Overview of costs in the English rail system
Public Accounts Committee
Closed
Inquiry
The rail franchise model has high fixed costs and low profit margins. The Department for Transport’s (DfT) net income from letting franchises fell significantly from 2016-17, becoming a net government subsidy in 2019-20. As passenger numbers dropped in the COVID-19 pandemic, rail industry income fell dramatically. It is unclear how …
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7
Recommendations
19
Conclusions
1
Report
1
Oral session
1
Event
Activity timeline 3 events
28 Oct
2021
2021
7 Jul
2021
2021
Report published
13 May
2021
2021
Oral evidence
Oral evidence sessions 1 session
13 May 2021
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Overview of costs in the English rail system
Andrew Haines · Network Rail
Bernadette Kelly CB · Department for Transport
Conrad Bailey · Department for Transport
John Larkinson · Office of Rail and Road
Reports 1 report · click to expand
| Title | HC No. | Published | Items | Response |
|---|---|---|---|---|
| Tenth Report - Overview of the English rail system | HC 170 | 7 Jul 2021 | 26 | Responded |
Recommendations & Conclusions
3 results
20
Conclusion
Acknowledged
Tenth Report - Overview of the Eng…
Net government funding increased 99.7% in real terms between 2015–16 and 2019–20 from £2.6 billion...
Net government funding increased 99.7% in real terms between 2015–16 and 2019–20 from £2.6 billion to £5.1 billion. This reflects increases in expenditure on operating and maintaining rail network infrastructure and the pre-COVID-19 deterioration in the passenger rail market as …
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Government Response
The government acknowledges the Committee's conclusion regarding increased government funding for rail. It recognises the value of greater financial transparency and states it has already started publishing operational support payments data, is developing whole-system financial reporting, and will consider options for its publication, subject to constraints.
HM Treasury
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14
Conclusion
Acknowledged
Tenth Report - Overview of the Eng…
Specifically in relation to passenger service operations, prior to the COVID-19 pandemic, private sector companies...
Specifically in relation to passenger service operations, prior to the COVID-19 pandemic, private sector companies operated passenger services under a franchise model but still received some level of government funding. The amount of government funding provided to train operators has …
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Government Response
The government acknowledges the Committee's conclusion regarding the significant increase in taxpayer funding and the Department's new contractual arrangements for passenger services. It details that National Rail Contracts (NRCs) involve annual business plans, with revenue and cost risk primarily with the Department, and performance incentivised through fees and contractual commitments, with NRC rollout ongoing.
HM Treasury
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18
Conclusion
Acknowledged
Tenth Report - Overview of the Eng…
Following our session on 13 May 2021, the Department told the Transport Committee that negotiations...
Following our session on 13 May 2021, the Department told the Transport Committee that negotiations with all train operators have concluded around terminating the underlying franchise agreements, which is necessary to enable the transition of operators 37 Qq 19, 31 …
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Government Response
The government acknowledges the Committee's observations on the transition to National Rail Contracts (NRCs). It details that NRCs require operators to deliver against annual business plans with revenue and cost risk largely with the Department, and performance is incentivised through fees and contractual commitments to specific activities.
HM Treasury
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