UK Construction and Law
The rail and road regulator is asked to build the Lower Thames Crossing funding framework by September 2027
By Staff Writer | 6 September 2026
An independent review of the Office of Rail and Road puts twelve recommendations to government and to the regulator. One of them hands it the regulatory framework for the first road scheme to be financed on a regulated asset base.
The Department for Business and Trade published the independent regulatory review of the Office of Rail and Road on 3 September 2026, alongside the Department for Transport. It runs to 58 pages, was commissioned under the government's Regulation Action Plan, and reports on the regulator as it stood between December 2025 and June 2026, while the Railways Bill was going through Parliament.
This independent review sets out an achievable pathway for the Office of Rail and Road (ORR) to evolve from a respected regulator into an organisation with a rebalanced remit that also serves as an independent strategic advisor to the Secretary of State (SofS) on the overall rail system.
Dr Richard Judge, author of the independent regulatory review of the Office of Rail and Road
Recommendation 10 is the one with a construction programme attached
The regulator, with the Department for Transport, is asked to design and populate a regulatory framework for regulated asset base financing of the Lower Thames Crossing by September 2027, drawing on the approaches used by the energy and water regulators and by the National Infrastructure and Service Transformation Authority.
The report treats this as new territory. The regulator expects to take on the role of regulator for any future road project built under a regulated asset base financing model, with the crossing as the first application, and while it will build on existing regulatory experience the report is direct that further capability and skills are still needed. The reason given for acting early is investor confidence: the review's position is that visible independent oversight, established before the money is committed, is what makes the model credible to the people funding it.
Two related recommendations sit behind it. The department is asked to take stock of how the regulator's roads function is funded, including options for aligning that funding more closely with the models used on the rail side, by March 2027. And it is asked to consider how the regulator might be enabled and funded to play an explicit part in supporting the long term asset health of the strategic road network, ideally within refreshed duties, by the same date.
The rest of the twelve
The first two recommendations are about clarity and capability. The department, with the regulator, Network Rail and the passenger operator body, is asked to publish by December 2026 a shared account of how the regulator's revised purpose will be delivered in practice, including intended changes over time and success measures. The regulator is then asked to define the parameters of an organisational redesign by December 2026 and to finish it by June 2027, after an audit of skills, capability and culture. The report warns against the familiar failure of a transformation programme that rushes to action before it has agreed what it is trying to achieve.
Three recommendations concern safety regulation, and they are the ones a contractor or an asset owner will feel. By March 2027 the regulator, with industry, is to establish a programme identifying how to account for whole of system effects when assessing whether a risk control is proportionate, including wider rail system factors, societal externalities and risk transferred to the roads. By the same date it is to publish ways of working principles for applying cost benefit analysis to risk controls, and to improve the transparency of the reasoning behind its safety priorities and interventions, including the trade offs and cost considerations taken into account.
The report also asks the department, consulting the regulator and National Highways, to refresh and realign the statutory and policy documents governing roads by March 2027, on the basis that they have drifted apart since their introduction in 2015. The remaining recommendations cover a joint dashboard for rail system performance by September 2027, greater integration of the regulator's road and rail expertise by the same date, and clear expectations for its part in the government's integrated transport strategy by March 2027.
What it does not do
The review is advice, not a decision. The publishing departments say only that government will now work with the regulator to consider the recommendations and next steps, so none of the twelve dates binds anyone yet. For the supply chain the item to watch is the crossing. A regulated asset base framework decides how efficiently spent expenditure is recognised, how outputs are measured and who carries the risk when a programme moves, and those are the questions that end up in the contracts.