Yesterday saw the publication of the High Level Output Specification (HLOS) and Statement of Funds Available (SoFA) for England and Wales for Network Rail’s Control Period 7 (CP7). CP7 will run from 1 April 2024 to 31 March 2029. The HLOS sets out at a very high level what the Secretary of State for Transport expects Network Rail to deliver. It doesn’t contain details on specific programmes of work, that comes later as part of Network Rail’s business planning process. It does, however, provide some clear direction and indication of priorities – the words ‘efficiency’ and ‘efficiencies’ appear no less than 18 times across just 8 pages of text. Alongside this, there are some reassuring and positive messages about supporting rail recovery and the role the industry can play to help economic growth, levelling up and decarbonisation.
The importance of a healthy rail supply chain is also acknowledged with a clear message to Network Rail about working more closely with suppliers and a third of spend being with SMEs. Pleasingly, the importance of reliable timelines and stability within the work pipeline (rather than just visibility) is also mentioned – the need for an assured pipeline is an issue we have raised numerous times with government as being of critical importance to suppliers.
The SoFA states that a total of £44bn is anticipated to be available to Network Rail to cover operations, maintenance and renewals during the 5-year period (enhancements are dealt with separately as part of the Rail Network Enhancements Pipeline). This £44bn includes just over £27.5bn of direct grant from government with the remainder coming from charges to operators and other commercial activities. For comparison, the SoFA figure for the current CP6 period was £34.7bn of grant with a total of just under £48bn available. But direct comparisons are difficult with no detail on the ‘quantity’ of work expected during the control period and the original CP6 SoFA did include some carry over of planned enhancement investment from CP5.
Elaine Clark, CEO of Rail Forum said: “We, and our members, look forward to working more collaboratively and closely with Network Rail to achieve the aims and objectives of the HLOS and to ensure we collectively deliver a cost effective and reliable railway for passengers and freight customers. The acknowledgement of the importance of the rail supply chain and the value of a stable pipeline of work with reliable timelines is a welcome positive step towards that closer working”.