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UPDATE: Where does the money go when you buy a train ticket?

Posted by SmartRail World Staff on Jan 3, 2014

The annual rise in rail fares in the United Kingdom have given passengers a rare insight into the economics of managing a modern railway. See below for an analysis of how the passenger's pound is divided up courtesy of the UK Department of Transport.

UPDATE: This story raised some questions from you SmartRail World readers, click the 'continue reading ' below the image to gain some further insights into the data from the Rail Delivery Group. The passenger's pound

Statistic from https://www.gov.uk/government/news/rail-fare-rises-lowest-in-a-decade

Following the publication of this information we spoke to the Rail Delivery Group and asked them some further questions:

Q. How can you have Investment in rail network and industry staff costs as separate? Do they not pay staff when investing in the network?

A. Industry staff costs refers to the cost of staff who are needed to run the day to day network (for example, train drivers, signallers, station staff). The investment figure is the amount that Network Rail spend on enhancing and renewing the rail infrastructure and while this does include the cost of staff who carry out this work (mainly contractors and project managers) this is a single figure percentage of that number. Material make up the biggest proportion.

Q. Does “industry staff” include all people in Network Rail, Train Operating Companies, Contractors and Department For Transport?

A. The figure includes all staff in Network Rail and train operating companies. DfT staff are, therefore, not included. Contractors are explained above so no, they don’t feature in this figure as, strictly speaking , they’re not needed to run the railway day-to-day. However in the NR bit of staff costs is the funding they give to ORR to run their organisation and NR’s proportion of British Transport Police’s costs. DfT staff, as with other funders staff, are not included.

Q. Is the profit of 3% before or after the subsidy?

A. The pie chart refers to how the industry’s income, which includes subsidy, is spent.

Q. Can you give an indication of where in the pie chart DfT monies comes into the equation, and where they go out?

A. The pie chart refers to how the industry’s income, which includes money from DfT, is spent. Expenditure of income from different sources is not separated out.

Many thanks to Daniel Golding and Seb Gordon from the Rail Delivery Group for speaking to SmartRail today. For more on the Rail Delivery Group and their work in the sector please see: http://www.raildeliverygroup.com/

Topics: Rail Fare Rises, UK Rail Industry, Features, Interviews, Passenger pound, Fare Collection, UK Department of Transport

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