Select Committee on Transport Written Evidence

Supplementary memorandum by Alan Osborne Esq (FOR 124A)


  Thank you very much for the opportunity afforded to me yesterday to give evidence to the Transport Committee last week. I was also very grateful for your forbearance, as appearing in front of and being critical of ones ex-employer in the full gaze of the media was a little surreal! You also gave me the opportunity of writing to you if I thought of further inputs in relation to the questions put to me and I should like to offer the further following points/points of clarification:

  1.  HMRI have many priorities relating to Cullen but they constantly get distracted by HSE "major hazard initiatives", central specialist reviews and central change management initiatives, many of which end up with nothing to show for the effort put in. HSE has a particularly dismal record relating to change management with several failed initiatives. This has made staff very cynical about them. I was asked by the Transport Committee to back up my concerns by raising some specific worries. The increasing "one size fits all" approach being adopted by HSE is crowding out important Cullen related work such as: not having a system for closing out recommendations made by HMRI, not having a regulatory strategy for the management of contractors (despite a commitment to ministers), no regulatory strategy for level crossings, inadequate guidance for inspectors (resulting in inconsistency), no strategy for rolling stock failures and poor data capture systems, not being able to attract people from the industry due to unattractive salaries (due to the need for consistency across HSE pay bands) and poor reputation. If HMRI is given some freedom they are more than capable of addressing these problems.

  2.  I am unsure if the Committee has the power to request internal reports from the HSE but if it can there are two reports that I feel would help the committee with its deliberations about the HSE and its regulatory function for the railways. They are: The final Rail Stakeholder Research Report carried out by an outside consultancy called BSG (Business Strategy Group) and a report prepared by HSE's Business Efficiency Unit called "A Report on the DRP/HMRI Interface" by Carter and Marlow. Given there could be suspicion about me being a bitter ex-employee, I think a review of these reports would enable the committee to see at first hand some of the issues. I believe the committee will find these reports corroborate my concerns. I take this opportunity though to stress that my only motivation is about getting the right structure for our railway industry—it is in no way to get back at the HSE. Yes I experienced difficulties but there are many excellent people at the HSE and the organisation has a number of strengths with many achievements to its credit over the last 30 years. I wished I had remembered to say this to the Committee yesterday.

  3.  There were questions at the Transport Committee about why I hadn't checked out HSE more thoroughly before I joined them. I think the key test is if I knew then what I know now would I still join them? My answer is an unequivocal "yes". I have managed to move HSE along and I have gained a lot of respect within the Railway Inspectorate and the industry for what I started. If I had been given the authority to do the job, by setting me demanding targets and giving me some freedom to deliver them I would have succeeded. HSE were well aware from my interview that this was the way I liked to work. But I went into the job with my eyes open. If I did underestimate anything, it was probably that the Cullen Report was not the passport for change that I thought it would be. I was told at the interview and after joining that I needed to become Mr Railway Safety in the same way Tom Windsor is Mr Railway Economics and Richard Bowker is Mr Railway Strategy but the role just didn't develop this way. I had to battle to be in the lead on such things as meetings with the SoS for Transport, meetings with the Permanent Secretary plus a range of meetings with the industry attended by the Director General and the policy team. I nearly didn't appear before the Transport Committee when you asked to receive evidence from the HSE on the Chancery Lane Tube derailment last year as my boss (Deputy Director General—Operations) felt he should do it. I have had letters sent by policy to senior officials at DfT with my name on them that I had not even seen. I have had papers put to the Health and Safety Commission that I did not sign off. I have had policy people turning up uninvited to meetings I have instituted with stakeholders (just to ensure their area is protected). The most serious underlying cause though is that policy and ops do not have a shared agenda and this has been very evident at external meetings. Policy see their role as reviewing/producing legislation and operations enforce the existing legislation and my plan was to combine these into an integrated process in order to drive out mistrust and develop a team. Good policy development must have operational feedback at every step but this just didn't happen (this is a feature in the reports I have suggested you request). This is why we have some very poor safety regulations in the railway industry (for example the Railways and Other Transport Systems regulations). But knowing what I know now I would still have taken the job on, because I think I have made, and in a strange way, continue to make, a difference.

