If you're considering working in UK rail industry it's important to understand how it works. The sector has changed a lot in the 200-odd years of its history and a many people are a little bit unsure of exactly how the nation's train services are managed.
Who's in charge?
While it has been nationalised for part of its history, the rail industry is currently privatised and has been so since the late 1990s. This means private companies, such as Virgin, London Midland and Northern Rail, are responsible for the day-to-day running of train services. There are currently 28 train operators in the UK, many of whom cover specific parts of the country.
However, these are not the only organisations that play a part in running UK rail. While the industry is no longer nationalised it's importance means the government is still heavily involved. The Department for Transport is responsible for the overall direction of the rail network and works alongside partners to deliver major projects such as the current High Speed Rail 2 development. It is also in charge of granting the contracts that allow train companies to operate a particular route for a specific period of time. Transport Scotland fulfils the same role north of the border.
Contracts are given to train companies on a franchise basis, which means that once one is coming towards its end, other operators are able to bid to take over that particular route. The prospect of losing the franchise is intended to encourage the incumbent train company to go to lengths to provide a good level of service and value for money, otherwise it runs the risk of having the franchise granted to a rival.
Other stakeholders
Another major player in the industry is Network Rail. This organisation is responsible for the management of the nations' physical track and signal infrastructure. It is in charge of carrying out any repairs when needed and ensuring everything is in good working order. Determining speed restrictions also falls under Network Rail's remit and the organisation even manages some train stations.
Other stakeholders that are involved in the running of rail include The Office of Rail Regulation, which monitors the performance of the industry and is responsible for ensuring health and safety best practices are upheld. Organisations with a smaller level of involvement include The Rail Accident Investigation Branch and The British Transport Police.
The fact so many stakeholders are involved with rail is great from a jobs perspective, as it means there is a wide range of employment opportunities available.
Where does the money come from?
The complex nature of the rail industry means the money it runs on comes from a variety of sources. According to figures from the Office for Rail Regulation, passenger income accounted for 59 per cent (£7.7 billion) of the total raised by the UK's train companies and Network Rail in 2012-13. A further 31 per cent (£4 billion) came in the form of government grants, while the remaining ten per cent (£1.3 billion) was generated through commercial operations such as stations, shops and car parks.
When it comes to deciding how much train travel costs, rail fares fall into two camps - regulated and unregulated. The former is decided by the government and is generally linked to inflation. Meanwhile, unregulated fares are chosen by train companies, although the government still has a considerable level of influence.
