Brown Review into railways 'a missed opportunity', says TUC

By agency reporter
January 12, 2013

Richard Brown's Review into rail franchising, published 10 January, has missed the opportunity to improve the UK's rail system, says the Trades Union Congress (TUC).

Mr Brown concludes in his report that rail franchising is "not broken" but the TUC has expressed disappointment that he appears to have joined the government in turning a blind eye to the problems of rail privatisation.

Research published by the TUC's Action for Rail campaign in October 2012, revealed that train operating companies (TOCs) made a £2.7 billion net gain from taxpayers in 2011-12.

This analysis of official figures shows that in return for paying £1.17 billion in premium costs to run services, companies received total public subsidies of £3.88 billion in 2011-12.

Despite being huge net recipients of public money, the TUC says serious questions remain about the value that private train operators are providing.

A study published last year by Transport for Quality of Life estimated that train operating companies contributed just one per cent of the investment that went into improving the UK's railways.

This contrasts sharply with the total cost of privatised rail, estimated by the Transport for Quality of Life report to be around £1.2billion per year.

The TUC says it has long been warning that the cost of franchising has resulted in the most expensive fares in Europe, and comes at a time when the government is planning to close ticket offices, and remove staff from trains and stations.

TUC General Secretary and chair of the Action for Rail campaign Frances O'Grady said: "This report shows how successive models of franchising have failed. However, instead of recognising that privatised rail operators are ill-equipped to provide a sustainable long-term public service, the review concludes that the UK needs more of the same.

"Our current system of corporate welfare - where train operators make a play of bidding for contracts knowing that their future revenue will be underwritten by the taxpayer - sadly looks here to stay.

"With such high costs associated with franchising and so little innovation or investment coming from the private sector, it is increasingly hard to justify the point of franchising."

She concluded: "Nothing appears to have been learned from the success of the publicly-owned East Coast Mainline, which has re-invested profits back into services. Instead, public rail subsidies will continue to end up in the pockets of shareholders. That is not my idea of putting passengers first and this review is a huge missed opportunity."


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