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This note describes how Network Rail is run, its responsibilities and reforms.
Network Rail is responsible for the operation, maintenance and improvement of railway infrastructure (i.e. the track, signals, bridges and stations) in England, Scotland and Wales. Its primary customers are the train and freight operating companies who run train services over the network. It was set up in 2002 as a company limited by guarantee, run on commercial lines but without shareholders, reinvesting profits in the railway. On 1 September 2014 the company became an arm’s-length body of the Department for Transport.
The company has been under pressure for several years due to engineering overruns and concerns over its governance structure and accountability. In May 2011 the McNulty Rail Value for Money study was published. This made a number of recommendations designed to make NR more efficient and accountable and to drive down the costs of the rail industry over the medium term. In response to McNulty, NR announced plans to devolve the way in which it managed and maintained the network into regional units that would be more closely aligned with the train companies in those areas. In March 2012 the Government responded to McNulty by proposing a revised governance structure for NR.
In 2013 it was announced that NR would be reclassified as a central government body in the public sector; the main effects of this are that NR’s debt (estimated to reach £50 billion by 2019) has moved onto the Government’s balance sheet and the Government is able to exert more direct control over pay and strategy. This took place on 1 September 2014.
