The Rail and Road Pod Episode 25: Balancing the costs and benefits of health and safety improvements on the railway

Saj Chowdhury

Hello, I’m Saj Chowdhury. Welcome to the 25th edition of the Rail and Road Pod. Now, as the rail health and safety regulator, it is our duty to ensure that the industry complies with regulations which state that safety risk is controlled as reasonably practicable, with factors such as effort and also cost taken into account. But how is industry working out what is reasonably practical when making a decision to spend money on safety improvements? And is industry working together in making safety-related decisions?

These are questions that are being explored in our Costs and Benefits of Safety Interventions work, which Jennifer Genevieve, Deputy Director in our Economics, Finance, and Markets Department, and Sarah Shore, Deputy Director for Railway Safety shed light on in this episode.

Now, before that, it’s time to review what’s been happening at ORR. In recent weeks, we called on Network Rail to improve performance for passengers across the Eastern region, Our consumer team reported that improvements must be made to managing help points at stations after highlighting poor reliability. We approved the go ahead for new train services between Swindon, Thornton, and Western-Super-Mare from the end of 2025 to be run by a new cooperatively owned operator.

We confirmed that London Liverpool Street station retained its title as Great Britain’s Most Used Railway Station in 2023-2024, with Denton station in Greater Manchester becoming the least used station. Now, back to this episode. We hope the work we’re doing here will better support the safety-related decision-making in the UK rail industry says Jennifer Genevieve, referring to our Costs and Benefits of Safety Review, who, along with Sarah Shore, explain to Liam Hughes here what ORR’s hopes are for the outcome of this work.

Liam Hughes

If you’re a regular listener of our podcast, you may already know that Britain has one of the safest railways in the world. As the rail regulator, that’s of course, something that we are incredibly proud of and something that we think the whole industry should take pride in as well.

We know that the industry strives for continuous improvement on the safety of our railways, but something that gets talked about a bit less frequently are the costs that those interventions have. Just because there is a safety intervention that could be made, it doesn’t necessarily mean it should be made.

Of course, we’re also the economic regulator for Britain’s railways. We want to make sure that the railway is value for money, which can help minimise what users and taxpayers are paying to support it.

So how do we, as an industry, strike this balance? That’s a nuanced and complex question, which is why I’m delighted to be here speaking with Jennifer Genevieve, Deputy Director in our Economics, Finance, and Markets team, and Sarah Shore, Deputy Director in our Railway Safety team, to dive into the detail and explain a bit more about our recent work.

Hello, both.

Sarah Shore

Hello.

Jennifer Genevieve

Hello.

Liam Hughes

So, Sarah, perhaps this is a good one to start off with you. How does the industry make those determinations and what do they need to consider?

Sarah Shore

Well, ensuring trains run safely is a given, and it’s an area that industry and the regulator have been committed to for a long time. What industry is required to do is set down in law, and at a basic level, it is complying with the law and ensuring that risks are controlled to a level that is set out in law as described as so far as is reasonably practicable. So that involves understanding your business, understanding the risks, assessing those risks, and weighing up the costs of controlling those risks and that balancing decisions to determine what level of interventions and controls are required. And that’s an established way of working to think through where you’re going to spend your money and how you’re going to spend your money when you’re investing in safety and health interventions as well.

Liam Hughes

And you use the phrase there, reasonably practicable. I don’t suppose you could you go into that a little bit more about what that means?

Sarah Shore

Yeah. So legislation uses a phrase, the standard that’s required is to control risks as far as it’s reasonably practicable. You can’t control every risk to the n’th degree, and that’s not what’s expected. So you’re expected to assess those risks, make a balanced decision, take account of cost, take account of the reasonableness, take account of the effort required in dealing with that risk, to come up with the controls that are balanced and can be delivered. It’s a well-established process, and normally it’s fairly straightforward in more day-to-day risks, but obviously within the rail industry, where you’re dealing with complex systems, complex projects, working out the level of investment and some of the costs is more complex. So you might go into more depth and think about cost-benefit analysis to determine if the controls you’re thinking about are reasonable.

Liam Hughes

Tell us a bit more about this piece of work, this review that you are doing into how the industry is achieving this balance between safety and cost.

Jennifer Genevieve

During the periodic review of Network Rail we assessed Network Rail’s plans for control period 7, and that included looking at the safety aspects of Network Rail’s business plans for the control period. Now that that control period has started, we’re monitoring delivery against the plans and against our final determination.

