Network Rail continued to make steady progress in reducing its costs and are on target to achieve the challenging efficiency savings set out for its current funding period, CP4, which runs from 2009-2014.

The company has reduced the costs of running the railway by £400m in the year and around £600m since the start of CP4.

Group Finance Director, Patrick Butcher, said: “The findings of the government-commissioned McNulty value for money review show that there are clear opportunities for the whole industry to make further savings in the costs of running the railway. The message is clear: the rail industry simply has to become more affordable for the users of the railway network and for taxpayers.”

Network Rail has taken a number of significant steps during the year in pursuit of delivery beyond our regulatory targets and to position the company for the longer term ambition set out in the McNulty review.

Revenue was £5,712m compared to £5,668m in 2009/10. Operating profits rose to £2,028m from 2009/10's £1,981m. Staff costs also fell to £1,734m from £1,746m, with staff numbers falling to 35,606 from 37,153, although average salaries rose by 1.5%.

Mr Butcher concluded: “This is a moment of great potential for the rail industry, where real reform for the benefit of user and taxpayer is a genuine possibility. Network Rail has been in the vanguard of change over the past year and will continue to drive for rapid, safe evolution. Examples of our initiatives include moving decision making closer to our customers, partnering with key industry players and setting up the potential for greater competition as a stimulus to further improvements in performance. There can be no turning back for reform – the key question we face is how to deliver at an ever increasing pace.”

(BMcN/GK)