Network Rail faces extra £213m National Insurance hit
Network Rail will take an additional £213m hit over the next few years from the National Insurance tax hikes announced in Rachel Reeves’ Autumn Budget, it has been revealed.
The figure marks a 16 per cent increase on a previously expected payout of £1.26bn over the remaining four years of its current financial control period.
Control Period 7 started in April last year and runs until the end of March 2029. Network Rail has committed more than £45bn in funding for the period to fix the UK’s railway infrastructure and improve safety.
The national body, which manages the UK rail network’s infrastructure, has come under financial pressure in recent years amid inflation, an extended period of industrial action and increasing costs associated with severe weather events.
The Office of Rail and Road (ORR) found in October the company’s financial performance fell by £2.8bn during the previous control period.
Network Rail’s chief executive Andrew Haines today faced questions from MPs on the Transport Committee over descriptions of Network Rail and its supply chains’ finances as “boom and bust”.
Haines said using the term to characterise overall spending would be “factually inacurate”, however he conceded there was “absolutely volatility” in certain areas, such as electrification.
He added the commitment to big projects such as HS2 and the Transpennine upgrade had also become “very significant”.
“We are probably spending more money on enhancements on our network than at any point in the last 100 years – typically around £7bn a year on HS2. If you’re not in those projects, the pipeline of funding is much more reduced.”
‘An accident waiting to happen’
The £213m was first revealed by Simon Lightwood, the Labour MP for Wakefield and Rothwell, in response to a parliamentary question in February.
Steve Mulholland, chief executive of the Construction Plant-Hire association (CPA), which represents key members of the railway supply chain, told City PM the increase would “decimate trackside jobs, stall projects and put safety on the line at risk”.
“Work shifts are expected to be slashed to just 60–70 per cent of the levels we saw in control period five and six. That means fewer staff, overstretched teams, and no money left for the basics. If tracks aren’t maintained and replaced, it’s not just a delay, it’s an accident waiting to happen.
“If this isn’t tackled fast, we’re not just risking rail safety – we’re putting the future of the rail infrastructure our economy relies upon in jeopardy.”
Network Rail and the government have been approached for comment.