n d / o r D i v i s i o n s ,
would b e the f o c u s of the B o a r d ' s
h e a d q u a r t e r functional
and
organisation
insofar
a s it is c o n c e r n e d with c u r r e n t p o l i c y making and the
efficiency
of the b u s i n e s s .
the n e c e s s a r y
degrees
He
w o u l d b e in a position to p r o v i d e
of c o - o r d i n a t i o n b e t w e e n c o m m e r c i a l ,
and technical r e q u i r e m e n t s
in r e s p e c t both of p a s s e n g e r
operating
and
freight
traffic.
3.21
T h e b u r d e n on o n e man would n e c e s s a r i l y
heavy.
title,
But the g r e a t majority
of us a r e
t h e r e must b e o n e man w h o s e
ultimate d e c i s i o n s on d a y - t o - d a y
taken,
responsibility
The
his r e s p o n s i b i l i t y for the e f f e c t i v e n e s s
Chairmen
would tend to m e a n that,
would
r e s o l v e d b y the C h a i r m a n .
should be a single
Chief
on a substantial
The
sufficient
difficulties
a s it
would h a v e to be
r e c o m m e n d that t h e r e
recognising
that he
in support to w h o m he will
Chief
General Manager
delegate
must h a v e a position of
status and authority within the B o a r d ,
and publicly,
and it might w e l l b e the c a s e that it would n o r m a l l y
recognise
time to t i m e ,
for the B o a r d
Planning
3.23
will h a v e
and
that c i r c u m s t a n c e s
and w e
Vice
be
Chairman.
and p e r s o n a l i t i e s c h a n g e
do not think that the l e g i s l a t i v e
n e e d define his status on the
from
provisions
Board.
Finance
These
a r e two a r e a s which a r e
so p e r v a s i v e
as a w h o l e ,
to
C l e a r l y he must b e a m e m b e r of the
a p p r o p r i a t e for him to b e appointed a s a Deputy o r
But w e
split
scale.
enable him to do this j o b .
Board,
rather
Many of us do not think
We therefore
staff
are
e m p h a s i s should b e on
General Manager,
will n e e d a c o n s i d e r a b l e
3.22
s e e that they
s o l v e the p r o b l e m ,
in p r a c t i c e ,
whatever
it is to take the
o r i g i n a l p r o p o s a l that this duty -could b e
between two V i c e
extremely
under
of the o r g a n i s a t i o n ,
than on his taking p e r s o n a l d e c i s i o n s .
that the B o a r d ' s
a g r e e d that,
matters - or
and a r e duly i m p l e m e n t e d .
be
that w e
an effect
on the w o r k
s o important,
and which
of the R a i l w a y s
Board
r e c o m m e n d that it will b e essential to appoint
m e m b e r s to the B o a r d
a s p e c t s of the B o a r d ' s
with specific
work.
r e s p o n s i b i l i t i e s for these
two
3.24
W e r e c o m m e n d that o n e m e m b e r
(or the c o - o r d i n a t i o n of long r a n g e
suggest that he must h a v e specific
3.24.1
e n s u r i n g that t h e r e a r e
compatible o b j e c t i v e s ,
for
e a c h main s e c t o r
should b e
responsible
planning in the r a i l w a y s .
responsibility
coherent,
We
for
comprehensive
s t r a t e g i e s and long r a n g e
of the b u s i n e s s ,
and
plans
directed
towards
the a c h i e v e m e n t of the o v e r a l l financial o b j e c t i v e s of
the
3.24.2
undertaking;
establishing
a s y s t e m a t i c o r g a n i s a t i o n a l and
framework
in w h i c h all planning activities should b e
c a r r i e d out and the r e s u l t s m o n i t o r e d ;
3.24.3
co-ordinating
It w o u l d b e n e c e s s a r y
a c o r p o r a t e planning department
knowledge and
3.26
He
and
all the long r a n g e planning
in the r a i l w a y s w h e r e v e r
3.25
procedural
for
carried
activities
out.
this m e m b e r
to b e s u p p o r t e d
consisting of p e o p l e with
varying
experience.
could a l s o be d i r e c t l y r e s p o n s i b l e
organisation planning
and p r o b a b l y
for
for an e c o n o m i c
management
and
commercial
studies department w h i c h would include m a r k e t r e s e a r c h .
he could a l s o include technical r e s e a r c h
Possibly
and d e v e l o p m e n t within his
sphere of
interest.
3.27
W e a l s o r e c o m m e n d that t h e r e should b e a m e m b e r
with specific
responsibility
by
r e s p o n s i b i l i t y for f i n a n c e .
H e would have a
appointed
special
for
3.27.1
the o v e r a l l financial p o l i c y of the
3.27.2
the o p e r a t i o n of the financial
3.27.3
the d e v e l o p m e n t of m a n a g e m e n t
undertaking;
control system;
information
and
and
control
systems.
We should h o w e v e r
from C o o p e r
comment that w e
Brothers
a r e due to r e c e i v e
on their r e v i e w
of b u d g e t a r y and
control and m a n a g e m e n t information by the end of July,
wish to r e v i e w
'
n
the r e s p o n s i b i l i t y
the light of that
report.
a
report
financial
and w e
f o r the d e v e l o p m e n t of these
may
systems
3 . 28
In v i e w of the g r e a t i m p o r t a n c e f o r finance
and supplies in the s p e c i a l c i r c u m s t a n c e s
of
of the r a i l w a y s ,
that the finance m e m b e r might a l s o b e r e s p o n s i b l e for
and it w o u l d a l s o b e a p p r o p r i a t e
circumstances
at the t i m e ,
responsibility for
3 . 29
responsible.
Board
activities
in the light of
estates.
to w h i c h ,
of c o u r s e ,
finance
status and
as a whole,
responsibility
they w o u l d both be
W e s u g g e s t that the l e g i s l a t i v e p r o v i s i o n f o r
the
should b e such that it w o u l d b e o p e n to the M i n i s t e r ,
consultation with the C h a i r m a n ,
C h a i r m e n of the B o a r d
appropriate.
suggest
he might a l s o h a v e an o v e r a l l
should h a v e positions of r e c o g n i s e d
on the B o a r d ,
we
these
It will b e e s s e n t i a l that both the planning and
members
Vice
to c o n s i d e r ,
whether
purchasing
to appoint both of t h e s e
if,
in p a r t i c u l a r
cases,
as
this
T h i s might m o s t c o n v e n i e n t l y b e a c h i e v e d ,
with the Iron and S t e e l A c t ,
seemed
by
1967, b y giving the M i n i s t e r
to appoint one o r m o r e m e m b e r s
in
analogy
power
of the B o a r d a s D e p u t y
or
Vice-Chairman.
Full-Time
Members
3 .30
In addition t h e r e must c l e a r l y b e a number
of full-time Board
members.
With the s o l e e x c e p t i o n of a m e m b e r w h o ,
we
should h a v e functional
relations
(paragraph
r e s p o n s i b i l i t i e s for p e r s o n n e l and
3.31)
we
and might often b e
various kinds.
be given
By
this,
T n e y should h a v e
r e q u i r e d to c o - o r d i n a t e
(necessarily
functional b o u n d a r i e s ) , r e l a t i o n s with the v a r i o u s
Regions,
for)
Authorities,
activities of
such v a r y i n g m a t t e r s a s the
d e v e l o p m e n t of the p a s s e n g e r b u s i n e s s
C h a i r m a n s h i p of
crossing
3.42 b e l o w .
many
Passenger
more
(or general
one o r m o r e of the s u b s i d i a r y units to which w e
paragraph
might
overall
the g e n e r a l o v e r s i g h t of o n e o r
or non-executive
members
s p h e r e s of
w e m e a n that individual m e m b e r s
r e s p o n s i b i l i t y for
Transport
labour
a r e a g r e e d that t h e s e B o a r d
should not h a v e functional d u t i e s .
interest,
recommend,
responsibility
refer
in
T h e functional head of e a c h of the v a r i o u s
departments should be the Chief
a whole,
reporting
( m o s t of them through the Chief
not, as n o w ,
Labour
Officer,
to a functional m e m b e r
to the B o a r d
General Manager,)
of the
as
and
Board.
Relations
3.31
In v i e w of the undoubted i m p o r t a n c e of p e r s o n n e l
labour r e l a t i o n s ,
should h a v e
and
w e think that t h e r e should b e a B o a r d m e m b e r
specific
r e s p o n s i b i l i t y for the l o n g e r t e r m
of labour r e l a t i o n s
in the i n d u s t r y .
would, of c o u r s e ,
be r e g a r d e d
The
Chief
development
General
a s the e m p l o y e r
who
Manager
of labour on the
railways and he should h a v e the support of a Chief
Officer
to deal
with p e r s o n n e l and labour r e l a t i o n s m a t t e r s on a day to day
basis.
But t h e r e will b e a n u m b e r of important i s s u e s w h i c h h a v e to be
taken to B o a r d
level,
and it is important the the Chief
Manager should not h a v e to d e v o t e a d i s p r o p o r t i o n a t e
time to t h e m .
Furthermore,
major r e s p o n s i b i l i t i e s
in addition to the Chief
this field.
The
as a w h o l e ,
and they m a y
should b e a n o t h e r o n e of t h e i r
General Manager,
labour relations m e m b e r
a wider r e m i t than the Chief
Officer,
merely a s the functional h e a d of his
3.32
number,
should,
however,
and should not b e
have
regarded
department.
W e do not think that it is p o s s i b l e to lay d o w n any
T h i s will d e p e n d on the
circumstances of the r a i l w a y
industry,
personality on the B o a r d .
in p r a c t i c e ,
the Chief
at B o a r d
maximum of s i x ,
precise
changing
and the different
types of
It a l s o d e p e n d s upon the extent to w h i c h ,
General Manager
level,
management o v e r the s y s t e m
new legislation should
well
with a s p e c i a l interest in
number of B o a r d m e m b e r s .
assistance,
amount of
l a b o u r r e l a t i o n s will be o n e of the
of the B o a r d
find it important that t h e r e
General
finds that he
needs
in the d i s c h a r g e of his duties for
as a whole.
p r o v i d e for
such full-time
general
W e s u g g e s t that the
a minimum of t h r e e ,
Board members,
and a
including the o n e
dealing with l a b o u r
Manager
and
relations,
and the m e m b e r s
but in addition to the Chief
with s p e c i f i c
for
planning
finance.
L e v e l of R e m u n e r a t i o n
Pensions)
for
3 . 33
We a r e
remuneration
Board,
and o t h e r
Board Members
seriously
Conditions of
and Chief
Chief
Officers.
This
h a v e c o n c l u d e d that w e
we
intend to m a k e r e c o m m e n d a t i o n s
In the m e a n t i m e ,
without making
substantial i n c r e a s e s
and in the o t h e r
Headquarters
in a subsequent
recommendations
it plain that,
will b e r e q u i r e d
conditions of s e r v i c e
Board Members
is s o vital a matter that
and f o r
Chief
It will b e o b v i o u s from
responsibilities,
departments.
in o u r
in the l e v e l of
the r e c o m m e n d a t i o n s
specific
both
m a d e above
functional
those
full r e s p o n s i b i l i t y
Chief
Officers
of the t w o m e m b e r s
the Chief
Officers
T h i s w o u l d not,
Officers
a s heads of
c o n c e r n e d with the
s u g g e s t should b e the
described
in p a r a g r a p h s
3.23
w o u l d r e p o r t to the Chief
however,
General
p r e v e n t the development of clo
r e l a t i o n s with any of the full-time m e m b e r s
of the B o a r d
h a v e a c c e p t e d a s p e c i a l i n t e r e s t in their s p h e r e of
w h o might
responsibility.
Members
W e r e c o m m e n d that t h e r e should b e at least t h r e e part­
time m e m b e r s ,
experience
remuneration
Officers.
should not h a v e
w h o would c a r r y
E x c e p t for
above,
3.35
view,
(including p e n s i o n s )
planning and finance functions w h i c h w e
Part-Time
about the structut
that a vital r o l e will b e p l a y e d b y the Chief
at H e a d q u a r t e r s ,
Manager.
report.
Staff
that most B o a r d m e m b e r s
to 3 . 2 9
and
is of such i m p o r t a n c e that it would
for us to m a k e g e n e r a l
responsibility
Officers
should m a k e detailed e n q u i r i e s ,
this matter
of the n e w B o a r d
3 . 34
(including
and o t h e r conditions of s e r v i c e for m e m b e r s of the
and f o r
be wrong
Service
c o n c e r n e d about the c u r r e n t l e v e l of
we
for
responsibilities
General
who
rather
should b e appointed for their ability and
than on any r e p r e s e n t a t i o n a l b a s i s .
Specifically
the G r o u p do not f a v o u r
the p r o p o s a l put f o r w a r d
by the B o a r d
there should be r e p r e s e n t a t i o n on the B o a r d of the National
Board,
the National
Organisation.
Steel Corporation
We a r e
and the National
satisfied that the n e c e s s a r y
with those b o d i e s can be a c h i e v e d in o t h e r
3.36
W e further
part-time m e m b e r s
recommend any e x a c t time limit,
and the C h a i r m a n c o n s i d e r
in mind that,
Coal
Freight
co-ordination
ways.
r e c o m m e n d that the p e r i o d of s e r v i c e
should b e r e s t r i c t e d .
for
W e do not w i s h to
but s u g g e s t that w h e n the M i n i s t e r
individual appointments they should
on the o n e hand,
part-time m e m b e r s
should
experience,
and the contribution they can m a k e w h i l s t ,
other hand,
t h e r e should b e sufficient c h a n g e
order to p r o v i d e for the n e c e s s a r y
in their
advantage in p r o v i d i n g
for g r e a t e r flexibility
in the
of part-time m e m b e r s than is n o w c u s t o m a r y .
r a n k s in
considerable
W e h a v e in mind that
whose
might b e p r e p a r e d
c o m p a r e d with that of a n o r m a l
services
to s e r v e
say a half-time b a s i s with a consequential and d e s i r a b l e
of his r e s p o n s i b i l i t y
regular
remuneration
there m a y b e o c c a s i o n s w h e n an eminent o u t s i d e r ,
would be of value to the r a i l w a y s ,
their
on the
infusion of n e w i d e a s at
In this connection w e think t h e r e will b e
bear
serve
for long enough to e n s u r e that the B o a r d get full v a l u e from
intervals.
that
on
enhancement
part-time
member.
A General
3.37
S c h e m e of O r g a n i s a t i o n and the P l a c e
We have already
general c o n s i d e r a t i o n s ,
set out in p a r a g r a p h s
p r e s e n t and future,
which
of the
3.7
to 3.12 the
in o u r v i e w
affect the relations b e t w e e n G e n e r a l M a n a g e m e n t at the
and R e g i o n a l M a n a g e m e n t .
We have also r e f e r r e d
Regions
will
centre,
in p a r a .
3.13 to
the effect on the s h a p e of the B o a r d ' s m a n a g e m e n t s t r u c t u r e of
the setting up of the National
Freight Organisation
and
Passenger
Transport A u t h o r i t i e s and to the d e v e l o p m e n t s w h i c h a r e
a greater
element of c e n t r a l d i r e c t i o n .
are consistent with o u r
Board,
A l l these
recommendations
and the appointment of a Chief
for
considerations
a small
General
leading to
non-functional
Manager.
3.38
We a r e
Boards
no l o n g e r
a g r e e d that the existing statutory
fulfil any e s s e n t i a l function,
militate against the e f f e c t i v e n e s s
we
r e c o m m e n d that the p r o v i s i o n
Act,
be
of
1962,
Regional
and m a y
Headquarter
indeed
control.
in S e c t i o n 2 of the
Accordingly
Transport
relating to the establishment of R e g i o n a l B o a r d s ,
should
repealed.
3.39
We are
i m p r e s s e d b y the d e s i r a b i l i t y of affording
C h a i r m a n of the B o a r d
degree
of flexibility
and the M i n i s t e r the g r e a t e s t
in d e v e l o p i n g
a Board
structure
possible
and
o r g a n i s a t i o n that m e e t s the n e e d s of a situation that i s ,
and
is likely to continue to b e ,
fluid.
with i n t e r e s t the p r e c e d e n t
c r e a t e d b y the Iron and S t e e l
1967,
w h i c h p r o v i d e s for
Accordingly we
have
noted
Act,
the submission to the r e s p o n s i b l e
for his a p p r o v a l of a g e n e r a l
to the
scheme of o r g a n i s a t i o n f o r
Minister
the
industry.
3.40
O u r studies s o far h a v e led us to b e l i e v e that it will be
necessary
in the future for the c e n t r e to a s s u m e a g r e a t e r
of c o n t r o l o v e r many of the B o a r d ' s
of R e g i o n a l
be a c l e a r
of s p e c i f i e d
General Managers
activities,
will c e r t a i n l y
and that the r o l e
change.
p o l i c y and planning o b j e c t i v e s ,
and it will b e
in length
specific
d e v e l o p m e n t will n e c e s s a r i l y
b e a lengthy p r o c e s s .
views,
r e c o m m e n d that a p r o v i s i o n c o r r e s p o n d i n g
and S t e e l A c t ,
1967,
desirable
wherever
Board
o r g a n i s a t i o n to the M i n i s t e r f o r
p e r i o d of the date of coming
that the B o a r d
particularly
a s their
We
therefore
to that in the
Iron
should b e included in the T r a n s p o r t
to p r o v i d e that the R a i l w a y s
schemes
must
But t h e s e a r e detailed m a t t e r s on w h i c h w e do not
feel qualified to put f o r w a r d
of
There
delegation of m a n a g e m e n t r e s p o n s i b i l i t y within the limits
that the chain of c o m m a n d should b e r e d u c e d
practicable.
degree
Bill
should submit a g e n e r a l
h e r a p p r o v a l within a
into o p e r a t i o n of the A c t .
should b e r e q u i r e d to submit the first of
within an initial p e r i o d of 12 m o n t h s .
scheme
specified
We
suggest
such
We think that it
would be d e s i r a b l e for
the M i n i s t e r h e r s e l f
power to initiate a c h a n g e ,
if she thought o n e to b e
in the a b s e n c e of p r o p o s a l s b y the
3.41
Group consisting
they p r o p o s e d .
necessary,
Board.
In their o r i g i n a l submission the B o a r d
policy c o - o r d i n a t i o n
Group,
to h a v e a continuing
s u g g e s t e d that top
would b e a c h i e v e d through an E x e c u t i v e
of the C h a i r m a n and the t w o V i c e - C h a i r m e n
If,
which w e
in the e v e n t ,
s u g g e s t should b e
particularly concerned
to the M i n i s t e r .
W e s u g g e s t that it would in any c a s e
appropriate that,
w h a t e v e r their r a n k s on the B o a r d ,
in addition to the C h a i r m a n ,
recommended
planning and finance m e m b e r s
paragraphs 3 . 2 3 to
3.42
the Chief
in p a r a g r a p h s
forward
be
such a
Group
General
3.19 to 3 . 2 2 ,
and the
w h o s e functions w e h a v e d e s c r i b e d in
Activities
It will c l e a r l y be n e c e s s a r y to c o n s i d e r
such a s w o r k s h o p s ,
scheme
3.29.
The B o a r d s A n c i l l a r y
1
with
from the g e n e r a l
of organisation w h i c h the B o a r d will be r e q u i r e d to put
Manager w h o m w e
whom
it is d e c i d e d to set up such a
planning, the details w o u l d no doubt e m e r g e
should include,
Policy
hotels and shipping
separate m a n a g e m e n t units o r
activities
should b e hived off
companies.
into
W e think that it w o u l d
be inappropriate f o r us to s e e k to r e a c h firm
this issue in the a b s e n c e of a c l e a r
whether
conclusions
on
a p p r e c i a t i o n of all the
relevant
factors .
Supporting
3.43
as possible
Documentation
W e h a v e attempted to k e e p this p a r t of o u r r e p o r t a s
consistent with our obligation to set out o u r
and the r e a s o n s
the British
Brothers,
for them c l e a r l y .
Railways
Board,
and the s e p a r a t e
The
P e a r s of
by
Cooper
letter giving an e x p r e s s i o n of his
own v i e w s a r e all a v a i l a b l e for r e f e r e n c e ,
within the M i n i s t r y and the
recommendations
o r i g i n a l submission
the R e p o r t by M r .
Board.
if n e c e s s a r y ,
short
both
Part
IV
LEGISLATION
3.44
The
l e g i s l a t i v e p r o v i s i o n s c o n s e q u e n t upon
recommendation
are
relatively
our
simple and fall u n d e r t h r e e
heads
as f o l l o w s : ­
3.44.1
An
amendment of
to p r o v i d e
new
including a p r o v i s i o n
1(8)
of
Part
the Iron and S t e e l A c t ,
3.44.2
The
on the l i n e s of
I of the F o u r t h
A
S c h e d u l e to
r e p e a l of S e c t i o n 2 of the T r a n s p o r t
n e w p r o v i s i o n will b e n e c e s s a r y
the B o a r d
to put f o r w a r d
o r g a n i s a t i o n for the M i n i s t e r ' s
period .
1962
Boards.
on the lines of that
4 of the Iron and S t e e l A c t ,
a general
Act,
Regional
in S e c t i o n
specified
sub­
1967.
w h i c h p r o v i d e s for the setting up of
3.44.3
A c t 1962
for the a m e n d e d s i z e and c o m p o s i t i o n of the
Board,
paragraph
S e c t i o n 1 of the T r a n s p o r t
1967,
requiring
s c h e m e of
a p p r o v a l within a
"
SUMMARY
OF
SECTION
CONCLUSIONS
AND
RECOMMENDATIONS
References to
paragraphs in
other s e c t i o n s
and A p p e n d i c e s
FINANCE
4.1
Our
summary
position of the B o a r d
allowing for
in 1969,
any capital
out in p a r a g r a p h
of the likely
and 1974,
reconstruction,
T h i s table s t a r t s with the B o a r d ' s
2.11
forecasts,
2.26
and w h i c h s h o w
E2
operating
which
a break-even
Freight Organisation,
services
After
h a v e c o n c l u d e d that,
c h a n g e s in p o l i c i e s ,
figures
take
National
grants
track
unless t h e r e
are
we
major
r e s u l t s in 1974
worse
than the
on the o t h e r hand,
they w o u l d b e unlikely to be m o r e
£10m.
at
than
better.
4.2
T h e best estimate,
evidence,
on the
is that the " s o c i a l " g r a n t s
unremunerative
recommended
exceed £40m.
per
or
the likely
have forecast;
E2
studying t h e s e f i g u r e s
might w e l l b e up to £ 4 0 m .
2.14 - 2 . 1 6
financial
but not of any
social p a s s e n g e r
best,
set
position on
account of the establishment of the
Board
is
a r e set out in A p p e n d i x
account in 1974. T h e s e
rationalisation.
before
2.26.
2.6
for
financial
passenger
services,
in o u r Interim
per
Report,
annum in 1969,
available
for
which
will
we
not
and £ 3 5 m .
annum in 1974, excluding i n t e r e s t in both
cases.
4
4.3
The
grant for track
d e s c r i b e d in p a r a g r a p h
2.23
to be of the o r d e r
of £15m.
this g r a n t will h a v e
below,
per
annum in 1969;
r e d u c e d to z e r o by 1974,
should h a v e
s a v i n g s of about the s a m e
order.
After
grant l e v e l s ,
and after
between £5m.
4.5
we
likely
charging interest,
we
in 1974 of
and £ 5 5 m .
On the b a s i s of the a b o v e
are
achieved
taking account of these
estimate a deficit f o r the B o a r d
2.27
is likely
but b y that date the B o a r d
4.4
2.26
4.27
rationalisation
satisfied that a c o n s i d e r a b l e
conclusions
write-off of
existing capital debt to the M i n i s t e r is
inevitable
if the B o a r d
financial
a r e to b e g i v e n
realistic
objectives.
4.6
2.28
We R e c o m m e n d
cf the B o a r d
that the capital debt
should b e written d o w n to a level
at w h i c h it can r e a s o n a b l y b e e x p e c t e d that the
2.42.1
i n t e r e s t payments
can b e found out of
prospective
r e v e n u e e a r l y in the 1970s.
4.7
2.42.2
We R e c o m m e n d
thus e n v i s a g e d
that the
should b e b a s e d on neither too
optimistic n o r too p e s s i m i s t i c
Board's
"break-even"
a forecast
r e v e n u e s in the e a r l y
of the
1970s.
2.31
4.8
We R e c o m m e n d
that the valuation of
2.42.4
the a s s e t s
should also be s c a l e d d o w n to what
is r e p r e s e n t e d b y the n e w
capital
4.9
that
We R e c o m m e n d
2.33.1
arrangements
2.42.5
any s u r p l u s on r e v e n u e
debt.
appropriate
should b e m a d e f o r
dealing with
account in c a s e ,
r e s u l t of following the p r e v i o u s
as a
recommendations
f o r cutting d o w n the capital debt,
write-off
necessary
particular,
the amount of
has been o v e r e s t i m a t e d ;
the M i n i s t e r should h a v e p o w e r
d i r e c t that any s u r p l u s ,
requirements
after taking the
into a c c o u n t ,
in
to
Board's
is paid into the
Exchequer.
4.10
We R e c o m m e n d that t h e r e
longer be provisions for
Minister
should no
deficit g r a n t s f r o m
the
( e x c e p t p e r h a p s f o r the transitional
period
1969 to 1971) : and in p a r t i c u l a r that no deficit
should be p a y a b l e in r e s p e c t of
grant
depreciation
provisions .
