Partnership railway s transformation in numbers

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2 Partnership railway s transformation in numbers Dataset on rail industry finances, performance and investment since December 2017

3 The economic benefits of rail The railway is vital to the economic health of the country and is a significant industrial sector in its own right: Each year the rail industry and its supply chain contributes up to 10.4bn in GVA Britain s railway provides benefits to the UK economy of up to 31bn a year, including: benefits to customers as well as companies using freight; reduction of congestion on roads; and wider economic impacts through closer links between businesses and communities. Investment from both public and private sectors through the partnership railway will secure almost 85bn of additional economic benefits to the country The railway and its supply chain employ 240,000 people with a further 100,000 job opportunities across the country anticipated by 2027 The industry has a target to create 20,000 new apprenticeships by 2020, 10,000 of whom will be new recruits from more diverse backgrounds Sources: Oxera, 2017, How does rail contribute to the UK economy? Oxera, 2017, Investment in rail: the economic benefits Rail Delivery Group, 2017, In Partnership for Britain s Prosperity 3

4 Rail s transformation in numbers Highlights from the RDG dataset: Sustained rise in passenger journeys and freight carried Train companies making record contributions to government - industry income covers day-to-day costs and supports investment Taxpayers paying smaller share of rail costs and customers a larger share the result of policy of successive governments Government support to the railway is at its lowest level since and private sector investment at its highest level since being measured Safety, satisfaction, number of services and fleet size have improved significantly Delay incidents down but more congested network means worse impact on customers Government spending funds extra capital expenditure to boost capacity and improve services 4

5 Partnership railway - finances snapshot

6 bn Analysis of Revenues and Costs The 10.5bn of revenue generated by the rail industry now more than covers the dayto-day running costs of the railway ( 10.3bn) 16 Industry financials ( bn) Day to Day Running Costs 10 Passenger income, 10.0 TOC operating costs, Other income, 0.5 Industry Generated Income NR operating and maintenance expenditure, Government funding, 3.7 Income NR capital and financing costs, 3.9 Costs Note: Day-to-day running costs excludes renewals and enhancements costs Source: ORR GB rail industry financial information

7 billons at prices Government Support to the Rail Industry Train operating companies in paid central government a net total of 0.8bn, whereas in they received 1.4bn from central government in real terms. Total Government support to the industry is at the lowest level since Grant to Network Rail peaked in ( 4.3bn), in this was 4.1bn Government support to the rail industry since (real terms) Net payments to/from TOCs PTE grants (for national rail services) Grant to Network Rail Total Gov't support Other elements of Gov't support Note: This data is presented from due to a change made to the allocation of funding for infrastructure from that year Note: Other elements of Government support comprises central government expenditure on major projects, support to arms length bodies including British Transport Police and Transport Focus, a grant to British Rail to finance its residual activities, and other adhoc rail projects. Source: ORR data portal 7

8 % operating margins Train Operating Company Operating Margins Operating margins as a proportion of revenue are lower than when franchising began 10% TOC operating margins 8% 6% 4% 2% 3.6%3.5% 3.5% 3.0% 2.6% 4.9% 5.2% 4.1% 4.2% 4.1% 4.2% 3.7% 3.0%3.1%3.0% 2.9%2.9% 2.4%2.3% 0% Note that operating margin (gross of tax) is used as profit margin (net of tax) is not available for the full time series. Source: Rail Industry Monitor, Statutory Accounts and ORR GB rail industry financial information

9 Passenger Share of Rail Income Passenger share of total rail industry income has increased from 57% in to 70% in , a slight fall from In , passengers contributed 6.6bn compared to 10.0bn in Over the same period the average price paid per journey in real terms reduced from 5.66 to % 70% Passenger income as a share of rail industry income 68% 71% 70% 65% 62% 60% 55% 57% 58% 50% 45% 40% Note: Rail industry income excludes DfT loans to Network Rail Source: ORR GB rail industry financial information and previous releases 9

