28th February 2025
How further rail reform could fund a fare freeze
Introduction RMT warmly welcomed the government’s commitment to create Great British Railways. A single, integrated publicly owned railway is something that the union has fought for since the disastrous privatisation experiment began in 1994. The passage of the public ownership Act in December and the consultation on the new publicly owned body, which opened last month are historic steps forward. As the Secretary of State Heidi Alexander, rightly noted at the time, this will save £150 million in Train Operating Company profits every year. When the Tories blasted the railway into a fragments 1994, they created a new set of parasitic private companies who turned taxpayers’ money and passenger fares into shareholder dividends for their City owners. The government has taken decisive action to tackle the most obvious of these, the train operating companies, who are finally being exiled from passenger operations through the Passenger Rail Services (Public Ownership) Act. But less well known are the other parasitic interests who remain on the railway. Tackling these interests could save Great British Railways £630 million a year in profit leakage. In this briefing, we explain how. Table 1: Savings from further rail reform Profit leakage from Great British Railways
Value in 2024
Rolling Stock Companies
£331 million
Sub-contracted renewals work for Network Rail
£180 million
Outsourced ‘ancillary’ work for Train Operating Companies
£126 million
Total
£637 million