Railway subsidies: Worth it or not?

[cmovcc]

the operating profit figures don't give the entire picture of the inefficiencies.

entire departments wouldn't exist if the railway was still one firm, e.g. the "avoid paying other TOCs/network rail" department each TOC needs, full of expensive lawyers.

there's also the lack of scale of economy... instead of one big HR department/highly paid board/legal team, you have ~20.

 

[yorksrob]

I'm sure there are lots around the country but there are quite a few late at night on GA that have a handful of passengers at most on them.

I suspect very strongly that being at the end of shifts etc, the costs that such services add to the overall cost of running the railway (maintenance, staffing etc) are minimal. Infact I'd even go so far as to say that removing them would probably have a detrimental effect on revenues as it would drive a lot of passengers away through making the service overall less useful to lifestyles.

In my experience, the phenomenum of emptyish late night trains doesn't occur so much in the areas which require subsidy as our trains tend to be shorter to start off with (and there are always a reasonable number of people wanting the last one back !).

 

[tbtc]

I suspect very strongly that being at the end of shifts etc, the costs that such services add to the overall cost of running the railway (maintenance, staffing etc) are minimal. Infact I'd even go so far as to say that removing them would probably have a detrimental effect on revenues as it would drive a lot of passengers away through making the service overall less useful to lifestyles.

In my experience, the phenomenum of emptyish late night trains doesn't occur so much in the areas which require subsidy as our trains tend to be shorter to start off with (and there are always a reasonable number of people wanting the last one back !).

This is a problem with evening services on a number of lines - the passenger numbers drop away after (say) 20:00, but then the last train of the evening is busy - not sure how any TOC should deal with that.

For example, if the last train is 22:30 and the TOC finds the resources to put on an additional train at 23:30 then based on my experience they'll just see a large chunk of the 22:30 passengers switching for a later train (leaving the 22:30 quiet but without a big increase in overall numbers).

Human nature to make your night out as long as possible, of course.

 

[yorksrob]

This is a problem with evening services on a number of lines - the passenger numbers drop away after (say) 20:00, but then the last train of the evening is busy - not sure how any TOC should deal with that.

For example, if the last train is 22:30 and the TOC finds the resources to put on an additional train at 23:30 then based on my experience they'll just see a large chunk of the 22:30 passengers switching for a later train (leaving the 22:30 quiet but without a big increase in overall numbers).

Human nature to make your night out as long as possible, of course.

Very true.

I tend to commute home a little later than most, and I find the trains at around half six and half seven to have become increasingly busy over the last year or so, so whether the last train is at 22:30 or 23:30, the quiet period is very short and seems to be becoming shorter.

 

[DynamicSpirit]

Of course as all the politicians mates are making a fortune out of privytisation it wont be changing anytime soon, I mean we (the great British taxpayer) are ploughing all this money into the railways as (hidden) subsidy which is being paid out as dividends to the shareholders, heads they win tails we lose.

Would you like to clarify which 'politicians mates' are 'making a fortune out of privytisation'?

If, as your post seems to imply, there is some corruption between 'all politicians' and their 'mates' causing their mates to be making a fortune, then presumably you have some evidence which you'll be taking to the police?

 

[YorkshireBear]

Would you like to clarify which 'politicians mates' are 'making a fortune out of privytisation'?

If, as your post seems to imply, there is some corruption between 'all politicians' and their 'mates' causing their mates to be making a fortune, then presumably you have some evidence which you'll be taking to the police?

All he is saying is often politicians are friends with some heads of TOCs (circles amongst the wealthy essentially)...

 

[LateThanNever]

Tesco's operating margin is normally in the 5-6% range, but they have suffered problems lately - so it was just 3.3% in the 2012/2013 set of accounts.

Thanks for the correction. I also agree with you that "For what is essentially a utility, 3% isn't a bad return in the present economic climate."

But the franchising system is madness anyway as so many of the franchisees are owned in part or whole by NATIONALISED foreign railways! Did write to the Chancellor to try to get him to keep 'our' nationalised Directly Operated Railways because it had actually returned money to the exchequeur rather than leaking it out to a foreign government but just got a reply with guff about how successful the franchising system is and how it had improved patronage! (Funny how London manages to do it without franchising). Basically the government is not letting any of the facts get in the way of their preconceived ideas. And we cannot afford benefits apparently but can afford a franchising system that is so opaque that even their own department got it all wrong and had to spend more of our money in consequence.

 

[transmanche]

But the franchising system is madness anyway as so many of the franchisees are owned in part or whole by NATIONALISED foreign railways!

I find it quite odd that BR was never allowed to compete on a level playing field with the private sector [*].

DB (through Arriva), NS (through Abellio), SNCF (through Keolis and GoVia) now operate a significant proportion of railways in GB. A commercially-orientated profit-making BR could have competed in GB & Europe for rail contracts, just as DB/NS/SNCF do.

