Rail Business UK looks at the details of the government’s rail reform plans, which would restructure the industry and establish Great British Railways as a new body bringing together infrastructure and operations in the biggest shake-up of the sector since privatisation.
UK: The government has launched consultation for a planned Railways Bill which Secretary of State for Transport Heidi Alexander said would implement a ‘once-in-a-generation overhaul of the fundamental rules, structures, and bodies that make up our rail industry’.
This ‘landmark’ reform would ‘sweep away decades of failure, creating a Great British Railways [that] passengers can rely on’, Alexander said when the eight-week consultation period was launched with the publication of A Railway Fit For Britain’s Future on February 18.
Described by government sources as the most substantial piece of rail-focused legislation to come before parliament since the Railways Act of 1993, the bill is expected to be introduced this summer and come into law in 2026.
It follows from the Passenger Railway Services (Public Ownership) Act which received royal assent in November 2024 as a relatively simply piece of legislation that could be passed quickly to stop the award of passenger train operating contracts to the private sector.
Great British Railways
The planned primary legislation would establish Great British Railways as a ‘directing mind’ bringing together infrastructure and passenger operating activities currently provided by organisations including Network Rail, train operating companies, the Rail Delivery Group, the Department for Transport and DfT’s in-house operators.
GBR would be created out of Network Rail Infrastructure Ltd, to simplify the transfers of assets, people and contracts. It would unite track and train ‘at a route level’ with integrated management and passengers travelling on GBR trains, running on GBR tracks to a GBR timetable.
Critical functions currently provided by the Rail Delivery Group will be integrated into GBR.
DfT will also evolve, stepping back from day-to-day management, with some of its functions transferring into GBR.
The Secretary of State would set the government’s vision and desired outcomes, appoint the Chair of GBR and have a clear role in the appointment of board members.
Scottish ministers will continue to set the strategy for the railway in Scotland, and the Secretary of State will have a duty to consult Welsh ministers on the long-term strategy.
GBR will be held to account by the Secretary of State through its Chair and board. The Secretary of State will have the power to issue directions and guidance, although this intention is that these powers ‘will be used sparingly’.
Much of the structure of the ‘tried and tested’ periodic review process will be carried over, with changes to existing legislation to simplify and clarify intent. As today, the Secretary of State will issue a High-Level Output Specification and Statement of Funds Available. GBR will create a business plan in setting out its proposed activity over the next five years, with the Office of Rail & Road assessing viability.
The first new funding process would take place at the end of the current control period in March 2029. While this will initially replicate the existing process used by Network Rail to ensure a stable funding stream, Rail Business UK understands that officials are keen to see a similar multi-year funding settlement applied to cover operating subsidy in the medium term.
Devolution
Existing devolved accountabilities in Scotland, Wales, London and the Liverpool City Region will remain, and the government will continue to engage to develop future arrangements.
A new statutory role for the devolved governments and mayors will give them a greater in governing, managing, planning, and developing the rail network in their areas.
Mayors could work with GBR to fund additional services or to better align train, bus and tram timetables.
Regulation and watchdogs
ORR’s role as safety regulator will not change, and it will continue to regulate High Speed 1, act as competition authority, remain the consumer law enforcement body and license non-GBR operators and infrastructure managers.
An independent passenger watchdog will be created, possibly from the existing Transport Focus. This will have powers to set standards for journey information and assistance, investigate persistent problems, and demand data and information from GBR. It will publish reports on poor service and refer issues to the regulator for enforcement action.
GBR, government, and the regulator will have a legal obligation to consult the watchdog.
Responses to the consultation will inform a decision on whether to consolidate passenger-focused functions of ORR, Transport Focus and the Rail Ombudsman into one body.
Open access and freight
A new track access framework to be established in primary legislation would see GBR make key decisions that are currently led by ORR, which will no longer approve access or direct the sale of access rights and will not set standard terms.
GBR’s own operators will not pay access charges, as ‘quasi-transactional payments within GBR would act as a barrier to simplification’.
Open access passenger services will continue to be permitted where they ‘encourage growth, improve connectivity and provide more choice’, as long as these benefits are not outweighed by costs to the taxpayer or impact on performance.
GBR will have a legal duty to promote and support rail freight growth for the economic and environmental benefits, and the government will include safeguards to ensure that freight operators receive fair access to the network.
A cost apportionment process will provide non-GBR operators with confidence that the charges they pay are fair, non-discriminatory and reflect the cost of them using the GBR network. Charging decisions will be appealable to the ORR.
Ticketing
GBR will be able to reform the fares and ticketing system without needing the agreement of multiple operators.
DfT said this aims to create a simpler and more intuitive ticketing system that reflects how people prefer to travel, not how operators prefer to receive revenue.
‘GBR will put an end to passengers having to worry about whether their ticket is valid on an alternative service’ in the event of disruption.
GBR will provide ticketing services directly to customers through ticket offices, vending machines, on trains and digitally. A website and app will gradually replace train operator websites, and will compete with third-party retailers and open access operators ’so that standards are continually driven up in the interest of consumers’.
Supply chain
One of GBR’s guiding principles will be to work closely with the private sector to support jobs, investment and innovation.
Network Rail spends £8bn/year in the rail supply chain, and it is hoped that more joined-up and long-term decision-making under GBR will give greater certainty to suppliers, including a long-term plan for rolling stock.
