Rail Partners, which represents independent passenger and freight train operators, warned that the government’s current focus on cost reduction will lead to reduced services and fewer people travelling by train.

“This would be a bad outcome for passengers and also for taxpayers funding the service,” the report said.

It recommends boosting investment from private sector operators to help them attract passengers in a bid to restore revenues that have been lost since the pandemic.

A thriving railway would also help to tackle some of the UK’s current economic challenges and contribute towards climate change efforts, report said.

“As a lower carbon form of transport, rail also helps to deliver the government’s sustainability objectives, air quality improvements and reduced congestion in towns and cities up and down the country.”

As it emerges from the pandemic, the rail sector is facing a significant financial hole. While fixed costs remain fairly constant...