Institutional affairs • UK • Great British Railway

Note: this page is for educational purposes only. It is not a substitute for the official page of the operating company or manufacturer. 

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“Great British Railways (GBR) will make the railway simpler and better for everyone. As well as preparing the ground for GBR, the Secretary of State for Transport has asked the Great British Railways Transition Team (GBRTT) to work with the Department for Transport and Network Rail to provide industry leadership, within today’s legal framework.“

This is how the transition was made from the old franchise system to the new body that manages the operation of British railways.

A report

Between 2016 and 2018, a variety of factors held back growth in the UK economy, including fears of a global slowdown, terrorist attacks (in London, Manchester, etc.) and uncertainty over Brexit. These mainly exogenous events quickly led to a stagnation in rail travel and a decline in associated revenues. Over time, the generous bonuses paid to the UK Treasury melted like snow in the sun. The boom years were over…

Economic downturn, bleak prospects, lack of candidates for franchise renewals, endless discussions, and criticisms of the system: the franchise was clearly on the brink of extinction. It took a long time for Boris Johnson’s Conservative government to admit it. The scheduling chaos of May 2018 on the northern and southeastern networks was the final blow. The Secretary of State for Transport at the time, Chris Grayling, then commissioned a “review” to calm frayed nerves.

Keith Williams, former CEO of British Airways, was tasked with this mission, initially causing some concerns. The new plan to be published became known as the “Williams Review.”

Keith Williams carried out this task quite well. In 2019, during a speech in Bradford, he stated, “What worked during the 25 years following privatization has now become a hindrance to the sector. It hinders collaboration, prevents the railway from operating as a system, and encourages operators to protect commercial interests.“

He then outlined his goals:

• Tackling fragmentation, short-termism, lack of accountability, and conflicts of interest resulting from the sector’s structures;
• Ensuring that British railways are financially viable for taxpayers and users;
• Improving accessibility.

Williams aimed to consolidate responsibilities that were previously scattered among the Department for Transport (DfT), Network Rail, and the regulator, ORR, while maintaining a greater distance between the government and the daily management of the railways. This excluded any form of nationalization and a return to British Rail, as still dreamed by the then Labour leader, Jeremy Corbyn.

In January 2020, Minister Chris Heaton-Harris, speaking in a debate in the House of Commons, indicated the “likely” path to be followed: private operators under concession. The distinction from the franchise is significant: in a concession model, a public body retains the “revenue risk” rather than transferring it to the designated operator. Bidders generally do not have to produce revenue forecasts.

A certain form of regionalization is also highlighted to “influence and inform decisions regarding [regional] services and upgrades,” thus creating a railway system more aligned with local desires and less tied to the ministry.

In March 2020, Britain, like the rest of the world, suffered the consequences of the pandemic. Travel restrictions imposed by the Johnson government resulted in a drastic drop in passenger flows and revenues for operators. In response, emergency measures agreements (EMAs) were created, replaced in September 2020 by emergency recovery measures agreements (ERMAs), then by new contracts (NRCs) in early 2021. The net subsidy to operators increased by £700 million, reaching £1.2 billion in 2020. The pandemic thus solidified Keith Williams’ ideas.

A new plan

In May 2021, the Williams Report, renamed ‘The Williams-Shapps Plan for Rail’, was published, providing for the creation of Great British Railways, often misinterpreted as nationalisation. The LROs took over some of the old franchises, prompting various comments. Price rises and fears about purchasing power exacerbated tensions. The resumption of traffic was difficult, marked by service cuts, as in Scotland. Politically, Labour was divided, with some wanting greater nationalisation and its leader, Keir Starmer, adopting a pragmatic approach.

On March 21, 2023, Derby was chosen as the headquarters of Great British Railways. This decision marked a significant step in the government’s plan to reform the nation’s railways, with Derby set to become the heart of Great Britain’s rail industry. The city was selected for its strong links to the wider network, well-established connections with the industry, and its extensive local cluster of private sector rail businesses. (Click on image to get access to the report)  🟧

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Institutional affairs • UK • Lexical