Government inquiry into Network Rail funding launched

The Transport Select Committee said most rail infrastructure funding was channelled through Network Rail, but this new inquiry would establish if that was still the right approach to take.

The funding is released to Network Rail in five year control periods (CP) with CP6 due to start in April 2019 and run until March 2024.

In October the Department for Transport (DfT) announced £47.9bn of funding had been set aside for CP6.

Several projects which were originally earmarked to take place during this period have already been cancelled, postponed or scaled back due to cost over runs in the current CP5. In July, transport secretary Chris Grayling scrapped plans to electrify sections of rail on the Midland Main Line and in South Wales and the North of England. At the time he said new bi-mode train technology offered seamless transfer from diesel power to electric which negated the need for the electrification schemes.

Rail watchdog, the Office of Road and Rail (ORR), also said Network Rail had become less efficient at the same time as it faced increasing financial pressure.

A ban on borrowing money has already been imposed on Network Rail during CP6 as debts at the end of CP5 are expected to hit £50bn.

Among other issues the inquiry will address the impact of postponing renewals from CP5 to CP6 and the implications of Grayling’s decision to remove major new enhancements from the control period process.

It will also look at whether the control period process is adequate at enabling the delivery of long terms rail infrastructure objectives and the implications of introducing more private funding into rail schemes. If favourable, it will look at how the barriers to private investors can be addressed.

Transport Select Committee chair Lilian Greenwood said: “Government has started work on funding and spending plans for Network Rail in CP6. This should address the failures of the current control period: scrapped electrification and enhancement projects; uncompleted work tipping from the current control period to the next; and deep disquiet about differences in regional funding.

“We will consider whether the mechanism of control periods is the best way to manage investment in rail infrastructure.

“At a time when UK passengers have seen ticket prices rising far faster than their wages, the Committee will examine whether the current system of planning and delivering investment is giving us the infrastructure we need if we are to have a modern 21st century railway.”

Deadline for written submissions is Monday 18 December 2017.