Network Rail is required to deliver obligations under its network licence, and these are monitored and enforced by us.
Enforcement is one of our key functions, and we shall use our powers firmly but fairly and in a timely manner.
We have enforcement policies which set out in detail what powers we have to enforce compliance with licences and our policies on when (and why) we would do so.
- The power to enforce licence conditions is under the Railways Act 1993.
- The periodic review process sets out the charges to operate the network and the deliverables that Network Rail should provide for that money.
Our regulatory policy for monitoring and enforcing Network Rail's network licence is set out in our holding Network Rail to account policy.
This policy, introduced in 2019 at the start of the new five year control period (CP6), allows ORR to target those areas that have the most serious impact and detriment to passengers, freight customers and funders by prioritising progress over process to reach early and pragmatic resolution of problems.
This policy is based on a three-stage approach:
Stage 1: Routine monitoring and assessment of Network Rail's performance
Drawing on a range of new data sources, we will compare and contrast performance across local routes, including highlighting good practice that can then be shared across the whole network.
Our new policy places particular emphasis on assessing the strength of Network Rail's stakeholder engagement and collaborative working across its business.
Stage 2: Investigation and early resolution of concerns to protect rail users
Here, we will step in earlier where necessary to protect rail users, and we are proposing new regulatory tools including holding ORR Hearings and requiring Network Rail to put in place formal improvement plans at an earlier stage than currently.
Stage 3: Enforcement
If Network Rail is unable to resolve issues, we may then take enforcement action.
Our new policy introduces an option to impose financial sanctions on routes (or the system operator) that can affect Network Rail management bonuses.
The policy also includes a new approach to financial penalties (fines) that allows ORR to scale penalties so as to be capable of being funded by management bonuses.
Both approaches avoid diverting funding from the operational railway while making a difference where it matters to management.
Other powers of enforcement
Our economic enforcement policy and penalties statement explains our policy for enforcing other licences, including train companies licences and other Network Licences.
It also sets out ORR’s policy for imposing penalties where a party has failed to comply with a decision, direction or notice issued under the Railways (Access, Management & Licensing of Railway Undertakings) Regulations 2016.
This part of the policy applies to Network Rail and other relevant operators in relation to their activities under these Regulations.
This policy sets out the remedies available to us if licence holders and relevant operators are not compliant and how we will decide whether and how to use them.
We have a separate enforcement policy relating to these regulations in Northern Ireland.
Enforcement policies are available separately in relation to our functions under Health and Safety, Competition and Roads
The enforcement of contracts and industry wide codes is with the contract parties and as such we have no direct enforcement powers.
How we enforce licences
We monitor the industry's delivery of its key regulatory and public interest obligations. We also investigate complaints about the behaviour of industry parties.
In some cases, our monitoring or investigation of complaints can lead to consideration of whether there has been, is, or likely to be, a breach of a licence obligation or of competition law.
Decisions on breaches of licence obligations or competition law are matters for our Board.
Before making a recommendation to our Board, we will send the party under investigation a "case to answer" letter.
This letter will explain what we are concerned about and why, and will describe the relevant licence condition and the nature of the possible breach.
The letter will give the licence holder a reasonable time (which will vary depending on the case and its urgency) within which to make representations on the case.
Following this, we will consider the representations and put a recommendation to our Board on whether we think there has been a breach and if further action should be taken. In some circumstances, we may wish to ask further questions.
After the Board has made a decision, we will send the licence holder a further letter explaining the decision.
If the Board finds a breach, this letter may also contain details of any action we require or any penalty we propose to impose.
In the case of possible breaches of competition law, we will issue a statement of objection in the same way as other competition authorities.