Authorities warned over trap in government plans to devolve rail funding
Regional and local authorities need to treat Government plans to devolve railway funding to them with some caution, according to Chris Cheek, editor of the TAS report Rail Industry Monitor 2005.
Writing in the editorial to this year’s edition of the 400+ page report analysing the finances and performance of the rail industry, Cheek warns authorities that greater power and influence over local rail services would also come with the responsibility when things did not go according to plan. This could force local politicians to take the blame for service cuts and fare increases because of Treasury cuts in rail funding.
Without their own revenue raising powers, authorities will be at the mercy of Government rule changes: this could leave them with no alternative but to get the funds through further increases in Council Tax – a system which, the report claims, has almost reached the limit of the money it can be expected to raise.
"Many observers argue that the Government plans represent a trap for local and regional politicians, and that Whitehall’s real motive is to save money whilst ensuring that somebody else … takes the blame," claims the report.
But the news need not necessarily be all bad, Cheek acknowledges. "Ministers have repeatedly said that they are not looking for another round of Beeching-style cuts, and maybe we should take them at their word," he suggests. "If so, then the ability to find and implement local solutions could yet offer regional networks’ best hope for survival and expansion."
The report highlights some of the strong progress made by regional rail networks since privatisation. Patronage has grown strongly – and is now 71% higher than 20 years ago. It is 45% ahead of where it was at the peak of the last economic boom in the late 1980s, says the report. Regional train operators have reduced their operating cost per kilometre by 20% in real terms, and are running 12% more train miles with 6% fewer staff. Passenger revenue per employee has grown by over 40% in real terms since 1996/97, the report estimates.
Despite these achievements, there are still problems, the report acknowledges: average train load on regional services is lower – around 48, compared with 110 in London and the South East, and 138 on InterCity services. Revenue yields are lower, too, at 7.65p per passenger kilometre in 2003/04, compared with 9.68p in the south east and 10.45p on InterCity.
ENDS
- For further information, contact Chris Cheek on 0870 900 1440.
- To view the full Executive Summary of the report, click HERE
- Click HERE to see the other RIM 2005 Release, "Train operators continue profit recovery."
NOTES TO EDITORS
- TAS Publications & Events is the publishing arm of The TAS Partnership. Founded in 1989, TAS has since grown to become the UK’s leading specialist public transport consultancy. Its recent clients include the Department for Transport, the Scottish Executive, and local authorities and transport operators throughout the country.
- Rail Industry Monitor 2005 is the eighth edition of the report first published in 1993. The full report is available, priced GBP235, from www.tas.uk.net or on our credit card hotline, 0870 900 1440. Individual volumes covering specific topic areas are also available – priced from GBP45.