Background to the report:
The arrangements for delivering rail services in England are complex and distributed across the public and private sector. This makes it difficult for Parliament and taxpayers to understand the overall financial position, to which the taxpayer is ultimately exposed, and the impact of government’s choices. Although the rail system was privatised on a franchising model in the 1990s, government provides significant ongoing subsidy and has a statutory obligation to put in place an ‘operator of last resort’ if a franchise cannot provide passenger services.
The COVID-19 pandemic made government’s financial exposure to these risks more immediate because emergency agreements transferred day-to-day revenue and cost risks to the Department, and precipitated the end of the established commercial model for franchising. The Williams Rail Review, set up to address long-standing issues within the system, is expected to report during 2021.
Scope of the report:
This overview aims to provide clarity at a moment of significant industry change. It looks at:
- how much it costs to run the rail system in England, how it is paid for and what the challenges and opportunities facing government are as it reforms the system; and
- income and expenditure over the past five financial years, ending in March 2020.
It covers England only as rail in Scotland, Wales and Northern Ireland is devolved to varying degrees.