10 Partnership railway - delivering a vital and growing public service

11 Passenger journeys (millons) Journey Growth Passenger numbers have more than doubled since , the first full year of rail franchising Average annual journey growth has been 3.84%, compared to 0.5% in the 18yrs prior Rail journeys per head of population have increased by 82% 2, , , , , , Passenger journeys since 1950 Passenger Journey Growth Period CAGR 1 65 years to % to % to % 1 Compound Annual Growth Rate Rail journeys per head of population Year Annual journeys per capita Source: ORR data portal 11

12 Thousand Passenger Km per Km of track Rail Volume Growth vs European Peers Distance travelled by passengers per km of track has nearly doubled since 1997, outperforming growth seen from many of its European peers 6,000 Thousand Passenger km per km of track by European Peers (1997 vs 2014) Growth in Thousand passenger km per km of track (1997 v 2014) 5,000 UK 94% 4,000 SE FR 57% 73% 3,000 DE 26% 2,000 ES 14% 1,000 0 NL UK IT FR DE ES SE NL IT 3% 8% Source: Eurostat database 12

13 % Movement Passenger Journeys vs GDP Growth Since , journey growth has been more than double GDP growth 120% 100% Rail journey and GDP growth GDP Growth Journey Growth 105% 80% 60% 56% 40% 44% 20% 14% 0% Source: ORR data portal and Cebr Economic Forecast 13

14 Change in modal share (1997 = 0%) Modal Change Shift to Rail Since 1997, National Rail has increased its modal share of all travel by 3.4%, while domestic air travel has remained broadly flat and road travel has fallen by 4.2% Passenger km by road have increased by 22bn since 1997 to 707bn passenger km with National Rail increasing by 30bn to 65bn 4.0% Change in Transport modal share since % 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% Air (Domestic) Road National Rail Source: Department for Transport Statistics and ORR data portal 14

15 Growth in Rail European Comparisons Growth in UK rail s share of passenger transport has far outstripped other European countries with only Sweden seeing similar growth Spain, France and the Netherlands have all seen around 1 percentage point increase in rail s modal share since 2000 whereas UK rail s share has increased by 3.4 percentage points European passenger transport modal share between 2000 and 2015 Train Bus Car United Kingdom Sweden Spain France Netherlands Germany Italy Percentage point change, 2000 to 2015 Source: Eurostat database 15

16 Index (2002 = 100) Mode of Transport to Work National Rail as the chosen mode of transport to work has increased by 73% since 2002, compared to a 8% increase in car commuting, a 49% increase in other types of rail and an overall increase of 12% Mode of transport to work Car National rail Other rail (underground, light railway systems and trams) Total travelling to work Source: Department for Transport Statistics and ORR data portal. (N.B. Oldest available data is 2002) 16

17 Index (2002 = 100) Index (2002 = 100) Trips per person all modes vs rail Whereas trends across all modes for trips per person for all journey purposes have fallen by 13% since 2002, trips per person by rail has climbed by close to 60% Trips Per Person Per Year All Modes (Excluding Short Walks) Trips per person by rail (NTS) 110 Commuting Business Leisure 190 Commuting and business Leisure Source: Department for Transport Statistics, National Travel Survey Source: Department for Transport Statistics, National Travel Survey 17

18 Journey Growth in London & South East Journey growth is not just due to increased demand from commuters - since total rail journeys in London and the South East have increased by more than rail commuting into Central London Rail journeys have also increased faster than journeys on the London Underground Growth in rail journeys versus growth in commuter numbers Total rail commuters into Central London Total LSE rail journeys Index 100= Source: ORR data portal, LUL Statutory Accounts Journey growth - Rail versus London Underground to Journey growth London Underground 65.6% London and South East rail 106.0% Source: ORR data portal, LUL Statutory Accounts 18

19 Billion tonne kilometres Bn Tonne Km Rail Freight Growth in Goods Carried Before , rail freight was in steady decline (down 59% between 1953 and ) It has since stabilised with growth in 13 of the 19 years since then A sharp fall in coal moved (from 6.5 to 1.4bn tonne kilometres) almost single-handedly drove the decline between and Domestic intermodal carried has increased by 93% since Freight carried 25.0 Freight Carried by Commodity Coal Metals Construction Oil and petroleum International Domestic intermodal Other Source: ORR data portal Source: ORR data portal 19

