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Rail regulator approves £35bn Network Rail funding plan

3115211 railworkers

The rail regulator has given the green light to Network Rail’s £35bn funding plan for control period six (CP6) between 2019 and 2024.

In its final determination for CP6, the Office of Rail and Road (ORR) has approved £31bn to be spent in England and Wales and £4bn to be spent in Scotland.

Of the total, £24.3bn is set aside to renew and maintain the railways, £285M will go into research and development and innovation, while £270M has been allocated to improving timetabling after the chaos caused by this summer’s switchover.

The final determination also includes an additional £15.2bn which Network Rail is set to receive “to support delivery of High Speed 2” (£4.8bn) and from £10.4bn in funds initially allocated to support the delivery of enhancements.

In its draft spending plan Network Rail had sought approval to spend £34bn in CP6. But the ORR told Network Rail to spend an additional £1bn during the five year period.

Of the additional money, £300M come from Crossrail subsidies that Network Rail ‘‘forgot’’ to include in its original Strategic Business Plan.

In its final determination the ORR has ruled that these Crossrail funds “must be included against projects that are easily cancellable”.

It adds: “In response, our final determination does not place any firm commitments on the company that rely on this funding. Instead, we will leave it to Network Rail to work closely with Department for Transport so that best use is made of these funds.”

Of the £35bn, the regulator has now approved £24.3bn to be spent in Great Britain on maintaining (£7.7bn) and renewing (£16.6bn) the existing railway, with renewal work getting a 17% funding increase from the £14.2bn in CP5.

In order to avoid future timetabling delays, £270M will be spent to employ around 100 new staff to work on timetabling and planning functions.

The five-year plan also supports further devolution of routes, with each of Network Rail’s eight geographic routes being given its own budget, delivery plans and scorecards. In addition, ORR has “strengthened local routes’ ability to buy goods and services they need locally rather than centrally, where it offers better value for money”.

The Performance Innovation Fund has also been increased to £40M from the initial £10M set out in the original Strategic Business Plan. While a £245M research and development fund will be available over the five years to help “develop new technology that improves industry’s performance or efficiency”.

ORR chief executive John Larkinson said: “Today’s decisions mean that Network Rail, its routes and its system operator can now press forward with their plans to deliver a service which passengers and freight customers rightly demand and deserve.

“These plans are focused on improving performance for passengers and freight operators by getting the basics right – ensuring that the railway is properly maintained and renewed, and on improving the daily operation of the railway.”

“There is no time to lose; Network Rail and, in particular, the routes and system operator must make sure they are ready to deliver from day one of the new control period. That is why we have and will continue to report on – and where necessary challenge – Network Rail’s readiness.” 

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