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Regulating Network Rail's Efficiency: Office of Rail Regulation
HC 828, Report by the Comptroller and Auditor General, Session 2010-12
- National Audit Office (NAO)
- TSO (The Stationery Office)
Limitations in Network Rail's information on its own costs are hampering the ability of the Office of Rail Regulation (the Regulator) to judge the genuineness of the efficiency savings reported by Network Rail.
'Regulating Network Rail's Efficiency: Office of Rail Regulation (HC 828)' acknowledges that the Regulator has significantly developed the methods it uses to judge efficiency. Its targets have demanded substantial improvements from Network Rail. Network Rail has made efficiency savings of 27% in the five years to 2008-09, equivalent to £1.8 billion in that final year. This was below the Regulator's target of 31%, although this was still an achievement when compared to savings in other regulated industries.
The Regulator has determined that substantial scope remains for Network Rail to improve its efficiency, estimating that maintenance and renewal activities were 34 to 40% less efficient than the most efficient European rail infrastructure managers in 2008.
The Regulator estimates that Network Rail can achieve further efficiency savings of 21% in the five years to March 2014 - equivalent to spending £940 million less in 2013-14 than the forecast for that year without efficiency gains. However, there are continuing limitations in the robustness and coverage of Network Rail's unit cost information. These need to be addressed promptly to improve confidence that future efficiency targets accurately reflect Network Rail's potential for sustainable savings, as the efficiency gap narrows, and that reported savings correctly reflect efficiency gains actually achieved.
|Format||Paperback||Published||01 Apr 2011|
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