Breakdown of TOC costs

[FrozenPoints]

The seasonal moaning begins - fares up - close scrutiny is on season ticket prices - really those who pay more on season tickets, yes, are commuters, but are more than likely to have jobs paying five figures at least.

Whether it the wrong assumption, do correct me.

But - I have seen an explaination before, but it is nowhere to be found on RailUK forums.

If I remember rightly, the ticket prices are split into:

Track access fees
Rolling stock operators
Maintainence fees (depending on who maintains individual rolling stock)
Staff wages (drivers, RPIs, administration, customer services)
Fuel
Rest of the revenue back to the TOC

What else is missing?

 

[richw]

i'm sure i seen somewhere the government take a certain % of revenue as well, but cant remember for definite?

 

[Pumbaa]

For every £1 spent;

49p to Network Rail - track access
17p to TOC staff costs
17p to maintenance of stock, admin of franchise
11p to leasing stock
4p to fuel/energy
3p as profit to franchisee


Source http://image.guardian.co.uk/sys-files/Guardian/documents/2010/12/31/RailMap2.pdf

 

[87015]

For every £1 spent;

49p to Network Rail - track access
17p to TOC staff costs
17p to maintenance of stock, admin of franchise
11p to leasing stock
4p to fuel/energy
3p as profit to franchisee


Source http://image.guardian.co.uk/sys-files/Guardian/documents/2010/12/31/RailMap2.pdf

Bit suspicious, certainly the profit / revenue balance is a bit different to that at xxx TOC which did its annual roundup recently, and its not as though ATOC are going to declare for such an article massive profits!!

 

[FrozenPoints]

Do the government take money out of the track access fees?

Or where does their money come from in pence?

 

[Pumbaa]

I suspect the cost of the franchise comes out of the 3p as profit to the taxpayer/franchisee as appropriate under cap and collar. The track access fees go straight to NR.

 

[mumrar]

Bit suspicious, certainly the profit / revenue balance is a bit different to that at xxx TOC which did its annual roundup recently, and its not as though ATOC are going to declare for such an article massive profits!!

Why is it suspicious? What do you know about railway operating costs that ATOC don't?

It's one thing for people to ask for the cost breakdown, but to then get it and question it's accuracy? When do you give up on something?

The government are reducing their subsidy of TOCs by a big percentage, how are the TOCs to replace this lost money other than fare rises?

Saw Sky News report talking about the 'average' figures being used to rip off commuters. Their example was that a Ramsgate season is going up by 12.8%, but a fare between Liskeard and Plymouth is dropping by 15% or so. That's not even the same TOC they're comparing, and so they are fiddling the figures to complain about TOCS, erm, fiddling figures!

If revenue is to increase then obviously they will pick well patronised routes, rather than making quiet rural fares go out of bounds. You can make money on the reduced fares by competing with other transport and increasing passenger numbers. The same can't be said for increasing the number of passengers on packed commuter services.

Just out of interest, how much did electricity bills and fuel costs rise, including the one just, over the past year? That's some figures I'd be intersted to see.

 

[Pumbaa]

Bit suspicious, certainly the profit / revenue balance is a bit different to that at xxx TOC which did its annual roundup recently, and its not as though ATOC are going to declare for such an article massive profits!!

Quite! I know of TOCs Y and Z where it definitely isn't the case, one where it is hugely disproportionate to them thanks to good bartering and the other case where they're still getting royally shafted due to their ongoing incompetence of communicating within their own outfit. No prizes for guessing who's who!

 

[route:oxford]

The seasonal moaning begins - fares up - close scrutiny is on season ticket prices - really those who pay more on season tickets, yes, are commuters, but are more than likely to have jobs paying five figures at least.

That's a really odd statement to make... Unless my calculations are completely potty, everyone (over 21) who works full-time (35+ hours per week) in the UK will earn at least a five figure sum.

(35*52)*£5.93 = £10,792.60

 

[jon0844]

And if you only earn around £14-15,000 then having £5k taken away for your travel is quite a hit. Especially as that salary is before tax and NI!

You'll need to earn quite a bit to be able to afford £3,500 (which I pay) - £5,000 - especially when it's not easy to change jobs these days, so you'll stick it out with your job even though as every year goes on, you may be paying £500 more (then £600 the year after and God knows what when the allowable increase goes up) and certainly not get anything close to that in the way of a pay rise.

I don't think we're there yet (especially as most commuters would have renewed at the 2010 rates, which were actually DOWN on 2009 in most cases) but by 2015, people may be approaching annual ticket prices that are approaching double!

