Annual Financial Report

Network Rail Limited

15 July 2026

 

Network Rail Limited 

15 July 2026 

Network Rail publishes annual report and accounts for the 12 months to 31 March 2026.

Network Rail Ltd ("Network Rail") today announces its results for the financial year ended 31 March 2026, the second year of Control Period 7 (CP7), which spans from 1 April 2024 to 31 March 2029.  

Paul Marshall, Chief Financial Officer for Network Rail, said: "

We are making strong progress in delivering efficiencies across the railway and are now targeting £4.1bn of savings over CP7, ahead of our original £3.9bn plan. This is helping us respond to sustained inflationary pressures while continuing to operate a safe and reliable railway and deliver our operations and capital programmes within our budgets and at a planned pace.

"At the same time, we are continuing to invest significantly in the network, targeting maintenance and renewals where they will deliver the greatest benefit for passengers and freight users. As a not-for-dividend company, every surplus we generate is reinvested back into the railway, including to support the renewals programme and long-term resilience of the network".

Financial Performance

·      Network Rail is making strong progress on achieving £4.1bn of efficiencies in CP7, £0.2bn higher than our original target and building on £4bn delivered in CP6 (2019-2024).

·      Revenue: £11.9bn (2024/25: £11.3bn), reflecting increases in revenue grants from governments largely to cover increased finance costs.

·      Operating Costs: £8.3bn (2024/25: £8.1bn), we strengthened maintenance and operations teams to improve resilience, against a backdrop of sustained inflation and higher depreciation.

·      Profit Before Tax: £0.6bn (2024/25: £0.7bn), with all surpluses reinvested in the renewals programme

·      Capital Investment: £5.9bn (2024/25: £6.2bn), comprising £31m lower renewals expenditure and £306m reduction in enhancements, in line with business plans. 

Outlook

Network Rail has continued to build on the £4bn of efficiencies delivered between 2019 and 2024. Two years into CP7, we are making strong progress and are now slightly ahead of the glide path set in our original plans. We are targeting £4.1bn of efficiencies over the 2024-2029 period, exceeding our original £3.9bn commitment, while continuing to maintain  a safe and reliable railway.  

Looking ahead, we recognise the challenges arising from sustained higher inflation and continued pressure on public finances. Within CP7, we expect the average age of some of our assets to increase, and we will manage this carefully by targeting maintenance and renewal activity where it delivers the greatest benefit for passengers and freight users.

We also recognise the growing need to invest in infrastructure that is resilient to more frequent extreme weather events. These factors have been reflected in our plans, and we remain focused on responding proactively.

Against this backdrop, our priority remains maximising value from every pound we spend.

By adopting smarter ways of working, modernising our asset base and strengthening collaboration across the industry, we are confident in our ability to continue to deliver a safe and reliable railway-one that continues to play a vital role in Britain's national infrastructure and supports clean, green and sustainable economic growth.  

The focus on value for money is also central to rail reform. By working more closely with train operating companies to deliver a more integrated railway. This includes supporting revenue growth from passengers and freight, optimising the delivery of infrastructure projects, and targeting investment to deliver the best value for customers.

Financial highlights

for the year ended 31 March 2026

	2026	2025
	£m	£m
Revenue	11,862	11,345
Operating profit	3,531	3,242
Profit before tax	617	725
Profit after tax	481	515
Net cash from operating activities	3,816	3,918
Net debt	(61,986)	(60,923)
Net assets	22,947	20,996
Rail network fixed assets	91,923	88,916
Investment property	321	194

Income statement

for the year ended 31 March 2026

		2026	2025
		Group	Group
	Note	£m	£m
Revenue	2	11,862	11,345
Net operating costs	3	(8,331)	(8,103)
Operating profit		3,531	3,242
Property revaluation movements and profits on disposal		(8)	(30)
Profit from operations	4	3,523	3,212
Other gains and losses		11	29
Finance income		5	5
Finance costs		(2,997)	(2,521)
Interest Income		16	-
Net interest on pension assets		59	-
Profit before tax		617	725
Tax	5	(136)	(210)
Profit for the year attributable to the owner of the company		481	515

