Rail passengers must expect above-inflation fare rises, with many commuters suffering from overcrowding in the short term, a report from a Government spending watchdog said today.
Some rail fare increases were as high as 20 per cent last year, the report from the National Audit Office (NAO) said.
Many passengers, particularly on routes serving London will face increased crowding at peak periods until plans to increase capacity - including 1,300 new carriages - can be carried out, the NAO added.
The report said that under the management of the Department for Transport, the process for awarding passenger rail franchises in England and Wales had delivered better value for money, with subsidies expected to fall.
The NAO said increased passenger numbers and a rise in the length of journeys taken was expected to result in a turnaround from a subsidy from the taxpayer of £811 million in 2006/7 to a payment of £326 million in 2011/12.
The report said the department's contract terms should improve the security, reliability, accessibility and quality of passenger rail services on the eight franchises it let between 2005 and 2007, but there was a risk that overcrowding and fare increases may offset any improvements to passenger satisfaction.
The NAO said most regulated fares (such as saver and season tickets) had risen by the rate of retail price index inflation plus 1 per cent.
Increases in non-regulated fares had been substantially higher - often 6-7 per cent, with some one-off increases as high as 20 per cent in 2007.
NAO head Tim Burr said: "Taxpayers and passengers should benefit from changes made to the franchising process for passenger rail services.
"The Department for Transport has contracted to save the taxpayer money while improving service quality, but it will need to see that capacity increases are well-managed and timely if passengers are to expect less crowded and more reliable journeys."
Commenting on the report, House of Commons Public Accounts chairman Edward Leigh MP said: "It's good that the Department for Transport's approach to the passenger rail franchising process since 2006 has produced better value for money for the taxpayer. And subsidies are projected to fall. But the risk is that a prolonged economic downturn will lead to their falling by less than expected.
"However, travelling by rail is still too often an unpleasant experience. The news that fares are likely to rise above inflation in these difficult times will infuriate many passengers who have no alternative but to travel day after day on packed trains.
"Indeed, rush-hour crowding is expected to increase for many, especially on lines into London, until 1,300 new carriages come on stream. For passengers, this increased capacity cannot come too soon."
A Department for Transport spokesman said: "We welcome the NAO's findings that the eight franchises they examined have reduced the burden on taxpayers while also securing improvements for passengers. We will study the findings and recommendations in detail.
"Rail has seen record levels of growth in the last decade and our priority is to address both current and future passenger growth. That is why over £10 billion is being invested to tackle the crowding problems currently experienced by passengers.
"Our plans will ensure that the rail network can cope with more than 20 per cent growth by 2014, on a network which will be even safer and more reliable."
Bob Crow, general secretary of the RMT transport union, said rail franchising remained "a fundamentally flawed system that delivers profits to private train operators out of proportion to any risk they take".
He went on: "The Government has made franchising look more efficient because it has been shifting the burden of subsidising franchisees' profits from the taxpayer to the fare-payer with inflation-busting fares increases.
"The prediction of a huge fall in subsidy is based on sharp and sustained increases in passenger numbers, but if they fail to materialise in the current economic climate it will be passengers and taxpayers who will have to fork out."
Shadow transport secretary Theresa Villiers said: "While the NAO has some positive news on franchising, too many passengers are still having to put up with cattle-class accommodation.
"Excessive Government micro-management of our railways is delaying the delivery of vitally-needed capacity enhancements, which means passengers suffer.
"Giving the rail industry more freedom to innovate, to speed up capacity improvements such as longer trains and longer platforms, is desperately needed if we are going to see real value for money on our railways."
Liberal Democrat transport spokesman Norman Baker said: "Buying a train ticket is increasingly becoming a lottery. What justification is there for a standard single fare from London to Warrington being £215?
"People are being forced off the trains and into their cars by unacceptable ticket prices.
"There are good deals when booking a ticket in advance but people need to be able to turn up and go without effectively being penalised for the privilege."
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