2014-15 business plan stocktake

4 February 2015

ORR CEO, Richard Price, looks back on how ORR has delivered against its strategic objectives for 2014-15.

Last week I reported to our Board on ORR's delivery against our strategic objectives since April 2014. I thought I'd share the highlights of what we have done and the areas where we have ground to make up. It has of course also been the first nine months of the new control period and the Board was also briefed on the performance of the network over this period. We published our industry report on Network Rail performance (the Network Rail Monitor) on the 20 November 2014 which highlighted that performance is generally below expectations and where improvements need to be made. 

As we are taking a different approach to regulating Network Rail over the new five year control period (also known as CP5). We are monitoring the network more closely to identify trends in performance so that we can intervene earlier where necessary. That means it is vital that we have the right data and analysis on how Network Rail and the rest of industry are doing. ORR's team has done a first rate job in producing this for the Board and its crucial we get this right early. However, the process of developing this analysis revealed concerns about the quality of the data we're getting from Network Rail in areas such as renewals and maintenance. I raised these concerns with Mark Carne, Network Rail's chief executive, and I welcome Mark's response which sets out how he intends to address data quality in each area. We are monitoring this closely because, without accurate information it's hard to understand the trends in the business performance properly. 

We've made progress with our process for determining the efficient costs on enhancements. We've already processed 18 schemes with a cumulative value of £3.4bn. Our main concerns rest on the timing of submissions from Network Rail, and on the increasing estimated costs which require further review and scrutiny to ensure Network Rail's proposals represent the most cost effective way of achieving benefits for rail users; and that government regards them as value for money and sensible to support. Late submissions and cost pressures mean that our assessment of Network Rail's proposals have slowed down. We are working through the details of these projects and putting in place plans to conclude ECAM by the end of the 2015. 

We continue to engage with the Department for Transport now that Network Rail is in the public sector. Our role as independent regulator changes very little as a result – indeed current legislation in Parliament would see us taking on a similar monitoring role in relation to the publically-owned Highways Agency. The role of the regulator – holding the business to account transparently on behalf of its customers and funders – is important whoever owns it. Of course some things are different, including Network Rail's inclusion in the public finances with fixed financial limits. We continue to work with the company and government to make sure that these changes can be made while making sure Network Rail has the commercial flexibility it needs to delivers its commitments to its customers. 

Delivery against our own business plan has been strong. In addition to getting the CP5 monitoring process in place, we've also started some important work in improving services for passengers, looking at how tickets are sold so that customers get the information they need to choose the best value ticket for their journey and how this could be improved. Our work on how passengers are kept informed during disruption is coming close to completion and we're expecting the train operators to confirm the details of their action plan very soon. 

We've delivered 80% of our public milestones on time: in some cases we have concluded that taking a slightly different approach is likely to get a better result (such as our work on the industry's approach to dealing with complaints; our consultation on the operation of the ticket retail market; and our own workforce planning). In others progress with the industry has been slower than we expected, and this has delayed our conclusions (capacity forecasting in particular). I do not think that this materially affects the benefit of the work we are doing in these areas, and in some cases will help us to get surer results. 

Recognising the importance of freight, we held an event with rail freight customers in October 2014 which provided an insight into their commercial environment. This engagement will be maintained by a freight customer panel in March and we will host an annual event later this year. 

We set ourselves a target at the beginning of the year that over 50% of our safety resource would be spent on proactive inspection and I'm delighted that we have kept this promise. ORR is just one part of the system which has reduced risks to passengers to their lowest ever levels and the best recent safety records in Europe: but we cannot be complacent and there is more to do, particularly in areas like level crossings and track worker safety. 

Accountability is really important to us at ORR to help keep the railway safe. As a body independent of government and accountable to parliament and the public, we need to make sure you know what we are doing, and why. I hope that you've found this quick insight useful. If you'd like to hear more, as we move into planning our strategic objectives for 2015/16, you can register to attend our business planning event on 10 February.