Rail regulator calls for Network Rail to spend additional £1bn on railway upgrades

The much-anticipated Office of Rail and Road (ORR) Periodic Review 2018 (PR18) into the next five years of spending has been published in which it says Network Rail needs to spend a further £1bn on Britain's railways to replace worn out assets.

The rail regulator in its latest review has found that Network Rail’s total budget for maintenance and renewal should be taken up to £18bn, with the report identifying that “strong planning” remains central to improving performance.

In its assessment of the five-year plans, the ORR has identified “greater scope” for the rail organisation to do more than proposed in order to prioritise reliability and safety after recent performances which have failed passengers up and down the country.

This is despite record levels of investment which will be spent on UK railways in Control Period 6 (CP6), from 2019 - 2024. This figure will be split with £30bn to England and Wales and £4bn to Scotland.

Chief executive of ORR Joanna Whittington said: "The entire rail industry, including passengers, freight customers and train operators, relies on Network Rail to deliver a high-quality service. ORR’s initial assessment of Network Rail’s five-year plans shows that the transition from a centrally run company to one structured around eight geographic routes has improved the quality of the plans, but we want to see £1bn more spent on renewing the railway to improve reliability and boost safety.”

Other recommendations in the report include an extra £80m in safety-related expenditure on initiatives such as worker safety and level crossings, making sure all train companies engage fully with finalising passenger performance targets and that concerns from the supply chain are addressed on the impacts of fluctuation in spending on efficiency.

Mark Carne, Network Rail chief executive, said: “Today’s draft determination is an important step in the process to finalise our plans to deliver a safe, reliable, improving and growing railway in the five years to 2024. We welcome the regulator’s general support for our plans for Britain’s railways, delivering a more reliable service that passengers can rely on.” 

Responding to the draft determination, Peter Loosley, policy director at the Railway Industry Association said: We understand that the £30bn relating to Operations, Maintenance and Renewals expenditure for England and Wales is consistent with both the SoFA and Network Rail’s Strategic Business Plans.  It does not of course contain any provision for ‘Hendy Tail’ enhancements which we understood to constitute roughly £9bn of the £47.8bn SoFA and which is a matter for the Department for Transport. RIA will need to examine the Draft Determination in detail and discuss with RIA members, ORR and others as necessary to inform our more detailed response.”