Spending cuts target rail upgrade

Virgin's plans for high speed trains could be hit by cuts

Work to improve the main railway line linking London to Glasgow may be halted after Network Rail was asked to cut spending by £2bn a year.

The Rail Regulator said the company could not continue spending at its current rate and postponing work on the West Coast Main Line for a year could save as much as £1bn.

In a report that paves the way for a final decision in December, Tom Winsor said work on the £10bn project should pause at the end of next year.

Plans to introduce a 125mph tilting train service between London and Manchester by autumn 2004 will go ahead.

But Mr Winsor said further work on the line run by Sir Richard Branson's Virgin company "may not be done".

He said Network Rail was spending around £6bn a year, but that he could get that down to £4bn a year within five years.

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In pictures

The west coast project is designed to reduce journey times between London, the Midlands, the north of England and Scotland.

But Mr Winsor said work that is not urgent should be delayed, so it is not carried out while inefficiency and costs are so high.

His report, published following an investigation by consultants Booz Allen Hamilton, says there should be a pause in the project to address "identified problems".

The solution would mean that some improvements may not happen as fast as passengers had expected, but it was still right to hold-off, Mr Winsor added.

"What taxpayers and the travelling public are not interested in doing is paying much higher than is necessary for a safe, reliable and punctual railway.

'Lack of knowledge'

"They will get that, but they want to have it at a proper price, with value for money."

The report also said there was a "critical lack of knowledge about the condition of West Coast Main Line assets and poor definition of the work required for enhancement schemes", making it difficult to forecast costs accurately.

The inefficiency that has gone into the company is quite remarkable Rail Regulator Tom Winsor

"Costs have gone out of control, they have exploded," Mr Winsor told the BBC.

"The inefficiency that has gone into the company is quite remarkable and my decision...is all about getting out of the system unnecessary cost."

Mr Winsor said his final announcement would determine "the size, the quality and the cost of the national railway network".

He said his proposals did not mean he was against Network Rail or its managers.

"I am right behind them in terms of the work they are doing, but I believe they can make these improvements faster than they are presently projecting," he said.

Network Rail said it had already planned to make 30% annual costs savings within six years.

HAVE YOUR SAY Safety is more important than value for money Matt, UK Send us your comments Regulator's tough call for efficiency

The company promised to work with Mr Winsor's office to "identify the speeds at which these efficiency savings can be made".

Shadow transport secretary Tim Collins said any postponement or cancellation of upgrading the West Coast Main Line would be a "significant humiliation" for transport secretary Alistair Darling.

Liberal Democrat transport spokesman Don Foster said spending cuts would be better achieved by linking "bonuses for senior Network Rail managers to their ability to achieve value for money for passengers".

Strategic Rail Authority chairman Richard Bowker said Mr Winsor's document was "a major and welcome part of delivering a safer, reliable and affordable railway".

He said the Rail Regulator was "rightly challenging the industry to deliver the West Coast project for the most efficient and economic price", but he said there would be no delay in delivering the strategy and its benefits for passengers and freight customers."

Louise Ellman, Labour MP for Liverpool Riverside, also backed the Rail Regulator in its quest for "efficiencies".

But she said: "This must not be at the expense of the North West's economic lifeline, the West Coast main line."