  4.  It is difficult for me to keep up with the detail of what is going on within HSE after 3 months absence. I did notice though from the HSE evidence to the Transport Committee that they are continuing with the Rail Delivery Programme and that the number of staff in policy seems to have reduced from over 50 to "around 40". I was also told after the committee meeting (by industry representatives), that due to my efforts, HSE was being less arrogant and trying to be more helpful in their approach. So why change I hear you ask? It is a good question given the backdrop also of improving safety performance on the railways. The answer is because more of the same will not get costs under control. The railways have suffered from decades of under-investment and it is imperative that the money is now spent wisely. My judgment is that HSE are not attitudinally or institutionally attuned to be able to get in amongst these cost issues. A fresh start with the new ORR will give it a good chance of success. The Committee was also impatient for examples of where HSE has caused costs to increase. I do think it is incumbent upon the industry to provide this information but I do know it is very difficult to answer because of the subtle nature of HSE's approach and power. Take RIMINI for example—this was put forward by the industry but only in response to HSE saying the number of staff fatalities was too high and action needed to be taken. Railtrack and Railway Safety came up with a new procedure and system that minimized track workers exposure to moving trains called RIMINI. RIMINI has certainly increased the cost of maintenance and renewals because it has made access to the track more restricted but there have also been many advantages of RIMINI by putting maintenance work on to a more planned basis. For the record I think the industry just needs to grit its teeth now and make RIMINI a success. HSE can with a clear conscience report that they did not ask for RIMINI, the industry decided to do it but of course HSE was the root cause. There are many more examples of this subtle process at work but what it all goes back to is a need for the railway safety regulator to take some responsibility for the economic viability of the industry—otherwise the industry will close down due to cost and passengers will be exposed to greater risk on the roads. So a focus by the HSE on its core job of worker health and safety could result in a more expensive railway causing it to not be economically viable leading to closures leading to fewer worker fatalities but more transport fatalities on the roads (which conveniently are not regulated by HSE. So whilst this would be bad for the nation, the HSE will pat itself on the back for achieving its targets! This is stretching the point I think but it does illustrate the potential pitfalls of the current approach. I mentioned the Potters Bar points redesign at the Committee. This is a good example of how railways being grouped with major hazards (eg nuclear) can increase cost. All the information so far suggests that the points involved in the Potters Bar derailment are, if properly maintained, fit for purpose. These points are currently used right across Europe. Yes they can be improved but this should only be done when there are opportunities to do so. Had Network Rail designed and installed new points across the network it would have cost many millions of pounds. No doubt HSE would have been celebrating had Network Rail gone ahead and implemented their recommendation but in risk management terms it could not be justified (particularly when you consider the risks associated with replacing points—remember the derailment at King's Cross last year) and the disruption to the network would be considerable. A regulator who understood the operations and challenges of a railway would not have gone down this route.

  5.  I mentioned Corporate Governance a number of times at the committee yesterday. A key component of Corporate Governance is the Turnbull Report (published in 1999). Government has committed its departments to the implementation of the Turnbull Report. It essentially requires a board "to be responsible for an organisation's system of internal control and seek regular assurance that will enable it to satisfy itself that the system is functioning effectively". I was quite concerned about how this worked within HSE when I first joined and I asked the Finance Director about it. I was told that governance is not the responsibility of the board! I asked why the board did not see copies of audit reports. I was told the Audit Committee dealt with those. I asked why the board did not see copies of the minutes of the Audit Committee—again I was told that governance was not the responsibility of the board! The new ORR is being set up in accord with the Better Regulation Task Force that amongst other things means that the board is properly constituted with a non-executive chairman and non-executive directors to hold the executives to account. This, together with effective risk based internal controls, is essential for good and balanced decision-making. I was really very concerned about the situation at HSE and said so. It was only when I tried to make the voice of railways heard at the HSE board that I really realised how difficult things were going to be. Other board members had the same problems also. The committee may have seen by now the latest copy of Rail Magazine—apparently my resignation was not even mentioned in the board minutes (nor my successor welcomed I hasten to add)!

  6. I did not get the chance to mention Europe at the Committee. I simply make the point that with several UK rail organisations dabbling in Europe we may not be being effective in negotiating a good position for the UK. Nearly all the compartments in rail have people doing things on the Europe scene and these need better coordination if we are to avoid storing up costs for the future.

  HSE have owned HMRI for over 13 years now. They have had a spate of major accidents on their watch. Lord Cullen was very critical of HSE but he thought they had the capacity to improve and he built in a safeguard of an external person. I was that person and I lived within for eleven and a half months. I tried my hardest to sort things but I could not. A fresh start is now what is needed. The problems have been defined in the stakeholder research and it must now be implemented.

  This letter is already overly long so I will stop at this point. I thank you again for considering my views and I wish you and your committee every success with your crucial report. If I can be of any further assistance in any way I would be only too delighted to help.

Alan Osborne

8 January 2004

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