{"id":135379,"date":"2024-10-01T20:00:00","date_gmt":"2024-10-01T10:00:00","guid":{"rendered":"http:\/\/www.vibewire.com.au\/?guid=b67f3ada554262a7fcd6a9c96001c1d0"},"modified":"2024-10-01T20:00:00","modified_gmt":"2024-10-01T10:00:00","slug":"getting-value-for-money-on-the-67bn-spent-on-britains-railway-infrastructure","status":"publish","type":"post","link":"https:\/\/www.vibewire.com.au\/?p=135379","title":{"rendered":"Getting value for money on the \u00a367bn spent on Britain\u2019s railway infrastructure"},"content":{"rendered":"

Getting value for money on the \u00a367bn spent on Britain\u2019s railway infrastructure<\/span>
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In the five years between April 2019 to 31 March 2024, Control Period 6, Network Rail spent \u00a367.4 billion (2023-24 prices), to operate, maintain, renew and enhance the national rail infrastructure in Great Britain.<\/div>\n
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An important role for ORR is to assess how efficiently Network Rail spends the funds it receives, with the goal of getting value for money for passengers and taxpayers. Our latest report, the annual efficiency and finance assessment<\/a>, is part of how we do exactly that.<\/p>\n

We found that, despite the challenging circumstances of the pandemic and strikes, Network Rail made \u00a34.0 billion of savings nationally by doing things differently or doing the same at lower cost, which we refer to as \u2018efficiencies\u2019. Across all its regions, Network Rail exceeded the regulatory targets for efficiency set in ORR\u2019s periodic review in 2018. In Scotland, Network Rail exceeded its efficiency target by 13%, resulting in a total reduction in expenditure of \u00a3356 million in CP6.<\/p>\n

But we also found that across income and expenditure \u2013 and when measured against what it was expected to deliver \u2013 the company\u2019s financial performance was down \u00a32.8 billion over the control period. This was due to challenges such as unplanned costs of severe weather events, under-delivery of planned renewals and, as already mentioned, the pandemic, industrial action and inflation.<\/p>\n

The pie chart below helps show Network Rail\u2019s spending in CP6. This includes not just expenditure on operations, maintenance, renewals and enhancements but all financing costs (including for index-linked debt).<\/p>\n

Network Rail\u2019s expenditure in CP6 (2023-24 prices)<\/strong><\/p>\n

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How did it deliver cost efficiencies?<\/h2>\n

Network Rail delivered the savings through improved contracting strategies, modernisation, staff related savings and better managing possession of the railway for carrying out maintenance and renewal of the network. Despite a slight increase in headcount (by 1%), staff costs decreased (by 4%) over the control period.<\/p>\n

Another way in which Network Rail was able to weather the financial shocks of the last five years was by fully using \u00a33.0 billion of risk funding approved by the ORR in the 2018 periodic review. This funding was set aside to mitigate financial risks which could not be managed by other means.  <\/p>\n

Looking ahead<\/h2>\n

We\u2019re at the start of a new five year control period in which Network Rail has \u00a343.1 billion (2023-24 prices) to operate, maintain and renew the railway. Enhancements are funded separately, so future enhancements delivered by Network Rail would add to this total expenditure, as will the financing of historic debt.<\/p>\n

As part of ORR\u2019s latest periodic review (PR23) Network Rail has committed to deliver \u00a33.7 billion (2023-24 prices) of efficiency improvements (\u00a33.2 billion in England and Wales, and \u00a30.4 billion in Scotland). In cash terms the projected efficiencies over the next five years are \u00a33.9 billion (very similar to those achieved in CP6).<\/p>\n

We believe Network Rail\u2019s plans for delivering these efficiencies are broadly robust, but we are continuing our discussions with the company to ensure our concerns about a funding gap in England & Wales are properly addressed so that essential expenditure on core assets is protected. <\/p>\n<\/div><\/div>\n<\/div><\/div>\n<\/p><\/div>\n

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Related links<\/div>\n
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Annual efficiency and finance assessment of Network Rail 2024<\/a><\/div>\n
Annual assessments of Network Rail<\/a><\/div>\n
Periodic review 2023 of Network Rail: final determination<\/a><\/div>\n
Network Rail's control period 7 delivery plan<\/a><\/div>\n
Holding Network Rail to account: letter to Network Rail dated 28 March<\/a><\/div>\n<\/p><\/div>\n<\/p><\/div>\n
\"Will<\/p>\n<\/div>\n
Will Godfrey<\/div>\n
Director of Economics, Finance and Markets<\/div>\n","protected":false},"excerpt":{"rendered":"

Getting value for money on the \u00a367bn spent on Britain\u2019s railway infrastructure
\nTue, 01\/10\/2024 – 10:00<\/p>\n

1 October 2024<\/p>\n

In the five years between April 2019 to 31 March 2024, Control Period 6, Network Rail spent \u00a367.4 billion (2023-24 price…<\/p>\n","protected":false},"author":13,"featured_media":1,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[],"tags":[],"class_list":["post-135379","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/135379","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=135379"}],"version-history":[{"count":2,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/135379\/revisions"}],"predecessor-version":[{"id":135430,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/135379\/revisions\/135430"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/"}],"wp:attachment":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=135379"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=135379"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=135379"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}