Opinion

Securing the future of our railways and roads means looking beyond short-term

Richard Price, chief executive, ORR

Office of Rail and Road chief executive Richard Price sets out a plan to help stimulate an industry wide discussion on the best way forward for UK transport well ahead of new funding periods beginning in 2018.

This is an exciting time for the Office of Rail and Road (ORR) as we bring our skills and expertise as the independent economic and safety regulator for the railways, to monitoring Highways England. We see this role as a tremendous opportunity to build on our strong track record of overseeing and driving efficiencies in complex and large scale infrastructure businesses.  Both road and rail have seen significant growth in demand in recent years, and both are now undertaking substantial investment programmes to provide improved capacity for the future.

"We are also looking beyond the short term challenges for the rail sector, to identify changes that may be needed to the funding and regulation of Network Rail"

At ORR, our approach to ensuring improvements for road and rail users, focuses on getting improved results both now and over the long term.  ORR wants to ensure that both Highways England and Network Rail work with their supply chains and industry to deliver on their ambitious plans. Our work on looking for ways to innovate in both sectors will focus on moving away from short-term planning to a longer-term, stable funding outlook reflecting the timeframes and complexities of major infrastructure investment. 

This longer-term security of funding, particularly for Highways England, will allow it to realise efficiencies alongside delivery of a five year performance specification and investment plan. The plan includes important outcomes such as making the network safer; improving the reliability of journey times; minimising disruption from road works and incidents; delivering better environmental outcomes, and increasing the capacity of the network.

We are also looking beyond the short term challenges for the rail sector, to identify changes that may be needed to the funding and regulation of Network Rail as well as alignment of incentives within the sector to maximise performance and bring down overall costs. Measures to stimulate competition, innovation and drive efficiencies are already afoot. 

The Chancellor’s 2015 summer Budget included proposals to change the way government support is channelled to the rail industry and devolve more power to Network Rail’s route managers. The reforms, building on recommendations set out in our long-term regulatory statement in 2013, have significant potential to improve the way that the rail network operates.

"We are working closely with people across the industry, funders, local authorities and transport users as we develop our new highways monitoring function and look for more innovative ways to build a better railway."

The Budget also introduced important reforms for the future funding of Highways England, through the creation of a Roads Fund, with all revenue raised from Vehicle Excise Duty in England being invested directly back into the strategic road network from 2020.

ORR's future thinking work focuses on the way regulation of Network Rail can help underpin devolution to its eight routes, maximising the benefits of comparative regulation and ensuring a focus on the different challenges in different areas.

This approach would require the creation of a more clearly defined national ‘system operator’ to deal with the network wide planning and capacity issues. While decisions on the structure of the railway are a matter for Government, ORR is exploring options for a different way of regulating Network Rail, to drive up the quality of services and increase value for the railway's customers and taxpayers.

We are working closely with people across the industry, funders, local authorities and transport users as we develop our new highways monitoring function and look for more innovative ways to build a better railway. We’ve already announced details of how we will carry out our monitoring and enforcement on our roads; our analysis and proposals on boosting efficiency and competition in the railways will be published early in 2016.

This will help stimulate an industry wide discussion on the best way forward, well ahead of the new funding period beginning in 2018.

 

Richard Price is the cheif executive of the Office of Rail and Road