After reviewing their classification against international statistical guidelines, the Office for National Statistics (ONS) has concluded that those train operating companies (TOCs) that have entered into emergency measures agreements (EMAs) with the UK and Scottish Governments should be classified to the public sector for statistical purposes.
Under the EMAs, normal franchise mechanisms have been amended, transferring almost all revenue and cost risk to the government. In addition, the TOCs have had restrictions placed on their ability to borrow money and cannot make significant changes to fares or staffing levels without government agreement. This has led the ONS to conclude that public sector control exists over them and that, in accordance with international statistical guidelines, they should be classified as public non-financial corporations with effect from 1 April 2020. As the EMAs are temporary in nature, the ONS will review the classification status of TOCs again in the future if the EMAs are amended or expire.
Any organisation’s classification status is a statistical matter that does not have any direct implications in areas such as ownership, legal status, or management structure. Therefore, following a classification, the only direct change is how an organisation is accounted for in ONS official statistics. Accordingly, the TOCs’ net borrowing and debt will be included in the relevant ONS public sector finances series and their workforces will be included in the public sector employment totals as soon as possible.
Notes to editors
Copies of the letters sent from the ONS to HM Treasury and the Scottish Government giving further details of the classification decision are available.
The TOCs affected by this classification decision are: Avanti West Coast; c2c; Caledonian Sleeper; Chiltern Railways; Cross Country; East Midlands Railway; Govia Thameslink Railway; Greater Anglia; Great Western Railway; Scotrail; Southeastern; South Western Railway; TransPennine Express; and West Midlands Trains.
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