Strikes and inflation drag Network Rail down to £1.1bn loss

Network Rail has tumbled to a £1.1 billion loss for the past year after it was affected by strike action and higher interest payments on its debts due to inflation.

The body, which owns and manages the infrastructure of most of the UK’s railway network, saw losses grow for the year to March 31 from a £324 million profit in the previous year.

It said this was primarily linked to increases in the value of inflation-linked bonds previously issued to fund the railway.

Higher inflation levels over the year resulted in significant increases to interest payments on these debts.

Network Rail saw its net debt grow to £59.1 billion from £56.1 billion last year as a result.

Andrew Haines, chief executive of National Rail, also said strike action hit “industry finances hard” over the year.

Thousands of rail workers took part in strike action over the year amid a dispute over pay and working conditions.

In March, members of the RMT union accepted a pay offer from Network Rail, which handed worked a 9% pay rise over two years.

However, members of the RMT and Aslef unions remain in disputes with a number of train operators.

Network Rail said on Tuesday that revenues grew to £10.01 billion for the year from £9.55 billion a year earlier as increased charges to train and freight operators and increased retail revenues were  partly offset by lower performance-related income.

It said this was driven by increased compensation paid to train and freight operators for cancelled services due to industrial action.

Income was also impacted by severe hot weather last summer, it added.

Mr Haines said: “For our railway the last year will be remembered for one issue almost exclusively: strikes.

“The period of industrial action at Network Rail was deeply bruising, not only for our relationships with colleagues, but for our passengers and freight customers right across Britain.

“Strike action hit our industry finances hard and knocked passenger confidence, but I passionately believe our perseverance and determination to agree the right deal has set up the railway for a brighter future.

“Now, a new chapter lies ahead, and it is our shared responsibility to heal from this period of industrial action to build a stronger, more resilient and safer business.”

Network Rail also reported that its investment increased to £6.5 billion compared with £6.1 billion the previous year.