20
Conclusion
Tenth Report - Overview of the English …
Acknowledged
Net government funding increased 99.7% in real terms between 2015–16 and 2019–20 from £2.6 billion to £5.1 billion. This reflects increases in expenditure on operating and maintaining rail network infrastructure and the pre-COVID-19 deterioration in the passenger rail market as growth in rail passengers plateaued.3 In addition, the Department told …
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Net government funding increased 99.7% in real terms between 2015–16 and 2019–20 from £2.6 billion to £5.1 billion. This reflects increases in expenditure on operating and maintaining rail network infrastructure and the pre-COVID-19 deterioration in the passenger rail market as growth in rail passengers plateaued.3 In addition, the Department told us that an estimated £8.5 billion of government financial support has been provided to the system in response to the COVID-19 pandemic.4
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Government response AI summary
The government acknowledges the Committee's conclusion regarding increased government funding for rail. It recognises the value of greater financial transparency and states it has already started publishing operational support payments data, is developing whole-system financial reporting, and will consider options for its publication, subject to …
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HM Treasury
14
Conclusion
Tenth Report - Overview of the English …
Acknowledged
Specifically in relation to passenger service operations, prior to the COVID-19 pandemic, private sector companies operated passenger services under a franchise model but still received some level of government funding. The amount of government funding provided to train operators has increased in recent years, changing from a net surplus paid …
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Specifically in relation to passenger service operations, prior to the COVID-19 pandemic, private sector companies operated passenger services under a franchise model but still received some level of government funding. The amount of government funding provided to train operators has increased in recent years, changing from a net surplus paid to the Department to net a deficit paid to operators in 2018–19.34 In March 2020, the Department told us it made a “conscious choice” to keep rail services running during the COVID-19 pandemic, despite the dramatic reduction in passenger numbers and associated revenue earned by operators. As a result, taxpayer financial support paid to operators increased significantly. The Department told us it will continue to pay operators to deliver services under the contracting system being drawn up as they transition operators from emergency measures. The Department acknowledged that transparency is “desirable” and will better enable Parliament and the public to understand what they are paying for in the rail system. The Department outlined its proposed quarterly review process for these new contracts, the outcomes of which should be made available to Parliament and the public.35 Written evidence we received reiterated the importance of improved financial transparency in light of recent significant increases in taxpayer funding to the rail system.36 30 C&AG’s report, p4 31 Q 34 32 Secretary of State for Transport, Great British Railways, The Williams-Shapps Plan for Rail, Department for Transport, May 2021 33 Q 23 34 C&AG’s report, p15 35 Qq 31, 42 36 Porterbrook (OE0001), paras 1.2, 6.2 12 Overview of the English rail system 2 Financial and environmental sustainability Interim National Rail contracts for passenger service delivery
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Government response AI summary
The government acknowledges the Committee's conclusion regarding the significant increase in taxpayer funding and the Department's new contractual arrangements for passenger services. It details that National Rail Contracts (NRCs) involve annual business plans, with revenue and cost risk primarily with the Department, and performance incentivised …
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HM Treasury
18
Conclusion
Tenth Report - Overview of the English …
Acknowledged
Following our session on 13 May 2021, the Department told the Transport Committee that negotiations with all train operators have concluded around terminating the underlying franchise agreements, which is necessary to enable the transition of operators 37 Qq 19, 31 38 C&AG’s report, pp 8, 15 39 Committee of Public …
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Following our session on 13 May 2021, the Department told the Transport Committee that negotiations with all train operators have concluded around terminating the underlying franchise agreements, which is necessary to enable the transition of operators 37 Qq 19, 31 38 C&AG’s report, pp 8, 15 39 Committee of Public Accounts, Rail franchising in the UK, Twenty-Fifth Report of Session 2017–19, HC 689, April 2018 40 C&AG’s report, p20 41 Qq 22, 31, 38 42 C&AG’s report, p19 43 Q 42 Overview of the English rail system 13 from ERMAs to the National Rail contracts.44 It will be agreeing these new contracts over this year45 and told us that these new arrangements will work on the basis of annual business planning by operators with quarterly reviews by the Department against specific targets. It also said that the new contracts will use a similar fee-based approach in place on the EMRAs.46 The Department acknowledged that oversight and management of these contracts will require significant Departmental resource, but felt that it would not be a step change from the intensive management required for awarding and managing franchise contracts.47
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Government response AI summary
The government acknowledges the Committee's observations on the transition to National Rail Contracts (NRCs). It details that NRCs require operators to deliver against annual business plans with revenue and cost risk largely with the Department, and performance is incentivised through fees and contractual commitments to …
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HM Treasury