How to balance the railway budget?

By colinbuchanan

The railways are transport’s enigma. Passenger traffic has never been higher, nor have
ticket prices, meaning revenue has reached record levels. The climate change agenda is
all positive as far as rail is concerned – provided we electrify the network and use
electricity generated from renewables or nuclear power – and everyone wants high speed
rail. A rosy future for the sector then?

Well no, because the UK rail industry survives only on a growing level of Government
support, which has increased from £1.4bn in 1999/00 to £5.2bn in 2008-09. Nine years
ago Railtrack went into administration because it was bankrupt. Now there is growing
concern that Network Rail is going the same way weighed down by huge debts despite
massive levels of direct taxpayers’ support and now facing industrial relation problems as
it tries to reduce costs by 21% to meet the Regulator’s requirements.

Costs in the industry are certainly astronomic, it takes for ever to get anything done and
we struggle to maintain the network, never mind enhance it. The Budget suggests high
speed rail, if it ever happens, will have to be paid for from within existing resources at
the same time as cuts of 25% in the DfT’s budget are being talked about.

The Government is already requiring passengers to make a bigger contribution to the

cost of operating the railway – which seems entirely fair. But expect even further
pressure to push rail fares up far more than growth in average earnings.

So what’s the solution? – another Beeching to close lightly used routes and stations –
privatising Network Rail – scrapping or scaling back major projects such as the
Thameslink upgrade and Crossrail – extending the life of existing rolling stock – large
scale fare increases – tapping other funding sources or adopting the usual British
approach of putting our heads in the sand and hoping it all goes away?

Answers on a postcard please to Lord Adonis.