The Office for National Statistics (ONS) has reclassified train companies operating under emergency measures agreements (EMAs) as part of the public sector.
The decision, for statistical purposes, affects firms with agreements with the UK and Scottish Governments. It follows the reclassification of Network Rail as a central government body in 2014.
A Great Western Railway train earlier this year
The ONS stated that it had made the decision after reviewing the classification of train operating companies (TOCs) against international statistical guidelines.
It explained that under EMAs, almost all revenue and cost risk are transferred to the government. In addition, the TOCs have had restrictions placed on their ability to borrow money and cannot make significant changes to fares or staffing levels without government agreement.
‘This has led the ONS to conclude that public sector control exists over them and that, in accordance with international statistical guidelines, they should be classified as public non-financial corporations with effect from 1 April 2020.
‘As the EMAs are temporary in nature, the ONS will review the classification status of TOCs again in the future if the EMAs are amended or expire.’
Paul Plummer, chief executive of the Rail Delivery Group, which represents train operators and Network Rail, said: 'This is a temporary accounting change that reflects the extent of government involvement in running trains during a national emergency.
‘The Covid crisis presents a chance to move towards a new way of running the railway where contracts put customers at the centre and the private sector’s track record of attracting people to travel by train in safety is harnessed to boost the economy, the environment and the public finances.’
The ONS stressed that the classification status of an organisation is a statistical matter that does not have any direct implications in areas such as ownership, legal status, or management structure.
‘Therefore, following a classification, the only direct change is how an organisation is accounted for in ONS official statistics. Accordingly, the TOCs’ net borrowing and debt will be included in the relevant ONS public sector finances series and their workforces will be included in the public sector employment totals as soon as possible.’
The TOCs affected by are: Avanti West Coast; c2c; Caledonian Sleeper; Chiltern Railways; Cross Country; East Midlands Railway; Govia Thameslink Railway; Greater Anglia; Great Western Railway; Scotrail; Southeastern; South Western Railway; TransPennine Express; and West Midlands Trains.
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