Memorandum by Alan Osborne Esq (FOR 124)
THE FUTURE OF THE RAILWAYS
1. I have been creating frameworks and systems
to improve health and safety for over 20 years. I graduated with
a degree in Health and Safety Engineering in 1982, and spent my
early years working in safety management roles in the chemical
industry (Bayer, Burmah Oil and BOC). Fifteen years of my career
have been at director level within the transport industry.
2. I was Safety and Quality Director for
London Underground Ltd (seven years) and Director of Safety and
Risk Management for the British Airports Authority (eight years).
Following Lord Cullen's criticisms of the Health and Safety Executive
(HSE) he recommended that the HSE should create a new post and
appoint "a person of outstanding managerial ability"
with the objective of injecting "new imagination and energy".
I joined the HSE as its Director of Rail Safety in November 2002.
I resigned the following October after 11½ difficult months
in the job. I am a fellow of the Institution of Occupational Safety
and Health and a fellow of the Institute of Quality Assurance.
3. The focus of my evidence to the Transport
Committee is safety regulation. My experiences have, though, brought
me to a fundamental belief that safety, quality and efficiency
are inextricably linked and that actions which bring about high
performance levels are often the same. Fundamentally, a failure
to clarify and align responsibilities, accountabilities and authority
will make even mediocre safety, quality and efficiency performance
4. There is little doubt that privatisation
caused the rail industry to fragment. Various mechanisms have
been introduced to maintain cohesion between the resulting organisational
entities. Specific safety mechanisms have included the introduction
of a safety case regime, new audit processes, the Railway Group
Safety Plan, Railway Group Standards, the creation of RSSB and
the creation of the Strategic Rail Authority's safety development
department etc. These are manifestations of an industry which
has tried (and continues to try) extremely hard to work in a joined
up and co-operative way.
5. Good work is in progress by a number
of the organisational entities (which I shall call compartments
from now on) within the industry but the key question remains
whether the fundamentals are yet right to achieve the high levels
of safety, quality and efficiency performance we all seek. The
underlying concern is that our railways are rather crowded with
separate compartments bringing the attendant risk that responsibilities,
accountabilities and authorities are not clear and do not align.
This can have an adverse impact on the flow of safety critical
information to enable effective decision-making and has been a
feature of a number of the recent serious rail accidents. There
is little doubt though that recent decisions by Network Rail to
reduce the number of organisational interfaces will improve the
situation, provided the transition is managed effectively.
6. What of the other compartments relating
to the industry though, particularly those with regulatory roles?
It is equally important that responsibilities, accountabilities
and authority align across the range of Government departments
and I am not sure that they do. Who does what and why is not clear.
A further complication is that when trying to resolve an industry-wide
problem it is not uncommon to have over 30 people at the meetings
representing the different industry compartments. This slows down
analysing and solving problems and can lead to poor decisions.
7. The Health and Safety at Work etc Act
1974 is potentially very flexible because it contains the test
of "reasonable practicability". In essence, this allows
a broad trade-off between risk and cost. If cost is grossly disproportionate
to the residual risk then the dutyholder would not be expected
to incur such a cost. The courts have the final say on this however.
There are uncertainties though in the way the test is applied
(by both the industry and its regulators) to a railway system.
It can be interpreted inconsistently and whilst it has been successfully
used for the safety of workers for many years, it has been more
problematic for broader aspects of society risk and specifically
for the safety of the traveling public. Whilst there are many
influences, this is a probable root cause of "gold-plating"
of standards development and implementation. It causes railway
managers and staff to try to make absolutely certain that the
test has been met at every step in a project and this adds to
cost and can be of dubious safety benefit ("better to not
meet cost and programme targets than risk going to jail").
The effective management of risk must be our goalnot to
attempt its total elimination.
8. It must be said that ineffective project
management and cost control mechanisms from the Railtrack era
have also played a significant part in escalating project and
operating costs. The extensive use of consultants (many of whom
are also unsure about how to apply the test of reasonable practicability
and associated cost benefit analysis tools) and a growth in central
overheads has also added to costs. To some extent though this
has been caused by a lack of confidence by railway management
and so the circularity continues. Network Rail are tackling some
of these issues but they also need joined-up help from the regulators
to address the root cause.
