Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

Supplementary memorandum by the Department for Transport, Local Government and the Regions (PRF 35C)


  I refer to the letter of 21 November, in which the Committee requested a copy of the Department's notes of the meeting between the Secretary of State and Railtrack's Chairman, Mr John Robinson, which took place on 25 July 2001.

  The minutes of the meeting are attached, together with a supplementary note which explains that the Department has decided, exceptionally, given the Secretary of State's wish to be helpful to the Committee, to make the notes available.

  The Department is releasing the minutes more generally at the same time as making it available to the Committee.


  The following record was originally classified (Restricted—Policy) and not disclosable under the Code of Practice on Access to Government Information. Given the Secretary of State's discussion with the Select Committee, and without prejudice to its position under the Code, the Department has decided exceptionally to make it available to the Committee, as it requested by 27 November, and is at the same time releasing the minute and this supplementary note.

  Mr Robinson spoke frankly and explicitly in confidence at the meeting. The record took this into account and its circulation was strictly limited accordingly. Against this background, the note of the meeting was circulated by the Secretary of State's Private Office on 30 July. As with all minutes produced by the Secretary of State's Private Office, it was not intended to be a verbatim record but to provide a concise note of the main points of the discussion and of the points requiring further action.

  Paragraph 6 of the note recorded that John Robinson said that he was working on a number of proposals relating to the company's short term and longer term finances which it would be helpful to discuss with the Government. The Secretary of State suggested that Mr Rowlands, the Director General in the Department responsible for railways, to whom the meeting note was addressed, should discuss the proposals with Railtrack's advisers, CSFB.

  This was a highly abbreviated account of what took place. Mr Robinson said that he considered the contents of this part of the discussion to be highly sensitive and would rather a record was not made of his comments. Given Mr Robinson's concerns, the Secretary of State agreed that this part of the meeting would not be minuted and that his private secretary would cease taking notes. These instructions were followed. (Another part of the discussion, on a Board-level change at Railtrack involving the departure of Mr Jonson Cox, was similarly recorded only in general terms, again at Mr Robinson's specific request).

  Based on the recollection of all those present on the Government side, the Secretary of State provided details of that part of the meeting which was not minuted in his Statement to the House of Commons on 15 October at column 954 and in his appearance before the Select Committee on 14 November (Questions 844-850 refer). The key points were that:

    —  Railtrack's financial situation was more serious than John Robinson had previously thought.

    —  Mr Robinson spoke about needing a soft letter of comfort from the Government before being able to access existing banking facilities.

    —  It was agreed that there should be discussions between officials and Railtrack's advisers.

    —  If Railtrack were unable to access their existing banking facilities through a soft letter of comfort from the Government or receive extra financial assistance from Government, it was clear that on 8 November, when Railtrack was due to give its interim results, it would be unable to make a going concern statement.


  1.  You were present on 25 July when the Secretary of State and John Spellar met with John Robinson, Chairman of Railtrack. Richard Mottram, Dan Corry and I were also present.

  2.  John Robinson said the Railtrack AGM had passed off as well as could be expected. He had had a positive meeting with the Safety on Trains Action Group and hoped a more constructive relationship could be maintained in future.

  3.  John Robinson said he was continuing to review Railtrack's management and finances. It would take another year to return to pre-Hatfield performance levels and probably three years to get performance to a level the company could be proud of. Turning things round was not a question of more investment, but rather running the company properly.

  4.  John Robinson outlined a number of steps he was taking to address Railtrack's current problems:

    —  He was trying to build a better working relationship with the Rail Regulator.

    —  He had appointed CSFB as advisors on the company's finance and structure.

    —  He was taking personal control of the West Coast Main Line upgrade.

    —  He would be making a number of changes at board level.

  5.  In all of this his aim was to focus on the key things Railtrack needed to do to run a safe, reliable railway, in particular cataloguing and managing the company's assets properly and having a robust maintenance programme.

  6.  John Robinson said he was working on a number of proposals relating to the company's short term and longer term finances which it would be helpful to discuss with Government. The Secretary of State suggested that you should discuss these proposals with CSFB.

  7.  John Robinson said that, while in the short term relations with the Regulator were improving, the current regulatory framework placed great burdens on Railtrack. He favoured a regulatory regime focused on two or three key areas (eg safety, punctuality and reliability), which would be a more realistic environment for the company's operations.

  8.  John Robinson said Alastair Morton's recent comments about Railtrack's ability to raise money in the markets had been unhelpful. The Secretary of State said he would be stressing to the Rail Delivery Group the need for all players in the industry to show discipline in their public comments.

  9.  The Secretary of State expressed concern at the high number of temporary speed restrictions on the network. John Robinson said this was not just a Railtrack problem—it was contractors who imposed the speed restrictions. You noted that the industry's risk aversion was in part due to ongoing speculation about managers being prosecuted over Hatfield.

  10.  John Robinson said he was not attracted to more radical models or reorganisation—such as giving TOCs control over track and signalling. This would lead to two more years of disruption. The Secretary of State stressed that there were many people who expected to see tangible results in return for the large public resources being put into rail; if the position did not improve quickly it was inevitable there would be calls for alternative structural arrangements to be considered.

David Hill

Private Secretary

30 July 2001

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