Network Rail Risk Funds review

8 Jun 2026 04:41 PM

GAD reviewed 2 Network Rail Risk Funds as part of the Office of Rail and Road’s programme to encourage greater private investment in railway infrastructure.

The Government Actuary’s Department (GAD) completed an independent actuarial review (PDF, 671KB) into the solvency level and fee rates charged for 2 Network Rail funds that provide third-party promoters with financial protection against defined liabilities that may arise during rail enhancement projects.

The review found that the risk funds were solvent overall, but that experience varied significantly by project categories within each fund, with some categories showing surpluses and others showing deficits. These findings will help inform an appropriate balance between fee rates being adequate to cover the underlying risk and encouraging private investment.

GAD’s role

We undertook an independent actuarial review of the Industry Risk Fund and the Network Rail Fee Fund for the Office of Rail and Road (ORR).

These funds are key components of the Rail Network Investment Framework (RNIF). This review is part of phase 3 of ORR’s programme to strengthen the RNIF and support greater private investment in Britain’s railway.

Funds assessment

GAD’s reviews found that the total projected headroom (the difference between contributions and ultimate expected claims) is overall positive. In detail, the review found the:

• Industry Risk Fund has built up considerable headroom over time, putting it in a strong position to absorb large future claims losses, whereas the headroom on the Network Rail Fee Fund is at a more modest level.
• The level of headroom by project category within each fund varied considerably, such that there is scope to adjust fee rates for each category within a fund to be more closely aligned to historical claims experience.

Credit: Unsplash

Contributions and claims

We drew on historical contribution and claims data, as well as the practical experience of those involved in managing the day-to-day running of the funds.

We estimated the ultimate level of claims arising from agreements in force between 2004 and 2025, including:

• claims already reported
• claims incurred but not yet reported
• the risk associated with future works under existing agreements

In addition, we also provided advice relating to a range of different options for making changes to fee rates in each fund based upon varying strategic objectives.

GAD actuary Andy van Buiten led on the review and yesterday said:

“We worked collaboratively with both Network Rail and ORR to understand the complexities of the funds. I am pleased that our findings will help inform decisions in relation to ORR’s programme of work to attract greater investment in the railways.”