Under section 408 of the Companies Act 2006 the group has elected to take the exemption with regards to disclosing the company income statement. The company's result for the year was £nil (2025: £nil)

Statement of comprehensive income

for the year ended 31 March 2026

	2026	2025
	Group	Group
	£m	£m
Profit for the year	481	515
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or loss:
Gain on revaluation of the rail network	1,632	556
Actuarial gain on defined benefit pension schemes	308	1,143
Deferred tax relating to components of other comprehensive income	(485)	(425)
Total items that will not be reclassified to profit or loss	1,455	1,274
Items that may be reclassified to profit or loss:
Reclassification of balances in hedging reserve to the income statement	15	25
Total items that may be reclassified to profit or loss	15	25
Other comprehensive income for the year	1,470	1,299
Total comprehensive income for the year	1,951	1,814

Statement of changes in equity

for the year ended 31 March 2026

	Revaluation	Other	Hedging	Retained	Total
Group	reserve	reserves*	reserve	earnings	equity
	£m	£m	£m	£m	£m
Balance at 31 March 2024	7,958	249	(60)	11,035	19,182
Profit for the year	-	-	-	515	515
Other comprehensive income
Revaluation of the railway network	556	-	-	-	556
Transfer of deemed cost depreciation from revaluation reserve	(240)	-	-	240	-
Increase in deferred tax liability on the railway network	(139)	-	-	-	(139)
Actuarial gain on defined benefit pension schemes	-	-	-	1,143	1,143
Deferred tax on actuarial gain	-	-	-	(286)	(286)
Transfer between reserves - deferred tax	60	-	-	(60)	-
Reclassification of balances in hedging reserve to the income statement	-	-	25	-	25
Total comprehensive income	237	-	25	1,552	1,814
Balance at 31 March 2025	8,195	249	(35)	12,587	20,996
Profit for the year	-	-	-	481	481
Other comprehensive income
Revaluation of the railway network	1,632	-	-	-	1,632
Transfer of deemed cost depreciation from revaluation reserve	(261)	-	-	261	-
Increase in deferred tax liability on the railway network	(408)	-	-	-	(408)
Actuarial gain on defined benefit pension schemes	-	-	-	308	308
Deferred tax on actuarial gain	-	-	-	(77)	(77)
Transfer between reserves - deferred tax	65	-	-	(65)	-
Reclassification of balances in hedging reserve to the income statement	-	-	15	-	15
Total comprehensive income	1,028	-	15	908	1,951
Balance at 31 March 2026	9,223	249	(20)	13,495	22,947

*Other reserves of £249m (2025: £249m) include a £242m vesting reserve on privatisation.

There has been no movement in the current or prior year affecting the statement of changes in equity for the company.

Balance Sheet

at 31 March 2026

		2026	2025
		Group	Group
	Note	£m	£m
Assets
Non-current assets
Intangible assets		55	58
Right of use assets		610	385
Property, plant and equipment - the rail network	6	91,923	88,916
Investment property		321	194
Derivative financial instruments		4	13
Retirement benefit asset		1,403	1,075
Interest in joint ventures		25	30
		94,341	90,671
Current assets
Assets held for sale		3	4
Inventories		553	418
Trade and other receivables		1,490	1,381
Current tax asset		-	-
Derivative financial instruments		3	9
Cash and cash equivalents		763	595
		2,812	2,407
Total assets		97,153	93,078
Liabilities
Current liabilities
Trade and other payables	7	(2,420)	(2,405)
Current tax liabilities		-	-
Borrowings	9	(6,472)	(8,360)
Derivative financial instruments		(16)	(18)
Provisions		(179)	(142)
		(9,087)	(10,925)
Net current liabilities		(6,275)	(8,518)
Non-current liabilities
Borrowings	9	(56,298)	(53,203)
Derivative financial instruments		(12)	(46)
Other payables	7	(421)	(125)
Retirement benefit obligation		(142)	(152)
Deferred tax liabilities		(8,246)	(7,631)
		(65,119)	(61,157)
Total liabilities		(74,206)	(72,082)
Net assets		22,947	20,996
Equity
Revaluation reserve		9,223	8,195
Other reserve		249	249
Hedging reserve		(20)	(35)
Retained Earnings		13,495	12,587
Total shareholder's funds and equity attributable to equity holders of the parent company		22,947	20,996

