ORR publishes annual rail funding report

18 January 2018

The Office of Rail and Road (ORR) has today published its annual summary of how the rail industry is funded and how this money is spent.

The report shows that in 2016-17:

  • £9.7bn of rail funding came from passenger fares, an increase of 1.1% from 2015-16.
  • £3.4bn came from government funding (net), a decrease of 0.7% since 2015-16.
  • Governments received £0.7bn net from train companies. This is because while companies received £2.5bn of government funding, they also paid a total of £3.2bn to governments under franchise agreements. Northern Rail received the most government funding (£284m) and South West Trains paid the most to governments (£366m).
  • Network Rail received £4.4bn in government grants, £1.5bn in access charges paid by train companies and £0.9bn from other income such as property. It also borrowed £6.1bn from government. This was largely used to pay for £3.4bn of enhancements projects, £2.4bn for the repayment of some of Network Rail’s private sector debt and other expenditure.
  • Franchised train companies’ expenditure increased by 1.7% to £12.6bn.
  • Network Rail’s expenditure increased by 6.5% to £7.6bn.
  • Across the country, expenditure per passenger kilometre was highest in Wales and Sussex at 43p and 40p respectively and lowest in London North West (28p) and Anglia (27p).

Over five years:

  • Income from fares has increased by 18.2%.
  • Government funding (excluding borrowing) has decreased by 21.1%.
  • Train companies expenditure has increased by 20.2%.
  • Network Rail’s expenditure has increased by 20.0%.
  • In 2016-17, government received £0.7bn (net) from train companies. In contrast, governments paid £0.1bn (net) to train companies in 2011-12.
  • Passenger journeys have increased by 18.4%.


  1. UK Rail Industry Financials:
  2. Graphs:
    Fares income and net government funding over 5 years * excludes open access train companies - £0.2bn in 2016/17
    Fares income and net government funding
    Industry income and expenditure in 2016-17

    Industry income and expenditure in 2016-17
  3. Methodology notes:
    • This publication does not include financial data (including government funding) for High Speed 2 (HS2), the non-operational parts of Crossrail (TFL Rail only) or the industry’s supply chain.
    • Network Rail’s expenditure included in this report is on a different basis to how we report on Network Rail’s expenditure in our Annual Efficiency and Finance assessment. This is because in this report we include depreciation instead of actual expenditure on renewals.
    • Prior year numbers (either shown in a figure or used to calculate a variance) have been adjusted for inflation.
  4. The Office of Rail and Road is the UK’s rail regulator and strategic roads monitor for England. Follow us @railandroad