24 March 2016
Article by Andrew Minnis, National Assembly for Wales Research Service
What’s been published and why now?
The Enterprise and Business Committee published it’s final inquiry report of the Fourth Assembly today, considering priorities for the future of Welsh rail infrastructure (PDF 896KB) .
Rail projects are delivered in five year “control periods” with the next, Control Period 6 (CP6), running from 2019-24. Although this is still a few years away, the Committee wanted to consider this issue now because preparations for CP6 are getting underway as the Office of Rail and Road (ORR) launches “Periodic Review 18”.
While Welsh Government has powers to invest in rail infrastructure, primary responsibility for funding Welsh rail infrastructure is not devolved. The process will therefore lead to the Secretary of State setting out what he expects the rail industry to deliver and ultimately to “final determinations” on Network Rail’s outputs and expenditure for CP6.
What did the Committee recommend?
The Committee a total of 18 recommendations in a number of areas.
High level priorities for infrastructure improvements
The Committee set out its key priorities in north, mid and south Wales in eight recommendations. Since this is a largely non-devolved area these focused largely on influencing UK Government and other rail delivery bodies. These included:
Delivery of a compelling business plan for north Wales electrification to be funded by the UK Government.
Access to English airports from north Wales.
Mid and West Wales
Enhanced services in mid Wales, particularly further improvements linking Aberystwyth to the English Midlands and beyond.
The need for absolute assurances that the electrification of the South Wales Mainline will continue unbroken as a single project all the way to Swansea.
The need for a robust plan for Cardiff Central Station with the track and signalling upgrades needed to create a station fit for a 21st Century capital city.
Upgrade of North and South Wales lines (and relief lines) to the largest gauge for freight containers, electrification of the Vale of Glamorgan line and the need to identify, and work to deliver, infrastructure priorities for freight across Wales.
Infrastructure planning and delivery
The Committee looked at the way in which planning for this non-devolved policy area is undertaken. It made recommendations for improvement of the current, non-devolved, arrangements and also considered arguments for further devolution.
In terms of current arrangements, it found that the Welsh Government’s role as a so called “third party” or “minority” funder of infrastructure is unclear. It felt this to be a concern, particularly as Welsh Government begins to take the lead on large-scale multi-million pound projects such as Valleys electrification.
It also felt that there is not enough transparency about Network Rail financial and performance data in Wales. In particular it concluded that the next Control Period should see targets and outputs set by the ORR at a Wales level (currently they’re set for England AND Wales), with improved reporting.
Having heard evidence suggesting Network Rail has underperformed on some projects, the Committee identified a need to ensure Network Rail structures are “fit for purpose” when working across the organisation’s administrative boundaries, and that Welsh projects should be managed by teams based in Wales (previously some have been managed from Swindon or Bristol). However, it was pleased to see that Network Rail is already working to address some of these concerns.
In terms of Welsh Government powers, the Committee recommended that Welsh Government should have greater responsibility for rail infrastructure, and that Network Rail must be more accountable to it as more investment comes from Wales itself.
It heard that there are options to do this without legislation, but identified a “strong case” for legislation formally devolving rail infrastructure powers to Wales. However, in recommending formal devolution it identified four key issues to be addressed clearly in advance of devolution:
- The need for a fair funding settlement;
- The approach to apportioning Network Rail’s current debt and managing future borrowing;
- How the cross-border network will be managed; and
- How risks, such as latent defects or overspend, will be managed.
Evidence emerged of the need for strong links with the new devolved English transport planning bodies such as Transport for the North (TfN) which will increasingly be responsible for planning rail (and other transport) enhancements.
While Welsh Government has developed a Memorandum of Understanding with TfN, the Committee felt the Welsh Government should “increase its efforts to develop key cross border relationships” with these devolved bodies and other key English stakeholders.
The Wales and Borders Rail Franchise
Since the Committee held a full inquiry into the future of the Wales and Borders rail franchise in 2013, it had not originally intended to cover this ground again.
However, issues emerged during this inquiry arising from planned devolution of responsibility for procuring the next Welsh rail franchise to the Welsh Government from 2017.
In particular, quite a lot of evidence pointed to concerns about the proposed review of the “franchise map”.
If cross-border / England only services are transferred into adjacent English franchises, respondents and witnesses expressed concern about the impact on the franchise, and particularly inconvenience for Welsh travellers forced to change trains.
While the UK Department for Transport said reports that cross-border passengers might have to change at the border are “spurious”, the Committee concluded “until we see the proposals for the next franchise in Wales, speculation about what is in and out will continue”.
It recommended that Welsh Government “must make it a priority” that “popular, profitable routes which are essential to the travelling public” are included in the next Welsh franchise.