Posted 16th April 2014 | 5 Comments
Passengers continue to pay a greater share
PASSENGERS are continuing to pay a greater share of railway costs, according to figures for the past financial year just released by the Office of Rail Regulation.
Discounted rail tickets, such as those bought in advance, accounted for £3 billion in revenue and over 40 per cent of farebox receipts, which totalled £7.7 bllion.
This was 3.6 per cent higher than in 2011-12 and 7.2 per cent more than than in 2010-11. The ORR is attributing the increase mainly to the growing number of passengers using the network.
Expenditure was consistent with recent years at £12.3 billion, of which the Government contributed £4 billion. This proportion of public support is the lowest in recent years, amounting to 30.9 per cent of industry income. The figure is 9.1 per cent lower than it was in 2010-11.
The number of passenger journeys has increased by 10.4 per cent over the past three years, while the amount of railfreight has risen by 29.7 per cent over the same period.
The ORR has also reported 'significant variations' in the level of government funding between England, Scotland and Wales. Total funding varied from £2.19 for each passenger journey in England, to £7.60 for a journey in Scotland, and £9.33 for a journey in Wales.
ORR chief executive Richard Price said: “Britain’s rail industry receives substantial income from passengers and taxpayers. People have a right to know where the money goes and what it helps deliver. ORR welcomes the industry’s support in compiling this report. It demonstrates a real step forward for the rail sector, which, with ORR’s help, is developing a stronger culture of openness and transparency, and providing more detailed data on costs, income and fares.
“Passengers are increasingly the main funder of the railways, and must be central to developing its plans for the future. ORR is working to put passengers at the heart of the railways – working with the industry to ensure passenger groups have a greater say in plans and delivery of new enhancements to the rail network; to review the quality of information provided to passengers during the recent disruptions; and to establish a code of practice on rail ticket selling.”
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Lutz, London
This s great news; Yes the figures for England are distorted; London and the South east should be separated out, and would probably show that the region is revenue positive or close to that milestone. This would help clarify a justify the reasoning behind the investment in the region.
@Melvyn Windebank, Canvey Island, Essex
The highways are revenue positive; i.e. they contribute more to the exchequer than they consume.
One last point; the release of the report more than a year after the period it is reporting on is a disgrace and is symptomatic of the problems of having the Government bureaucrats involved in running the railways.
Chris Jones-Bridger, Buckley Flintshire
Encouragement should be taken from these figures that the industry is becoming financially more robust. That with continuing growth the gap between costs and revenue is narrowing.
The devil still remains in the detail. Total goverment support is easily portrayed negatively as a subsidy wheras it is a combination of revenue support for the social railway and investment capital for network enhancement tnat is vital to handle the increaded business the industry is atracting. Also given the premium payments being made by many franchise holders I think clarification is requied if the support figure is gross or net of these payments.
The comparative support figures quoted between England & the devolved nations while factually accurate can also mislead the unwary. The England figures are skewed by the strong performance of the Inter City and SE franchises. A better indication of comparative performance is use of support figures between the devolved nations & the regional operations within England.
The growth in freight activity is also encouraging as the actual tonnage hauled is increasing not just tonne/kilometers. While coal volume is holding up it will be interesting to see how total activity holds up in coming years as the energy mix at power stations changes in the coming years.
Tony Pearce, Reading
The increase in Railfreight interests me. I note that Container traffic is buoyant - a pity this didn't happen years ago as this was one of the main planks of the Beeching Report. But I am puzzled by the large increase in Coal Tonnage. I had presumed that the UK was trying to eliminate Coal as a dirty means of electricty production but over the last 10 years the UK seems to be increasingly dependant on its import. Is this a trend that will last ?
Melvyn Windebank, Canvey Island, Essex
And yet we still get comments about railways loosing vast sums of money and getting massive subsidises !
I reckon its time the highways agency was put on a level playing field with network rail and made to publish details of income and expenditure and given the same target of raising the same percentage from its users in direct tolls and charges . Starting with the M40 through the Chilterns !
Chris Neville-Smith, Durham, England
Quick question Railnews: which figures are these. There's some figures this this effect that come out in August, but as it's not August which figures are these?
[You may be thinking of National Rail Trends. The source in this case is the ORR's annual 'GB rail industry financials information' report, published on 16 April. When our story was posted the report had not appeared on the ORR website, so we couldn't provide a link to it. It's there now, at http://orr.gov.uk/news-and-media/press-releases/2014/discounted-tickets-net-rail-industry-3bn-orr-rail-financials-report-2012-13.--Editor.]