20 Grwoth since Freight Growth vs European Peers Of comparable European railways, UK freight mode share growth, at 3.0% since , is behind only Italy and Germany (which has a more favorable regulatory environment where lorries are not permitted on roads on Sundays) Rail freight modal share growth 6% 4% 2% 3.0% 5.3% 4.3% 2.2% 0% -2% -4% -3.3% -3.3% -4.1% -6% 1998 to 2015 United Kingdom Germany Italy Netherlands Sweden Spain France Source: Eurostat database 20

21 Employment in Rail The rail industry and its supply chain employ up to 240,000 people The number of people employed by train companies has increased by 47% since 1997/98 Train Company Employees and UK Workers Train Company Employees All UK Workers 50% 45% 47% 40% 35% 30% 25% 20% 20% 15% 10% 5% 0% Source: ORR data portal and ONS 21

22 Sustainability CO 2 Emissions Already a relatively green mode of transport, CO 2 emissions generated per kilometre by passenger operators have decreased by 25% since Traction energy - CO 2 emissions per km 65.0 g/co2e per passenger km g/co2e Source: ORR data portal 22

23 Partnership railway - successful for customers

24 DE SE IT ES FR NL UK Fatal train accidents Injuries and fatalities per billion passenger miles Safety Safety has continued to improve. The UK continues to be amongst the safest railways in Europe for customers and workforce. UK train accidents with passenger or workforce on-board fatalities since Train accidents with passenger and workforce fatalities 10 year moving average 6 All network Injuries and Fatalities Per Billion Passenger Miles (2014) Source: ORR data portal Source: Eurostat Note: Includes all recorded injuries and fatalities on the rail network including workforce and those at level crossings 24

25 Index (1999/00 = 100) Average Journey Price vs Average Earnings Average earnings (+1.7%) have grown faster in real terms than the average price paid per journey (-5.6%) since The average price paid per journey in real terms was 5.46 in In contrast, the average price paid per journey on a Season ticket has fallen in real terms by 15.1% since and has been relatively flat since Average price per journey vs average earnings in real terms Average earnings Average price paid per journey Average price paid per journey (season tickets) Source: ORR data portal and Cebr Economic forecast Note is the first available year for Average Earnings within the Cebr Economic Forecast 25

26 Index: 2010/11 = 100 Average Price Per Passenger Mile The average price paid per passenger mile has increased by 1.8% in real terms since Prices paid for Anytime fares have increased over this period (by 2.9%), compared to -0.1%, 6.0% and 1.0% increases for Seasons, Off-Peak and Advance respectively as operators price tickets to encourage people to travel on cheaper Advance fares Price paid per mile, prices Anytime Off-Peak Advance Seasons Total 94 Source: ORR data porta. Product level information only available from

27 Average Journey Price vs Utility Prices Since 1998 average rail journey price (per km) has increased in real terms by 4.9%, whereas water prices increased by 14.9%, electricity prices are up 39.1% and gas prices up 84.6% Source: ONS RPI component data, ORR data portal 27

28 % of total passenger journeys % of total passenger revenue Journeys and Revenue by Ticket Type Nearly half of all passenger revenue now comes from cheaper time restricted tickets (Off-Peak, Super Off-Peak and Advance), up from 39% ten years ago, whilst the proportion of journeys on discounted tickets has also increased. Journeys on anytime travel and restricted times Revenue from anytime travel and restricted times 100% Anytime tickets Time restricted tickets 100% Anytime tickets Time restricted tickets 90% 80% 70% 31% 33% 90% 80% 70% 39% 46% 60% 60% 50% 50% 40% 30% 20% 69% 67% 40% 30% 20% 61% 54% 10% 10% 0% % Source: LENNON data Source: LENNON data 28

