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Thursday, 10 January, 2002, 18:20 GMT
Rail's financial fudge
By BBC News Online's James Arnold

It is a truth universally acknowledged that Britain's railways are desperately under-invested - especially in comparison with our sleek European neighbours.

But proving or disproving that point with hard statistics is almost impossible.

Every European government is keen to trumpet its commitment to infrastructure investment, but the most casual probe into the figures throws up a host of contradictions and complications.

Only one thing is clear: as with all statistics, governments can make rail investment figures behave in any way they wish.

The billion-pound question

So how much does Britain invest in the railways?

Tony Blair was asked precisely this at Prime Minister's Questions on Wednesday, and was able to answer unequivocally: total investment in the country's rail network has been an annual 2.2bn since Labour took power, up from 1.4bn during the last eight years of the previous administration.

Figures from the Strategic Rail Authority (SRA), one of Britain's regulators, back Mr Blair up.

In 2000-01, the SRA says, total investment was 2.9bn - the highest level in real terms since World War II.

But what's not clear is precisely what "investment" means in this context.

While most people might assume that it means money specifically spent to upgrade the network (new rolling stock, signalling technology and so on), it could equally mean cash intended simply to keep everything going (staff wages and basic maintenance, for example).

The Department of Transport, Local Government and the Regions was unable to clear up this question for BBC News Online.

French rail murk

In other European countries, where the rail system tends to be a monolith owned solely by the state, the financial picture ought to be clearer.

In fact, it can be much, much muddier.

In France, for example, much rail money passes through an entity called Reseau Ferre de France (RFF), which charges train monopoly SNCF for network access, while - oddly - simultaneously paying it a fee to manage the system.

Loss-making RFF borrows money on international markets in order to refinance its debts, and is the recipient of hefty government subsidies.

Whether a subsidy to RFF counts as rail infrastructure is a matter for debate.

On the one hand, it is a mere book-keeping exercise, the transfer of funds from one state organ to another; on the other, it frees up cash for RFF to plough into infrastructure projects such as the 30bn TGV high-speed train.

Spending less...

Not all countries have railway financing quite as murky as France's.

Indeed, a few EU states are able to publish rail investment figures as straightforward-looking as Britain's.

Germany, for example, is spending 2.7bn a year over the next three years, while smaller Austria and Finland currently invest 553m and 267m respectively.

Compared in proportional terms, Britain comes off well.

Austrian investment represents 9.8 pence per kilometre of track, with Germany at 7.2 pence and Finland at just 4.6 pence.

Britain, by contrast, is currently spending a whopping 13.9 pence per kilometre.

... getting more

But the seductive lure of statistics is misleading.

For a start, the figures from Germany, Finland and Austria represent investment in its purest form - purchases of new stock, renewal of track and so on.

The figures also reflect only the most recent couple of years, while most experts agree that comparisons can only truly be made over several decades.

Lower spending in one country in one period could simply reflect the fact that there is little need for expenditure, since trains and tracks have been upgraded in a previous round of investment.

Other measures show Britain dangerously lagging its rivals.

Research from the European Commission - published five years ago and due to be repeated in 2002 - showed that the UK came 12th among EU member states in terms of overall transport spending.

Where the money goes

More to the point, what interests most rail travellers is value for money.

Since British railways have such a dreadful image, and the price of tickets is - unequivocally, this time - much higher than the EU average, passengers may well ask where the 2.2bn is going.

France may have a financial nightmare in the RFF, including a swelling 23bn euros (14bn; $20.3bn) debt mountain, but it also has arguably the best rail service in the world - notably the TGV, which travels the 411 miles from Paris to Marseilles in less than three hours.

Worrying about how much is spent is something of an irrelevance to passengers - it's how you spend it that counts.

BBC News Online's in-depth coverage on the state of the UK's railways

10 year rail plan

See also:

10 Jan 02 | Politics
10 Jan 02 | Politics
10 Jan 02 | England
09 Jan 02 | UK
10 Jan 02 | Politics
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