Operators prepare for challenging budget cuts in 2022

Train operators have been told to cut hundreds of millions of pounds from their running costs next year.

The Department for Transport has written to the managing directors of passenger train companies, setting out their budgets. The Rail Delivery Group and individual train operators have confirmed to RAIL that letters outlining spending restrictions have been received.

A Government source said final decisions had not yet been taken. But one train operator indicated that its budget was likely to be reduced by more than 10% from April 2022.

In 2020-21, the railway received £10.4 billion of additional support compared with before the pandemic, according to the latest Office of Rail and Road figures.

Passenger numbers recovered to 70% of pre-pandemic levels in autumn 2021, but there are initial indications that concern about the latest Omicron variant of the COVID virus has again suppressed demand for travel. Demand for some London services dropped by up to 10% in the first days of December.

One train operator told RAIL: “We all get the fact that demand is low… and will stay low. We recognise that we have reached a point where it is difficult for us to take more than we need as an industry. We are competing for funding against schools, the NHS, and so on.

“The concern for us is the scale of what we are being asked to do. This is very definitely a Treasury ‘ask’. It is not being driven by the Department for Transport.

A Department for Transport spokesman said: “As taxpayers would expect, we have asked operators to provide credible and sustainable business plans which ensure taxpayer money is used efficiently, to deliver exceptional services, promote recovery to reset the balance in financial support and ensure the railway has a bright future.”

To read the full story, see RAIL 946

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