An illusion of success: The consequences of British rail privatisation

•The article challenges narratives of the success of UK rail privatisation using accounting data from Network Rail and private train operating companies.•Large government subsidies channelled through Network Rail have radically changed the appearance of railway finances.•Lower track access charges levied by Network Rail have artificially inflated train operator profits, generating returns for the taxpayer and the illusion of financial self-sufficiency.•This accounting fix has bolstered claims that rail privatisation has been a financial success.This article accounts for the British experiment with rail privatisation and how it has worked out economically and politically. The focus is not simply on profitability and public subsidy, but on the appearances which accounting arrangements create. The article scrutinises the Network Rail subsidy regime, which enables train operators to achieve fictitious profitability without increased direct state support. This enables supporters of privatisation to claim train operators produce a net gain for the British taxpayer. The claim forms the heart of a trade narrative which is employed by the industry and their political backers to deflect criticism and stymy reform.