And it not just on the railways: today we have RATP bidding for and operating bus services in London and trams in Manchester; but TfL (and it predecessors) or TfGM/GMPTE don't get the same commercial freedom to make a profit.

* Railways Act 1993 s25 prevented most public bodies from being railway franchisees, but specifically BRB was allowed to be a franchisee. However OPRF was allowed to excluded BRB in the name of competition.

 

[DynamicSpirit]

All he is saying is often politicians are friends with some heads of TOCs (circles amongst the wealthy essentially)...

Actually, no, he said quite a bit more than that.

Of course as all the politicians mates are making a fortune out of privytisation it wont be changing anytime soon,

Firstly he said all the politicians mates... (my emphasis). It's not clear whether he meant all politicians or all friends of politicians, but either way that's casting the net considerably wider than 'often politicians are friends with...'

Secondly he used the word 'as' in a context that clearly implies 'because' therefore implying that it's *because* these politicians' mates are making money that nothing will change.

That is quite a serious charge, amounting in effect to a claim of corruption.

But perhaps at this point we should wait for 455driver himself to explain what he meant.

 

[transmanche]

That is quite a serious charge, amounting in effect to a claim of corruption.

I think you're reading far too much into what was obviously colloquial language, not legalese.

 

[455driver]

Firstly he said all the politicians mates... (my emphasis). It's not clear whether he meant all politicians or all friends of politicians, but either way that's casting the net considerably wider than 'often politicians are friends with...'
But perhaps at this point we should wait for 455driver himself to explain what he meant.

I didnt mean all the politicians friends in a literal sense, actually I cant be bothered anymore.

I tell you what, if you want to take my posts so literally I wont be posting any more, I am sick to the back teeth of having my posts picked over word for word and also people who have no idea about the intricacies of the rules that railways are forced to work saying "why cant they dump a power car in the middle of nowhere", "why cant I break my journey 27 times with my advance ticket" so I would just like to say goodbye to all the decent posters on here, I have had a gutful of the know alls on this forum, ta ra folks!

 

[tbtc]

Did write to the Chancellor to try to get him to keep 'our' nationalised Directly Operated Railways because it had actually returned money to the exchequeur

Everyone who's run the ECML franchise has returned money to the exchequer. Nothing unique about DOR - its a profitable franchise that DOR DOR are making a profit on. Proves nothing about the public/ private debate.

I find it quite odd that BR was never allowed to compete on a level playing field with the private sector [*].

DB (through Arriva), NS (through Abellio), SNCF (through Keolis and GoVia) now operate a significant proportion of railways in GB. A commercially-orientated profit-making BR could have competed in GB & Europe for rail contracts, just as DB/NS/SNCF do.

And it not just on the railways: today we have RATP bidding for and operating bus services in London and trams in Manchester; but TfL (and it predecessors) or TfGM/GMPTE don't get the same commercial freedom to make a profit

GMPTE may not have the commercial freedom that others do, but Manchester Airports Group (owned by the ten Greater Manchester councils) has a lot of freedom - owning airports well well outside Manchester.

 

[yorksrob]

Everyone who's run the ECML franchise has returned money to the exchequer. Nothing unique about DOR - its a profitable franchise that DOR DOR are making a profit on. Proves nothing about the public/ private debate.

It does say everything about the priorities of our overlords that they would rather put the staff and passengers of a profitable franchise that has already gone through a fair amount of upheaval in recent years through another refranchising, whilst other franchises which really do need a refresh (we Northern users are going to have to wait another three years before something gets done about our inadequate evening services) are put on hold, just to fit in with Tory party ideology.

 

[Lampshade]

I'm one of the people the OP is taking about.

TOCs should receive no subsidy from central government. Nil. Nada. Zero. Zilch. Nothing whatsoever.

If a route is loss making, it is down to the TOC to make it profitable. If they can't afford to invest properly in routes to do this, they shouldn't have bid such a stupid amount for their franchise. There's no commercial risk if the government will just bail the TOC out when it runs into trouble a la East Midlands Trains.

 

[yorksrob]

And what if a service is necessary but can't be made profitable ?

 

[Lampshade]

And what if a service is necessary but can't be made profitable ?

Then the profits from the routes that do make money should be used to cross-subside those that don't, instead of lining shareholders' pockets.

 

[yorksrob]

Then the profits from the routes that do make money should be used to cross-subside those that don't, instead of lining shareholders' pockets.

Sounds pretty logical to me. I think realistically, you'd still end up having to top up the system though simply to cover the infrastructure costs.

 

[tbtc]

It does say everything about the priorities of our overlords that they would rather put the staff and passengers of a profitable franchise that has already gone through a fair amount of upheaval in recent years through another refranchising, whilst other franchises which really do need a refresh (we Northern users are going to have to wait another three years before something gets done about our inadequate evening services) are put on hold, just to fit in with Tory party ideology.

