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Rail could cost £6bn per year without government reform

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Commuters are facing the prospect of a New Year's hike in rail fares as the cost of a multi-billion pound bailout of the country's railways begins to be felt.
Aslef has called for a strike at the end of June.

Maintaining the railway sector without government reform could cost up to £6bn of taxpayers’ money a year, warned a report published today.

An analysis by UK think tank Centre for Policy Studies (CPS) argued that without a complete makeover, the network will fall into a decline and underinvestment scenario that could force the government to either increase income tax or cut services to revive it.

“The pandemic fundamentally changed the nature of rail in the UK,” said the report’s author Tony Lodge.

“The government has the opportunity – through the new Great British Railways body – to radically overhaul the current model to make sure that it is fit for purpose and able to meet modern passenger demands.”

CPS figures highlighted that post-Covid the number of people commuting everyday at peak times is at 15 per cent of pre-pandemic levels, as most commuting now takes place between Tuesday and Thursday.

As a result of more flexible working patters, Mondays and Fridays are respectively 20 and 50 per cent below 2019 levels.

According to Lodge, through the institution of Great British Railways, the UK Government should aim to deliver a simpler and more flexible system, boosting private investment and abolishing peak fares.

“Frankly, if the government doesn’t implement these reforms, there is no certainty that rail will have a future and taxpayers will inevitably be forced to foot the bill for its decline,” he explained.

The report comes after Westminster confirmed the creation of Great British Railways (GBR) in the Queen’s Speech last Tuesday.

Under the new Transport Bill, GBR was created to simplify the network, taking over from Network Rail and performing some of the functions of the Department for Transport (DfT) such as awarding contracts to private operators.

Even though GBR is set to create its own ticketing system, rival Trainline is reportedly in talks with the DfT over its contract.

“We don’t know what that future platform may look like [but] we have a strong position which relates to the scale at which we operate,” said chief executive Jody Ford on 5 May.

We think we have a strong hand to play here.”