Train services facing big cuts to cover funding shortfall

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Shares in the UK’s train operators eased lower after plans emerged yesterday for big cuts in services to help recoup the huge amounts spent keeping the network running during the pandemic.

A collapse in the numbers of passengers travelling during the pandemic coupled with more home-working will mean a recovery back to pre-pandemic levels might take years, commentators have suggested.

A group formed of train operators, Network Rail and unions and known as the “Rail Industry Recovery Group” has been set up to look at ways costs can be reduced.

A framework governing negotiations published yesterday said the gap in the industry’s finances is currently estimated at circa £2bn per annum.

“It is planned that train service levels will be curtailed, reduced or flexed in the future to align service levels and capacity to predicted variable passenger demand with the flexibility to expand as passenger growth returns.”

Steve Montgomery, chairman of trade body the Rail Delivery Group said: “To build back a railway which is sustainable in the long-term and addresses changing passenger needs, we must change the way we work and not take more than our fair share from the public purse.”

The government effectively renationalised the industry earlier this year with an end to the franchise system and operators running train services on a fee basis.

Shares in FirstGroup PLC LON:FGP) dropped 0.5% to 82p while Go-Ahead  Group PLC eased back 0.6% to 1,178p.

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