Office of
Rail Regulation

Nichols has acted as a trusted Independent Reporter for the Office of Rail Regulation since 2009. Our reviews have enabled Network Rail to deliver its projects and programmes more effectively and efficiently and allowed the ORR to assure Network Rail’s performance.

Challenge
The Office of Rail Regulation (ORR) is the economic and safety regulator for the UK rail network. As the economic regulator, the ORR sets output targets and determines the funding that Network Rail receives. It ensures that Network Rail performs as a reasonable and efficient operator in line with its Network License.

As Independent Reporter, Nichols provides the ORR with assurance of Network Rail’s operational and project delivery performance. Between 2009 and 2014 we have conducted over 30 separate reviews covering operational performance, infrastructure projects, asset management and capability improvement programmes.

Experience
We have combined our breadth of industry knowledge and change management experience to identify specific opportunities to improve delivery. Such as the significant improvements in planning and efficiency that resulted from our review of the £900m Reading Re-modelling project.

Additionally, we have identified wider lessons that are transferable to other programmes. For example, when examining Network Rail’s operational performance we identified systemic delivery issues and risks, which resulted in regulatory enforcement action. This helped to drive vast improvements in the management systems adopted by Network Rail, which have now become established good practice.

For planning purposes, Network Rail works within 5 year Control Periods. The Secretary of State for Transport indicates what work should be completed during a given Control Period. For each Control Period, the ORR undertake Period Reviews to determine what Network Rail must achieve, the money it requires to do this, and the incentives needed to encourage delivery and outperformance. The ORR then publishes a Determination to Network Rail which sets out all the decisions from the Period Review.

In 2009, our reviews of Network Rail’s capabilities in Project and Programme Management helped to guide the setting of regulatory targets for Control Period 4 (2009-2014). In 2013, we reviewed Network Rail’s progress and ongoing improvement plans for Control Period 4, providing a provisional efficiency assessment of Network Rail’s submission to the ORR covering the £7.2bn cost of their enhancement programmes.

Benefits
Through the application of the efficiency framework, we have ensured that value for money continues to be obtained. In the Control Period 5 review, we identified £600m of cost savings, these were included in the draft Determination provided by the ORR to Network Rail.

Our assignments have been delivered under a joint duty of care to both the ORR and Network Rail. We pride ourselves on being an independent guiding mind, recognising and promoting good performance, innovation and learning in our reviews. Our careful investigation and high quality of communication has ensured that our reviews have been clear, and well received by the ORR, Network Rail and the wider industry.