Regulator advises on funding for the Scottish railways

16 March 2012

The Office of Rail Regulation (ORR) has written to the Cabinet Secretary for Infrastructure and the Minister for Housing and Transport at the Scottish Government advising that Network Rail needs between £2.6bn to £3.4bn over the next five year funding period to deliver Scotland’s railways. This would see Network Rail deliver efficiencies of between 14% and 28% in addition to the 21% efficiency improvement it should achieve in the current period which ends in 2014.

In the letter, the rail regulator sets out its assessment of Network Rail’s overall revenue requirement in Scotland for the 2014-2019 funding period (control period 5), which commences in April 2014, taking account of the costs of the existing railway and agreed enhancements. The advice on Network Rail’s costs and outputs for CP5 will inform the determination of what the Scottish Government wants to achieve from the railways in this period and the funds available to do this.

The assessment is an important part of the rail regulator’s periodic review (PR13) – ORR’s assessment of what Network Rail must achieve from 2014, the money it needs to do so, and the incentives needed to encourage delivery and performance. It builds on the rail regulator’s commitment to improving the value for money that the railway provides to its customers and taxpayers.

To read the letter to Scottish Government Ministers, visit: http://www.rail-reg.gov.uk/pr13/pdf/advice_letter_to_scottish_ministers.pdf

ORR’s advice for overall revenue requirement in England and Wales can be read at: http://www.rail-reg.gov.uk/pr13/pdf/advice_letter_to_sos.pdf

To read ORR’s advice in full, visit: http://www.rail-reg.gov.uk/pr13/publications/index.php

Looking ahead in the PR13 process: 

• By 30 April 2012 – ORR publishes the framework for setting Network Rail’s funding, including new incentives to ensure the whole industry pulls in the same direction to deliver the best for customers and taxpayers. 
• By 31 July 2012 – The Secretary of State for Transport and Scottish Ministers publish their High Level Output Specifications and Statements of Funds Available - what they want to achieve from the railways in this period and the funds available to do this.
• 1 August 2012 – ORR consults on the specific outputs, for example, rail projects and performance targets, that Network Rail will be required to deliver between 2014-2019.