The vast majority of the trains in service in England, Scotland and Wales are not owned by the train operating companies (TOCs) that run passenger services but by rolling stock companies (ROSCOs) that lease the engines and carriages to TOCs who hold government-issued franchises. (In Northern Ireland, trains are owned by the state railway, NI Railways)


This ROSCO-leasing arrangement was the brainchild of John Major’s Conservative government which embarked on a plan to privatise British Rail (BR) over 30 years ago. Under the Tories, British Rail (BR) was split into three distinct parts.  

  1. Rail infrastructure (tracks and signalling) was sold off to Railtrack, a consortium that later became Network Rail.   
  2. The customer-facing passenger transport provision was tendered out via a franchise system to train operating companies (TOCs) that control various areas/regions backed by a public subsidy in return for company investment to improve the service. 
  3. Lastly, BR’s fleet of railway vehicles was sold to three ROSCOs to manage and lease stock to the new franchisees. ROSCOs were set up to offer operating leases rather than finance leases, which meant assets were returned to the ROSCO at the end of the lease period. By extension, they carried most of the risk of holding and maintaining the rolling stock. The ROSCOs were also responsible for investing in new trains.

Birth of ROSCOs

As a result of the Railways Act 1993, three rolling stock companies – Angel Trains, Eversholt and Porterbrook – were born and took control, in equal measure, of BR’s passenger fleet of about 11,000 vehicles, including new and old assets.

In 1993, the BR passenger fleet had an approximate book value of £2bn, according to a June 2017 House of Commons briefing paper. The proceeds from the sale of the ROSCOs exceeded £2.5bn, the government said at the time.

Two subsequent reports, looking into the privatisation of the ROSCOs, the first by the National Audit Office (NAO) and the second by the Commons Public Accounts Committee, both in 1998, concluded that the ROSCO sale had been rushed through, causing a material loss of value for the taxpayer.

“The NAO calculated that at the time of privatisation the value of the three ROSCOs future cash flows, under continuing public ownership, would have been £2.9bn. The value obtained by the government sale (sale proceeds, risk transferred and possible tax receipts) was considered to be only ‘up to £2.2bn,” according to the House of Commons briefing paper.

All three ROSCOs experienced a wave of buying and selling in the years after privatisation. Angel Trains, which was originally bought for almost £700m in 1996 was sold for £3.5bn in 2015. Eversholt, which was acquired in 1996 for £518m, was sold in 2015 for £2.5bn. Porterbrook, acquired for £528m in 1996, was sold for an undisclosed sum in 2014.

See: Angel Trains up for sale, All change in wake of Angel Trains sale and HSBC is last bank to quit ROSCOs

In 2006, the Labour government ordered a Competition Commission inquiry into the ROSCOs’ practices and suggestions they were overcharging TOCs, claims that were rejected by the ROSCOs. In its findings, the CC found a lack of rivalry resulting from a shortage of vehicles available for lease.

See: Competition Commission blasts ROSCOs over train leasing costs and CC rules Roscos restrict choice


In recent years, other specialist train leasing companies, mini-ROSCOs, have come along to begin to rival the top players, these are:

Nevertheless, the top three ROSCOs continue to own about 87% of the existing rail network fleet, according to the Rail Delivery Group in 2018. According to transport experts, the ROSCOs continue to control no less than 70% of the existing stock.

A period of ownership stability followed the buying frenzy of the early years. More recently, on the issue of ownership, an October 2021 briefing by the Rail, Maritime and Transport (RMT) workers’ union, found that all three ROSCOs today have parent companies based in low tax jurisdictions.

Pandemic years

With the government stepping in to guarantee lease payments in full to the ROSCOs by the train operators during the pandemic, the subsequent payment of dividends by ROSCOs to their shareholders was tantamount to ‘government dependency on profit making’ the union said.  

During the pandemic, the government propped up the UK railways with £14bn, after effectively nationalising the privatised operators in 2020 as working from home became the norm.

Looking at the 2020 financial year, the three ROSCOs paid out dividends worth £950m. “The pandemic payouts have mostly disappeared not just overseas but into the murky world of Luxembourg’s low tax regime and the offshore tax haven of Jersey,” the RMT reported.

“The rolling stock racket is a long-established scandal on the railways … in the last 10 years, the rolling stock companies have paid out £2.7bn in dividends to their owners. These dividends typically represent around 100% of their pre-tax profits. The average dividend payment is around £260m each year.

“On average this extraction of profit represents around 13% of what the Train Operating Companies – and now the government – pay to the rolling stock companies. It represents an average of 2.8% of total expenditure by Train Operating companies,” according to the RMT.

The ROSCOs’ overseas parent companies

Source: RMT Union

Today, the ROSCOs are owned by investment vehicles associated with financial service companies and infrastructure investment companies, registered most commonly in Luxembourg.