How your train fare's helping the government cut its rail subsidies
16 April 2014 9:41am
BRITAIN’S railways are being funded increasingly by passengers as the government trims back its subsidies.
In the last financial year, customers stumped up £7.7bn, or 59.2 per cent of the network’s £12.3bn running costs, or even more if you include the £700m paid out in parking charges.
The Office of Rail Regulation said this increase, from 58.5 per cent two years ago, reflects the rising popularity of rail travel more than above-inflation fare increases.
In any case, passengers using unregulated fares, such as discounted advance tickets and first class upgrades, are coughing up £5bn, or two-thirds of all passenger income.
How much each passenger is subsidised by the government varies massively depending on where in the country they are travelling.
South West Trains, for example, is able to completely offset public subsidies with the £843m in fares it takes a year, while Northern Rail, a more rural set of routes, takes 69 per cent of its funding from the government.
An average English journey is subsidised by the state to the tune of £2.19, compared to £7.60 in Scotland and £9.33 in Wales.
While many London-bound passengers are currently shouldering more of the funding burden than travellers in, say, Aberystwyth, the subsidy disparity means much-needed local services to the likes of Giggleswick and Cark can be run even at times when the routes are not funding themselves. The numbers will also vary depending on which lines are being upgraded or require lots of maintenance.
And commuters in the capital shouldn’t feel too hard done by – the recently revamped London Overground took 49 per cent of its running costs in public subsidies last year.
Network Rail, the public sector body that maintains the railways, is having its state funding cut by a fifth over the next five years, meaning the level of contribution from passengers, and the £204m that train operators paid out in dividends last year, will become increasingly important.