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GB Rail Finances 2011/12

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LNW-GW Joint

LNW-GW Joint

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A very interesting document has appeared on the ORR web site, breaking down the costs and income of the GB railway.
http://www.rail-reg.gov.uk/upload/pdf/gb-financials-2012.pdf
The figures are now of course more than a year old.

There is a lot of detail about NR and TOC income and expenditure broken down in various ways.
Overall government support for the railways was £4.011 billion.

Of many statistics this one stands out:
Government funding varied from £2.27 per passenger journey in England to £7.67 per passenger journey in Scotland and £9.15 per passenger journey in Wales.
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HowardGWR

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Today we have this article on the NR debt.

http://www.telegraph.co.uk/finance/...year-1-in-every-10-spent-on-the-railways.html

Nathalie Thomas in The Telegraph said:
Network Rail debt repayments cost £1.5bn a year - £1 in every £10 spent on the railways

Servicing Network Rail’s debt cost taxpayers and passengers £1.5bn in 2011-12 - 13pc of the total cost of running and maintaining the railways.

The sum is contained in a report released by the Office of Rail Regulation (ORR) on Thursday, which also shows that the burden of financing Britain’s railway network is also increasingly falling on passengers.

The cost of running the railways rose 2.9pc to £11.6bn in 2011-12, according to the industry’s regulator. Money generated from passengers accounted for 58pc, or £7.2bn, of the rail industry’s total £12.5bn income during the year, compared to £4bn received from the Government through subsidies.

Passenger income rose 8.7pc compared to 2010-11, although part of this rise was attributable to a 7.2pc increase in the number of journeys made in 2011-12.

The ORR report is likely to spark further political wrangling over the East Coast Main Line, which Transport Secretary Patrick McLoughlin intends to re-privatise before the next General Election. According to the ORR's figures, the East Coast franchise is the least reliant on Government funding. Labour wants to maintain the line as a state-run franchise to compare against privately-operated services....
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Debt - what debt? If NR was like the Highways Agency and was called the RA (Railways Agency) the debt would not exist like a stone around the neck and would just be part of the overall National Debt. By 'hypothecating' the debt in this way, an excuse is made to let pax carry two thirds of it (see Passenger Focus quote in article) rather than the tax payer.

So if you build a new section of motorway, cost to taxpayer is whatever it costs. No cost to motorist and no interest payments on capital by motorists. If you build a new bit of railway, cost in interest payments to tax payer one third, cost to pax two thirds..

Not right is it?
 
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WatcherZero

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Not really surprising as according to that table only London Overground and Merseyrail received less investment! Im sure I saw in some breakdown of East Coast finances somewhere that it had only invested £20m in improving services since being nationalised.
 
Starmill

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HowardGWR said:
Today we have this article on the NR debt.

http://www.telegraph.co.uk/finance/...year-1-in-every-10-spent-on-the-railways.html

Debt - what debt? If NR was like the Highways Agency and was called the RA (Railways Agency) the debt would not exist like a stone around the neck and would just be part of the overall National Debt. By 'hypothecating' the debt in this way, an excuse is made to let pax carry two thirds of it (see Passenger Focus quote in article) rather than the tax payer.
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I personally don't think that's quite it - it's just that there is NO incentive for Osbo to acknowledge an additional £X billion of debt on his balance sheet is there? NR is in the public sector when it suits them and the private sector when it doesn't! I don't know exactly how NR's administrative/financial structure ended up the way it is currently, but I'm much inclined to agree that whatever it is, it would probably be better off as another Executive Agency of the Department for Transport (or perhaps a non-ministerial department?).
 
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mrcheek

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starmill said:
I personally don't think that's quite it - it's just that there is NO incentive for Osbo to acknowledge an additional £X billion of debt on his balance sheet is there? NR is in the public sector when it suits them and the private sector when it doesn't! I don't know exactly how NR's administrative/financial structure ended up the way it is currently, but I'm much inclined to agree that whatever it is, it would probably be better off as another Executive Agency of the Department for Transport (or perhaps a non-ministerial department?).
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In fairness, the bizarre structure, and the way of classifying its debt, was created by the Labour government. Osbourne keeps it since it enables figures on government debt to be comparable
 
Starmill

Starmill

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egadbrain said:
In fairness, the bizarre structure, and the way of classifying its debt, was created by the Labour government. Osborne keeps it since it enables figures on government debt to be comparable
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*cough**cough* LOWER. Although yeah, Indeed :)
 
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daccer

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As these results are up to end March 2012 it does make one wonder why it has taken so long to publish the info. The growth in passenger numbers and fare revenue has continued in 2012-2013 (those figures have been published already I believe). I also believe NR is achieving its economy targets so I can only guess that this report when generated next year will show a continued drop in Govt support and an increasing burden being placed on the passenger. I guess the real question is when will the Govt consider the appropriate balance has been met and the ratio is at an acceptable level.
 
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The Ham

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daccer said:
I guess the real question is when will the Govt consider the appropriate balance has been met and the ratio is at an acceptable level.
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That depends which political bias is in power and what the political view on transport is at the time.

I would suggest that if Labour is in power it would be more likely to accept a lower amount of passenger support to be right than the Torys (all else being equal).

However a pro rail government and/or one with spare money to pay down the debt could also be more likely to accept a lower amount of passenger support.
 
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