9. Overlay on top of these difficulties,
a climate of fear from prosecutions, enforcement action and manslaughter
charges and it is not hard to see how a risk-averse culture would
be the resultant. There has to be a concerted effort by Government
to address this issue on our railways. Drawing parallels with
the aviation industry is interesting at this point. Safety is
an inherent and integrated part of the aviation industry but it
is not generally risk averse. Of course tensions exist across
the various organisational compartments within the aviation industry
but responsibilities, accountabilities and authority are carefully
defined. Interestingly, enforcement action is rare and working
together is more of a feature of the aviation regulatory scene.
As a result tensions are more manageable, more constructive and
more risk-based than we seem to enjoy on our railways. A key difference
between rail and aviation is that aviation has its own safety
regulatory framework based not on a framework primarily aimed
at workforce safety (which I am not saying is unimportant) but
focused on the specific and broad range of risks of the aviation
10. The Health and Safety at Work Act has
some important concepts to build upon and it has served the safety
of workers well over the last 30 years. I am though now of the
view that over time, specific legislation for railways would be
beneficial to the improvement of safety, quality and efficiency
and the cost-effective management of the risks. I am also of the
view that it is time to review the whole Health and Safety System
again, as a performance plateau seems to have been reached. Indeed
an important objective must be to reduce the quantity of legislation
and to simplify it wherever possible (I am however aware that
this is outside of the remit of the Transport Committee). Specifically
for railways, it is more important for the rail industry to benchmark
against other transport modes (across the world) than to have
a regulatory framework that is compatible with the nuclear and
chemical industries (more about this later). There is also much
to learn from the aviation and marine regulatory frameworks and
the way regulatory action works within these modes.
11. Rail passengers must be afforded the
protection of an independent guardian for safety and economy (as
air passengers are). Whilst self-regulation has an important part
to play, safety and economy must be independently regulated if
they are to enjoy the trust of the traveling public. The key difference
for rail passengers now is that the economic regulator (currently
the Office of the Rail Regulator) is one government department
and the safety regulator is a small part of another (the HSE).
HSE's rail activities are then further spread across the HSE.
A further aspect is that the HSE is primarily focused on the health
and safety of workers and its forward strategy will move it even
further in this direction with an enhanced focus on improving
12. As confirmed by recent stakeholder research
(carried out by HSE), the HSE has not enjoyed much success since
it acquired the Railway Inspectorate in 1990. Even after 13 years
of ownership, railway stakeholders only rated it at 4.7 out of
a possible 10 for its efforts. The detail of the research shows
how the HSE does not carry the trust and respect of its rail stakeholders
and there is confusion about its approach ("no clear understanding
of HSE Rail organisation even from those who deal with it on a
regular basis; Even those with a vague idea of an inspectorate
and policy division are unclear of its functions and roles; HSE
rail staff have little operational knowledge of the railways;
HSE should be acting in the public interestit is not perceived
to be doing so; Many fear that HSE's approach is driven by the
development of rules and that one more regulation would solve
13. It has also had a series of major rail
accidents on its watch and it was severely criticised by Lord
Cullen. Cullen considered it to be most important that HSE's leadership
of its railway work be improved and recommended the creation of
the post from which I recently resigned. The job design suffers
from the same ailments as the industry in terms of a lack of clear
responsibilities, accountabilities and authority across HSE Rail.
14. It is not clear who at the HSE Board
carries responsibility, accountability and authority for rail
matters and it could be any one or a mixture of six board members.
