Select Committee on Welsh Affairs Minutes of Evidence

Examination of Witnesses (Questions 260 - 276)



  260. That is not a real answer you are giving us.
  (Mr Coulshed) I accept it is a general answer. Part of the franchise process is designed to generate passenger benefits, indeed part of the Secretary of State's policy statement in July was precisely to focus the SRA more on obtaining passenger benefits in the short as well as in the long term from franchise propositions invited. In a way it is very difficult to be specific about the Wales and Borders franchise or any other one at this stage. The SRA have told us that they believe that this reshaping of the franchise map will deliver passenger benefits and we said, "fine, go away and do it".

Chris Ruane

  261. Forgive me for being very, very late Chairman, I was on the International Development Committee. Forgive me if my question has been touched upon before, my understanding is that over the next 10 years £60 billion will be spent on the rail part of transport. Using the Barnett formula £3 billion should be coming to Wales, but it has never been stated that we will be getting that. How can franchises be drawn up, how can bids be accepted if the bidders do not know how much investment is going to be put into those railways over the next 10 years?
  (Mr Coulshed) I think there are two separate parts to that question, one about Barnett, which I will come back to, and one about how bidders know. I think that second part is a very good question and it is part of the reason behind the Secretary of State's franchising policy statement, that the process the SRA had started was so open-ended it was very difficult for bidders to make a very clear judgment of what it was they were being invited to do. The Secretary of State whould ask the SRA in future franchising processes to be a bit more specific to help the bidders shape their proposals with an eye to the budget available. So far as Barnett is concerned I do not want to be particularly controversial, especially in an area I am not a great expert in. I do not think Barnett does necessarily apply to the allocation of railway funds within the 10 year plan. The SRA has been asked to go away and draw up a strategic plan which delivers the primary output, the 10 year plan that sets out what the government wants to achieve. That is something which the SRA will have to look at on GB as a whole. No doubt there will be issues all round the country, England and Wales, and to some extent Scotland for this purpose, about whether the SRA in determining its priorities for its investment plan is being equally fair to every part of great Britain. The task it was given was quite clear, it was to deliver the output required by the 10 year plan, that was the primary objective, and it was not about to split its budget into particular regional components.

  262. In Wales we do not know if we are going to get a good deal, a bad deal or a poor deal?
  (Mr Coulshed) I guess from your point of view no, you do not.

  263. When will we know?
  (Mr Coulshed) The SRAs Strategic Plan when it comes will set out its view on the priorities for investment that will deliver the output that the 10 year plan asked for and that should be in the next few weeks.

  264. Is this going to be a case of much gets more, in other words London and the southeast once again are going to get that infrastructure on the top of the Channel Tunnel, on top of the Jubilee Line, on top of the investment in the past 10 years and Wales is going to be left on the fringes?
  (Mr Coulshed) I do not think I ought to anticipate what the SRA may say in the strategic plan.

Mr Prisk

  265. In the draft Directive, the guidance for the Strategic Rail Authority it does say "all bidders must be made aware of the criteria on which their bids are assessed", whilst I appreciate it is the responsibility of the SRA are you satisfied that the department that achieved?
  (Mr Coulshed) I think the reason why it is in the directions and guidance was that the bidders for some of the early franchise bids came back and said it had been difficult to get to this answer, in the end they had not got there but the process had been made complicated by the very open nature of the SRAs process. We have not really reached an equivalent point with any franchises since the Secretary of State's franchising policy statement and the draft directions and guidance which were issued in June, we do not really have anything concrete to look at from the SRA to look at and say, "yes, that is fine", we will do when the next franchise comes up, which might be Wales and Borders, and there are one or two others.

  266. The SRA say that the criteria was to select bids as set out in the instructions to the bidders, it is a Great Britain wide document. How are local criteria to be taken into account in the franchising process?
  (Mr Coulshed) I think what the SRA were referring to was the process by which initial expressions of interest are reduced to a range of bidders invited to submit initial proposals. What they were looking at there fundamentally was credit and credibility, I think there is something in their written evidence explaining that as far as Wales and the borders was concerned, all of the initial expressions of interest they had were from reputable companies who had been engaged in the franchising process on some occasion before. If it had not been somebody of that kind clearly their background capability would have to be looked into further. When it comes to the local input what the SRA is engaged in, at that stage is just basically basic capability of the company, nothing do with what they are proposing. The next stage, when they invite proposals from the long list, if you like, is the point at which they would expect the proposers to come forward with ideas on the back of or on the basis of consultations that they would have held, discussions they would have had with local and actual and potential users, local authorities and the like. This is one of the areas where I think the SRA may want to say a little bit more for the guidance of bidders in future. At each stage, the qualification stage, the long listing stage, then when the SRA is considering proposals from short listed bidders it will be looking for evidence from them that they are properly taking account of the wishes of local stakeholders, local authorities, and people who might want to use the railway line.

