UK: Network Rail achieved £840m of efficiency improvements in 2021-22, ahead of the £830m target for the year, according to an annual assessment of its efficiency and wider financial performance published by the Office of Rail & Road.
The infrastructure manager has delivered £1·9bn of efficiency improvements across the first three years of Control Period 6 (2019-24). It is now aiming to deliver £4bn of efficiency improvements across the five years, an increase on the £3·5bn target originally set by ORR.
ORR said the expected increase in efficiency savings would mostly come from workforce reform initiatives.
Comparing the performance of NR’s five regions ORR said it was concerned about the ability of the Scotland Region to meet its CP6 efficiency target. The region had underperformed financially by £136m in 2021-22, representing 28% of NR’s overall underperformance, despite accounting for just 11% of the relevant expenditure. It reported £64m of efficiencies in the year, 21% behind its delivery plan.
Despite the additional efficiency gains, ORR found that NR had missed its wider target financial performance by £487m in 2021-2022. Cumulatively, over the first three years of CP6, the infrastructure manager was £891m below the target set in its delivery plan. This was mostly due to cost pressures and reduced income exceeding the amount of efficiency improvements.
Responding to the report, Network Rail CEO Andrew Haines said ‘the additional spend of £891m over the last three years has been largely driven by rising inflation and the impact of the Covid-19 pandemic on our business. As agreed with ORR, we have also consciously increased spending on introducing new safety measures — for example on making our railway more resilient to climate change and increased extreme weather, and improving track worker safety.’