NETWORK RAIL showed an operating profit of more than £2 billion last year, but fewer trains ran on time and its debt rose by more than £1 billion to a new record of just over £25 billion. The company said the fall in performance had been caused by the severe winter weather.

The company said it had continued to make 'steady progress' in reducing its costs, and remains on target to achieve the 'challenging efficiency savings' set out for its current funding period, Control Period 4, which runs from 2009-2014.

It said that in real terms, it had reduced the costs of running the railway by £400 million in the last year, and by around £600 million since the start of CP4.

Revenue was £5,712 million (2009/10, £5,668 million) and the operating profit wase £2,028 million (previous year : £1,981million). Profit after tax was £313 million, compared with £284 million in 2009/10.

Capital expenditure was almost stable at £3,997 million, compared with £3,920 million the year before, but the company's borrowings had reached  £25,049 million by the end of the year (previous year £23,838 million).

Performance fell back slightly, with trains 'on time' down from 91.5 per cent in 2009-10 to 90.9 per cent. Network Rail said this was 'mainly as a result of the severe winter weather'.

Network Rail group finance director Patrick Butcher said: “The findings of the government-commissioned McNulty value for money review show that there are clear opportunities for the whole industry to make further savings in the costs of running the railway. The message is clear: the rail industry simply has to become more affordable for the users of the railway network and for taxpayers.”