Honest question - do passengers notice franchise changes that much? Its generally the same trains run by the same staff - with a handful of trains repainted in the first few months - its such little "upheaval" that people I know in Sheffield still refer to using Virgin and Midland Mainline services (nobody I know still refers to Arriva Trains Northern - that brand never seemed to strike a chord!).

There's really not a great deal can be done with Northern until the wires are up (and we can argue about what to do with the "spare" DMUs).

 

[yorksrob]

Honest question - do passengers notice franchise changes that much? Its generally the same trains run by the same staff - with a handful of trains repainted in the first few months - its such little "upheaval" that people I know in Sheffield still refer to using Virgin and Midland Mainline services (nobody I know still refers to Arriva Trains Northern - that brand never seemed to strike a chord!).

There's really not a great deal can be done with Northern until the wires are up (and we can argue about what to do with the "spare" DMUs).

My particular gripe to do with Northern is a lack of evening services (one of the few issues which doesn't need an influx of new rolling stock to be solved) and it's one shared by at least one local MP in the area. It will, however require an adjustment to the franchise.

As for TOC changes, I've no doubt that endless upheaval must affect the morale of staff and will eventually feed through to passengers. IMO East Coast should be left to get on with it for a few years.

 

[LateThanNever]

Everyone who's run the ECML franchise has returned money to the exchequer. Nothing unique about DOR - its a profitable franchise that DOR DOR are making a profit on. Proves nothing about the public/ private debate.

Except GNER and Nat Express who threw up the sponge! I'm not suggesting that Directly Operated are particularly clever - just that it's so much better for the taxpayer to have the money rather than somebody else!
--- old post above --- --- new post below ---

GMPTE may not have the commercial freedom that others do, but Manchester Airports Group (owned by the ten Greater Manchester councils) has a lot of freedom - owning airports well well outside Manchester.

So who owns Transport for Greater Manchester?

 

[tbtc]

Except GNER and Nat Express who threw up the sponge!

Its a profitable franchise - anyone bidding for it next time round will offer to pay a premium to the exchequer (just like DOR do).

The difference is that these private companies feel that they can pay this premium and still make some profit.

According to this article - http://www.telegraph.co.uk/news/1486190/GNER-pays-1.3bn-for-East-Coast-franchise.html - GNER were paying £22m to the Government (on top of the profit for Sea Containers) - they felt that they could increase this to £130m/ year (and still make profit).

The ECML franchise is a simple InterCity one that only runs long trains (with lucrative First Class passengers) without the kind of "socially necessary" branchlines that suck up a lot of subsidy elsewhere in the UK.

 

[LateThanNever]

Its a profitable franchise - anyone bidding for it next time round will offer to pay a premium to the exchequer (just like DOR do).

The difference is that these private companies feel that they can pay this premium and still make some profit.

According to this article - http://www.telegraph.co.uk/news/1486190/GNER-pays-1.3bn-for-East-Coast-franchise.html - GNER were paying £22m to the Government (on top of the profit for Sea Containers) - they felt that they could increase this to £130m/ year (and still make profit).

The ECML franchise is a simple InterCity one that only runs long trains (with lucrative First Class passengers) without the kind of "socially necessary" branchlines that suck up a lot of subsidy elsewhere in the UK.

Broadly I agree but why shouldn't the taxpayer have/keep the benefit?

 

[tbtc]

Broadly I agree but why shouldn't the taxpayer have/keep the benefit?

Taxpayers were getting the benefit from GNER paying £130m/ year in premiums.

The question is really "could a publicly operated company have increased passenger numbers/ cut costs sufficiently to pay a higher premium than GNER" (not "could a publicly operated company pay a premium").

The public sector does some things better, but not everything - a publicly owned Wales & Borders franchise would still require a big subsidy, just because of the nature of the operation.

 

[yorksrob]

The question is really "could a publicly operated company have increased passenger numbers/ cut costs sufficiently to pay a higher premium than GNER" (not "could a publicly operated company pay a premium").

Without having public and private companies operating side by side, it's impossible to tell one way or the other.

 

[DynamicSpirit]

I didnt mean all the politicians friends in a literal sense, actually I cant be bothered anymore.

I tell you what, if you want to take my posts so literally I wont be posting any more, I am sick to the back teeth of having my posts picked over word for word and also people who have no idea about the intricacies of the rules that railways are forced to work saying "why cant they dump a power car in the middle of nowhere", "why cant I break my journey 27 times with my advance ticket" so I would just like to say goodbye to all the decent posters on here, I have had a gutful of the know alls on this forum, ta ra folks!

