UK rail operators offer government a choice: Pay up, relax lockdown, or stop services

Putney station, south west London. Image: Getty.

This story might sound familiar: A collapse in ridership during the Covid pandemic has destroyed the finances of an entire transport network. Now those who run that network are demanding an injection of public money – or, they say, its future viability is in question.

This time, the network in the spotlight is Britain’s railways. Over the past three months, the rails have seen just 30 million passengers. Compare that to 439 million in the same time period last year – a drop of 93%.

The network is run by private rail operators, normally as franchises in which train operating companies (TOCs) pay a fee and bank the revenues. But to ensure that trains kept running for those who needed them, the government introduced “emergency measures agreements” on 23 March, replacing that longstanding franchise system with a management contract one, in which the operators are paid a set fee, equivalent to a 2% profit margin on their pre-pandemic operating costs. Essentially, it was an admission that the government wanted trains to keep running more than it wanted TOCs to bear the financial risk.

To pay for all this, according to figures released by the government this week, the government has approved around £3.5bn of extra spending, of which “£2.9bn relates to the 2020/21 financial year”. The Guardian combined this with those journey numbers to calculate that it amounts to a subsidy of £100 for every journey taken. A spokesperson said that the Department for Transport disputed those figures – but didn’t explain why or offer alternative calculations.

And people still aren’t travelling. The emergency measures agreements are due to run until September. The TOCs are now calling on the government to extend the arrangements by another 12 to 18 months.

Ministers essentially have three options. They can accede to the TOCs’ demands, which means continuing to pour money into subsidising rail services. They can loosen social distancing rules, and encourage people to return to rail travel (changing the guidance to allow people to stand within one metre of each other, rather than the current two, would allow trains to run at 45% of normal capacity, rather than the current 15-20%). Or they can accept that some services are going to stop running. 

It’s an unenviable choice. But it’s one which is currently facing other transport networks, too. Transport for London has already received a £1.6bn bailout, which is meant to last until October. If passenger numbers aren’t returning to normal by then, the government will face a choice between pumping more money in, or accepting reductions in services. Across the Atlantic, meanwhile, the US’s Amtrak rail network has announced plans to slash services nationwide in response to pandemic-led falls in passenger numbers. 

What all of these networks have in common is that, in normal times, they’re funded largely via passengers. The farebox recovery ratio – the proportion of operating expenses funded by fares – is around 95% for Amtrak, 94% for London’s Overground and DLR services, and 134% for the Underground. (I can’t find an equivalent figure for the national railways, but the reason fares rise ahead of inflation each year is because the government has been reducing subsidies.)

That’s great in normal times – but these are not normal times. Now it’s those networks that were always reliant on subsidies that stand to emerge from the pandemic in the best financial shape.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.


CityMetric is now City Monitor! Come see us at our new home

City Monitor is now live in beta at

CityMetric is now City Monitor, a name that reflects both a ramping up of our ambitions as well as our membership in a network of like-minded publications from New Statesman Media Group. Our new site is now live in beta, so please visit us there going forward. Here’s what CityMetric readers should know about this exciting transition.  

Regular CityMetric readers may have already noticed a few changes around here since the spring. CityMetric’s beloved founding editor, Jonn Elledge, has moved on to some new adventures, and a new team has formed to take the site into the future. It’s led by yours truly – I’m Sommer Mathis, the editor-in-chief of City Monitor. Hello!

My background includes having served as the founding editor of CityLab, editor-in-chief of Atlas Obscura, and editor-in-chief of DCist, a local news publication in the District of Columbia. I’ve been reporting on and writing about cities in one way or another for the past 15 years. To me, there is no more important story in the world right now than how cities are changing and adapting to an increasingly challenging global landscape. The majority of the world’s population lives in cities, and if we’re ever going to be able to tackle the most pressing issues currently facing our planet – the climate emergency, rising inequality, the Covid-19 pandemic ­­­– cities are going to have to lead the way.

That’s why City Monitor is now a global publication dedicated to the future of cities everywhere – not just in the UK (nor for that matter just in the US, where I live). Our mission is to help our readers, many of whom are in leadership positions around the globe, navigate how cities are changing and discover what’s next in the world of urban policy. We’ll do that through original reporting, expert opinion and most crucially, a data-driven approach that emphasises evidence and rigorous analysis. We want to arm local decision-makers and those they work in concert with – whether that’s elected officials, bureaucratic leaders, policy advocates, neighbourhood activists, academics and researchers, entrepreneurs, or plain-old engaged citizens – with real insights and potential answers to tough problems. Subjects we cover include transportation, infrastructure, housing, urban design, public safety, the environment, the economy, and much more.

The City Monitor team is made up of some of the most experienced urban policy journalists in the world. Our managing editor is Adam Sneed, also a CityLab alum where he served as a senior associate editor. Before that he was a technology reporter at Politico. Allison Arieff is City Monitor’s senior editor. She was previously editorial director of the urban planning and policy think tank SPUR, as well as a contributing columnist for The New York Times. Staff writer Jake Blumgart most recently covered development, housing and politics for WHYY, the local public radio station in Philadelphia. And our data reporter is Alexandra Kanik, whose previous roles include data reporting for Louisville Public Media in Kentucky and PublicSource in Pittsburgh, Pennsylvania.

Our team will continue to grow in the coming weeks, and we’ll also be collaborating closely with our editorial colleagues across New Statesman Media Group. In fact, we’re launching a whole network of new publications, covering topics such as the clean energy transition, foreign direct investment, technology, banks and more. Many of these sectors will frequently overlap with our cities coverage, and a key part of our plan is make the most of the expertise that all of these newsrooms combined will bring to bear on our journalism.

Please visit going forward, where you can also sign up for our free email newsletter.

As for CityMetric, some of its archives have already been moved over to the new website, and the rest will follow not long after. If you’re looking for a favourite piece from CityMetric’s past, for a time you’ll still be able to find it here, but before long the whole archive will move over to City Monitor.

On behalf of the City Monitor team, I’m thrilled to invite you to come along for the ride at our new digs. You can follow City Monitor on LinkedIn and on Twitter. If you’re interested in learning more about the potential for a commercial partnership with City Monitor, please get in touch with our director of partnerships, Joe Maughan.

I want to thank and congratulate Jonn Elledge on a brilliant run. Everything we do from here on out will be building on the legacy of his work, and the community that he built here at CityMetric. Cheers, Jonn!

To our readers, on behalf of the City Monitor team, thank you from all of us for being such loyal CityMetric fans. We couldn’t have done any of this without you.

Sommer Mathis is editor-in-chief of City Monitor.