Transparency data

Details of operational support payments to franchised passenger rail operators under emergency agreements and National Rail Contracts

Updated 17 December 2024

Many rail industry processes, including payments under franchise contracts, occur once each ‘rail period’. There are 13 such periods per financial year (each ending at 1:59 am on the day after the final date given).

This table of payments to franchised passenger rail operators under emergency agreements and National Rail Contracts shows payments made over the first 53 periods since these arrangements have been in place, namely:

• financial year 2019 to 2020, period 13: 1 March 2020 to 31 March 2020
• financial year 2020 to 2021, periods 1 to 13: 1 April 2020 to 31 March 2021
• financial year 2021 to 2022, periods 1 to 13: 1 April 2021 to 31 March 2022
• financial year 2022 to 2023, periods 1 to 13: 1 April 2022 to 31 March 2023
• financial year 2023 to 2024, periods 1 to 13: 1 April 2023 to 31 March 2024

How operational support payments are calculated and made

A similar budgeting process continues to apply under the more recent national rail contracts (NRCs) as under the emergency recovery measures agreements (ERMAs) and the emergency measures agreements (EMAs).

Specifically, the Department for Transport (DfT) agrees a budget for each rail period with each train operating company (TOC). The final set of TOCs transitioned from ERMA to NRC in October 2023.

This budget is reviewed by DfT and contains forecasts of:

• costs
• capital expenditure
• revenue

Operational support payments are generally made from DfT to TOCs on the first weekday of each period.

For NRCs, each periodic contract payment initially comprises a ‘forward-looking’ forecast for revenue, costs and capital expenditure for that period. The forecasts are taken from TOC’s periodic budget.

For ERMAs, each payment initially comprises a ‘forward-looking’ forecast for costs and capital expenditure, less a ‘backwards-looking’ estimate for revenue received for the previous period.

While the initial payment is made on the first weekday of a period, the management accounts are submitted within 10 weekdays following the end of the period. Under the agreements, there is an interval of up to 3 periods between the initial payment and the adjustment.

This adjustment process can lead to either upward or downward movement in the operational support payments as actual values for costs, capital expenditure and revenues can be higher or lower than the initial values.

For any given period, the total contract payment is, therefore, made in 2 stages:

• the first is made on the first weekday of the period, based on forecast costs and estimated revenues
• the second is made 2 or 3 periods later and ensures the total net payment reflects actual costs and revenues as reported in TOC management accounts

Scope of the periodic payment data

The operational payments to TOCs under emergency agreements and NRCs data includes both stages of the operational support payment, as described above, for all periods shown.

However, it does not include any allowance for the effect of future payments and future adjustments that may partly relate to these periods, unless explicitly stated. These future payments and adjustments may include longer-term retrospective adjustments to reconcile payments to full audited TOC accounts.

Management and performance fees due to TOCs are also excluded from this operational support data.

Exceptions to standard arrangements

During the period covered by this data, 2 franchises were in public ownership throughout – East Coast and Northern. These 2 franchises were not operating under emergency agreements as DfT already had full responsibility for their costs and revenues. Their payment data is shown here for completeness and comparability. Payments to these franchises continued to be made in accordance with their existing service agreements. No management or performance fees were payable to these 2 TOCs.

Two franchises – Great Western and South Eastern – were previously operating under franchise agreements that expired on 31 March 2020. During the period covered by this data, they were operating under new franchise agreements, beginning on 1 April 2020, that were signed alongside their EMAs in late March 2020.

Both franchises had different EMA term lengths, and other smaller differences to standard EMA arrangements. South Eastern transferred to public ownership on 17 October 2021, from when similar arrangements to the other franchises also in public ownership came into place, and Great Western transferred onto a National Rail contract on 26 June 2022.

One franchise – Cross Country – had an EMA that was one rail period longer than the standard term to coincide with the end date of its previous franchise agreement in October 2020. A directly-awarded franchise agreement of 3 years’ duration with an extension option of up to 1 year, came into effect when this ended on 18 October 2020.

This agreement included various bespoke requirements specific to this franchise, but the core commercial arrangements – whereby DfT received revenue collected and paid most costs incurred through a regular franchise payment – were consistent with those used in the EMAs and ERMAs. Cross Country transferred onto a National Rail contract on 15 October 2023.

One franchise – TransPennine Express – transferred to public ownership in May 2023, from when similar arrangements to the other franchises also in public ownership came into place.