I am sure that once you go beyond a certain distance the number of commuters reduce and the impact is - relatively speaking - reduced, or at least you're now down to the people who earn considerably more and aren't as badly affected. I doubt many people come from much further than, say, Peterborough to come to work in London unless it's a fairly good job. I am generalising here and it's only opinion, but I'd be surprised if it wasn't the case.

 

[Old Timer]

For every £1 spent;

3p as profit to franchisee

Source http://image.guardian.co.uk/sys-files/Guardian/documents/2010/12/31/RailMap2.pdf

That is an absolutely awful return on capital invested so to speak, when you consider that Tesco actually INCREASED their profits by 15%, (over 5 times what a TOC makes) in the first quarter of 2010.

 

[WatcherZero]

The 3% profit margin is roughly correct for lower industry average Virgin West Coast 2009 is 10%, Northern 3.1% 2008, 4.2% 2009, Arriva 5.6% 2008, 3.7% in 2009.

 

[Justin Smith]

The seasonal moaning begins - fares up - close scrutiny is on season ticket prices - really those who pay more on season tickets, yes, are commuters, but are more than likely to have jobs paying five figures at least.
Whether it the wrong assumption, do correct me.

But - I have seen an explaination before, but it is nowhere to be found on RailUK forums.

If I remember rightly, the ticket prices are split into:

Track access fees
Rolling stock operators
Maintainence fees (depending on who maintains individual rolling stock)
Staff wages (drivers, RPIs, administration, customer services)
Fuel
Rest of the revenue back to the TOC

What else is missing?

I`d have thought it`s a very small majority who are on salaries over £100,000. But even if they`re on more than the average wage, that means they`re the ones already paying the taxes which subsidise the railways !

 

[route:oxford]

I doubt many people come from much further than, say, Peterborough to come to work in London unless it's a fairly good job. I am generalising here and it's only opinion, but I'd be surprised if it wasn't the case.

There are quite a few people who commute from York aren't there?

I do know someone who commuted from Stirling to Docklands 3 days a week (EDI-LCY) - his journey was quicker than some who travelled less that 40 miles.

 

[swt_passenger]

I suspect the cost of the franchise comes out of the 3p as profit to the taxpayer/franchisee as appropriate under cap and collar. The track access fees go straight to NR.

If you are referring to the costs of running the franchise other than staff, which is separately listed, isn't it more likely to come out of the '17p to maintenance of stock, admin of franchise'?

 

[Justin Smith]

For every £1 spent;

49p to Network Rail - track access
17p to TOC staff costs
17p to maintenance of stock, admin of franchise
11p to leasing stock
4p to fuel/energy
3p as profit to franchisee

Source http://image.guardian.co.uk/sys-files/Guardian/documents/2010/12/31/RailMap2.pdf

I have to say that most sites I go past, not just on the railways (but they're one of the worst), there are generally loads of men stood about watching a few working*.
It's a fact.
You look next time.
I run a small business and I know how much it costs to employ people. Every time I see people at work not actually working I'm shocked, but I sees it all the time.....
Maybe this explains why the costs for anything to do with the railways always seem astronomical. One often reads that it costs hundreds of thousands of pounds (or sometimes millions ! ) just to put in a passenger crossing bridge or extend a platform. Where do they get these figures ? ! ?

* Apart from small builders, where the boss, who actually signs the wage cheques, is probably on site much of the time.....

 

[jon0844]

There are quite a few people who commute from York aren't there?

I am sure there are, but I am sure they must have very good, probably well paid, jobs or are working as consultants, have another office (and so don't need to travel in every single day) and so on. I did say I was generalising though!

I really wouldn't keep my job, which arguably can be done from home many days anyway - yet there are no flexible season tickets to allow me to opt out from travel 2-3 days every week or two) if I moved that far away. Even if it allowed me to live in a much bigger house, which was the main reason for me moving to Hatfield.

From leaving Hatfield to leaving Old Street is 33 minutes (including a change at Finsbury Park) which makes my ticket more than £1,000 for every minute I'm on the train (actually, even more - I'm on the platform at Finsbury Park for around 5 minutes of that!!!). Admittedly, that money is for a Travelcard, so it does cover my travel all over London when I need it.

If I lived in York and worked near King's Cross then it's not too painful (except when things go wrong) but if I had to factor in a trip through London on one or more tube lines, I'd go mad!

@Justin Smith, I don't usually agree with you (when it comes to things like seat pitches!) but I do often see people seemingly doing very little on the railway. Sadly, like any job of this type, you do get those who work very hard and those who seek to shy away form it. As more and more work is sub-contracted, it can get worse and worse. However, it's not a problem unique to the railway - it happens for Local Authorities that have outsourced maintenance and repair work, rubbish collection and so on. You must also include work on the Highways too. Nevertheless, there will be jobs where people aren't going to be getting their 'hands dirty' all the time and may only be needed for specific duties - and they may well be very bored waiting around to get on with their particular job, perhaps having been let down by others.

