Network Rail will get £1.8bn less than it says it needs to run Britain’s railways between 2014 and 2019, the rail regulator announced last week.
The Office of Rail Regulation told Network Rail that it could spend a total of £38.3bn operating and upgrading the network.
This is less than the £40.1bn Network Rail had asked for but is more than the £35.7bn it is allowed to spend in the current five year regulatory period.
The regulator has approved more than £12bn worth of enhancements to Britain’s rail network to ease congestion and improve performance.
But it said that within this, projects totalling more than £7bn do not yet have clear delivery plans or costs so the regulator is giving Network Rail until March 2015 to work up efficient plans for these enhancements before allowing the money to be spent.
Network Rail will be allowed to spend £5bn on maintenance and £240M on equipment and working practices to improve the safety of track workers.
The regulator said it had increased funding to upgrade or close level crossings by £32M compared with the amount included in its draft determination, published in June, to £109M.
It said it had only revised the figures in the draft determination as “new and compelling evidence had been provided”.
It said it would also monitor Network Rail’s management, maintenance and renewal work more closely and intervene earlier to stop problems escalating.
Network Rail has until 7 February to respond in detail to the announcement, but must decide by 31 January if wants to appeal against the regulator’s decision through the Competition Commission.
It will publish a draft delivery plan for the funding period in December and a detailed version on 31 March.
Network Rail chief executive David Higgins said he would “seek clarification and work through the detail”.