Taxpayers will continue to pay to keep the rail network running for at least 18 months

Monday, 21st September 2020, 1:00 pm
Updated Monday, 21st September 2020, 1:00 pm
The emergency measures introduced by the government in March have already cost £3.5bn. (Photo: Shutterstock)
The emergency measures introduced by the government in March have already cost £3.5bn. (Photo: Shutterstock)

The government is set to extend taxpayer-funded support for rail firms as passenger numbers fail to return to pre-pandemic levels.

The requirements of social distancing and an en-masse move to home working have badly impacted the UK's rail firms since the pandemic hit, with passenger numbers remaining low even after lockdown was lifted.

Sign up to our public interest bulletins - get the latest news on the Coronavirus

Sign up to our public interest bulletins - get the latest news on the Coronavirus

The government introduced emergency measures to bail out train firms during lockdown, using taxpayer money to plug the gap left by a shortfall in ticket revenues.

Thus far, the measures have cost the government £3.5 billion, and will be extended for another 18 months in order to allow services to continue running even with low passenger numbers.

In June, it was reported that each rail journey taken in the UK since lockdown began had cost the tax payer about £100 in subsidies.

Though passenger numbers have crept up over the past few months, it's reported that they remain less than half of pre-pandemic levels. 

Ministers have said that they will use the next 18 months to reform Britain's railways, and put an end to the franchising system which has been in place since the 1990s.

What is rail franchising?

Rail franchising is a system where private train operating companies are awarded contracts to operate railway services following a bidding and competition process.

The government is now considering using a concessions-based system as an alternative, whereby train companies will be paid a fixed fee to run rail services.

In a statement, Transport Secretary Grant Shapps said: "The model of privatisation adopted 25 years ago has seen significant rises in passenger numbers, but this pandemic has proven that it is no longer working."

He added that the move would end "uncertainty and confusion about whether you are using the right ticket or the right train company".

Mixed reaction

Train companies have welcomed a move away from Britain's oft-criticised rail franchising system.

Paul Plummer, the boss of the Rail Delivery Group, which represents train firms, called for a simpler-to-use fare system.

He told the BBC: "These transitional contracts should be a stepping-stone to a better railway."

Rail Expert Sir Michael Holden told the BBC's Today programme, however, that the current emergency measures were "the worst possible arrangement to run the railways".

"We've got the dead hand of the government on the helm... controlling all of the detailed decisions of the railway."

"And yet, they're still paying for public sector operators to run the railway for them", he said.