Subsidies

[21C101]

Very interesting DFT link.

https://www.gov.uk/government/publications/rail-subsidy-per-passenger-mile

The total subsidy to DfT franchised train operators was 6.8 pence per passenger mile in 2013 to 2014, down from 7.3 pence per passenger mile in 2012 to 2013.
For this indicator, total subsidy includes:

• (a) subsidy paid directly to train operators by government
• figures published by the Office of Rail Regulation based on passenger kilometres, converted to miles
• (b) an allocation of the Network Grant (that is, payments made directly to Network Rail)
• this is calculated by taking the total network grant, apportioned according to each franchise’s share of fixed track access charges

Basically, for England, the following subsidies are paid (including the Network Grant paid directly to Network Rail, subsidies paid directly to TOCs and premiums from TOCs:

Former SR (FCC,Southern, SE, SWT) £193.5 Million

Former GWR (FGW, Chiltern): £288.9 million

Former LNER (East Coast, Transpennine, Northern, Greater Anglia: £882.8 million.

Former LMS (Virgin, London Midland, Cross Country, LTS, EMT): £917.4 million

Total: £2,298.6 Million

Scotland & Wales + UK Freight £1,700 Million (Based on total funding for GB being £4 billion - can't find a detailed breakdown)

 

[yorksrob]

I would have thought that both the old the old LNER and LMS areas would have included bits of today's Northern and TPE ?

The biggest surprise is that the old GWR is so relatively subsidy free ? The old Southern tended to be more profitable given the greater proportion of middle distance commuter routes, but I would have had the GWR area down as being more akin to the other English regions.

 

[rebmcr]

Without detail/context, these figures are very uninformative.

 

[Abpj17]

*sighs* and after the complaints about the south getting all the money in a different thread; it's unfortunate that for example, FCC were paying 266mn to Dft, but Northern were getting a subsidy of 172mn...plus a grant of 180mn equating to a subsidy of 50p per passenger mile. I travel at least 17k miles a year, a subsiday of 50p per mile would get me a nice first class annual season ticket (I know it doesn't quite work like that!)

 

[21C101]

I would have thought that both the old the old LNER and LMS areas would have included bits of today's Northern and TPE ?

The biggest surprise is that the old GWR is so relatively subsidy free ? The old Southern tended to be more profitable given the greater proportion of middle distance commuter routes, but I would have had the GWR area down as being more akin to the other English regions.

The TOC areas are best approximations to the old big four, as they obviously don't align properly.

Southern figures are distorted by Southeastern needing a large grant (presumably to fund HS1) SWT, Southern and FCC are basically profitable.

GWR figures are distorted by not including Arriva Wales (because I can't find the breakdown) which I gather gets a stonking subsidy.

However what is manifestly obvious is that the northern non intercity railways are grossly subsidised while those in the south are virtually at breakeven, with Scotland getting astonishing levels of subsidy.

 

[yorksrob]

The TOC areas are best approximations to the old big four, as they obviously don't align properly.

Southern figures are distorted by Southeastern needing a large grant (presumably to fund HS1) SWT, Southern and FCC are basically profitable.

GWR figures are distorted by not including Arriva Wales (because I can't find the breakdown) which I gather gets a stonking subsidy.

However what is manifestly obvious is that the northern non intercity railways are grossly subsidised while those in the south are virtually at breakeven, with Scotland getting astonishing levels of subsidy.

Although the LMS and LNER ares do, of course include a fair chunk of InterCity and NSE routage. I understand East Coast has been paying a premium of late but I'm not sure about Virgin or Anglia.

 

[21C101]

Although the LMS and LNER ares do, of course include a fair chunk of InterCity and NSE routage. I understand East Coast has been paying a premium of late but I'm not sure about Virgin or Anglia.

Yes, ICEC along with FCC are the only ones paying a premium once network rail payments are taken into account

The real basket case is Northern (£707 million including £182m from PTEs) - and of course Wales and Scotland

however Virgin (£180m), Crosscountry (£315m) and EMT (£182) million are all significantly subsidised once the network rail payments are included.

The biggest shock though is Southeastern, getting £334 million subsidy

 

[AM9]

The TOC areas are best approximations to the old big four, as they obviously don't align properly.

Southern figures are distorted by Southeastern needing a large grant (presumably to fund HS1) SWT, Southern and FCC are basically profitable.

GWR figures are distorted by not including Arriva Wales (because I can't find the breakdown) which I gather gets a stonking subsidy.

However what is manifestly obvious is that the northern non intercity railways are grossly subsidised while those in the south are virtually at breakeven, with Scotland getting astonishing levels of subsidy.

