Press Story

The figures show the levels of government subsidy has fallen for the Northern Rail and First TransPennine Express train operating companies (TOCs), but routes elsewhere in England pay in to the Treasury. The figures show that in the year 2014/15:

First TransPennine Express received £43.5m in subsidy, falling from £61.5m in 2013/14; while Northern Rail received £112.7m – falling from 172.1m in 2013/14.
First TransPennine Express received 2.3p per passenger kilometre (falling from 3.7p in 2013/14) while Northern Rail received 4.9p, a fall from 7.8p in 2013/14.

But analysis of more comprehensive Government figures shows that Northerners are actually losing out and investment in transport infrastructure is being swallowed up by London. It found:

In 2013-14, rail spending per head across the North was £84, compared to London’s £298 and the UK average of £105. Despite 23.5 per cent of the UK’s population living in the North in 2013, it received only 18.8 per cent of the UK’s expenditure on railways in 2013/14. In turn London, with only 13.1 per cent of the UK’s population, received 36.8 per cent of the spending.
Total spending on railways actually rose between 2012-13 and 2013-14, but this was due entirely to increases in expenditure in London and Scotland – while the North was cut by £47m, spending in London rose by £224m; the North West was hit disproportionately badly by the cuts, making £30 million contribution to the railway expenditure savings.
Between 2012-13 and 2013-14, national expenditure on rail per head rose by 1.2 per cent with rises in expenditure in London (by 8.4 per cent) and Scotland (by 3.4 per cent); the North on the other hand had its per capita expenditure cut by 3.9 per cent – while other areas saw even sharper reductions.

If, over the past five years, the North’s per head expenditure on rail had equalled the average across all UK regions, it would have risen by £1.9b (27.9 per cent) from £6.8b, to £8.7b.

The figures come as key projects in the Northern Powerhouse and Northern Hub are paused, delayed or shelved.

Luke Raikes, IPPR North Research Fellow, said:

“In isolation these ORR figures might appear to show that the south is ‘subsidising’ the rail services of people in the North. But this is just a small part of a bigger picture on rail spending – more comprehensive government figures show that that spending per capita on rail is far higher and increasing in London, while in the North spending is lower than average and has been cut.

“Due to a long history of underinvestment, Northern passengers still travel to work on overcrowded Pacer trains and face sluggish journey times and connections between major towns and cities. If the North is to grow and prosper then it needs the investment in a modern, efficient rail network. But despite the rhetoric, the government’s infrastructure pipeline and recent announcements indicate that that the historic investment gap looks set to get worse, not improve.

“This highlights the need for some of these responsibilities to be devolved – as is common in other countries. If the North is to truly fulfil its economic potential then it can’t be entirely dependent on central government, and more decisions about the North’s transport infrastructure should be made in the North by the new Transport for the North organisation.”

ENDS

Notes to editors:

All figures are in real terms.

The country and regional analysis is the source of historical spending, and was published by HM Treasury in December 2014.

National spending refers only to the total attributed to UK regions and countries, therefore excluding spending outside of the UK.

The national infrastructure pipeline is the source of planned infrastructure expenditure and was published by HM Treasury in July 2015.

Planned expenditure figures only include projects in which public money is involved (public–private or public only), and include expenditure from 2015/16 onwards.

IPPR North published preliminary ideas for a body called ‘Transport for the North’ as part of our work on economic prosperity in the north of England in November 2012. We argued that the remit of this body should be to work on key strategic transport issues across the three northern English regions and be a key means of improving transport integration in England.

The latest report sets out a blueprint for how the North can move towards an enhanced Transport for the North body over the next 10 years (a timbale is provided in the report summary). Setting out a 10-year blueprint for what a modern, integrated transport network should look like, TfN would ultimately:

Appoint a Transport Commissioner for the North, who would be accountable to the public and be a figurehead for developing northern transport;
Move towards a contactless, cross-boundary ticketing system – using mobile phones and contactless payments for journeys across different modes of transport;
Manage rail franchises, rolling stock and stations – to do away with outdated Pacer trains, and make overcrowded services and platforms a thing of the past.