The Big Question: How can we fix Britain's railways, and where will we find the funding?

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The Independent Online

Why are we asking this now?

We have all been there. You go through the trouble of booking train tickets weeks in advance, only to find when the day of the trip comes, the train is late or even cancelled. The reason – planned engineering works. But those days could be much more uncommon in five years' time, after the rail regulator announced yesterday that Network Rail, the company tasked with looking after Britain's rail infrastructure, would have to justify its new multi-billion-pound funding package by making big cuts to delays, cancellations and disruptions on our lines. It has also been handed a list of track and station improvements to be carried out by 2014.

But the amount of funding Network Rail has been given is a contentious issue. It is billions under the sum it asked for – and some of the money has to be found through efficiency savings, leading some to fear that jobs could be lost and passengers will not necessarily benefit. Others say that Britain's rail network requires a much more radical shake-up – and a more powerful regulator.

How much will Network Rail be given?

All in all, Network Rail has a total budget of £26.7bn for 2009 to 2014. But the Office of Rail Regulation (ORR) wants some clear improvements for its money. In particular, it wants to see trains run on time for 93 per cent of the time on the busiest routes in the South-east of England. Currently, its record is 90 per cent. For the rest of the country, the ORR is demanding a 92 per cent punctuality rate. And it wants engineering disruptions reduced by more than a third. Network Rail also has to find some of the money by becoming more efficient.

What improvements will we see on the rail network?

The main building project will be in London – to connect King's Cross station to the Thameslink network, which links the South-east to the Midlands and beyond. But outside the capital, there are also some big projects planned, such as the long overdue rebuilding of Birmingham New Street station and a new station for Reading. The Midland and East Coast main lines will also be upgraded, and Glasgow airport will receive a new rail link.

Is it enough to do everything they want?

Network Rail is being cautious before making any complaints about the stack of cash they have been given to play with, but it is significantly less than the amount they asked for – more than £2bn less. Some projects were ditched by the ORR, such as the expansion for capacity on a congested 14-mile stretch of track between Swindon and Kemble, and improvements to Crewe station. But Network Rail does not have to accept the funding package. If it believes that the £26.7bn settlement is not enough, it can take its case to the Competition Commission, which will decide on a final figure once and for all.

Isn't high-speed rail the answer to an improved rail network?

High-speed rail is back on the political agenda but sadly, it is not included in the funding plan announced yesterday. Lord Adonis, the new rail minister, is sitting on a new committee examining the issue, but any decision on building high-speed lines is years away, as planning and consultation requirements make projects of that size very slow to implement.

The Conservatives are even keener on high-speed rail – in fact, they have promised to build a high-speed network across the country as an alternative to expanding Heathrow airport. Commuters could then take a high-speed rail line from Leeds to Lille, or from Birmingham to Brussels. But they would face similar delays in forcing through such ambitious plans.

Will we see any additions to the building plans?

As the Government plans to spend our way out of financial difficulties, it would seem like boosting the building plans for Britain's railways would be top of the list. The regulator says it has no problem with the Government wanting to add to Network Rail's labours. But if it wants more projects, it will have to stump up the money to pay for them.

There are also concerns about a £4.4bn chunk of the rail funding pot, which is to be raised through the financial markets. The credit crunch has made financial institutions much more reluctant to lend large quantities of money, leading some to question the wisdom of such a commitment. The ORR argues it has taken the current economic difficulties into account in calculating the figure, and says most will be borrowed later on, when financial markets have begun to lend more freely again.

How will Network Rail be forced to carry out these improvements?

When you ask the regulators that question, they always act tough, saying they will hold National Rail to account by constantly being on its case. But is that enough? It has not stopped Network Rail failing passengers badly in recent times, with thousands stranded in Rugby and Warwickshire over the Christmas and New Year period because of – you guessed it – engineering works.

The stick of choice then was a fine – and a thumping one at that. Network Rail had to shell out £14m for its failures. But as Network Rail is a government-funded, not-for-profit organisation, critics argue that the people paying the fine were taxpayers. A better way to concentrate the minds of Network Rail bosses, they argue, would be to hit their bonuses. MPs on the House of Commons transport committee were furious when bonuses were handed to Network Rail executives soon after the New Year rail disruptions.

Will all this benefit the passenger?

On the face of it, it sounds like a dream for beleaguered rail passengers – fewer delays, fewer engineering works, better stations and improved lines. But there are concerns that a battle between Network Rail and its regulator over funding could see passengers forgotten. Unions have also expressed concern that efficiencies could hit the passenger. And there is a little detail that passenger groups will be keeping an eye on. Network Rail will now be charging the train companies less for running on its tracks. Will they pass the savings on to passengers by reducing ticket prices? Time will tell.

How can the railways be improved in the future?

There is one thing that the railways would benefit from – a little bit of political attention. Facing his first grilling by fellow MPs at the transport select committee this week, the new Transport Secretary Geoff Hoon admitted the public had not been backward in coming forward with their thoughts on the nation's railway system. And he has accepted an invitation to travel on a peak-time train from Shropshire to Birmingham – a notoriously overcrowded route."He needs to see for himself what my constituents go through every day," said Mark Pritchard, the Conservative MP for The Wrekin in Shropshire. Maybe the trip will help that high-speed rail network arrive sooner than expected.

Will the Network Rail funding package improve the railways?

Yes...

* There are tough targets for punctuality improvement, which should ease engineering work delays.

* It contains a major "to do" list, including new lines and the rebuilding of Birmingham New Street station.

* After under-investment, funding of the rail network has increased. This package continues that trend.

No...

* Some funding still needs to be raised from private finance – that is difficult in this financial climate.

* Network Rail asked for £2bn more than it got. It may argue it needs further funding.

* Ambitious plans, like a high-speed network, are needed to really improve things. That looks a long way off.

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