Network Rail is making changes to its business. We support this and are changing the way we regulate Network Rail.
Around £48 billion of money is due to be spent in the next control period (‘CP6’), which runs from 1 April 2019 to 31 March 2024. Network Rail has different financial incentives compared to most companies in regulated sectors. So it is important that our monitoring shines a light on whether Network Rail is delivering efficiently.
A big change in CP6 is that we will be making more comparisons between the eight geographical areas that Network Rail has split its network into. This in turn, provides a strong reputational incentive for it to become more efficient.
Our proposals
We are currently consulting on ways to enhance our current approach for how we assess and report Network Rail’s efficiency and wider financial performance. We are doing this, because we want the best outcomes for the people who use the rail network through supporting better value for money.
To achieve this, we are proposing:
- to obtain a better understanding of the efficiency of Network Rail’s routes by putting greater emphasis on reviewing and reporting how routes have delivered efficiency improvements, e.g. by delivering the same work for less money;
- more assessment of the specific types of work that Network Rail’s routes are doing, the cost of that work, and the value it brings to customers. We set out suggested measures in this consultation, but importantly, want to work with Network Rail and stakeholders to identify the most useful measures for its business;
- to make greater use of information from our safety role, for example, drawing on insights from safety reports; and
- that we will provide a forward-looking view of the efficiencies that Network Rail will likely achieve across CP6 as part of our annual reporting. This will include assessing the quality and progress of routes’ efficiency plans and monitoring leading indicators of delivery.
In summary, we are looking to enhance how we measure and report on Network Rail’s efficiency and wider financial performance in CP6.
Have your say
Find out more in our full consultation and we welcome feedback before it closes on 14 March 2018.