23
Conclusion
Tenth Report - Overview of the English …
Deferred
The Office of Rail and Road told us that in Control Period 5 (2014–15 to 2018–19), Network Rail became less efficient and failed to meet efficiency targets.58 Indeed, in contrast to assumptions made by the Office of Rail and Road that Network Rail could improve the efficiency of its core …
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The Office of Rail and Road told us that in Control Period 5 (2014–15 to 2018–19), Network Rail became less efficient and failed to meet efficiency targets.58 Indeed, in contrast to assumptions made by the Office of Rail and Road that Network Rail could improve the efficiency of its core business activities by 19.4% during Control Period 5, its efficiency actually declined by 7.4%.59 For Control Period 6 (2019–20 to 2023–24), Network Rail told us it has agreed to a target of £4 billion of efficiency savings on operations, maintenance, renewals and support activities. This is an increase from the original target of £3.5 billion, which Network Rail considers it can exceed.60
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Government response AI summary
Network Rail will provide a detailed response by December 2021, outlining how it will achieve the £4 billion efficiency target in Control Period 6, including improvements in approach, an efficiency framework, and specific targets for remaining years.
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HM Treasury
24
Conclusion
Tenth Report - Overview of the English …
Deferred
In the first year of Control Period 6 (2019–20), Network Rail exceeded its planned efficiency savings; achieving £385 million compared to £316 million expected.61 The Office of Rail and Road told us that Network Rail has improved its efficiency through the development of a bottom-up business plan which routes and …
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In the first year of Control Period 6 (2019–20), Network Rail exceeded its planned efficiency savings; achieving £385 million compared to £316 million expected.61 The Office of Rail and Road told us that Network Rail has improved its efficiency through the development of a bottom-up business plan which routes and regions are bought into.62
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Government response AI summary
Network Rail will submit a detailed response to the Committee by December 2021, outlining its plan to achieve the efficiency target in Control Period 6, including improvements in approach, an efficiency framework, and specific targets.
Read full response →
HM Treasury
25
Conclusion
Tenth Report - Overview of the English …
Deferred
But Network Rail recognised that there “is still a mountain to climb” to achieve the full efficiency improvements it has committed to, and that it will need to continue to increase savings.63 Network Rail estimated that 60% of remaining planned efficiencies would come from renewals activities (like for like replacements …
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But Network Rail recognised that there “is still a mountain to climb” to achieve the full efficiency improvements it has committed to, and that it will need to continue to increase savings.63 Network Rail estimated that 60% of remaining planned efficiencies would come from renewals activities (like for like replacements to renew the railway).64 However, the Office of Rail and Road highlighted in 2020 that plans for renewals were immature.65 A review of Network Rail’s delivery plans, published by the Office of Rail and Road in January 2021, highlighted that Network Rail needed to do more work to develop a smooth renewals profile and consider how this would improve efficiency in Control Period 6.66 Lessons must be learned from the problems with renewals activities in Control Period 5 which caused significant inefficiencies.67 A subsequent review letter, published after our 56 Qq 53, 54 57 Rail Industry Association (OES0004), p3 section 3 58 Q 34 59 Office of Rail and Road, Annual efficiency and finance assessment of Network Rail 2018–19, July 2019, p3 60 Qq 32, 46 61 Office of Rail and Road, Annual efficiency and finance assessment of Network Rail 2019–20, July 2020, p14 62 Q 34 63 Qq 32, 34; Office of Rail and Road, Annual efficiency and finance assessment of Network Rail 2019–20, July 2020, p5 64 Q 46 65 Office of Rail and Road, Annual efficiency and finance assessment of Network Rail 2019–20, July 2020, p6 66 Office of Rail and Road, ORR’s review of Network Rail’s delivery plan update (RF8) for the financial year 2020– 21, January 2021 67 Q 34 Overview of the English rail system 15 session, highlighted that COVID-19 has had a significant impact on the development of some efficiency plans and has caused cost pressures, meaning that assumptions made at the start of Control Period 6 are now too optimistic.68
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Government response AI summary
Network Rail will write to the Committee by December 2021, committing to delivering efficiency improvements in Control Period 6 and detailing how targets will be met, including improvements in approach, an efficiency framework, and specific targets.
Read full response →
HM Treasury
26
Conclusion
Tenth Report - Overview of the English …
Deferred
In 2020, the Office of Rail and Road reported inherent uncertainty in the value of some of the efficiency savings made by Network Rail in 2019–20.69 The Office of Rail and Road told us that it has now agreed a set of indicators with Network Rail which measure the likelihood …
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In 2020, the Office of Rail and Road reported inherent uncertainty in the value of some of the efficiency savings made by Network Rail in 2019–20.69 The Office of Rail and Road told us that it has now agreed a set of indicators with Network Rail which measure the likelihood of Network Rail meeting its efficiency targets for the Control Period. It also told us that Network Rail’s regional management information has improved, enabling a better understanding of relative performance. Despite these improvements, the Office of Rail and Road reiterated the large scale of the challenge faced by Network Rail in achieving its efficiency target for Control Period 6.70 68 Office of Rail and Road, ORR’s review of Network Rail’s RF11 delivery plan update for the financial year 2021–22, March 2021 69 Office of Rail and Road, Annual efficiency and finance assessment of Network Rail 2019–20, July 2020, p5 70 Q 34 16 Overview of the English rail system
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Government response AI summary
Network Rail will submit a detailed response by December 2021, outlining how it will achieve its efficiency target for Control Period 6, including improved approaches, an efficiency framework, and details on targets and the impact of COVID-19.
Read full response →
HM Treasury