NR’s fines could come from managers’ bonuses - ORR
Rail regulators plan to change the way they hold Network Rail to account, to levy fines that can be paid from managers’ bonus funds.
The Office of Rail and Road (ORR) explained that it wanted to create an expectation that senior managers should bear personal responsibility for any problems. It said the change would mean that fines no longer deprived the company of money that could fund the network’s operations, maintenance and renewals.
However, ORR noted that it has no role in setting NR bonuses, so said that it would levy penalties at a size capable of being financed from bonuses and then let NR and its owner (the Department for Transport) decide where to take the money from.
The proposed changes come as the ORR prepares for Network Rail’s next five-year control period that starts next April, and for which ORR announced funding of £34.7 billion in October ( RAIL 865).
ORR Railway Planning and Performance Director Graham Richards said: “Our new approach puts passengers and other railway users firmly at the centre of concerns while placing strong emphasis on Network Rail working together with its customers to solve problems early.
“Passengers, business and the entire rail industry need Network Rail to deliver a high-quality service. Resolving issues early is important.”
ORR is now consulting railway stakeholders about the form that future NR assessment should take. It is asking for views on its plans to pay particular attention to the targets NR has agreed with its customers, but also monitor the other measures on NR’s scorecards as well as the company’s financial performance and efficiency.
In its 38-page consultation document, ORR says it will monitor NR’s routes and its System Operator function by looking at six areas: NR’s absolute performance against commitments; ORR’s confidence in customers’ and stakeholders’ ability to hold NR to account; NR’s relative performance against its business units; performance trends and trajectories; leading indicators of future performance; and the strength of NR’s governance and assurance arrangements to help manage risk.