4.11
We R e c o m m e n d that the B o a r d ' s
continuing obligations d e r i v i n g f r o m
r e s p e c t of r o a d b r i d g e s ,
superannuation
level
r e c o m m e n d in p a r a g r a p h
should not be specific
4.12
the past
should b e
reconstruction
4,6
above
and continuing
We R e c o m m e n d
that w a y s
found of c o m p e n s a t i n g the B o a r d f o r
them of subventions to o p e r a t o r s
p r o v i d e d in p l a c e of w i t h d r a w n
STRUCTURE
4.13
AND
(in
crossings,
and the P o l i c e , )
into account in the capital
other
which
grants.
should b e
the c o s t to
services
services.
ORGANISATION
W e c o n c l u d e that the setting up of
national and r e g i o n a l
we
and that t h e r e
of bus
rail
taken
transport organisations,
and
technical
developments
influence
the s h a p e of the c e n t r a l s t r u c t u r e of the
Board,
within the r a i l w a y s ,
new
and the relationship b e t w e e n the c e n t r e
the R e g i o n s .
to f o r e s e e
A g a i n s t this b a c k g r o u n d w e
that t h e r e
have
all
and
tried
the m a n a g e m e n t s t r u c t u r e which w o u l d be
a p p r o p r i a t e in a f e w y e a r s t i m e ,
different
will
while
recognising
will b e a transitional p e r i o d during
arrangements
m a k e no specific
may b e n e e d e d :
recommendations.
which
on t h e s e
we
4.14
Our
general
should as f a r
conclusion
is that the
3.15
Board
3.30
c o n c e n t r a t e on p o l i c y questions and in particular
on the p r o b l e m s
of future planning,
individual m e m b e r s
day-to-day
and the
specific
functions.
R e c o m m e n d that ultimately the
should c o n s i s t l a r g e l y of
members,
to
should not be tied d o w n by
responsibilities for
We therefore
Board
as p o s s i b l e b e f r e e
non-functional
and should b e s m a l l e r than at present.
Chairman
3.16
4.15
We Recommend
the B o a r d
should b e r e l i e v e d of
responsibilities,
on the m a j o r
Board's
that the C h a i r m a n of
day-to-day
in o r d e r to b e able to concentrate
i s s u e s of policy, and to p r o j e c t the
i m a g e both within the o r g a n i s a t i o n
and to
the public at l a r g e .
"Chief
General
4.16
3.19-22
Manager"
W e R e c o m m e n d that a single member of
the B o a r d should b e r e s p o n s i b l e f o r controlling and
co-ordinating
all a s p e c t s of the d a y - t o - d a y
of the r a i l w a y s .
General
Manager"
H e is e n v i s a g e d
whom
as a "Chief
it might b e appropriate to
appoint as a Deputy o r V i c e - C h a i r m a n .
co-ordinate
commercial,
requirements
running
operating
H e would
and technical
in r e s p e c t of both p a s s e n g e r
and freig
traffic.
Planning
4.17
W e R e c o m m e n d that one m e m b e r of the
3.24
Board,
w h o might b e a V i c e - C h a i r m a n ,
3.29
h a v e specific
should
r e s p o n s b i l i t y f o r the co-ordination of
long r a n g e planning in the
railways.
Finance
3.27
4.18
We R e c o m m e n d that another member, w
3.29
might a l s o b e
a Vice-Chairman,
r e s p o n s i b i l i t y f o r financial
policy.
should have specif'
Labour
Relations
4.19
3,31
We Recommend
Board
should h a v e s p e c i f i c
longer-term
3.32
Members
4.20
We R e c o m m e n d
General
of t w o ,
Manager",
Board
and the m e m b e r s
finance
of five o t h e r
We R e c o m m e n d
a minimum
full-time
that t h e r e should b e at
least three part-time m e m b e r s ,
appointed f o r
their
ability
of S e r v i c e
4.22
Members
that the p e r i o d of
of p a r t - t i m e m e m b e r s
R e m u n e r a t i o n , E t c . , of B o a r d
and of Chief O f f i c e r s
4.23
rather
basis.
of P a r t - T i m e
We R e c o m m e n d
service
w h o should b e
and e x p e r i e n c e
than on any r e p r e s e n t a t i o n a l
3.36
labour
Members
4.21
Period
and
with
members.
Part-Time
3,35
relations.
t h e r e should b e p r o v i s i o n f o r
and a maximum
the
that in addition to the
r e s p o n s i b i l i t i e s f o r planning,
relations,
of the
responsibility for
d e v e l o p m e n t of l a b o u r
Full-Time
"Chief
that o n e m e m b e r
should b e
restricted.
Members
W e a r e confident that substantial
increases
will b e r e q u i r e d in the l e v e l of r e m u n e r a t i o n
3.33
o t h e r conditions of s e r v i c e
3,36
for B o a r d
members,
(including p e n s i o n s ) , both
and f o r
Chief O f f i c e r s ,
p r o p o s e to m a k e r e c o m m e n d a t i o n s
in a l a t e r
There
in the
should b e g r e a t e r flexibility
remuneration
and in
of p a r t - t i m e m e m b e r s
than is
and
we
report .
now
customary.
Regional
4.24
3.38
Boards
We Recommend
that the statutory
relating to the establishment of R e g i o n a l
be
repealed.
provisions
Boards
should
The
General
4.25
3.40
Scheme
of
Organisation
We R e c o m m e n d
that the R a i l w a y s Board
should be r e q u i r e d to submit a g e n e r a l
o r g a n i s a t i o n to the Minister f o r
a specific
period
(say
12 months)
into o p e r a t i o n of the A c t .
have
her
The
approval within
of
the coming
Minister
should
a continuing p o w e r to initiate c h a n g e s ,
thinks they a r e
TRADE
if she
necessary.
UNION
1.7
4,26
A
recommendations
VIEWS
W e h a v e taken account in the above
of the v i e w s
Unions e x p r e s s e d
and g e n e r a l
subjects
w h i c h the
to us on m a t t e r s of
B o a r d structure;
a r e set out in A p p e n d i x A ,
recommendations
referred
Trade
finance
their v i e w s on other
c o m m e n t s h a v e not led us to m a k e
they
scheme of
but their
any
specific
on those of the m a t t e r s to which
which a r e within o u r t e r m s of
reference,
"'
"STANDBY" AND
"SURPLUS"
INFRASTRUCTURE
CAPACITY
1.8
4,27
2.20-23
c o n c l u d e d that it is highly unlikely that "standby
capacity"
B
j.
After
a detailed investigation w e have
additional to that r e q u i r e d f o r
the
railways'
commercial
be p r o v e d
to e x i s t as a p e r m a n e n t element of any
foreseeable
and s o c i a l s e r v i c e s
railway network.
s u r p l u s c a p a c i t y in the s y s t e m ,
We Recommend
that,
length in p a r a g r a p h s
right to pay
There
2.20
to 2 . 2 3 ,
a g r a n t to the B o a r d ,
and on a t a p e r i n g b a s i s ,
of this s u r p l u s
defintely is
however,
f o r the r e a s o n s
could
and
set out at
it would be
fixed in advance
to assist in the elimination
and the rationalisation
of the system.
OTHER OBLIGATIONS
FROM THE P A S T
Road Bridges
4.28
and L e v e l
DERIVING
Crossings
W e h a v e c o n c l u d e d that,
although
is a g o o d c a s e in equity f o r t r a n s f e r r i n g
bridges
o v e r the r a i l w a y to local o r
authorities,
regarded
road
highway
on the b a s i s that they should b e
as p a r t of the h i g h w a y ,
is l e s s g o o d ,
that o w n e r s h i p
the B o a r d ,
the c a s e in l a w
and the p r a c t i c a l difficulties
l a r g e to b e i g n o r e d .
We therefore
of the b r i d g e s
are
too
Recommend
should r e m a i n
with
but that account should b e taken of
the c o s t s of their m a i n t e n a n c e ,
about £ l - ^ m .
per
reconstruction
4.29
there
annum,
which w e
which
amount to
in the capital
recommend.
W e also
Recommend
4.29.1
that the B o a r d ' s
present
payment of £ 4 0 , 0 0 0 p e r
in r e s p e c t of trunk
should b e
4.29.2
road
present
r e s p o n s i b i l i t y f o r the
b e b o r n e b y the
4.29.3
surfaces
all o v e r l i n e b r i d g e s
local
bridges
discontinued;
that the B o a r d ' s
of
annum
should
appropriate
authority;
that the B o a r d ' s
present
duties
in r e s p e c t of the maintenance of
bridges
date ,
4.29.4
should b e b r o u g h t
up-to­
and
that the p o w e r s
Officers
of the Inspecting
of R a i l w a y s
to r a i l w a y b r i d g e s
b y local
extended.
in
relation
already
owned
authorities should b e
responsibility f o r their M u s e u m
the S w i n d o n
Corporation
at S w i n d o n
but,that,
failing
to
this,
they will h a v e no alternative to continuing to
b e a r the c o s t s falling to them u n d e r the t e r m s
of their existing a g r e e m e n t
Railways
Savings
with the
Banks
2.17
4.35
2.29
b e taken
C18
B a n k deposits in the capital
we
Corporation.
We Recommend
that account
should
of the i n t e r e s t b u r d e n on t h e s e
Savings
reconstruction
recommend
Transport
Police
2.18-19
4.36
W e h a v e c o n c l u d e d that t h e r e is
C19-C24
c a s e f o r s o m e public contribution t o w a r d s
costs,
a
these
to the extent of about £ 6 0 0 , 0 0 0 p e r
and We R e c o m m e n d
annum,
that this should b e taken
account in the p r o p o s e d capital
D12
which
reconstruction.
C o s t i n g of U n r e m u n e r a t i v e
Passenger
4.37
that the costing
We Recommend
into
Services
basis
u s e d f o r the calculation of g r a n t s f o r
these
services
Authorities
from
Passenger
should b e the s a m e
Transport
as that adopted f o r the
calculation of g r a n t s to b e paid b y the
Minister.
LEGISLATION
4.38
Legislative provisions
as f o l l o w s
: ­
4,38.1
An
will be
amendment of S e c t i o n
Transport
Act,
1962, to
f o r the a m e n d e d s i z e
of the n e w B o a r d ,
provision
1 of the
provide
and
composition
including
a
giving the M i n i s t e r a
to appoint one o r m o r e
the B o a r d
needed
as Deputy o r
power
members
of
Vice-Chairman
4.38.2
The
Act,
4.38.3
repeal
of S e c t i o n
1963, p r o v i d i n g f o r the setting up
of R e g i o n a l
Boards,
A
r e q u i r i n g the B o a r d
provision
forward
a general
f o r the M i n i s t e r ' s
specified
4.38.4
2 of the Transport
scheme
to put
of organisation
approval
within a
period.
Provisions
to g i v e effect
to o u r
financial
recommendations .
4.38.5
Provisions
to g i v e effect to o u r
recommendations
and m u s e u m s
on b r i d g e s o v e r
and h i s t o r i c a l
railways
records.
APPRECIATION
4.39
Although w e
to y o u l a t e r in the y e a r ,
shall b e submitting o n e o r
the completion of this r e p o r t
o n e w h i c h w e submitted in J a n u a r y p r o v i d e s
f o r us to e x p r e s s
from
Mr.
and f r o m
Directors,
the S e c r e t a r i a t .
w o r k h a s fallen on their s h o u l d e r s ,
circulation
an a p p r o p r i a t e
of the n u m e r o u s p a p e r s
p a r t i c u l a r l y in the p r e p a r a t i o n
Mr.
A
Hammond
very
opportunity
received
and
h e a v y burden of
not only in the drafting
and
and minutes of o u r meetings but
of this r e p o r t .
their tasks to o u r e n t i r e satisfaction
and w e
They
have
performed
a r e most grateful
S i g n e d on behalf of the
Joint S t e e r i n g G r o u p
John
Morris
Chairman
D.
Barlow
Secretary
6th July.
1967
reports
and the Interim
o u r thanks f o r the a s s i s t a n c e w e h a v e
o u r t w o Joint E x e c u t i v e
Lazarus,
m o r e further
to them.
APPENDIX.
VIEWS
ON
OF
THE
MATTERS
RAILWAY
OTHER
THAN
MANAGEMENT
A.l.
W e e x p l a i n e d in o u r
that w e h o p e d to h a v e
TRADE
UNIONS
FINANCE
AND
STRUCTURE
Interim
Report
(paragraph
2.8)
Union v i e w s on a number of m a t t e r s ,
we h a v e n o w had w r i t t e n e v i d e n c e from
all t h r e e R a i l w a y
and
Unions,
and h a v e held a s e p a r a t e meeting
with r e p r e s e n t a t i v e s
Union.
e a c h U n i o n both on finance
W e h a v e had v i e w s from
on m a n a g e m e n t
structure,
A
from
each
and
and h a v e taken account of them in
the r e c o m m e n d a t i o n s w h i c h w e m a k e in S e c t i o n s 2 and 3 of the
main p a r t of this R e p o r t .
There
are
a number of o t h e r
matters
on which the U n i o n s h a v e put v i e w s to u s which w e think the
Minister and the C h a i r m a n w o u l d w i s h us to r e p o r t ,
set out in the s u c c e e d i n g
and t h e s e
are
paragraphs.
Closures
A.2.
All three Unions w e r e
in f a v o u r
of a halt to
closures pending the determination of future p o l i c y .
thought that c l o s u r e of lines and w i t h d r a w a l s
halted pending the establishment of
for c o s t i n g " .
They
The
of c l o s u r e s ,
should r e c e i v e
are
TSSA
consider w h e t h e r b r a n c h
costing
operators
r e q u i r e d to pay a s a condition of
closure
pointed out the h a r m
i m a g e b y continual c l o s u r e s ,
cost-cutting e x e r c i s e s
greater
s t r e s s e d the i m p o r t a n c e of c o r r e c t
should b e taken into a c c o u n t .
A.3.
basis
and that the v a l u e
and thought that the s u b s i d i e s to bus
to the r a i l w a y
be
thought that joint consultation should play a
NUR
which the R a i l w a y s
should
" a sound and rational
lines to the main line s e r v i c e s
emphasis.
ASLEF
of s e r v i c e
greater p a r t in the c o n s i d e r a t i o n of c l o s u r e s ,
of f e e d e r
further
done
and the n e e d to
lines could not b e s a v e d by the kind of
n o w being c a r r i e d out in E a s t
W e e x p l a i n e d to the U n i o n s that in fact
:­
Anglia.
A . 3.1
Cooper
B r o t h e r s h a v e said that the B o a r d s p r e s e n t
1
costing p r i n c i p l e s a r e g e n e r a l l y
A . 3.2
sound,
t h e r e is no e v i d e n c e that the elimination of b r a n c h
h a s d e p r i v e d the r a i l w a y s of an a p p r e c i a b l e
of profitable traffic,
A . 3.3 passenger
closures
about £17m. p e r
A . 4.
ASLEF
on u n r e m u n e r a t i v e
s i n c e the s p r i n g of 1963 a r e
saving
year.
s u g g e s t e d that r e s t r i c t i n g the l e v e l of
service
lines w a s harmful to the i m a g e of the
11 of A n n e x A )
should c o n s i d e r
amount
and
but on the o t h e r hand in o u r Interim
(paragraph
lines
Report w e
recommended
that the Minister and the
w h e t h e r the B o a r d
railways,
Chairman
should p r o c e e d with
specific
c h a n g e s w h i c h would result in substantial s a v i n g s in c o s t .
A.5
The
NUR
thought that t h e r e w a s a c a s e f o r a contribution
b y local authorities t o w a r d s the c o s t of p r o v i d i n g
b e c a u s e the v a l u e ,
the r a i l w a y s
have been
for e x a m p l e ,
railway
of h o u s e s in a r e a s
is enhanced b y i m p r o v e d
railway
served
services.
informed of the d e v e l o p m e n t of the p o l i c y
in the White P a p e r
(paragraph
for the retention of p a s s e n g e r
communities.
could usefully
27)
services,
for p a r t of the
We
outlined
responsibility
s e r v i c e s to b e d e v o l v e d onto local
W e do not think that this is a matter on w h i c h
comment f u r t h e r .
We h a v e ,
S e c t i o n 2 of this R e p o r t that whilst further
however,
a r e of the definite v i e w that the B o a r d
thought n e e d s to be
A . 6.
We w e r e
( See
informed of the a g r e e m e n t that had b e e n
f i g u r e s about the cost of r a i l w a y
s e r v i c e s p r o p o s e d for
r e p r e s e n t a t i v e s a g r e e d at the meeting with
that the M i n i s t r y would c o n s i d e r
major
be
D).
r e a c h e d with the U n i o n s that they should r e c e i v e m o r e
T h e Ministry
services
should not l o n g e r
r e q u i r e d to do s o o n c e the n e w finance p r o v i s i o n s apply
a l s o p a r a g r a p h 11 of A p p e n d i x
we
said in
g i v e n to the m e a n s of meeting the cost of r e p l a c e m e n t bus
we
by
detailed
closure.
ASLEF
h o w they could take account of
points r a i s e d by the U n i o n s about individual
closures.
Road/Rail T r a c k
A.7.
Costs
ASLEF
rationalised,
s t r e s s e d that r o a d / r a i l
with p a r t i c u l a r
The Ministry
reference
they put f o r w a r d
of the r o a d
to r a i l w a y t r a c k
system
those of a c c i d e n t s )
costs.
and at o u r meeting
the v i e w that o v e r a l l the total
(including v a r i o u s a n c i l l a r y
The
heavy g o o d s v e h i c l e s and b u s e s did not m a k e an
not think that it w o u l d b e a p p r o p r i a t e for
We have,
Report that specific
licence
saying that
adequate
W e k n o w that this is a matter
which is v e r y much u n d e r c o n s i d e r a t i o n
comment on the i s s u e s
as
Ministry
also explained that they did not think that the c a s e f o r
contribution had b e e n p r o v e d .
with
c o s t s such
all r o a d u s e r s .
of
cost
w a s h e a v i l y o u t w e i g h e d b y the total
duty and fuel tax d e r i v e d from
A.8.
be
r e p r e s e n t a t i v e s h a v e p r o v i d e d us with a s u m m a r y
the p r e v i o u s a r g u m e n t s on this i s s u e ,
ASLEF
competition should
in the M i n i s t r y ,
us to m a k e any
and do
further
involved.
however,
recommended
in S e c t i o n 2 of this
account should b e taken of the c o s t s of
railway-owned o v e r l i n e
r o a d b r i d g e s in the capital
reconstruction
of the B o a r d .
Control of W i t h d r a w a l s of F r e i g h t
Freight
Services
and C l o s u r e s of
Stations
A.9.
ASLEF
r e c o m m e n d e d that t h e s e should b e
subject to the c o n t r o l of the M i n i s t e r ,
b e c a u s e of their
for the o v e r a l l t r a n s p o r t p o l i c i e s w h i c h the Minister
working out.
A t o u r meeting with A S L E F ,
out that their p o l i c y of freight c o n c e n t r a t i o n ,
trains, had in fact meant that m o r e
carried on c e r t a i n s e r v i c e s .
recognised that t h e r e w e r e
made
importance
was
the B o a r d
now
pointed
and the u s e of
freight traffic
A t the s a m e t i m e ,
o t h e r freight traffics
was
the
liner
being
railways
w h i c h would b e
declining .
A. 10.
W e do not think that the c a s e h a s b e e n p r o v e d
closer Ministerial c o n t r o l o v e r
w i t h d r a w a l of freight
that
services
and
c l o s u r e of freight
have decided
stations w o u l d
serve
any useful p u r p o s e ,
not to m a k e any s p e c i f i c
explain in A p p e n d i c e s B
and the B o a r d
and D to this R e p o r t that the
a r e jointly p u r s u i n g
the allocation of t r a c k
recommendations.
costs for
c e r t a i n questions relating to
freight s e r v i c e s ,
infrastructure
Joint
work
the G r o u p ' s
and their
services,
on the p r o b l e m s of
surplus
capacity.
Consultation
A . 11.
This
is o n e of the subjects being c o n s i d e r e d
the a u s p i c e s of the M i n i s t e r of
of r e f e r e n c e
g i v e n to u s .
Labour,
s t r e s s on the n e e d f o r
W e confine o u r s e l v e s ,
i m p r o v i n g the w a y
for joint consultation w a s u s e d .
modifications w e r e
right.
used for
necessary,
therefore,
in w h i c h the
ASLEF
modifications w e r e
TSSA
N o n e of the
s u g g e s t e d to us that any substantial modifications
A . 12.
any s h a r e
Trade
but that it w o u l d b e w r o n g
in m a n a g e m e n t d e c i s i o n s .
A . 13 .
This
staff
necessary.
should b e m e m b e r s with
but t h e r e should not be
But w e
direct
Board.
in relation to all the nationalised
are
consultation
b e c a u s e of the individual
r e p r e s e n t a t i o n on the
do not think that w e
put to u s .
would be
is a matter w h i c h is c u r r e n t l y being
by the G o v e r n m e n t
and w e
Unions
f o r the U n i o n s to have
There
Union e x p e r i e n c e on the B o a r d ,
Union o r
But it w a s
thought that t h e r e should be m o r e
contribution they could m a k e ,
Trade
same
in M a n a g e m e n t
TSSA
with the staff,
being
took the
necessary.
system
and the number of c l o s u r e s had
t h r o w n a g r e a t strain on the s y s t e m .
Participation
certain
they thought that the p r e s e n t
r e c o g n i s e d that r e c e n t c h a n g e s ,
Staff
machinery
said that whilst
c o n s i d e r a t i o n of c l o s u r e c a s e s .
to
general
But h a r m had b e e n done by this m a c h i n e r y
v i e w that only m i n o r
under
and is not within the terms
r e p o r t i n g that in the e v i d e n c e g i v e n to us t h e r e w a s
was
We
Ministry
implications f o r the c o n t r o l of the w i t h d r a w a l of freight
which a r i s e from
and we
considered
industries
r e q u i r e d to comment on the views
should explain that in looking at the
overall
problem of the B o a r d ' s
management
structure w e
have
concentrated
on the s h a p e and s i z e of the B o a r d ,
and h a v e not thought it
necessary
Trade
for us to r e c o m m e n d h o w
should b e dealt w i t h .
This
Union
representation
s e e m s to b e mainly a question
the M i n i s t e r w h e n s h e c o m e s to m a k e appointments to the
for
new
Board.
The n e c e s s i t y for
A . 14
Adequate
Public
Services
In their e v i d e n c e the N U R
of clean and c o m f o r t a b l e
speedy s e r v i c e s ,
comfortable
trains,
courtesy
pointed out the
importance
a c o n v e n i e n t l y timed
and a s s i s t a n c e from
service,
the staff,
station facilities and punctuality of t r a i n s .
be p r o v i d e d at an e c o n o m i c p r i c e .
electrification w a s
important.
They
TSSA
These-must
a l s o thought that
further
thought that a unified
structure and w e l l p r e p a r e d timetables w e r e
important.
fare
They
also
s t r e s s e d the n e e d f o r the r e m o v a l of d e r e l i c t station b u i l d i n g s .
A . 15.
These
all s e e m
within the m a n a g e m e n t
r e s p o n s i b i l i t y of the B o a r d ,
not w i s h to c o m m e n t ,
e x c e p t to emphasise that,
in o u r r e c o m m e n d a t i o n s
in S e c t i o n
unremunerative p a s s e n g e r
on b r o a d
to b e m a t t e r s w h i c h p r o p e r l y
2,
services,
a Separate
A.16.
The
NUR
Police
would
a s set out g e n e r a l l y
the
w h i c h a r e to be g r a n t
aided
the n e e d for the future
s e r v i c e s which a r e
to the public and w h i c h c a n b e run at a
Need f o r
and w e
and a p a r t from
s o c i a l and e c o n o m i c g r o u n d s ,
be for the B o a r d to plan to p r o v i d e
lie
will
attractive
profit.
Force
thought that the p r e s e n t T r a n s p o r t
Police
tended to act on behalf of the R a i l w a y m a n a g e m e n t in m a t t e r s
concerning
individual r a i l w a y m e n ,
in the P o l i c e being
A . 17.
This
independent of the R a i l w a y s
by the Joint T e a m
the N U R
advantages
Board.
is not a question w h i c h w e h a v e b e e n able to
consider in any detail,
existing R a i l w a y
and that t h e r e would b e
but it s e e m s to e m e r g e
that t h e r e a r e v e r y
Police
strong
should b e m a i n t a i n e d .
on what is e s s e n t i a l l y
a narrow
from the w o r k
reasons why
The
the
v i e w s of
a s p e c t of the p o l i c e
done
functions
do not,
arguments
in f a v o u r
A d v a n t a g e s of
A . 18.
As
in o r d e r to
TSSA
in o u r v i e w ,
g o n e a r to outweighing
of the f o r c e
being
continued.
Electrification
already
provide
stated the N U R
r e g a r d this a s
a g o o d s t a n d a r d of s e r v i c e
No
s e p a r a t e c o m m e n t is n e c e s s a r y ,
important
for the public.
thought it important for the g o o d i m a g e of the
A . 19.
the
railways.
o t h e r than to
refer
to the v a r i o u s p l a c e s i n this R e p o r t in w h i c h w e h a v e s t r e s s e d the
need for
forward
planning in o r d e r
investment in m a j o r
capital s c h e m e s
to e n s u r e that,
is only a p p r o v e d
w h e r e the B o a r d and the M i n i s t e r a r e
r e t u r n to b e obtained from
N e e d to I m p r o v e
A . 20 .
TSSA
Career
the
f o r the future,
in c a s e s
satisfied on the
financial
investment.
Prospects
referred
to the i m p o r t a n c e of c a r e e r
prospects,
and thought this could be a c h i e v e d by i m p r o v e m e n t of the quality
and conditions of w o r k .
possible
Their
should be a c q u i r e d f o r
main aim w a s that the best man
a particular post,
but s o
far
a s p r a c t i c a b l e the e x p e r t i s e a l r e a d y a v a i l a b l e within the
industry
should b e fully utilised.
movement
b e t w e e n the v a r i o u s
they w e r e
s e c t o r s of the nationalised t r a n s p o r t
in p r i n c i p l e against s e n i o r m a n a g e r s being
from outside
A . 21.
