ONS says UK rail was effectively renationalized during pandemic | Business


Rail companies have effectively been renationalized on a temporary basis, the UK statistics agency said on Friday, sparking a dispute between unions and private operators over railway ownership.The coronavirus pandemic and the lockdown forced the government to take emergency action to support rail companies by assuming the financial risk of rail franchises, after passenger numbers nearly declined.

The Office for National Statistics has now written to the Treasury and the Scottish Government to inform them of its decision to reclassify train companies as non-financial public companies in light of the measures.

The change, backdated to April 1, means that railway company loans will be included in the ONS figures on public sector borrowing and the number of state employees.

At the same time, railway companies are not allowed to change schedules or staffing without specific government approval.

State support for rail companies means that almost all of the revenue and cost risks of the companies are “borne by the government,” the ONS said.

The Rail Delivery Group, which represents rail operators, insisted that the reclassification should only be seen as a cosmetic change rather than a fundamental and lasting change in the structure of rail ownership.

“This is a temporary accounting change that reflects the extent of government involvement in the movement of trains during a national emergency,” said RDG chief executive Paul Plummer.

“The Covid crisis offers a chance to evolve into a new way of running the railroad, where contracts put customers at the center and where the private sector track record of attracting people to safe train travel is exploited to stimulate the economy, the environment and public finances. ”

However, the transport union TSSA, which has always called for the nationalization of the railways, has urged Transport Secretary Grant Shapps to take the opportunity to do so.

“The Office of National Statistics has openly exposed the truth about our railways – they are now publicly owned,” TSSA Secretary General Manuel Cortes said.

“I know that telling the truth is not the strong point of this Conservative government. However, Transportation Secretary Grant Shapps needs to be clear and recognize that our railways are now publicly owned and take direct control of their management rather than continue to line privateers’ pockets with taxpayer dollars.

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Although the emergency measures are temporary, they come at a crucial time for the future of England’s complex rail franchising system.

The government commissioned a review of the future of the railways, following a series of failed franchises that ended up effectively nationalizing, including the Northern System earlier this year.

Former British Airways boss Keith Williams, who is leading the current review, said last year the government should take a ‘step back’ from the UK railroad, which could be run by a new body .


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