Network Rail – Control Period 7 information for England and Wales

Bill Free, Rail Director, CECA has provided the following update:

The Department for Transport have published two documents in connection with Control Period 7 (the period April 2024 to March 2029). These are:

These apply to England and Wales only – Scotland will be carrying out the same exercise shortly.

The HLOS covers very similar ground to the last one (for CP7) and doesn’t have any surprises.

Looking at the SOFA this is less reassuring. The high level figures are:

  • Network Rail Expenditure – CP6 £47.9bn – CP7 £44.1bn
  • Supported by Government Grant – CP6 £34.7bn – CP7 £27.5bn

Things to bear in mind in looking at these figures, might I suggest:

  • Enhancements: CP6 included some expenditure on Enhancements that had been committed to at the time of producing the document. I think this was circa £1.9bn (but don’t quote me). The CP7 figure doesn’t include any Enhancements.
  • Inflation: The Bank of England’s ready reckoner has added 22% to costs since the SOFA for CP6 was published. However, this is not necessarily construction inflation
  • Efficiency: Network Rail have a large number of efficiency drives underway (MVP, ACE, PACE, SPEED etc) which would, if successful, make for a more efficient, cheaper and – hopefully – more profitable environment for the Supply Chain
  • Operational costs: Network Rail’s operational costs are included in the overall figure and are obviously coming under a lot of pressure!

CECA will be holding a Rail Group meeting in the New Year and have invited representation from ORR, DfT, etc to help explain all this. Further details will be provided in due course.