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Railhub Archive
2005-01-18 DfT-001
Department for Transport


Financial agreement sets Scotland's railways on track

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Department for Transport

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Department for Transport

Financial agreement sets Scotland's railways on track

18 Jan 2005 00:00
source Department for Transport
type Press release

Scotland's railway will be put on a secure financial footing, Alistair Darling and Jack McConnell announced today.

They published details of the financial agreement that will see around 325 million transferred from the Department for Transport to the Scottish Executive to ensure that Scottish Ministers are able to carry out their new powers under the Railways Bill.

The Railways Bill, once enacted, devolves to the Scottish Ministers powers to determine Scottish railway strategies; to let, monitor and manage the Scotrail franchise; and to specify rail infrastructure needs in Scotland. It will also be able to set fares and fund improvements to the railway. Only some functions - principally safety and the licensing of railway operators - will remain reserved to UK Ministers.

The Bill is currently before the Westminster Parliament and the Scottish Parliament will shortly begin to debate the associated Sewel Motion.

The Secretary of State has agreed to provide the Scottish Executive with sufficient funding to cover all the responsibilities transferred to Scotland's Ministers. It will be approximately 325m - covering administration spend, the costs of operating, maintaining and renewing the network. It contains funding which will enable a range of enhancements to Scotland's railway.

This settlement will also ensure that improvements at Waverley Station can be taken forward.

Part of this figure will be made up of the Regulatory Asset Base for Scotland. This will be determined by the Office of the Rail Regulator. It is estimated that this will be a share close to 10 per cent of the RAB for Great Britain, which is the basis on which the figures have been calculated.

Secretary of State for Transport, Alistair Darling, said:

"As I set out in last year's Rail Review, the Scottish Executive is to be given more power in determining its railway strategies and managing rail franchises. It is clear that the Scottish Executive is best placed to decide what is right for Scotland's railways.

"The significant funding transfer I am announcing today will enable the SE to carry out its new powers effectively and represents the Government's long term investment in and commitment to the railways."

First Minister Jack McConnell said:

"This is the most significant devolution of new powers to Scottish Ministers since 1999. The substantial funding will allow progress on, amongst other things, the first phase of the Waverley redevelopment."

Scottish Transport Minister Nicol Stephen said:

"This is a good deal for Scotland. These new powers and funding will allow our new transport agency to deliver our ambitious programme for improving the rail network. We want to work closely with the rail industry to provide a better deal for passengers."

Notes to Editors

Railways Bill:

1. The Railways Bill and explanatory notes are available via the DfT's web site on Scrutiny of the Bill by Standing Committee in the House of Commons concluded this morning and the Bill is provisionally due to have Report and Third Reading on 27 January. It would then be passed to the Lords for further consideration.

2. The Bill implements all the aspects of the Rail White paper that require legislative change. In relation to Scotland it will enable Scottish Ministers to:

* Specify and fund outputs required from Network Rail in Scotland.

* Publish a Scottish Railway Strategy

* Designate, let, fund and manage Scottish franchises, and publish a Statement of Policy on franchising

* Enforce Scottish franchises in accordance with the Railways Act 1993 procedure

* Set fares, including penalty fares

* Publish a code of practice for disabled passengers

* Appoint a member of the Rail Passengers Council

* Give financial assistance to any person for the purpose of developing Scottish railways - passenger, freight, Network Rail

* Publish guidance on proposals for closures of Scottish railway services/facilities; and make any proposals to ORR for closures of services that the Scottish Ministers fund or that a Scottish operator wishes to withdraw

* Designate, where applicable, new Scottish services as experimental for a trial period of five years

* Approve railway operators' byelaws in respect of services and facilities within Scotland. Approve byelaws for cross-border operators jointly with the Secretary of State.

* Be the Operator of Last Resort if Scottish franchises are withdrawn or end and another franchisee is not appointed

* Be able to apply to the courts for railway administration orders in respect of Scottish franchises

* Have powers to make secondary legislation in Scotland in a number of circumstances where there is a power for the Secretary of State to do so in England and Wales - e.g. Penalty Fares Regulations

3. The Bill confers extensive additional functions on Scottish Ministers to look after railway matters in Scotland, within the structure defined for the railways across Great Britain. Most functions which elsewhere will be for the Secretary of State for Transport will be taken on by Scotland's Ministers. Safety aspects of rail operations will continue to be determined on a common GB basis and economic regulation of the relations between Ministers, Network Rail and the Train Operating Companies will continue to be the responsibility of the Office of the Rail Regulator.

4. In Scotland the changes in the Rail Bill affect the executive powers of the Scottish Ministers. Responsibility for primary legislation dealing with the management and operation of Railways remains reserved to the Westminster Parliament.


5. The 'Regulatory Asset Base' (RAB) is the Office of Rail Regulation's calculation of the value of Network Rail's assets. When establishing NR's income at Access Charge Reviews, ORR include an allowance for a return on the RAB to cover NR's cost of capital and also an allowance for the 'amortisation', or depreciation, of the RAB.

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Railhub Archive ::: 2005-01-18 DfT-001


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