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Remember the ‘90s? That's where we look for the historic norm
For grace under pressure and unremitting helpfulness the DfT Rail press office is hard to beat. I am gratuitously offensive about their bosses, deride their policies, ask excruciatingly obscure questions and still they provide service with a smile.
Last month I left readers musing on the reference to the ‘historic norm' in the Sustainable railways White Paper. Pending a reply to my question from DfT Rail I floated the idea of the 1980s. But when the answer arrived it turned out that Norm was much more recent.
I have put the formal definition in a box, as it would be sacrilege to sub-edit such limpid, yet finely honed, civil service prose
Defining the historic normThe historic norm relates to the period 1997/98 to 2001/02, between privatisation and the collapse of Railtrack, when the privatised railway had lower subsidy, growing passenger numbers, and a greater proportion of the cost of running the railway was borne by passenger revenue. We are not saying that subsidy levels are identical to that period, or that we intend to match them exactly, but simply that compared to today the subsidy profile for HLOS will return closer to this historic norm. |
£ million 2007/08 prices |
Railway funding 1996/77- 2001/02 |
|||||
|
1996/97 |
1997/98 |
1998/99 |
1999/2000 |
2000/01 |
2001/02 |
Total support |
2759.4 |
2331.965 |
1972.24 |
1728.438 |
1458.996 |
2143.213 |
Revenue |
3380.923 |
3596.76 |
3841.267 |
4105.345 |
4101.775 |
4164.359 |
Total income |
6140.323 |
5928.725 |
5813.507 |
5833.782 |
5560.771 |
6307.573 |
Taxpayer% |
44.9 |
39.3 |
33.9 |
29.6 |
26.2 |
34.0 |
Now, I don't want to seen ungrateful, but I think DfT Rail has got it wrong. Because 2001/02 is the first year of control Period 2 when Rail Regulator Tom Winsor 's Periodic Review gave Railtrack more income but not as much as it had asked for.
On top of which, in 2001/02, the aftermath of Hatfield was hitting revenue . And, as you can see, the proportion of the cost of the railway met by the taxpayer went up by eight percentage points.
Even worse, 2001/02 marked the start of the infrastructure cost explosion from which the railway is still suffering Chart 1 shows how the burden on the tax payer increased.
So, had I been drafting the reply to my own question, I would have toughed it out and said April 1996 to April 2001 – the dawn of privatisation. Of course you could argue that the taxpayer's share was coming down only because Railtrack's funds were being consumed by a plague of boiling frogs and that such under-investment was bound to end in tears.
But either way, when you calculate the annual cost averaged over the five years, the starting year makes only £50-75 million difference either way. So now we know that the historic norm for support is roundly £2 billion a year at current prices.
This is not far off the £1.78 average subsidy for the nine years 1982-1991, the last complete economic cycle. But it's nearly twice the glory years 1988-1991.
Note that DfT Rail makes the point that the historic norm is not a target, just something to approach. Given that the annual average in the Statement of Funds Available is £3.5billion you can understand this caveat.