Added to this the board does not have the normal governance arrangements
of a board. This results in the board being compelled to agree
things that the three strong "executive" have brought
to the board. The minutes of board meetings do not record differing
points of view and important issues bypass the board completely
and go straight to the Health and Safety Commission. Some things,
having been approved by the board, are later changed by the Commission,
causing significant tensions. Board members do not get to see
(let alone discuss) important work carried out by so-called board
sub-committees on things like the HSE business risks, financial
statements, the work of the audit committee, HSE's vision, mission
and strategy etc. In summary there is a lack of clarity and corporate
15. The board only seems to exist to dissipate
responsibility of "the executive" for difficult/controversial
issuesthe entire board process and the governance of the
HSE requires a fundamental review. The board's openness and governance
arrangements were challenged in an audit by The Constitution Unit
in December 2002 but very little has been done to implement the
recommendations to date ("we noted the reduction in board
papers made available from early 2001. We understand this reflects
a change in policy, under which fewer decisions supported by such
papers, are taken by the board . . . has HSE become less open?
Some stakeholders were sceptical about HSE's claim to be an open
organisation, and sometimes this scepticism was combined with
a degree of mistrust"). This report makes interesting
reading and was the subject of a somewhat rose-tinted HSE press
release on 12 December 2002.
16. On the broader workings of the board,
a fellow board member summed the situation up at a board awayday
when he said he felt like a second-class member of the board.
On top of this unhealthy climate, the board's general demeanor
towards the rail industry is extremely negative and this tends
to affect its attitude towards its own rail functions. This is
felt by the staff in these functions and seriously affects morale.
17. HSE has, over a period of time, seriously
diluted the railway experience within HMRI to a point of almost
extinction (compare this to the Civil Aviation Authority). It
is the only transport mode for which it regulates the safety of
the traveling public and it is therefore not particularly logical
for it to regulate railway safety. Views expressed to me when
I first joined HSE were that railways take up too much time compared
with the their core business of regulating the health and safety
of workers (hence HSC/E's new strategy).
18. Key targets are due to be met in 2004
for the Revitalising Health and Safety initiative (launched by
HSE in June 2000 for all industry sectors). Early evidence suggests
that the key targets will not be met and performance will in fact
be worse than before June 2000. Coupled with HSE's significant
funding challenges and a comprehensive employee attitude survey
this year, this will put HSC/E under further considerable pressure.
My concern is that this could further distort/distract the work
19. There are two arguments I have heard
advanced by the HSE in favour of it keeping its role for railway
safety regulationthat a new regulator would not have such
easy access to its specialists (human factors, safety case methods,
risk assessment skills etc) and that the industry might "capture"
its regulator if it was removed from HSE. The first argument is
I believe easy to resolve through a trading agreement of some
kind. The second argument can be addressed by placing the regulatory
role with another regulatorthe newly constituted Office
of Rail Regulation (being created as a result of the Railways
and Transport Act which received Royal Assent in July 2003) for
20. Such a move is consistent with continuing
to reduce the number of compartments within the industry (indeed
there are several compartments within HSE which have rail responsibilities)
and it moves the industry closer to the aviation model as represented
by the Civil Aviation Authority (which has ownership of the safety
and economic regulatory roles). The majority view from HSE's stakeholder
research is "that the railways safety regulator should
not remain part of the HSC/E". In the same research,
stakeholders "recognised that there are some good people
within the HSE and that new incumbents were making a difference
but the fear was that these people, no matter how well intentioned
would not be able to impact on the total culture of HSC/E".
A further compelling argument though is that the safety regulator
would be bound by the ORR's duty to have regard for the economic
viability of the industry (which is not a duty which HSE has other
than through the concept of "reasonably practicable").
The move would give the safety regulator a fresh beginning with
proper corporate governance mechanisms to ensure appropriate checks
and balances in its decision-making.
21. The trend towards reducing the number
of organisational interfaces and compartments is helpful to the
achievement of a shared vision, greater focus and high performance.
I believe that further opportunities could be explored, based
on a careful review (perhaps by the independent National Audit
Office), of how responsibility, accountability and authority are
currently dispersed within the industry.
22. Furthermore, I believe that over time
the railways would benefit from a dedicated safety regulatory
framework (which would in any case need to reflect emerging EU
structures and rules) to ensure the industry's (and its customers')
specific needs and risks are addressed.
23. A useful first step could be taken by
transferring HSE's rail safety functions to the newly constituted
Office of Rail Regulation with safety regulation included within
its purpose, role and function.