Network Rail bonuses could be used to pay regulatory fines under new proposals

Fines levied on Network Rail for poor performance could be funded through management bonuses, the rail regulator has suggested.

The Office of Rail and Road (ORR) has opened a consultation today that will look at news ways to hold Britain's railway operator to account following a disastrous year with the botched timetable upgrade in May.

The proposed policies focus on a three-stage approach to resolve problems at Network Rail. At the first stage Network Rail will be routinely monitored and assessed on areas such as stakeholder engagement and working across track and train, while the second stage could see the regulator intervene to force Network Rail to put in formal improvement plans at an earlier stage.

If Network Rail is unable to resolve issues, the ORR could impose fines on Network Rail that will be funded from the bonuses of managers working on the routes that are performing particularly badly.

At the moment Network Rail can be fined by the regulator, but the money comes from funds that would otherwise be used on the railway. The ORR would have the power to scale a penalty that could hit either a portion of an individual's bonus pot to all of it.

ORR director of railway planning and performance Graham Richards said: “ORR’s regulation will target the areas that have most serious impact on all rail users, and do so early. Of course, our strongest sanctions remain to address serious and long term failures.”

In July the ORR blamed "systematic failings" at Network Rail for the disruption caused by the botched May timetable change, which caused widespread cancellations, delays and overcrowding.

Its investigation concluded that Network Rail "failed to comply with its licence requirements to run and efficient and effective process", meaning train operators could not plan the timetable to work for passengers. Train drivers could not be trained on the new routes, meaning there was often a driver shortage that prevented trains from running.

Train operators Govia Thameslink Railway and Northern also came under particular scrutiny for failing to provide adequate information to passengers.

The ORR consultation on the proposed new measures will run until 25 January.​​ If implemented it will come into force at the start of Network Rail's next control period on 1 April.

Network Rail has been approached for comment.