Well I hope you don't leave. As far as language is concerned - it's not about being overly literal, I merely took what you wrote at face value. After all, if someone used the same loose language to refer to all railway staff when they really meant some railway staff, I bet lots of people here would (rightly) be jumping to correct the post! Why should it be any different when it's politicians we're talking about? As a wider point (not particularly directed at you, lots of posters here are equally bad): Politicians are in the end human beings just like everyone else, but there seems to be an attitude, not just on railforums but in wider society, that it's OK to make derogatory generalizations about politicians that would be seen as obviously unacceptable if made about other groups of people. And frankly, that's just wrong.

As far as answering questions to people who don't know about railway rules etc. - well I can understand the frustration if the same questions keep cropping up, but in the end those questions are asked because people genuinely don't know the answer. Answering questions like that is doing a service by helping people understand the situation better - which of course ultimately is going to benefit everyone (including railway staff).

 

[transmanche]

GMPTE may not have the commercial freedom that others do, but Manchester Airports Group (owned by the ten Greater Manchester councils) has a lot of freedom - owning airports well well outside Manchester.

But should Manchester Airports Group decide that it wanted to operate a rail franchise, the Railways Act 1993 s25(1)(e) would prohibit them from doing so!

 

[A-driver]

I tell you what, if you want to take my posts so literally I wont be posting any more, I am sick to the back teeth of having my posts picked over word for word and also people who have no idea about the intricacies of the rules that railways are forced to work saying "why cant they dump a power car in the middle of nowhere", "why cant I break my journey 27 times with my advance ticket" so I would just like to say goodbye to all the decent posters on here, I have had a gutful of the know alls on this forum, ta ra folks!

I'm right behind you with this 455driver.

This used to be a good forum with interesting discussions and I have always been happy to post advice to wannabe drivers, explain in detail answers to questions on rail operations etc but lately this place has just become silly.

On this very thread we have been told that our (drivers) salaries are 'enhanced' apparently, we are constantly being told by those with no idea whatsoever what our job entails (and that is clear from their posts) that we are overpaid, that our unions just hold TOCs to ransom whenever they feel like it, that we are lazy and the word 'incompetent' has been used many a time in describing members of staff. To be honest I'm bored of it all and am sick of just reading pages if ignorant abuse to my colleagues from people who have completely misunderstood situations.

The recent FGW train stranded thread and its equally pathetic spin off 'why can't passengers just be allowed to get off a broken down train after 10 mins and set up camp on the tracks' thread highlighted these issues and basically it seems whenever those of us with experience and real knowledge of the operations procedures on the railways take the time to make often lengthy and detailed posts explaining reasons why things happen, backed up with evidence and personal experiences, we are shot down for it with people with absolutely no idea what they are on about selectively quoting bits, picking posts apart word for word and taking phrases out of context to build up some stupid argument against what we have put. At best the posts get ignored and threads end up going around in circles with utter drivel being spouted.

There are many on here who have downloaded the rule book off the RSSB site and read other articles etc and I'm not saying we should be treated as royalty just because we are staff but we have all spent the best part of a year being taught the rule book properly and many of us have years and years or real life experience applying it practically and dealing with various situations and incidents so we actually do know what we are talking about.

There are far better rail forums out there which I am on such as railchat where discussion is sensible and dosnt descend into wild speculation and refusal from members to accept that perhaps they dont know quite as much as they think they do. I have better things to do with my time than come on here to try and answer questions and provide factual reasoning behind things rather than speculate only to be shot down for it and even insulted personally by those who are on here with their own anti staff, anti union, jealous, ignorant etc etc agendas.

So I'm right with you 455driver, bye to the rest of you.

 

[YorkshireBear]

There seems to have been a fairly large increase in bitterness and aggression on the forum in the last 6 months...

 

[pemma]

Would you rather TOCs stopped operating services that are loss making or would you rather the same level of service was kept with the TOCs getting the subsidies to run services that run at a loss?

Note that if some unprofitable local services were axed then passenger numbers on profitable Intercity services could drop making Intercity services less profitable as some people won't be able to get to the nearest Intercity station without the connecting local service. That is unless you introduce a replacement bus service which will less attractive than the train it replaced and may need subsiding itself, especially in the evenings and on Sundays.

 

[The Ham]

Note that if some unprofitable local services were axed then passenger numbers on profitable Intercity services could drop making Intercity services less profitable as some people won't be able to get to the nearest Intercity station without the connecting local service. That is unless you introduce a replacement bus service which will less attractive than the train it replaced and may need subsiding itself, especially in the evenings and on Sundays.

Quite, it is (hopefully) one of the lessons learned from some of the Beeching cuts.

--- old post above --- --- new post below ---

I'm right behind you with this 455driver.

As someone who isn't rail staff, firstly I hope I haven't contributed to what you see as negative postings (if I have sorry) and wish to say that I for one hope that both of you and the other rail staff who come on here do continue to stay on this forum. As without them the forum will be a lot poorer.