Noting that all of FCC is bundled with southern when at least half was in reality shared between LNER and LMS. Similarly, both Northern and TPE are covering both LNER and LMS services. Cross Country is mainly ex GW, LNER & LMS including significant parts of the latter two's Scottish services. What about the TFL acquisitions, Overground - LMS & Southern, Central Line, GW & LNER and the Waterloo & City line - Southern. Although subsidy is not provided directly form the DfT, TfL does get funding from Londoners themselves via the GLA and some funding from central government but the exact sum is difficult to define.
In effect, such a split is meaningless for any comparison (or even sniping) as costs arbitrarily attributed to rail groupings that died some 66 years ago are in a totally irrelevant context.

 

[yorksrob]

If it does suggest anything, its that the rural and branch lines of the South West aren't exactly breaking the bank. Perheps such routes aren't as subsidy hungry as assumed.

 

[starrymarkb]

The Devon Metro is Profitable (I don't know if that's before or after NR adjustments)

 

[pemma]

(including the Network Grant paid directly to Network Rail

It's been well publicised that this was calculated incorrectly on the figures published, meaning the operators with heavy long trains (like Virgin, East Coast and XC) look better than they actually are and the operators with lighter short trains (like Northern and non-mainline services run by FGW and EMT) look worse than they actually are.

 

[Wolfie]

It's been well publicised that this was calculated incorrectly on the figures published, meaning the operators with heavy long trains (like Virgin, East Coast and XC) look better than they actually are and the operators with lighter short trains (like Northern and non-mainline services run by FGW and EMT) look worse than they actually are.

One pressure group trying to push one particular angle came to this conclusion. This oh-so definitive "proof" has been used to bleat ever since.....

 

[pemma]

One pressure group trying to push one particular angle came to this conclusion. This oh-so definitive "proof" has been used to bleat ever since.....

If that's not the case, explain why Northern's subsidy per passenger mile has almost doubled despite no significant changes to services or the fleet. It must relate to the Network Rail grant seeing a huge increase, so why is that given track access and station access costs haven't seen huge increases and why hasn't it affected operators running Intercity services?

 

[Bald Rick]

If it does suggest anything, its that the rural and branch lines of the South West aren't exactly breaking the bank. Perheps such routes aren't as subsidy hungry as assumed.

Or, possibly, that the high volume of high value tickets sold to commuters of the Thames Valley, and the very high value long distance travellers from Bristol, Cardiff, Plymouth and Exeter areas, offset the rural lines.

Representing something vaguely similar, if East Coast was merged with half of northern (representing the rural services) and half of FCC (representing the London commuter services), the result would be rather similar to GW.

 

[Rapidash]

The Devon Metro is Profitable (I don't know if that's before or after NR adjustments)

Any numbers/source for that?

 

[yorksrob]

Or, possibly, that the high volume of high value tickets sold to commuters of the Thames Valley, and the very high value long distance travellers from Bristol, Cardiff, Plymouth and Exeter areas, offset the rural lines.

Representing something vaguely similar, if East Coast was merged with half of northern (representing the rural services) and half of FCC (representing the London commuter services), the result would be rather similar to GW.

That's a possibility, although given the figures in the OP are based on the old Regions which also include high volume, high value commuter routes in the South East, one might expect a similar effect on those areas.

Here's another thought. How much subsidy does TFL pay for tube services ?

It strikes me that a lot of the local routes in the highly subsidised "LMS" and "LNER" areas perform a similar function for regional cities that the tube does for London, so in effect, there is an additional subsidy applied to the South East for similar services that is not reflected here.

 

[pemma]

Southern figures are distorted by Southeastern needing a large grant (presumably to fund HS1) SWT, Southern and FCC are basically profitable.

Indeed. The total Southeastern subsidy is larger than the premiums paid by FCC, SWT and EC combined, so anyone who makes the claim that the South subsides the North is talking rubbish - the South can't even fund the Southeastern franchise, never mind Northern.

 

[yorksrob]

Indeed. The total Southeastern subsidy is larger than the premiums paid by FCC, SWT and EC combined, so anyone who makes the claim that the South subsides the North is talking rubbish - the South can't even fund the Southeastern franchise.

And we don't even get a compartment carriage for it anymore :cry:

 

[WatcherZero]

That's a possibility, although given the figures in the OP are based on the old Regions which also include high volume, high value commuter routes in the South East, one might expect a similar effect on those areas.

Here's another thought. How much subsidy does TFL pay for tube services ?

It strikes me that a lot of the local routes in the highly subsidised "LMS" and "LNER" areas perform a similar function for regional cities that the tube does for London, so in effect, there is an additional subsidy applied to the South East for similar services that is not reflected here.

Tfl receives £1bn per year from the Dft towards the Tube running costs. Its a large amount but not on a per capita basis, TfL tends to use most of it for upgrade and renewal programs. none of the other light rail networks in the country day to day operations are directly subsidised by the Dft though they get grants for expansions and T&W received support for the renewal program.

