Public Bodies Bill [HL]

Lord Faulkner of Worcester Excerpts

Tuesday 14th December 2010 Lords Chamber

Moved by

[Lord Faulkner of Worcester]

25: Schedule 1, page 16, line 16, leave out “BRB (Residuary) Limited.”

[Lord Faulkner of Worcester]

My Lords, I move Amendment 25 because I want to give the Minister an opportunity to describe what the Government envisage will happen to the powers, duties and assets of BRB (Residuary) Ltd if, or rather when, that body is abolished. The Committee may be aware that this company is all that is left of the once mighty British Railways Board, which oversaw the running and ownership of the entire state-owned railway from 1962 until privatisation. BRB (Residuary) Ltd was formed in 2001 to manage most of the remaining property, rights and liabilities of the BRB. These included a diverse property portfolio and the settlement of industrial injury claims submitted by former British Railways employees. The residuary company looks after 148 non-operational sites, many of which were bought in the 19th century to facilitate railway construction. It would like to sell these when market conditions are right. Therefore, my first question to the Minister is: what organisation will be responsible for selling these sites if BRB (Residuary) Ltd is abolished? Secondly, does he feel that this is the right time to get rid of a body that has operated successfully and profitably, at least until there was a revaluation of its assets in 2009?

I should also like to ask the Minister about the property held at the discretion of the Department for Transport for future operational use, such as the platforms and other structures at Waterloo International station, the North Pole international depot in west London, the Old Dalby test track, the Temple Mills bus depot and Glasgow Eastfield depot. What does he envisage will happen to those?

Perhaps most significant and difficult are the 4,000 bridges, tunnels, viaducts and other structures throughout England, Scotland and Wales which no longer form part of the operational railway but still have to be maintained. This is called the “burdensome estate”. It includes structures such as the Thornton Viaduct in Bradford, which no longer carries a railway but is an important part of the Great Northern Trail cycle route. There has been speculation in the media about where these matters will reside once BRB (Residuary) Ltd has disappeared. It has been suggested that the Highways Agency might take over the burdensome estate, such as the redundant viaducts and stretches of land, and I should be grateful if the Minister could clarify that.

Finally, BRB (Residuary) Ltd is also responsible for handling compensation claims from former railway employees who suffered illnesses as a result of their working conditions. Many of these have been related to working with asbestos and other dangerous materials. At 31 March 2010 there were 459 disease and injury claims outstanding against the company. Who will take on the responsibility for the requirement to look after the industrial injury claims of these former railway employees? There are a number of issues here and I look forward to hearing the Minister’s answer. I beg to move.

[Lord Rosser]

My noble friend Lord Faulkner of Worcester has raised a number of important points about the role and responsibilities of BRB (Residuary) Ltd and what the Government’s intentions are in relation to those activities, not least its operational and non-operational property—its estate of some 4,000 bridges, tunnels, viaducts and other structures—and the management of industrial injury claims. I, too, look forward to the Minister’s reply to the points raised by my noble friend.

As he said, BRB (Residuary) Ltd is a residuary organisation staffed mainly by former employees of British Rail who have a detailed and specialist knowledge of the assets and liabilities now managed by the organisation. The company is committed, for so long as it exists, to ensuring that the knowledge held by the former BR staff is retained for use by those who might be responsible for the management of the long-term assets and liabilities in the future. In the light of that, can the Minister say what will happen to the staff of BRB (Residuary) Ltd if it is abolished? Can he give an assurance that any information currently accessible through a Freedom of Information Act request will still be accessible through such a request following any transfer of BRB (Residuary) Ltd’s duties and responsibilities elsewhere?

The criteria against which the Government said their review of public bodies would be carried out were: does the public body have a precise technical operation; is it necessary for impartial decisions to be made about the distribution of taxpayers’ money; and does it fulfil a need for facts to be transparently determined independent of political interference? A public body would stay if it was deemed to have passed one of the three tests.

In June this year, the Minister for the Cabinet Office said that the Government wanted to cut the number of public bodies to increase accountability and cut costs. Can the Minister explain why the Government have apparently decided that the BRB (Residuary) body does not carry out a technical operation, does not have to make impartial decisions and does not need to establish facts independent of political interference, when one of its roles is managing industrial injury claims supported by former BR employees and its staff have the detailed and specialist knowledge of the assets and liabilities that BRB (Residuary) Ltd manages?

Finally, since the Cabinet Office Minister has said that one declared objective of this exercise is to cut costs, can the noble Lord tell us what the contribution will be to the reduction in costs made by abolishing BRB (Residuary) Ltd?

--- Later in debate ---

[Lord Taylor of Holbeach]

My Lords, I thank the noble Lord, Lord Faulkner of Worcester, for tabling Amendment 25, because it gives the Government an opportunity to put on record the decision to include BRB (Residuary) Ltd in the list of bodies to be abolished.

As the noble Lord may know, consultations on the decision have been ongoing for some time. Many historical obligations associated with railway structures continue to rest with BRB and cannot be transferred with title through the normal property conveyancing process but must be transferred to someone else, such as the Secretary of State or some other public body under a transfer scheme. That can be done only by primary legislation, which is why BRB is mentioned in the Bill. As the noble Lord, Lord Rosser, said, BRB is also liable for the industrial injury claims from former railway industry employees. It would be more difficult to transfer BRB to the Secretary of State for those claims to be dealt with without having a statutory transfer scheme, which is again why the body has been included in this Bill.

BRB (Residuary) Ltd is a public limited company that was created in 2001 to manage and dispose of British Rail’s commercial property assets, to manage historical liabilities for industrial injury claims and to maintain some 4,000 or so railway structures that are no longer used for railway purposes—to which the noble Lord referred as the burdensome estate.

The intention to abolish BRB once it has achieved its objective of maximising money from the disposal of its assets has been in place for some time. The inclusion of the body in Schedule 1 is necessary in order to wind up the body fully, as otherwise it would not be possible to transfer certain liabilities relating to the burdensome estate. Its inclusion in Schedule 1 will also facilitate the transfer of residual assets and liabilities to other parts of the public sector in the most cost-effective manner. For example, the conveyancing of the individual structures alone would cost approximately £6 million in the absence of a statutory transfer scheme, which the Bill provides for.

The noble Lord, Lord Rosser, asked about the cost implications. Savings on staff costs, premises and accounts, audit et cetera are expected to be around £6 million in 2013-14 and £6.9 million per annum thereafter. On the number of jobs that may be involved, we currently envisage that roughly 30 posts would be made redundant as a result of these changes.

Although I have not provided detailed information on some of the structures that the noble Lord asked about—I hope that he will allow me to write to him when I have found out any detail on those that is available to me—in the light of the information that I have provided, I ask the noble Lord to withdraw his amendment.

[Lord Faulkner of Worcester]

I thank the Minister very much indeed for that helpful reply. A number of issues that remain unresolved were mentioned by myself, my noble friend Lord Rosser and, indeed, by the noble Lord, Lord Greaves. If, on reflection, the Minister feels that he is able to give some more information in writing, that would be very welcome.

The decision to abolish BRB (Residuary) Ltd is not controversial—indeed, it was taken by the previous Administration—but I was anxious to ensure that things were not done in a rush or in a way that might result in the assets being sold for much less than is possible. I am satisfied by the Minister’s response, and I beg leave to withdraw the amendment.

Amendment 25 withdrawn.

Amendment 26

Moved by