Private train companies could be handed responsibility for trackrepairs in a move that campaigners warn will put profit before safety.
A major study designed to reduce the £5bn cost of subsidising the rail industry is expected to recommend stripping Network Rail of responsibility for lines in at least seven regions, with "vertical integration" of train firms and maintenance.
The report by Sir Roy McNulty, the former head of the Civil Aviation Authority, is due to be published this week. It is expected to say that the Office of Rail Regulation should ensure there is "greater emphasis on the cost implications of safety regulation", leading to concerns that work could be delayed to save money.
Sir Roy will say that vertical integration "has potential" in areas where franchises and maintenance contracts are ready, notably Anglia, ScotRail, South West Trains, Southern and Southeastern, Merseyrail, Wales and Western regions. The benefits could be between £1.6bn and £5.5bn.
However, critics will point to the tragic history of private firms being responsible for safety. Last week Network Rail apologised for the 2002 Potters Bar rail crash in which seven died. It was fined £3m. Railtrack was the private infrastructure company in charge at the time, but Network Rail, created when the industry was renationalised, has shouldered the responsibility.
Railtrack was fined £4m after the 1999 Paddington crash which killed 31 people, and in 2005 Network Rail was found guilty of breaching health and safety legislation in the run-up to the 2000 Hatfield crash, in which four died, and which led to the renationalisation of rail infrastructure.
Pam Warren, a survivor of the Paddington crash, claims cutting corners on safety to save money is the "economics of the loony bin" and risks repeating the devastating incidents that blighted the railways in the 1990s and early 2000s. She said she could "understand" the need to find savings, and believes the pay of industry executives and budgets for station refurbishments could be trimmed. But she told The Independent on Sunday that safety "has to be kept independent so that the public's lives are not put at risk".
Leaked documents from the review seen by The IoS, including a presentation given to the Transport Secretary, Philip Hammond, suggest the industry changes would provide "clear and credible leadership in relation to safety and risk management". It stresses safety should be "good management practice rather than a bolt-on".
However, Keith Norman, general secretary of the Aslef rail union, warned against private firms taking on responsibility for infrastructure once again. "Reintroducing the profit motive into the maintenance of infrastructure would be a very dangerous step. How many times do we need to make the same mistake? Do we really want safety standards to be decided by accountants? The maintenance of the track must remain under public control."
Mr Hammond is expected place greater emphasis on co-operation in the industry. He will dismiss the suggestion from unions that only publicly owned companies take safety seriously, pointing to the record of private airlines. Mr Hammond will also stress that any changes to the way the rail industry is run will mean getting a better deal for passengers and taxpayers. In particular, the pay and perks of rail industry staff are likely to be targeted, igniting a major row with unions. For example, 500,000 former British Rail employees receive benefits including up to 50 hours' free travel and 75 per cent off fares.
Network Rail currently employs around 35,000 people, with another 49,000 working for train operating companies. In a speech last week Mr Hammond said: "A 21st-century rail network needs 21st-century employment practices. With fares and levels of taxpayer support already so high, it would be simply irresponsible for us to ignore this issue any longer. Addressing inefficient working practices and excessive wage demands will form a key part of the strategy for building a sustainable and affordable railway."
Sir Roy is also expected to recommend lifting the cap on fares, rises in car parking costs at stations, the closure of ticket offices and fewer staff on stations and trains. Bob Crow, the general secretary of the RMT rail union, has vowed to "fight this attack on jobs, safety and service quality every step of the way".
A survivor's story
Pam Warren became an active campaigner in the wake of the Paddington crash of 5 October 1999, which killed 31 people and injured 520. After suffering horrific burns, inset, she had to wear a surgical mask for 18 months. Now writing an autobiography which she hopes will help others overcome trauma, she is also working for BBC Radio Berkshire and the Dame Kelly Holmes Legacy Trust
"I am now catching the train again – with a friend who keeps me calm. I have had a major flashback while he has been with me, which was a bit frightening for him, but as long as he keeps talking and keeps my mind away from the fact we are on a train, I'm fine.
"I still keep an eye on safety issues, because I feel, if I am putting my life back on the line, I want to know that they are still taking safety seriously.
"Sir Roy McNulty has been looking into this for quite a while. I thought, 'Why isn't anyone saying anything because the red flag should be raised now?' There was an awful lot of reference to risk and incentive rewards. I don't like that terminology at all. Back in 2000-01 it came across quite clearly that the rail industry considered it cheaper to pay compensation to those who were injured or killed than it was to do some of the improvements. You can almost see the recipe beginning again. That, to me, is the economics of the loony bin. Safety has to be kept independent, so that the public's lives are not put at risk.
"I started campaigning quite quickly after the crash and I thought I was fine. After 10 years you have probably been through the yucky bits like drinking too much and depression. It was only on the 10th anniversary that I thought, 'Actually I can take it or leave it. I can walk away from it now – I'm not the train crash victim any more'."