Monitoring Network Rail's efficiency

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Our efficiency and finance assessment of Network Rail for 2020-21 relates to the second year of control period 6 (CP6), which runs from 1 April 2019 to 31 March 2024.

By reporting on Network Rail’s efficiency and wider financial performance over time, we give assurance to rail users and funders that Network Rail is delivering what is expected and at the same time, we provide a strong reputational incentive on Network Rail to become more efficient.

Our annual assessments are intended to help customers, funders and other interested parties gain a better understanding of Network Rail's efficiency and financial performance compared with the CP6 financial assumptions that we set out in our 2018 periodic review (PR18) final determination.

Annual efficiency and finance assessment of Network Rail 2020-21

Our assessment provides a yearly snapshot based on the best available information and presents financial information on Great Britain, England & Wales, and Network Rail’s five regions: Scotland, Southern, Wales & Western, Eastern, and North West & Central.

It contains information and commentary on Network Rail's income and expenditure and its efficiency compared to our PR18 determination. 

The report highlights 

  • Network Rail financially underperformed by £424 million in 2020-21, in part due to the impact of the Covid-19 pandemic.
  • Network Rail has reported £710 million of efficiency improvements in 2020-21, with all five regions exceeding their efficiency targets in the year.
  • At the end of 2020-21 Network Rail reported a 10% increase in headcount in the two years since the end of control period 5, with significant increases in senior management headcount. It is not clear that the increase in headcount has been efficient and Network Rail should do more to show the benefits of this recruitment but we note that it is now considering its workforce plans.
  • We are concerned about the relatively low level of risk funding in Network Rail’s plan for financial risks in years 3 to 5 of CP6. We recently published a letter summarising our review of Network Rail’s updated delivery plan for the remaining three years of CP6.