Network Rail to become public sector body in 2014

[whole diary]

[Electric train]

Well its official NR^» (Network Rail - home page) is now part of the National debt

http://www.railnews.co.uk/news/2013/12/17-network-rail-is-nationalised-by.html

NETWORK RAIL will become a public sector body during the coming year, following a reclassification of the company's status by the Office for National Statistics. The present company was set up in late 2001 to take over from Railtrack, but although NR had no shareholders it was said to be in the private sector.

The change in its status will place its current debt of some ^30 billion into the public accounts for the first time. Network Rail said the change was a largely technical matter and would not affect its governance, structure or investment plans.

[JayMac]

But will certainly effect how it is seen by politicians. Especially those of a blue hue.

Re-privatisation anyone? At least for some of the juicy bits like the property portfolio. Selling off stations would raise a few bob for HM Treasury.

Buy four London stations and you get to double the rent. Oh, hang on. That's Monopoly^. Wouldn't happen in the real world would it? 

[SDS]

I wonder therefore if Freedom of Information would now apply to it.

NeR battled very hard in the past to not become FoI applicable and took it all the way to the Information Appeal Tribunal.

[paul7575]

I wonder therefore if Freedom of Information would now apply to it. 

They might even let us view their web cams...   

Paul

[ChrisB]

And be subject to austerity measures now?

[trainer]

It seems to be a form of re-nationalisation by stealth. 

[ChrisB]

Not sure about that - I think the National Audit Office has imposed this on HMG

[bradshaw]

Office for National Statistics released this document online yesterday:-
Classification of Network Rail under European System of Accounts 2010
It is available as a pdf download and runs to 9 pages.

http://www.ons.gov.uk/ons/dcp171766_345415.pdf

Effectively it rules that, because Network Rail debt is guaranteed by  the Government, the latter is exposed to the risk and therefore NR^» (Network Rail - home page) is under Government control.

There follows a "New Market Test" which concludes that NR is not a "market body" and is a central Government controlled body and is subject to the new EU^» (European Union - about) rules. This mean that the NR debt has to be added to the National debt.

[stebbo]

As I understand it this is designed to stop the nonsense perpetrated by Governments of all persuasions over the last decades of setting up "autonomous" bodies like Network Rail/Railtrack and PPI schemes for hospitals so as ostensibly to get the debts of these bodies off the Government balance sheet. Complete nonsense all round.

[stuving]

As I remember it, when NR^» (Network Rail - home page) was created there was some dispute about its status, and the decision was pretty close. While the published record doesn't show it, I suspect that by ONS^» (Office for National Statistics - website)'s own tests it was always in the public sector, and they had to be bullied quite hard to accept the (then) government's idea that it was not.

Now at the time it was not 100% clear how NR would operate, and it might have had a reasonable degree of autonomy. However, over the ten years since then DfT^» (Department for Transport - about) has dictated all the financial decisions. So now, with the supporting argument of a common EU^» (European Union - about) definition, the ONS have overturned that original decision (the change is backdated).

What's rather odd is that a technical change in the ONS's statistics should lead to a change in the way NR is managed.

[ellendune]

As I understand it this is designed to stop the nonsense perpetrated by Governments of all persuasions over the last decades of setting up "autonomous" bodies like Network Rail/Railtrack and PPI schemes for hospitals so as ostensibly to get the debts of these bodies off the Government balance sheet. Complete nonsense all round.

I didn't think there was any doubt about Railtrack's status - or it wouldn't have gone bust!

[stuving]

I didn't think there was any doubt about Railtrack's status - or it wouldn't have gone bust!

There is for some of the shareholders, who are still claiming they was robbed as Railtrack was not really independent of government.

Small shareholders of Eurotunnel, who are mostly French, think much the same. In that case it was not a bankruptcy, but the debt reconstructions diluted their shares' value by more than, for example, Greek bonds.

[stebbo]

Or was the legal position with Railtrack not sufficiently examined?

[ellendune]

Or was the legal position with Railtrack not sufficiently examined?

I thought it was tested in court and found against them.

[Rhydgaled]

As I understand it this is designed to stop the nonsense perpetrated by Governments of all persuasions over the last decades of setting up "autonomous" bodies like Network Rail/Railtrack and PPI schemes for hospitals so as ostensibly to get the debts of these bodies off the Government balance sheet. Complete nonsense all round.

Do the IEP^▸ (Intercity Express Program / Project.) and Thameslink (PFI deals?) fall foul of this too?