By Richard Johnstone | 16 February 2015
The government’s subsidy for the rail industry fell below £4bn in 2013/14, an analysis by the Office of Rail Regulation has found.
According to the watchdog’s GB rail industry financial information 2013/14 report, the total public sector subsidy for the industry was £3.8bn, down from £4bn the year before. The subsidy has fallen 16.4% since 2010/11.
Public spending on the industry was split between the Department for Transport (£2.6bn), Transport Scotland (£762m), and the Welsh Government (£152m). Funding was also provided by regional passenger transport executives (£178m) and Transport for London (£83m).
Nearly all of the government funds – £3.7bn – were provided in an operating grant to state-owned Network Rail.
The Department for Transport only provided £100m net to train operators, as nearly all of the £2bn of operational support was recovered in £1.9bn of premium payments from other franchise holders across the network.
According to the analysis, the total cost of running Britain’s railways was £12.7bn in 2013/14, an increase of 0.7% year-on-year.
However, ORR chief executive Richard Price highlighted there had been a substantial growth in the use of the railways over the past four years.
‘ORR’s report also highlights that the rail industry has been successful in keeping costs stable despite carrying significantly more passengers,’ he stated.
‘Our industry financials publications provide an open and comprehensive explanation of industry income and expenditure to help passengers understand how the money they pay in fares is being used.’
