8 January 2025
Private train operators award themselves bumper payouts as nationalisation looms On 4th December, Transport Secretary Heidi Alexander told the House of Commons that following Royal Assent to the Passenger Rail Services (Public Ownership) Act, she was ‘today launching the programme to transition passenger rail services currently operated by privately-owned operators into public ownership’. This was, she said ‘a crucial first step towards fundamental rail reform.’1 In the same statement, she confirmed that the first three franchises to come into public ownership would be c2c, South-Western and then Greater Anglia in autumn 2025: ‘The Government will issue an expiry notice to Greater Anglia in due course to confirm the exact transfer date.’2 Thereafter it was expected that a franchise would come into public ownership every three months according to the expiry of their contracts or core terms. As the Transport Secretary noted this would create immediate savings from the management fees paid to private train operators: "At the moment, we pay roughly about £150 million pounds in management fees to the train operating companies."3 These companies can turn these fees into dividends, subject to the agreement of the Secretary of State, which under these contracts, cannot be unreasonably withheld. In this briefing we show what the private companies operating passenger services have done with their fees, with the agreement of the Secretary of State under the last administration, in the year up to March 2024.
This Act does not cover the devolved Concessions, the Elizabeth Line, London Overground and Merseyrail, where the power to bring them into public ownership already lies with the devolved transport authorities that procure them, TfL and Merseytravel and their devolved Mayoral Authorities, the GLA and the Liverpool City Region. 2 https://questions-statements.parliament.uk/written-statements/detail/2024-12-04/hcws281 3 https://www.independent.co.uk/business/three-rail-firms-to-be-brought-into-public-ownership-butfares-will-still-rise-b2658561.html 1