Support for English TOCs 23/24

[Nicholas Lewis]

DfT released data for their financial support to English operators for 2023/24 and all years since covid



So despite all the criticism levelled at Avanti they actually make a tidy contribution to DfT (technically the Treasury) unlike the DfT operated LNER who still need a subsidy. East Anglia also doing a great job and showing that a boring reliable railway, which incidentally also has very high leasing costs from the influx of new trains, can still turn in profit for the taxpayer. Needs to be emulated by other so lets hope DfT operated can sustain that.

Then I used ORR data on passenger journeys last year and created a cost/passenger carried table.



The outlier to me on a the basis of cost per passenger carried looks to be SE compared to its fellow neighbours of GTR and SWR. Of course this is last year and things have moved in a positive direction for many operators this year on pass numbers that will lower that ratio along with other cost savings at each operator agreed with DfT.

Finally this is only the passenger operator subsidies in addition NR absorbed another 11.1B according to ORR finance report for 23/24 so if you could divi that up across each operator it would give you some quite eye watering costs / passenger carried. Of course what its almost impossible to record is the value other benefits bring to give a true cost to the taxpayer.

 

[LNW-GW Joint]

Northern + TPE gives a horrific number for the north overall.
But we haven't got similar figures for TfW and Scotrail, which will probably give the north a run for the highest subsidy.

 

[Bletchleyite]

Northern is understandable, but TPE is surprising - aren't they forever going on about being InterCity, don'tchanow?

Avanti clearly proves you don't need ridiculous off peak fares to be profitable! (Though the Anytimes are still silly)

 

[Pumbaa]

SE would be in same position as SW etc if it wasn’t for HS1, which saddles what would be a ‘profitable’ network with enormous infrastructure recovery charges.

 

[YorkshireBear]

Northern is understandable, but TPE is surprising - aren't they forever going on about being InterCity, don'tchanow?

Avanti clearly proves you don't need ridiculous off peak fares to be profitable! (Though the Anytimes are still silly)

I expected TPE to be higher to be honest I was impressed it was that low! With all the unreliability and timetable cuts as well as operating local services Leeds to Huddersfield and Manchester and with regular TRU diversions too.

I'd say that shows TPE could get themselves to contributing back to the DfT (ignoring NR costs) once TRU is more established.

 

[Krokodil]

So despite all the criticism levelled at Avanti they actually make a tidy contribution to DfT

Imagine how much more they could make if they didn't have to pay out compo left, right and centre for poor performance (saw yet another 805 down to one engine yesterday). Though Network Rail shouldn't be left off of the hook, many of the delays out of Euston are infrastructure-related.

Imagine also how much more they could make if they could add extra capacity on the UK's most profitable route. Maybe operate 400m trains to Manchester or something...

unlike the DfT operated LNER who still need a subsidy

I wonder how much the Agility contract is to blame for that. It was horrendously expensive.

Then I used ORR data on passenger journeys last year and created a cost/passenger carried table.

Cost/passenger km would be interesting to see

Northern is understandable, but TPE is surprising - aren't they forever going on about being InterCity, don'tchanow?

These figures are taken from the period when they were in an utter state of chaos.

 

[HSTEd]

So despite all the criticism levelled at Avanti they actually make a tidy contribution to DfT (technically the Treasury) unlike the DfT operated LNER who still need a subsidy.

As you note, only because the rates for track access are deliberately set far below cost recovery, concealing huge subsidies to TOCs in the grant to Network Rail.
If they made a contribution to the Treasury it is because the DfT wants it look like that.

East Anglia also doing a great job and showing that a boring reliable railway, which incidentally also has very high leasing costs from the influx of new trains, can still turn in profit for the taxpayer. Needs to be emulated by other so lets hope DfT operated can sustain that.

Well the DfT can certainly engineer a TOC "profit" if it choses.... whether or not the railway can slow the haemmorhage of money is another question.

 

[43096]

So despite all the criticism levelled at Avanti they actually make a tidy contribution to DfT (technically the Treasury) unlike the DfT operated LNER who still need a subsidy.

