Transport Insights

Shadow transport secretary and former transport minister Richard Holden has asked another perceptive question, with the result that ministers are unable to provide the evidential basis for a claim that nationalising rail operations could save £150m.

To ask the Secretary of State for Transport, with reference to the press notice entitled New dawn for rail as South Western services return to public hands, published on 25 May 2025, on what evidential basis her Department calculated that public ownership of railways would save £150 million from the public purse; and if she will publish (a) the categories of fees that are no longer payable and (b) the estimated value of each fee category.

Note however that the original wording said the move will save “up to £150 million a year in fees alone”, which is an obviously sneaky PR framing.

But the answer from Simon Lightwood (pictured) is that ministers are unable or unwilling to show their workings.

He merely asserts that there was an estimate:

Private sector train operating companies are paid fixed and performance-based fees are set out in their National Rail Contracts with the Department. Operations are being transferred into public ownership as their National Rail Contract expire, meaning these fees will no longer be applicable once services have transferred. This saving is estimated to be up to £150million per annum once all franchised contracts have expired, with a proportion of these savings achieved each year in the interim as individual operators’ services transfer.

The opening statement does not make grammatical sense, but Lightwood seems to be saying that each operator’s contract shows how much their fees will be. They are however very opaque.

You would imagine that any government department would be able to show its workings and Holden has only asked the Department for Transport to say how much is paid – and will be saved – by way of both fixed and performance-based fees.

But they can’t. No doubt because the numbers would not stand up to scrutiny.

Part of the problem could of course be that the maximum fees would be payable when everything is working well…

Note btw that press releases of this sort usually include explanatory “Notes for Editors” in the email version that are not published online.