Whilst r e c o g n i s i n g the n e e d f o r
recruited
industry.
A t the meeting with T S S A ,
pointed out the n e e d f o r
time to t i m e ,
industry,
injecting
the B o a r d
representatives
n e w b l o o d into the r a i l w a y s
not l e a s t for training p u r p o s e s .
W e a c c e p t the need
for selecting the b e s t available p e o p l e f o r the top m a n a g e r i a l
and c l e a r l y this cannot a l w a y s b e done b y picking p e o p l e
within the r a i l w a y
the p u r p o s e
industry.
But it is important,
of r a i s i n g m o r a l e ,
not least
is no b a r to the
promotion of able r a i l w a y m e n to top p o s t s .
posts,
already
that it should continue to b e
by all t h o s e within the industry that t h e r e
from
for
seen
Retention and Strengthening
A.22.
TSSA
of the F i n a n c i a l M a n a g e m e n t
thought it important that this c e n t r a l
should be maintained and s t r e n g t h e n e d ,
came into e x i s t e n c e ,
service.
service
and that e v e n w h e n
computers.
W e h a v e included r e c o m m e n d a t i o n s
in S e c t i o n 3 of
services.
Brothers a r e due to r e p o r t to us in the n e a r future on
information and financial c o n t r o l ,
detailed r e c o m m e n d a t i o n s
and w e
in the autumn.
h o p e to put
would a l l o w a p p r o p r i a t e c o - o r d i n a t i o n in
forward
W e would e x p e c t that
NFO
this field.
Productivity
TSSA
thought that this w o u l d b e a c h i e v e d b y
an i m p r o v e d quality of
staff.
They
a l s o pointed to the
for s u p e r v i s o r s of the bonus p a y m e n t s f o r w a g e s
A.25.
Cooper
management
the administrative a r r a n g e m e n t s eventually a g r e e d for the
A.24.
central
T h i s w a s p a r t i c u l a r l y important in the light of the
this R e p o r t for the c o n t r o l of the c e n t r a l finance
Labour
NFO
t h e r e should b e no attempt to split this
greater u s e and c o m p l e x i t y of
A.23.
Services
These
of L a b o u r ' s
are
enquiry,
recuiting
problems
staff.
c l e a r l y m a t t e r s w h i c h fall within the M i n i s t e r
and w e
do not think that w e
should
comment.
160
APPENDIX
"STANDBY"
AND
"SURPLUS"
B
INFRASTRUCTURE
CAPACITY
SUMMARY
B.l.
We referred
the S p e c i a l
in o u r Interim
Report Annex
A
C o m m i t t e e which w e had set up to study in detail the
concept of standby c a p a c i t y w h i c h w a s s p e c i f i c a l l y
terms of r e f e r e n c e .
W e said then that w e
were
included in o u r
a g r e e d that
were c o n c e r n e d with standby c a p a c i t y in i n f r a s t r u c t u r e
formation,
track
terminals,
depots o r w a g o n s
that the r e a l
and s i g n a l l i n g ,
etc.)
network,
the C h a i r m a n of the B o a r d ,
(b)
required
(a)
existed,
proposed
on
commercial
and
sound c o m m e r c i a l
if any p a r t of it w a s
we
additional to that w h i c h the
reasons
(e.g.
to
efficiency. )
aiming to identify the nature of such s u r p l u s ,
and,
and
was
In o t h e r w o r d s ,
with p r e d i c t a b l e p e a k s o r to a s s i s t o p e r a t i o n a l
were also
agreed
a most important point to e m p h a s i s e ,
were looking f o r s u r p l u s w h i c h w a s
railways w o u l d n e e d f o r
w o u l d the
also
a g r e e d b e t w e e n the M i n i s t e r
f o r the s o c i a l s e r v i c e s .
this s e e m e d to the G r o u p
0
contain standby c a p a c i t y w h i c h
additional to that standby c a p a c i t y
and
We w e r e
if at all,
as b r o a d l y
(i.e
we
and not with any standby in
and c a r r i a g e s .
question w a s h o w f a r ,
future r a i l w a y
grounds,
P a r t III to
likely to p e r s i s t ,
the
cope
We
w h y it
reasons
why.
B.2.
In the light of details investigations c a r r i e d out on their
behalf, the C o m m i t t e e
standby. c a p a c i t y
for c o m m e r c i a l
finally
as set out a b o v e ,
(i.e.
additional to that
required
and s o c i a l s e r v i c e s ) , could b e p r o v e d to exist
a permanent e l e m e n t of
accept this
a g r e e d that it w a s highly unlikely that
view.
any f o r e s e e a b l e
railway
network.
We
as
(
B.3.
The
definetely
was
Committee w e r e
considerable
c o s t of w h i c h the B o a r d
agreed,
however,
that t h e r e
s u r p l u s capacity in the s y s t e m ,
w o u l d b e unable to b e a r unaided if the
continuance of the deficit w a s to be a v o i d e d .
The
distinction is that standby capacity w o u l d h a v e
permanence:
s u r p l u s is e s s e n t i a l l y t e m p o r a r y
surplus w a s
mainly
a matter of e x c e s s t r a c k c a p a c i t y ,
it w a s m o r e
r e l e v a n t to look
r o u t e s within the s y s t e m ,
B.4.
As
below,
we
and
route m i l e a g e .
was
In other
at the width of the individual
d e s c r i b e d in detail in p a r a g r a p h s
of w o r k
This
r a t h e r than at its total l e n g t h .
a c c e p t e d the C o m m i t t e e ' s
programme
essential
and c a p a b l e of r e m o v a l .
r e l a t e d only to a m i n o r extent to e x c e s s
words,
the
B . 1 2 to
B.14
r e c o m m e n d a t i o n that a
should b e settled to identify this s u r p l u s ,
that its cost could b e a s s e s s e d ,
and a p r o g r a m m e
could
so
subsequently
b e a g r e e d f o r its elimination.
WORK
OF
THE
S u r p l u s in the S y s t e m
B.5.
An
STANDBY
CAPACITY
as a Whole
initial a p p r o a c h
COMMITTEE
'*
adopted b y the C o m m i t t e e w a s
to
a s s u m e that standby capacity w a s maintained by the r a i l w a y s in
the f o r m of a number of r o u t e s which w e r e
additional to those
w h i c h w o u l d b e p r o v i d e d by a fully c o m m e r c i a l
w a s thought that the d i f f e r e n c e
w h i c h would
disclose
"The
m i l e s of
D e v e l o p m e n t of the M a j o r
published in 1965,
and the 11,000 mile
a g r e e d b e t w e e n the Ministry
a quantifiable
of t h e s e 3 , 0 0 0
8,000
report,
Routes",
subsequently
b e t w e e n the 8,000
T h u s it
h a v e b e e n likely to result f r o m the a p p r o a c h
in the B o a r d ' s
Trunk
system.
miles,
route capacity
route
contained
Railway
system
and the R a i l w a y s ,
amount of standby c a p a c i t y .
might
Consideration
miles of route and of the r o u t e s on the
remaining
d i s c l o s e d that the C o m m i t t e e should be looking at
r a t h e r than route miles as
such.
Examination of
Specific
B,6.
Board
The
Committee if s p e c i a l
Routes
s u g g e s t e d that it might b e helpful f o r
studies w e r e
routes of w i d e l y v a r y i n g
were m a d e by
The
from
characteristics.
Three
such
first
King's
Cross
to D o n c a s t e r .
The
have
day.
a signalling s y s t e m
p a s s e n g e r trains
periods.
capacity w a s
next route s t u d i e d ,
services
s u m m e r holiday traffic
for completely
had r e n d e r e d
to p r e s e n t
capacity.
s o m e of the t r a c k
It w a s
on the r o u t e ,
route,
The
w h i c h is at
all of double t r a c k is p r o p o s e d
considered
resulting train and t r a c k
adequate f o r p r e s e n t
with
and an
for
reduction to mainly s i n g l e t r a c k with a p p r o p r i a t e
loops.
a
d e c l i n e in
a c o n s e q u e n t reduction of the t r a c k m i l e a g e ,
The
was
management has plans
r e v i s e d train s e r v i c e s
present nearly
for
adequately
requirements.
that the r e g i o n a l
i n c r e a s e in t r a c k utilisation.
peak
possible
P l y m o u t h to P e n z a n c e ,
route on w h i c h the long t e r m
however,
during
available
c o v e r e d the c o s t of p r o v i d i n g this s u r p l u s
found,
express
It w a s implicit that the
peak p a s s e n g e r
c a p a c i t y superfluous
o r 18
but it had not s o f a r b e e n
to sell this capacity to u s e r s .
"secondary"
running
Its c a u s e w a s the n e e d to
frequent i n t e r v a l s
In c o n s e q u e n c e ,
net r e v e n u e f r o m
identified
trains,
which would p a s s
at v e r y
the r e s t of the d a y ,
study
w h i c h w o u l d p e r m i t the
s l o w freight t r a i n s p e r
was
by
route studied w a s the E a s t C o a s t main line
of an additional 36 e x p r e s s p a s s e n g e r
The
studies
Board.
s o m e surplus capacity,
B.6.2
individual
a M i n i s t r y e c o n o m i s t w o r k i n g on data p r o v i d e d
British R a i l w a y s
B.6.1
m a d e of a n u m b e r of
the
capacity
and future
passing
is
needs.
a c a s e w h e r e s u r p l u s capacity had b e e n
This
identified,
but by r e - a r r a n g i n g
and r e d u c i n g the train
it w o u l d be p o s s i b l e to eliminate n e a r l y
surplus capacity.
Some
f o r the singling p r o j e c t ,
v e r y high in c o m p a r i s o n
B.6.3
Finally,
Glasgow
a study w a s
route,
all of the
investment w o u l d b e
required
but the potential s a v i n g s
with the investment
m a d e of the W e a v e r
as it w o u l d b e
after
required.
Junction to
would
have
to adjust the c a p a c i t y to suit
future c o m m e r c i a l
and o p e r a t i n g r e q u i r e m e n t s .
with this f r e e d o m ,
it w a s p r o p o s e d to install
capacity,
s o that the d a y - l o n g
w o u l d b e only just o v e r 60%.
r a t e of
As
Even
surplus
utilisation
with the E a s t
main l i n e , this high l e v e l of c a p a c i t y
was
the n e e d to signal the route to c a r r y
of traffic
were
electrification.
T h i s is a route on w h i c h the r a i l w a y s
almost c o m p l e t e f r e e d o m
services,
at c e r t a i n t i m e s of the d a y .
in t h e m s e l v e s b e p r o f i t a b l e t r a f f i c s ,
Cost
c a u s e d by
short-run
As
peaks
these
would
e v e n including the
c o s t of the e x t r a c a p a c i t y they r e q u i r e d ,
it w a s
concluded
that the e x i s t e n c e of the s u r p l u s c a p a c i t y on the route
w o u l d not i m p o s e
B.7.
It w a s implicit in t h e s e t h r e e
to tailor the i n f r a s t r u c t u r e
volume
is,
and mix of traffic
therefore,
circumstances
it.
handicap upon the
at l e a s t in the long t e r m .
almost e n t i r e l y
railways.
r e p o r t s that it is possible
c a p a c i t y of a r o u t e to the
to c o p e with profitable p e a k s )
rate for
a financial
a matter of c o m m e r c i a l
o r of h i s t o r y .
There
expected
Any
choice
(e.g
m a y well be
in w h i c h it is c h e a p e r to l e a v e the s u r p l u s ,
a t i m e , than to i n c u r e the e x p e n d i t u r e
surplus
at any
r e q u i r e d to eliminate
Distinction b e t w e e n
B.8.
The
and
Surplus
C o m m i t t e e finally
agreed,
there is c e r t a i n l y
this c r e a t e s
Standby
accept,
that
s u r p l u s c a p a c i t y in the existing n e t w o r k ,
a financial p r o b l e m s i n c e ,
consistently maintained,
them will m e r e l y
and w e
as the B o a r d
to l e a v e the w h o l e
have
responsibility
with
e n s u r e the continuance of the deficit.
Committee t h e r e f o r e
The
c a m e to the c o n c l u s i o n that the b e s t
f o r w a r d w a s to t r y to a g r e e
surplus i n f r a s t r u c t u r e
about the s i z e
capacity,
and c o s t of
way
this
to d e c i d e h o w long it w o u l d take
to eliminate it,
and then to a g r e e on a method of p a y m e n t
would p r o v i d e
an i n c e n t i v e to the B o a r d to get r i d of this
as soon as p o s s i b l e .
The
and
Committee
a g r e e d that,
which
surplus
given
time,
there should be no difficulty in calculating the extent of the s u r p l u s ,
though they r e c o g n i s e d that it might v a r y
changed traffic
levels.
Proposals
f o r Identification of S u r p l u s
B.9.
The
infrastructure
be r u n .
Committee
a g r e e d that the extent of
therefore,
considerations.
O n l y the B o a r d
concerned.
be on the " s e c o n d a r y "
system.
track,
M o s t of it,
in the light of the
a s s u m e d that the full c o s t of the minimum
Any existing capacity in e x c e s s
be identified s e p a r a t e l y
multiple
maintenance
services,
necessary
w o u l d qualify f o r the s o c i a l
of the minimum
requirements
and included in the calculation of
with plans f o r its
"primary"
mileage.
track capacity f o r t h e s e s e r v i c e s
capacity,
thus l o w e r i n g
O n lines u s e d only by g r a n t - a i d e d p a s s e n g e r
the C o m m i t t e e
profitability
w o u l d be in the f o r m of double o r
s o m e of w h i c h could b e r e d u c e d ,
o
and
w o u l d b e in a position
but s o m e w o u l d b e on the
costs without r e d u c i n g the route
B.10
operating
Most of it w o u l d p r o b a b l y b e found to
system,
also,
surplus
and t y p e s of trains to
be d i v o r c e d f r o m
to identify this s u r p l u s i n f r a s t r u c t u r e
of the traffics
Capacity
w o u l d d e p e n d on the n u m b e r
It could not,
commercial
o v e r time in the light of
elimination.
grant.
should
surplus
B.11.
Special problems
a r o s e in the identification of
capacity
and the allocation of c o s t s f o r g r a n t p u r p o s e s
carrying
freight
as w e l l
as g r a n t - a i d e d p a s s e n g e r
also on " f r e i g h t o n l y " l i n e s .
The
a line is s h a r e d b e t w e e n freight
difficult
question,
on lines
services,
allocation of t r a c k
and p a s s e n g e r
surplus
costs,
services,
and
where
is a
and it may not a l w a y s b e right to a c c e p t the
recommendation
in the o r i g i n a l
Costing principles,
which
r e p o r t from
advocated
Cooper
Brothers
a continuance of the
on
Railways'
p r e s e n t p r a c t i c e of calculating this on the b a s i s of total train weights,
As
set out in A p p e n d i x
m a k e firm
D,
recommendations
we
a r e hoping to b e in a position to
about this l a t e r in the
year.
Recommendations
B.12
The
plan of
Committee therefore
r e c o m m e n d e d that the
action should be taken b y the B o a r d
B.12.1
they should identify
on the s e c o n d a r y
B.12. 2
or
following
:­
all existing s u r p l u s capacity
primary
whether
system;
they should identify t h o s e lines on the s e c o n d a r y
which would be needed for social p a s s e n g e r
but on w h i c h ,
would
are so used,
a l s o run freight s e r v i c e s .
the B o a r d
were
whilst they
should c o n s i d e r
likely to r e q u i r e
the
system
services,
Board
In r e s p e c t of t h e s e ,
w h e t h e r the freight
additional i n f r a s t r u c t u r e
services
and
w h e t h e r they could m e e t its c o s t ;
B.12.3
they should estimate the c o s t of the continuing maintenance
of e a c h e l e m e n t of surplus
(if
B.12.4
any)
capacity
an 11,000 mile
B.13
A
and the capital cost
of its elimination;
they should p r e p a r e
surplus
capacity
a programme
f o r the elimination of
(taking into account the commitment to
system).
capital investment p r o g r a m m e
should then be
agreed
with the M i n i s t r y f o r the elimination of the s u r p l u s .
A
also be
in the first
year,
a g r e e d , on a diminishing b a s i s ,
which would,
grant should
p a y f o r the actual c o s t of maintaining this s u r p l u s .
w o u l d b e paid annually
T h e grant
at a l e v e l w h i c h w o u l d b e fixed in advance,
and which w o u l d b e r e d u c e d y e a r b y y e a r
at a r a t e which
assumed
that the a g r e e d elimination p r o g r a m m e
could b e maintained.
effect of this should b e that the B o a r d
w o u l d b e r e l i e v e d of all the
costs of their n o n - c o m m e r c i a l
surplus infrastructure
they s u c c e e d e d in cutting it out as quickly
as the
envisaged.
The
after taking
account of the s o c i a l s u b s i d i e s ,
It would be
p r o v i d e d that
programme
B o a r d w o u l d then b e left with a n e t w o r k
its part on a c o m m e r c i a l
network
which,
should be able to p l a y
b a s i s in the c o u n t r y ' s t r a n s p o r t
a much s l i m m e r
The
system.
than at p r e s e n t but it w o u l d
retain the m a r g i n n e e d e d f o r c o m m e r c i a l
reasons,
and the
Committee did not b e l i e v e that any additional surplus capacity
or should, b e
maintained.
IMPLEMENTATION
B.14.
We
OF
THE
COMMITTEE'S
and the p r e l i m i n a r y
remaining p a r a g r a p h s
B . 15 .1
Further
stages
work
reliable
2 of this
The
that
involved
which w e
have
Report.
d e s i g n e d to p r o d u c e ,
by the autumn,
a
estimate.
T h e p r e p a r a t i o n o v e r the next 18 months of a detailed
a s s e s s m e n t of s u r p l u s ,
line by l i n e ,
the calculation of
its cost and the p r e p a r a t i o n of a plan f o r its
over
Definition of
elimination
a stated p e r i o d .
Preparation of a D e t a i l e d A s s e s s m e n t of S u r p l u s ,
B.16.
surplus
work.
T h e p r e p a r a t i o n of the b r o a d e s t i m a t e ,
more
B.15.3
and c o s t i n g of
a s s e s s m e n t of its c o s t .
are three separate
included in S e c t i o n
B.15.2
formulation
in this A p p e n d i x d e s c r i b e d the p r o g r e s s
has s o f a r b e e n m a d e with this
There
and d e c i d e d to
C o m m i t t e e to assist the B o a r d in the
of their detailed p r o p o s a l s f o r the identification
B.15.
RECOMMENDATION
a c c e p t e d all t h e s e r e c o m m e n d a t i o n s ,
set up a further
infrastructure
need,
and its
cost.
Surplus
It is a s s u m e d that it will b e n e c e s s a r y
Provide s e r v i c e s o v e r
a specific
to maintain
and
route m i l e a g e d e t e r m i n e d b y the
Network
for
Development,
context s u r p l u s t r a c k
published in M a r c h 1967.
and signalling
capacity
that w h i c h can be eliminated at no c o s t ,
show
a reasonable
still l e a v e sufficient
commercially
or
To
0
examination
available on a c o m m e r c i a l
and e c o n o m i c
in relation to the
traffic
will b e
moved.
a s s u m e that the p r o p o s e d
Bill will b e c o m e
the B o a r d ,
needs,
law
and that the G o v e r n m e n t will d e c i d e to c o m m e n c e the
in future,
W e think it is a r e a s o n a b l e
before
date,
to p r o d u c e
and its c o s t ,
through traffic
for
sufficiently
on w h i c h the total
calculated.
are concerned
as
commercia
account must b e taken of the
contained in the r e p o r t on the D e v e l o p m e n t
Routes,
a
B o a r d h a v e m a d e it c l e a r that so f a r
d e s i r a b l e traffics
date".
assumption that it will be feasible
a s s e s s m e n t of s u r p l u s ,
The
1st J a n u a r y ,
to this date as the " p r e s c r i b e d
the p r e s c r i b e d
amount of g r a n t c a n b e
unit
and signalling
as the methods b y which this traffic
We r e f e r ,
Trunk
a critical
all t r a c k
p a y m e n t of g r a n t s in r e s p e c t of this s u r p l u s f r o m
precepts
grounds.
social
during 1968,
B.19
Minister
and f o r
We
accurate
are
basis
B.18.
1969.
as
w h i c h the
establish the extent of this s u r p l u s ,
c o m p r i s i n g the 11,000 route mile n e t w o r k
as w e l l
and yet
Surplus
must b e m a d e of the n e e d f o r
likely to b e
investment,
capacity to o p e r a t e such s e r v i c e s
and those s e r v i c e s
as
at a c o s t w h i c h will
d e c i d e s should be r e t a i n e d on b r o a d s o c i a l
B.17
can be defined
r e t u r n on any n e c e s s a r y
desirable
E s t a b l i s h m e n t of
In that
of the Railway
f o r the c o n c e n t r a t i o n of the maximum v o l u m e of
over
the minimum of
r o u t e s to r e d u c e the cost per
carried.
B . 20.
E v e n the best estimate of s u r p l u s
can b e no m o r e than an approximation of
capacity,
a theoretical
however,
position
which could exist at s o m e point in t i m e . It can n e v e r truly
the actual position on the t r a c k
as c h a n g e s in train s p e e d s ,
reflect
speed
I
mix,
and m e t h o d s of o p e r a t i o n will take p l a c e continually to
improve efficiency
transport will
and p r o d u c t i v i t y ;
also c h a n g e ,
and t h e s e f a c t o r s
d e g r e e of s u r p l u s c a p a c i t y .
"prescribed
d a t e " to m a k e
the demand f o r
will v a r y
It will be n e c e s s a r y
f o r w a r d to this five y e a r p e r i o d ,
This
and w e
practice the B o a r d
assessment
a somewhat
B.21.
We a r e
the B o a r d
But w e
and w h i c h ,
methods
at least
able to eliminate o v e r
and signalling o v e r
as to the major
that p e r i o d .
part,
For
the
they
this
They
will
purpose
at the time that e a c h individual line is
will be kept of all s u r p l u s
The
r e m o v e d p r i o r to the
commensurate with the s e r v i c e s
and its r e m o v a l
to r e - l a y
There
surveyec
prescribed
accept
and signalling facilities to a minimum
to b e p r o v i d e d ,
the
cannot c o i n c i d e in t i m e .
r e d u c t i o n s it will be n e c e s s a r y
resigned, to install t r a c k
is
remaining.
B o a r d h a v e m a d e it plain that w h i l e they
their obligation to r e d u c e t r a c k
the n e c e s s a r y
as the b a s i s
all s u r p l u s which
and the g r a n t will c o v e r the b a l a n c e of s u r p l u s
crossings.
but
will estimate the likely pattern of o p e r a t i o n s by the end
currently in e x i s t e n c e
barriers,
surplus
will b e c r e a t e d by the c h a n g e s in the l e v e l s
also include
of surplus
recognise
date,
for their c a l c u l a t i o n s .
B.22.
for
will be r e q u i r e d to
and u s e this estimate
date,
as
and that in
of the p r e s c r i b e d p e r i o d in 1974,
A record
1974,
will b e r e q u i r e d
at the p r e s c r i b e d
and c h a n g e s in o p e r a t i n g
expect to b e
hence
the extent of any
a g r e e d that the B o a r d
also that s u r p l u s which
next f e w y e a r s
refer
process.
assess not only the c u r r e n t s u r p l u s
of traffic,
B . 21 b e l o w ) .
artificial p i c t u r e ,
will n e e d to r e v i e w
capacity as a continuing
period
ending on 1st J a n u a r y ,
the p u r p o s e of calculating the s i z e of the g r a n t .
that this is n e c e s s a r i l y
the
( s e e paragraph
We a s s u m e that this will be five y e a r s ,
the
as it will
o r to b e c r e a t e d o v e r
during w h i c h g r a n t s will be p a y a b l e
the actual
before
an a s s e s s m e n t of s u r p l u s
be likely to exist on that d a t e ,
the " p r e s c r i b e d p e r i o d " .
rail
To
achive
in many c a s e s to
c i r c u i t s and automatic l e v e l
and r e - a l i g n t r a c k
identification
crossing
and eliminate points
is a limit to the p h y s i c a l
resources
and
available
f o r this w o r k
works
in
design
offices,
itself,
and on the t r a c k
in contracting f i r m s ,
and the B o a r d
unrealistic to s u p p o s e that r e s o u r c e s
The
most convenient time
layout is w h e n
re-laying
w h e n signalling
why earlier
B . 23 .
A
at a v e r y
at w h i c h to simplify
of the t r a c k b e c o m e s
rapid
a railway
necessary
or
a s s e t s h a v e r e a c h e d the end of their useful life
and must be r e p l a c e d .
reasons
r e g a r d it as
can b e c o n c e n t r a t e d to
eliminate s u r p l u s c a p a c i t y f r o m the n e t w o r k
pace.
in railway
But t h e r e may be e c o n o m i c
c h a n g e is
decision
and financial
necessary.
about the p r i o r i t y to b e g i v e n to the work
i n v o l v e d in eliminating s u r p l u s will h a v e to b e r e a c h e d by the
Ministry
and the B o a r d
has b e e n c o m p l e t e d ,
from
d i r e c t w h e n the full
a s s e s s m e n t of surplu
and w h e n it is p o s s i b l e to c o m p a r e the res
e x p e n d i t u r e on the elimination of s u r p l u s
against the expecte
r e t u r n on investment f o r the d e v e l o p m e n t of the main routes and
facilities.
