The white paper, apparently, reassured him.

Well, I have news for councillor Alistair Watson — he has been stuffed, well and truly. In an arm-wrestle between the minister and the councillor, the minister will always win.

Nicol Stephen, the transport minister, duly confirmed last week's report in The Sunday Times that Transport Scotland could, and would, seize the SPTE's role in running Scotland's railways.

Were he not such a diplomat, Stephen might point out that democracy demanded that all of Scotland's railways be run by the Scottish executive, rather than a regional body. Instead, he covered the SPTE with praise, setting it up as a role model for other Scots regions. Watson, it seems, bought it.

But the tail has clearly been wagging the dog, and in the present climate Strathclyde couldn't keep Scotland's railways. Nor should it.

It's not done yet. Alistair Darling's UK-wide rail review, due in a matter of weeks, is widely expected to abolish the Strategic Rail Authority (SRA) — whose strategy and authority have long been under fire — and split responsibility for the railways between the Department for Transport (DfT) and a revamped Network Rail.

In the midst of this upheaval, Stephen is playing a canny game. As the SRA hands back power to the DfT, so Edinburgh will take its share. The minister's hands will be firmly around the neck of the preferred franchise bidder, FirstGroup. He is also seeking more powers over the infrastructure, just as Darling is preparing to devolve the whole operation.

As Network Rail takes over some SRA responsibilities, so Edinburgh will gradually assume control of rail infrastructure spending in Scotland. And, with devolved control of trains and track, the minister is in pole position to run a vertical-integration pilot; controlling tracks and trains throughout Scotland in one operation for the first time since the demise of British Rail.

The benefits are manifest — a simpler railway is also a safer and cheaper railway. So the strategy is clear — the rail review allows the minister, ever so gently, to relieve London of some of the financial pressure of Scotland's railways, and pull extra power towards Edinburgh.

Or rather, towards Glasgow. For if Stephen is half the diplomat he seems, Glasgow is where he should put the new Transport Scotland agency. Not only would such a move defuse SPTE opposition to what is clearly a land grab, it would allow the seamless transfer of experienced SPTE staff to the new agency. It would also acknowledge the existence of ScotRail, Virgin and Network Rail — all based in Glasgow — as being at the centre of the Scottish rail network.

In the meantime, the SPTE is being squeezed by the new West of Scotland transport partnership Westrans, where a number of local authorities are set to dilute the influence of the incumbent members. At the end of that process, Watson and the present SPTE board will not only be stuffed, but sliced and diced as well.

When Stephen praises the SPTE as a role model for other transport partnerships, he is surely damning with faint praise. The last thing the executive wants is for the fledgling Sestrans, Hitrans and the rest to emulate Strathclyde's massive cost base. The hidden agenda must be for Westrans to finish off what Edinburgh has started — keep the expertise, but fillet the empire.

Amid all this upheaval, ministers must not lose sight of those who underwrite the industry — the passengers and the taxpayers, most of whom pay twice, in both subsidy and fares. The benefits of rail devolution are clear, but they must not be squandered by building up regional empires in the style of the SPTE.

The signs are already there — even before Darling has reported — and, while the goalposts are still moving, there are websites and consultancy documents galore, all to protect vested interests. It is much too complex and expensive.

The minister's job is to ensure that Transport Scotland delivers high-quality services for the best possible price. Above all, his priority has to be that passengers and taxpayers are the ones who do not, in the councillor's charming phrase, get stuffed.

Shredding the sector

In any business, the pressure for greater efficiency is always on. But when HSBC, the world's second-largest bank, declares it will reduce its workforce by no fewer than 3,500 jobs, one wonders just how far the ultra-competitive banking cost base can be cut.

The best efficiency indicator is the cost/income ratio, which for HSBC is a far-from-competitive 51 at the last results. Barclays, too, is in the fifties, though both the Scottish banks come in the low forties.

HBOS, which is still heavily weighted towards the retail market, comes in just under 42. And the Royal Bank, post-shredding by Sir Fred, is also 42, down from 58 five years ago. In fact the Royal, whose corporate mix makes it most comparable to HSBC, shows just how far the men in Canary Wharf have to go.

But the pressure on the cost base will not go away, whether you are running a bank or Scottish Opera's chorus. Elsewhere in the financial forest, Standard Life is trying to establish its most efficient cost base as a preparation for converting to the rigours of the stock market.

It's a different sector, of course, but it is not exempt from market pressures. The target keeps moving — the cost base cannot be set in stone.