 

[JamesRowden]

Indeed. The total Southeastern subsidy is larger than the premiums paid by FCC, SWT and EC combined, so anyone who makes the claim that the South subsides the North is talking rubbish - the South can't even fund the Southeastern franchise, never mind Northern.

You aren't including the money that comes from People in the 'South' through taxes to fund the operation of the Railways.

 

[pemma]

You aren't including the money that comes from People in the 'South' through taxes to fund the operation of the Railways.

Remember evidence presented to the Transport Select Committee recently said tax payer funding per head in London was a huge 24 times higher than it was in the North East.

So given most people in the North East pay 20% income tax, do most Londoners pay 480% income tax? OK London salaries are higher so maybe 240% income tax instead?

 

[JamesRowden]

Remember evidence presented to the Transport Select Committee recently said tax payer funding per head in London was a huge 24 times higher than it was in the North East.

So given most people in the North East pay 20% income tax, do most Londoners pay 480% income tax?

You said: 'South' not 'London'; and 'North' not 'North East'.

Also, I expect that your assumption that people in the 'North East' earn as much as people in London might well in incorrect.
--- old post above --- --- new post below ---
Also, even though I don't live in London: I use services which pass through London frequently. Sometimes without even entering London.

 

[pemma]

Also, I expect that your assumption that people in the 'North East' earn as much as people in London might well in incorrect.

Which is why I said

OK London salaries are higher so maybe 240% income tax instead?

That assumes the average person in London earns twice as much as the average person in the North East.

I think I mis-read your earlier post. You didn't actually imply the South were funding other parts of the country (unlike some other posters on here) but did imply the shortfall Southeastern needed could be made up using taxes collected in the South.

 

[backontrack]

Very interesting DFT link.

https://www.gov.uk/government/publications/rail-subsidy-per-passenger-mile


Basically, for England, the following subsidies are paid (including the Network Grant paid directly to Network Rail, subsidies paid directly to TOCs and premiums from TOCs:

Former SR (FCC,Southern, SE, SWT) £193.5 Million

Former GWR (FGW, Chiltern): £288.9 million

Former LNER (East Coast, Transpennine, Northern, Greater Anglia: £882.8 million.

Former LMS (Virgin, London Midland, Cross Country, LTS, EMT): £917.4 million

Total: £2,298.6 Million

Scotland & Wales + UK Freight £1,700 Million (Based on total funding for GB being £4 billion - can't find a detailed breakdown)

Erm, c2c?

 

[ainsworth74]

Erm, c2c?

Also known as LTS, London Tilbury and Southend. Admittedly a strange choice as all the others have their correct franchise names but it is there.

 

[21C101]

Also known as LTS, London Tilbury and Southend. Admittedly a strange choice as all the others have their correct franchise names but it is there.

C**kup on my part.

 

[yorksrob]

Tfl receives £1bn per year from the Dft towards the Tube running costs. Its a large amount but not on a per capita basis

That's a fair point. But it does suggest that keeping urban areas moving is an expensive business but it is also money well spent. I think it's unfair to single out Northern urban areas just because their transport needs are met by the national railway network.

 

[21C101]

That's a fair point. But it does suggest that keeping urban areas moving is an expensive business but it is also money well spent. I think it's unfair to single out Northern urban areas just because their transport needs are met by the national railway network.

I was under the impression that most of the subsidy for Northern, like that for Wales or Scotland was for funding sparsely populated rural routes like the Whitby line, Hellifield - Carnforth and the Barrow to Carlisle line that were only kept open for political reasons and would have been shut down in a flash in the '60's if they were in, say, south west England.

The PTE subsidy is only about £180 million of the £700 million.

 

[yorksrob]

I was under the impression that most of the subsidy for Northern, like that for Wales or Scotland was for funding sparsely populated rural routes like the Whitby line, Hellifield - Carnforth and the Barrow to Carlisle line that were only kept open for political reasons and would have been shut down in a flash in the '60's if they were in, say, south west England.

The PTE subsidy is only about £180 million of the £700 million.

A common misconception. But as the South West shows, rural routes and branch lines do not, necessarily a subsidy make.

The fact that such routes would have been shut down "in a flash" when the railway was badly run and subject to gross political mismanagement (if not down right corruption in the case of Marples) is hardly a good indicator to what should be good policy now.

I don't even think you're right about sparsely populated rural routes. Having grown up in Kent, there are a couple of routes which, thank goodness they survived, but had they been in the North, I feel sure they would have got the chop. Strood to Paddock Wood springs to mind and even my beloved Marshlink (which is the source of my railway obsession) would probably have been done for.

The point to remember is that the Northern regional railway connects together a lot of urban areas.

 

[ChiefPlanner]

The real money is in Network Rail....