The
resources
for
efficiency
Board
set a high v a l u e on the u s e of the availabl
modernising
and d e v e l o p i n g main r o u t e s to improv
s o that the b e s t s e r v i c e
n u m b e r of the population
b e l i e v e that,
and the l a r g e s t s e c t o r s of industry.
in t e r m s of c a s h contribution to viability,
limited p h y s i c a l
resources
signalling on a trunk r o u t e ,
achieve m o r e
and p r o d u c e
available,
the p r i o r i t i e s
and w e
investment in track and
should
a much better net r e t u r n to the railw
work
r e q u i r e d f o r the eliminati
But they r e c o g n i s e that it will b e n e c e s s a r y to revi
w h e n the detailed a s s e s s m e n t of s u r p l u s is availabl
a g r e e that this a s s e s s m e n t should b e p r o d u c e d
as p o s s i b l e .
T
with the
a s s o c i a t e d with electrification,
than investment in the e n g i n e e r i n g
of s u r p l u s .
can b e g i v e n to the greatest
When it is a v a i l a b l e ,
h a v e to e x p l o r e
alternative p o l i c i e s
the B o a r d
as quickl
and the Ministry w
and estimate their
effect.
Grant f o r
Surplus
B.24.
When the s u r p l u s has b e e n identified b y the
described a b o v e ,
and to the extent that elimination will not h a v e
taken p l a c e by the p r e s c r i b e d
surplus i n f r a s t r u c t u r e
based on
date,
the amount of the g r a n t
to be paid initially
(i.e.
in 1969)
the annual c o s t of the m a i n t e n a n c e of t r a c k
signalling installations;
B.24.2
signalling o p e r a t i o n
Pending
structure f o r the r a i l w a y s
prescribed
settlement of the n e w
it will not b e p o s s i b l e to
the future i n t e r e s t and d e p r e c i a t i o n
For the time b e i n g ,
surplus, i n t e r e s t
conditions,
therefore,
Method of Calculation f o r
The
different
categories
of line
B o a r d h a v e i n f o r m e d us of the methods which
and the
into s e v e r a l
We
they
assessment
it will
different
related to its u s e and the type of s e r v i c e o p e r a t e d .
be
categories
endorse
approach.
Assumptions U s e d f o r the E s t i m a t e of the O r d e r
Magnitude F i g u r e
W e h a v e e x p l a i n e d in p a r a g r a p h
of
B . 1 8 that w e think it
assumption that the detailed a s s e s s m e n t
substantially c o m p l e t e d b y 1st J a n u a r y ,
cannot b e done in any s h o r t e r p e r i o d .
order of magnitude f i g u r e ,
a
surplus.
separately.
essential to divide the rail n e t w o r k
and w e
determine
as it w o u l d b e in p r e s e n t
of its c o s t and h a v e e x p l a i n e d that f o r this p u r p o s e
's a r e a s o n a b l e
capital
e l e m e n t in the c o s t of
propose to adopt f o r the identification of s u r p l u s
their method of
during the
in the a s s e s s m e n t of the c o s t of
and amortisation
should b e s h o w n
and
costs,
w h i c h the B o a r d estimate will b e c r e a t e d
prescribed p e r i o d .
B.26.
be
and
for those s u r p l u s facilities which will e x i s t on the
B.25.
will
for
: ­
B.24.1
date, o r
methods
But it c l e a r l y
In o r d e r to p r o d u c e
s h o r t cut m e t h o d s had to b e
a c c e p t the C o m m i t t e e ' s
cceptable within the time
1969.
v i e w that t h e s e methods
constraint.
can b e
an
employed,
are
B . 27
0
T h e figures
the B o a r d ,
of the c o s t of s u r p l u s
t o g e t h e r with the justification
included in S e c t i o n
o v e r a l l finanical
2 of this R e p o r t ,
situation.
Ministry of T r a n s p o r t
The
as p o s s i b l e o v e r the next f e w
available estimate b e f o r e
Parliament.
to b e a l a r g e
a grant,
dealing with the
Board,
economists,
for
as estimated by
have been
Board's
with a s s i s t a n c e from the
will r e f i n e t h e s e figures so far
months in o r d e r to p r o d u c e the be:
t r a n s p o r t legislation is introduced into
W e must e m p h a s i s e ,
however,
that t h e r e is bound
e l e m e n t of uncertainity until the B o a r d
identified in detail w h e n s u r p l u s e x i s t s o r
can b e
have
created.
APPENDIX
OTHER
OBLIGATIONS
C.l.
We have
Teams have
DERIVING
explained
in p a r a g r a p h
c o m p l e t e d the w o r k
in our e a r l i e r
Report,
statement in P a r t
FROM
where
I V of A n n e x
THE
to w h i c h r e f e r e n c e
g a v e a f a i r l y full
A.
T h e following
out o u r final c o n c l u s i o n s and r e c o m m e n d a t i o n s ,
as they i n v o l v e f i n a n c e ,
ROAD
BRIDGES
C.2.
As
give further
AND
in o u r
their e a r l i e r
was
made
progress
paragraphs
e x c e p t in so
set
far
been
Report.
LEVEL
recorded
Joint
c a s e they h a v e a l r e a d y
CROSSINGS
last R e p o r t ,
c o n s i d e r a t i o n to the difficulties
arising from
transfer
in w h i c h
2 of the main
included in S e c t i o n
PAST
1.9 that the
we
we
a s k e d the T e a m
which w e
recommendations
for
the
was
reconstituted on a w i d e r
to
envisaged
complete
of r e s p o n s i b i l i t y for t h e s e b r i d g e s to local authorities
the Joint T e a m
C
and
basis.
Bridges
C.3.
In p r i n c i p l e ,
existing h i g h w a y o v e r l i n e b r i d g e s
be r e g a r d e d
as p a r t of the h i g h w a y ,
that financial
responsibility
Although it w o u l d
authorities,
seem
and it is c l e a r l y
should r e m a i n with the
logical to t r a n s f e r
inappropriate
railways.
the b r i d g e s to h i g h w a y
this is i m p o s s i b l e b e c a u s e of the w a y the R a t e
Grant is distributed.
them to the l a r g e r
It w o u l d ,
therefore,
local authorities.
be necessary
But the R a t e
to c o m p e n s a t e the l o c a l authorities in an equitable
submitted to us s h o w
W e h a v e had to c o n c l u d e that,
case in equity for t r a n s f e r r i n g
In r e a c h i n g this c o n c l u s i o n w e
it i m p o s s i b l e
for
although t h e r e
the
and
is a g o o d
in l a w the c a s e
a r e too l a r g e to b e
have
Grant
annum).
the b r i d g e s ,
good, and the p r a c t i c a l difficulties
transfer
a s b e t w e e n o n e authority
another from £100 to £500 p e r b r i d g e p e r
C.4.
Support
manner.
that the c o m p e n s a t i o n
transfer of t h e s e b r i d g e s w o u l d v a r y
to
Support
is b a s e d on c o m p l i c a t e d calculations w h i c h w o u l d m a k e
(Figures
should
is
ignored.
a l s o had in mind that t h e s e
less
b r i d g e s r e p r e s e n t only o n e - s i x t h of all the b r i d g e s f o r
Board are
responsible,
on m a n p o w e r
grounds,
and that in any c a s e
which the
it w o u l d b e
( a s w e l l a s for safety r e a s o n s ) ,
the r e s p o n s i b i l i t y for the p h y s i c a l maintenance of t h e s e
with the B o a r d ,
s i n c e in p r a c t i c e ,
for t h e s e b r i d g e s ,
their maintenance
C .5.
the B o a r d
e v e n if they lost
bridges
responsibility
could h a r d l y m a k e any reduction in
r e c o m m e n d that o w n e r s h i p of r o a d
o v e r the r a i l w a y should r e m a i n with the B o a r d ,
2,
in the financial
which w e
propose.
C.6.
W e a l s o r e c o m m e n d that the B o a r d ' s
present
W e a l s o s u g g e s t that, e v e n if the
a r e to continue in the B o a r d ' s
r e s p o n s i b i l i t y for i h e
b y the a p p r o p r i a t e
surfaces
payment
ownership,
Finally,
should b r i n g u p - t o - d a t e the B o a r d ' s
should
bridges
of all o v e r l i n e b r i d g e s
local authority.
their present
should be borne
the T r a n s p o r t
extended.
Crossings
C.7.
S o far
as level c r o s s i n g s are
concerned,
concluded that the method of c r o s s i n g o p e r a t i o n ,
control must r e m a i n with the r a i l w a y s ,
s e e k any financial
operating
Ministry's
contribution from
we
m a k e it quite impossible to
the local authorities to the
c o s t s of public r o a d l e v e l c r o s s i n g s ,
although w e
p r o p o s a l to introduce legislation e m p o w e r i n g
note the
local
improvement.
In v i e w of the extent to which l e v e l c r o s s i n g
b e e n inflated a s a result of the g r o w t h in r o a d traffic,
c h a n g e in its n a t u r e ,
have
and the fact that
authorities to contribute to the capital cost of their
C . 8.
and the
of R a i l w a y s in relation to railway
b r i d g e s a l r e a d y o w n e d b y local authorities should b e
Level
Bill
p r e s e n t duties in r e s p e c t of
maintenance at p r e s e n t b a s e d on minimum legal liability,
p o w e r s of the Inspecting O f f i c e r s
which
reconstruction
of £ 4 0 , 0 0 0 p e r annum in r e s p e c t of trunk r o a d b r i d g e s
themselves
bridges
but that as set
account should be taken of t h e s e c o s t s ,
amount to about £1-^rn . p e r annum,
be discontinued.
to leave
staff.
We therefore
out in S e c t i o n
sensible,
costs have
and the
and a l s o in the light of the additional
responsibilities w h i c h w e
put on the B o a r d
crossings,
are
i n f o r m e d the M i n i s t e r p r o p o s e s
in r e s p e c t of a c c o m m o d a t i o n
and
to
occupation
w e think that it w o u l d b e right to r e l i e v e the B o a r d
a figure of the o r d e r
of £lm . p e r
year.
of
We have recommended
Section 2 of this R e p o r t that this is the f i g u r e
which
should
in
be
taken into account in the calculations leading to o u r p r o p o s a l s
for
recapitalisation.
PENSIONS
C.9.
W e e x p l a i n e d in o u r Interim
20 to 2 2 )
that the main questions to r e s o l v e
if so h o w f a r ,
the B o a r d
should b e r e l i e v e d
and p e n s i o n liabilities relating to staff
social o r
Report
abandoned lines,
decisions of the B o a r d ' s
(Annex
were
of
A
paragraph
whether,
superannuation
previously employed
on
and its obligations w h i c h r e s u l t
predecessors.
and
There
was
from
a l s o the
problem of the i n t e r e s t b u r d e n on superannuation and p e n s i o n
deposits and p r o v i s i o n s
viable a s s e t s .
which w e r e
no l o n g e r
W e r e a l i s e d that in facing
asking w h e t h e r the B o a r d
should,
new b o d y ,
from
starting a f r e s h
represented by
these issues w e
in effect,
or
whether
it w a s
any
were
be r e g a r d e d as a
the c u r r e n t d a t e ,
with only the
liabilities that they had c h o s e n to i m p o s e on t h e m s e l v e s for
future,
fund
right that they should b e s a d d l e d
the
with
some p a r t at least of the l e g a c y of the p a s t .
C.10.
W e s u g g e s t e d at that time that if the a r g u m e n t s
releasing the B o a r d
from
this might r e p r e s e n t
a sum of the o r d e r
year.
To
for other
C.11.
do s o ,
for
its obligations should b e a c c e p t e d in full,
however,
of £15m.
to £ 2 0 m .
w o u l d b e a m o s t unfortunate
i n d u s t r i e s in a s i m i l a r
per
precedent
position.
W e h a v e n o w l o o k e d into the f i g u r e s
in m o r e
detail,
and
think it m a y b e helpful to set them out u n d e r t w o s e p a r a t e h e a d s
follows:
as
C.11.1
The
Interest
Using
Burden
1965 f i g u r e s the B o a r d had to pay
C . 11.1.1
Interest on Superannuation and
Pension
for
C.11.1.2
F u n d portion of
Retirement
Provision
Benefits.
I n t e r e s t on F u n d b a l a n c e s
on deposit b y B r i t i s h
BTC
(Male Wages
Pension
Scheme.
are
not r e p r e s e n t e d by c a s h ,
fixed a s s e t s in w h i c h ,
at one time o r
monies have been invested.
They
a r e an
considered
s e p a r a t e l y from
The
These
of the B o a r d s
1
obligations
C . 11.2.1
Future
and the
r i s e cannot b e
the
decisions,
predecessors
include the following : c h a r g e s to r e v e n u e
a deficiency
in r e s p e c t of
(not yet quantified)
emerging
the application of r e a l i s t i c assumptions
wages,
The
overall
capital liabilities.
P e n s i o n s O b l i g a t i o n s resulting from
and p r a c t i c e s ,
the
integral
the question of the
i n t e r e s t b u r d e n of the B o a r d ' s
relate
but b y
another,
p a r t of the capital s t r u c t u r e of the B o a r d
i n t e r e s t c h a r g e s to w h i c h they g i v e
p . a.
£10.8m p . a.
capital s u m s to w h i c h t h e s e interest c h a r g e s
(about £ 2 7 0 m . )
C . 11.2
p.a,
£lm
Total
The
£6.2m
Railways
Interest on b a l a n c e of
Grades)
p . a,
held
Board.
C.11.1.3
£3.6m
etc.
present
from
on
to the valuation of the funds.
capital value of t h e s e
deficiencies
m a y w e l l amount to a further £50m .
C . 11. 2 . 2 A n
unquantified f i g u r e
reflecting
the extent
to w h i c h the B o a r d m a y b e i n v o l v e d in
further
d e f i c i e n c y p a y m e n t s attributable to
what the B o a r d
consider
to b e the unduly
g e n e r o u s p r o v i s i o n s of the L M S
Pension
Scheme .
The
Joint W o r k i n g T e a m
h a v e estimated that t h e s e
o t h e r p e n s i o n obligations of w h i c h the B o a r d
should b e r e l i e v e d
the d i f f e r e n c e
Superannuation
r a t e of i n t e r e s t ,
the d i f f e r e n c e
b e t w e e n the
w h a t they w o u l d be paying u n d e r the contribution
rates
future
deficiencies
non-statutory
about £ 8 m .
scheme,
the c o s t of
and the c o s t of p a y m e n t s
customary practices)
to £ 9 m .
per
annum,
deficiencies
These
in the F u n d w e r e
sums together
to £ 2 0 m . p e r annum.
this r e l a t e s
but this d e p e n d s to
C.13.
liquidated.
add up to a total of about £17m.
set out a b o v e ,
something
to the b u r d e n on the B o a r d
over
half of
resulting from
Board,
decisions
predecessors.
In addition to the f o r e g o i n g
estimated at £ 2 0 m .
£1.6m.)
to b e
any
to the interest b u r d e n on s u m s i n v e s t e d with the
the r e m a i n d e r
of their
As
under
might amount to
a c o n s i d e r a b l e extent on the r a t e at w h i c h
C.12.
and a
and
in the n e w p e n s i o n s
in
interest
contributions actually being paid b y s a l a r i e d staff
prescribed
they
Fund
b e t w e e n the r a t e of
c r e d i t e d to funds d e p o s i t e d with the B o a r d
realistic
consider
( t h e s e include c h a r g e s to r e v e n u e
r e s p e c t of the liquidation of
deficiencies,
and
(resulting
there
is a capital
in an annual r e v e n u e
in r e s p e c t of the b a c k - d a t i n g
obligation
c h a r g e of
e l e m e n t of the n e w
grade fund and continuing obligations of £ 0 . 1 5 m .
a year
of the e x t e n s i o n of the benefits of the n e w fund to staff
wages
in r e s p e c t
who
retired b e t w e e n 1st J a n u a r y 1967 and the start of the n e w fund in
August 1967 .
There
a r e also deficiencies
on o t h e r funds of the
order
of £ 2 0 m .
revenue
at the r a t e of £ 1 . 5 m .
the £ 1 . 6 m .
for
w h i c h a r e being c u r r e n t l y met b y c h a r g e s to
mentioned e a r l i e r
as expenditure
a year.
This
figure t o g e t h e r
and the £ 0 . 1 5 m . , h a v e b e e n
chargeable
to r e v e n u e
with
allowed
in the l o n g - r a n g e
revenue
forecasts.
C . 14.
W e a c c e p t the a r g u m e n t s w h i c h w e mentioned
in our
last R e p o r t that it w o u l d set a d a n g e r o u s p r e c e d e n t to m a k e
any
specific
These
g r a n t s in relief
of the B o a r d ' s
pension obligations.
a r e c l e a r l y obligations w h i c h h a v e to b e m e t ,
is w h e t h e r the payment
Board.
and the only question
should and could be m a d e in future by the
We recommend
in S e c t i o n
2 of this R e p o r t that account
should b e taken of t h e s e obligations in the financial
which w e
propose .
C.15.
S o far
n e e d further
a s can n o w b e a s s e s s e d
study)
sheet at 31st D e c e m b e r
reappraised
1966 .
The
with £ 2 7 5 m .
in the balance
capital v a l u e s adopted for the
with the c u r r e n t r a t e of 4%.
be of the o r d e r
of £11m.
of £19m.
The
future
compared
annual interest burd
with the present
A g a i n s t this i n c r e a s e of £8m . can b e offset
a v o i d a n c e of d e f i c i e n c y
increased
as c o m p a r e d
obligations
superannuation obligations a s s u m e an i n t e r e s t rate of 5%
will t h e r e f o r e
figure
(although t h e s e figures will
the total capital v a l u e of the p e n s i o n s
is of the o r d e r of £ 3 7 0 m .
compared
reconstruction
the
c h a r g e s to r e v e n u e of s o m e £ 3 m . leaving £5m,
c h a r g e s to b e taken into account in the f o r w a r d
revenue
e s t i m a t e s and the a s s e s s m e n t of the debt to the M i n i s t e r .
MUSEUMS
C . 16 .
AND
HISTORICAL
Since w e
RECORDS
submitted o u r
Interim R e p o r t the Joint
Team
h a v e b e e n investigating the feasibility of implementing t h e i r main
recommendation,
Board,
that it would b e in the i n t e r e s t s of the
and beneficial from
that the B o a r d
the standpoint of museum
should build a n e w
to the D e p a r t m e n t of Education and
Science Museum,
Clapham
site.
Transport
Science
Railways
policy
Museum,
for
generally,
transfer
a s an outstation of the
with the funds r e a l i s e d from
the s a l e of the
C.17.
After
receiving
and r e c o m m e n d a t i o n s
C . 17 .1
their further
a r e as
r e p o r t o u r main
follows:-
It would not b e p o s s i b l e to set up a n e w
transport museum,
the p r i m a r y
r e p l a c e the museum
funds should c o m e f r o m
released
within the
recommendation
that the
building w o u l d
to b e p r o v i d e d out of the
site.
enable
money
- w h i c h w o u l d p r o b a b l y amount to about
£517,000 - by the s a l e of the sites of the
present
m u s e u m s at C l a p h a m
the
Board
and Y o r k .
n o r the L o n d o n
building available
Neither
Transport
Board
in the L o n d o n a r e a ,
Railways
have a
but the
Railways
B o a r d h a v e s u g g e s t e d the c o n v e r s i o n of a m o t i v e
depot at Y o r k
and w h i c h could b e
D e p a r t m e n t of
Education and S c i e n c e
to a p p r o v a l by M i n i s t e r s ,
r e s p o n s i b i l i t y for
be p r e p a r e d to
a museum p r o v i d e d
C.17.3
If the p r o p o s e d
n e w museum
assume
in this w a y ,
at Y o r k
was
administered
admission w a s
year
at p r e s e n t i n c u r r e d by the R a i l w a y s
Board
t r a n s p o r t m u s e u m s at Clapham
on the
existing
Since
deficit,
would r e d u c e the total c o s t of the
total
l e s s than those
and Y o r k .
c o s t s g o to s w e l l the r a i l w a y
Education and
and the
continued,
net c o s t s w o u l d b e about £15,000 a
to the E x c h e q u e r ,
and the
accept
Education and S c i e n c e ,
p o l i c y of c h a r g i n g for
to Y o r k
subject
its m a i n t e n a n c e .
b y the D e p a r t m e n t of
museaum
funds.
would,
M i n i s t r y of P u b l i c Building and W o r k s w o u l d
for
as
satisfactorily
c o n v e r t e d within the limits i m p o s e d b y a v a i l a b l e
responsibility
power
w h i c h w o u l d b e w e l l fitted to s e r v e
a transport museum,
The
to
financial
the s a l e of the C l a p h a m
c o n v e r s i o n of an existing
a n e w museum
purpose-built
p u r p o s e of w h i c h w a s
at C l a p h a m ,
limits i m p o s e d b y the e a r l i e r
C . 17 . 2 T h e
conclusions
a move
museums
p r o v i d e d that the D e p a r t m e n t of
Science
were
to continue the
present
charging policy.
(To
discontinue this c h a r g i n g
w o u l d i n c r e a s e the p r e s e n t
annual c o s t s of
c o l l e c t i o n s to the E x c h e q u e r
C . 17 . 4 T h e
of the
all those r a i l w a y
Science Museum,
depot w o u l d p r o v i d e
exhibits w h i c h ,
own
r e l i c s back
into their k e e p i n g
Transport
to take their
r a t h e r than s e e
Board's
relics.
W e r e c o m m e n d that t h o s e exhibits w h i c h w o u l d
qualify
for
inclusion in a national collection
accordance
them
should
in the L o n d o n T r a n s p o r t
annual e x p e n d i t u r e on
with the e s t a b l i s h e d p r a c t i c e ,
not
should,
in the
in
first
instance b e o f f e r e d f r e e
of c h a r g e to local m u s e u m s
recognised
societies,
preservation
homes w e r e
realised
for
C . 17 .6
London
and w e u n d e r s t a n d that this
r e s u l t in a d e c r e a s e
view
in a
indicated that they w o u l d p r e f e r
r e m o v e d to Y o r k ,
C.17.5
The
enough
in the
merit preservation
national t r a n s p o r t c o l l e c t i o n .
B o a r d have
the
b y about £10,000 p . a . )
c o n v e r s i o n of the Y o r k
s p a c e for
policy
The
and t h o s e f o r
'* A n y
not found should b e s o l d .
in this w a y
and
which
sums
should b e a d d e d to the funds
available
setting up the n e w museum .
D e p a r t m e n t of E d u c a t i o n and
be willing to a s s u m e
Swindon.
Board
Science
would
r e s p o n s i b i l i t y f o r the m u s e u m
We therefore
r e c o m m e n d that the
Corporation.
the m u s e u m at S w i n d o n to
Should this p r o v e
impossible,
at
Railways
should attempt to negotiate the t r a n s f e r
r e s p o n s i b i l i t y for
not
of
Swindon
we
think
that the B o a r d h a v e no a l t e r n a t i v e to continuing to b e a r
the c o s t s falling to them u n d e r the t e r m s of
existing
agreement.
C . 17 .7 Whilst it w o u l d b e p h y s i c a l l y
the r e c o r d s
Record
the
p o s s i b l e to
accommodate
at p r e s e n t held in the R a i l w a y s
Office
about £ 6 0 , 0 0 0 ,
Board's
in L o n d o n in a small e x t e n s i o n ,
to the p r o p o s e d
York
Museum,
costing
it is
i m p r o b a b l e that this could b e done within the
financial limits.
we
agreed
But in v i e w of the small sum
concerned
r e c o m m e n d that the o c c a s i o n should b e taken to
transfer
the h i s t o r i c a l r e c o r d s to Y o r k ,
e v e n if this
cannot b e done entirely within the financial limits
b y the p r o c e e d s
York
C . 18 .8 T h e
from
the s a l e of the Clapham
set
and
sites .
Standing
C o m m i s s i o n s on M u s e u m s and
Galleries
h a v e b e e n consulted and a r e b r o a d l y satisfied with the
above proposals .
C . 17 .9 W e finally
r e c o m m e n d that p r o v i s i o n should be m a d e
the forthcoming
carried
out,
Bill to enable t h e s e p r o p o s a l s to b e
and that the n e c e s s a r y
b e left to the B o a r d
RAILWAYS
C.18.
SAVINGS
(Annex
and the
arrangements
Ministry.
A
specific r e c o m m e n d a t i o n s
paragraph
31) .
in o u r
W e h a v e dealt in S e c t i o n 2
of this R e p o r t with the implication of the interest b u r d e n on
Savings B a n k s d e p o s i t s .
apart from
recording
the r e c o m m e n d a t i o n s
N o o t h e r point a r i s e s on this
that, the B o a r d h a v e a l r e a d y l a r g e l y
which w e m a d e .
Following
and said that o u r
the Joint T e a m
inter alia a T r e a s u r y
the H o m e O f f i c e ,
BR
banks
statement of the a r g u m e n t s for
against s o m e element of E x c h e q u e r
In the e v e n t ,
and
closed.
POLICE
W e set out a brief
last R e p o r t ,
implemented
the centralisation
Savings B a n k has n o w b e e n established and the f o r m e r
C. 19 .
these
subject,
computerisation of the existing banks at D a r l i n g t o n a n e w
TRANSPORT
might
BANK
W e included four
Interim R e p o r t
in
grant f o r the P o l i c e in o u r
study of this item w a s
was
and
strengthened
representative,
continuing.
s o a s to include
and the F i n a n c e
and submitted a further
still
Report.
Officer
from
C . 20 .
