Source · Select Committees · Public Accounts Committee
Recommendation 6
6
It is not clear to us how Network Rail expects to achieve the remaining efficiencies...
Conclusion
It is not clear to us how Network Rail expects to achieve the remaining efficiencies planned in Control Period 6. In Control Period 5 (2014–15 to 2018–19), Network Rail failed to achieve its efficiencies target as agreed with the Office of Rail and Road (ORR). In the first two years of Control Period 6 (2019–20 and 2020–21), Network Rail has made progress and is ahead of its target on efficiencies. A set of indicators developed with the ORR will hopefully improve governance and understanding of the likelihood of efficiencies in Control Period 6 being met. Management data has also improved, and Network Rail better understands differences in efficiencies between its operating regions. However, the scale of the efficiencies challenge is increasing, and Network Rail recognises that there is still a mountain to climb to achieve the £4 billion efficiencies target set for Control Period 6. Network Rail will need to continue to increase savings year on year. However, Network Rail is vague on its plans for efficiencies and seems heavily reliant on achieving remaining efficiency savings in Control Period 6 through infrastructure renewals activities. Recommendation: Network Rail should write to the Committee by December to set out its efficiencies plan for the remainder of Control Period 6, how exactly it plans to achieve the £3 billion of efficiencies remaining, and how the efficiencies process is governed, monitored and incentivised. 8 Overview of the English rail system 1 Rail system recovery and reform
Government Response
Not Addressed
HM Government
Not Addressed
6.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2021 6.2 Network Rail will write to the Committee in December 2021. Network Rail remain committed to delivering the committed efficiency improvements in Control Period 6, and Network Rail will continue to be held to account for doing so by the independent Office of Rail and Road. Network Rail is developing a detailed response to recommendation 6 for submission by December 2021. In this, Network Rail will further set out how it will achieve the efficiency target in Control Period 6 and address wider points raised by the Committee: • set out improvements in approach, process, incentivisation and governance for Control Period 6 delivery; • describe the efficiencies framework to track the movement of industry costs over time; • provide details of efficiency targets for the remaining years of Control Period 6; • explain the increase in the Operations, Maintenance and Renewals (OMR) efficiency target from £3.5 billion to £4 billion; and • provide further detail on the impact of the COVID-19 pandemic.