This is an interesting article on the Yorkshire Post website.
I didn't realise that the Northern Rail franchise was awarded on a zero growth basis!
Yorkshire Post
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Northern Rail - Where Does The Money Go?
Started by Harveybos, Jan 19 2012 04:39 PM
1 reply to this topic
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Old Hand
Posted 24 January 2012 - 05:13 PM
Hmmm, can't resist this one,
The recent fare increases are nowt to do wi'train operator, they are imposed by the government, a national fares policy. Scandalously the fare rises earlier this month in West Yorks were 2% more than anywhere else, to pay for old trains we got some years ago.
On the railways, money comes from two sources, the fare box and the taxpayer via the government. If the cost of running the operation is more then the ticket revenue, as is the case with Northern, then the government provides the balance. In the reverse case, as per East Coast (the operator of the trains to London), where ticket revenue exceeds costs, then the operator pays the government the excess. If revenue is a few per cent above target, as it is in Northern, then up to 80% of the excess is skimmed off by the government. If Northern did not get a subsidy the fares would be three times what they are, and no one would travel, so fares would get ever higher...
Train operators run trains to a timetable set by the government at a price agreed with government, and government controls precisely which trains, anecdotally what Bic pens, it can have. It has no need for capital investment, that's not its contract. No company would offer an extra service without the cost being covered somehow, and as Northern has no contract to run extra services, or have extra trains, or come round and clean your windows, it does not do that. If it asked the government to be allowed to do so, the government would say no because it would cost the tax payer. Operating an extra train costs a lot of money someone has to fund, and the fare box is not enough!
But yes, the contract was let on an no growth basis, because that's what the government of the day thought about the north - it was seeking to close lines and cut services at the time. We've been very lucky to get the extra morning and evening train to/from Leeds, thanks to some very cheap trains which the Scottish operator had finished with and had pensioned off.
That's the railways for you!!
The recent fare increases are nowt to do wi'train operator, they are imposed by the government, a national fares policy. Scandalously the fare rises earlier this month in West Yorks were 2% more than anywhere else, to pay for old trains we got some years ago.
On the railways, money comes from two sources, the fare box and the taxpayer via the government. If the cost of running the operation is more then the ticket revenue, as is the case with Northern, then the government provides the balance. In the reverse case, as per East Coast (the operator of the trains to London), where ticket revenue exceeds costs, then the operator pays the government the excess. If revenue is a few per cent above target, as it is in Northern, then up to 80% of the excess is skimmed off by the government. If Northern did not get a subsidy the fares would be three times what they are, and no one would travel, so fares would get ever higher...
Train operators run trains to a timetable set by the government at a price agreed with government, and government controls precisely which trains, anecdotally what Bic pens, it can have. It has no need for capital investment, that's not its contract. No company would offer an extra service without the cost being covered somehow, and as Northern has no contract to run extra services, or have extra trains, or come round and clean your windows, it does not do that. If it asked the government to be allowed to do so, the government would say no because it would cost the tax payer. Operating an extra train costs a lot of money someone has to fund, and the fare box is not enough!
But yes, the contract was let on an no growth basis, because that's what the government of the day thought about the north - it was seeking to close lines and cut services at the time. We've been very lucky to get the extra morning and evening train to/from Leeds, thanks to some very cheap trains which the Scottish operator had finished with and had pensioned off.
That's the railways for you!!
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