Text Size

Current Size: 100%

Government cut to rail freight grants bad for economy & society

22 February 2017

The Government’s 21 per cent cut to the rail freight grants, effective from the beginning of April, is bad for the economy and society as it will force trainloads of freight back onto our roads, the third most congested in Europe. 

These grants are paid in recognition of the benefits to society and the economy of removing HGVs from our roads to compensate the rail freight industry for the market distortion where HGVs are paying less than a third of the costs they impose on the tax payer in terms of road crashes, road congestion, road damage and pollution. 

Philippa Edmunds, Freight on Rail Manager, said:

 “These cuts, which are not aligned with the Government’s own rail freight strategy of September 2016, are counter-productive as they will result in more road fatalities, more congestion and pollution. Rail freight is the safer, faster and cleaner way to transport freight between our ports and cities; Government figures show that lorries are almost six times more likely than cars to be involved in fatal collisions on local roads.”

She added,

“Furthermore, rail freight, which produces up to 15 times less nitrogen dioxide emissions than HGVs for the equivalent journey, can help the Government reduce air pollution at a time when its air quality strategy has been rejected for the second time. The latest DfT figures show that HGVs are responsible for 21 per cent of NOx emissions while accounting for 5 per cent of vehicle miles.

“The Mode Shift Revenue Support (MSRS) Grants are only paid by the DfT for actual traffic removed from roads, - are therefore risk adjusted for government – and represent excellent value for money to the UK taxpayer.”  

For further information please contact Philippa Edmunds on 020 8241 9982 / 07593 976 548 or philippa.edmunds@bettertransport.org.uk

Notes to Editors

[1] The Government has stated that it is reducing the grant by circa £4m per annum, effective from 1 April 2017. Grant reduction from £19,852,105 this last year to £15,738,424.94 per annum effective 1 April 2017 and further reduction from April 2018 for the year 2018/19 to £15,171,483.26

So this year it is a reduction of just over £4m (£4,113,680.71) reduction which is almost a 21 per cent budget reduction. Next year’s reduction is over 23 per cent reduction on the year 2016/17

Detailed breakdown here for 2017/18 and 2018/19 budgets

Grants awarded for 2016/17 Total grant awards for 2016/17 is £19,852,105.65

This was made up of the original budget for 2016/17 - £17,773,891.73 and then 2 further extensions to the budget – Read DfT Grant funding figures here

Two additional increases in budget 2016/17

- first £1,583034.56 (read details here)

- second additional increase in budget for 2016/17 was £495,179.36 (read details here)

Total grant awards for 2016/17 £19,852,105.65

[2] Research carried out for the Campaign for Better Transport, (Addendum to Metropolitan Transport Research Unit MTRU 2014 report February 2015. Heavy Goods Vehicles – do they pay for the damage they cause 2014) using DfT criteria, (Latest DfT Mode Shift Benefit Values issued December 2014 were used) found that HGVs pay less than a third of the costs associated with their activities, in terms of road congestion, road collisions, road damage and pollution which equates to an annual subsidy of around £6.5 billion. These conclusions are in line with a MDS Transmodal study in 2007 which found a very similar amount of underpayment: £6billion. 


[3] In 2014, on motorways, HGVs were involved in almost half (45 per cent) of fatal collisions although they only accounted for 11.6 per cent of the miles driven on them. Source: Traffic statistics table TRA0104, Accident statistics Table RAS 30017, both DfT

[4] An consumer freight train can remove 75 HGVs and an aggregates train can remove up to 160 HGVs – Network Rail Value of Freight 2013

Large HGVs are up to 160,000 times more damaging to road surfaces than the average car – 4th power law

[5] DfT Freight Carbon Review February 2017 Page 7 paragraph 3


Rail freight produces 90 per cent less PM10 particulates and up to 15 times less nitrogen dioxide emissions than HGVs for the equivalent journey. Highways England figures show that HGVs are producing around 50 per cent of the nitrogen oxide pollution from road pollution on the strategic road network even though they only make up 5 per cent of road miles driven in the UK.

Rail freight produces 76 per cent less CO2 emissions than the equivalent HGV journey- Network Rail Value of Freight 2013