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Network Rail’s £35bn CP6 spend approved

The Office of Road and Rail (ORR) has approved Network Rail’s £34.7bn five-year spending plans.

The ORR has given the green light to proposals for £31bn of spending in England and Wales and £4bn in Scotland over the five-year Control Period 6 (CP6) from April 2019.

The regulator said Network Rail had responded to its challenge to develop plans to improve reliability. This had seen the client propose spending £7.7bn on maintenance and £16.6bn on renewing existing railway (see table for full breakdown).

Network Rail’s plans represent a 17 per cent increase in spending on renewals from the £14.2bn committed in CP5, which the ORR argued would help cut delays caused by infrastructure failures such as track defects.

In November last year, the government announced it would be investing nearly £48bn into the rail network across CP6 – £10bn more than in CP5.

This was broken down into the £34.7bn approved by the ORR today that is supplied by a direct government grant, along with a further £13.2bn coming from track access charges and other sources, such as Network Rail’s property portfolio.

Eight of Network Rail’s geographic routes will be handed their own budgets as part of the plans, in an effort to make the organisation more locally focused.

The ORR said that, in addition to the splitting budgets regionally, it had strengthened local routes’ ability to buy goods and services locally rather than centrally, in cases where it offered better value.

The plans also feature a £245m research and development fund and a £40m performance innovation fund.

Railway Industry Association chief executive Darren Caplan welcomed the ORR’s approval as well as its suggestion that extra funds could be released towards the end of control periods.

“In its final determination, the ORR suggests releasing ‘risk funds’ to allow increased spending in the later years of control periods, thereby smoothing out work profiles,” he said.

“We welcome this move and look forward to working with Network Rail and ORR to ensure the funds are used correctly.”

ORR chief executive John Larkinson said: “These plans are focused on improving performance for passengers and freight operators by getting the basics right – ensuring that the railway is properly maintained and renewed, and on improving the daily operation of the railway.

“There is no time to lose; Network Rail and, in particular, the routes and system operator must make sure they are ready to deliver from day one of the new control period.

“That is why we have and will continue to report on – and where necessary challenge – Network Rail’s readiness.”

Network Rail CP6 government grant budget

Work typeEngland & WalesScotlandCombined
Operations £3.19bn £239m £3.43bn
Support £2.31bn £295m £2.61bn
Maintenance £6.98bn £715m £7.69bn
Renewals £14.58bn £2.06bn £16.64bn
Other £3.97bn £362m £4.33bn
Total £31.03bn £3.67bn £34.70bn

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