Network Rail facing funding crisis


Network Rail is facing its largest funding crunch since the aftermath of the 2007/8 financial crisis, putting its supply chain in jeopardy and raising concerns over safety, according to reports.

The Independent has revealed it has seen a letter written by senior Network Rail official Ben Brooks, in which he makes a grim summary of the organisation’s prospects up to 2019, the remainder of its ‘control period 5’.


The cuts will affect its ‘high output track renewals’ as well as potentially put a major strain on companies in the supply chain. Union officials have warned of threats to safety, although this has been strenuously denied by Network Rail.

Network Rail's financial issues trace back to a £2.5bn black hole identified in the Hendy review.

Mr Brooks wrote: ‘Because of significant overspends in some areas, including some enhancement schemes and the fact that the routes are more expensive to run than predicted, there is simply not enough money left in CP5 to continue as we have been. So the whole of Network Rail has to cut costs.

He continued: ‘The last time the track renewals industry had a cost challenge of this magnitude, 7-8 years ago, the supply chain suffered massively (we lost a principal contractor and many second tier suppliers)…this is going to be a tough couple of years for the whole industry.’

According The Independent, the financial woes will see the cancellation of all remaining renewal schemes on the London North Western route, running from the Euston Station through Cumbria to Scotland; all work on the Wessex route, taking in South West London, plus all work planned for 2019 in Wales.

There are reduced renewal plans on the South East route, from London across Kent, Surrey and Sussex, and on the Western route from London Paddington to Bristol and Penzance.

The letter also suggests that £139m of spending has been deferred from planned work on the London North Eastern and East Midlands route, covering lines from the Scottish border to London King's Cross and from Sheffield to London St Pancras.

General secretary of the TSSA union, Manuel Cortes, said this had ‘terrifying’ safety implications.

‘These cuts must be resisted. We are one of the richest countries on the planet. There is simply no need to play austerity politics with rail safety - it will endanger passenger lives. If they go through, it is hard to conceive how another rail disaster cannot happen,’ he said.

‘These cuts mean the Tories are now arresting and revising economic development in areas of the country that most need them and the supply chains that feed into infrastructure investment will be hit hard.

A Network Rail spokeswoman said: ‘Network Rail has no plans to cut any safety-critical jobs or any safety critical work. Any such suggestion is ridiculous scaremongering.

‘The rail network has faced a number of cost pressures and changing priorities, and like all businesses we have to live within our means. This sometimes means making hard choices.

‘We are making savings in non-essential areas to ensure we’re delivering value to the taxpayer, while at the same time continuing to deliver a safe, reliable and expanding railway. The safe running of the rail network will never be compromised and the adjustment in the activity of our high output track renewals work represents just 0.3% of our spend in the running of the railway network.

'Britain has the safest railway in Europe, thanks to the efforts of many thousands of hard working men and women, and they are ill-served by such baseless scaremongering by trade unions.’

Register now for full access

Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

comments powered by Disqus