We really want to see schemes being optimised by Network Rail, and also we want to see an understanding of the implications and the costs for Network Rail and for others.

Liam Hughes

We’ve written to the industry and kicked off a review. Could you talk me through the timeline and what we’re aiming to get out of that?

Jennifer Genevieve

So far, we’ve met with over 30 organisations. That includes Network Rail, passenger and freight operators, the supply chain and industry organisations.

We’re seeking to understand here how they are approaching safety-related decision-making, including how cost and benefits on safety interventions are assessed.

We’ve also jointly commissioned an independent reporter piece of work with Network Rail, and that’s looking at some of the bigger decisions that Network Rail has made, such as on track worker safety, on electrical safety delivery, and also on level crossings. And from these case studies, what we’re specifically seeking to understand is how Network Rail assesses value for money and whether reasonable practicability is being systematically tested. So we’ve been asking industry how it assesses so far as a reasonably practical when they’re making safety investment decisions. And we are looking to see whether decisions are being supported by quantification of the costs and of the benefits.

We’ve also been discussing the application of industry standards, and we’ve explored how often duty holders seek derogations from those standards. And then we’re also looking at how industry works together in making safety-related decisions. We published an update on our findings in September. That doesn’t yet include the findings from the independent reporter piece of work.

But what we have found in terms of testing reasonable practicability is that there is broad use across the industry of RSSB’s guidance taking safe decisions. And that’s the approach that we would expect industry to follow when they’re making safety-relating decisions.

Liam Hughes

You mentioned industry guidance there. Is that an area we’ll be looking at as part of the review?

Jennifer Genevieve

It does seem that the quantitative cost-benefit analysis is rarely used to test reasonable practicability, and there’s more reliance on standards and a reliance on following good practice. But some duty holders have told us that they would welcome more accessible guidance and training on quantifying the cost and the benefits of safety interventions.

On standards, many duty holders we’ve spoken to take standards as a starting point with minimal or no deviation, really, from them. Industry subcommittees, and in particular, the RSSB committees are seen as helpful for us to discuss the application of those standards.

What we’ve also found is that the process to deviate from standards is reasonably well understood, but in practise, some consider that the ability to deviate is not always straightforward. And then finally, on collaboration, we found evidence of good collaboration on safety interventions within the industry and also the sharing of best practice. And that seems to us to be an area of strength for the rail industry. We also see that there’s value in working together early in the design phase of a project. Sarah might want to say a bit more about safety by design.

Sarah Shore

Yeah, I think it’s also important to say that none of this is about changing legislation, changing the law, changing regulations. None of this is new in the sense of how you manage safety in the workplace and industry.

It is about applying existing practise, existing legislation, existing tools and guidance. But there are good principles to be applied. And as Jennifer has mentioned, there are some things that could do with perhaps strengthening. And so there’s quite a lot of collaboration already goes on in the industry. But one of the things that we have found is that sometimes things are picked up and become issues from a safety perspective when they should have been identified a while ago and dealt with an earlier stage. And it’s always more expensive to deal with things retrospectively than it is to plan them in and plan in safety and plan your thinking and work things through before you get to actually do the work. And safety by design is a key part of that, getting involved at the design stage, designing safety into the way you’re going to implement a particular project, a particular change in infrastructure.

So as I say none of this is new, but I think we just need to reinforce some of the good practice, remind people of some of the tools and guidance available, and revisit some of it, really, if it’s needed to update to make sure people are understanding and able to use it and able to work through it.

But much of that will rely on good collaboration, both within the industry but also with the regulator. I think it’s important that we’re involved in discussions, and as I say, at an early stage, to make sure that we can give a view, we can understand what’s being proposed, and we can identify issues that others might need to consider when they’re spending their money.

Liam Hughes

And so looking at this review, is it going to mean a different approach from us as a regulator? Perhaps are we going to look at the guidance which industry is working from? How is that going to change?

Sarah Shore

Well, in terms of safety, our safety role and the way we regulate safety won’t change. The role of our inspectors will continue. They’ll continue with their inspections, with their investigations, with the programme of proactive that we have. That will be unchanged. That’s the established way of regulating the industry and seeing the day-to-day running of the industry. So that will not change.

But we do expect to find issues relating to how the industry is making its decisions, how it’s making decisions about costs, and how it’s applying those decisions in terms of safety interventions. And whilst none of this is new, it is a complex area. And we hope through some of the independent reporter work and the findings there, we can help to improve things like the guidance, things like awareness, so the industry is better placed to carry out its cost-benefit analysis and make those decisions, and that there’s a greater transparency of how those decisions are made.

