Compensation to rail firms passes half a billion a year


The total annual compensation paid by the public sector to rail firms for disruption hit half a billion pounds for the first time, according to the latest official data.

Network Rail paid train operating companies (TOCs) a total of £180.5m under Schedule 8, which covers unplanned disruption from issues such as signalling and track problems, during 2017/18, and nearly £357m in Schedule 4 payments, which cover planned works. 

While schedule 8 payments went down by half a million poundds on 2016/17 levels, Schedule 4 jumped by around £56m, meaning the total compensation paid during the year was £537m, compared to £482m in 2016/17. 


A Network Rail spokesperson said: 'We know that services for passengers haven’t been good enough, and we take responsibility for the part we have played in poor reliability.

'Network Rail is fully committed to delivering better services for passengers, both through our own measures and actions and by working more closely together with our industry partners.'

Network Rail said the increase in Schedule 4 payments reflected the increased amount of engineering work it carried out to maintain and improve the railway for passengers.

As Transport Network has reported, Network Rail’s annual accounts referred to an increase of £52m in combined Schedule 4 and Schedule 8 payments in 2017/18. However, figures published by the Office of Rail and Road (ORR) regulator put the combined figure at £439m for 2017/18, up from £404m.

Network Rail told Transport Network that the difference between the two organisations' figures was explained by the fact that its data covers Schedule 4 compensation for maintenance, renewals and enhancements while the ORR does not include enhancements in its figures.

The total paid by TOCs to Network Rail through the Access Charge Supplement which Network Rail says ‘can be thought of as an insurance premium payable in exchange for Schedule 4 protection for planned disruption’, fell from £224m to £209m, representing a further financial gain for rail firms of around £15m.

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