28 February 2025
RMT Press Office:
RMT has published new research showing that a national fare freeze could be funded through further rail reform with passengers facing yet another above-inflation fare hike of 4.6% on Sunday.
The union’s analysis reveals that even after the government’s welcome plans to bring train operations into public ownership, at least £630 million a year is still being drained from the railway through outsourced track, train, and station contracts, as well as rolling stock leasing firms.
RMT General Secretary Mick Lynch said: "We have strongly supported the government’s proposals for a publicly owned Great British Railways, and we now want to work with Ministers to build on this good start, developing a plan that could fund a fare freeze for passengers.
"Bringing outsourced rail contracts—including cleaning, catering, and track renewals—back in-house as they expire, and taking action on the profiteering of rolling stock leasing companies, could save £630 million a year, enough to fully fund a fare freeze.
"Reversing three decades of failed rail privatisation will not happen overnight, but if we want our railways to drive economic growth and cut carbon emissions, we must begin phasing out the costly and inefficient outsourcing of jobs for private profit."
END
- According to the ORR, last year, the rolling stock companies (ROSCOs) paid dividends worth £331 million. ROSCO Porterbrook’s CEO was paid £1.4 million last year.
-
RMT estimates that the profits of outsourcing firms who contract to provide cleaning, catering and security on the railway amount to around £125 million a year. Outsourcing costs are included in ‘other costs’ of train operating companies in the ORR’s financial data. Last year other costs were £2.8 billion. Assuming, conservatively outsourcing contracts account for just 50% of these other costs, that would mean that outsourcing costs would be £1.4 billion across the sector. Outsourcing firms typically make a gross profit of around 9% on their contracts, meaning that profit leakage would be £126 million.
- Sub-contracted renewals accounted for around £3 billion of Network Rail’s ‘procurement’ spending in 2022. Sub-contracting firms estimate renewals margins at 6%, giving an aggregate profit figure of £180 million.
-
The total profit leakage via these three routes amounts to in excess of £630 million.
-
Last year, passenger revenue amounted to £10.1 billion from franchised passenger services. £630 million represents 6.3% of that revenue.
Unity House
Tel: 020 7387 4771
Email: