§ Mr. Yeoasked the Secretary of State for Trade and Industry when the Monopolies and Mergers Commission report on the British Railways Board's property activities will be published.
§ Mr. FletcherThe report is published today. The Commission was asked to report on British Rail's efficiency and costs in relation to its property activities, including the acquisition, management, development and disposal of land.
The Commission notes that British Rail recognises that the future outlook for its property activities is one of a declining work load on sales of surplus property and growing work on developing and managing operational land for commercial purposes. It also notes that the work load in managing the unrewarding tail of burdensome properties will continue.
The Commission makes a number of specific recommendations aimed at improving the management of British Rail's property, including the appointment of a director of property of equal status with British Rail's other functional and sector heads, responsible for maximising return from the whole estate, and for a member of the British Railway's Board to be given specific responsibility for property matters.
The Commission believes that better procedures are needed for releasing land no longer required for operational use. Greater use of private sector expertise is recommended in several areas of the board's activities, including in identifying and valuing the potential of land no longer required, where more positive procedures are recommended for assessing the scope for enhancing realisable values.
The Commission also made some criticism of the implementation of BR's programme of property sales.
The Commission acknowledges the board's success in developing and exploiting its operational estates, but considers that a more systematic review of development opportunities would be beneficial; that greater competition between developers should be encouraged; and that marketing techniques should be improved, again perhaps drawing on outside expertise.
The report highlights British Rail's large number of unattractive, low value properties including closed branch lines, and suggests that the sale of such properties at prices which do not fully cover the selling costs involved might nevertheless be in the board's longer term interests if it brings relief from subsequent management costs. But such decisions need to be taken against more accurate assessments of the costs of retaining and managing each property. The report also recommends a review of British Rail's liabilities in respect of property no longer needed for the railway.
180WThe Commission also recommends a range of proposals aimed at improving the operational efficiency of the board including a computer-based financial and management accounting arid costing system.
Finally, as is usual in such references, the Commission was asked to consider whether the board is pursuing a course of conduct which operates against the public interest. They conclude that while their inquiries identified room for improvement in many areas none of the shortcomings identified, taken singly or together, could be judged to operate against the public interest. The board will be producing its preliminary response to the Commission's findings in three to four months and my right hon. Friend, the Secretary of State for Transport, will make a statement on this response at that time.