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2012

Rail fares for 2012 now available

20/12/2011

Train fares will rise by an average of 5.9% in January 2012, the Association of Train Operating Companies (ATOC) has said.

From Tuesday 20th December, fares valid from 2nd January 2012 can be found at National Rail Enquiries so people can check how much their ticket or any other fare will cost next year. This is a few weeks later than usual following the government’s decision on 29 November to lower the average rise it had set for Season tickets and some other fares in 2012.

Michael Roberts, Chief Executive of ATOC, said: “Money raised through fares helps pay for new trains, faster services and better stations.

“The long-standing government approach to sustaining rail investment is to cut the contribution from taxpayers and increase the share paid for by passengers.

“The industry is working together to continue cutting costs as a way to help limit future fare rises and offer better value for money for taxpayers over the longer term.”

ATOC has launched a new website for passengers, explaining why many fares are going up, where money from fares goes and how to save money on rail travel. Click here

ENDS

Q&A

Why do many fares rise every year?

The level of fare rises is determined largely by government policy. Since 2004 the government has sought to sustain investment in the railways by reducing the contribution from taxpayers and increasing the share paid by passengers.

Around half of all fares are linked by a government formula to July’s inflation rate as measured by the retail price index (RPI). These are known as regulated fares and comprise Season tickets for most commuter journeys and Off-Peak fares on most intercity journeys. Since 2004, the annual change in these fares overall has been set by the government at RPI plus one per cent.

The new fares for 2012 take effect from Monday 2nd January.

Hasn’t the government just cut fares?

On 29 November, the UK government announced that in January, regulated fares across most of England will rise by an average of RPI plus one per cent. This is a change to what the government announced in last year’s Spending Review when it said it wanted these fares to rise by RPI plus three per cent in 2012.

Operators have been working hard to re-price millions of fares since the government’s change of policy in November.

Devolved administrations in Scotland and Wales had already decided to keep regulated fares at RPI plus one per cent for Scotrail and many Arriva Trains Wales services, so most of Britain will now see the same average rise for regulated fares in 2012. Merseyrail’s franchise agreement with the local Passenger Transport Executive pegs regulated fares to RPI plus zero, and that remains the same.

What about other fares?

Train companies set remaining fares, known as unregulated tickets. These cover cheap Advance fares, leisure tickets for local journeys and business fares for intercity journeys at busier times of the day. Such fares tend to cover journeys where passengers could choose to drive, catch a bus or fly rather than travel by train, so prices reflect market conditions.

Even these fares are heavily influenced by government policy. Operators have to meet tough financial commitments agreed with the government when franchise agreements are signed. For a number of years, these payments have been shaped by government policy to reduce the share paid for by taxpayers towards the cost of the running of the railways.

How is ‘flex’ applied to regulated fares?

For many years the government has allowed train companies to vary individual regulated fares by up to 5% above, or by any amount below, the average change in regulated fares. This arrangement allows train companies to respond to changes in demand on particular routes or at individual stations, over the length of their franchises. This ‘flex’ was suspended for one year in 2010, and restored in 2011.

Under ‘flex’, fares that go up by more than the average must be balanced by others that rise by less than the average, or that fall. These changes are weighted by revenue, meaning that train companies cannot put all the highest fare rises on the busiest routes.

The Department for Transport uses a very strict compliance process set out in the franchise contracts that train companies sign to run services, to closely monitor the way operators apply flex. The process scrutinises all routes in the franchise to ensure the system is followed properly.

How much do passengers and taxpayers pay towards the railways?

Public funding for the railways has dropped by a third since 2006/7, while the money raised through fares has steadily increased.
Currently, passengers contribute around £6.5bn and taxpayers £4bn a year to the running of the railways.

Is anything being done to limit fare rises in the future?
Train companies and the wider rail industry know that in the longer term, the way to limit future fare increases is to reduce the overall cost of running the railways. That’s why train companies and other rail organisations are working with the government to cut costs and deliver better value for money for both passengers and taxpayers in the future. Overall annual costs have already fallen by more than £700million in the last five years.

Where does the money go?

For every pound of income that train companies receive:
48p goes to Network Rail (which charges operators to run trains on the tracks) and other infrastructure costs
17p goes on staff costs
17p goes on miscellaneous costs (including train maintenance, administration, contractors)
11p goes on leasing trains
4p goes on fuel / energy
3p goes to train company profit

Where will money be invested?

With well over 1.3bn journeys a year, demand for rail travel has not been this high in peacetime since the 1920s. Journey numbers have increased by more than 5% during the first nine months of 2011. The money raised through fares - together with direct government funding for Network Rail - helps to make investment in the railways possible, to deal with this growing demand.

Hundreds of millions of pounds of investment in recent years has contributed to rail’s growing popularity. Record levels of passengers are satisfied with their service according to the independent watchdog Passenger Focus. According to the latest National Passenger Survey, 84% of passengers are satisfied with their overall journey, 11% are neither satisfied nor dissatisfied and 6% are dissatisfied.
The government has committed to what it describes as one of the biggest packages of rail investment for a century. It will deliver more than 2,700 new rail carriages, the Crossrail and Thameslink projects in London, and more parts of the network are to be electrified which will see quicker, more reliable, greener journeys on trains with greater capacity.

Over the last year, passengers have seen:

• New, more frequent and reliable services across north and south London thanks to more than £300m worth of improvements
• A new fleet of diesel trains in the West Midlands and on the Chiltern route which has allowed significant capacity improvements in other areas of the country
• The launch of a new timetable on the East Coast mainline giving more and faster services between London and West Yorkshire, Newcastle and Scotland.
• A brand new £22m station at Newport in Wales
• Major station and route works at Birmingham New Street and Reading

In 2012, passengers will see:

• More capacity on busy commuter services in the Thames Valley, Bristol, Manchester and Leeds.
• Hugely improved and extended Kings Cross mainline and Blackfriars stations in London. £900million has been spent on the two stations to give passengers better facilities and longer platforms.
• A new £9.5million line and junction in York, allowing more trains and more reliable services on the East Coast and TransPennine routes. £17m is also being spent to improve reliability on the East Coast mainline.
• A transformed Edinburgh Waverley station in Scotland, where £150m is being spent on a new roof, better information systems, new platforms and concourse.

How do the fare changes affect different journeys?

Figures show that the average price paid for a single ticket is £5.00. Applying January’s 5.9% rise would see this figure rise to £5.30. Broken down by sector, this means the average price paid for a single journey will rise to:

- £3.85 in London and the South East – on average 23p per mile
- £21.18 on long distance routes – on average 22p per mile
- £3.48 on regional routes – on average 17p per mile

Why does ATOC publish an average figure?

There are tens of millions of fares in the system covering trains between our 2,500 stations to get millions of passengers around the country every day. ATOC seeks to give the public a general steer of how much, on average, fares will go up by in January by giving one overall figure.
From Tuesday 20th December, fares valid from 2nd January 2012 can be found at National Rail Enquiries, so people can check how much their regular ticket – or any ticket – will cost next year.

Do all fares rise?

No. Some fares go up by more than the average, some fares go up by less than the average, some fares will stay at the same level, and some will go down.