Wednesday, 4 January 2012

Some Fares Facts

The British Association of Train Operators (ATOC) has issued a short guide to rail fares. I think it is worth restating here.

In response to the question, "Why do many fares rise every year?" they say,
"The overall level of fare rises is determined largely by Government policy. Since 2004, the Government has sought to sustain investment in the railways by reducing the amount that taxpayers contribute and requiring passengers to pay a greater share."

They go on to say that successive governments have done this in two ways:

"1. Around half of all fares are linked by a Government formula to July's inflation rate as measured by the retail price index (RPI). These are known as regulated tickets and comprise Season tickets for most commuter journeys and Off-Peak fares on most intercity journeys.

"2. Train companies set the remaining fares, known as unregulated tickets, (such as intercity journeys at busier times of the day). These generally cover journeys where passengers have choice about whether or not they travel by train and so prices reflect market conditions.

"Even these fares remain heavily influenced by Government policy. Operators have to meet tough financial commitments agreed with the Government when franchise agreements are signed. For a number of years, these payments have been shaped by Government policy to reduce the share paid for by taxpayers towards the cost of the running of the railways.

"Public funding for the railways has dropped by a third since 2006/7, whilst the money raised through fares has steadily increased. Currently, passengers contribute £6.5bn and taxpayers £4bn a year to the running of the railways."

I'm afraid I'm of the view that fare increases are inevitable and largely justifiable.  However, what I don't believe is that Government has proper control over the continuing inefficiencies in the railway system, particularly in infrastructure management and train procurement.

ATOC also produced a pie chart showing where the fares money goes.


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