Network Rail 'must cut spending'
Debt-ridden Network Rail (NR) has been told by regulators that it must shave nearly £2 billion from spending plans over the next five years and meet new punctuality targets.
The subsidised company, which is responsible for tracks and signalling, announced last month that its debt had soared past £30 billion.
It has set out plans to spend £23.3 billion running the railway network from 2014 to 2019 but the Office of Rail Regulation (ORR) has calculated the day-to-day costs at the lower figure of £21.4 billion.
In an assessment of NR's plans for the five-year period, the regulator also said it will also expect higher standards of management of the network's infrastructure as well as improved safety for passengers and railway workers.
The ORR said that savings on spending for the period could be achieved "through the implementation of new technologies, better management of the railways and more efficient ways of working". It said the savings would not come at the expense of safety and that maintenance expenditure would be protected, with additional funding for the improvement of structures such as bridges and tunnels as well as upgrading level crossings.
ORR said money could be saved through measures such as keeping better data on the condition of the network so that problems could be identified and fixed before they occur, reducing delays. The regulator also said analysis showed that train operators, NR and suppliers could save money by working together more efficiently.
Network Rail is already forecast to have delivered efficiencies of 40% in running the railways from 2004 and 2014 and ORR said it expected to see a further 20% from 2014 to 2019. A total figure for running and expanding Britain's railways for the five-year period - which includes the cost of servicing its vast debts as well as enhancements to the network - has been put at £40.1 billion by NR but the ORR said this should be £37.9 billion.
The regulator said that while it had approved a £12 billion programme of enhancements, some £7 billion of these were in the very early stages of planning. It said that to safeguard taxpayer interest, it was requiring NR "to provide well-developed plans to ensure they represent real value for money".
Network Rail said the ORR's proposals would need "careful and detailed thought" before a formal response in September.
Anthony Smith, chief executive of Passenger Focus, welcomed improvements in rail service called for in the document, but he added: "Passengers may be baffled that after five more years of investment the overall target for punctuality at the end of 2019 will differ only marginally from now."