ORR shines a light on the finances and growth of Britain’s railways

18 April 2013

The Office of Rail Regulation (ORR) has today published more detail than ever before on the costs, funding and growth of Britain's railways.

'GB rail financial information 2011-2012' provides a detailed analysis of latest financial data from train operators, Network Rail and governments, and highlights:

  • The cost of Britain's railways in 2011-12 was £11.61 billion (bn) – up 2.9% from £11.28 bn in the previous year. ORR's analysis also examines the effects of inflation, and on this basis costs decreased by 2.1%.
  • Income from passenger fares is covering a higher proportion of the cost of Britain's railways relative to taxpayers. Fares contributed 57.6% of the industry's total income in 2011-12, up from 55.8% in the previous year. Governments' funding contributed 32.1% in 2011-12, down 1.8% over the past year.
  • There are significant regional variations in governments' funding for the railways. Public subsidy in 2011-12 was £2.27 per passenger journey in England, £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.

Notes to editors

  1. Read the complete GB rail financial information 2011-2012 report.
  2. Passenger income was £7.2bn in 2011-12, an increase of 8.7% from 2010-11. This is partly attributable to a 7.2% increase in the number of passenger journeys. Passenger income represents ticket income from passenger journeys as opposed to non-ticket industry income such as car parking and retail income at stations.
  3. ORR's analysis shows that the franchised rail industry received £4.0bn of net governments' funding in 2011-12, representing 32% of the industry's total income. Governments' funding decreased by £19 million (m) (0.5%) compared to 2010-11.
  4. The two main sources of direct governments' funding of the rail industry were the Department for Transport (£3.1bn) and Transport Scotland (£0.7bn). DfT funding decreased by £70m (2.2%) in 2011-12 compared to 2010-11, and Transport Scotland funding increased by £60m (9.7%).
  5. Total industry expenditure was £11.6bn, an increase of 2.9% from 2010-11. £5.9bn (51%) was incurred in train operations and £5.7bn (49%) incurred in operating rail infrastructure. Financing Network Rail's debt contributed £1.5bn (13%) of these costs. The current level of Network Rail's debt is restricted by set limits. ORR is examining Network Rail's debt and financial sustainability as it assesses the company's Strategic Business Plan 2014-19. ORR's draft determination of the funding, projects and targets for the railways from 2014-19 will be published on 12 June 2013. Later this year, ORR will also outline rail financing options for consideration as part of its long-term regulatory statement.
  6. ORR's analysis also examines the effects of inflation and passenger growth.
  7. ORR thanks the Department for Transport, Transport Scotland, the Welsh Government, Network Rail, the Association of Train Operating Companies and train operators for helping to validate the statistics and ensure the accuracy of this report.
  8. Follow the Office of Rail Regulation on Twitter @railregulation