Dream of rail privatisation falls flat ten years on

17 August 2005

5th November 2003


On the tenth anniversary of the Railways Act 1993, which created the privatised railway, Transport 2000 reveals the rising costs of Britain’s rail network. On 5 November ten years ago, the Government put a powder keg under British Railways with the granting of Royal Assent to the Railways Act 1993. The act set privatisation in motion and promised greater efficiency, yet ten years on new research for Transport 2000 shows the reverse has happened.



According to the research, carried out by Roger Ford and published in The Rising Cost of Britain’s Railways, public sector support for our railways in 2003-04 is expected to total £3.84 billion. In British Rail’s last year as operator of an integrated railway the total subsidy was £1.325 billion (at 2003-04 prices).


Revenue, which the architects of privatisation expected to rise dramatically, has crawled from £4.94 billion in 1989-90 to an expected £5 billion this year.


The cost of the West Coast Main Line route modernisation now stands at £16.68 million per mile (at 2000-01 prices), compared with the East Coast Main Line modernisation in the 1980s at £1.8 million per mile (at 2000-01 prices) or even the French TGV Est – a completely new, high-speed line – at £10.84 million (at 2000-01 prices). The costs of many areas of work are now well in excess of twice those at privatisation.


A quick appraisal of the claims made ten years ago shows that many of the grand hopes of privatisation are still to be met:



John MacGregor, then Secretary of State for Transport, claimed that privatisation would mean “greater efficiency”. Total public support for the railways is now nearly three times more than in the last year of BR. Back in 1993, a report for Transport 2000 by Steer Davies Gleave predicted that costs would increase between 15 and 28 per cent, meaning higher fares and higher revenue support from the taxpayer. Indeed fares rises have outstripped inflation, subsidy has increased and costs have too, by rather more than Transport 2000 predicted.


Operational benefits

The hope was that operational convenience would cease to take precedence over customer needs. Since the fragmentation of our railways, practices such as stopping late trains short to allow them to catch up with the timetable, and neglecting to hold connecting services so as to minimise the effect on performance figures have become commonplace.



In 1996 Sir George Young, MacGregor’s successor at the Department of Transport, talked of a “renaissance” that would see performance rise from the much criticised levels BR achieved. In 1992-93 BR achieved nearly 90 per cent of arrivals on time. The latest figures from the SRA showed just 80 per cent in 2002-03.



Not all fears of those who opposed the privatisation have been realised, though. Certainly, fears of line closures, service reductions and declining passenger numbers have not been borne out. In fact our railways are now carrying more people than ever before and the numbers keep rising. Other good news stories include the recent spate of new trains coming onto the tracks and the opening of the Channel Tunnel Rail Link. On the ground, the picture is patchy. Where there has been investment and innovation there has been improvement. But passengers are still left waiting for these benefits to be experienced across the network.


Transport 2000 Public Transport Campaigner Mick Duncan commented, “The hopes and dreams of the Privatisers have not been matched by reality. Costs, subsidies and fares have rocketed and performance has deteriorated.”


But he added: “Thankfully, the current shape of the railway is almost unrecognisable from the fractured, free-market picture outlined in the 1993 act. Network Rail’s taking-over of maintenance work and the Strategic Rail Authority’s new hands-on approach to franchising represent a much more integrated and indeed interventionist railway than the Government tried to create. It turns out that British Rail ran a pretty good operation. Let’s hope that the SRA and Network Rail can hammer down costs and get us back on track.”


But the legacy of 1993’s privatisation was summed up by Jonathan Bray, ex-chair of Save Our Railways, writing in Transport 2000’s Platform Bulletin this month as: “The high watermark for the worst, and most unpopular, excesses of the application of free market fundamentalism to the provision of public services.”

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