Each rail passenger journey taken in the UK since lockdown has cost the taxpayer about £100 in subsidies, with billions of pounds of government money spent on running near-empty services.
Transport experts said that unless the government reviewed physical distancing rules and encouraged people back on to trains, it would face a “bleak choice” between continuing to pay high subsidies for empty trains or mothballing rail services.
The UK government has so far approved an additional £3.5bn to bail out train operators and continue running services under six-month emergency agreements due to expire in September.
Accounts from the regulator the Office of Rail and Road in February showed annual government funding to the rail industry, including to Network Rail, pre-crisis had reached £4.3bn. With the extra bailout cash, the total pro-rata subsidy for the last three months alone would be almost £3bn.
In that period, passenger numbers have fallen below 30 million, according to provisional Department for Transport (DfT) figures, meaning the subsidy per passenger journey is about £100. In a similar period last year, 439m rail journeys were made nationally.
Tony Travers, a professor of public policy at the London School of Economics, said: “You add all this together and you’ve got a bleak choice. Until and unless the government decides to get people back using public transport, does it run a full railway with a very high subsidy, or when does it come under pressure from the Treasury to mothball services?
“There’s a real problem because if the government doesn’t actually encourage people to travel, the revenues are going to stay low. For how long will the public purse fund empty trains?”
The government suspended rail franchises on 23 March as lockdown restrictions were brought in to combat the Covid-19 pandemic, and replaced them with emergency measures agreements. Under these contracts, the government pays train firms a management fee equivalent to a 2% profit margin on pre-pandemic operating costs.
An extension is being discussed and industry sources say agreements could be struck on similar terms for a further 12 to 18 months.
One train operator said any attempt to revert to previous franchise agreements or ask the private sector to take on the risk of continuing low revenues would lead most train companies to give up and “hand back the keys”.
Rail executives have echoed calls from other business sectors to reduce distancing measures, especially given the lower risk of Covid-19 transmission with the introduction of mandatory face masks on public transport.
The industry calculates that a 1-metre separation would allow trains to run at 45% capacity, rather than the current maximum of 20%.
Calls have been further fuelled by the sight of airlines returning to business without any distancing inside planes.
The RMT union said the current agreements meant the taxpayer was funding the entire cost of the railway, while train operating companies continued to make a profit.
Its general secretary, Mick Cash, said the deals “simply cannot continue for the long term” and he urged the government to nationalise the railways.
“It’s time the government used that money to invest in our railways and bring them under public control rather than keeping the failed system of privatisation on life support,” he said.
The Rail Delivery Group, which represents train operators, said the government subsidy had enabled them to run vital services for key workers and prevented massive job losses in the sector.
John Thomas, the group’s director of policy, said the number of journeys had plunged by up to 96% due to coronavirus, and the government was “providing rail companies with temporary support so we can keep workers moving during this time of national need”.
He added: “We want to work together with government to evolve the current arrangements as we emerge from the crisis to ensure a reformed railway can work for passengers, support jobs, connect communities and help the economy grow.”
The DfT said it disputed the calculation of subsidy per journey. A spokesperson said: “We believe it is absolutely right to have taken on the financial cost of these journeys. Our intervention has protected thousands of jobs in the rail industry, and ensured that essential services, which frontline workers depend on, including NHS staff, continue to run.
“Our message remains that people should avoid public transport if possible. However, when passengers do return as the economy restarts, our intervention means the railway is ready and able to support the national recovery from Covid.”
