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Rail industry made and spent £18.4bn in 2015-16, ORR reveals

ORR has this week published its UK rail industry financial information 2015-16, which has revealed the expenditure and income sources of the whole rail industry for the past year.

The publication was started in 2010-11 and aims to increase accountability and transparency for customers as well as members of the industry by publishing a detailed review of industry finance, which supports the recommendations that the Transport Select Committee made back in its 2012 ‘Rail 2020’ report.

Significant findings this year included that the rail industry had a combined income of £18.4bn, of which just over half came from fares, whilst government funding made up 36% of the total income.

This is an increase from last year, when ORR reported that the income of the industry was £13.5bn, of which a far bigger 71% was made up of passenger fares and government funding came to about 25% of total funding.

However, this increase may be owed mainly to changes in the report, as it increased its scope to include freight operators, open access operators, HS1, rolling stock companies and Northern Ireland Railways. Eurotunnel, HS2 and Crossrail were excluded from this year’s publication.

The report also found that fares from franchised TOCs had increased by 3.4%, or £0.3bn, since 2014-15, largely due to a boost of almost 4% in passenger journeys.

ORR also announced that Network Rail’s gross income for the year came to £6.6bn, and that £4.3bn of this was made up of government funding – around 65% of the infrastructure owner’s funding.

Rail industry expenditure was also £18.4bn, with 35% spent on passenger train operations, whilst 32% was spent on Network Rail (including operations, maintenance, renewals and borrowing costs), and 19% went to payments to government.

In 2014-15, industry expenditure was £13.6bn, of which 46% went to Network rail whilst cost to franchised train operators made up £8.7bn of expenditure.

Expenditure for the infrastructure owner was also found to be a total of £7bn, and that operating costs and maintenance costs accounted for most of their costs at 40%, whilst an additional £2.4bn was spent of amortisation of capital expenditure.

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