DfT delays SoFA to review NR's renewals activity
DfT to review renewals Government sets out its High Level Output Specification but delays Statement of Funds Available to allow review of renewals work.
GOVERNMENTS in London and Edinburgh set out their plans for their rail networks from 201924 on July 20, with Scotland setting out specific targets for performance - including 92.5% of passenger trains to arrive on time (see table) - and London deciding to impose no targets.
Transport Scotland said it wanted to see faster journeys, strengthened commuter services, and effective connections between cities and regions. It listed five strategic priorities: improved services; improved capacity; improved value; more effective integration between train operators and Network Rail and between rail and other transport; and increasing inclusive economic growth.
The Department for Transport called for NR to become more efficient and more productive. It called for “ambitious implementation of route devolution to ensure competitive tension and improved understanding of costs through better benchmarking”.
DfT’s High Level Output Specification (HLOS) said: “The Secretary of State does not propose to set national top-down performance targets. He believes that the best way to deliver performance will be for Network Rail, through its devolved Route structures, to work closely with train operators and representatives of the end users of the railway to determine appropriate metrics and stretching yet realistic target levels for each part of the network. These should also align where appropriate with the performance objectives set by funders for rail franchises and concessions.”
DfT has set demand forecasts for London, Birmingham, Leeds and Manchester that it expects any investment plans to deliver. This would entail London’s three-hour morning peak capacity growing from 655,600 seats in 2018-19 to 689,400 in 2023-24.
The HLOSs form part of work by the Office of Rail and Road (ORR) to determine what funding Network Rail needs over the five years from 2019-24 (Control Period 6), and what charges
train operators should pay. ORR served legal notice on the DfT and Transport Scotland that required them to provide HLOS and an accompanying Statement of Funds Available (SoFA) by July 20.
However, UK Secretary of State for Transport Chris Grayling said he would not produce a SoFA until the autumn, telling Parliament in a written statement on July 20: “Before committing to the specific levels of funding required, I have decided that the Government requires more assurance on the likely costs of the work programme. Network Rail’s progress on improving its efficiency in recent years has fallen short of my expectations.
“The Government will therefore carry out further work to examine the approach to setting appropriate levels of maintenance and renewals activity for Control Period 6 and to improving Network Rail’s efficiency. This will enable me to confirm the extent of Government’s funding envelope through the publication of a Statement of Funds Available by October 13 2017.”
DfT’s HLOS commits to no infrastructure enhancements, but will concentrate on operations, maintenance and renewals. The switch comes after NR failed to deliver an ambitious £13 billion list of enhancements (many based on incomplete plans and cost forecasts) in 2012’s HLOS that set targets for 2014-19. ORR reported that in 2016-17 NR delivered 13 of 19 enhancement projects, missed five and revised one.
DfT’s decision to delay its SoFA meant that Transport Scotland could not publish one. In its HLOS, TS notes: “At the time of publication of this HLOS, the UK Government has advised the Scottish Ministers of its intention to change the basis of funding for Network Rail in CP6, but the first formal proposals about how these new funding arrangements will work in Scotland were not received from the UK Government until the evening before the publication deadline of July 20 2017. This has not left time for prudent consideration and the necessary negotiations to confirm satisfactory arrangements.”
RAIL understands that DfT is planning to treat enhancements as standalone projects with their own funding, rather than wrapping them into HLOS and an overall SoFA.
Grayling told Parliament: “In light of the findings of the Bowe Review, which emphasised the need to enable better planning, cost control and alignment with the needs of users of the railway, Government will take forward the funding of these enhancements separately. The Government is developing a new process for delivering enhancements and intends to publish more information on this in the autumn.”