Privatisation of BR 'flawed', top official admits

The senior civil servant who pushed through rail privatisation admits in a forthcoming television programme he knew that the whole idea was flawed from the start.

Sir Patrick Brown, the permanent secretary at the Department of Transport in the early 1990s, says in a BBC4 programme, Witness to History: Privatising the Railways, that it was the Treasury's insistence that resulted in the separation of the infrastructure and the operations. This split has not only led to the recent expensive failure of the infrastructure company, Railtrack, but has also been the root cause of several fatal train disasters since privatisation.

Sir Patrick says that the split had become a "totem" which was being pushed by the Treasury and he was not in a position to change it. The admission has not stopped him benefiting from the flawed privatisation, however. Last week he became part-time, non-executive chairman of the Go Ahead group, which has three rail franchises, at an annual salary of over £60,000.

The structure of the railways for privatisation, with a separate Railtrack, had been developed by the Treasury before the 1992 election in order to encourage competition between different train operators.

The idea was that the 25 operators created at privatisation would bid against each other to run lucrative services because there would be "open access" to the tracks, but the plan proved to be impracticable from the outset.

Soon after the 1992 general election, John MacGregor, then Secretary of State for Transport, had to abandon the concept of open access when he realised that it would not be possible to franchise out the train operations if rival companies could then "cherry-pick" profitable services.

Yet Sir Patrick and his colleagues at the Department of Transport kept pushing through the model which involved splitting up British Rail, even though they realised that there was no good reason for doing so.

He says in the programme: "The fact that to do the franchising successfully would mean that we would have to essentially ditch competition didn't surprise me at all.

"I don't think any of us in the Department of Transport thought that open access as described could have any part in the privatisation. But you couldn't say so."

He goes on to say that it was the Treasury which insisted on the model: "Because the Treasury were very keen on it, it was impossible to admit openly what later became obvious and you knew to be the truth earlier, which was that open access was impossible."

John Welsby, chairman of British Rail in its dying days before privatisation, says in the programme: "All the operational and managerial problems that derived from splitting off the infrastructure from the operations were being incurred for no benefit."

Sir Patrick responds that ministers refused to consider changing the scheme at that late stage: "At this point you've got a Bill in front of Parliament, you're on the way."

The lack of co-ordination in the industry has not only resulted in an increase in delays but also led to soaring costs which have made investment in the network much more expensive than under BR.

Railtrack, which made losses of £534m in 2000/01, was put into administration last October after running out of money and was replaced earlier this month with the not-for-profit Network Rail.

'Witness to History: Privatising the Railways', will be screened on BBC4 at 9pm on Wednesday 23 October