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Network Rail Limited Annual Report and Accounts 2021 Strategic Report

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Network Rail Limited Annual Report and Accounts 2021 Strategic Report Strategic report The numbers below are important to show our financial and non-financial performance. We report OUR YEAR IN numbers for both 2019/20 and 2020/21. For 2019/20, only three weeks were affected by the coronavirus pandemic. However, the whole of 2020/21 was NUMBERS impacted by the pandemic. Revenue in the year Passenger km travelled (bn) 2020/2021 2019/2020 2020/2021 2019/2020 £9,618m £8,099m 12.5km 66.8km Operating costs (before depreciation & amortisation) Passenger trains on time Public Performance Measure 2020/2021 2019/2020 2020/2021 2019/2020 £4,479m £3,924m 93.4% 86.2% Profit before tax Freight moved Net tonne kilometres 2020/2021 2019/2020 2020/2021 2019/2020 £1.6bn £375m 15.2bn 16.6bn Net debt Freight trains on time Freight Delivery Metric 2020/2021 2019/2020 2020/2021 2019/2020 £54.7bn £54.6bn 95.2% 93.4% Capital expenditure Lost time injury frequency rate 2020/2021 2019/2020 2020/2021 2019/2020 £5,928m £5,176m 0.277 0.290 Means time lost to injuries and fatalities among Network Rail staff and contractors. A lower figure represents a better performance. Environmental sustainability 2020/2021 2019/2020 Network Rail’s employee engagement index 9.8% 5.7% June 2021 pulse survey July 2020 pulse survey % reduction in greenhouse gas emissions against our 2018/19 baseline. Numbers do not include traction carbon reduction, which 58% 66% is not part of Network Rail’s direct emissions. 06 / Network Rail Limited / Annual Report and Accounts 2021 Strategic report KEY IMPROVEMENTS TO THE NETWORK North West & Central Scotland’s Railway HS2 On-Network Works (ONW) Kintore Station Location: Euston, Old Oak Common, Location: Kintore, Aberdeenshire Water Orton The new station will reconnect Ongoing work to prepare for Kintore to the rail network for the first construction, and connection to the time since the original station closed existing rail network, of HS2 between in the 1960s. London Euston and Birmingham Curzon Street. HS2 will bring much-needed East Kilbride Electrification additional capacity to the West Coast. Location: East Kilbride, South Trans-Pennine Route Upgrade Lanarkshire Location: Hope Valley - Manchester- Electrification will transform Leeds-York / Manchester to Sheffield the service we provide to our customers and offer greener, more Work to improve frequency, reliability environmentally friendly travel options and speed of services between to the public. Manchester, Leeds and York (TRU). Hope Valley upgrades will also remove bottleneck to allow passenger services to overtake freight trains. Wales & Western Southern Eastern Great Western Electrification, Severn Upgrading Gatwick Airport Station East Coast Main Line upgrade Tunnel (electric operation) Location: Gatwick Airport, West- Location: Werrington, Cambridgeshire Location: Severn Tunnel. South Sussex, England A new tunnel under the East Coast Gloucestershire, England to Widening platforms reduces crowding Main Line will separate passenger Monmouthshire, Wales and improves accessibility. and freight services – delivering better Electrification allows journeys reliability for millions of passengers from Cardiff to London, realising Upgrading Sandwich Station every year. environmental and journey time Location: Sandwich, Kent, England improvements for passengers. Horden Station Improvements at Sandwich station, Location: Horden, County Durham South West Rail Resilience Programme, including longer platforms and a Phase 1 - Marine Parade Dawlish new footbridge, were largely third A new station was built in just six party funded and well received by months, restoring services to Horden Location: Dawlish, South Devon stakeholders. for the first time in nearly 60 years. Reducing the number of weather induced line closures allows us to run more of our planned services. Annual Report and Accounts 2021 \ Network Rail Limited \ 07 Strategic report NETWORK RAIL’S STORY Vision, values, strategy, performance. Network Rail exists to get people and goods where they need to be and to support our country’s economic prosperity. We do this by running a safe, reliable and efficient railway that serves our customers and communities. To be successful, we need to be a company that is on the side of passengers and freight users. This is why we developed our vision of Putting Passengers First. OUR VISION Putting Passengers First Our regions make sure that their services and decisions meet the needs of the passengers, customers and communities they serve. OUR VALUES Our values – how we behave – allow us to deliver our vision. We empower our people to always be safe, care about the railway, its users and each other, and put teamwork at the heart of all that we do. This means that we Put Passengers First. STRATEGIC PRIORITIES The key elements of Putting Passengers First are grouped under our six strategic priorities: • Safety • Sustainable Growth • Train Service Delivery • Customers and Communities PERFORMANCE • Efficiencies • People Our balanced scorecard allows us to measure how well we’re doing against our strategic priorities. The linkages between our vision, values, strategic priorities and performance are explained more in About Network Rail on page 19. 