We a r e
Board
to c o n s i d e r
c l e a r that w h i l e it is a matter f o r
r e s p o n s i b i l i t y of the B o a r d
is e n t i r e l y a
itself,
commercial
the p a r t i c u l a r
s e r v i c e s of
devoted
C . 2 0 . 1 to the detection of c r i m e
C . 20 . 2 to g e n e r a l public
(to w h i c h w e
civil
Force,
at the s a m e time it could b e
said that s o m e part of the benefit from
Report)
Railways
w h e t h e r they want to maintain a P o l i c e
and that an e l e m e n t of the f o r c e
the P o l i c e
the
referred
and
services
in p a r a g r a p h
32 of A n n e x
A
a c c r u e d to the g e n e r a l public and a f f o r d e d
to o u r
r elief
earlier
to the
forces.
C . 21.
It has p r o v e d
of P o l i c e
services
necessarily
a precise
assessment
and their benefits and any apportionment must
b e a matter of j u d g m e n t .
apart f r o m
Police
i m p o s s i b l e to p r o v i d e
any fall out benefit from
as a w h o l e ,
Some
of us h a v e a r g u e d that
the s e r v i c e s of the
Transport
the p a r t i c u l a r benefits a c c r u i n g f r o m
d e v o t e d to the detection of c r i m e and the g e n e r a l public
were
sufficiently
C.22.
substantial to m e r i t financial
O t h e r s of us d i s a g r e e
that it h a s b e e n e s t a b l i s h e d that,
services
and do not think
d e c i d e d to limit their
p o l i c e s e r v i c e s to what w o u l d b e d e s i r a b l e on c o m m e r c i a l
this w o u l d m a k e a significant
Police
and its c o s t .
describe
reduction
It is in their v i e w
services
recognition.
with this v i e w ,
if the B o a r d
the
in the B r i t i s h
grounds,
Transport
clearly unreasonable
to
any fall out benefit to the community at l a r g e a s being
"substantial".
Moreover,
direction,
to the B o a r d
i.e.
C.23.
t h e r e a r e fall out benefits
from
in the other
the activities of the civil
Police.
W e h a v e finally c o n c l u d e d that w e must a c c e p t that there
is a c a s e f o r
s o m e public contribution t o w a r d s t h e s e c o s t s .
main r e a s o n for this is that the T r a n s p o r t
duties o v e r
and a b o v e those w h i c h
organisation.
should a s s u m e
Police
clearly
a r e p r o p e r to a
The
perform
commercial
In the past it h a s b e e n e x p e c t e d that public
bodies
s o m e s o c i a l obligations without r e m u n e r a t i o n ,
but we
take it that it is n o w e s t a b l i s h e d
the r a i l w a y s
for
precise b a s i s for
G o v e r n m e n t p o l i c y to
e x p e n d i t u r e i n c u r r e d for
recompense
social r e a s o n s .
apportionment c a n be a r r i v e d at,
No
but w e
suggest
that calculations should b e b a s e d on 50 p e r cent of the cost of the
force attributable to C I D
and to g e n e r a l public s e r v i c e
This- w o u l d amount to about £ 6 0 0 , 0 0 0
per
annum,
20% of the total c o s t of maintaining the B r i t i s h
C.24.
We have
therefore
recommended
functions.
i.e.
about
Transport
in S e c t i o n
Report that the continuing s e r v i c e s by the B r i t i s h
Police.
2 of this
Transport
Police to the g e n e r a l public should b e r e c o g n i s e d b y including
the p r o p o s e d
capital r e c o n s t r u c t i o n of the B o a r d
in r e s p e c t of t h e s e
Police
costs.
a specific
in
element
APPENDIX
UN R E M U N E R A T I V E
PASSENGER
SERVICES
D.l.
W e e x p l a i n e d in o u r Interim
Consulting
G r o u p had b e e n e n g a g e d in the p r e p a r a t i o n of a
form- of q u e s t i o n n a i r e ,
circumstances,
Railways
all o r p a r t of w h i c h ,
work w a s
B o a r d in r e s p e c t of e a c h s e r v i c e
made,
application f o r m
f o r such
developed by C o o p e r
D.2.1
before
an
a grant.
some
Brothers,
and they h a v e
which w e have
to p r o v i d e the M i n i s t r y
is
this
now
a sample
services.
:­
with information
the p r e s e n t s e r v i c e
as
provisionally
25 u n r e m u n e r a t i v e p a s s e n g e r
T h e p u r p o s e of the q u e s t i o n n a i r e
D.2.1.1
application
Subsequently,
and w h i c h is being t e s t e d in p r a c t i c e f o r
exercise covering
D.2.
on
and w h i c h could then s e r v e
produced a f o r m of q u e s t i o n n a i r e
approved,
depending
P-E
w o u l d n e e d to b e c o m p l e t e d by the B r i t i s h
for a s o c i a l g r a n t w a s
the actual
R e p o r t that the
and its
on : ­
operating
methods;
D.2.1.2
the p r e s e n t u s a g e of the s e r v i c e
its financial
D . 2.1.3
results;
the B o a r d ' s
the s e r v i c e
D.2.1.4
a forecast
p r o p o s a l s for
c h a n g e s in
and its o p e r a t i n g
of the financial
three y e a r s
D.2.2
and
methods;
results
for
ahead.
to enable the B o a r d to d e m o n s t r a t e that the s e r v i c e
being,
level
o r is planned to b e ,
- that i s ,
operated
at an optimum
at the minimum deficit consistent
meeting the local
demand.
with
is
D
D.2.3
to p r o v i d e the M i n i s t r y with the b a s i c information to
assist them to m a k e
D.2.3.1
an a s s e s s m e n t of
w h e t h e r the s o c i a l
justify the
D.2.3.2
n e e d is sufficient
w h e t h e r t h e r e is any s c o p e f o r
of s e r v i c e
o r improving operating
methods
the b a s i c s o c i a l
need.
will h a v e to s t a r t f r o m the p r e s e n t s e r v i c e ,
the q u e s t i o n n a i r e
the b e s t available
a s s e s s m e n t of future
The
Minister's
decision
needs.
a s s e s s m e n t of s o c i a l n e e d i s fundamental
as to w h e t h e r o r not a s e r v i c e
to the
should b e
T h e q u e s t i o n n a i r e p r o v i d e s f o r the M i n i s t r y to
r e c e i v e b a s i c information on the p r e s e n t u s a g e of the rail
t o g e t h e r with a list of
Consultants h a v e
alternative t r a n s p o r t s e r v i c e s .
a d v i s e d that, in t h e i r v i e w ,
should b e sufficient in the majority
cases more
possession
source
of c a s e s .
information
In s o m e ,
borderline,
and the M i n i s t r y will h a v e to obtain this f r o m
T h e present
and will
whatever
including p o s s i b l y in the m o s t difficult
and p r o j e c t e d financial
demand.
r e s u l t s will b e set
a l s o b e e x p r e s s e d in t e r m s of
D.4.1
percentages
D.4.2
r a t e s p e r train m i l e ;
D.4.3
rates p e r p a s s e n g e r
The
The
this b a s i c
c a s e s mounting a full m a r k e t s u r v e y of p a s s e n g e r
out in full,
service
information is r e q u i r e d than the B o a r d h a s in their
is most c o n v e n i e n t ,
D.4.
but
is d e s i g n e d to l e a d to a d e c i s i o n being b a s e d on
D.3.
grant-aided.
improving
r e s u l t s b y r e d u c i n g the level
w h i l e still satisfying
assessment
to
subsidy;
the financial
The
:­
of
earnings;
and
mile.
e x p r e s s i o n of the deficit as a p e r c e n t a g e of e a r n i n g s will be
helpful b y s h o w i n g the extent to w h i c h c u r r e n t p a s s e n g e r s
a r e in
fact p a y i n g their w a y .
T h e e x p r e s s i o n of a r a t e p e r train mile
will b e useful p r i m a r i l y
as
with s i m i l a r c h a r a c t e r i s t i c s .
a basis for
The
comparison between
services
Consultants h o p e that the figure
expressed
useful
as a r a t e p e r p a s s e n g e r
mile will be particularly­
as an evaluation of the p a s s e n g e r benefit w h i c h
result f r o m the payment of a g r a n t .
be c a s e s
w h e r e on v e r y
be n e c e s s a r y
this f i g u r e
Whilst t h e r e will
rate p e r
a yardstick
decisions can be r e a c h e d .
against which
in the long r u n ,
of these g r a n t s h a s to b e contained within
D.5.
passenger
preliminary
and Incentives f o r
Cost
the total
the
amount
an annual e s t i m a t e .
Reduction
In their original R e p o r t on S u b s i d i e s ,
Cooper
r e c o m m e n d e d that the subsidy should b e a g r e e d f o r
3 years
mile,
It will a l s o b e a useful tool f o r
determination of p r i o r i t i e s if,
Cost E s c a l a t i o n
clearly
s t r o n g s o c i a l h a r d s h i p g r o u n d s it m a y
to pay an exceptional
should p r o v e
would
Brothers
a p e r i o d of
and that no p r o v i s i o n should b e m a d e f o r e s c a l a t i o n of
costs.
W e a c c e p t e d this r e c o m m e n d a t i o n
It now e m e r g e s
be u s e d ,
c l e a r l y that,
if this f o r m
in o u r Interim
Report.
of q u e s t i o n n a i r e is to
the B o a r d will b e r e q u i r e d to take into account
any
possible e c o n o m i e s in calculating the amount of the deficit
is to b e g r a n t - a i d e d .
them to m e e t m a j o r
It m a y ,
therefore,
be m o r e
i n c r e a s e s in c o s t s o v e r
difficult
the 3 y e a r
We h a v e not yet found any solution to this point,
which
but w e
for
period.
propose
to return to it w h e n the a s s e s s m e n t s of the first 25 s e r v i c e s
have
been c o m p l e t e d .
Track
and Signalling
D.6.
and w e
Costs
In their original r e p o r t ,
recommended,
allocated to s e r v i c e s
concerned.
that t r a c k
Cooper
In the light of the w o r k
would b e m o r e l o g i c a l ,
we
suggested,
and signalling c o s t s should b e
a c c o r d i n g to the w e i g h t
consider standby c a p a c i t y ,
and n u m b e r of
trains
of the C o m m i t t e e set up to
are now considering
w h e t h e r it
in c a s e s w h e r e the capacity of
determined s o l e l y by the peak n e e d s of
service,
Brothers
a grant-aided
a route is
passenger
f o r that s e r v i c e to b e a r m o s t of the c o s t s of the track,
and s i g n a l l i n g ,
with the o t h e r s e r v i c e s only b e a r i n g
of the w e a r and t e a r c o s t s .
a proportion
T h i s would be particularly
significant
in c a s e s
service
where
a line w a s used jointly by a c o m m u t e r
and by o t h e r p a s s e n g e r
arranging
w e have
that,
and freight s e r v i c e s .
in the p r o c e s s i n g
already
referred,
should b e t r i e d out,
passenger
We
are
of the s a m p l e e x e r c i s e to which
both methods of allocating t r a c k
in o r d e r that w e can s e e the
of the a l t e r n a t i v e
approaches.
recommendations
on this point in due
costs
practical
W e p r o p o s e to m a k e
effect
further
course.
Interest
D.7.
We
referred
in p a r a g r a p h 3 . 8
of o u r
to the n e e d to d e t e r m i n e the b a s i s on w h i c h
charge
Interim
Report,
an a p p r o p r i a t e
interest
should b e m a d e f o r the e s s e t s u s e d in p r o v i d i n g
unremunerative passenger
services.
We a r e
a g r e e d that in respect
of t h e s e s e r v i c e s the g r a n t p a y a b l e should include i n t e r e s t as a
cost ranking for
Ministry w e
specific
grant.
When the g r a n t is paid by the
r e c o m m e n d that the b a s i s should b e a
reasonable
attribution of the actual interest p a y a b l e by the B o a r d .
should b e subject to further
the
This
d i s c u s s i o n b e t w e e n the Ministry
and
Board.
Capital
Losses
D.8.
on S u b s i d i s e d
Lines
W e pointed out in p a r a g r a p h
3.16 of o u r Interim
that if a s u b s i d i s e d s e r v i c e
were
had b e e n fully
then the B o a r d
loss,
and w e
D.9
We
depreciated,
s a i d that w e
are
would make
b e e n fully
recovered
service.
W e do not,
and p e r i o d i c maintenance has not
however,
think that it is f o r the G r o u p to
the p r e c i s e m e a n s b y which this should b e
achieved,
and the Board.
Services
W e pointed out in p a r a g r a p h
3.23
of o u r Interim
Report
still had to c o n s i d e r h o w best to c o v e r the subventions to
operators
of rail
Board
w h e n the d e c i s i o n is taken to w i t h d r a w the
C o s t of R e p l a c e m e n t B u s
that w e
a capital
must also b e g i v e n to cases
and this c a n b e p u r s u e d d i r e c t b e t w e e n the M i n i s t r y
D.10
assets
c o n s i d e r i n g h o w this should be met.
Consideration
e x p e n d i t u r e on r e n e w a l s
recommend
w i t h d r a w n b e f o r e the fixed
a g r e e d that in t h e s e c i r c u m s t a n c e s the
should b e c o m p e n s a t e d .
where
were
Report
of bus s e r v i c e s p r o v i d e d
services.
as a condition of the withdrawal
D.H
We h a v e still not b e e n
method f o r t h i s , b e c a u s e
able to c o n s i d e r
discussions
a r e continuing within the
Ministry as to the p r o v i s i o n s to b e included in the
T r a n s p o r t Bill
about bus s e r v i c e s
best method f o r
a detailed
generally.
dealing with the c o m p a r a t i v e l y
forthcoming
Obviously
the
small n u m b e r of
bus s e r v i c e s p r o v i d e d in r e p l a c e m e n t f o r w i t h d r a w n
rail
services
will depend on the g e n e r a l pattern of the p r o v i s i o n s to b e
made
about the g r e a t e r
as a
whole.
number of bus s e r v i c e s f o r the country
We a r e h o w e v e r
p r o p o s a l s f o r the B o a r d ' s
bus s e r v i c e s
Passenger
the
new
finance that the r e s p o n s i b i l i t y f o r
should b e r e m o v e d f r o m
Transport
D.12
c l e a r that it f o l l o w s f r o m
the
railways.
Authorities
W e h a v e b e e n kept i n f o r m e d by the Ministry
about the
development of thinking on the constitution and duties of
Transport Authorities.
It is c l e a r that,
unremunerative p a s s e n g e r
arrangements
these
services
Passenger
c e r t a i n l y in r e s p e c t of
w h o l l y within c o n u r b a t i o n s ,
the
w h i c h w e h a v e r e c o m m e n d e d f o r the payment of
grants will not apply,
and that the r e s p o n s i b i l i t y f o r paying
will b e laid upon t h e s e n e w A u t h o r i t i e s .
But oh the
grants
assumption
that this will not affect the o v e r a l l financial position of the
Board,
we do not think that it is f o r us to g o into the details of the
arrangements w h i c h will b e r e q u i r e d .
however,
recommend,
that the costing b a s i s u s e d f o r t h e s e calculations
be the s a m e
paid b y the
should
as that adopted for the calculation of g r a n t s to b e
Minister.
Future P r o g r a m m e
D.13
We s t r o n g l y
The
of
Work
r e s u l t s of the s a m p l e e x e r c i s e mentioned in
paragraph 1 of this A p p e n d i x
we then p r o p o s e to r e v i e w
will b e
available in the autumn,
the w h o l e situation,
and to s e e
far the r e c o m m e n d a t i o n s of the Consultants will be
dealing with the identification of u n r e m u n e r a t i v e
costing of t h e m ,
how
adequate
services,
and
for
the
and the p r e p a r a t i o n of material on which the
M i n i s t e r can m a k e
a decision
as to w h e t h e r the s e r v i c e
b e g r a n t - a i d e d on b r o a d social
h o p e that it will b e
e a r l y in the A u t u m n ,
possible for
should
and e c o n o m i c g r o u n d s .
We
us to submit a further
and the t h e n c e f o r w a r d
report
the r a i l w a y s
can
p r o c e e d with the s u b m i s s i o n of c a s e s in r e s p e c t of all the
unremunerative p a s s e n g e r
our previous
services
recommendations.
this should be done
w h i c h fall within the field of
We r e g a r d
it as important that
as quickly as p o s s i b l e s o that,
a statutory g r a n t s c h e m e
comes
into full o p e r a t i o n ,
may b e able to quote in t h e i r annual r e p o r t m o r e
even
the
exact
before
Board
figures
of the extent to w h i c h the deficit is r e l a t e d to the b u r d e n of these
unremunerative,
but s o c i a l l y n e c e s s a r y ,
passenger
services.
APPENDIX
LONG-TERM
Summary
Between
3 per
cent p e r annum,
There
FORECASTS
of E c o n o m i c assumptions on which
forecasts w e r e prepared
E .1.1
and w a g e s
REVENUE
1967 and 1975 total output will expand
will r i s e ,
industrial production b y 3 . 3
in r e a l t e r m s ,
by 3 p e r
per
by
cent
cent p e r
annum.
will be no inflation and no c h a n g e in the p r i c e s paid b y
the B o a r d
for m a t e r i a l s and
services.
E .1.2
C o a l consumption
and e x p o r t s w h i c h amounted to
178m.
tons in 1966,
135m.
tons in 1974. *
g e n e r a t i o n will r i s e
will d e c l i n e to 158m.
Within the totals,
slightly.
in 1969 and
c o a l for
drastically
-
e.g.
domestic.
Consumption by the steel
P r o d u c t i o n will b e
i n c r e a s i n g l y on the E a s t Midlands and
E.1.3
Steel production,
will i n c r e a s e to 2 8 m .
changeover
substantially
E.1.4
which
South
was
industry
some
concentrated
Yorkshire.
24im.
tons in 1966,
tons in 1969 and 31/32m . tons in 1974.
to i m p o r t e d
complete b y
iron o r e
will continue and
be
1974.
Oil g r o w t h will b e
natural g a s
about
electricity
will b e maintained and the r e m a i n i n g u s e s will d e c l i n e ,
The
diminished,
but not vitally,
by
developments.
E.1.5
C h e m i c a l s will r e p r e s e n t an important g r o w t h
E.1.6
The
Consumer
expenditure
population will r i s e by 2-^/3 million by
and c a r o w n e r s h i p ,
from
El
will i n c r e a s e by 2 . 2
a i r will be maintained on main r o u t e s o v e r
with a likely d e c r e a s e
competition will
1974.
p e r cent p e r
at p r e s e n t 9^m . , will r e a c h
in the cost of m o t o r i n g
industry.
annum
16m . Competition
200 m i l e s
and,
in r e a l t e r m s ,
increase.
E.1.7
There
E.1.8
The
will b e no Channel T u n n e l b y
11,000 mile n e t w o r k
and maintained until 1974.
1974.
will be r e a c h e d in 1969
car
E.1.9
There
will b e no m a j o r
difficulty
allocation of investment for profitable
to maintain profitable
E . 1 . 10
traffic
There
or
E.1.11
services
The
to that
*
projects
o r those
an
essential
services.
will b e no difficulty
in getting
w h i c h cannot b e m a d e
of £ 2 0 m .
per
present
annum,
rid of
freight
profitable.
relationship with the National
will be such that the R a i l w a y s '
is of the o r d e r
in s e c u r i n g
Freight
Organisation
l o s s e s on s u n d r i e s ,
will be w h o l l y
transferred
Organisation.
The
Finance
Sub-Group
estimate on the b a s i s of
considered
120m.
an a l t e r n a t i v e
tons in 1974.
which
Appendix
BRITISH
LONG
TERM
RAILWAYS
REVENUE
1 9 6 6
j
Actual Allocations ( B a s e )
Revenue
TRAFFIC
Passenger
Principal
Secondary
Stopping
London Suburban
Other Suburban
Coaching Traffic
B . R . Parcels
G . P . O . Mails
Freight
Coal
Iron h Steel
Oil - T r a i n L o a d
Other - T r a i n load
- Wagon load
High Capacity Containers
Sundries
Miscellaneous Receipts and
Expenditure
TOTAL
DIRECT
EXPENSES/
MARGIN
INDIRECT E X P E N S E S
T r a c k V Signalling
Administration
General Expe nses
Adjustment to allow for : ­
(a)
w a g e i n c r e a s e s in 1967 and
1968 in e x c e s s of " n o r m '
(b)
delay in displacement of
surplus staff
Add
Ancillary Income
TOTAL
(Net)
REVENUE/EXPENSES/
MARGIN
Notes:
(1)
(2)
*
Allocated
£m .
expenses
£m .
74
26
28
43
9
180
43
21
38
31
12
145
BOARD
FORECASTS
i 9 69
Provisional
Margin
Margi
n
Revenue
Revenu e
£m.
£m.
31
5
/SS7
12
35
79
23
23
44
7
176
) 9 7 4
Estimates
Allocated
Expenses
£m.
44
14
26
32
10
126
Provisional
Margi
Margin
n
Revenue
D
£m .
£m.
£m.
35
9
87
25
23
47
7
189
47
14
21
36
10
128
40
11
2
11
31
24
55
27
12
39
4
12
16
40
19
4
9
20
11
4
107
25
8
4
10
1
18
4
70
4*
4
151
ai
12
Gl
50
1
33
10
43
4
11
15
37
23
60
32
11
43
100
34
5
J53
1
24
217
68
31
2
54
1
40
196
32
3
3,
£U
84
39
6
13
38
6
9
195
52
31
3
6
40
2
5
139
GJ
4
4
56
65
27
8
19
21
29
8
177
9
464
4*
388
5
76
8
439
5*
313
3
126
8
429
105
42
7
542
-
94
40
13
460
/947
--
/M7
-
(5J7
10
£D37
6
439
7
5
475
-
CD
/M7
rru
446
475
mi
464
My
m
/787
439
464
6
542
470
542
-
/7B7
Estimates
Allocated
Margin
h.xpens e s
£m.
37
21
58
21
E .2
5
12 1
17
32
8
3
7
7
278
07
61
£SZ7
Ml
429
92
39
14
423
-
10
/To7
429
7
433
-
i
436
433
3
us
6
T h e expenditure shown h e r e is that relating to Miscellaneous Receipts which have not been
c o v e r e d already in the estimates given for the individual traffics a b o v e .
T h e estimates given above a r e subject to the qualifications outlined in the attached Memorandum.
17th May. 1967
APPENDIX
COMPOSITION
OF
JOINT S T E E R I N G
F
GROUP
CHAIRMAN:
John M o r r i s , MJP.
Joint P a r l i a m e n t a r y S e c r e t a r y ,
Ministry of T r a n s p o r t .
MEMBERS:
J. P . Berkin,
C.B.E.
f o r m e r l y Managing D i r e c t o r ,
Shell Petroleum Company Limited.
J. G . Cuckney,
Managing D i r e c t o r ,
S t a n d a r d Industrial G r o u p
D . O . Henley,
Assistant U n d e r
Public Finance,
Secretary
D e p a r t m e n t of E c o n o m i c
J.
/
*
J.
B.
of
State,
Affairs.
Hunt,
Under S e c r e t a r y , Public E n t e r p r i s e s ,
H.M. Treasury.
P . G . James,
M e m b e r , British R a i l w a y s B o a r d .
F . C . Margetts, C . B . E .
M e m b e r , British R a i l w a y s B o a r d .
Professor A . J. Merrett,
P r o f e s s o r of F i n a n c e ,
L o n d o n G r a d u a t e S c h o o l of
Business Studies.
C . P . Scott-Maiden,
C.B.
Under Secretary, Railways
M i n i s t r y of T r a n s p o r t .
P . H . Shirley,
Vice-Chairman,
British Railways
Board.
Group,
G. C . Wardale,
Under Secretary, Finance
M i n i s t r y of T r a n s p o r t .
J.
W.
Wardle,
Group,
J.P.
Running M o v e m e n t s S u p e r v i s o r ,
British Rail Diesel Depot,
Tyseley,
Birmingham .
* H . C . Johnson,
C.B.E.
Vice-Chairman,
British Railways B o a r d .
H a s attended J . S . G . m e e t i n g s from
2nd M a y , 1967, v i c e M r . M a r g e t t s .
/ W . I. W i n c h e s t e r ,
Chief O f f i c e r ( F i n a n c i a l R e s e a r c h ) ,
British Railways B o a r d .
D e p u t i s e d for M r . J a m e s during the
l a t t e r ' s absence... (8th A p r i l , 1967,
to 8th M a y , 1967) .
JOINT
EXECUTIVE
DIRECTORS:
J. R . Hammond,
M.B.E.
British Railways B o a r d .
P. E . Lazarus,
M i n i s t r y of T r a n s p o r t .
SECRETARY:
D. E. Barlow,
M i n i s t r y of T r a n s p o r t .
COPY'HO,
1 i
8
RAIL',-.'AY POLICY RLVIB'7
JOIffT -5TESRING GROUP
I n t e r i m Report
to the M i n i s t e r
pI^airman of
1.1
of
for
1966)
of
the G o v e r n m e n t ' s
future
the c o u n t r y ' s
substantial
railway
there
transport
network.
c o n s i d e r a t i o n s which l e d to
the r a i l
network a l s o
financial
Minister
Board
of
Transport
of
that
would be a n e e d ,
system, f o r
necessary
the r a i l w a y s .
to
to
as
a
and
the d e c i s i o n
Steering
3057
conclusion
other
stabilise
devise
a new
Accordingly
and the Chairman of
the r a i l w a y
The f u l l
(Cmnd.
The s o c i a l
made i t
framework f o r
s e t tip a J o i n t
aspects
Board
on T r a n s p o r t P o l i c y
records
the f o r e s e e a b l e
part
and the
Introduction
The V/iiite P a p e r
July
transport
the B r i t i s h R a i l w a y s
--
Seotion
of
the
the
Railways
Group to r e v i e w
certain
industry.
terms o f r e f e r e n c e
for
this Joint
Review
a r e r e p r o d u c e d as Annex B.
The Members of
the J o i n t
S t e e r i n g Group a r e
listed
i n Annex C.
