£3bn Treasury black hole as WFH hit rail journeys

WORKING from home helped blow a £3billion black hole in public finances last year due to the fall in rail travel.

A damning National Audit Office report warned that taxpayers are propping up the railways in an ‘unsustainable’ way as costs exceed revenue from ticket fares.

Before the pandemic, the Treasury was making a net profit as 350million more journeys were being made each year.

But despite taxpayers subsidising the running of the railways by £3.1billion last year, there was a record level of cancellations, the NAO report confirmed.

‘The rail sector’s performance for passengers and the taxpayer is not good enough and has not been for some time. With key parts of reform now paused until the next parliament, long-standing issues on the railway remain,’ it said. ‘The cost of running services exceeds revenue at a level the Department for Transport views as unsustainable.’

‘Passenger services were also not punctual or reliable enough before the pandemic and performance in 2022/23 has fallen back to these levels.’ It noted that 13.7 per cent of trains arrived late last year, while 3.8 per cent were cancelled – the highest rate since records began eight years ago. This was equivalent to 860 cancelled trains each day.

The report continued: ‘ Since the pandemic, revenue has been affected by fewer passengers and changes in the type of journeys made. A greater proportion of travel is now on off-peak tickets, with fewer commuting season tickets and less business travel.’ Before the pandemic, in 2018/19, 1.75billion journeys were made. But last year there were just 1.38billion journeys, with a £3.1billion loss recorded.

The Government has launched a plan for overhauling the network with the creation of Great British Railways, but it will not be legislated for in this Parliament.

A DfT spokesman said: ‘ The £3.1billion of subsidies the NAO refers to are a result of external pressures – including the challenges of post-Covid passenger recovery – not related to rail reform savings.

‘We are now pressing ahead with improvements… like expanding pay-as-you-go ticketing, piloting simpler fares and announcing a target for rail freight growth.’

RMT boss Mick Lynch slammed ‘the Government’s shambolic management of our railways’, adding: ‘ Ministers promised reform after our privatised and fragmented railways resulted in the timetable meltdown in 2018, but since then the railways have lurched from crisis to crisis.’