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Limitations in Network Rail's information on its own costs are hampering the ability of the Office of Rail Regulation (the Regulator) to judge the genuineness of the efficiency savings reported by Network Rail. This report acknowledges that the Regulator has significantly developed the methods it uses to judge efficiency. Its targets have demanded substantial improvements from Network Rail. Network Rail has made efficiency savings of 27 per cent in the five years to 2008-09, equivalent to £1.8 billion in that final year. This was below the Regulator's target of 31 per cent, although this was still an achievement when compared to savings in other regulated industries. The Regulator has determined that substantial scope remains for Network Rail to improve its efficiency, estimating that maintenance and renewal activities were 34 per cent to 40 per cent less efficient than the most efficient European rail infrastructure managers in 2008. The Regulator estimates that Network Rail can achieve further efficiency savings of 21 per cent in the five years to March 2014 - equivalent to spending £940 million less in 2013-14 than the forecast for that year without efficiency gains. However, there are continuing limitations in the robustness and coverage of Network Rail's unit cost information. These need to be addressed promptly to improve confidence that future efficiency targets accurately reflect Network Rail's potential for sustainable savings, as the efficiency gap narrows, and that reported savings correctly reflect efficiency gains actually achieved.
The Office of Rail Regulation (the Regulator) is the independent economic and safety regulator of the rail industry in England, Scotland and Wales. The Regulator's duties include promoting economy and efficiency in the rail industry with much of its work focusing on Network Rail, the owner and monopoly provider of the national rail network, including track, signalling and stations. Network Rail does not face normal commercial pressures from investors and lenders to improve efficiency as it is a not-for-dividend company without shareholders, financed by debt guaranteed by the Government. It is therefore the role of the Regulator to hold Network Rail to account for its performance and to incentivise it to become more efficient. The Regulator sets efficiency targets when it determines the limits on fees Network Rail can charge train operators for use of tracks, stations and depots. Sir Roy McNulty's recent review of the rail industry showed that the rail industry continued to fail to achieve effective value for money. The Committee states that the Regulator did not exert sufficient pressure on Network Rail to improve its efficiency, and that there is an absence of effective sanctions for under-performance in the system and should enforce a stronger link between performance and bonus payments to Network Rail's senior managers. The relationship between Network Rail, the Regulator and their advisors appears to the Committee to be too cosy. Network Rail should be more accountable for its use of public money, and more transparent in its operations. The Committee sets out 11 conclusions and recommendations.
The Department for Transport is eighteen months into a five-year, £9 billion investment programme to improve rail travel, in particular by increasing the number of passenger places on trains by March 2014. The Department's latest plans show that all the relevant targets will be missed. There will be 15 per cent fewer extra places delivered in London in the morning peak and 33 per cent fewer into other major cities, compared to the numbers the Department stated would be needed just to hold overcrowding at current levels. The Committee is concerned that the failure to meet the targets set will lead to substantial increases in already unacceptable overcrowding levels by 2014 and beyond. Rising demand for rail travel combined with serious cuts in public expenditure make it imperative that the rail industry becomes more efficient, otherwise the passenger will suffer. The Department says that levels of crowding, and ticket prices, depend on policy decisions about the level of government subsidy, but this ignores the scope for efficiency savings to release resources for front line services. The industry's ability to provide a good quality rail service, including acceptable levels of crowding, depends crucially on the efficiency of all players in the rail industry, and of Network Rail in particular. Rail infrastructure costs more in Great Britain than in other countries, and there is a large potential for Network Rail to improve its efficiency. The Office of Rail Regulation should be challenging Network Rail's efficiency at a detailed level.
This insightful book provides readers with an in-depth discussion of the use of benchmarking in regulation in the European transport sector. It argues that benchmarking is invaluable to regulators, particularly in the transport sector where the pressures of competition in – or for – the market are often absent.