1.2
firms
To a s s i s t w i t h our work we a p p o i n t e d two
of
consultants,
Company and M e s s r s .
whom we g a v e
via.
Messrs.
the
the r e m i t s
set
costing
out
calculated,
they were to
(c)
at
(a)
to
first
employed by
passenger
services
for
s h o u l d be
and p a i d .
look
financial
procedures,
information
v/e a s k e d P-E
to
and
controlled
the B o a r d ' s
control
As a
and
examine
the methods by which any s u b s i d i e s
unretnunerative
Later
to
i n Annex D.
methods a t p r e s e n t
B r i t i s h Railways,
(b)
Cooper B r o t h e r s
P-E C o n s u l t i n g Group L i m i t e d ,
s t e p we a s k e d Cooper B r o t h e r s
(a)
separate
and
budgetary
and t h e i r
management
systems.
initially
examine
services,
service
sample l o s s - m a k i n g
and to a s s e s s what changes
operating
structures
financial
passenger
practices
might l e a d
and
in
fare
to an improvement
results;
/(h)
in
(b)
to
c o n s i d e r how t h i s
b e s t be a p p l i e d
(c)
to
k i n d of
loss-making
generally,
and
to look at
the B o a r d ' s
for
examination
marketing both f o r
might
services
methods and
policies
freight
passenger
and
services.
1.3
P-E have
made u s e f u l
progress
with
b u t we have now d e c i d e d t o hand o v e r
c o n s u l t a n c y work to Cooper B r o t h e r s
the
remits
stage,
originally
assigned
Cooper B r o t h e r s w i l l
(a)
to
advise
be
this
all
work,
the
who w i l l
to P-E.
complete
As a
final
asked
on any p r o p o s a l s
management s t r u c t u r e
by the B o a r d on
and to make
recommendations,
(b)
to recommend the p r o c e d u r e s
forecasting
of
1.4
British
the f u t u r e
Our terms of r e f e r e n c e
on the B o a r d ,
bridges
pensions
British
and l e v e l
for
past
Transport
.;ould be b e s t
obligations
Teams of
some c a s e s
were
1.5
deriving
of
and p r e s e n t
Police
in r e s p e c t
employees,
and o t h e r
the o t h e r Departments
met e i g h t
times a s a f u l l
selected
members on s p e c i f i c
at l e a s t
by J o i n t
the B o a r d ,
the J o i n t
t h e r e have been a number of
It
These Teams
Steering
Group
to c o m p l e t e
the work a l l o t t e d
a very large
employing
because of
this,
has
been a v a i l a b l e
for
today
and of
is
over
short
i t h a s not
and r e p o r t
of
to
of
and
time
that
that
been
a t the
the problems
present
involved.
/We
-2­
';7e
the
complex
340,000 p e o p l e
to u s ,
ramifications
to u s .
draw a t t e n t i o n
the r e l a t i v e l y
us to a s s i m i l a t e
time on the f u l l
of
i t w o u l d t a k e us
fact
businesses
in
Report
to
that B r i t i s h Railways
and
meetings
h a s a l w a y s been e n v i s a g e d t h a t
a year
Group,
t h i n k i t w o u l d be a p p r o p r i a t e
possible
and i n
subjects.
Summary P r o g r e s s
2.
so f a r
it
similar
concerned.
addition
2.1
the
work.
i e have
Section
road
and
and o f
place,
from the M i n i s t r y ,
after
of
.7e c o n c l u d e d t h a t
i n the f i r s t
s e t up i m m e d i a t e l y
which
superannuation
Force.
these
the
from the p a s t
those
crossings,
examined,
began t h e i r
expenditure
made mention of
including
t o have
officers
income and
for
Railways.
continuing o b l i g a t i o n s
rest
to be a d o p t e d
-.7e w e r e , h o w e v e r ,
by the
end of
Minister
a s k e d to p r o v i d e
1966, which w o u l d
and the Chairman as
information
needed f o r
changes to be
an I n t e r i m R e p o r t ,
in p a r t i c u l a r
much as p o s s i b l e
determining
included
jive
the
of
the
the
legislative
i n the f o r t h c o m i n g
Transport
Dill.
2.2
v/e have
therefore
d e v o t e d moat of
this
part
our t a s k ,
and S e c t i o n
jives
of
our main recommendations
adoi)ted f o r
subsidies
This has
calculating,
for
i n v o l v e d us
the c a l c u l a t i o n
subsidies.
principles
generally
adequate f o r
have a l s o
satisfied
improvement
calculating
it
possible
Board's
and e f f i c i e n t l y
to
unremunerative
2.5
the
a position
towards
made f o r
engaged
factor
will
s t a n d b y c a p a c i t y which i s
terms of
reference..
to
this
yet
2.6
of
in f a r t 1
v/e have
respects,
and
III
t o take
Paper
says
to o p e r a t e
that
which p r o v i d e s
and to move a s
financial
soon
the e q u i l i b r i u m
will
d e a l i n g w i t h the l o s s e s
services retained
on which t h e
(Part
II
on
on b r o a d
Consultants
Annex A ) .
be the t r e a t m e n t
specifically
of
the
mentioned
their
cost
in
the
of
our
Group
work
is
not
the e f f e c t
of
any
Annex A )
into
account
o t h e r b u r d e n s .on the
i n P a r t IV o f
to d a t e
are
Teams t o
belowc­
,
for
eequilibrium.
Reports
'
the
economically
Joint
summarised
to
services.
R a i l w a y s which we asked v a r i o u s
are
.7e
;
of Annex A.
p r o p o s a l s we may d e v e l o p r e g a r d i n g
on p r o g r e s s
basis
controlling
V/e s e t up a Committee of
(Part
also
Railways,
some a t t e n t i o n
c o m p l i c a t e d rpaestion but
completed.
depend
required.
reducing
achieving
passenger
particularly
study
be
objectives,
and economic g r o u n d s ,
Another
II
costing
on an i n t e r i m
on s u b s i d i s e d
Jnite
task w i l l
be the a r r a n g e m e n t s
are
the
costing
subsidies
on the new b a s i s
One f a c t o r
social
in f a r t
financial
as. p o s s i b l e
2.4
revenue
23 o f
essential
realistic
of
on t h e s e w i l l
the
to g i v e
be
services.
i n a number of
methods of
described
Paragraph
the
right
c o s t s and i n c r e a s i n g
2.3
that
to
controlling
As i n d i c a t e d
soLind and c e r t a i n l y
thought
the v a r i o u s
These a r e
since
to
Report
and metdods a t p r e s e n t u s e d by t h e
a l t h o u g h open t o
are
this
in a c o n s i d e r a t i o n
employed,
of Annex A, we a r e
and
passenjer
methods a t p r e s e n t
of
3 of
on the p r i n c i p l e s
paying
unremunerative
our a t t e n t i o n
/2.6 1
investigate.
Annex A,
and
2.6.1
Road B r i d g e s
and L e v e l
A l t h o u g h we had h o p e d ,
report
by the Seam,
negotiations
transfer
that
as a r e s u l t
overline
authority
bridges
and County Borough C o u n c i l s ,
about
the p o s s i b l e
railway
this
at l e a s t
f o r t h e time b e i n g ,
2.6.2
further.
level
to County
to
Councils
concerned
f o r the s a f e t y
of
and the learn have been a s k e d to
consider
include
early
associations
we have become
implications
operations
of an
i t ^ o u l d be p o s s i b l e .to open
w i t h the l o c a l
public
Crossings
I n any case we doubt
whether,
the n e g o t i a t i o n s
could
crossings.
Pensions
This
i s an e x t r e m e l y
substantial
complicated
sums of money a r e i n v o l v e d .
p a r t y h a s examined t h e p r o b l e m s
implications
solution
The w o r k i n g
involved
and t h e i r
and the S t e e r i n g Group c o n s i d e r
must w a i t u n t i l
financial
problem and v e r y
prospects
v/e can see the
that
likely
of t h e B o a r d and c o n s i d e r
c a p i t a l b u r d e n s which i t w i l l
be s e n s i b l e
to
the
place
upon the r a i l w a y s .
2.6.3
Musgeu.met and H i s t c i r j i a a l ^ R e c o r d s
Both s h o u l d be t r a n s f e r r e d , to the Department
of education
site
and s c i e n c e ,
and housed t o g e t h e r
to be p r o v i d e d by the R a i l w a y s B o a r d i f
be.done without
2.6.4.
financial
IlalJLj/ax tarings
the i n t e r e s t
rate
loss.
in b e i n g ,
and s t e p s
the membership.
should
Por t h i s
purpose
s h o u l d be r a i s e d .
Mien t h e N a t i o n a l F r e i g h t
Bank membership
t h i s can
Banks
They s h o u l d be kept
be taken to i n c r e a s e
on one
Organisation
i s set up,
s h o u l d be e x t e n d e d t o s t a f f
of
that
organisation.
2.6.5.
Transport
We a r e s t i l l
force
of
continuing
provides
extent
2.7
Police
t a n c e f o r the c i v i l
sufficient
to j u s t i f y
Cooper B r o t h e r s
the l i k e l y
(This
phrase
o u r study o f w h e t h e r
total
a specific
to an
subsidy.
cannot y e t make any e s t i m a t e
size
of g r a n t s
for social
i s i n t e n d e d to c o v e r g r a n t s
unremunerative
police
this
passenger
services
social
and economic g r o u n d s .
grants
are r e f e r r e d
services.
for
r e t a i n e d on b r o a d
Por convenience
t o as s u b s i d i e s
in this
these
report.)
/Until.
-4­
Until
such an e s t i m a t e
decided whether
cannot
( P a r a g r a p h 2*5.)
burdens-on
discuss
revenue
this
and we have
and--of --the
the'..R a i l w a y s
gauge how l a r g e
the B o a r d ' s
available,
t o recommend- a g r a n t .in r e s p e c t . of
standby c a p a c i t y
financial
is
further
( P a r a g r a p h 2 . 6 ) , - we
the g a p w i l l
and t h e i r
be
between
remaining
in Section
We have n o t y e t made
able
to r e p o r t
on management
case
is
dependent on M i n i s t e r i a l
about
of
the N a t i o n a l
a number o f
matters
Union v i e w s e a r l y
y e t begun our
sufficient
Freight
procedures,
and the
Headquarters
important
o f Annex
2.9
about
financial
structure
Finance
one
we have
not
investment
appraisal.
and r o l e
^cessarily
of
control
the
Board s
!
and the more
briefly,
in Part V
A.
We need o n l y
add t h a t
our
aim h a s b e e n t o
of
possible
and i n the most r e a d a b l e
our recommendations
d e t a i l e d papers
already
Board.
Similarly
and b u d g e t a r y
the g i s t
are
is
preliminary
organisation,
are l i s t e d ,
It
investment
Cooper B r o t h e r s have made c e r t a i n
any
to have
the B o a r d ' s
for
to be
decisions
on which we hope
criteria
We
which i n
Organisation.
assessment of
recommendations
progress
structure,
i n the New Y e a r .
programmes and the
costs.
k,
2.8
partly
other
and the r e p o r t s
available
In t h i s
confined
both
form.
to d a t e ,
our.
Consultants,
therefore,
of
as
All
i n the M i n i s t r y
to a s t a t e m e n t
and recommendations
shortly
from the
Interim Report,
ourselves
supporting
as
provide
and i n
the
we have
our main
findings
w i t h the minimum o f
material.
Section 3.
Methods of C a l c u l a t i n g . P a y i n g
Controlling
Subsidies
for
Unremunerative
and
Passenger
Service s
3.1
We i n t e r p r e t
s u b s i d y ought
broad, s o c i a l
the White
t o be p a y a b l e
passenger
attainable
from w h i c h ,
attributable
wherever
service,
falls
the
a
the M i n i s t e r
on
decides
to r e t a i n
revenue
reasonably
short of
the
a
properly
costs.
The White
possibility
to mean t h a t
and economic g r o u n d s
particular
3.2
Paper
Paper
that
i n p a r a g r a p h 27 to
ldical a u t h o r i t i e s
any r a t e ,
of
passenger
services.
consideration
also refers
the f i n a n c i a l
might assume
responsibility
We know t h a t
i n the M i n i s t r y ,
this
but for
is
for
the
some,
such
under
the p u r p o s e s
of
/inxerim
-5­
at
this
Report
I n t e r i m R e p o r t we have
concentrated
on the
and methods to be a d o p t e d where the
by the M i n i s t e r
similar
principles
subsidies
3*3
of T r a n s p o r t o
subsidies
assessment of net l o s s e s
time,
payment i n a r r e a r s
incurred.
that
present
subsidies
so as
reduce
each
and the
detailed figures.
Parliament
that
substitute
for
i n mind the
3*h
that
We have
all
which t h e y
3.5
costs
a considerable
actual
it
offers
subsidised
(including
a r e not a b l e
We recommend t h a t
to
the
efficiently
Furthermore
this
accounts
dispute
if
will
of
about
to
satisfy
acceptable
results,
t o the B o a r d to
once a s u b s i d y h a s
should,
as f a r
some p a r t
as
bearing
reduce
of
been
possible,
in respect
joint
costs)
to r e c o v e r f r o m ' t h e
terminal
i n c u r r e d on f a c i l i t i e s
services
vYe r e f e r
of
and
receipts
is
costs vary with
inevitably
passenger
signalling
subsidised
those
services.
further
to be u n d e r t a k e n to d e t e r m i n e
the volume
in respect
services,
of
traffic.
This
p r o c e s s but w i l l
of
there
any of
are
( d e f i n e d by Cooper B r o t h e r s
these
how
will
h e l p us
to
unremunerative
true " j o i n t
costs",
as those a s s o c i a t e d w i t h t h e
s i t u a t i o n where the p r o d u c t i o n
production
and
u s e d o n l y by
s h o u l d be c h a r g e d t o
be a l e n g t h y
see how f a r ,
and t r a c k
i n p a r a g r a p h 3 of Annex A to t h e
research which
of
one p r o d u c t e n a b l e s
of
another
to take place
(Annex A P a r t
I Para.
2).
a t no e x t r a
C o s t s which v a r y w i t h
rank f o r
true
s h o u l d remain the r e s p o n s i b i l i t y
joint
costs
B o a r d b u t v/e do not a c c e p t
in practice,
subsidy.
It
is
the B o a r d ' s
output
arguable
t h i s view b e c a u s e
remunerative
that
of
the
i t would mean
services
/have
-6­
the
cost)
should c e r t a i n l y
that,
believe
services.
that
it
as
losses.
of
a
of
inducement
on a u d i t e d a c t u a l
concluded
authorities.
losses
services
w o u l d be an
payment
the
service.
passenger
3-6
actual
s h o u l d be p o s s i b l e
this
that
incurred over
the c o s t s which t h e Board i n c u r
service
from the
of
possibility
agreed in p r i n c i p l e ,
cover
to be
the need f o r a u d i t e d
incentive
on the
imply
s h o u l d be b a s e d on an
subsidised
It
paid
recommendation b e c a u s e we
to r e d u c e
considerably
losses
or o t h e r
a r e p a i d on an e s t i m a t e d l o s s ,
service
are
than on the b a s i s
in respect
t o run t h e i r
as p o s s i b l e
likely
rather
We make t h i s
this will
Railways
T h i s does n o t
a r e t o be p a i d by l o c a l
p e r i o d of
subsidies
s h o u l d not be a d o p t e d where
We recommend t h a t
future
principles
would
have
to c a r r y
subsidise
the
our
studies
of
a more p r e c i s e
into
individual
total
Board s
general
we p r o p o s e
joint
costs
costs
formula
passenger
prepare
1
joint
the u n r e m u n e r a t i v e .
of
for
full
figures
for
as
all
the
and the
development
calculating
a basis
prospects.
For t h i s
costs
(other
recommend t h a t
it
the
services
subsidised
that
are
properly
3*8
V/e recommend t h a t
depreciation,
be
assessed
historic
include
an a l l o w a n c e ,
interest
in
a later
charge
unremunerative
passenger
v7e a g r e e w i t h
3=9
that
it
t o take
retained,
and s u b s i d i s e d ,
Contributory
journeys
partly
it
be
the
;
adopted f o r
consistent
as
the
does not f o l l o w
accord
in a l l
particular,
accounting
off
a
3.11
that
of
period for
If
which
the p e r i o d
l o n g enough
is
three
subsidies
kept to
to p r o v i d e
7
*
account
the
subsidies
any
risk.
of
to
s h o u l d be
for
costing
arrangement
and
of
years
the
principles
criticism.
accounts
be c h a r g e d
should
formulae;
in
for
historic
costs.
s h o u l d n o r m a l l y be
s h o u l d be f i x e d
three
at
revenue
w i t h the c o s t i n g
on the b a s i s
We recommend t h a t
revenue
service.
the f i n a n c i a l
depreciation w i l l
purposes
into
t h a t may be
as o t h e r w i s e
respects
these
s h o u l d be
adopted g e n e r a l l y
that
to
contributory
w o u l d be open to m i s u n d e r s t a n d i n g s
It
should
recommendation
1
off-service
calculation
the r a i l w a y s ,
on
calculating
to t a k e
important
w i t h those
and n o t
b o t h the B o a r d and the
revenue
is
should
subsidies
a service
on and p a r t l y
3 * 1 0 'Ve r e g a r d
within
whether
no doubt have
revenue
this
in providing
in
any a c c o u n t o f
contributory
include
appropriate
the Cooper B r o t h e r s
in deciding
amount of
should
services.
although,
Ministry w i l l
the
used
w o u l d be i n a p p r o p r i a t e ,
subsidies,
costs
which we hope
for
to
traffic.
that
recommend t h a t
assets
we
those
cost b a s i s ,
report,
on the
of
to passenger
on a b a s i s
the
to a l l o c a t e
recommend
on a r e p l a c e m e n t
We a l s o
costs,
subsidy payable
and we f u r t h e r
costs.
determine
a proportion
the
them
studies.
appropriate
attributable
;
used by
administration
would be
purpose
and a p p o r t i o n
profitability
As r e g a r d s g e n e r a l
3*7
variable
the
than
c o n c e r n e d on the b a s i s
passenger
to
examining
to
Board f o r
subsidies
for
as f u l l y
services
completion
we i n t e n d
administration)
the
cross­
Pending
services,
financial
to t r e a t
and thus
years,
an i n c e n t i v e ,
in
advance.
this w i l l
and s h o r t
/it
the
be
enough
not
for
it not normally to be necessary to include any
provision for review of individual cases during
that
pgried.
If
tiffliB
whin
sufeiidy
thi
oosti
rigs
shove
fixad,
ma
r u l i n g .a&
the is
than
the
Beard
thi.
will
have to cope with thase, and should not be able to
ask; f o r
of
the
any i n c r e a s e
in subsidy u n t i l
three year period
described
in 3 * l h
subsidies
for
and 3 * 1 5 *
particular
to ease
the
review,
and i n o r d e r
initial
subsidies
periods
than t h r e e y e a r s
3 * 1 2
by
service,
Part
submit
II
being
by
of
the B o a r d .
whatever
those
will
services,
the
explored.
services
service
conurbations
need t o be
3 . 1 3
of
for
-Me recommend t h a t
of
in
This review
3 o l h
of the
case f o r
Where t h e r e
in contemplation,
is
a
in
i n f o r m a t i o n may
a d d i t i o n to c a r e f u l
the M i n i s t r y
but
scrutiny
should
select
submitted
a check
t h i s would be done i n a
of
proportion
a c c o u n t a n t who might be
that for
very l a r g e
particularly
in conurbations,
provide
a review
for
significantly
during
The M i n i s t e r
frequency
fares,
subsidy
the
auditors.
We r e c o g n i s e
3 . 1 5
demand
other
s h o u l d not i n c l u d e
c a s e s by an independent
Board's
for
relevant
additional
submissions,
the c a l c u l a t i o n s ,
of
give
all
d e t a i l e d r e v i e w a sample from the c a s e s
t o them.
of
sought.
the B o a r d ' s
for
example,
standard
the
and economic g r o u n d s .
reorganisation
means o f
to e n a b l e
on b r o a d
traffic
are
the demand-
on the m e r i t s
major
(see
They s h o u l d a l s o
considerations,
social
Board
to which t h i s
the l i g h t
service
details
an a d e q u a t e
they have of
in
the
and t h a t a l l
and the e x t e n t
to d e c i d e ,
shorter
submitted
sufficient
show t h a t
be met by the p r o p o s e d
Minister
and
arrangement
In each case
providing
information
staggered
assessment
s h o u l d be
t o the M i n i s t r y
s e r v i c e , have b e e n f u l l y
of
i n a proportion of c a s e s .
subsidies
costs, while
review
to be p a i d f o r
operated e f f i c i e n t l y
reducing
circumstances
s h o u l d be
to s e t up t h i s
to
termination
The d a t e s f o r
burden of
may have
Annex A )
i n the
services
administrative
Requests f o r
should
except
the
if
i t may be n e c e s s a r y
circumstances
period.
must have c o n t r o l
over
and s t a n d a r d of
t o ask f o r
service,
service.
a r e v i e w of
o
the
to
change
the t h r e e y e a r
on any s u b s i d i s e d
entitled
services,
the
and the maximum
The B o a r d
subsidy
/an
should be
if
there
increase
is
CONFIDENTIAL
an i n c r e a s e
result
of
i n the d e f i c i t
the e x e r c i s e
3.1 6 F u r t h e r m o r e ,
a service
will
of
approval
a s t a t e d amount,
in respect,
or
any c a p i t a l
the f u t u r e
B o a r d s h o u l d be r e q u i r e d
specific
on any s e r v i c e
the M i n i s t e r ' s
because
affect
-
respect,
If
the f i x e d
a s s e t s have b e e n f u l l y
how t h i s
a subsidised
against
as being
amount f o r
each s e r v i c e ,
l/l3th
a
s h o u l d he r e n e w e d ,
then pending
at
made
subsidised
before
then
the
considering
off
the
to t h e
sums s h o u l d be
the a n n u a l
agreed
the p e r i o d f i x e d
for
a
and a d e c i s i o n h a s n o t
as t o whether
a t the
same o r
such an agreement the
to be p a i d ,
over
account).
of
$here
for
which i s
and we a r e
part
such
the
Ministry
depreciated,
These
the M i n i s t r y
the p r e v i o u s
necessary retrospective
is
subsidy,
i s withdrawn
capital
come t o an e n d ,
y e t b e e n t a k e n by
continue
of
on
expenditure
by w r i t i n g
intervals.
calculated
subsidy has
of
s h o u l d be p a i d by the M i n i s t r y
B o a r d a t ip-weekly
level,
loss,
s h o u l d be met ( e . g .
Subsidies
subsidy
service
make a c a p i t a l
unexpired balance
3.17
level
any r e n e w a l s ,
service.
Board w i l l
investment
any p r o p o s e d c a p i t a l
in p a r t i a l
direct
control.
to r e f e r t o t h e
including
as a
^gg
adjustment
the
any
different
subsidy
level,
with
when the new
should
any
subsidy
agreed.
3.18
The Board
s h o u l d be
required
to g i v e
the
estimated financial
results,
in respect
passenger
in their
Annual R e p o r t .
services,
w o u l d be
required
probably
make i t
i n the
Accounts.
3.19
We t h i n k
to
ascertain
impossible
it
reasonable
supplied with f i g u r e s ,
each
subsidised
service
example,
3.20
of passenger
provisions
include
provisions
(a)
d e a l t with
b u t c o u l d take
a general
in t h i s
that
as f a r
the M i n i s t e r
respect
audited
figures
s h o u l d be
in respect
to show the e x t e n t
its
to which
the form,
of
the
w o u l d not r e l a t e
of
target
review
of
section w i l l
as p o s s i b l e
s h o u l d be w i d e l y drawn.
that
would
t h a t the M i n i s t r y
These f i g u r e s
that
to
for
counts.
equilibrium,
V/e s u g g e s t
The time
these f i g u r e s
Once the B o a r d h a s r e a c h e d
financial
3.21
results,
subsidised
at agreed i n t e r v a l s ,
service,
i s being used.
the f i n a n c i a l
to
of
overall
of
the
be
the
financial,
necessary.
legislative
The e s s e n t i a l s
s h o u l d have p o w e r ,
individual
unremunerative
A D
9
are
­
in
services
(i)
to d e c i d e
on b r o a d
(ii)
that
they s h o u l d be
social
and economic
(iii)
t o be
to d e c i d e
years
(iv)
extent
that
a period
for
being
three
information
about
the
such s e r v i c e s
are
All
lative
proposals.
possible,
s e t out
in a d d i t i o n
Ministry
to
supplying
i n p a r a g r a p h 3*1 8 ,
an o b l i g a t i o n
capital
to r e f e r
expenditure
to the
any
I n the meantime,
v/e recommend t h a t
and a s
proposals
to
legis­
on the
out,
on i n d i v i d u a l
t o be p a i d ,
basis
and the
that
that
relates
the extent
to
to w h i c h the B o a r d ' s
s e r v i c e s which,
specifically
for
s u b s i d i s e d by
the
services
amounts
c o n c e r n e d s h o u l d be n o t e d i n the Annual R e p o r t s ,
order
of
soon as
s h o u l d be c a r r i e d
as though s u b s i d i e s were
should
Minister.
calculations
should reach d e c i s i o n s
the
in r e s p e c t
the above recommendations r e l a t e
in paragraph 3-3
in
used­
any such s e r v i c e
3.22
to
up to
d e t a i l s mentioned
major
subsidy
of
t o which
the B o a r d ,
be under
of
ahead,
to c a l l
fact
of
provided,
on t h e l e v e l
be p a i d f o r
for
grounds,
to a g r e e w i t h the B o a r d the l e v e l
service
(b)
continued
in
deficit
the f u t u r e ,
will
the M i n i s t r y ' c a n be
be
readily
seen.
