Recommendation 14

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