The financing of the rail industry in Great Britain is how

rail transport in Great Britain The railway system in Great Britain is the oldest railway system in the world. The first locomotive-hauled public railway opened in 1825, which was followed by an era of rapid expansion. Most of the track is managed by Network Rail, which in ...

is paid for. Most of the industry's income comes from passengers, with the government also providing

rail subsidies Many countries offer subsidies to their railways because of the social and economic benefits that it brings. The economic benefits can greatly assist in funding the rail network. Those countries usually also fund or subsidize road construction, and ...

, and income from property and freight also providing a small proportion. The majority of the expenditure (£12.1 billion) is spent by train operating companies on leasing/maintaining trains, paying staff, and purchasing fuel.

Network Rail Network Rail Limited is the owner (via its subsidiary Network Rail Infrastructure Limited, which was known as Railtrack plc before 2002) and infrastructure manager of most of the railway network in Great Britain. Network Rail is an "arm's leng ...

spends the other £6.6 billion on maintaining and upgrading track, stations, tunnels, signals and bridges.

Train operating companies

The train operating companies collect money from the passengers via fares (£9.4 billion in 2015/16) and other forms of income (e.g. parking and catering) and spend it on running trains. They spent £2.8 billion on staffing, £0.6 billion on fuel, £1.4 billion on leasing trains, £1.3 billion on infrastructure access charges and £2.8 billion on other expenditure. They also paid out £228 million in dividends, around 1.2% of the total industry expenditure.

Network Rail

Network Rail maintains and upgrades the rail infrastructure in Great Britain. In 2015/16, it spent £3.1 billion on renewals and £3.2 billion on enhancements.

Passenger income

Passenger income is made up of fares as well as car parking charges and on-board catering.

Regulated fares

Certain fares (about 40%) are regulated by the government. This includes Season tickets on most commuter journeys, some Off-Peak return tickets on long distance journeys and Anytime tickets around major cities. The government uses July's Retail Prices Index (RPI) measure of inflation to determine the increase in the price of these fares. Currently price rises on regulated fares can increase by at most RPI inflation.

Government support

Government support comes through three main mechanisms: *A direct grant to Network Rail *Subsidies to train operating companies (TOCs) from central government *Subsidies given by devolved administrations, either countries such as Scotland, Wales or cities which have some control over transport such as London, Manchester or Liverpool. Funding varies from region to region, with £1.41 per passenger journey in England to £6.51 per journey in Scotland and £8.34 per journey in Wales. Since becoming a public sector body in September 2014, Network Rail borrows directly from government. Additionally government loans have been made to the

Greater London Authority The Greater London Authority (GLA), colloquially known by the metonym "City Hall", is the devolved regional governance body of Greater London. It consists of two political branches: the executive Mayoralty (currently led by Sadiq Khan) and the ...

and Transport for London to support the building of

Crossrail Crossrail is a railway construction project mainly in central London. Its aim is to provide a high-frequency hybrid commuter rail and rapid transit system crossing the capital from suburbs on the west to east, by connecting two major railway ...

Direct grant

The government gave £3.8 billion to Network Rail in 2015/16.

TOC subsidies

The government gave out £2.4 billion in subsidies and received £3.0 billion in franchise payment, so received a net total of £0.6 billion.

Regional subsidies

Certain regions have the ability to subsidise services within their area. Cities such as London, Liverpool and Manchester do this through Transport for London,

Merseytravel Merseytravel is the passenger transport executive, responsible for the coordination of public transport in the Liverpool City Region in North West England. Merseytravel was established on 1 December 1969 as the Merseyside Passenger Transpor ...

and

Transport for Greater Manchester Transport for Greater Manchester (TfGM) is the public body responsible for co-ordinating transport services throughout Greater Manchester in North West England. TfGM is responsible for investments in improving transport services and facilities. ...

respectively. Scotland and Wales gave out £0.8 billion and £0.2 billion respectively.

References

{{reflist Rail transport in Great Britain