1 - Rail in Scotland
1.1 The Scottish rail network is extensive and diverse and of a similar size to many independent rail systems in the smaller countries of Europe. With around 2,800 kilometres of track (25% of which is electrified) and 350 stations, the rail system includes the most heavily used commuter network in the UK outside London, as well as regional routes which provide lifeline connections to remote communities and promote tourism. It is a mixed-use railway with both rail passenger services and freight companies using the network.
1.2 Over the last eight years there has been considerable investment in the Scottish rail network, with improvements to capacity and the opening of new lines: Larkhall-Hamilton, Stirling-Alloa-Kincardine, and Airdrie-Bathgate. There are also further improvements on-going with the Borders Railway and the Edinburgh-Glasgow Improvement Programme.
1.3 Around 78 million passenger journeys are made each year within Scotland on ScotRail services, of which the majority (63.87% of the total) are made in the Strathclyde area. Strathclyde is the largest and most used suburban rail network in the UK outside of London. There are also around a further 6 million passenger journeys across the border to and from England.
Table 1 : Profile of Rail in Scotland
|Km rail routes (passengers and goods)
|Rail passenger journeys per annum (includes cross-border journeys)
||84.5 million ^
|ScotRail passenger km per annum
||2.53 billion *
|Tonnes rail freight lifted in Scotland per annum
||10.33 million ^
|Refs: ^(2008/09), *(2009/10):
Source Scottish Transport Statistics 2010
1.4 There is increasing demand for rail passenger services, with ScotRail passenger numbers increasing by 25.5% since the start of the current franchise (contract) in 2004.
1.5 Demand is expected to continue to grow. The demand for rail travel in the Glasgow conurbation is forecast to increase by between 24% and 38% by 2024-25. The Edinburgh growth for the same period is forecast to be between 90% and 115%. Strong growth is also forecast in areas outside the Scottish central belt.
1.6 The current operations and governance arrangements of the Scottish and GB rail network are complex:
- All the railway track in Scotland is owned by Network Rail, except for track in privately owned freight yards or heritage railways. Train Operating Companies enter into contractual agreements with Network Rail for the use of rail facilities - the track, stations and depots.
- All the stations in Scotland are currently owned by Network Rail except for Prestwick International Airport Station. Almost all of these stations are then leased to the ScotRail franchisee. Network Rail manages Glasgow Central (high level) and Edinburgh Waverley stations and the rest are leased to ScotRail and operated by them, except for Dunbar which is operated by the train company providing East Coast services.
- The trains are owned by Rolling Stock Leasing Companies (ROSCOs), and are leased to the various Train Operating Companies (for example First ScotRail Ltd).
- Rail passenger services that start and finish in Scotland are currently provided through a franchise operated by a private company, currently First ScotRail Limited (the franchisee). These services are subsidised and specified by the Scottish Government.
- The current franchise also covers the Caledonian Sleeper services to and from London Euston.
- Other cross-border rail passenger services are provided by other franchises, which are funded and specified by the UK Government through the Department for Transport (DfT).
- Freight services are a commercial matter and decisions to run freight services are taken by Freight Operating Companies (FOCs) and their customers. FOCs also have to enter into contractual agreements with Network Rail for use of the track.
- The Glasgow Subway (underground) is not part of the heavy rail network. It is owned and managed by Strathclyde Partnership for Transport. Issues relating to the Subway are not covered by this consultation.
- The Office of Rail Regulation (ORR) is the independent economic and safety regulator for Great Britain's railways. Network Rail's activities and funding are regulated and monitored by the ORR. The Scottish Ministers can issue Guidance on how the ORR carries out its duties in respect of Scotland.
- Passenger Focus is the body which represents passengers and is the passenger rights ombudsman. It is sponsored by DfT and the Scottish Ministers appoint one of the board members. The ORR also has a role in protecting the position of passengers.
The Scottish Ministers
1.7 Under the Railways Acts we are responsible for funding and specifying the rail network in Scotland and for setting the long-term vision for rail in Scotland. This means that we specify and contract for rail passenger services and fund the maintenance, renewal and investment activities delivered by Network Rail within Scotland. However, responsibility for primary legislation dealing with the provision and regulation of Railways remains largely reserved to the Westminster Parliament. In addition, many railways-related government functions remain reserved to the Secretary of State.
1.8 The current contract (franchise) for rail passenger services ends in 2014, as do the current funding arrangements for Network Rail. We are therefore considering the options for the way forward from 2014.
1.9 Our ambition is to have a railway that offers value for money, ensures closer working and integration between Network Rail and the service operator and, importantly, has the passenger interests at its heart.
1.10 Investment in more and better rail services, along with rising costs in the rail industry, has increased the amount of funding we have to provide for Scotland's railways to over £700m in 2011/12. The main costs are for infrastructure, managed by Network Rail, and rail passenger services delivered by the franchisee (First ScotRail Ltd).
Table 2: Scottish Government – Rail budgets (£ millions)
|Rail Infrastructure in Scotland (Network Rail)
|Rail Services in Scotland (ScotRail Franchise)
*Fluctuations in subsidy payments are due to the ORR determined flow of finance (for fixed track access charges) to Network Rail through the franchise.
Additional funding is also provided for the delivery of major rail public transport projects including the Edinburgh-Glasgow Improvement Programme and the Borders Railway
1.11 The costs for the infrastructure element include the costs of operating, maintaining and renewing the physical infrastructure. This also includes the finance charges to pay for improvements.
1.12 The costs for the rail passenger services include the operational costs such as leasing of rolling stock and the charge for accessing the track.
1.13 The Scottish Rail Cash Flows diagram illustrates the financial flows through the rail industry in Scotland. This diagram shows the direct level of support provided by the taxpayer through the government to the industry. The direct revenue contribution from passengers is £259 million, 26% of the total.
*All figures published in Transport Scotland Annual Report and Accounts 2010/11, except for ScotRail revenue figure supplied by First ScotRail. Figures are actual spend, not budget. "Other rail investments" is for specific projects and originated from other Transport Scotland budget lines.
1.14 With both the new contract for rail passenger services and a new financial settlement for Network Rail due to start in 2014, we have an opportunity to determine the appropriate level of subsidy for the railway in Scotland.
1.15 The financial realities of funding the rail services in Scotland mean that we have to take a clear and strategic view as to the priorities for our funding. This consultation is being conducted to look at what rail services we can provide that best meets the needs of the Scottish economy, businesses, passengers and communities, against a backdrop of decreasing budgets.
1.16 We should be in a better position to consider and address these issues once this consultation is complete.