Network Rail told to make cuts of £3.3bn by watchdog

Passenger groups have warned that Britain's rail watchdog is trying to get "a railway on the cheap" as it announced budget cuts of £3.3bn which could put planned improvements "at risk".

The rail regulator, Chris Bolt, has ordered Network Rail, the rail infrastructure company, to slash its budget from £31.1bn to £27.8bn by 2014 and make efficiency savings of 21 per cent. But a spokesman for the Office of the Rail Regulator (ORR) dismissed fears of cuts in much-needed improvements to the capacity of the railways as "nonsense" and insisted that Network Rail could still afford to go ahead with major schemes.

The ORR admitted, however, that the draft budget, to be confirmed in October, could mean that passengers will have endure weekend engineering work on the railways for years to come.

The regulators said engineering work would be "much less disruptive" by 2014 but added there would be still "some way to go" after that before a seven-day railway would be operational.

Network Rail's chief executive, Iain Coucher, said: "I am extremely concerned that the funding settlement outlined today will put our plans to meet rising demand at risk."

Anthony Smith, chief executive of the customer watchdog Passenger Focus, said the ORR had to be "realistic and not force Network Rail to deliver a railway on the cheap. Forcing them to scrimp and cut corners will mean a poorer service for passengers."

Bill Emery, chief executive of the ORR,said: "This is a good package for passengers, for freight customers and for taxpayers."