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Passengers paying more for railway – ORR

The proportion of cost of the railway paid for by passengers is rising, new data from the ORR shows. The GB Rail Financial Information 2011-12 report puts the total cost of the railways at £11.61bn, up 2.9% on the previous year.

However, if inflation is taken into account, this represents a decrease in costs of 2.1%.

Income from fares contributed 57.6% of the total cost of the railways, up from 55.8% the previous year. Government funding was 32.15%, down 1.8%, but includes significant regional variation. These figures refer to the operational costs of the railway (e.g. subsidy), not capital investment.

In England, government funding contributed £2.27 per passenger journey, £7.67 in Scotland and £9.15 in Wales.

ORR chief executive Richard Price said: “Governments have recently committed billions of pounds to improving Britain’s railways in the coming years because of the benefits it will bring to our economy and society. Taxpayers and rail customers have every right to know exactly where their money goes and what it delivers. Our report shines a light on the funding and growth of Britain’s railways, providing more detail than ever before.

“This data is valuable as we scrutinise the proposed £37.5bn plan for the railways between 2014-19 to ensure it is affordable, that every penny is made to count and that all those involved in delivering the plan work together to achieve high levels of safety, performance and value for Britain.”

Michael Roberts, chief executive of ATOC, said: “Passengers and taxpayers are benefiting from a booming railway that is delivering better value for money.

“The railways are relying on less taxpayer support and a lower level of revenue per journey as train companies succeed in encouraging more passengers to travel by train. Train companies have reduced their unit costs in real terms, playing their part along with industry partners and Government in improving rail's efficiency.

“The Government’s recent steps to get franchising back on track, recognising the private sector’s role in delivering a successful railway, will help ensure the industry can continue to provide the best possible deal for passengers and taxpayers.” 

Anthony Smith, chief executive of Passenger Focus, said: “For too long passengers have been the passive recipients of major decisions made on their behalf behind closed doors. These figures confirm what passengers have known for some time – the shift towards the railways being funded more by passengers and less by taxpayers has already gone a long way.

“Passengers are now putting in almost two pounds for every pound the taxpayer puts into the railway – so we say the voice of the user and main funder of the railways should be radically boosted, in a process that needs to be opened up to scrutiny. We are going to work with Government to make this a reality – the time has come for passenger power!”

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