Future regulation of the rail network

28 July 2022
Director of Economics, Finance and Markets Will Godfrey discusses periodic review (PR23) consultations, ORR guidance to Network Rail on the production of its five year Business Plan, and our response to the UK Government on proposed legislative reforms.

The ORR has a number of functions, one of which is the economic regulation of the national rail infrastructure. A key part of this work is the periodic review, PR23, which we are consulting on now.

What is a periodic review?

Our periodic review process determines how much money the infrastructure manager, currently Network Rail, should receive for operating, maintaining and renewing the network over a five-year period. This review covers the period from April 2024 to March 2029.

The periodic review also establishes what that company should be required to deliver for passengers and freight customers.

What are the benefits?

Periodic reviews are one of the main ways in which we look to secure value for money for users and funders of the railway. Our periodic reviews is designed to incentivise a long-term focus on safety, performance, asset sustainability, and efficiency.

This gives the infrastructure manager and, in turn, its supply chain, as well as users of the network, increased certainty to plan and operate their businesses efficiently.

We also aim to meet the UK and the Scottish governments’ aspirations for the coming decades.

The rail industry is preparing for significant reform, with the planned establishment of Great British Railways. GBR will take over ownership and management of the railway infrastructure, as well as the letting and management of passenger rail contracts.

We also recognise that our periodic review is taking place during a challenging time for the rail industry and the wider economy and we know that we will need to take account of this.

What are you consulting on?

We are consulting on a number of issues. First, we are seeking views on how we hold the infrastructure manager – be it Network Rail or Great British Railways – to account in the five-year control period.

Second, we also set out the proposed measures we think the infrastructure manager should report on as part of how we hold them to account. These measures are designed to reflect what is important to rail users and funders.

In addition to these consultations, we have published guidance to Network Rail on the production of its five year Business Plan which will set out what it intends to deliver, based on its funding and the required outputs.

Finally, as part of our work to support to support effective implementation of the future structure and regulation of the railways, we have published our response to the UK Government on its proposed legislative reforms.

What happens next?

We’re inviting responses to our consultations by 30 September. 

Visit our PR23 page to learn more.