New consultations for UK Rail - Infrastructure manager regulations, proposed legislative reforms and the regulation of HS1 stations

• United Kingdom

• Governments and Infrastructure

25-08-2022

The Office of Rail and Road (‘ORR’) has recently published several consultations, guidance documents and responses in respect of rail reform and regulation. Key updates in respect of the regulators publications are summarised below:

Supporting documents for the ORR’s periodic review 2023

The ORR has published three documents which support its 2023 periodic review (‘PR23’) which will determine Network Rail's outputs and funding for Control Period 7 (‘CP7’) and, which in the future, will apply to Great British Railways as it assumes the roles and responsibilities of the infrastructure manager from Network Rail.

The first consultation launched by the ORR sets out the policy framework as to how the ORR proposes to regulate the infrastructure manager and hold it to account for the funding it receives for CP7. This also includes consideration of the specific success measures that it proposes to adopt to ascertain success. Aligned with this is the second consultation (which is a technical consultation) on the specific success measures that are referred to in the CP7 policy framework consultation.

While the proposals are structured around the current rail industry they take into account the changing landscape resulting from future industry reform. The proposed policy framework is largely aligned with CP6 and so there is not expected to be any significant shift in ORR’s approach to regulation during CP7. However ORR is proposing new success measures in respect of passenger train performance, freight train performance and environmental sustainability. Success measures have also been adopted against the outcome areas to focus the ORR’s monitoring and review functions.

Both consultations close on 30 September 2022, after which the ORR intends to publish its conclusions and feed stakeholder responses into its draft and final determinations for PR23 in 2023.

In addition and in support of the consultation, ORR has issued Guidance to Network Rail on the production of its February 2023 Strategic Business Plan (SBP). The guidance gives insights into ORR’s priorities for understanding and challenging Network Rail’s proposals for meeting stakeholder’s aims for the railway in CP7 (and how it will best use the funding available to it meet those aims) including in the areas of health safety, asset management, environmental sustainability and innovation and use of technology (with respect to which there is a focus on how intends to accelerate its adoption of new technology).

ORR’s response to consultation on proposed legislative reforms

The ORR has also published its response to the UK Government on its consultation on proposed legislative reforms to implement the Williams-Shapps Plan for Rail. The consultation covered:

• core functions and duties of Great British Railways;
• a new governance framework; and
• reform of wider industry structures and processes.

ORR’s response acknowledges its continued role in focusing on safety, value and performance of the railways while welcoming the endorsement of a broader remit to include, amongst other responsibilities, its role of overseeing the Ombudsman.

ORR has commented on the governance and accountability, access, competition and reform proposals outlined within the consultation, notably amongst other points that:

• Great British Railways licence should set out its accountabilities and make clear provision for the ORR to have enforcement powers against GBR. Clarity should also be given on the responsibilities of each interested party including the Department for Transport and devolved authorities;
• GBR’s access policy should be publicly consulted on and independently upheld;
• it sees an opportunity to improve the transparency, quality and coherence of decision-making arising from the responsibilities for train service specifications and network capacity being sat solely within GBR which in turn will be under the auspices of the ORR; and
• although GBR should operate as an integrated body this should not result in any compromise as to the scope of access rights for third parties that must be appropriately protected.

ORR conclusions on regulation of HS1 stations

Lastly, the ORR has published conclusions following its consultation on the new second regulatory statement and holding to account policy for the remainder of CP3 of HS1 (‘statement and policy’). The consultation follows revisions to the ORR’s regulatory responsibilities under the Concession Agreement between HS1 Ltd and the Secretary of State for Transport. The Concession Agreement sets out the operation and management of the HS1 network and the scope of the ORR’s regulatory powers. The scope of such powers has extended to also now include periodic reviews and subsequent monitoring of HS1 stations.

The conclusions paper sets out changes the ORR has implemented to the statement and policy following stakeholder feedback. Amongst other proposals, the conclusions specifically note:

• revisions to the statement to clarify HS1 Ltd’s asset stewardship requirements and ORR’s approach to reviewing performance against such requirements and acknowledgement of the difference between the HS1 model and the rest of the UK rail network;
• stakeholder expectations for the periodic review of HS1 stations funding which focus on transparency, clearly defined roles and responsibilities and duties to consult on the approach to periodic reviews;
• expectations in relation to the ‘Life Cycle Report’ that HS1 Ltd must submit for each station; and
• stakeholder support for ORR’s proposed approach to holding HS1 Ltd to account, monitoring its assets and to the periodic review of renewals funding for HS1 stations subject to clarification on financial reporting obligations and enforcement procedures for non-compliance by HS1.

Further to the consultation, the ORR has now published its second regulatory statement in respect of the HS1 network.