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Network Rail's IT budget could be scaled back by £150m

Kathleen Hall

Network Rail could have its future IT budget slashed by £150m, according to the Office of Rail Regulation (ORR).

Network Rail had proposed an additional IT investment of £333m in IT, as part of the body's £37.5bn railway investment plan for 2014-2019.

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But the ORR said the cost of running the network during that period should be £2bn lower than the rail body had estimated.

Of the total £613m earmarked for IT renewals in its next five-year investment period, £150m of that figure is above the previous period of IT investment. 

“This increase is based on benchmarking against other organisations, but no clear plans have been produced for how this will be spent or what it will deliver,” said the ORR.

The ORR said it had not been presented with sufficient justification for its proposed increase in IT expenditure over and above its Offering Rail Better Information Services (ORBIS) expenditure.

“We have assessed the total efficient expenditure for IT and ORBIS based on a continuation of CP4 levels of expenditure. The company has recently submitted some further evidence which we will consider in our final determination.

"Continued investment in IT will be essential if we are to continue improving the service that we deliver to our customers as well as reducing costs. We have therefore included a further £333m within our plan," said Network Rail in its five-year plan for railway investment released in January.


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