Great British Railways considers public ownership of new trains
A new strategy could see the government buying trains outright instead of leasing them from private firms.
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Great British Railways (GBR) is examining a shift towards public ownership of new trains, moving away from the established practice of leasing them from private rolling stock companies. This potential change follows a year where rail operators incurred £2.7 billion in leasing costs. The government's new rolling stock and infrastructure strategy will evaluate public ownership, leasing, and other financing models for all future train orders. Existing leases will remain unaffected by this proposed change.
Since the privatisation of the rail network, rolling stock companies (ROSCOs) have typically owned passenger trains, leasing them to the operators that run services. The Office of Rail and Road's (ORR) analysis for 2024-25 indicated that these companies received £1.3 billion in income against £1 billion in expenditure, resulting in a net profit margin of 18.5%. Dividends paid by ROSCOs decreased to £275 million in the same period, down from £339 million the previous year.
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Potential Cost Savings and Strategic Integration
The government suggests that acquiring trains for public ownership could yield substantial savings in certain circumstances, although specific fleets or potential savings figures have not yet been identified. The calculation for GBR will involve weighing the total costs of purchasing, financing, maintaining, and eventually replacing a train fleet against the ongoing expense of leasing over its operational lifespan. The ORR reported that franchised train companies spent a total of £4.1 billion on rolling stock in 2024-25, with £2.7 billion allocated to leases and £1.5 billion to maintenance.
Beyond financing, the strategy advocates for a more holistic approach to planning. This includes integrating decisions about train procurement with those concerning track infrastructure, depot facilities, and maintenance schedules, rather than addressing them in isolation. GBR also intends to promote the development of more standardised train 'families' designed for flexible deployment across the national network. Future train fleets are expected to incorporate enhanced passenger information systems and digital connectivity, with battery-powered and further electrified trains intended to replace diesel services.
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Benefits for Manufacturers and Future Considerations
A significant potential benefit of this strategic shift lies in creating a stable, long-term pipeline of work for rolling stock manufacturers. This aims to move away from the historical pattern of 'feast and famine' in railway orders, which has caused instability for the industry. Industry reports suggest that smoothing order fluctuations could ensure a consistent annual workload for UK railway factories, providing more reliable employment for factory staff and their supply chains. However, the government acknowledges that customer experience with previous procurement decisions, such as the seating on Thameslink trains, serves as a reminder of potential pitfalls.
Questions this report answers
+What is Great British Railways considering for new trains?
Great British Railways is considering purchasing new trains for public ownership instead of routinely leasing them from private companies. This strategy aims to assess different financing arrangements for future train orders.
+How much did rail operators spend on train leases last year?
In the last financial year, rail operators spent £2.7 billion on leasing trains from private rolling stock companies. This figure is part of a total £4.1 billion expenditure on rolling stock.
+What profit margins did rolling stock companies report?
According to the Office of Rail and Road's analysis for 2024-25, rolling stock companies reported a net profit margin of 18.5%. They received £1.3 billion in income against £1 billion in expenditure.
+What are the proposed strategic changes for train planning?
The strategy proposes planning trains alongside track, depots, and maintenance facilities, rather than as separate considerations. It also aims to develop more standardised train families for flexible use across the network.
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