Rail Transport in Great Britain - Reorganisation & Privatisation - B

Rail Transport in Great Britain - B

Reorganisation & Privatisation

The Railways Act 1993 divided the railways up, with Railtrack taking ownership of British Rail's property portfolio, tracks, signals, bridges and tunnels, Rolling Stock Operating Companies, and train operating companies.

Passenger transport services were bundled together into franchises to facilitate cross-subsidy within franchises, with many regulations on ticket prices and types, regulated fare increases and "Parliamentary service" obligations. Companies submit bids to the franchising authority - often the Secretary of State for Transport, Passenger Transport Authority, or devolved government - competing for the lowest subsidy requirement and to invest in the railway over the lifespan of the franchise. There is also provision for subsidy between franchises, with profitable franchises demanding payments made to the government to cover a share of the losses from others. Examples of franchises include ScotRail, Great Western, and Southern Trains.

Open Access Operators are entirely free to set their own services and fares unaffected by government regulations. Examples of such operators are Lumo and Grand Central, Hull Trains and Heathrow Express. In the case of the Intercity West Coast and InterCity East Coast franchises, applicants submit bids to return the most money to the government from operating the service. This has led to franchisees collapsing when passenger growth targets are not met as promised payments to the government cannot be paid and the franchise is exited early.

In 2023, Network Rail held over £59.1 billion in debt, and £1.176 billion interest payments. Many of these debts were incurred by Railtrack and transferred to Network Rail when it collapsed.

British Rail operations were privatised during 1994–1997. Ownership of the track and infrastructure passed to Railtrack, whilst passenger operations were franchised to individual private sector operators (originally there were 25 franchises) and the goods services sold outright (six companies were set up, but five of these were sold to the same buyer).

The government said privatisation would see an improvement in passenger services and satisfaction (according to the National Rail Passenger survey) has indeed gone up from 76% in 1999 (when the survey started) to 83% in 2013 and the number of passengers not satisfied with their journey dropped from 10% to 6%. Since privatisation, passenger levels have more than doubled, and have surpassed their level in the late 1940s.

Train fares cost 2.7% more than under British Rail in real terms on average. However, while the price of anytime and off-peak tickets has increased, the price of Advance tickets has dramatically decreased in real terms: the average Advance ticket in 1995 cost £9.14 (in 2014 prices) compared to £5.17 in 2014.

Rail subsidies have increased from £2.9bn in 1992–93 to £3.8bn in 2015–16 (in current prices), although subsidy per journey has fallen from £3.85 per journey to £2.19 per journey. However, this masks great regional variation, as in 2014–15 funding varied from "£1.41 per passenger journey in England to £6.51 per journey in Scotland and £8.34 per journey in Wales."

The public image of rail travel was severely damaged by a series of significant accidents after privatisation. These included the Hatfield accident, caused by a rail fragmenting due to the development of microscopic cracks. Following this, the rail infrastructure company Railtrack imposed over 1,200 emergency speed restrictions across its network and instigated an extremely costly nationwide track replacement programme.

The consequent severe operational disruption to the national network and the company's spiralling costs set in motion a series of events which resulted in the collapse of the company and its replacement with Network Rail, a state-owned, "not-for-profit" company, with risks underwritten by the taxpayer. According to the European Railway Agency, in 2013 Britain had the safest railways in Europe based on the number of train safety incidents.

At the end of September 2003, the first part of High Speed 1, a high-speed link to the Channel Tunnel and onward to France and Belgium, was completed, significantly adding to the rail infrastructure of the country. The rest of the link, from north Kent to London St Pancras opened in 2007. A major programme of remedial work on the West Coast Main Line started in 1997 and finished in 2008.

In the 2010s, many upgrades are under way, such as Thameslink, Crossrail, the Northern Hub and electrification of the Great Western Main Line. Electrification plans for the Midland Main Line and the Transpennine line between Manchester and Leeds have been scaled back. Construction of High Speed 2 is underway, with a projected completion date of 2026 for Phase 1 (London to Birmingham) and 2033 for Phase 2. A poll of 1,500 adults in Britain in June 2018 showed that 64% support renationalising Britain's railways.

Coronavirus Years

Currently six franchises are under public ownership (effectively nationalised), four of them, LNER, Northern Trains, Southeastern, and TransPennine are operators of last resort owned by the Department for Transport, whereas Transport for Wales Rail is owned by Transport for Wales, a Welsh-Government owned company, with no current plans to re-privatise the latter. On 1 April 2022, ScotRail was put under public ownership by the Scottish Government, under Transport Scotland as ScotRail Trains operating on the same day.

During 2020, in the midst of the COVID-19 pandemic, all train operating companies (TOCs) entered into emergency measures agreements (EMAs) with the UK and Scottish Governments. Normal franchise mechanisms have been amended, transferring almost all revenue and cost risk to the government, effectively 'renationalising' the network temporarily.

In September 2020, the Government permanently got rid of the rail franchising system. On 20 May 2021, the Government announced a white paper that would transform the operation of the railways. The rail network will be partly renationalised, with infrastructure and operations brought together under the state-owned public body Great British Railways. Operations will be managed on a concessions model. According to the BBC, this represents the largest shake-up in the UK's railways since privatisation.

On 18 November 2021, the government announced the biggest ever public investment in Britain's rail network costing £96 billion and promising quicker and more frequent rail connections in the North and Midlands. The so called Integrated Rail Plan (IRP) includes substantially improved connections North-South as well as East-West and includes three new High Speed Lines.

Rail Transport in Great Britain Overview

Infrastructure Company: Network Rail (until 2024)

Major Operators:

National Rail franchisees

Independent operators

State-owned operators

Ridership: 1.738 billion (2019/20)

Passenger km: 66.8 km (41.5 mi) billion (2019/20)

System Length Total: 15,811 km (9,824 mi)

Electrified: 5,374 km (3,339 mi)

No. Stations: 2,576