Statement of cash flows

for the year ended 31 March 2026

		2026	2025
		Group	Group
	Note	£m	£m
Cash flow from operating activities
Cash generated from operations	8	5,776	5,533
Interest paid*		(1,960)	(1,615)
Income tax received		-	-
Net cash generated from operating activities		3,816	3,918
Investing activities
Interest received		21	5
Purchase of property, plant and equipment		(5,867)	(6,274)
Proceeds on disposal of property		30	107
Capital grants received		2,253	2,545
Net cash inflows / (outflows) from joint ventures		7	2
Net cash used in investing activities		(3,556)	(3,615)
Financing activities
Repayment of borrowings		(582)	(40)
New loans raised		542	-
Decrease in collateral placed		24	40
Decrease/(increase) in collateral held		-	(3)
Cash acquired on acquisition of LCR		45	-
Lease incentives		16	-
Repayment of lease liabilities		(137)	(133)
Net cash used in financing activities		(92)	(136)
Net increase in cash and cash equivalents		168	167
Cash and cash equivalents at the beginning of the year		595	428
Cash and cash equivalents at the end of the year		763	595

*Balance includes the net interest on derivative financial instruments

Notes to the financial statements

for the year ended 31 March 2026

1.  General information

Network Rail Limited ('the company') is a company limited by guarantee which is incorporated and domiciled in Great Britain and registered in England and Wales under the Companies Act 2006. Network Rail Limited is an arm's length body of the Department for Transport.

The company registration number is 04402220.

The company's registered office is situated at Waterloo General Office, London, SE1 8SW, United Kingdom.

The company's and its subsidiaries' (together 'the group' or 'Network Rail') principal activities are detailed in the 'About Network Rail' section of our Annual Report and Accounts 2025, Strategic report.

Network Rail is organised as a single operating segment for financial reporting purposes.

The Secretary of State is the sole member of the Company.

Going concern

The group's business activities, together with the factors likely to affect its future development, performance and position are set out in the 2026 Annual Report and accounts of Network Rail Limited ('the accounts'), in  the "About Network Rail" section on pages 11 to 16, and "Business unit summaries" on pages 33 to 66. The financial position of the group, its cash flows, liquidity position and borrowing facilities are described in the Chief Financial Officer's review on pages 28 to 32.

In assessing the Group's prospects, the Directors considered the most recent developments in UK rail reform. In particular, the Government has progressed its programme to establish Great British Railways (GBR) as a new publicly owned body responsible for both rail infrastructure and the majority of passenger services. The Railways Bill, which was introduced to Parliament on 5 November 2025 and continues to progress through Parliament in 2026, provides the legislative framework for these reforms.

This proposes that a new public body, Great British Railways, will integrate the railways, owning the infrastructure, collecting fare revenue, running, and planning the network, and setting most fares and timetables. It is planned that Network Rail will be absorbed into the public body to bring about single, unified, and accountable leadership for the national network. While the precise structure and timing of the final model remain subject to legislative outcomes and implementation planning, it is not expected that these reforms will adversely impact the Group's ability to continue as a going concern, as the underlying functions of Network Rail are expected to be absorbed into GBR.

