Train punctuality is continuing to improve but the small number of train passengers who think they are getting value for money for their journeys is "discouraging", rail regulators said today.

The Office of Rail Regulation (ORR) revealed that 87 per cent of trains ran on time in April-June 2006 compared with 84.3 per cent on time in April-June 2005.

But the fact that only 41 per cent of customers think rail travel is value for money "should be of concern" to train companies, the ORR added.

In the first of a series of rail reviews, the ORR said the complexity of fares and lack of knowledge of available discounts is another "key area to address", while another problem is misuse of level crossings by road users.

Like other sectors of the economy, train operators are "facing significant increases in fuel and power costs" and the development of more fuel-efficient trains has become "a higher priority".

The ORR also said that long-distance rail services in western England operated by the First Group had deteriorated and are well below the average.

The ORR said it was working with interested parties on the western England problem and First Great Western and Network Rail are working on an improvement plan that should be in place next month.

ORR chief executive Bill Emery said: "Our first review identifies many positive trends, and many challenges ahead. Overall passenger satisfaction stays at an all-time high. There is continuing steady progress in train punctuality, and stewardship of the network.

"However, Network Rail and its partners need to address the regional variations in performance. Maintaining and improving on this performance also requires the industry to meet the challenges of growing demand, and fluctuating energy costs."

Mr Emery added: "Managing safety on the railways is vital. We are concerned about the increasing risk associated with misuse of level crossings that lies behind the deteriorating position in the statistics.

"We are supporting and encouraging Network Rail and other safety duty holders to tackle these issues and level crossings will continue to be one of our main priorities as joint safety and economic regulator."