Hybrid work leaves a £2bn black hole on the railways

Passengers have returned to pre-pandemic levels but commuter changes mean finances are still suffering

By Oliver Gill



Daily Telegraph


Front page

WORKING from home has blown a £2bn hole in rail industry finances despite the number of Britons using the train network returning to near prepandemic levels. Senior industry figures say despite ongoing strike action 97pc of travellers are back on the rails compared with 2019. But they are travelling less frequently and less during peak hours. One senior executive said: “We have almost completely recaptured the market. The passengers that were using the railway pre-covid are now using the railway. But they are not using it as much. And the journeys they are taking generate less revenue for the railway.” The rise of hybrid working – with a tendency for commuters to go to the office only on Tuesdays, Wednesdays and Thursdays – as well as a sharp fall in business rail travel accounts for the fall in fare revenue, sources added. Rail use during Friday morning peak times remains at 50pc of pre-pandemic levels. But when non-peak travel is included, Friday is the busiest day of the week, meaning large numbers are travelling on lower off-peak fares. It is understood Andrew Haines, the chief executive of Network Rail, briefed industry leaders before the Conservative Party conference that changes in working habits have solidified a £2bn hole in the annual rail industry budgets. The shortfall comes as Network Rail prepares to ram through changes to working practices this week. A consultation closed at the end of last week with the Rail, Maritime and Transport workers union (RMT) providing feedback on the changes on Thursday. Changes include greater use of technology and changing rosters so staff are able to work more widely across the business. They are designed to combat years of union resistance which meant tasks such as hanging a plug socket could take a team of nine workers. It will be the first time Network Rail has used a legal consultation to force through changes to practices. “Network Rail has done what they thought they would never do, which is implement [changes] without the unions,” one industry source said. “They [the unions] will either use that as the lever within to renegotiate pay, which is the sensible thing to do, or they might try and escalate the action.” The latest round of industrial action took place yesterday when RMT members from 15 train operators and Network Rail walked out. The TSSA, which represents station ticket office workers, also went on strike, hitting services on Avanti West Coast, c2c and Transpennine Express services. The industrial action meant just one in five services was able to operate. The Government spent about £16bn supporting railways in the pandemic, equivalent to £600 per household, as fare income slumped due to lockdowns. Yet ministers are increasingly wary of the amount they throw at the sector. Transport Focus, the consumer watchdog, has said public transport will have to “work very hard to regain its market”. Meanwhile, Anne-marie Trevelyan, the Transport Secretary, used her speech at the Tory conference last week to say she wants “to transform the rail industry to make it sustainable for the next 100 years”. She added: “The very last thing our country needs right now is more damaging industrial disputes.”