Having carefully considered the responses we received to our series of consultations on the financial framework for PR18, we set out our decisions in the financial framework supplementary document that forms part of ORR's draft determination for PR18.
Our decisions on the financial framework address a range of issues for CP6 (the five year control period for Network Rail that will commence on 1 April 2019), including:
- a switch from RPI to CPI for inflation indexation for revenue requirement calculations and for track access charges; and
- the management of financial risk in the context of route level financial settlements and Network Rail's reclassification as an arm's length public sector body.
We did not set out proposed revenue requirement values in our draft determination, because Network Rail was carrying out targeted updates to its strategic business plans. However, we set out the approach we used to calculate revenue requirements for each route (including the System Operator and Freight and National Passenger Operator) once expenditure requirements and forecast income values had been settled.
Links to our earlier consultations on the PR18 financial framework, and the responses we received are provided below.
Draft Determination
The financial framework supplementary document, together with a full range of draft determination documents for PR18 (including the specialist reports we commissioned) can be found on our draft determination page.
March 2018 second consultation document
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This consultation set out our 'minded to' proposals for a number of financial issues, especially our proposal to move from RPI to CPI for inflation indexation. We noted that some existing mechanisms and adjustments would not be needed in CP6, but might be revisited if Network Rail’s funding structure were to change in future. We also explained the key issues affecting budgetary flexibility and financial risk management for Network Rail in CP6.
Second consultation on the PR18 financial framework
Published 27 March 2018
We received eight responses from a range of stakeholders. We are grateful to all those who responded. We have published all non-confidential responses (see link below).
Responses to second consultation on PR18 financial framework
Published 12 June 2018
Consultant's report
Financial policy issues at PR18: Advice to the ORR
Report from Europe Economics - 31 March 2017
December 2017 update
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Update on the financial framework for PR18
Published 14 December 2017
This letter updated the information we set out in our first consultation on the financial framework for PR18, published in January 2017. It outlined several policy developments that have implications for Network Rail’s funding structure for CP6 and our route level approach to determining its revenue requirements.
We received five responses to the letter from a range of stakeholders. We are grateful to all those who responded. We have published all non-confidential responses (see link below).
Responses to the update on the PR18 financial framework
Published 12 June 2018
January 2017 consultation document
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Consultation on the financial framework for PR18
Published 26 January 2017
We received 21 responses to the first consultation from a range of stakeholders. We are grateful to all those who responded. We have published all non-confidential responses (see link below).
Responses to first consultation on PR18 financial framework
Published 12 June 2018