29 A 99 S 00 A 00 S 01 A 01 S 02 A02 S 03 A 03 S 04 A 04 S 05 A 05 S 06 A 06 S 07 A 07 S 08 A 08 S 09 A 09 S 10 A 10 S 11 A 11 S 12 A 12 S 13 A 13 S 14 A 14 S 15 A 15 S 16 A 16 S 17 % Customer Satisfaction Since surveys began in 1999 customer satisfaction has increased from 76% to 83% The number of customers rating their journey as satisfied or good is now 1,437 million, up from 708m in 1999, an increase of 103% Customers' Overall Satisfaction % satisfied or good' % neither nor' % dissatisfied or poor' Annual-equivalent journeys in millions rated as "Good" or "Satisfied" Difference Journeys (m) 708 1, Source: ORR data portal and National Rail Passenger Survey Note: A Autumn, S - Spring Source: Network Rail Passenger Survey (started in Autumn 1999) 29

30 % % Customer Satisfaction Whilst overall satisfaction has increased from 76% to 83%, satisfaction with value for money has increased from 41% to 47% and those satisfied with service punctuality has increased by 3 percentage points. Customers' satisfaction with value for money % satisfied or good' % neither nor' % dissatisfied or poor' Customers' satisfaction with punctuality/reliability % satisfied or good' % neither nor' % dissatisfied or poor' A 99 S 17 A 99 S 17 Note: A Autumn, S - Spring Source: Network Rail Passenger Survey (started in Autumn 1999) 30

31 % Customer Satisfaction vs European Peers 2013 Customers in the UK score rail services higher on a number of measures than do those in France, Germany, Spain and the Netherlands Overall, rail customers in the UK were more satisfied than those of any other major European railway 100 Customers' Satisfaction vs European Peers on Key Metrics UK France Germany Spain Netherlands Punctuality / reliability Train frequency Information provision - during the journey Cleanliness and good maintenance of stations Source: EU Commission, 2013 (N.B. most recent survey) 31

32 Partnership railway - successful for taxpayers

33 Running Costs vs Industry Generated Revenues In , the railway ran at a 2bn a year loss in terms of its day-to-day costs, in it more than covered those costs Running Costs vs Industry Generated Revenue 12 Industry-generated revenue Day-to-day industry running costs bn Note: Day-to-day running costs excludes renewals and enhancements costs Source: ORR GB rail industry financial information

34 TOC payments to Government ( millions) Government funding share of rail income TOC Payments Vs Government Funding Net payments from Train Operating Companies to government increased to 843 million in real terms, while government funding as a share of total rail industry income remained at 26% in TOC payments to Government Vs Government funding TOC payments to Government ( prices) Government funding share of rail industry income % 45% % 32% 32% % 26% 26% 40% 35% 30% 25% 20% 15% % % 0% Note: As per ORR' s GB rail industry financial information , government loans to NR are not included Source: ORR data portal and ORR GB rail industry financial information (plus previous releases) 34

35 Cost per passenger mile Passenger Train Unit Costs Since , passenger train company costs per passenger mile have declined by 8.8% in real terms TOC costs per passenger mile 27p 26p 25p 26p 25p 25p 25p 24p 23p 23p 23p 22p 21p 20p 19p 18p 17p 16p 15p Note: TOC costs cover staff costs, rolling stock costs and other costs (payments to Government are excluded) Source: ORR data portal 35

36 Infrastructure Costs per Train Mile Network Rail operating costs have fallen by 46% since This reduction is primarily due to the introduction of new technology, innovation and insourcing some key activities Cost ( ) NR operating costs per train mile, prices Source: Network Rail 36

37 Tonnes per freight train Freight Company Efficiency Freight efficiency has improved as longer and heavier freight trains are now in operation. The number of trains has fallen by 44% since but tonnes per freight train have increased by 63% Productivity of freight services Source: ORR data portal 37

38 Partnership railway connecting communities

39 More Services Investment means train companies are running 28% more services since Frequency of services on many key long distance routes has doubled Number of planned services per year (m) Source: Network Rail % change % Trains per day Off-peak hourly frequency Year % Change % Change Manchester to London % % Leeds to Edinburgh % 0 1 n/a London to Norwich % % Leeds to London (1) % % London to Sheffield % % Bristol to London (2) % % Glasgow Queen Street to Edinburgh (3) % % Leeds to Huddersfield to Manchester (4) % % Cardiff to London % % Source: Network Rail (1) Virgin East Coast only; excludes East Midlands Trains (2) Bristol Temple Meads only ; excludes Bristol Parkway (3) Express services via Falkirk only; excludes other routes (4) Includes services to Manchester Victoria 39

