ONS exploring classification of DfT OLR TOCs as public sector bodies

[TUC]

Northern were classified in March 2020 based on the previous accounts of the privatised franchise (likely 2018/19 but I've not checked).

It doesn't seem unlikely that most costs were met by revenue in that period.

Really? When Northern has some of the highest levels of rural and small town mileage?

 

[MrJeeves]

Really? When Northern has some of the highest levels of rural and small town mileage?

Since it seems neither of us bothered to check, I thought I'd take the liberty to do it now.

The set of accounts published in early March 2020 are for the financial year 2018/19 as I as predicted:

ARRIVA RAIL NORTH LIMITED filing history - Find and update company information - GOV.UK

ARRIVA RAIL NORTH LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

The accounts show that almost exactly 50% (49.9%) of the company's turnover was from passenger revenue combined with other non-franchise payments in that FY, with the year prior being 54.7%.

 

[TUC]

Since it seems neither of us bothered to check, I thought I'd take the liberty to do it now.

The set of accounts published in early March 2020 are for the financial year 2018/19 as I as predicted:

ARRIVA RAIL NORTH LIMITED filing history - Find and update company information - GOV.UK

ARRIVA RAIL NORTH LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

View attachment 157361
The accounts show that almost exactly 50% (49.9%) of the company's turnover was from passenger revenue combined with other non-franchise payments in that FY, with the year prior being 54.7%.

Thanks. That's the total income. The test as I understand it is whether the majority of their costs are covered by the revenue generated. The accounts appear to show an operating loss of £221,673,000 for 2018/19, so it is hard to see how the test was satisfied.

 

[MrJeeves]

Thanks. That's the total income. The test as I understand it is whether the majority of their costs are covered by the revenue generated. The accounts appear to show an operating loss of £221,673,000 for 2018/19, so it is hard to see how the test was satisfied.

Yes, my bad. I had been mixing this up with something else I was looking at recently.

It didn't pass the test in 2018/19, but that FY also included a £180k charge relating to the termination of the franchise. If we knock that off the losses, alongside the impairment of assets recorded due to the termination of the franchise (£71k), we get a "pseudo-profit" ~£29k.

I'm not an accountant nor do I work for the ONS, and I'm sure you can't just "ignore" these things, but if we're comparing finances of running (and not losing) the franchise, I think this makes sense personally?

With that £29k ""profit"", we can see the total costs are around £710k, meaning pax income covers ~51.9% of costs. In 2017/18, total costs would be ~£617k and non-franchise income was ~£344k, meaning ~55.7% of costs were covered.