Funding

ORR is funded through a combination of licence fees and a railway safety levy. Economic regulation activities are funded through the licence fee and health and safety activities through the safety levy.

Licence fees

A standard condition in all operator licences requires the licence holder to pay an annual fee to ORR. Following a recent consultation on funding arrangements we have concluded that the full costs of economic regulation should be borne by Network Rail, and accordingly with effect from 1 April 2006 other licence holders will no longer be required to pay a licence fee.

Safety levy

Following the passage of the Railway Safety Levy Regulations 2006, providers of railway services are required to pay a levy to cover the costs of ORR’s activities as the health and safety regulator and enforcement body for the railway industry. The levy is based on relevant turnover – that is the turnover on railway-related activities reported by the railway service provider for the previous financial year. Those railway service providers with a relevant turnover below £1 million are not liable to pay the levy, and those railway service providers with a relevant turnover between £1 million and £5 million are liable only to pay a flat rate fee of £1000.  

ORR writes to railway service providers who are potentially liable to pay the levy, asking for details of relevant turnover and on the basis of the information determines the levy due. Full guidance on the process and on the information requirements is provided to potential levy payers. 

ORR's determination in respect of the safety levy for 2008-09 is available as a related link.