40 Intensity of Network Usage 1.4 million more trains arrived as planned in compared to , nearly 3,800 extra trains per day Until extra services were accommodated on the railway with increasing punctuality 8.0 Planned Train Services and Train Services Arriving On-Time Total Planned Trains Services Number of train services arriving as planned Hatfield (Oct 2000) / / / / / / / / / / / / / / / / / / / /17 Million train services Source: Network Rail and ORR data portal 40

41 Moving Annual Average (MAA) % Punctuality of Passenger Services In , 88.7% of train services (equivalent to 1.5bn customers) arrived as planned. This equates to 776 million more punctual journeys than in Punctuality on long distance and regional & Scottish services is static or improving slightly compared to but in London & South East, where the railway is most congested, it is declining Public Performance Measure by Operating Sector Long Distance Regional & Scot London & South East All Franchised Operators 95% 90% 85% 80% 75% 70% 65% 60% Source: ORR data portal Note: as planned relates to the PPM measure defined as arriving at the final destination within five minutes of the planned timetable for London and South East, Regional and Scotland operators, or within ten minutes for Long Distance operators). 41

42 Number of delay incidents (thousands) Number of Incidents and Delay Minutes Individual incidents of delay fell by 3% between and However, the impact of each delay has grown as the railway is more congested Number of Incidents and Delay Minutes per Incident 36.0 Incidents Delay Minutes per Incident Delays mins per incident Source: Network Rail 42

43 Delay mins (04/05 = 100) Freight Delays Delay minutes suffered by freight companies have reduced by 41.0% since Similarly, delay caused by freight companies has reduced by 43.3% The rail freight industry has undertaken many performance initiatives in recent years. Fewer and longer freight trains have also resulted in fewer delays to other services Delay minutes - Freight Operators Index - Delay Minutes Caused Index - Delay Minutes Suffered Source: Network Rail 43

44 Partnership railway investing to improve

45 Orders Placed Rolling Stock Passenger Services Compared to there are 2,500 more carriages on the railway, a 25% increase Britain s train fleet is increasing faster than at any time in recent decades. Rail companies have committed to running 5,700 new carriages by 2021 and in ,850 new carriages were ordered. Around half of these new vehicles will be built in Britain Change in total fleet size Growth Total vehicles in passenger use 10,400 12,968 25% 2,000 Orders placed for mainline passenger rolling stock (i.e. excludes LUL/light rail) 1,800 1,600 1,400 1,200 1, Source: ORR data portal 45

46 Private investment ( Millions) Private Investment in Rail Private investment in rail has increased 63.5% since driven by the increased investment in rolling stock, up by over 90% to 767m in Private investment in the rail industry 1,000 Track and Signalling Rolling Stock Stations Other Investment Note: In there were a large number of rail yards sold to Network Rail which is included in the 'Stations' category. Source: ORR data portal 46

47 bn bn Infrastructure Expenditure The cost of running the railway has fallen by 20% since This has supported a 255% increase in investment by governments on enhancements over the same period 8 7 Network Rail operating and maintenance expenditure ( prices) Operating expenditure Maintenance expenditure 8 7 Network Rail renewal and enhancement expenditure ( prices) Renewal expenditure Enhancement expenditure* Source: Network Rail Regulatory Accounts Note: * Network Rail funded enhancements only Source: Network Rail Regulatory Accounts 47

48 Bn Euros Infrastructure investment by European Union Members Britain is investing over 1bn more than France and over 3bn more than Germany on its infrastructure, despite both countries having over 13,000km more of track Total infrastructure expenditure in EU Member States 10.0 Maintenance Renewal Enhancements UK FR DE IT ES PL SE AT NL NO BE HU CZ DK FI LT RO LV SK LU SI HR PT BG Source: Eurostat

49 Methodology All data is the most recent data available at the time of compiling Where possible, data is from as this was the first full financial year after all franchises had been let Earliest data available from the most reliable data sources presented whenever data from is not available RPI has been used where figures are adjusted for inflation and set at prices

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