ORR assessment of Network Rail’s performance – good progress commended, some further improvements required

29 September 2005
ORR/38/05

The Office of Rail Regulation today published its second annual assessment of the performance of Network Rail in 2004-05. ORR has also issued a notice on Network Rail‘s forthcoming 2006 business plan.

The highlights are that Network Rail has performed well in the operation, maintenance and renewal of the network, and particularly in achieving improvements in train performance. But it must sustain the improvement and develop in a number of respects, in particular ensuring that areas of poor performance are addressed, understanding its customers’ needs, documenting the capability of the network, and assessing the condition of stations and depots.
 
Network Rail has achieved its performance whilst underspending against its regulatory allowance. Much of the underspend relates to deferral of renewals activity to later years in the current control period. It is important that the company ensures that it has sufficient management and financial resources to deliver this work. In addition, some of the underspend is due to Network Rail exceeding its efficiency targets. We commend the company for carrying out its work more efficiently than projected, but consider it needs to do much more to improve the monitoring of unit costs.

Network Rail must also improve its business planning and forecasting and demonstrate that it can both control expenditure, and deliver and sustain the outputs its customers and funders expect.

Notes for editors

1. The assessment covers the financial year from 1 April 2004 to 31 March 2005 and follows monitoring and analysis by ORR of Network Rail’s performance throughout the year and assessment of Network Rail‘s annual return and the audit of it by independent regulatory reporters.
2. The annual assessment of Network Rail is also available from the ORR Librarian, Sue MacSwan, 1 Waterhouse Square, 138–142 Holborn, London EC1N 2TQ, tel: 020 7282 2001, fax: 020 7282 2045, e-mail: rail.library@orr.gsi.gov.uk.
3. The 2006 business plan notice has been issued in accordance with paragraphs 4.2 and 5(l) of Condition 7 of Network Rail’s network licence and sets out the form and content of Network Rail’s business plan for the period to March 2009. ORR expects Network Rail to produce a separate plan and cost submission for the period beyond March 2009 as an input to ORR’s periodic review of Network Rail.
4. The Network Rail 2006 business plan notice and covering letter is available here.

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