Monitoring Network Rail's efficiency

By reporting on Network Rail’s efficiency and wider financial performance over time, we give assurance to rail users and funders that Network Rail is delivering what is expected and at the same time, we provide a strong reputational incentive on Network Rail to become more efficient.

Publications and updates

Annual efficiency and finance assessment of Network Rail

23 July 2018

This document provides our efficiency and finance assessment of Network Rail for 2017-18, the fourth year of control period 5 (CP5), which runs from 1 April 2014 to 31 March 2019.

Our annual assessments are intended to help customers, funders and other interested parties gain a better understanding of Network Rail's financial performance compared with the CP5 financial assumptions that we set out in our 2013 periodic review (‘PR13’) determination. Our assessments provide a yearly snapshot based on the best available information. It presents financial information on Great Britain, Scotland, and Wales, as well as Network Rail’s routes. It contains information and commentary on Network Rail's expenditure and its efficiency compared to our PR13 determination, its income, borrowing, debt and regulatory asset base (RAB).

The report highlights:

  1. The efficiency of Network Rail’s operations, support, maintenance and renewals activities declined by £4m (0.4%) in 2017-18, compounding the £218m (4.4%) decline across the first three years of CP5.
  2. Network Rail underperformed against its internal budget by £0.1bn in 2017-18.
  3. Significant enhancements have been delivered on budget.
  4. Network Rail’s debt increased by £5.5bn to £50.3bn in 2017-18.
  5. Preparing for control period 6: Because poor planning for CP5 caused a number of the problems with Network Rail’s renewals delivery and efficiency, we challenged the company to demonstrate that it is better prepared to deliver efficiently from the start of CP6. Network Rail has undertaken an analysis of some of the key leading indicators of efficient delivery for each of its routes for 2019-20, the first year of CP6. Given that it is around nine months before the start of CP6, we would not expect routes to have fully developed workbanks, contractual arrangements and resources. However, Network Rail’s analysis shows that most routes still have a substantial amount of work to do to get ready for the start of CP6. Network Rail needs to be clearer about its targets, and to improve its comparative analysis of the regional variations across its leading indicators. We will hold Network Rail to account through our regular director-level meetings with individual routes and report on progress in our next Monitor publication.

Previous assessments

Underspend and efficiency

It is important for the viability and development of the railway that Network Rail delivers its outputs at the least possible cost in order to minimise the financial burden on both its customers and funders.

In order to facilitate this, in 2006 we published our policy on monitoring underspend and efficiency.

Further information