The group has considerable financial resources together with long-term contracts with a number of customers and suppliers. Network Rail does not expect to undertake any new borrowing in the next 12 months. Instead, its activities will be largely funded by grants from the Department for Transport (DfT) and revenue from customers. Network Rail has secured a £41.6bn loan facility with the DfT, which it intends to draw upon to specifically refinance its existing debt. This facility remains within its parameters.

Network Rail has nine separate grant agreements in place with DfT and Transport Scotland (TS) to fund activities in the next 12 months. These grants are: - with DfT - Network Grant; Enhancements Grant; British Transport Police Grant; Financing Costs Grant for DfT interest; Financing Costs Grant for external interest (bonds and swaps); Fares and Ticketing Reform Grant and Corporation Tax Grant - with TS - Network Grant and Enhancements Grant.

Business plans and financial models are used to project cash flows and monitor financial risks and liquidity positions, forecast future funding requirements and other key financial ratios, including those relevant to our network licence. Analysis is undertaken to understand the resilience of the group and its business model to the potential impact of the group's principal risks, or a combination of those risks. This analysis takes account of the availability and effectiveness of the mitigating actions that could realistically be taken to avoid or reduce the impact or occurrence of the underlying risks. The board considers the likely effectiveness of such actions through regular monitoring and review of risk management and internal control systems. Further details are set out in the Viability Statement on pages 78 to 80. In addition, Note 23 to the accounts includes the group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit, liquidity and foreign exchange risk.

After making enquiries, including those detailed above, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

2.  Revenue

	2026	2025
	Group	Group
	£m	£m
Grant income	8,153	7,633
Franchised network access	3,287	3,326
Freight revenue	72	70
Property rental income	314	270
Other income	36	46
Revenue	11,862	11,345

The effect of the performance regimes was a net loss of £175m (2025: net loss of £86m) which is included in the Franchised network access line in the above table. This led to an increase in revenue in the Grant Income line as additional grant was drawn down.

3.  Net operating costs

	2026	2025
	Group	Group
	£m	£m
Employee costs	3,274	3,069
Own costs capitalised	(920)	(833)
Maintenance external charges	1,412	1,348
Energy charges	948	1,010
Business rates	315	311
Telecommunication and IT	256	243
Operational external charges	922	857
Other industry costs	184	167
Other operating income and recoveries	(420)	(371)
Net operating costs before depreciation and amortisation	5,971	5,801
Depreciation	2,848	2,732
Amortisation of grants	(488)	(430)
Net operating costs	8,331	8,103

Other operating income and recoveries includes income earned by the group's trading subsidiaries and ancillary income.

4.  Profit from operations

Total profit from operations is stated after charging/(crediting):

	2026	2025
	Group	Group
	£m	£m
Research and development costs expensed	7	10
Amortisation of intangible assets	1	1
Profit/(Loss) on sale of properties	(5)	(1)
Decrease in the fair value of investment properties	13	30
Cost of inventories recognised as an expense	218	191
Write down of inventories recognised as an expense	19	12
Amounts payable to auditors
Fees payable to the company's auditors for the audit of the company and consolidated financial statements	0.64	0.55
Fees payable to the company's auditors for audit related services:
-  The audit of the company's subsidiaries	0.12	0.14
-  Regulatory accounts audit and interim review	-	0.04
Total amounts payable to group auditors	0.76	0.73

For financial years ended 31 March 2026 and 2025 no fees were payable to the company's auditors in respect of non-audit related services. In addition to the audit fee information given in the table the group pays £0.67m for the audit of subsidiaries that are not performed by the group auditor.

