Search

Purpose The purpose of this paper is to identify and evaluate the role and influence played by the discipline of accounting through its association with the multiple logics of government reforms to transform the public tertiary education sector in New Zealand. Design/methodology/approach The study adopts a case study approach utilising multiple data collection methods. Neo-institutional theory provides an insightful complement to neo-liberalism and enhances the understanding of institutional logics driving government reforms and the transformation of public tertiary institutions. Findings The findings reveal that accounting has become a powerful conduit for the exercise of the neo-liberalism reforms by government and implemented by managerial control over public tertiary education institutions. Research limitations/implications By addressing a gap in the literature, the paper shows how political and economic neo-liberal policies have been implemented in tertiary education with the discipline of accounting being adopted as a prime driver of these reforms. The paper has significant implications for educational management, academics and learners in understanding how and why the inherent nature, objectives and processes of the overall educational experience have undergone a radical reformation. Originality/value New Zealand is one of the first countries to implement these educational reforms and adopted “accounting technologies” to reduce costs and improve performance. But the reality has often been very different. Most of the government’s original objectives have not been fulfilled and the reforms have been costly for the academic profession. This paper provides a valuable source of learning for academics, managers and politicians.

This paper is concerned with the financial performance of the British passenger rail industry since privatisation in the mid-1990s. This experiment, which not merely transferred a state-owned and fully integrated industry into the private sector, but dismantled it into over 100 separate entities, has generated considerable and highly critical academic literature. A major contention of this literature is that, contrary to the predictions of its proponents, privatisation has largely failed to improve efficiency and has actually increased costs, or more exactly, costs are higher than they would have been, had privatisation not taken place. However, although various writers have put forward diverse arguments to support this position, robust data on the overall costs of the (now highly fragmented) industry have been lacking. Further, a proper assessment of the additional costs (or otherwise) of privatisation can only be made in light of ‘counterfactual’ estimates (necessarily speculative) of the costs of the state-run industry if privatisation had not occurred. This paper aims to fill this literature gap by: (1) constructing a robust series of the overall operating costs of British passenger rail services since privatisation, (2) projecting, using reasonable assumptions, what operating costs would have been if privatisation not taken place, and (3) estimating the increase in such costs arising since privatisation. The results, whilst they can only be broadly indicative, are nevertheless clear. Even after conservative assumptions, rail privatisation has resulted in considerable additional costs: it was a major public policy error.

This paper contributes to the literature that analyses the relationship between Share-Option Based Compensation (SOBC) expense and shareholder returns. It utilises a sample of financial firms listed in the European Economic Area and Switzerland between 2005 and 2016 to make inferences about the impact of the financial crisis on the above-mentioned relationship. The paper also assesses the extent to which the relationship between SOBC expense and shareholder returns during the financial crisis varies with ownership concentration. We find evidence that the positive relationship between SOBC expense and shareholder returns is significantly more apparent during the financial crisis. This suggests that investors place more emphasis on the unrecognised intangible features of SOBC contracts during the crisis, even though their associated expenses are subject to managerial discretion and measurement errors. We also find that the positive relationship between SOBC expense and shareholder returns over the financial crisis is more pronounced when ownership is more concentrated. The results of our study are robust after controlling for firm size, potential investment growth opportunities, traditional banking activities and firm self-selection bias.

Academic studies of the industries privatised in Britain since the mid-1980s have focused on regulation and performance. This paper discusses the impact of changes in accounting policies within the British railway industry, which has been almost completely neglected in the literature to date. The paper analyses the financial reporting of the railway infrastructure from 1992 to 2004: under state ownership, then as a listed company and finally as a ‘not-for-dividend’ entity. At each stage the accounting treatment of the infrastructure assets has been subject to major manipulation to suit the needs and convenience of the industry's management – not the users.

The Railways Act 1993 privatised the British railways industry resulting in the separation of ownership and control of the railway infrastructure (track, signals and stations) from that of passenger train operations. The Great North Eastern Railway (GNER), a major train operator, was unable to meet its contractual obligations shortly after successfully re-tendering for its second franchise. By referring to the organisational form and structure of the franchising process, this paper discusses the main financial and operational problems that specifically contributed to the collapse of GNER. In particular, the paper argues that the fragmented structure of privatised train operations, the lack of industry coordination and the inherent problems of franchising an essential transport service explain the demise of GNER and have undermined the general objectives of railway privatisation. Overall, the paper highlights that privatisation of train services has failed to deliver both travelling benefits for the public and financial benefits to the state.

The shareholder primacy model is dominant in Anglo-Saxon corporate governance and financial reporting even though it is considered to be dysfunctional and a source of crisis. The possibilities of reforms are routinely stymied with the claims that shareholders are the owners of large corporations and management should promote their interests. This paper seeks to debunk such claims. It shows that a corporation is a distinct legal person and cannot be owned by its shareholders. It argues that shareholders in contemporary corporations are owners of ?fictitious? capital which is very distinct from ?real? capital. The systemic pressures require the holders of fictitious capital to constantly buy/sell shares in pursuit of short-term gains. The paper further shows that in a globalised economy, the shareholding duration in major UK companies has shrunk and shareholders are more dispersed than ever before. They are not in any position to control or direct corporations for the benefit of other stakeholders and society generally. The paper calls for abandonment of the shareholder model of governance and calls for empowerment of stakeholders with a long-term interest in the wellbeing of corporations.

