Institutional affairs • UK • Great British Railway

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Key points

• Great British Railways (GBR) is the new UK public body announced in May 2021, set to take on infrastructure, fares & scheduling, as well as the operation of passenger trains. 
• The reform stems from the Williams Report (also known as the Williams-Shapps Plan for Rail) which addressed issues around fragmentation, lack of accountability and the old franchise system.
• With Labour coming to power in July 2024, GBR’s parliamentary journey accelerated, raising several questions.

“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).  

2019-2024: an average of one secretary of state per year!

Although the Conservatives backed reform via GBR, they failed to turn the plan into law during their final period in office. While under Boris Johnson governments and his successors the blueprint was welcomed, delivery stalled: legislation to establish GBR was not introduced before the dissolution of Parliament ahead of the 2024 general election.

2024

In July 2024, Labour returned to power after a 14-year absence. Their return was marked by the acceleration of the implementation of Great British Railways and by relative hostility towards private operators. Some private operators, such as First Group, but especially rail freight operators, felt it was time to take a stand to defend their business.

After being included in the July 2024 King’s Speech, the Passenger Railway Services (Public Ownership) Act was introduced to Parliament in July 2024, and passed into law on 28 November 2024.

The Act amended the Railways Act 1993 to allow the transport secretary to only enter or extend a franchise agreement under specific circumstances and to allow a public sector company to provide train operations when existing franchises end.

The Act applies to England, Wales and Scotland and prohibits ministers in the Senedd and Holyrood from entering new franchise agreements. In Scotland, Scottish Rail Holdings—a public company—is already responsible for ScotRail and the Caledonian Sleeper, while train services within Wales are run by Transport for Wales, which is owned by the Welsh government.

At the same time, the Chancellor Rachel Reeves has announced in July a raft of cuts to government programmes and policies to plug a projected Government overspend of £22 billion. She said in total there are £1 billion of various transport projects committed to 2025 that are “unfunded” and that the Transport Secretary will undertake a review of those commitments. The Restoring Your Railways programme was officially scrapped by Chancellor Rachel Reeves in 2024.  

In September 2024 the government launched “Shadow Great British Railways”, which it said would “pave the way” for GBR.

Battle lines are clearly being drawn ahead of the expected new legislation to set up Great British Railways, which will ‘bring track and train together’ although at that time, in what way Network Rail will be reintegrated was still unclear. Also not clear was the proposed role and extent of open access (OA) operation, a vital key to the success or otherwise of GBR. According to The Times, FirstGroup has been leading the charge for ‘curbs on the new state rail operator’, lobbying along with several other current train and open access operators and Trainline against the Government’s proposals.

2025

During 2025, it was still unclear what form GBR would take. The first signs came in the spring when the regulator ORR was asked to step down some new requests for network access by private operators.

This initiative makes sense from a political perspective: on the one hand, Labour is not in favour of private operators; on the other hand, the lack of money meant that certain investments in network capacity had to be postponed, contrary to election promises. It was therefore becoming clear that the new pre-GBR policy was to no longer satisfy all requests for access. This caused great concern among rail freight operators.

During Autumn, assurances have nevertheless been given regarding a strengthening of the ORR’s role, and a rail entity within the current Department for Transport (DfT) is expected to move to the future GBR. ‘Can the former DfT staff become team players‘, wrote Roger Ford in Modern Railways? ‘For the last 30-years‘, explains Ford, ‘these civil servant have increasingbly been the masters of train operators. But once employed by GBR, the roles will be reversed. They will be there to support the managers bringing in £11.5 billion in revenues a year – not to chide for costing the taxpayer too much.’

The bill defines GBR’s statutory functions, which includes maintaining railways infrastructure, providing railway services, carrying out research and publishing advice, as well as the duties it will consider when carrying out these statutory functions, was laid before parliament on November 5. 🟧

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