5.  Tax

The tax charge is made up as follows:

	2026	2025
	Group	Group
	£m	£m
Current tax:
Corporation tax charge	-	-
Adjustment in respect of prior years	-	-
Total current tax charge	-	-
Deferred tax:
Current year charge	(170)	(206)
Adjustment in respect of prior years	34	(4)
Total deferred tax charge	(136)	(210)
Total tax charge	(136)	(210)

The tax charge for the year can be reconciled to the profit per the income statement as follows:

	2026	2025
	Group	Group
	£m	£m
Profit before tax	617	725
Tax at the UK corporation tax rate of 25 per cent (2024: 25 per cent)	(154)	(181)
Adjustment in respect of prior years	34	(4)
Income/(expense) not subject to tax	(22)	(22)
De-recognition of deferred tax assets recognised in the year	6	(3)
Total tax charge for the year	(136)	(210)

Deferred tax at 31 March 2026 is calculated at a rate of 25 per cent (2025: 25 per cent) based on the tax rate expected to prevail based on legislative enactments at the point temporary differences resolve. The amount at which temporary differences crystallise is sensitive to the decisions on future tax laws to be taken by Parliament. 

UK corporation tax is calculated at 25 per cent (2025: 25 per cent). 

6.  Property, plant and equipment - the rail network

	Group assets	Group capital grants	Group carrying value
	£m	£m	£m
Valuation
At 31 March 2024	102,488	(15,605)	86,883
Additions - Enhancements	2,520	(2,520)	-
Additions - Renewals	3,684	-	3,684
Total additions	6,204	(2,520)	3,684
Disposals	(16)	-	(16)
Transfers to investment property	(1)	-	(1)
(Depreciation charge)/grant amortisation for the year	(2,612)	422	(2,190)
Reclassification of deferred capital grants	556	-	556
At 31 March 2025	106,619	(17,703)	88,916
Additions - Enhancements	2,214	(2,214)	-
Additions - Renewals	3,653	-	3,653
Total additions	5,867	(2,214)	3,653
Disposals	(18)	-	(18)
Transfers to investment property	(5)	-	(5)
(Depreciation charge)/grant amortisation for the year	(2,726)	471	(2,255)
Reclassification of deferred capital grants	1,632	-	1,632
At 31 March 2026	111,369	(19,446)	91,923

Given the economic and physical interdependency of the assets comprising the rail network, the company has concluded that the rail network is considered as a single class of asset. The rail network is carried at its fair value.

As there is no active market in railway infrastructure assets, the company has derived the fair value of the rail network using an income approach. Under this approach the cash flows that a network licence holder expects to generate from the rail network are assessed using a market rate of return. This valuation is carried out twice a year and revaluation gains and losses are reflected in other comprehensive income.

The independent rail regulator, the Office of Rail and Road (ORR), stated (in the 2018 periodic review final determination: Supplementary document - financial framework) that a private network licence holder of the railway network would have its revenue requirement determined using the building block model of regulation. Under this model the network licence holder's annual income (received in the form of the network grant and track access charges) would comprise:

a) The regulator's assessment of the efficient costs of operating and maintaining the network.

b) An allowance for Regulatory Asset Base (RAB) amortisation - qualifying capital expenditure is added to the RAB as incurred and recovered by the company through future amortisation allowances (in order to spread the cost to customers and stakeholders of investment in the rail network over many years).

c) An allowed return on the RAB - calculated by applying the rate of return permitted by the ORR (based on its assessment of the market's cost of capital) to the RAB balance.

Future cash flows under (a) are assumed to be equivalent over time to the network licence holder's actual costs of operation and maintenance, on the basis that the Regulator aims to set targets which are ambitious but achievable. These therefore have no net impact on forecast future cash flows, or the valuations. The allowed return (c) is based on a cost of capital which would be offset in a discounted future cash flows model (see Discount rate below). The economic rights inherent in ownership of the regulated rail network asset are therefore vested primarily in the value of the RAB, which will be recovered through future regulated income as the RAB is amortised (b).

This means that it is possible for the RAB itself to be used as the starting point for a discounted cash flow valuation. The RAB fluctuates in valuation; increasing in value principally as a result of allowances for capital expenditure and inflation indexation, whilst reducing for amortisation. The adjustments may give rise to upwards or downwards revaluations. Further changes are subject to:

a) Adjustment for any difference between regulatory rate of return and the market cost of capital that a third-party investor would use to assess the value of the network (the rate of return and market cost of capital are currently assessed as fully aligned); and

b) Adjustment for forecast future under or out performance against the regulatory determination over the remainder of the current control period. No adjustment is made in respect of future control periods on the expectation of the Regulator setting, over the long term, ambitious but achievable determination.

