Inflation pushes up cost of the railways

Marion Dakers
THE COST of running Britain’s railways fell 2.1 per cent in real terms last year to £11.6bn, although including inflation the network’s expenses rose 2.9 per cent.

Passenger spending rose 8.7 per cent to £7.2bn in 2011-12, meaning users of the railway contributed 58 per cent of its running costs through fares, the Office of Rail Regulation watchdog said yesterday.

The government chipped in £4bn, or 32 per cent, with the remainder generated from property income and other revenue streams.

While infrastructure spending fell 1.8 per cent, Network Rail doled out £1.5bn to maintain its £28bn debts.

The ORR statistics show that rail subsidies are not evenly spread throughout the country.

The least subsidised line is the East Coast, which has been operated by the state since National Express handed back the franchise in 2009.

The intercity route between London and northern Scotland required a net one per cent subsidy as a percentage of overall income.

By contrast, routes in mostly rural areas such as the Northern franchise, or those subject to major upgrade work like the London Overground, required up to 69 per cent of their costs to be met by the state.