 

[Old Timer]

The 3% profit margin is roughly correct for lower industry average Virgin West Coast 2009 is 10%, Northern 3.1% 2008, 4.2% 2009, Arriva 5.6% 2008, 3.7% in 2009.

Thank you for that !

Probably why there is a preponderance of bus Companies. The Infrastructure Companies look for much higher than 3% I can assure you.

Rather counteracts against the many arguments on here about how TOCs are ripping passengers off, surely ?

Incidentally, just heard on the radio news !

Shock, Horror, but did you know TOC are increasing the price of their most popular tickets ? So said a appalled sounding bint of a reporter, followed by a soundbite from an equally "shocked" "passenger" :roll::roll::roll:

Errr its called economics, dear :roll:

Its a shame the reporter didn't look at how many supermarket items have risen recently - you only spot it when you been away and then come back, because they just add the odd penny on here and there.

And the Media wonder why they are despised so much :roll:

 

[jon0844]

I began to take photos (sad, I know) of the 24 case of Coca Cola cans some years ago (sadly, they were lost when a hard drive failed) as I noticed that they changed the price regularly while keeping the same artwork.

When I started it said £5.99. Next time you're in Tesco, look at the price for 24 cans now. I've just checked online and they're £8.85, which means another recent change as the photo itself shows £7.49!

The only defence is that we don't NEED to drink Coke or some of the things that have jumped in price far more than inflation, while we do need to get to work. However, prices are increasing all over the place. Something people probably DO need is toilet paper and this has gone up by even more than 'luxury' items like Coke.

 

[FrozenPoints]

Thank you for that !

Probably why there is a preponderance of bus Companies. The Infrastructure Companies look for much higher than 3% I can assure you.

Rather counteracts against the many arguments on here about how TOCs are ripping passengers off, surely ?

Incidentally, just heard on the radio news !

Shock, Horror, but did you know TOC are increasing the price of their most popular tickets ? So said a appalled sounding bint of a reporter, followed by a soundbite from an equally "shocked" "passenger" :roll::roll::roll:

Errr its called economics, dear :roll:

Its a shame the reporter didn't look at how many supermarket items have risen recently - you only spot it when you been away and then come back, because they just add the odd penny on here and there.

And the Media wonder why they are despised so much :roll:

There was an industry rumour track access fees went up?

But what is the case - I am sure they go up y/y but hiked?

 

[RPI]

the piece about Plymouth to Looe fares dropping is interesting, they're only being dropped because of the withdrawal of the Plymouth to Looe Carnet tickets which was useful for people who only worked a couple of days per week.

 

[mumrar]

I do know someone who commuted from Stirling to Docklands 3 days a week (EDI-LCY) - his journey was quicker than some who travelled less that 40 miles.

Well, looking at National Rail Stirling to Kings Cross takes 5hrs50 on the quickest run, don't suppose you can remember which 40 mile 6 hour commute was can you, I'd be intrigued to know. Seriously.

 

[Mojo]

Well, looking at National Rail Stirling to Kings Cross takes 5hrs50 on the quickest run, don't suppose you can remember which 40 mile 6 hour commute was can you, I'd be intrigued to know. Seriously.

Judging by the abbreviations used it seems the person in question commuted by aeroplane from Edinburgh to London City rather than on the train.

 

[Pumbaa]

If you are referring to the costs of running the franchise other than staff, which is separately listed, isn't it more likely to come out of the '17p to maintenance of stock, admin of franchise'?

I interpreted that the profit agreement between DfT and TOC came into that 3% bracket; the admin costs of franchise I interpreted as referring to the actual running of the franchise, the overheads, parent company swindling etc.

I agree it is a convoluted method. I have emailed GDesk asking if the info was obtained via FoI request or from ATOC voluntarily, and if the former whether they'd share to avoid me the same hassle.
--- old post above --- --- new post below ---

The 3% profit margin is roughly correct for lower industry average Virgin West Coast 2009 is 10%, Northern 3.1% 2008, 4.2% 2009, Arriva 5.6% 2008, 3.7% in 2009.

One of those I referred to in my second post; although the fact they still pay lower track access fees and half leasing costs does help their case somewhat... And maybe why DfT is so bitter among other factors

 

[mumrar]

Judging by the abbreviations used it seems the person in question commuted by aeroplane from Edinburgh to London City rather than on the train.

Oh right, what I know about air travel you could write on a Rizla with a thick marker pen!