When valuing the network, management is required to consider the value a knowledgeable willing party would place on the network in an arm's length transaction. On the grounds that third party investors are known to value the assets of regulated companies by reference to the RAB, and that the cash flows associated with the regulatory framework are considered sufficiently stable and robust to form the basis of a third party valuation, management has used the RAB as the starting point for its valuation.

Revaluation

The valuation includes a £1,632m upward movement in the value of the railway. The key drivers for the valuation are:

·      The impact of indexation inflation (£2.9bn increase in the valuation);

·      £150m favourable impact of expected performance, offset in part by,

·      The rate at which assets are amortised in the RAB and assets are depreciated under IAS 16 (£1.4bn decrease in the valuation).

Impact of indexation inflation

Indexation inflation was based on November CPI, of 3.2 per cent. This has added £2.9bn to the valuation of the Regulatory Asset Base.

The valuation is sensitive to the CPI assumption. If CPI varied by 1%, this would result in a £0.9bn change in the valuation of the network.

Third party funding

Additions to the railway network funded by capital grant, rather than via the RAB funding mechanism, are included in the valuation at cost. The carrying value of property, plant and equipment is calculated after netting off associated grant funding received or receivable.

Disposals

The disposals of £18m were as the result of property sales in the usual course of business. In line with Regulatory Accounting Guidelines the net proceeds of sales are deducted from the RAB, reducing the valuation of the Railway Network Valuation. The valuation of the disposals is assessed as being equal to the reduction in the valuation of the railway network relating to property sales.

Renewals are completed at the useful life of the asset and hence there is no value attributable to the item being renewed that needs to be derecognised from PPE.

Depreciation

The depreciation charge for any year is calculated using the average carrying value for the year and the estimated remaining weighted average useful economic life of the rail network. The remaining weighted average useful economic life of the rail network was calculated using the engineering assessment of serviceable economic lives of the major categories that comprise the rail network. The estimated remaining weighted average useful economic life of the network is currently 40 years (2025: 40 years).

Discount rate

The discount rate used in the income approach is the pre-tax rate of return set by the ORR. The ORR performs a periodic review every five years, which leads to the setting of the appropriate rate for the five-year period. The ORR's method encompasses advice from consultants, comparisons to similar infrastructure assets and discussions with Network Rail. Management believes this cost of capital reflects the assumptions that a market participant would make in arriving at a discount rate.

Should the ORR amend the permitted rate of return in future quinquennial reviews, the regulator would raise or lower the permitted charges to customers so as to achieve the new rate of return. In other words, the cash flows would change but the RAB would not.

The ORR confirmed that a conventionally funded market participant would receive an allowed return equal to the full market cost of capital. This has been reiterated in their final determination for CP7. Management expects that if the rail network asset were to be transferred to a private owner during CP7, ORR would determine the private owner's revenue requirement for CP7 using the original pre-tax (CPI) WACC of 3.98% set out in their final determination for this Control Period amended for the movement since then. Management expects that the rate of return set by the regulator in subsequent quinquennial reviews will be consistent with the market discount rates for infrastructure assets at the quinquennial review date.

	Change in cost of capital (basis points)	31 March 2026	31 March 2025
Change in fair value	25	£723m	£949m
	50	£1,368m	£1,795m
Percentage change in fair value	25	0.8%	1.1%
	50	1.5%	2.0%
Change in annual deprecation charge	25	£18m	£24m
	50	£34m	£45m

7.  Trade and other payables

	2026	2025
	Group	Group
Current liabilities: trade and other payables	£m	£m
Trade payables	(417)	(832)
Collateral received from counterparties		-
Payments received on account	(35)	(31)
Other payables	(429)	(412)
Other interest accruals	(273)	(268)
Other accruals	(930)	(600)
Deferred income	(336)	(262)
Total	(2,420)	(2,405)

The average credit period taken for trade purchases is 31 days (2025: 35 days).

