Regulator’s rail finance report highlights impact of pandemic

Body
Components

The Office of Rail and Road (ORR) has today published its annual report on the rail industry’s finances for 2019-20. 

The Rail Industry Finance (UK) 2019-20 report shows the income, expenditure, and government funding of the UK rail industry for the financial year 1 April 2019 to 31 March 2020, together with an update for the impact of the coronavirus (Covid-19) pandemic.

The main points include:

  • As a whole, the industry in 2019-20 cost £20.2bn, which was funded through fares and other passenger income (£11.6bn), government (£6.5bn) and other sources (£2.0bn). 
  • Fares income in 2019-20 dropped by 1.1% to £10.4bn, largely due to the impact of Covid-19 in March. 
  • Government funding of the operational railway increased by 45.2% to £6.5bn, largely due to the planned increases in Network Rail’s funding at the start of control period 6 (CP6), but also due to the impact of Covid-19.
  • Industry costs were £20.2bn in 2019-20. This represents a £0.8bn (4.0%) annual increase, largely due to increased infrastructure operating and maintenance costs (£0.4bn), and increased rolling stock leasing costs due to the introduction of new trains (£0.4bn). 

 The impact of Covid-19 on the rail industry in 2020-21:

  • Passenger journeys started to decline from the beginning of March 2020 and by the end of Q1 (1 April to 30 June) had dropped to as low as 5% of normal levels. Income from fares in 2020-21 Q1 was £184m, £2.5bn (93.1%) lower than 2019-20 Q1.
  • As a result of the reduction in passenger and other income, governments have increased financial support to maintain train services. Department for Transport payments to train operators between April and June 2020 was £2.0bn.This is higher than the £1.2bn of government funding for franchised passenger operators during the whole of the 2019-20 financial year. These numbers are not finalised and could change.
     

Notes to editors
Collapse accordion Open accordion

  1. Rail Industry Finances 2019-20
  2. All data tables, a quality and methodology report and an interactive tool associated with this release are published on the rail industry finance page of the ORR data portal.
  3. The Chancellor published his 2021-22 Spending Review yesterday, which included some funding for the response to COVID-19. We note that the support for passenger rail services is forecast to be £8.0bn in 2020-21. As noted in the Spending Review, this is an estimate and remains highly uncertain and depends on future decisions about public health restrictions.
  4. Rail industry income and expenditure, UK, 2019-20:

Rail industry finance (UK) 2019-20 graphic