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Government Must Act Over Franchise Failure Payments - Cortes

30 January 2019

TSSA General Secretary, Manuel Cortes has called on the Government to take evasive action after figures from the rail industry regulator showed a staggering forty per cent fall in franchise payments from train operators. 

 

The Office of Rail and Road (ORR) reported that operators paid the Treasury £400m in the twelve months to the end of March 2018, down from £700m the previous year.

The ORR data came the day after it was revealed that passenger satisfaction with rail journeys had fallen to a 10-year low after a timetable upgrade in the summer led to disruption and the cancellation of thousands of services.

Manuel Cortes said: “This is just the latest in a series of crystal-clear signals to the Conservative Government that private rail franchising has failed. What we see in these figures is hard evidence of a system which is simply not fit for purpose.

“Franchise payments have reduced dramatically, there’s lower growth across the railways, less revenue being generated, higher fares - which we know are nothing to do with staffing costs – and above inflation increases for train leasing charges.

“At the same time nearly four billion pounds more in government funding has been pumped in to prop up the privateers. What a rip-off!

“This is outrageous - a long way short of where Britain’s railways need to be in the 21st century. Chris Failing Grayling needs to get real about what’s going on and what millions of passengers are having to endure in the name of generating cash for a handful of shareholders.

“I hope Keith Williams – who is conducting the Government’s Rail Review – is taking heed because we really do need fundamental change. Our railways are the backbone of Britain and can’t be allowed to fail.

“We need a nationalised rail network now. Nothing else will do.”

During the period under review, the railway industry generated revenue of £19.4bn, down 1.3 per cent from the 12 months earlier, but spent £20.6bn, up 1.4 per cent.

Net government funding was up 8 per cent to £3.8bn in the period.

Fare income fell 2.4 per cent to £9.8bn because the number of journeys declined, mostly driven by platform closures at London’s Waterloo station, the UK’s busiest, and industrial strike action, the ORR said.

Staffing costs only increased by 0.9% - below CPI and RPI. Train leasing charges rose by 5.5%.

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