There
3-23
of
service
remain c e r t a i n
withdrawals,
The main one
i s how t o c o v e r
services provided
drawal
of
rail
h.1
terms o f
a s . a c o n d i t i o n of
the most i m p o r t a n t
reference
is
to r e v i e w
tasks
i n the White
indicated
The B o a r d e s t i m a t e
current
that
part
of
situation,
results
and b u t f o r
they c o u l d by now have
the d e f i c i t .
with­
But i t
as
it
this
1966
of
and the
revenue
statutory
accounts,
We a c c e p t
the
a further
t o quote
that
a
economic
heavy
the B o a r d a r e
is useful
10
our
Paper.
affects
achieved
in
prospects
from the p r e s e n t n a t i o n a l
particularly
industries,
operators
implicit
the order of £132 m i l l i o n .
this
the
developments
their
as v i e w e d t h r o u g h t h e i r
be o f
consider..
to
the f i n a n c i a l
new p o l i c i e s
will
to
out
Prospects
of
deficit,
still
the s u b v e n t i o n s
the B o a r d i n the l i g h t
1+.2
arising
services.
Financial
One o f
questions
which we have
of bus
S e c t i o n h.
other
confident
reduction
the
that
in
present
/figure
figure
in order
t o show the
scale
of
the
problem.
I t has not y e t b e e n p o s s i b l e
to a s s e s s
the
reduction in future
which w i l l
be
deficits
a b o u t b y Exchequer g r a n t s
or
authorities
specific
passenger
in respect
services.
other g r a n t s ,
clear
that
for
standby
still
including
stage
t o draw a t t e n t i o n
costs.
It
and the need f o r
t o the
k.3
s h o u l d a l s o be b o r n e
investment
the B o a r d s
is
a year.
p r o v i d e d out
of
of
h.h
of
activity
the B o a r d ' s b u s i n e s s
of
of
assessment
in order
of
of
rather
as
it
flows
o v e r the
of
be
which
profitability
reverse.
policies,
taking
the p r e s e n t
Review.
future
t o make a
earning
fully
realistic
capacity
on t h i s
in
that
the r e v i e w must
the B o a r d ' s major
trunk
p r o d u c t by p r o d u c t .
combined r e s o u r c e s
of
be o b t a i n e d from t r a i n
of p a r t
of
of
Brothers.
be u n d e r t a k e n
to
our
y e t d e c i d e d on
and Cooper
relate
years
from
to our e x a m i n a t i o n
which a r e r e l e v a n t
whole
in future
in
capacity.
i n hand and
the p o t e n t i a l
load t r a f f i c s
regional
particular,
standby
Other s t u d i e s which we a r e p u t t i n g
viability
this
a l s o be c o n s i d e r i n g whether any
could u s e f u l l y
and
does
to v i e w the
system a s a w h o l e ,
the M i n i s t r y
the
is
including
s h o u l d n o t be beyond the
in r e l a t i o n
this
efficiency,
seems l i k e l y
from an a p p r a i s a l
studies
over
in
W h i l s t we have n o t
We s h a l l
1
of
But
a factor
will
to r e p o r t
start
h.6
it
the
Board a
extent
than the
to attempt
the B o a r d ' s
d e t a i l e d methods
h.5
of
the
the r a t e
assessing
increases
to be a b l e
the B o a r d ,
is
c o n s i d e r i n g how b e s t
main r e p o r t .
This
true
the g o v e r n m e n t ' s
future
still
i n mind t h a t
i n t e r e s t burden.
t h o s e which s h o u l d r e s u l t
We^are
this
assets.
investment
The aim s h o u l d be
account
of
early
t h a t much of
importance
i n the l i g h t
this
assessment
a s s e t s and t o t h i s
continuing necessary
the r a i l w a y
and
It
1
of
a
current depreciation provisions
surplus
the
subsidies,
at
is
is
Board's
continuing
n o t add to the B o a r d s
adds t o
But i t
existence
1
£100 m i l l i o n
sale
the
some o v e r a l l
c a p a c i t y of
the
of
for
possibly
seems p r u d e n t a t
earning
capital
other
making
capacity,,
these v a r i o u s
total
It
loss
be a gap -
between the t o t a l
their
gap,
by payment by
There may a l s o be a case
there w i l l
l a r g e gap revenue,
e,g,
of
brought
revenues
and to
the
the wagon l o a d t r a f f i c .
/results
The
to
results
of
in
to a s s i s t
time
s h o u l d be
residual
all
these
structure.
Section
5
of
provisions
Bill
about
any
Board's
Main R e p o r t
We i n t e n d to
course
i n the T r a n s p o r t
available
g r a n t p o w e r s and a b o u t the
capital
5.1
s h o u l d be
i n d e t e r m i n i n g what
included
deficit
studies
the
submit our main r e p o r t
during
summer.
S i g n e d on b e h a l f
of
the J o i n t
JOHN MORRIS
Chairman
B. E. BARLOW
Secretary
10th J a n u a r y ,
the
1967.
12
CONFIDENTIAL
Steering-Group
ANNEX A
Part
I.
Costing P r i n c i p l e s
1.
7e have had the b e n e f i t
Cooper B r o t h e r s ,
in g r e a t
all
detail,
suggest that
all
certain
conclusion
and the ways
is
as
changes
research
least
methods now used to
ground
needed
But w h i l s t
their
over­
principles
are
generally
movement c o s t s
s t u d i e s would be
The d i f f i c u l t i e s
from
joint
the
for
appropriate
costs
of
railway
(defined
costing
arise
by Cooper B r o t h e r s
as
those
s i t u a t i o n where t h e p r o d u c t i o n
one p r o d u c t
the p r o d u c t i o n o f
enables
a t no e x t r a c o s t )
divided
of
their
(a)
this
Direct
(b)
Indirect
costs
i n t o two
which a r e
and s p e c i f i c
directly
costs
t o the
(track
administration)
treated
as b e i n g b o t h f i x e d
classification
costing research
(a)
how,
(b)
costs
is
in e i t h e r the
measures of
-
is
and
that
t o be
scale,
it
is
necessary,
that
determine
costs vary
traffic
with
or
output;
level
of
each
normally
improved,
other than o u t p u t ,
cost
and
joint.
volume of
railway
both
conveyed);
which a r e
what f a c t o r s ,
of
t o be
they can be
should be u n d e r t a k e n t o
and on what time
changes
other
of
oategories:­
traffic
general
In
have
and s i g n a l l i n g
We a g r e e w i t h Cooper B r o t h e r s
the
( t h o s e which do
considered
(that
of
take
quantity produced).
costs
costs -
attributed
another to
problem, B r i t i s h R a i l w a y s
operating
variable
if
and f i x e d
v a r y w i t h changes i n the
recognition
3.
for
mainly
a s s o c i a t e d w i t h the
not
they
purposes.
2.
place
it
below,
on an i n t e r i m b a s i s ,
calculate
passenger p r o f i t a b i l i t y
is
costing
applied
from
to g i v e
are d e s i r a b l e ,
that the p r e s e n t
at
the
s e t out
can be r e a c h e d .
i n which t h e y a r e
sound and t h a t ,
subsidy
and,
further
conclusions
of
report
yet been a b l e
needs,
respect
a very f u l l
the whole
vie have not
i n one important
final
of
which c o v e r s
t h e s t u d y which i t
before
and Methods
affect
activity.
/It
the
It
will
be p a r t i c u l a r l y
important
c o s t s v a r y from the a v e r a g e .
costing
far
of
information
the v a r i o u s
we s h a l l
Cooper B r o t h e r s
recovered
as
accept that
iart
the
which i n v o l v e s
actually
that
it
is
present
continue
and not
for
interest
specific
This
do not
i n good o r d e r
purposes,
in
overall
working r e s u l t s
costing
purposes
if
costs
be p o s s i b l e
to
we
a current­
s h o u l d be
assigned
operations.
for
continue
to
and not
on
if
be
the f u l l
account,
and
and i n f o r m a t i o n
required
cost
if
those
are
to
the
systems
for
costing
Traffic
either by analysis
Costing
of
o r by ad hoc s t u d i e s .
disadvantages,
the b u d g e t s
that
calculate
it
should
the
Both
which would
c o u l d be used
t o the maximum e x t e n t
Cooper B r o t h e r s b e l i e v e
capital
perpetuity.
methods hove c o n s i d e r a b l e
avoided
go
certainly
to be r e t a i n e d
i s necessary for
to a s c e r t a i n
largely
profit
intended
will
at
basis,
into
information
Service
be
of a
be
think
interest
seems e s s e n t i a l
accounting
the
and i t
it
should
the r a i l w a y s which a r e
provide
It
particular
cost
I s t o he t a k e n
The p r e s e n t
present,
should
we t h i n k t h a t d e p r e c i a t i o n ,
costs.
S.
sum
circumstances,
as p o s s i b l e
historic
be kept
it
not
charged
and s u b s i d y p u r p o s e s ,
of
the
But we do n o t
In these
items needed f o r
operations
interest,
a t the
that
through fixed
on a r e p l a c e m e n t
assets
accept
equilibrium.
assessed
of
interest
should be
as f a r
Furthermore,
costing
assets
We
and which has such a l o n g way t o
shares.
and t h a t
be
assessing
t o t h i n k i n terms
to he f i n a n c e d
equity
should
an i n d u s t r y which i s
can a c h i e v e
think that
rate,
We a l s o
interest
contribution".
from o t h e r c o s t s .
t o make p r o f i t s ,
it
hut
to c e r t a i n
in
needs
figures,
method of
allocating
appropriate
contribution
before
a "profit
this
c o s t s meet t h e
as a c o s t ,
p a i d by t h e Board
distinguished
5.
of
far
c o n s i d e r how
have recommended t h a t
of
unsatisfactory.
at
a l s o need t o
presentations
should not be t r e a t e d
to
In looking
managers who have t o use t h e s e
4.
is
t o a s c e r t a i n how
for
possible.
increasingly
from the b u d g e t s
the
total
and
/unit
-1k­
unit
costs f o r
distinguishing
term c o s t s .
to e x p l o r e
individual
and t r a c k
"between s h o r t - t e r m v a r i a b l e
We a r e
this
locations
in
agreed
detail.
-15­
that
sections,
and
long­
they should be
asked
Part I I .
Methods f o r M i n i m i s i n g the Net D e f i c i t
Unremunerative Passenger S e r v i c e s
7.
P-E C o n s u l t i n g
a number of
at
a loss,
the
objectives
reducing
using
(e.g.
increasing
fare
levels
to
revenue
the t r a v e l l i n g
type,
services,
the l o s s
all
of
at the
reduction
is
been taken,
Railways,
track,
of
etc.)
by a d j u s t m e n t s
service best
public,
or are
but
these,
by P - S
reduced.
having
due
currently being
of
course,
may be
respect
refused
either
by
British
suggestions
by t h e B o a r d .
Not
questionnaire,
or part
of
which,
now b e i n g
pursued
of
of
a form
depending
on
c i r c u m s t a n c e s , would need to be completed by
the
British
R a i l w a y s Board b e f o r e
for
subsidy
is
from d e t a i l s
of
form would
readily
the current
cost
consideration
of
result
service
and
t o means f o r
patronage,
achievable
and would
was
indicate
all
.
standard
increasing
had been g i v e n t o
loss
Under
the
Apart
demand and any
in s e r v i c e .
the Board would
reducing net
as
such a s u b s i d y .
on p o t e n t i a l
alteration
headings r e l a t i n g
reducing
then s e r v e
include whatever/information
available
proposed
an a p p l i c a t i o n
made and which c o u l d
form f o r
all
feasible.
i s the p r e p a r a t i o n
application
in
this
planned,
immediate t a s k which i s
all
was
made f u r t h e r
considered
in
w h i c h have
by the Consultants
this
of
largely rural
Much of
to steps
the C o n s u l t a n t s
The most
actual
and
suited
shows t h a t ,
which a r e
attributable
w h i c h a r e now b e i n g
9.
crossings,
time when c l o s u r e
c o u l d be s u b s t a n t i a l l y
of
for
economy.)
The work done so f a r
five
the
by
main
simplifying
(e.g.
of
running
the amount of
level
and by p r o v i d i n g
the needs of
regard
at
Their
possibilities
by r e d u c i n g
arrangements
a review
has been r e f u s e d
c o n d u c t o r g u a r d s on t r a i n s ,
for
of
which c l o s u r e
out
currently
or h e r p r e d e c e s s o r s .
costs
also
8.
which a r e
were to c o n s i d e r
protection
to
services
and f o r
the M i n i s t e r ,
Group have c a r r i e d
on
revenue
that
practicable
estimate
or
the
d u r i n g the s u b s i d y p e r i o d .
means
financial
We have
/still
-16-
CONF1DE N T I A L
still
to c o n s i d e r whether
the Board i n a c e r t a i n
authorities
sufficient
further
form,
amount of
which w o u l d
specific
about s o c i a l
enquiries
need,
Committees.
further
assessments
proposals
also
for
primarily
the drawing
for
conurbations.
in
up o f
costs
extent
t o which t h e s e c o s t s
and r e v e n u e ,
t o your
e, r l y
for
character
bear
closure
1962 A c t ,
savings
those
are
in
particular
factors
may be v a r i a b l e
which
the
in
of
in
a t t e n t i o n concerns
even a l t h o u g h
(It
t h e p u b l i c a t i o n of
impact on p u b l i c
that,
if
aiscussions
opinion
recommend the M i n i s t e r
once a
under S e c t i o n
i n those
is
is
public
has a
lost).
We
consider
proposals
sensible
danger
and
changes
reduce c o s t s .
The
light
to
can b e
Minister
of
an
reaction.
/PART
-17­
the
to
a real
existing
w o u l d then have t o t a k e a d e c i s i o n i n t h e
likely
important
proposals
specific
e s s e s where
56
considerable
and the Chairman t o
made which would s u b s t a n t i a l l y
of
the
inhibited,
irretrievably
the B o a r d s h o u l d submit
assessment
which
present,
and t h e r e
are p r o t r a c t e d ,
customers may b e
the M i n i s t r y
at
themselves
may b e p o s s i b l e .
major
potential
closure,
services
has b e e n p u b l i s h e d . ,
a service
cost
from
from making any changes which a l t e r
i n mind t h a t
whether
of
end
and which we t h i n k s h o u l d b e
B r i t i s h Railways Board f e e l
the
used s e r v i c e s
and an e v a l u a t i o n of
ore c u r r e n t l y proposed f o r
of
procedures
recommendation, w h i c h r e s u l t s
the work b y C o n s u l t a n t s ,
proposal
their
circumstances.
Cne immediate
brought
their
a s k e d them t o g i v e
affect
11.
Users
such a q u e s t i o n n a i r e ,
a t t e n t i o n to the i d e n t i f i c a t i o n
different
these
o r d e r t o check
the more d e n s e l y
V9e have
of
part
a r e now b e i n g c a r r i e d out b y
t o e n a b l e them t o s e e how f a r
appropriate
provide
whether
such as t h e T r a n s p o r t
Consultative
the C o n s u l t a n t s ,
or
t o c o n s i d e r what
s h o u l d be p l a y e d i n t h e c o n s i d e r a t i o n
10.
would
local
may he n e c e s s a r y i n some
have a l s o s t i l l
a p p l i c a t i o n s by b o d i e s
involve
discussion with
and G-overnment D e p a r t m e n t s ,
information
cases.
this
III.
Standby
PaRT I I I .
12.
of
This
concept i s
reference,
study i t
Capacit
specifically
and v/e have s e t up e. s p e c i a l Committee
in d e t a i l .
We a r e a g r e e d t h a t we a r e
only w i t h standby c a p a c i t y
formation,
standby
We a r e
in i n f r a s t r u c t u r e
t r a c k and s i g n a l l i n g ,
in terminals,
also
i n c l u d e d i n our terms
depots
agreed that
etc.,)
will
broadly
a g r e e d b e t w e e n the M i n i s t e r
the B o a r d ,
to that
the p r o p o s e d f u t u r e
contain "standby"
required
the s o c i a l
(a)
In
looking
for
transport
(e.g.
surplus
capacity
point
which i s
u n d e r t a k i n g needs
t o cope w i t h p r e d i c t a b l e
operational
efficiency).
t h e n a t u r e of
such s u r p l u s ,
part
of:
likely
13.
The Committee has n o t y e t
it
is
conclusions,
interim.
since
could,
subsidies
part
of
inter
that
in order to
costs
reijort
for
have
a c t u a l volume of
unit
output i . e . ,
output l i k e l y
the r e a s o n a b l e
a c h i e v e d on a r e g u l a r b a s i s
were a v a i l a b l e .
recommendation, would n o t
where t h e e x p e c t e d l e v e l
the extent
that
that b a s i s
would be les&
the
traffic
the
flowing
(if,
s
2 grant
identify
and,
if
any
why.
firm
for
for
social
reduced).
recommend
- location,
in that l o c a t i o n i f
according
apply to t r a c k
output
the
to
and
the
the
signalling,
than the a c t u a l
recovered
To
on
costs,
because
than the p o t e n t i a l
traffic
/whi ch
-18­
that
of
should be u s e d ) .
c o s t s w h i c h might b e
was l e s s
volume
the
output which c o u l d b e
(This,
of
a
standby
achieved during
" t h e normal''
the
time,
example,
Cooper B r o t h e r s
t o be
in
this
on the
thereby
costs f o r
any
reasons
should b e d i v i d e d not b y
p e r i o d b u t by what t h e y c a l l
traffic
a bearing
to
are
t h a t v/e can r e p o r t
service
on c o s t i n g ,
calculate
seems
assist
reasons
any
for
that which
must be mentioned a t
alia,
a period
and ( b )
aiming t o
reached
little
on the s u b s i d i s e d
In t h e i r
o r to
exists,
the
t r . . c k c o s t s were c o v e r e d b y
Ik.
to
of
additional
and t h i s
^lso
why i t
if
as now
t o e m p h a s i s e , we
in c e r t a i n circumstances
ona the l o s s
actual
is
But the s u b j e c t
it
grounds,
peaks
to p e r s i s t ,
and t h e r e
how f a r ,
sound commercial
We a r e
any
carriages.
which i s
additional
for
s
and the Chairman
other words,
t h e Group a most i m p o r t a n t
(i.e,
railway network,
on commercial
services.
ana
question is
at a l l ,
concerned
and n o t w i t h
o r wagons
the r e a l
to
which could f l o w without f u r t h e r
attributable
locution
surplus.
and the
This
to the cost
relevance
to the s u r p l u s
of
cost,
capacity
this
w o u l d he
inherent
in
that
a c c o u n t s w o u l d show the s i z e
of
the
ana o t h e r p o s s i b l e
the s u r p l u s
to the "standby"
alternative
approaches
in the i n f r a s t r u c t u r e
and
question w i l l
further
exploration.
-19-
CONFIDENTSAL
require
its
Pi-.RT I V .
15.
Other Ob l i p ; a t i o n s
We have a l r e a d y
to look
Road B r i d g e s
account,
l'or
on the B o a r d at
which some £ 9 0 0 , 0 0 0 was
the 2-1 y e a r s
traffic.
thought
this
above
i960,
crossings,
had b e e n i n f l a t e d
administratively
Ministry
of
towards t h e c o s t
of
of
the
in
lyhb.
They a l s o
£ 3 2 7 , 0 0 0 p e r annum f o r
As
regards
to
deal
relief
of which t h e r e
, nnum t o
cost
in
1965 was
17.
The p r e s e n t
for bridges
is
statutory
and l e v e l
a l a c k of
administrative
standards
of
to
for
the
about
of
bridges.
over p u b l i c
at p r e s e n t ,
their
roads,
total
j u s t under £1-^m.
and u n s a t i s f a c t o r y .
there
the
from l i a b i l i t y
crossings
framework of
crossings
is
responsibility
obviously
The main d i s a d v a n t a g e s
complicated
are
clearly
defined
obligations,
complexity,
failure
to reach
provision,
which o f t e n p r e v e n t
of b r i d g e s
great
satisfactory
and a d m i n i s t r a t i v e
the r e m o v a l
that
difficulties
which
are
no l o n g e r n e c e s s a r y .
I n these circumstances
Team recommended t h a t
t h e r e w o u l d be much to b e s a i d
the t r a n s f e r
bridges
18.
responsibility
t o County C o u n c i l s
The Team t h o u g h t ,
time b e i n g ,
part
of
of
i n costs
there
for
public
the J o i n t
that,
overline
at l e a s t
s h o u l d b e no attempt
for
level
for
the
to t r a n s f e r
any
crossings.
mainly due t o the i n c r e a s e
The
in railway
rise
wages,
/not
20
for
and County B o r o u g h C o u n c i l s .
however,
the r e s p o n s i b i l i t y
is
was
the
;
have t o f i n d
a r e some 2 , 8 0 0
it
with
I n a d d i t i o n to
the r o a d s u r f a c e s
protected level
road
i 9 6 0 , because
t h e t r u n k r o .d b r i d g e s w h i c h were t r a n s f e r r e d
Minister
extent
by t h e g r o w t h i n
more c o n v e n i e n t
their
deficit.
to
the B o a r d pay £ h 0 , 0 0 0 p e r
in respect
was
1y65
revenue
because
the revenue d e f i c i t .
figures
the
had a g r e e d
The payment was s t o p p e d i n
through
to
the M i n i s t r y
some £2m. p e r y e a r
and l e v e l
t o which this
in
an a d d i t i o n t o t h e
up t o
pay the R a i l w a y s
from
present.
overline bridges
and. t h e r e f o r e
road bridges
deriving
up
Crossings
cost of
of
£1,506,000,
j o i n t Teams w e r e s e t
obligations,
and l e v e l
The t o t a l
16.
s a i d that
a t the v a r i o u s
p a s t , which r e s t
d e r i v i n p ; from the -past
to
not t o
an i n c r e a s e i n r o a d t r a f f i c ,
authorities
level
of
w o u l d have no e f f e c t i v e
costs,
governing
furthermore
t h e powers
of
to modernisation costs
negotiations
19.
Whilst
that
it
and
would b e
the
local
control
legal
extremely
we a g r e e w i t h t h e
for
t o be b o r n e by l o c a l
are considerable
difficulties
about
to maintain s u f f i c i e n t l y
and w o r k ,
and f o r
think that
these p r a c t i c a l
loci
explored,
give
further
consideration
20.
Pensions
to
result
There
or
is
which
realise
that
relating
starting
of
afresh
or w h e t h e r i t
they choose
s a d d l e d w i t h some p a r t
a sum o f
relieve
to s t
s h o u l d be
is
e do not
1
been
The
s o how
far,
end
previously
employed
obligations
which
predecessors. -
deposits
issues
end p r o v i s i o n s
be
we a r e
assets.
v siting
We
whether
r e g a r d e d as a new b o d y ,
d a t e , with only
the
to impose on t h e m s e l v e s
right
of
that
to £20m.
this
might
per y e a r .
for
be
the
t h e B o a r d from
accepted, i n f u l l
a sum of t h i s
they s h o u l d
the l e g - cy o f
releasing
of £15m.
t h e B o a r d of
railway
the i n t e r e s t b u r d e n on
at l e a s t
the arguments f o r
the o r d e r
ff
and i t s
from a c u r r e n t
the f u t u r e ,
obligation
and i f
superannuation
1
in e f f e c t ,
that
If
for
a r e more d i f f i c u l t .
the h o a r d s
these
liabilities
21.
standards,
have y e t
r e p r e s e n t e d by any v i a b l e
in facing
there
would b e
arranging
are whether,
and p e n s i o n fund
tbe Board should,
about
resolve
a r e no l o n g e r
transfer
to them.
the p r o b l e m o f
superannuation
there
and we have a s k e d t h e Team t o
abandoned l i n e s ,
also
authorities
field
from d e c i s i o n s
public
In particular
difficulties
t h e h o a r d s h o u l d be r e l i e v e d o f
on s o c i a l
^ complete
in this
pension l i a b i l i t i e s
of
authorities,
authority personnel.
sufficiently
main q u e s t i o n s
recommendation
t o be done w i t h s a f e t y , f o r
operations
The problems
and
high inspection
taid t h e r e would be d i f f i c u l t i e s
inspection,
contribute
the c o s t s
these b r i d g e s .
must be some doubt whether l o c a l
able
to
complex,
overline bridges
for
the
difficult.
w o u l d b e more a p p r o p r i a t e
of r e s p o n s i b i l i t y
over
provisions
authorities
are extremely
in principle
local
past.
its
represent
To
s i z e would, however,
/ a most
21
be
l1 aQdo
a most u n f o r t u n a t e
similar
cannot
decided that
tackle
any p o s i t i v e
likely
on i t s
financial
vie are
useful
own,
other
industries
in
a
in
for
that
as
the T r a n s p o r t
the
a whole.
Luseums have a
.jid c u l t u r a l
the g r e a t e r
the f u t u r e
preserved should be
defer
Records
part
them s h o u l d be p r e s e r v e d ,
that provision for
have t o
we can s e e
the board
educational
The J o i n t Team t h i n k t h a t
an i s s u e w h i c h we
to you u n t i l
and h i s t o r i c a l
satisfied
is
a i d t h a t we s h a l l
prospects
scientific,
exhibits
this
recommendation
huseums
23.
for
position.
We have
22.
precedent
of
such as t o
role
of
and we
their
play.
the
consider
such e x h i b i t s
assure
to
,,s
are
continuing
development.
