Rail companies have plans for double-digit budget cuts next year and it is becoming more likely that the number of trains on the UK rail network will fall as the rail industry grapples with declining revenues since the coronavirus pandemic. increase.
The transport ministry, which manages the railroad’s finances, told rail operators they needed to cut spending, according to three people familiar with the matter.
Budget cuts of 10% or more were being discussed, but the exact amount may vary by company, and some operators may not be facing such drastic cuts, two sources said. said.
Railway executives said it was inevitable that fewer trains would run as a result of budgeting.
“These are very demanding cost reductions and there are concerns that they will affect the rail and passenger experience,” said another.
Rail operators are preparing budgets for the fiscal year starting in April 2023 under the direction of DfT. DfT said in March 2020 he assumed all costs and revenue risks from the industry when Covid caused an almost instant collapse in passenger numbers.
The new pressure on the industry’s finances comes as the number of high-cost commuters falls in parallel as passenger numbers and ticket revenues struggle to recover from the effects of the pandemic.
According to the industry regulator, the Railways and Highways Authority, total passenger revenue was £2.2bn for the three months from July to September, the latest quarter for which data is available. This represents 71% of £3.1bn for the same period in 2019, adjusted for inflation.
The industry earned £164m in season tickets during this period, just 29.4% of the £556m it made three years earlier. The number of peak tickets sold has also plummeted as more people adjust their commute times to avoid the most expensive trains.
Ministers have long said the industry must reform to save money and adapt to changing travel patterns.
But the shadow transportation secretary, Louise Hay, said the government needed to “clean up” about its plans and “stop evading accountability” for railroad problems.
“After years of broken infrastructure promises and indefensible refusal to hold failing private operators accountable, rail passengers across the country are forced to rely on failing services. gone,” she said.
“The veil of secrecy over the steep cuts to an already alarmingly poor service is very troubling.”
The railroad bankruptcy is also responsible for some of the greatest industrial unrest in a generation, with unions on strike waves over disputes over wage increases and changes to working practices.
With the budget so tight, the government said a significant increase in wages had to be tied to modernization, provoking clashes with the RMT unions.
The Ministry of Transport said: We will continue to ensure that all rail operators continue to provide services that better meet post-pandemic demand in the most cost-effective manner. ”
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