Steve Richards: Yes, but who is responsible for our railways (and other public services)?

The Government inherited the chaos of railway privatisation but lacked a sense of what to do about it
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The Independent Online

As Mr Humphrys was speaking at Westminster, the extraordinary court case involving former Railtrack shareholders continued its hearings a mile or two down the road. The shareholders are alleging the Government plotted to push Railtrack into insolvency, depriving them of significant compensation. The court transcripts should be read across the land and with special intensity in the office of the Today programme. They illustrate, in a way that is darkly comic and deadly serious, the relative powerlessness of elected ministers. These boys and girls are not as big as some assume.

This week, Tom Winsor, the former rail regulator, reminded the court that he had the power to provide Railtrack with more money if the company had made a "compelling case". Think about it. This was a mighty power in the hands of the unelected regulator. In theory, Mr Winsor could have clicked his fingers and ordered the powerless Chancellor of the Exchequer to provide a few billion pounds for Railtrack. The Transport Secretary would not have got a look in, and the Chancellor would have had to stump up the cash.

The court hearing is a reminder that Railtrack was accountable to the shareholders rather than elected politicians. After the Hatfield train crash, Tony Blair summoned senior members of the company for a crisis meeting in Downing Street. With a degree of urgency, Mr Blair wanted to know what Railtrack planned to do next. The senior members were genuinely baffled. They had to keep their shareholders happy. It was not a matter for Mr Blair.

In fact, the crisis in the railways was also a matter for several other unelected bodies including the hyperactive Health and Safety Executive, the Strategic Rail Authority and the privatised train companies, but the elected politicians did not have the power to do much. Perhaps it was also partly with the shareholders in mind that some of the private train operators raised the prospect last week of a "congestion charge" on the busier trains in the rush hour. Such a measure would raise more cash without the need for additional investment in bigger trains: hell for commuters, but bliss for shareholders.

The broader tensions between Mr Winsor and former transport secretaries arose when the ministers started to interfere in what he regarded as his responsibilities. The lines of power became dizzyingly complicated. A Transport Secretary could sack a regulator but the regulator, although he had immense powers, could not sack a Transport Secretary. So who was in charge?

The world has moved on from the era when senior ministers were big boys and girls, which is probably why the Today programme sounds outdated so often. The programme works on the naive assumption that elected politicians wield supreme power and must be interrogated accordingly. In the real world, there has been a revolutionary redistribution of power.

The Government inherited the chaos of railway privatisation, but lacked a sense of what to do about it. New Labour has no clear philosophy on matters relating to ownership. Broadly it encourages greater private sector involvement and is wary of taking too much control itself. This is not so much an ideological commitment as a political one. Old Labour sought to run too much, New Labour must be seen to be different.

Recently, Mr Blair told the current Transport Secretary, Alistair Darling, that he could introduce reforms to the railways but they must not be perceived in any way as renationalisation. Mr Darling has met this demand. The successor to Railtrack, Network Rail, is a private company, although one without shareholders. The cast list of those running the railways has narrowed, but is still vast.

The Government's confusion in relation to what it can and cannot do manifests itself in two conflicting ways. Sometimes, ministers desire to act and find they do not have the power to do so. I recall, in the heady days after the 1997 election, the new culture secretary, Chris Smith, outlining proudly his egalitarian ambitions for the national lottery. Within seconds of his declaration, the Lottery Commission declared that he had no power to intervene in such a way. This was a matter for the Commission.

Conversely, there are times when ministers assert their powerlessness only to discover they still get the blame for a situation over which they have no power. Senior ministers used to say in private that one of the reasons for keeping the railways in the private sector was they would not get the blame when things went wrong. To their horror, they still got the blame. That is one of the reasons why the more recent transport secretaries have become more active to the fury of the likes of Mr Winsor: If they are the big boys and girls to be bashed around by Mr Humphrys after a train crash, they might as well acquire some big powers.

We are in a transition. The messy redistribution of power over the last two decades is part of the shift from old-style corporatism towards new ways of delivering services at a local level. With some services, the transition has been smooth. The most successful privatisations arose when former nationalised companies found themselves competing in a natural market place. The changes have been much more tortuous when state monopolies have been replaced by private monopolies.

In between, the Government has attempted to devolve the delivery of health and education while retaining the responsibility for standards and raising the taxes to pay for the services. Gordon Brown is the only minister to have attempted to get a grip on this theme, in a substantial speech delivered during the second term on the opportunities and limitations of the market in the provision of public services.

Mr Blair's instincts are right about the need for reforms to the public services, but he would do well to keep a copy of Mr Brown's speech by his side. On the extended use of the private sector in the NHS and the introduction of more city academy schools, I ask two questions: Who is responsible and to whom are they accountable? If the answer begins: "Well it's a bit complicated ...", I will reflect on the current Railtrack court case and head for a darkened room.