08 / Network Rail Limited / Annual Report and Accounts 2021 Strategic report OPERATING MODEL In 2020/21 we continued our journey to become more We can deliver a more sustainable, efficient, joined-up customer focussed and service driven. We’ve introduced railway which is on the side of passengers and freight users. a new operating structure to bring us closer to the passengers, customers and communities we serve. Our operating model reflects that we all work directly for We’re now in better shape to meet the changing needs the benefit of passengers and freight users, or we work to of passengers and freight users and respond to external support those that do. changes like coronavirus and future rail industry reform. Eastern; North West Our funding & Central; Scotland’s comes from: PASSENGERS AND Railway; Southern; • UK Government FREIGHT USERS Wales & Western - make sure services and • Transport Scotland decisions will meet • Charging train operators the needs of their to use our track passengers, customers • Income from our OUR FIVE and communities: REGIONS property assets These regions are sub- divided into 15 routes, whose focus is on running services and repairing or renewing the railway SERVICE infrastructure. We are held to DIRECTORATE account by: • The Office of Rail and Route Services - leads Road - our economic and network operations and safety regulator strategy, and provides essential operational and • UK Government: NETWORK-WIDE business services. Department for DIRECTORATES Transport, HM Treasury • Transport Scotland System Operator - brings together timetables, EXECUTIVE network and industry LEADERSHIP strategies and plans. Our key stakeholders TEAM Technical Authority include (in no particular - provides technical order): lineside neighbours, leadership and specialist Samaritans, national and expertise. local government, our NETWORK Finance, HR, supply chain, our people, RAIL Communications - trades unions, Transport BOARD provide professional Focus, British Transport support to our regions Police, industry partners. and functions. Annual Report and Accounts 2021 \ Network Rail Limited \ 09 Strategic report INTRODUCTION BY OUR CHAIR Sir Peter Hendy, CBE This year, the railway has proved itself to be vital in keeping Britain connected. Throughout the pandemic, the railway has delivered goods such as food, power and medical supplies, while providing a reliable service for those who needed to keep going to work, including doctors, nurses and retail workers. As Britain emerges from the worst crisis of our lifetimes, the railway will continue to play an important role. Connectivity drives economic growth, jobs, housing and social cohesion, which are all even more critical against a very difficult economic landscape. One of the Government’s main priorities is levelling-up and rail will help deliver this, while also supporting its ambitious decarbonisation targets by making rail greener and getting more people and goods off the road and onto trains. Equally importantly, the railway will help to reconnect people – bringing friends, family and loved ones back together and allowing businesses to once again reap the benefits of the innovation and competition that comes with being clustered together in towns and cities. To provide those essential services, our colleagues have been on the front line to keep Britain moving. Their dedication has allowed us to safely run a flexible timetable, as well as target our investments and upgrade work so we’re better placed to provide returning passengers with a reliable railway and help our freight customers continue to move more goods, more efficiently. Many of those colleagues have also made time to help out in the community, with hundreds of hours given to supporting those in need. This has been recognised at the highest level, with eleven honours awarded to our people this year – a record. This year has seen the rail industry come together in a way it hasn’t for many years and we are determined to nurture this for the future. This teamwork will be vital in restoring confidence among passengers who’ve been away from the railway for so long, and in turning our stations back into bustling hubs that are destinations for retail and hospitality. 10 / Network Rail Limited / Annual Report and Accounts 2021 Strategic report Putting passengers first is more essential than ever –
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