A railway that puts people before profit
UK railways need reform. Privatisation of our railways has led to a fragmented and dysfunctional system.
Since privatisation, more than £11 billion of public funds has been misspent: on debt write-offs, dividend payments to private investors, fragmentation costs including profit margins of complex tiers of contractors and sub-contractors, and higher interest payments in order to keep Network Rail’s debts off the government balance sheet.
At the same time, privatisation has failed to deliver on its promises. Genuine private investment makes an insignificant contribution to the railways, representing about one per cent of the total money that goes into the railway each year. Our fares are among the highest in Europe, many of our services are overcrowded and rely on obsolete rolling stock.
We need a railway that delivers for people before profit.
In most European countries apart from Britain, the tracks and other infrastructure are publicly-owned and there is also a publicly-owned train operator that provides the majority of passenger train services.
We believe that the UK government should replace the current fragmented system with a publicly owned railway that makes sure that the system operates as a coherent whole, including:
- Bringing train operating companies back into the public sector (which can be done at no cost as franchises expire or fail)
- Bringing Network Rail into public ownership, thereby significantly reducing debt servicing costs.
- Shifting from the expensive and wasteful rolling stock leasing system to buying trains outright and using government purchasing to support UK train building.
Taking a fresh approach to the management of the UK’s rail services could lead to huge benefits for the travelling public and UK business.
- Removing complex interfaces, transaction costs, increased debt servicing and private profit and dividend payments from the industry could save over £1bn a year, resulting in lower fares and public subsidy.
- Greater efficiency from a more integrated system. In its final year, British Rail was well ahead of European comparators in terms of train kms per member of staff, this has worsened under privatisation.
- Reuniting rail under public ownership will simplify the system for the passenger, increasing accountability and transparency and enabling more integrated, flexible and less complicated ticketing.
- Ending wasteful competition for staff resources between train operating companies and taking a more productive approach to workforce planning, training and industrial relations.
- Greater public control over new train orders can ensure better value train manufacturing in the long run as well as enabling a more strategic approach to rolling stock that supports UK manufacturing.
- Eliminating safety risks associated with profit-driven cost cutting and sub-contracting and through a more coordinated approach to safety and critical safety work such as maintenance, track renewal and signalling across the industry.