Network Rail has improved efficiency and reduced cancellations, but the rail regulator has warned that cuts to planned renewals in England and Wales could lead to worsening asset condition, greater disruption and higher costs in future.
The Office of Rail and Road’s annual assessment of Network Rail found that passenger cancellations across Great Britain fell from 4.1% to 3.5% in the year to March 2026, although this remained above the 3.3% target.
Freight cancellations also improved, falling from 1.5% to 1%, ahead of the 1.3% target. The improvement was attributed partly to fewer cancellations caused by severe weather, infrastructure failures and external incidents.
Passenger punctuality remained broadly stable, with 84.1% of services arriving within three minutes of their scheduled time, compared with 84.3% in the previous year. However, only 65.9% of trains arrived on time, below the 67.2% target. fileciteturn0file0
ORR said targeted regulatory intervention had contributed to performance improvements in several regions. Enhanced monitoring of Wales & Western has now ended after the region delivered improvements in reliability, punctuality and performance governance.
The region completed 56 of 63 actions in its improvement plan, while interventions including the Thames Valley points resilience programme helped cut associated delays by 53%.
Eastern region also delivered a performance improvement plan following ORR intervention, with three of its four routes showing signs of recovery towards the end of the year. The regulator said the December 2025 East Coast Main Line timetable change had been well prepared and had initially performed broadly as expected.
Network Rail also exceeded its efficiency target for the second consecutive year, delivering £614 million of savings, £25 million ahead of plan. It now forecasts £4.1 billion of efficiencies during Control Period 7, above the original £3.9 billion requirement.
Savings were delivered through measures including improved contracting, resource management, better workbank planning and the use of technology.
However, the regulator warned that these savings had not been enough to offset inflationary pressures. General inflation and higher input costs added £978 million of pressure during the first two years of CP7, while inflation across the full control period is now expected to add more than £2 billion compared with assumptions made during the 2023 funding review.
Network Rail has closed an earlier funding gap of around £500 million in England and Wales, primarily by reducing planned renewals.
The company is now forecast to deliver only 83% of the original CP7 renewals plan in England and Wales. Across Great Britain, the figure is expected to be 88%.
ORR said this would leave Network Rail unlikely to meet its asset sustainability target in England and Wales. Asset condition is forecast to decline by 2.7% during CP7, compared with the planned 2.5% reduction.
The regulator warned that lower renewals volumes would increase reliance on maintenance and minor works, while creating a greater risk of asset failures, temporary speed restrictions and worsening reliability.
It also said some financial pressure had resulted from factors within Network Rail’s control, including a shift from planned to more expensive reactive work, inflexible contracts and delays to immature strategic programmes.
Digital signalling renewals have slipped beyond CP7, while elements of the West Coast North Modernisation Programme have also been deferred. ORR said digital signalling supply chain uncertainty and misalignment between infrastructure, fleet fitment and enabling programmes risked further instability.
Concerns were also raised about persistent non-compliance with structural assessment and examination standards, particularly across bridges, stations and other operational property.
ORR has commissioned an independent review into the causes of repeated structural asset non-compliance, with findings expected in autumn 2026.
The regulator also identified gaps in the resilience of signalling power back-up systems following incidents at Stoke, Stone and Kidsgrove. Network Rail’s Technical Authority has been asked to provide assurance by September that effective arrangements are in place across all regions.
Scotland’s position was more stable. Network Rail Scotland has not reduced its renewals programme because of inflation and is broadly delivering against its CP7 plan.
Passenger cancellations in Scotland fell to 2.1%, better than the 2.3% target and the lowest of any Network Rail region. However, the Scotland Train Performance Measure finished the year at 89.8%, below the 90.7% recovery target.
ORR said the rate of improvement required to reach the 92.5% target by the fourth year of CP7 placed that ambition at risk.
Graham Richards, ORR director of planning and performance, said: “Fewer cancellations is good news for passengers and freight customers. And £614 million of efficiencies this year is good news for taxpayers.
“But we know there is still much more to be done through Network Rail working ever more closely with train operators to deliver better whole-industry outcomes.
“If we’re to continue to protect and improve future train performance, we must carefully manage our ageing railway infrastructure.
“We recognise that in a constrained funding environment there are no easy answers, which is why we have challenged Network Rail to provide better evidence of how it will mitigate the effects of declining asset condition on train safety and performance outcomes.”
ORR said scrutiny of renewals, maintenance and asset condition would be its priority area during the coming year, as the industry prepares for the transition to Great British Railways.
