Network Rail regulation and performance

30.01.19

Franchise payments to government slump by 40% as falling passenger numbers, strikes and delays hit rail industry’s income

Falling passenger numbers has seen the rail industry suffer a fall in income in last the year, resulting in a 40% drop in franchise payments to the government, the rail regulator has revealed.

The ORR’s annual report shows that the rail industry is being squeezed after upgrade delays, strikes and rail fare controversy has led to a fall in passenger numbers, leading to the government receiving around £400m from train operators in 2017-18 – down from £700m the previous year.

The figures show that the rail industry received £19.4bn in income last year, a 1.3% decrease from 2016-17, and income from rail fares fell 2.4%. The ORR said that the cost of running the railways also rose by 1.4% to £20.6bn.

According to the annual report, franchise payments to the government decreased due to a combination of payments made to some train operators for delays to infrastructure upgrades, and lower-than-expected growth across the rail industry.

The payments from operators were down because of planned changes set out in franchise agreements and planned cost increases on some franchises – and operators also declared £300m in dividends, which is a 27% decrease.

The income received from fares by the rail industry was £9.8bn, down 2.4% from 2016-17, which is due to a 1.4% fall in passenger journeys.

The ORR attributed some of this decrease to a massive 8% drop off in passenger journeys experienced by South West Trains, largely because of the Waterloo platform closure in summer 2017 and strike action.

Commenting on the decline in franchise payments made by train operators in 2017-18, the RMT’s general secretary Mick Cash claimed it was “another £300m added to the great rail rip-off.”

He said: “The hard truth is that another £300 million that could have been invested in guaranteeing safe staffing levels and improving services has been siphoned out of the railway in dividends by the greedy private train operators while they have slashed their returns to the public purse by the same amount.”

Network Rail’s costs rose by almost a tenth to £8.6bn, largely due to increased financing costs, and it also paid out £400m in compensation to train operators, a 4.6% increase, which “reflects poor performance.”

Image credit - alice-photo

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

Government gives ‘hugely important’ £208m Belfast Transport Hub the green light

22/03/2019Government gives ‘hugely important’ £208m Belfast Transport Hub the green light

A new £208m Belfast Transport Hub with major rail and bus connections has been granted planning permission by the ... more >
New to-the-minute measures for train punctuality introduced to tackle delays

22/03/2019New to-the-minute measures for train punctuality introduced to tackle delays

New measures of train punctuality are to be released by train operators and Network Rail next month in a bid to improve ... more >
FirstGroup finalises £100m order for Hitachi trains as plans for London-Edinburgh rail link move forward

22/03/2019FirstGroup finalises £100m order for Hitachi trains as plans for London-Edinburgh rail link move forward

FirstGroup has finalised a £100m order for Hitachi AT300 electric trainsets in a partnership between the two compa... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the TOC, gives RTM an update on the innovative scheme. Recognising that young people are more likely to take a risk trespassing on railway tracks, C... more > more last word articles >

'the sleepers' daily blog

The West Midlands 30-year strategy

19/03/2019The West Midlands 30-year strategy

Malcolm Holmes, executive director of West Midlands Rail Executive (WMRE), outlines the West Midlands Rail Investment Strategy 2018-2047. The West Midlands Rail Executive was formed three years ago to give local authorities a direct influence over the award of the region’s main rail franchise. Working with the Department for Transpo... more >
read more blog posts from 'the sleeper' >

comment

26-30 Railcard: taking advantage of opportunities

19/03/201926-30 Railcard: taking advantage of opportunities

After a nine-month national trial, the rail industry launched its seventh National Railcard for 26-30-year-olds on 2 January 2019. Rail Delivery ... more >
Caledonian Sleeper: a railway icon re-imagined

19/03/2019Caledonian Sleeper: a railway icon re-imagined

The world-renowned Caledonian Sleeper, due to begin operations at the end of spring 2019, completed its first Scotland to London journey earlier ... more >
East West Rail: the next steps

19/03/2019East West Rail: the next steps

In January, five route options for the central section of East West Rail were published as part of a public consultation on the next phase of the... more >
Rail's role in transit-orientated developments

19/03/2019Rail's role in transit-orientated developments

Jonathan Bray, director at the Urban Transport Group (UTG), argues that transit-oriented developments are the future – and that rail has a ... more >

rail industry focus

View all News

interviews

Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >