A new report from the Office of Rail and Road (ORR) shows that Network Rail has exceeded its efficiency target in the last year, though its overall financial performance showed an overspend which was approaching £1bn.

The Annual Efficiency and Finance Assessment of Network Rail, covering the period April 2022 to March 2022, was published today and showed that Network Rail spent nearly £16bn on Britain’s rail infrastructure during the year in question. The report noted that there were numerous challenges facing the organisation which is charged with operating, maintaining, renewing and enhancing the British rail infrastructure. Despite the challenges, the ORR noted that Network Rail’s efficiency improved, showing it to be on track to exceed the original target of £934m set by the ORR.  Overall, Network Rail achieved £949m of efficiency savings up to March 2023.

During the first four years of Control Period Six, Network Rail has achieved £2.9bn of efficiencies, well on target to achieve the £4bn revised figure required for the control period. However, some regions have said that they Amy struggle to reach their revised targets. The previous commitment set by the ORR at the 2018 periodic review was £3.5bn of efficiency savings.

Network Rail’s financial performance was below target, overspending by £974m. The underspend can be partly attributed to industrial action – mostly through higher payments to train operators in relation to service disruption – as well as poor weather conditions which affected assets and necessitated speed restrictions.

The periodic review of Network Rail for 2023-24 is already under way with the ORR publishing its draft determination document in June. It says that Network Rail should have a greater focus on train performance with its plans for the next five-year funding period – Control Period Seven, which begins in April – concentrating on renewing core assets, providing better train services for passengers and freight operators and ensuring the resilience of core assets, including track, structures and earthworks, as climate change presents ongoing challenges.