Network Rail structure is altered

Politicians will now have a direct say in the level of bonuses for Network Rail (NR) bosses after changes to the company's structure were agreed.

From Monday, NR's net debt, currently standing at about £33 billion, will officially become part of the national debt.

This will effectively mean that NR, whose debt had hitherto been kept off the Government's books and which has members rather than shareholders, becomes a public-sector company.

Today, NR's members, who hold the company's board to account, agreed to the structural changes which will see the Secretary of State for Transport - currently Patrick McLoughlin - having powers over the appointment of the company's chairman, its remuneration policy and the selection of its members.

The level of NR bonuses has been a contentious issue for some time, with previous transport secretaries questioning the amounts received by the company's executive directors at a time when rail regulators have criticised the company's punctuality record.

NR's remuneration committee have now restricted top bosses to an annual, performance-related bonuses of no more than 20% of salary, although this could still entitle chief executive Mark Carne, on a salary of £675,000 a year, to a bonus of as much as £135,000.

Unions and campaigners will stage a protest outside NR's headquarters on Monday.

They say that the reclassification of NR should pave the way for the renationalisation of the whole of the rail network.

Mick Whelan, general secretary of train drivers' union Aslef, said he was delighted that NR had been "brought back onto the books as a public body".

He went on: "We have consistently called for Britain's railways to be brought back into public ownership, so we think it's great that half of our railway system - the steel if not the wheels - have now been brought back into public ownership."

Both Mr Whelan and Manuel Cortes, leader of the TSSA rail union, are opposing the decision to exclude NR from being covered by the Freedom of Information Act.

Mr Cortes said: "Passengers pay the highest fares in Europe. They have a right to know where and how their billions are being spent."

A Department for Transport spokesman said: "The classification of NR is an independent statistical decision by the Office of National Statistics (ONS).

"It does not change the industry structure or affect the day-to-day operations of the rail network. The ONS decision has no effect on fares, performance, punctuality, safety or timetables."

Michael Roberts, director general of rail industry body the Rail Delivery Group, said: "NR's ability to be flexible and self-determining has enabled it to make vital decisions to maintain and invest in Britain's railway.

"The rail industry is keen to make sure that NR's operational independence is preserved while also ensuring that, at a time of record investment in the railway, the company is accountable to passengers and taxpayers. Rail passengers will see no change to the operational running of the railway as a result of this reclassification."

Shadow transport secretary Mary Creagh said: "David Cameron said sunshine is the best disinfectant, but he and his ministers are strangely reluctant to let light in on the workings of Network Rail, which becomes a government body on 1 September.

"Hard-pressed fare-payers and taxpayers deserve to know how their £4 billion annual support is being used - especially as ticket prices have risen by 20% since 2010. Labour would make Network Rail subject to FOI."