Before accepting new suppliers, and upon letting significant contracts, the group evaluates suppliers' creditworthiness using external credit scoring systems and other relevant data.

The directors consider that the carrying value of trade and other payables approximates to their fair value. All balances are ordinarily non-interest bearing and denominated in sterling.

The Other accruals balances contains a degree of estimation uncertainty regarding the amounts to be paid. The majority of the balance relates to COWD which is disclosed as a key source of estimation uncertainty.

	2026	2025
	Group	Group
Non-current liabilities: other payables	£m	£m
Capital grants deferred income	(393)	(104)
Other payables	(28)	(21)
Total	(421)	(125)

As part of the acquisition of Railtrack PLC, Network Rail received a grant of £300m from the Strategic Rail Authority to fund the purchase. In line with Network Rail's accounting policy this revenue is deferred and amortised over the average remaining life of the railway network (as this represents the substantial part of the assets purchased), currently 40 years, on a straight-line basis. The balance on the grant after amortisation at 31 March 2026 is £74m (2025: £83m).

8.  Notes to the statement of cash flows

	2026	2025
	Group	Group
	£m	£m
Profit before tax	617	725
Adjustments for:
Property revaluation movements and profits on disposal	8	30
Fair value gain on derivatives and debt	(11)	(29)
Net interest expense	2,917	2,516
Depreciation of the rail network and leases under IFRS 16	2,848	2,732
Amortisation of grants	(488)	(430)
Amortisation of intangible assets	3	1
Non cash movement in retirement benefit obligations	29	77
Increase in provisions	37	20
Operating cash flows before movements in working capital	5,960	5,642
Increase in inventories	(122)	(47)
(Increase)/Decrease in receivables	(42)	(14)
Increase in payables	(20)	(48)
Cash generated from operations	5,776	5,533

Cash and cash equivalents

Cash and cash equivalents (which are represented as a single class of assets on the face of the balance sheet) comprise cash at bank, collateral and commercial paper, all of which are on call with the exception of short-term deposits. There were £864m (excluding offsetting clearing accounts) of short term deposits with the government banking scheme ("GBS") held as at 31 March 2026 (2025: £631m).

9.  Borrowings

	2026	2025
	Group	Group
	£m	£m
Net borrowings by instrument:
Cash and cash equivalents	763	595
Collateral placed with counterparties	21	45
Bank loans	(720)	(687)
Lease liabilities	(657)	(410)
Bonds issued under the Debt Issuance Programme (less unamortised premium, discount and fees)	(29,014)	(28,586)
Borrowings issued by the DfT*	(32,379)	(31,880)
	(61,986)	(60,923)
Movement in net borrowings:
At the beginning of the year	(60,923)	(60,145)
Increase in cash and cash equivalents	168	167
Proceeds from borrowings	(8,297)	(15,698)
Repayment of borrowings	8,297	15,698
Capital accretion	(1,035)	(938)
Movement in collateral placed with counterparties	(24)	(40)
Movement in collateral received from counterparties	-	3
Movement in lease liabilities	(247)	(54)
Decrease in DfT collateral facility	40	40
Fair value and other movements	35	44
At the end of the year	(61,986)	(60,923)
Net borrowings are reconciled to the balance sheet as set out below:
Cash and cash equivalents	763	595
Collateral placed with counterparties (included in trade and other receivables)	21	45
Borrowings included in current liabilities	(6,472)	(8,360)
Borrowing included in non-current liabilities	(56,298)	(53,203)
	(61,986)	(60,923)

*As at 31 March 2026, a collateral facility of £0m (2025: £40m) was included in this balance.

 

END