  267. Like the National Assembly?
  (Mr Coulshed) Your question was expressed in local terms, of course they would expect the bidders to have regard to whatever the National Assembly said as well.

  268. If I can come back to the original question, what do you have against the National Assembly actually nominating a board member for the SRA?
  (Mr Coulshed) I am not sure there is anything much I can add to the answer I gave previously. Ministers considered this issue at the time, they took the view that it was not appropriate for a person to be appointed by the National Assembly as a sort of representative for Wales, this is a national body which is responsible for railway strategy for the whole of GB. Ministers are looking for members of the body to have expertise in a number of different areas, but that does not mean they are representatives and they did not think it was appropriate for a representative to be appointed by somebody else.

  269. Can I ask you, maybe, a personal question, as head of the division within the department you have an input and you sometimes, often I would imagine, advise ministers and secretaries of state, whether it is taken on board is another matter. What is your view about the question of that?
  (Mr Coulshed) You are putting me in a really difficult spot here because the advice we give to ministers is confidential. I think I must appeal to the Chairman for protection on this point.

  Chairman: If you wish to keep mum on that issue.

  Chris Ruane: We will not tell anybody.

  Chairman: That was the closest I have ever seen to that particular protocol being breached.

Adam Price

  270. If I can take you back to Martin's earlier question about the successor body Railtrack, it is a point of information really, you refer to the team within the department that is drawing up the not-for-profit company based proposal, am I right in thinking that at least two private sector companies or groups have already expressed a possible potential interest in bidding for the successor?
  (Mr Coulshed) I know no more than you have read in the papers actually.

  271. A possibility. There may be alternative bids.
  (Mr Coulshed) There is certainly a possibility.

  272. Does the department have in place a system for manning any potential conflict of interest then as the department that is developing the proposal and the department that ultimately has ministerial responsibility for choosing the successful business?
  (Mr Coulshed) I am going to have to ask my colleagues to write to you on this. I do not know enough to give you a detailed answer, I am sorry[5].


  273. If I can move on to what I hope is going to be our last question. Thank you for being so brief and succinct in your answers in your memorandum. We asked about Objective 1 funding on transport issues. I understand there was a problem in your reply, there was a mistake[6].
  (Ms Phillips) There is. I have to apologise to the Committee, we muddled up Objective 1 and Objective 2, we misunderstood your question on moving assets, apart from that we got it right. I have to say I really do apologise, this was a complete oversight on our part. If I can ask Garry White to tell you what the correct answer should have been to the first two questions, 15(a) and 15(b), that will then help you with any supplementaries you might have.
  (Mr White) Yes. The correct answer to 15(a) should have been the government's view is that provided a project meets some of the aims, objectives and needs identified in the programme and agreed by the European Commission it may be supported. Objective 1 funding is being sought for tram schemes in Merseyside and South Yorkshire, under the current English Objective 1 programmes. These are likely to support the provision of infrastructure rather than mobile assets. In response to 15(b), have Objective 1 funds been used previously in this way? The Merseyside Objective 1 programme during 1994 to 1999 used the structural funds towards the cost of infrastructure projects related to transport communication and they involved the provision of bus, rail station facilities, bus lanes and the infrastructure in airports and docks, they have not involved provision of mobile assets.

  274. I think you cleared up the question that we wanted to ask you.

  (Ms Phillips) We are terribly sorry about that misunderstanding.

Mr Caton

  275. Have we cleared it up, you said that they did not in the past, do you think it is possible under this Objective 1 round?
  (Mr White) If it is featured in the agreed programme and agreed with the European Commission, I apologise I am not familiar with the Welsh Objective 1 programme, if it is agreed that mobile assets such as bus and trams can be supported then that is a possibility. It is not ineligible. I should, perhaps, add that the Commission have certainly instigated a move away from infrastructure projects to more business support measures.


  276. We will be talking to the Commission, it is really a question for them from what you say.
  (Mr White) Yes.

  Chairman: Unless there is anything else? Thank you very much for your patience and your answers.

5   See page 61. Back

6   See note on page 60 for complete answer to question. Back

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