Economic regulation research

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An update on ORR’s review of train performance incentives.

We are carrying out research projects that will help shape economic regulation in the context of a changing rail industry. These projects will look at how the rail system functions as a whole, and in particular how rail bodies and train operators are incentivised to deliver for customers.

Review of train performance incentives

Our review of train performance incentives is looking at what drives decisions that affect train punctuality and reliability. Such mechanisms include, for example, the terms of track access contracts and franchise agreements, and potential licence enforcement action.

ORR has published a letter in October 2020  with an update on its review of train performance incentives. The letter summarises the findings from the consultants SYSTRA’s research into what drives train performance – SYSTRA’s work is linked below. The letter also notes changes to the industry’s structure which may affect the contractual performance regime. We are now considering options and are inviting engagement ahead of a formal consultation.

Effectiveness of the incentive and regulatory tool framework

We are reviewing our regulatory and incentives framework for how we regulate Network Rail. The aim of this work is to understand how we can improve and evolve our regulation of Network Rail. We will be gathering information to help better understand how current incentives and regulatory framework influences Network Rail's decisions. We will be considering the full range of incentives including financial, non-financial, legal and regulatory incentives. We will use this insight to consider how we can evolve the way we regulate Network Rail.