The Office of Rail and Road (ORR) has announced that the amount of subsidy the railways receive from the government has decreased, due to an increase in revenue from fares.

Between April 2024 and March 2025, revenue from the rail network increased by 8% to £11.5 billion in comparison with the previous year. With 1.7 billion passenger journeys, they are now approaching pre-pandemic levels, but revenue from fares is still 12% less than what it was before the pandemic.

At £11.9 billion, the funding from the UK and devolved governments towards running the railways was £0.9 billion less than the previous year. Statistics show that the highest level of government support per passenger-kilometre travelled went to Scotland. Other key findings include:

• Operational income for the railways of £25.9 billion was down by £151 million.
• An operational industry expenditure of £26.0 billion was £23.5 billion higher than the previous year.

Most of the current railway investment is going towards HS2. Although there was a £10.3 billion investment in new and enhanced rail infrastructure and rolling stock, this was £0.4 billion less than the previous year, with the majority of it, £7.1 billion, going towards HS2.

Investment in the railway industry by private companies increased by £161 million to £756 million. Half of the 20 public contracted train operators expected to pay £164 million in dividends, 3% less than the previous year, and publicly owned operators accounted for 12% of this total.

The rolling stock companies (ROSCOs) paid £275 million in dividends to shareholders, which was £64 million less than the previous year.

As well as looking at revenue income, the Office of Rail and Road has has role in authorising locomotives for use on Britain’s railways, and considering applications for interested parties to operate new train services through the Channel Tunnel.

“Taking stock of the national rail finances in our annual report, we welcome the continued recovery in fares income in the last year. But cost pressures and a lagged recovery in industry income compared to passenger journeys explain why the reduction in government funding still leaves the overall subsidy substantially above pre-pandemic levels.”

Will Godfrey, Director of Economics, Finance and Markets