ORR reports Network Rail is off to an encouraging start in delivering its £3.5bn savings plans
19 December 2019
The Office of Rail and Road (ORR) has seen encouraging progress in its first assessment of how efficiently Network Rail is delivering its five-year plans, which run from 1 April 2019 – 31 March 2024.
ORR found that Network Rail has responded well to our initial concerns and as a result has provided more robust evidence and appears on track to deliver £391m of efficiency savings in 2019-20, ahead of its target. This is encouraging progress and a welcome turnaround, based on the strengthening of efficiency planning and delivery, and stronger central oversight and is part of Network Rail’s commitment to deliver £3.5bn of efficiency improvements during the course of the five years.
However, more needs to be done over the next few months. The challenge increases significantly in 2020-21, as more work to renew the railway is planned and the efficiency challenge almost doubles. ORR has raised concerns about the quality of plans to improve renewals efficiency. ORR is also reviewing how efficiently Network Rail is engaging with the supply chain given lower than anticipated work orders and the current 10% underspend of renewals work, which Network Rail is confident will be mainly recovered by the end of the year.
John Larkinson, Chief Executive, ORR said: "We have seen encouraging progress from Network Rail in response to our earlier concerns and evidence so far suggests there is a welcome turnaround from the previous control period. However, the next four years have much more challenging efficiency targets and it is imperative that Network Rail stays focussed, particularly on ensuring work to renew the railway is planned well in advance to maximise efficiency and provide a stable work plan for the supply chain. ORR will be continuing to keep a close eye on progress to ensure Network Rail delivers."
Notes to editors
- Network Rail's preparations to deliver efficiently in CP6 (GB) PDF, 1,085 Kb
- Preparations to deliver efficiently in Scotland in CP6 PDF, 916 Kb
- Network Rail's funding for network grant related expenditure in year 1 of CP6 PDF, 402 Kb
(this letter will be published in due course)
- Putting passengers first (PPF) follow-up letter: Phase 2 update PDF, 150 Kb