Taxpayer funding for railways falls as post-pandemic passenger …
Passenger numbers on the UK’s train network increased by more than 40 per cent in the last financial year, which meant the sector needed less financial support from central government.
The Office of Rail and Road (ORR) published its annual Rail industry finance statistical report, which covers 1 April 2022 to 31 March 2023.
As well as passenger numbers continuing to recover from the lows seen during the Covid-19 pandemic, the introduction of services to the central section of the Elizabeth line also helped to generate additional revenue for the industry.
However, industrial action across Great Britain resulted in fewer train services than anticipated.
The Covid lockdowns saw the number of rail journeys in the UK drop by more than 400 million between April and June 2020 when compared to the same time the previous year to levels not seen since the Victorian era[1].
The ORR report showed that a total of 1.4 billion journeys were made in Great Britain during the last financial year – a 40 per cent bump from the previous year. However, annual passenger journeys are still only 80 per cent of the 1.7bn journeys made in the last pre-pandemic year between April 2019 and March 2020.
Fare income in the latest year was £8.6bn – adjusted for inflation, this represents an increase of 34 per cent (£2.2bn) from the previous year due to the increase in passenger journeys.
The government contributed £11.9bn to the day-to-day operations of the railway in the latest year, a drop of £2.7bn (19 per cent) from the previous year. The rail industry as a whole received £22.7bn of operational income in the latest year, which means government funding now represents just over half (52 per cent) of this.
Investment in new and enhanced rail infrastructure and rolling stock increased to £9.7bn – an increase of £1.2bn – largely due to continued investment in HS2.
With Prime Minister Rishi Sunak recently scrapping the proposed rail connection[2] between Birmingham and Manchester, this figure could fall further.
Will Godfrey, ORR’s finance director, said: “Our official statistics are an important barometer of the financial health of Britain’s railways. This year, in the context of rising inflation and industrial action, we see that rail has still continued its post-pandemic recovery. Passenger journeys have increased significantly, helped in part due to the Elizabeth line’s opening, and were 40 per cent up on the previous year.
“Our figures also show that as a result of returning passengers, fare revenue continued to rise and that government support for the day-to-day running of the railway has reduced.”
References
- ^ since the Victorian era (eandt.theiet.org)
- ^ scrapping the proposed rail connection (eandt.theiet.org)