Liam Hughes

What does that collaboration look like on a day-to-day basis? If we look ahead once the review is completed and our recommendations have been given, how is ORR going to work together across the safety teams and the finance teams, but also with industry to make sure that those safety interventions are made at the earliest opportunity as opposed to further down the line.

Sarah Shore

If I start with safety, I think there are already good established collaboration arrangements in place. Liaison is a really important part of our regulatory approach. So our inspectors, our specialists, our senior managers are regularly meeting and discussing the rail business, the rail plans, rail proposals throughout. And I think we need to make sure that those mechanisms, those liaison points, are focused and dealing with these types of issues and looking at safety and elements at the earliest stage as much as we can we need to know if change is afoot. Some of it we already know because of just the nature of what’s happening. But the business themselves, if they’ve got certain developments that are taking place, it’s important that they make us aware so we can go through management of change processes together and work with industry to do that. So I think to that extent, that is already there.

I also think there is good collaboration amongst industry and good liaison, and the RSSB provides a good focal point for that sharing of information and sharing of good practise. And then internally, we’ve got proposals to strengthen our arrangements. I don’t know if Jen, you want to comment on those?

Jennifer Genevieve

Yes. So as I said, we worked closely together during the periodic review of Network Rail to review the safety aspects of Network Rail’s plans, and we continue to work on the monitoring of the delivery of those plans.

Sarah Shore

There’s a huge amount of overlap actually between us internally as well in terms of our areas of interest, and that’s always been there, but I think it’s… For example, on asset management has close links with issues relating to safety, and there’s always been cross-working. But I think the work on PR23 and the joining up on that has really brought that into a more focused place as we look at costs and benefits of safety.

Again, always looking at them at an earlier point to work through and be able to discuss those more closely with the industry to get a common understanding of where we all stand.

Liam Hughes

Give me an indication of what is the size of the prize here. If we conclude our review and take a look at how the industry can work a bit better when it comes to making decisions around the costs and benefits of safety, what does the ideal world or the ideal rail network look in terms of making those decisions going forward?

Jennifer Genevieve

Through the sharing of the learnings and best practice from the review and also the actions that we expect as a result of the recommendations we’re going to make, we really hope that the work that we’re doing here will better support safety-related decision-making in the UK rail industry.

Sarah Shore

Yeah, and I think we expect a world where we perhaps understand one another more. I think there’s perhaps a little bit of to-ing and fro-ing trying to work out where everyone is coming from. I think if we work in this way, if we improve this collaboration in relation to understanding costs of safety, we’ll be in a world where we all understand the end goal more clearly and can work towards it.

Liam Hughes

How does this piece of work fit into rail reform and how we’re going to see the world of rail change over the coming years?

Jennifer Genevieve

Well, what rail reform will do is bring track and train together, and we see opportunities there actually to improve joined up decision making on safety-related decisions. It is worth bearing in mind, though, that there will be a large number of organisations that remain outside of GBR. And so the good cross-industry working and collaboration that we’ve seen throughout this review, it will be vital for that to continue.

Liam Hughes

So we can expect the review to finalise at the beginning of next year. Talk to me a little bit more about the timeline there, the next steps, and perhaps how we can expect the industry to change or do things differently once it’s been able to digest the findings of the review.

Jennifer Genevieve

Yes, we’re intending to issue our report in early 2025, and that will include the findings from our discussions with industry and also the findings from the independent reporter piece of work that we’ve commissioned on Network Rail’s approach. We’ll be making recommendations based on our own review and on the independent reporter review as well.

Sarah Shore

In terms of what we expect to see, ultimately, we’re looking to see that industry is able to make better safety-related decision-making.

We’re looking that those decisions are made at the right time, applying the right thinking, and that when we’re looking at things like cost- benefit analysis, which will be a key part of this, that that’s done consistently across the industry, and that industry has the confidence when it’s applying cost-benefit analysis thinking and making its decisions.

Liam Hughes

Thank you both, really interesting discussion. Thanks very much for taking the time. Thank you.

Sarah Shore

Thank you.

Saj Chowdhury

Thank you, Liam, and Sarah, and Jennifer. We look forward to the updates on this work. That’s all for this podcast.

Remember, you can find out more about our health and safety and economic responsibilities and also our other work in rail and road by visiting orr.gov.uk And of course, you can follow us on our social channels, including X, formerly Twitter, LinkedIn, and why not check out our new Instagram page. Thank you for listening.