Avanti are not saddled with the additional cost of a DfT-negotiated contract for their trains, unlike LNER. I would bet the additional cost of IETs accounts for a big chunk of LNER’s subsidy.

 

[SCDR_WMR]

Do these figures take into consideration where ticket sales are shared? In not, that would skew the Avanti/WMT figures somewhat. Almost all of my sales are from shared stations on the west coast for instance.

 

[Gerald Fiennes]

The Avanti number does look a little odd. Maybe there are some 'one-offs' involved, as this is a table (presumably) of cash disbursements rather than underlying surplus/deficit?

 

[dk1]

Greater Anglia at the top end of yet another league table

We’ve been told many times recently in the MDs weekly brief that we were the only operator to return a premium to the DfT.

 

[Geeves]

I'd be interested to see how EMR, SWT or Anglia performed if they had their most profitable routes bundled off into an entirely different franchise like Northern...

 

[dk1]

I'd be interested to see how EMR, SWT or Anglia performed if they had their most profitable routes bundled off into an entirely different franchise like Northern...

Anglia was unique in having Intercity and local routes combined into one franchise back in 1997.

 

[43096]

I'd be interested to see how EMR, SWT or Anglia performed if they had their most profitable routes bundled off into an entirely different franchise like Northern...

Looking at TPE's results they need almost as much subsidy per passenger as Northern do, so adding TPE back into Northern it's still the same picture. Both are far more subsidised on that basis than anyother operators.

 

[Geeves]

Anglia was unique in having Intercity and local routes combined into one franchise back in 1997.

I dream of the day we suddenly aren't a basket case franchise, you know surprisingly there's not much money to make on Carnforth to Bentham or Parton to Whitehaven haha but they do perform a social need! Then there's the old arguement that should the railways really need to make a profit at all?

 

[dk1]

I dream of the day we suddenly aren't a basket case franchise, you know surprisingly there's not much money to make on Carnforth to Bentham or Parton to Whitehaven haha but they do perform a social need! Then there's the old arguement that should the railways really need to make a profit at all?

You know mate I was so impressed with the Harrogate loop line on Sunday. I knew it had gone half hourly between Harrogate/Knaresborough and York on weekdays but was blown away not only it was half-hourly Sunday afternoon/early evening but also how busy the 3-car 158/170s were at the York end.

Very different traincrew agreements to West of the Pennines though.

 

[LNW-GW Joint]

Anglia was unique in having Intercity and local routes combined into one franchise back in 1997.

GWR was another like that, by merging FGW with Thames and Wessex in, I think, 2004.
All part of the "one TOC per London terminus" policy of the SRA, but never applied to Euston, St Pancras or King's Cross.

 

[dk1]

GWR was another like that, by merging FGW with Thames and Wessex in, I think, 2004.
All part of the "one TOC per London terminus" policy of the SRA, but never applied to Euston, St Pancras or King's Cross.

Ironically we thought we’d been sold down the river by getting GB Railways as the parent company as most wanted National Express to win. That soon changed and we had a real family feel as such a small franchise. Even control knew us drivers & guards not only by our first but even by our nicknames. All I will say is be very careful what you wish for as the worst times of my career were once NX operated our franchise between 2004 & 2012 under the ridiculous ‘one’ then NXEA banners. Awful days indeed for many of us and the network.

 

[A S Leib]

It's not the main point, but I am continuously surprised by how high of a proportion of journeys are taken on GTR, SWR and Southeastern when they serve, at a rough estimate, a quarter of England's population (which I suppose is an advantage of having massive frequent commuter networks).

 

[Bald Rick]

Do these figures take into consideration where ticket sales are shared? In not, that would skew the Avanti/WMT figures somewhat. Almost all of my sales are from shared stations on the west coast for instance.

Yes, it includes the industry agreed apportionment of revenue

It's not the main point, but I am continuously surprised by how high of a proportion of journeys are taken on GTR, SWR and Southeastern when they serve, at a rough estimate, a quarter of England's population (which I suppose is an advantage of having massive frequent commuter networks).

Quite. Add in Elizabeth line and London Overground, and those 5 between them carry about 2 in every 3 passengers on the GB network.

 

[sh24]

It does answer the question about why the North doesn't have "nice things". There is little revenue to be had to offset the huge capital costs.