The Department
24.
of E d u c a t i o n
and. S c i e n c e w o u l d be
willing
t o assume r e s p o n s i b i l i t y
huseums
(which they would a d m i n i s t e r
t h e S c i e n c e Museum)
Claphc..m e x h i b i t s
assured.
a site
site,
and no f i n a l
at
that
prepared
of
for
a material
in
effect
of
be
the
could be
in finding
decision
of
a new
can be
taken
evaluated.
necessary
auucation
to
and
the p r e s e n t B . R .
the p r o p o s e d
tnat
of
policy
would
a transfer
to
that
t h a t a move from Clapham
and. we w o u l d hope t h a t
to e n a b l e
the t r a n s p o r t
over r e s p o n s i b i l i t y
have
transfer,
the
t h e Clapham s i t e would p r o v i d e
funds
accommodation f o r
of
any change i n t h i s
would b e s e n s i b l e ,
sufficient
satellites
premises
will
we a r e a g r e e d
any c a s e d e s i r a b l e ,
handing
as
on the c o s t
S o l e b y the b o a r d of
with
it
continue
entrance,
in principle
Department
to
as
Transport
and the c o s t s
the Department
Science'are
charging
stage,
the
rehousing
i n more s u i t a b l e
c o n s i d e r whether
is
early
has b e e n f o u n d ,
Furthermore,
but
the
T h e r e may be d i f f i c u l t y
more s u i t a b l e
until
if
for
for
them t o p r o v i d e
collections
them
better
before
them t o the D e p a r t m e n t of
E d u c a t i o n and S c i e n c e .
25.
^-s r e g a r d s
that
they are
of
the h i s t o r i c . ! R e c o r d s ,
no v a ! u e
to
the b o a r d i n
b u s i n e s s , b u t we a c c e p t
that
preservation
of g e n e r a l
on grounds
we are
the b u l k
of
satisfied
running
their
them m e r i t
educational
usefulness
/ a n d as
22
and as i l l u s t r a t i n g
think there
spent
an a s p e c t o f
may he some s c o p e f o r
on p r e s e r v i n g
English
social
records
history.
We
r e d u c t i o n i n the
the r e c o r d s , by c e n t r a l i s i n g
i n one b u i l d i n g , b u t we a c c e p t
they a r e n o t s u i t a b l e
for
amount
the
that
i n c l u s i o n i n the P u b l i c
Record
Office.
26.
If
the Department
of E d u c a t i o n and S c i e n c e
over
t h e museums, t h e n we recommend t h a t
s h o u l d be t a k e n t o house t h e
the t r a n s p o r t
be s a i d
for
exhibits.
this
27.
same s i t e
ana t h i s
of Education
administrative
would be
looking
for
Railways Savinas
a first
as
deposits
the f i r s t
period
step,
1965.
the extent
of
the
we have l o o k e d at t h e t r e n d
years.
Deposits
They f e l l
o f £lorn.
fell
1966 t o £ 3 7 . 3 m .
After
in total
of
b y £2.9m,,
by a f u r t h e r
1965 w i t h d r a w a l s
£13m. t h e f a l l
a matter
records.
s i x months of
1959 t o
the
Banks
over recent
from 1963 t o
to
and S c i e n c e .
a p o s s i b l e new s i t e f o r
museums and h i s t o r i c a l
as
and
acceptable
The B r i t i s h -Railways B o a r d a r e now, a s
urgency,
26.
on t h e
opportunity
We t h i n k t h e r e w o u l d be much t o
on e d u c a t i o n a l ,
f i n . .nci. 1 grounds,,
Department
records
the
take
in
£2.7m.
P o r the
whole
e x c e e d e d new d e p o s i t s
crediting
deposits
interest
to
totalling
amounts t o a l i t t l e
over
£3m.
29.
The Team's
researches
a d m i n i s t r a t i o n would n o t
r e d u c t i o n i n the t o t a l
administrative
costs
accounts
calculation
is
be m a t e r i a l l y
30.
These
Railways
deposits.
a source of
of
deposits.
the o r d e r
deposited,
of
provide
Furthermore,
relatively
and of
to
any major
strong
the
the
costs would not
up t o l+OJo.
arguments why t h e
the p r e s e n t
size
of
e^ual
i m p o r t a n c e , they
are
cheap c a p i t a l
f o r the Railways
as
w e l l ;/:s an i n c e n t i v e t o s a v i n g s
23
of
the
Equally
15 t o 20% i n
computer
a f f e c t e d b y an i n c r e a s e
to increase
to
and now t h a t much of
computer,
circumstances
of
diminish i n proportion
amount o f
done b y
should try
the c o s t s
w o u l d not be a f f e c t e d
e x t e n t b y an i n c r e a s e
number of
show t h a t
amongst R a i l w a y
staff.
31.
I n these
circumstances
That the
(1)
we recommend:
existing basis
R a i l w a y s S a v i n g s Banks
of
is
o p e r a t i o n of
left
the
basically
unchanged.
That p o s i t i v e
(2)
encourage
s t e p s be
an i n c r e a s e
Bonks and of
deductions
i n membership o f
t h e e x t e n d e d u s e of
as
a regular
T h a t the i n t e r e s t
(3)
taken b y t h e Board
should be adjusted to b r i n g
with other comparable
(h)
of
..n e n l a r g e d " T r a n s p o r t "
Transport
may b e
that the s e r v i c e s
r e g a r d e d as f a l l i n g
( b u t not e x c l u s i v e )
Freight
as
into
of
The p r o t e c t i o n
the s o l e
three
of p r o p e r t y
of
Bunk.
The d e t e c t i o n
of
Department
of
i n which
of
crime
ser
the p r e m i s e s
in transit
,This
the
(b)
ices,
clearly
a
mainly
such as t h e c o n t r o l
of main
of
of
railway
crowds,
the public
general
a n d the
maintenance
order.
and ( c )
above w o u l d b e
have emphasised t h a t ne :.rly 20% of
a r e i n the CID and w i t h o u t
them.
some element
justified.
the T r a n s p o r t
them crimes
w o u l d merely b e r e p o r t e d t o t h e C i v i l
i n v e s t i g a t i o n \)j
and
Investigation
The R a i l w a y s B o a r d have c l a i m e d t h a t
f o r both
is
and.
Board.
which i s
the m a r s h a l l i n g
h e l p t o members of
public
are
(GID) .
i n tae v i c i n i t y
stations,
of
s
of
the C r i m i n a l
General public
traffic
Police
distinguishable
travellers.
responsibility
function
grant
in
categories:
the p r o p e r t y
33.
depositors
the T r a n s p o r t
p r o p e r t y of the Board, -and of g o o d s
(c)
employees,
Organisation
Savings
i n c l u d e d the S a f e g u a r d i n g
(b)
line
Police
appears
(a)
deposits
the bank i n t o
eligible
c
It
on
bunks.
a National
s h o u l d i n f u t u r e be
32.
savings.
That i n a d d i t i o n t o R a i l w a y s B o a r d
employees
the
payroll
means of
rate payable
to
on the
They
Police
railways
Police Forces
The T r a n s p o r t P o l i c e CID
for
thus
/provide
2h
of
provide r e l i e f
render
about
direct
for
the C i v i l P o l i c e F o r c e s ,
assistance,
72 5 a r r e s t s .
better
for
example,
Furthermore
in
general
is
essential.
they a r e . a b l e
public,
As r e g a r d s
some 2kk of
employed i n t h i s
field
c o v e r e d by the C i v i l
also
136 5 b y
i n c i r c u m s t a n c e s where k n o w l e d g e o f
operations
and
to
cope
transport
services
for
the Transport P o l i c e
much of
Police
which i s
(e.g.
making
the
are
common w i t h
control
that
of
immigration).
3k.
On t h e o t h e r h a n d ,
Railways
provide
or l o s s e s ,
r e d u c t i o n of
35.
con b e
a police force
commercial r e a s o n s ,
cost
it
and t h a t
argued t h a t
largely for
their
public
w o u l d be m a t e r i a l l y
their
Our s t u d y o f
police
this
sound
image,
e f f e c t e d by
activities.
item i s
25
the
still
continuing.
and t h e
any
Part
V".
Financial
and B u d g e t a r y C o n t r o l
36.
Cooper B r o t h e r s
have had a p r e l i m i n a r y
budgeting
and management
Railways,
and have g i v e n us c e r t a i n
conclusions,
deserve
also
agree,
which a r e
some mention
right
great
37.
as
their
strides
fact
introduced
systems of
important
British
It
w i t h which we
that
the
only three
is
entirely
present
to f o u r
have a l r e a d y been made by t h e
Cooper B r o t h e r s '
the
to
Interim Report.
view,
the
look at
preliminary
sufficiently
in v i e w of
p r o c e d u r e s were
information
in t h i s
to r e c o r d
that
Procedures
years
ago
Board.
p r e l i m i n a r y recommendations
are
follows:
(i)
As f a r
as p r a c t i c a b l e
budgeting
should
a r e a and depot
be
(ii)
involved
There
be extended
i n the
budgeting
s h o u l d be a g r e a t e r
budgeted
sales
and volume of
(b)
(c)
individual
process,
degree
of
i n terms of
both
receipts
activity;
resources
the e x p e c t e d
sales;
required
cost
of
providing
the
to
and
e x p e n d i t u r e b u d g e t s which s h o u l d
the
may
the:
estimated physical
achieve
so t h a t
managers w i t h i n a d i v i s i o n
c o - o r d i n a t i o n between
(a)
"responsibility"
represent
resources
required.
(iii)
There
s h o u l d be an a n a l y s i s
between budgeted
activities
and a c t u a l
or locations
s e p a r a t e l y the e f f e c t s
(a)
differences
output
(h)
the
for
to
show
of:
actual
outside
manager c o n c e r n e d ;
spending f o r
differences
results
envisaged
changes which a r e
the
in order
b e t w e e n the
and t h a t
of
level
i n the
the
of
budgets;
control
and o v e r
which the manager
or
of
under
is
responsible.
(iv)
I n o r d e r to
compare a c t u a l
expenditure
w i t h t h e e x p e n d i t u r e which should have
Incurred f o r
the
achieved,
will
it
level
of
output
incurred
been
actually
be n e c e s s a r y t o d i v i d e
between t h o s e t h a t
may be e x p e c t e d
costs
to:
/(a)
26
(a)
v a r y w i t h i n the b u d g e t
changes
(b)
i n the
remain unchanged,
budget
If
this
if
greater
at
output;
least
during
i s made t o d e t e r m i n e
elements of
budgeting
locations,
of
with
the
period.
attempt
variable
and
level
period,
is
then i t
use of
the c o s t s
extended
of
to
the
activities,
individual
would be p o s s i b l e
the b u d g e t s
for
to make
costing
purposes.
(v)
They e n t i r e l y
support the
philosophy
u n d e r l y i n g t h e developments
control
information
overall
p l a n of
of
of
proposed
September
comparing t h e v a l u e
allowances)
of
output
management
i n the
1964.
Board's
The
( i n terms of
principle
standard
produced w i t h the
the r e s o u r c e s used i n
s h o u l d however be
in
its
extended
cost
production
to
other
activit ies.
(vi)
They r e g a r d
it
information
systems now b e i n g
be d e s i g n e d
t o be
extent
system.
as
possible
important
integrated
In t u r n ,
this
and,
of
be d e s i g n e d
to a s c e r t a i n
control
budgetary
system
costing
the c o s t s
should,
t o meet
t h e r e b y r e d u c e the need f o r
studies
should
t o the maximum
integrated
the t r a f f i c
control
planned
information
as p o s s i b l e ,
requirements
the
w i t h the b u d g e t a r y
control/management
as f a r
that
the
service
ad-hoc
of
sample
individual
activities.
(vii)
Cooper B r o t h e r s
strengthening
Finance
have f i n a l l y
of
the R a i l w a y s
organisation,
recommended
some
Headquarters
and g r e a t e r
central
direction.
38.
7e have not yet been a b l e
on t h e s e recommendations,
field
and
i t would be d a n g e r o u s
before
we have a f u r t h e r
7e a r e
ensuring that
to take a f i n a l
indeed o v e r much of
for
report
they,
view
the
us to attempt t o do so
from t h e
Consultants.
in consultation
with
the
/Board
27
Board,
that
their
c a r r y out
a detailed
would he r e q u i r e d
outline
the a d v a n t a g e s
investigation
to c a r r y
recommendations
that t h i s
decision-making,
would
and the c o s t .
l o o k at
all
b e t w e e n and w i t h i n r e g i o n s ,
greater uniformity
of
provide
for
V/e w i l l
those
out.
to
of
accept,
We a r e
in
further
also
procedure
and t o recommend how
may be
steps
managerial
report
the v a r i a t i o n s
practice
28
effect
the
which we d e c i d e
when t h i s work has been c a r r i e d
a s k i n g them t o
into
of
desirable.
far
C Q NIP i n P W T I A I
v.vl*iriUCIN
I I M L
ANNEX B
Terms o f R e f e r e n c e
1o
for
the Joint
Review
The Government h a s r e a c h e d the c o n c l u s i o n
the f o r e s e e a b l e
the c o u n t r y ' s
future
there w i l l
transport
r a i l w a y network.
system,
In order to
he a n e e d ,
for
a
and u n c e r t a i n t y ,
concentrate
interests
and t o e n a b l e
the p u b l i c
r a i l w a y n e t w o r k s h o u l d be
of
population
industry
routes
There a r e
still
s t a t i o n s whose r e t e n t i o n
l o n g e r be
justified,
The Government
that
this
i n the t r a n s p o r t
modernisation
the
the
the
It
will
flows
for
of
additional
and t o
commuters
services
and
and
can no
w i l l be
decided
soon as p o s s i b l e
and t h e R a i l w a y s
to
of
Board a r e
system s h a l l
the
play
avoid
the r e p l a c e m e n t
traction
wherever t h i s
Investment w i l l
of
systems
can b e
and of
part
of
will
s t o c k and the
track
justified
heavy f l o w s
will
a full
Capital
rolling
be c o n c e n t r a t e d
and commuter l i n e s
determined
c o u n t r y and do so w i t h
economic e f f i c i e n c y .
trunk routes c a r r y i n g
feeder
traffic
and t h e i r f u t u r e
system of
increasing
be provided f o r
terms.
of
i n modern c o n d i t i o n s
stabilised rail
signalling
size
to
uncertainty,
2.
rapidly
an
the main c e n t r e s
services
as
of
change
and i n d u s t r y ,
some l i n e s ,
u n d e r the u s u a l p r o c e d u r e
prolonging
trade
and commerce, w i t h
provide e s s e n t i a l passenger
others.
t h e system i n
linking
freight
to
of c o n t i n u a l
the b a s i c
routes
t o s e r v e major
stability
d e t e r m i n e d now.
consist primarily
and of
of
and of
Government has d e c i d e d t h a t
as part
management and s t a f f
on the development
of
for
substantial
restore
i n d u s t r y w h i c h has b e e n t h e s u b j e c t
that
in
and
economic
on t h e main
traffic,
but
other
a l s o b e a d a p t e d to modern
needs.
3.
The s o c i a l
to
the d e c i s i o n
to
it
necessary to
substitute
that
clear
and o t h e r
considerations
stabilise
the r a i l
network
a new f i n a n c i a l
imposed b y the T r a n s p o r t
Act,
1962.
that the requirement contained
B o a r d to " p a y
w h i c h have
also
led
make
framework
It
has become
i n the A c t f o r
i t s w a y " b y the b e g i n n i n g
of 1968
is
/entirely
-29­
for
the
entirely
into
unrealistic
and w o u l d ,
if
pursued,
force
it
a c t i o n w h i c h i n many c a s e s w o u l d be a g a i n s t
interests
of
plans
transport
for
Government
the community and i n c o n s i s t e n t w i t h
is
and o t h e r s e r v i c e s
developing.
amended to p r o v i d e
financial
the
It
must
more r e a l i s t i c
objectives
which the
therefore
and
the
he
appropriate
and a new f i n a n c i a l
framework
and
discipline.
Jr.
Against
t h i s background the M i n i s t e r
and. the Chairman o f t h e R a i l w a y s
undertake
a review
industry.
Steering
expert
certain aspects
Secretary
independent
including
Group w i l l
consisting
economists
whole w i l l
of
railway
be
the
of
Joint
Transport.
a s s i s t e d b y an
as n e c e s s a r y
from the M i n i s t r y ' s
of Economic P l a n n i n g
subjects.
The tfcerms o f
be
as
new
of
reference
of
the r e v i e w as
and t o
of
identify
covering
those
categories
and f r e i g h t )
costs;
to
isolate
those
viable;
remaining
and t o
loss-makers
no p r o s p e c t s
in d e t a i l
s e r v i c e which i s
so t h a t
it
to consider
policy
isolate
on each
the
those
and t o
cost
t o become
s h o u l d be g r a n t - a i d e d
decide
on b r o a d
grounds;
any s t e p s
i n the f i e l d
of
pricing
o r e l s e w h e r e w h i c h may be n e c e s s a r y
of those
a l r e a d y remunerative
potentially
with
passenger
t h e Government can
improve the p r o s p e c t s
are
not
t o examine
unlikely ever
and economic
services
categories
of becoming v i a b l e ;
t h e annual l o s s
costing
which are
which are p o t e n t i a l l y
social
a
follows:
for
whether
joint
particular
To e s t a b l i s h an a c c e p t a b l e b a s i s
viable
and
Directorate
and- b y a number of
B o a r d teams i n v e s t i g a t i n g
(both passenger
(b)
the
to
a c c o u n t a n c y and management c o n s u l t a n t s
Ministry/Railways
(a)
of
t o the M i n i s t r y
Joint S t e e r i n g
working p a r t y ,
General
B o a r d have a g r e e d
Group u n d e r t h e c h a i r m a n s h i p
The
Transport
For t h i s p u r p o s e t h e y have s e t up a -Joint
Parliamentary
5.
of
of
services
and t h o s e which
to
which
are
viable;
/(c)
-30­
(c)
to examine the B o a r d ' s
financial
of
control
of
i n the l i g h t
the new p r o p o s a l s
essential
methods
for
the c o s t
services
o t h e r changes p r o p o s e d i n the W h i t e
(d)
(e)
to assess
whether
the c o s t
of
includes
an element
if
the r a i l w a y
of
t o examine t h e
deriving
Board,
bridges
from
for
so,
investment
and of
extent
appraisal;
obligations
on the
in respect
and l e v e l - c r o s s i n g s ,
employees,
Paper;
programmes
the p a s t which r e s t
a n n u a t i o n and p e n s i o n s
of
capacity';
investment
those
of
infrastructure
continuing
including
and
to what
"standby
to examine the B o a r d ' s
and the c r i t e r i a
(f)
and,
and
particularly
meeting
but u n r e m u n e r a t i v e
costing
of
road
super­
for past
the B r i t i s h
of
and p r e s e n t
Transport
Police
Force;
(g)
to c o n s i d e r
the s u i t a b i l i t y
management s t r u c t u r e
future
of
operation
the c o n t e n t s
of
of
the
and p r o c e d u r e s
the
system
Board's
for
in the
t h e W h i t e P a p e r and
changes which may stem
(h)
of
recommendations,
including
for
legislative
and t o r e p o r t
Chairman of
light
the
therefrom;
t o make c o n s e q u e n t i a l
suggestions
the
possible
changes;
t o the M i n i s t e r
the R a i l w a y s
-31­
Board
of T r a n s p o r t
accordingly,,
and the
ANNEX C
COMPOSITION OF JOINT
STEERINGGROUP
CHAIRMAN:
John M o r r i s , M.P.
Joint Parliamentary Secretary,
M i n i s t r y of T r a n s p o r t .
MEMBERS
J . P. B e r k i n , C . B . E .
f o r m e r l y Managing D i r e c t o r ,
S h e l l P e t r o l e u m Company L i m i t e d
J . G o Cuckney,
Managing D i r e c t o r ,
Standard I n d u s t r i a l
Group.
P o G o James,
Member, B r i t i s h R a i l w a y s
Board
F o
C o
Margetts,
C B o E .
Member, B r i t i s h R a i l w a y s
Board.
P r o f e s s o r j\ J . M e r r e t t ,
P r o f e s s o r of F i n a n c e ,
London G r a d u a t e S c h o o l of
Business Studies.
a
P. H o S h i r l e y ,
Vice-Chairman,
B r i t i s h Railways
Board.
J o W o Wardie, J.P.
Running Movements S u p e r v i s o r ,
B r i t i s h R a i l D i e s e l Depot,
Tyseley,
Birmingham.
C o P. S c o t t - M a i d e n , C . B .
Under S e c r e t a r y , R a i l w a y s
M i n i s t r y of T r a n s p o r t .
G o C, W a r d a l e ,
Under S e c r e t a r y , F i n a n c e
M i n i s t r y of T r a n s p o r t .
Group.
D o O o Henley,
A s s i s t a n t Under S e c r e t a r y
P u b l i c Finance,
Department
JOINT EXECUTIVE
DIRECTORS
:
o f Economic
J o J o B o Hunt,
Under S e c r e t a r y , P u b l i c
H o M o
Treasury
J o
R. Hammond, M o B o E .
B r i t i s h R a i l w a y s Board
P. E o L a z a r u s \
M i n i s t r y of T r a n s p o r t .
SECRETARY
D o S o Barlow,
M i n i s t r y of T r a n s p o r t .
-32­
Group,
of
State
Affairs
Enterprise
ANNEX D
REMITS GIVEN TO CONSULTANTS
Remits
Review
1 .1
principles
Railways
and comment on the a c c e p t a b i l i t y
and p r o c e d u r e s
Board f o r
profitability
the
Recommend any changes
w h i c h may be
of
and p a s s e n g e r
and
traffic.
in these p r i n c i p l e s
and p r o c e d u r e s
desirable­
categories
lines
the
British
the costs
Recommend the methods by which t h e
1 ,2
of
now a d o p t e d by t h e
assessment
of f r e i g h t
of
of f r e i g h t
and s e r v i c e s
traffic
s h o u l d be
profitability
and i n d i v i d u a l
passenger
assessed­
Recommend the methods by which any s u b s i d i e s
1 .3
unremunerative passenger
controlled
1-h
services
s h o u l d be
for
calculated,
and p a i d ­
Recommend how, and on what
time b a s e ,
individual
loss-making passenger
calculated
and m o n i t o r
the p r e p a r a t i o n
figures
the B o a r d ' s
staff.
by
services
the r e s u l t s
should
of
the
of
be
necessary
Remit 2
Consider
2.1
services
the r e s u l t s
structure,
results
of
viability
of.service,
loss-making
of
the
effect
the s e r v i c e s
those
operating practices
i n the l o n g
of
passenger
including
which w o u l d be l i k e l y
these s e r v i c e s
Estimate
2.2
all
and recommend any c h a n g e s ,
t y p e and f r e q u e n c y
fare
of
to
improve
in
the
and
the
run.
the recommended changes
on the
concerned.
Rjomjt^J)
Review
3.1
likely
the
extent
t o which t h o s e f r e i g h t
to be marketed by t h e Board a f t e r
the n a t i o n a l
freight
of
and d e t e r m i n e
customers
organisations
under which a d d i t i o n a l
types
traffic
the formation
fulfil
of
services
the
traffic
of
requirements
and
conditions
c o u l d be o b t a i n e d by
the
Eaard.
/3o2
*Tt
has been a g r e e d w i t h
further
clarification
organisation,
after
the p h r a s e
the formation
in remits
3=1
give p r i o r i t y
of
the r o l e
"those
in t h e i r
and o t h e r b u l k
require
the p r o v i s i o n
of
the n a t i o n a l
of
services
freight
that w i l l
freight
coo..
organisation"
t o company
road c o l l e c t i o n
by B r i t i s h R a i l w a y s
33.
pending
the C o n s u l t a n t s
consideration
traffic
that,
the n a t i o n a l
freight
and 3=2 means t h a t
traffic
services,
of
the C o n s u l t a n t s
will
train
n o t be l i k e l y
and
or B r i t i s h Road
delivery
Services.
to
Review
3o2
and make recommendations
and o r g a n i s a t i o n
passenger
Railways
and f o r
is
the n a t i o n a l
to
that
policies
services
to b e s e l l i n g
freight
after
for
which
the
organisation,-
passenger
progress
both p a s s e n g e r
review
inter-city
initially
passenger
side with
British
formation
including
sales
services
necessary
Steering
those
t o keep
studies
and which w i l l
abreast
studies
side with
w i t h the n a t i o n a l
Undertake
t o a study
but k e e p i n g
the c o n u r b a t i o n
pricing
services.
t o be l i m i t e d
The C o n s u l t a n t s
a s to p r o g r e s s
on the
and f r e i g h t
and on the f r e i g h t
researchesc
Remit
freight
of m a r k e t i n g
and make recommendations
for
This
be
functions
methods
organisation­
Review
3.4
all
those
likely
of
3o3
of
on the
on the
already
the B o a r d ' s
themselves
freight
of
in
own
informed
organisation.
w h i c h work has
be a u t h o r i s e d
shown to
by
the
Group
4
h.1
Review
financial
and make recommendations
and b u d g e t a r y
both
to revenue
h.2
Review
account
and t o
procedures
investment
and make recommendations
statistical
and o t h e r
for
purposes.,
control
control
on t h e
information
Board's
as
applied
projects.
on the
provided
financial,
to
management
Remit 5
Recommend t h e p r o c e d u r e s
5.1
casting
the
Railways
future
and f o r
operating
and f i n a n c i a l
estimates
as
of
of
by the B o a r d ' s
the J o i n t
British
estimates
position
fore­
the
of
Boardo
staff
Steering
the
of
Group
require.
Remit
6
Advise
6.1
long-term
the p r e p a r a t i o n
such l o n g - t e r m
may
and e x p e n d i t u r e
preparing
results
Monitor
5.2
income
t o be a d o p t e d f o r
on any p r o p o s a l s
by t h e Board on management
structure.
Recommend any
6.2
responsibilities
be
changes
i n management
which work
on o t h e r
desirable.
*
See f o o t n o t e
on p r e v i o u s
34.
CONFIDENTIAL
page.
structure
r e m i t s has
and
shown
to