The rail infrastructure business was set the task of slashing costs by 22% between 2009 and 2014 and is now half way through its five year review period.

Since then efficiency gains in its works programme have helped to deliver 17% cost savings.

This has been achieved by contractors delivering capital works for less, better asset management and by reducing operating and maintenance costs.

Network Rail’s running costs, in real terms, are over £300m lower in the first six months of the financial year than the prevailing costs back in 2008-9, when the efficiency challenge was set.

The forecast is to achieve over £700m of savings by the end of the year.

Capital works spending rose by a fifth to £2bn in the first half of the financial year as Network Rail accelerated spending on major projects like Thameslink with major work at Farringdon and Blackfriars, as well as projects at King’s Cross, Birmingham New Street, Reading, and on Crossrail.

Unveiling half-year results, group finance director, Patrick Butcher, said: “Over the next six months Network Rail will undertake a major transition, with all the newly devolved routes planning their businesses and taking decisions that draw on local knowledge.

“The structures for new ways of working and partnerships with customers are in place, and in this way Network Rail will continue to provide a leading role in changing the rail industry.

“This and other strategic change programmes represent a major reform to the structure of Network Rail.”

He added: “It will create a platform for new collaborative ways of working with its customers that will drive down the overall cost of the railway.”