Rail 2020

Great Britain: Parliament: House of Commons: Transport Committee

Published: 2013-01-04

Total Pages: 52


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In this report setting out their vision for the railway by 2020 the Transport Committee endorses the quest for a more efficient railway but raises concerns about safety, staffing and the protection of passenger interests. The Committee calls for: clarity about the purpose and effectiveness of rail subsidies; a clear link between policy on rail and other aspects of transport policy; a strategic approach to policy-making which does not sacrifice democratic accountability, takes passenger interests more clearly into account, upholds safety standards and develops a strategy for improving the security of the rail network; greater transparency about the costs of rail to ensure that new investment, operator alliances, profit or wastage levels and various forms of franchise can be better compared and evaluated; more modern, flexible fares and ticketing options and a clear long-term policy on regulated fares that rules out even higher fares for commuters on peak time trains; a strong single economic regulator for the rail industry; effective industry leadership via the Rail Delivery Group, scrutinised closely by the regulator to ensure that this strategic body acts in the best interests of the farepayer and taxpayer, rather than simply of established rail interests; devolution for some rail franchises to local or regional bodies. The Committee recommends that the Rail Delivery Group, made up of senior industry leaders, should spearhead the swift implementation of innovative ticketing technology and work with Passenger Focus to develop a clear strategy for improving retail facilities on stations and trains.
This report points out that the Department for Transport's latest plans for increasing rail capacity would not deliver as much extra capacity as originally specified, although the taxpayer would have provided nearly as much financial support (£1.2 billion over the period 2009-14) to train companies as originally envisaged. Value for money is also at risk because costs, particularly of rail carriages, have risen at the same time as the recession has reduced the Department's projections of demand. Against this background, the Department has reviewed each individual scheme before entering into contract to ensure that it still offers value for money. By March 2010, the Department had secured use of 526 extra carriages, with a further 106 ordered and due to be ready for operation by 2012. Capacity is now expected for 99,000 extra passengers into London in the morning peak (between 07:00 and 09:59), 15 per cent fewer than originally envisaged, and 25,500 extra passengers into other English cities, 33 per cent fewer. Passenger Transport Executives in the North of England - local government bodies responsible for the public transport in major cities - feel that their expectations for increased capacity in their area have not been met. In 2007 the DfT published a thirty-year strategy which set aside £9 billion for capacity increases. Within this, £7 billion was allocated to Network Rail. The Office of Rail Regulation (ORR) scrutinised Network Rail's plans to but the level of cost detail available to ORR restricts its ability to judge or evaluate.
Taking a global approach, this insightful Handbook brings together leading researchers to provide a comprehensive overview of the state-of-the-art in railway regulation with a particular focus on countries that rely heavily on railways for transportation links. The Handbook also considers the most pressing issues for those working in and with railway systems, and outlines future trends in the development of rail globally.
This NAO report examines the delays to passengers on main line rail services and what needs to be done to reduce such incidents. In the 2006-07 period, 0.8 million incidents led to 14 million minutes of delay to franchised passenger rail services, costing a minimum of £1 billion (which averages around £73 for each minute of delay) in the time lost to passengers. The NAO examines how well Network Rail and the Train Operating Companies work together along with the emergency services in resolving unexpected rail incidents. The incidents themselves could be infrastructure faults, fleet problems, fatalities and trepass. The Audit Office has set out a number of recommendations, including: that Network Rail should have in place procedures for notifying emergency services personnel of relevant telephone numbers to be used during incidents and should examine the costs and benefits of introducing a dedicated national telephone number for emergency; Train Operating Companies should implement the good practice guidelines issued by the Association of Train Operating Companies for the accurate and useful initial information to passengers and frequency of updates; they also should use other means of communicating information, such as visual displays onboard trains; Network Rail should analyse its own incident review reports centrally to draw together lessons from across the network; whlist Train Operating Companies should complete more detailed incident reports to cover best practice and lessons learned and further develop contingency plans for stations so staff can respond quickly to disruption; that organisations across the transport sector including Network Rail, the British Transport Police and the Highways Agency should pool the lessons learned from the various rail incidents and the Department of Transport should encourage sharing of best practice and experience across the sector.
The reports published as HC 470 (ISBN 9780215555106); HC 440 (9780215555144); HC 471 (9780215555205); HC 439 (9780215555243); HC 538 (9780215555434); HC 424 (9780215555496); HC 553 (9780215555502); HC 503 (9780215555571); HC 573 (9780215555595); HC 610 (9780215555656); HC 594 (9780215555717), session 2010-11
The Routledge Handbook of Transport Economics offers the first state of the art overview of the discipline of transport economics as it stands today, reflective of key research and policy. Transport is an important area of study and one which is problem rich, stimulating a great deal of debate in areas which impact on everyday lives. Much of this focuses on the practicalities of the modern-day phenomenon of mass movement and all of the issues which surround it. The discipline of economics is central to this debate, and consequently the study and application of transport economics has a chief role to play in seeking to address subjects relating to major transport issues. It can be argued that at the very heart of any transport issue or problem lies the underlying economics of the situation – understand that and you alleviate the problem. Featuring contributions from world-leading scholars and practitioners from across the globe, all of the chapters within this book are written from a practical perspective; theory is applied and developed using real-world examples. The book examines concepts, issues, ideas and practicalities of transport provision in five key topic areas: public transport public transport reform economic development and transport modelling transport and the environment freight transport. A real strength of the book is in linking theory to practice, and hence the ‘economics’ that are examined in this text are not the economics of the abstract, but rather the economics of everyday living. Practical and insightful, this volume is an essential reference for any student or researcher working in all areas of transport provision, ranging from planning, appraisal, regulation and freight; and for all practitioners looking to develop their professional knowledge and who are seeking professional accreditation.