Lack of information hinders scrutiny of Network Rail

Friday, 1 April 2011 12:01 AM

By Hannah Brenton

Network Rail must provide more information on costs to improve its efficiency, a report has said.

The report by the National Audit Office (NAO) said Network Rail needed to provide more cost information "promptly".

The report found the national rail service is still failing to match its European counterparts, despite making substantial efficiency savings in recent years.

In the five years preceding 2008/09, Network Rail made efficiency savings of 27%, only four per cent below the 31% target of the rail regulator, the Office of Rail Regulation.

But there remains "substantial scope" for improvements - the regulator estimated maintenance work was almost 40% less efficient than in Europe.

It estimated a further 21% of savings could be found over the next five years until March 2014 - saving £940 million.

The NAO said that the lack of information on costs was now hindering the ability of the regulator to judge further efficiency drives.

As a national monopoly, efficiency savings in the rail network are largely driven by reputation and as a component of the directors' pay packages, rather than through competition.

Amyas Morse, head of the NAO, said further improvements depended upon more information being available.

"The gap between Network Rail's efficiency, as a monopoly provider, and that of comparative European rail infrastructure managers has been effectively identified by the Office of Rail Regulation," he said.

"It is so wide that it has served up to now to drive forward improvements in efficiency by Network Rail.

"However, further progress will depend on the regulator developing significantly better information on Network Rail's costs."

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