I saw a stat that almost 70% of GB rail journeys start or end in Greater London.

 

[357]

All I will say is be very careful what you wish for as the worst times of my career were once NX operated our franchise between 2004 & 2012 under the ridiculous ‘one’ then NXEA banners. Awful days indeed for many of us and the network.

Agreed!

 

[Adrian1980uk]

Currently does anyone else think operators like east midlands and cross country don't stand any hope of turning their finances around without longer trains to take advantage of demand. Overcrowding means fares not being taken and puts passengers off.

 

[Krokodil]

It does answer the question about why the North doesn't have "nice things". There is little revenue to be had to offset the huge capital costs.

People don't use the trains because the service is poor. The service is poor because people don't use trains. How does that cycle break?

 

[Nicholas Lewis]

Avanti are not saddled with the additional cost of a DfT-negotiated contract for their trains, unlike LNER. I would bet the additional cost of IETs accounts for a big chunk of LNER’s subsidy.

Latest LNER accounts have the following line in operating expenses

Rolling Stock Maintenance and Spares agreement at a staggering 233m which may also include the 91's as Agility East Coast Trains show 183m income for the LNER fleet albeit not identical financial years. Even using the lower figure thats close to 3.3m for a 9 car and 1.8m for a 5 car (65 sets at an equivalent coach rate is basis of may calcs). [GWR sets look to be costing even more!].

As a comparator Rock Rail East Anglia charge £35m for 24x745 + 38 x 755 for 2023 thats enough to show you what a legacy the DfT negotiated contract has left around LNER and GWR.

AWCs 805/807s at 23 units are being leased at 18m pa.

 

[dk1]

Agreed!

Cheers.

People don't use the trains because the service is poor. The service is poor because people don't use trains. How does that cycle break?

Passenger numbers seem to be growing again even in some areas with a poor service/reliability.

 

[Krokodil]

Passenger numbers seem to be growing again even in some areas with a poor service/reliability.

Yes, growing in spite of the dreadful performance and infrequent service. Imagine what they'd do if some investment was put into Northern and the infrastructure it uses.

 

[dk1]

Yes, growing in spite of the dreadful performance and infrequent service. Imagine what they'd do if some investment was put into Northern and the infrastructure it uses.

Quite agree.

 

[Stephen42]

Latest LNER accounts have the following line in operating expenses

Rolling Stock Maintenance and Spares agreement at a staggering 233m which may also include the 91's as Agility East Coast Trains show 183m income for the LNER fleet albeit not identical financial years. Even using the lower figure thats close to 3.3m for a 9 car and 1.8m for a 5 car (65 sets at an equivalent coach rate is basis of may calcs). [GWR sets look to be costing even more!].

As a comparator Rock Rail East Anglia charge £35m for 24x745 + 38 x 755 for 2023 thats enough to show you what a legacy the DfT negotiated contract has left around LNER and GWR.

AWCs 805/807s at 23 units are being leased at 18m pa.

The Rock Rail agreements do not include any maintenance costs where as the LNER one does. Most of Agility East Cost Trains revenue leaves Hitachi's way, £144m for the maintenance agreement. With that removed the LNER units would be cheaper per vehicle than the AWC ones, would be higher as Hitachi will be making profit on the agreement. One of the big factors is that without maintenance costs it's easier to agree flat rate deals, with maintenance costs escalating over time there will need to be a rate escalator and recent high inflation will have pushed up the price.

 

[Nicholas Lewis]

The Rock Rail agreements do not include any maintenance costs where as the LNER one does. Most of Agility East Cost Trains revenue leaves Hitachi's way, £144m for the maintenance agreement. With that removed the LNER units would be cheaper per vehicle than the AWC ones, would be higher as Hitachi will be making profit on the agreement. One of the big factors is that without maintenance costs it's easier to agree flat rate deals, with maintenance costs escalating over time there will need to be a rate escalator and recent high inflation will have pushed up the price.

Oh yes good point thanks for clarifying. Perhaps when there all under GBR we will get better transparency on costs although I wouldn't be surprised that when all the companies are assimilated into GBR we will end up with less transparency.