Since rail privatization the performance of passenger services has received considerable publicity and comment, but that of the rail freight industry has received scant attention. The freight operators, industry planners and regulators, and governments have proclaimed it a ‘success story’ and advanced ambitious growth targets. This paper evaluates the overall performance of rail freight and argues it has been, at best, disappointing. The projected growth figures for rail freight are wildly optimistic.

The privatisation of Britain's railways involved not only the transfer to private ownership but also the break-up of a previously integrated industry. Under the government's plan the railway's passenger rolling stock was sold to three rolling stock companies (or ‘ROSCOs’). This paper focuses on the role of the ROSCOs in the rail industry and their financial performance, critically examining the available literature and in particular the use that has been made of Transaction Cost Economics (TCE) to analyse the relations between ROSCOs and train operators, as well measuring their profitability from financial statements. The ROSCOs have been able to charge excessively high lease rentals to the train operating companies (TOCs). Analysis based on TCE which argues that ROSCOs have taken on serious risk to justify these returns (of default by a TOC, or of holding rolling stock surplus to requirements) has been misplaced, failing to see the dysfunctional nature of the market and the implicit government guarantee to maintain services. The paper finds that the ROSCOs need to be regulated and more transparent in their dealings with both train operators and the public.

A significant aspect of the privatization of the British railway industry was that the provision of passenger train services would be awarded on a competitively tendered franchise basis. The turbulence in the ownership of the East Coast Main Line (ECML) franchise is testimony to the inherent and serious structural weaknesses in the business model underlying the franchising of train services and highlights the more general failings of the government's model of railway privatization.

The three UK rolling stock companies (ROSCOs) are a product of the privatization of the railway industry in the 1990s. As the UK approaches the 25th anniversary of the first privatization of a state-owned industry (telecommunications), this article evaluates the background and the structure of the ROSCO privatization sales. The authors show that the privatization of the UK's rolling stock industry was a significant triumph of political expediency over sound governmental financial policy. The ROSCOs have attracted relatively little attention, yet nowhere else have the flaws in the privatization process become more apparent.

Increasing attention is being focused on the implicit fiscal obligations of governments, which may be real (in terms of future resource commitments) even if they remain unrecognised in official accounts. Such obligations may exist in relation to important parts of national economic infrastructure, regardless of the legal position. In a little over a decade the track and station infrastructure of the UK rail industry has been successively owned by an integrated nationalised corporation (British Rail); a private company listed on the Stock Exchange (Railtrack); and after the latter's collapse, an ostensibly private but not-for-dividend company (Network Rail) whose debts are guaranteed by the government. Governmental accounting has been an important factor in these restructurings. Privatisation of the railways was a consequence, inter alia, of the desire to free government from fiscal responsibility for the industry; and the peculiar structure of Network Rail was largely dictated by a desire to exclude its debt from statistics of government borrowing. However, if it is accepted that the government must ensure the continued existence of the railway network, then inevitably there is a guarantee behind it, which cannot be repudiated, and should be openly disclosed in the National Accounts.

In 1996, the UK government privatised the railway industry based on a separation of rail infrastructure from train operations. Track, stations and signalling were transferred to a private sector infrastructure company, Railtrack plc. Separate passenger and freight train operators were required to pay track access charges to Railtrack for use of its rail infrastructure. In 2001, in an attempt to meet the government’s plan to expand freight traffic, the government-appointed rail regulator substantially reduced the amount of track charges payable to Railtrack by the freight operators. The resulting shortfall in Railtrack’s revenue is met by public subsidy from another regulatory agency, the Strategic Rail Authority. A failure by the regulators to insist on rail freight growth targets or to impose any claw-back of the subsidies for non-performance is a tribute to weak political and legislative control over regulatory mechanisms and, to a certain extent, reflects the ‘capture’ of the state regulatory process by the freight industry. The net result has been a decline in rail freight traffic, an increase in public subsidy and a substantial increase in the earnings of the largest freight operator.

By 2005 the group financial statements of companies listed on a stock exchange in an EU member state must be prepared in accordance with International Accounting Standards (IASs). The adoption of IASs should,inter alia: facilitate the movement of capital; remove barriers to cross‐border trading; permit comparison of company results; and assist the evaluation of managerial and corporate performance. The introduction of IASs will impact, in varying degrees, on companies in all member states. However, the affect of IASs on corporate reporting will be more limited in the UK. The UK's existing corporate reporting framework already has significant similarities with many of the IASs' objectives. But for most other EU countries, the adoption of IASs will cause a significant upheaval in accounting policies and in the preparation of annual financial statements. To be implemented successfully, a significant gulf needs to be bridged between the new reporting policies in the IASs and the high degree of state regulation and legalistically‐driven reporting systems already established in these countries. Overall, the introduction of IASs should bring longer‐term benefits but a number of reporting challenges and even confusion will result in the short‐term.

Railtrack plc, floated in 1996, was the private sector owner of Britain’s railway track, signals and stations. Its major source of revenue came from track access charges, which individual train operating companies (TOCs) paid for use of the infrastructure. Since many of these TOCs received substantial subsidies to assist in paying their track access charges, Railtrack was in effect being heavily subsidised. In October 2001, the Government decided that these arrangements were no longer viable and placed Railtrack into administration. This article explains how the level of indirect subsidies to Railtrack had become excessive, and raises crucial questions that need to be addressed in settling the future shape of the railway industry.