THE transport secretary Patrick McLoughlin has confirmed changes at the Department for Transport which will include the creation of a new Rail Executive within the DfT following the Brown Report into the collapse of the Intercity West Coast franchise competition in October 2012.

The new group will take charge of rail franchising, but its creation may be only the first step towards a more 'arms-length' railway body, it has been revealed.

In a written statement to Parliament today, the transport secretary said: "Creation of the rail executive will support the drive to strengthen our focus on passengers; build an enhanced culture of commercial expertise and innovation; and ensure greater coordination of improvements to track and trains. A single team will manage the interdependencies between rolling stock, track, stations, freight and passenger services; and between existing services and HS2. It will also develop an effective framework agreement for Network Rail, for September 2014, when it will be classified as public sector.

"A new approach to recruitment, reward and career development for commercial rail skills will allow the rail executive to increase capability at all levels and bolster commercial experience in the management team. This will reduce the department’s dependency upon consultants and increase its ability to negotiate the best deal for passengers and the taxpayer."

He added:  It will be led by an externally recruited managing director and supported by non-executive board members.

"The review has also recommended we consider a longer term option of a new, more arms-length body with responsibility for rail delivery functions. The creation of the rail executive provides a strong foundation for such future evolution and the government will consider moving to a more arms-length body in 2016."

Mr McLoughln told the House of Commons transport committee yesterday that he is in the process of appointing a new director general of rail franchising, and that he hoped to announce the identity of the successful candidate shortly.

He said: "One of the things which Richard Brown did recommend in his report was that we should set up a separate group within the Department to do rail franchising.The Rail Executive will build on the existing Rail Group which has, I think, got franchising back on track."

Mr McLoughlin added that the change would "bring in some more commercial elements, which I think were needed to bolster that section".

He also told the Committee that he would remain 'involved in key consideration of franchise decisions', but would not be 'involved in detailed commercial negotiations'.