By Isabella Lawson, FGF Research Fellow
Nationalising the railway and creating GBR is a major operational and political task
Over the last few years, you may well have heard about plans to reform the railway – first started (in a way) under the previous Conservative government, and now being delivered under the current Labour government. While nationalising public services is a known (and often popular) process, what is potentially less understood about this particular job is the sheer scale and complexity, or the level of the political stakes involved. This will be the biggest change to the railway since British Rail was privatised in the 1990s, and from an institutional complexity perspective, is arguably the biggest thing the government will do in this parliament.
Yet while this process of bringing train operating companies (TOCs) back into public ownership and creating Great British Railways (GBR) as the new ‘directing mind’ for an integrated rail network has been the subject of intense debate within the rail industry, the wider policy landscape (and the wider public) has not been paying such close attention. Could this mean GBR loses sight of the passenger, or the wider goals of public transport, as we go through this enormous change?
At FGF, we have spent recent months reading the reams of government and industry documents about GBR, and speaking to key figures from across the rail industry and beyond, including: current and former politicians, advisers and civil servants; academics and journalists; industry leaders and representatives from passenger, freight, infrastructure and supply chain companies; trade unions and others – to determine how we can set up GBR for success.
In doing so, we’re looking to determine the key questions that government – both the Department for Transport (DfT) and the Treasury – and the GBR leadership are going to face as the new body is established. We’re not looking to reopen some of the big policy principles that have already been answered by government, nor wade in on highly operational matters that will be for the new team at GBR when in place. What we want to do is highlight the big strategic choices that need to be made, and the trade-offs that these will entail, as this major new state institution is created.
Where are we at the moment?
One of Labour’s first acts after it won office was to pass the Passenger Railway Services (Public Ownership) Act in November 2024, allowing the government to bring private franchised rail operators – the likes of West Midlands Trains and Greater Anglia – under public control as their contracts expired. That was part one of the reform agenda. Part two is to create GBR (not as easy as it sounds!). A second piece of legislation, the Railways Bill, does just that and is passing through the Houses of Parliament as we speak. It will carry over into the next parliamentary session, is due to progress to the House of Lords this autumn, and receive Royal Assent late this year or early in 2027. It is predicted that GBR in its initial form will then be established before the end of 2027.
Once GBR is established and fully operational, it will employ over 100,000 people (in a highly unionised industry). It will comprise what is currently 17 different organisations: Network Rail (which manages rail infrastructure across the country), the Department for Transport Operator (or DFTO, the public body currently running those train companies which have already been nationalised), 14 private train operators which had previously been operating under a franchise system, and the Rail Delivery Group (which provides information and services directly to passengers). It will be responsible for managing over £10bn of annual funding from the government.
It will also be directly responsible to the Secretary of State for Transport. This means it has the potential to become a physical demonstration of the state of the country, and the ability of the government to run its own institutions. Could we end up in a position where Heidi Alexander is held responsible for litter left behind on trains in Southampton? Or will it be possible to maintain appropriate distance between politicians and the leaders of GBR, with the former engaging mostly on strategic issues and the latter being allowed to get on with operational matters?
There is no shortage of material out there from the government and other organisations like Network Rail around GBR. Just recently, we saw the framework for a Memorandum of Understanding with the Scottish government and a Memorandum of Understanding with the Welsh government published. The Transport Select Committee has also released its recommendations to the DfT around the Railways Bill (and the government has now published its response), and the Secretary of State has sent a letter to the new Chair of the DFTO laying out her expectations of the role during the transition to GBR.
However, many of these documents are quite technical and the journey of the Bill through parliament seems to raise as many questions as it answers around things like the GBR operating model and licence; where stakeholders will sit in the new landscape; terms and conditions for workers; and many more. Through our work, we’re looking to highlight some of those questions for government ministers, civil servants, and the future GBR leadership. In particular, we aim to highlight those where the choices made will have far-reaching implications, and specific trade-offs will need to be made. Below, I set out a few of these.
What will GBR’s overarching purpose be, and how can its culture support that?
As GBR brings together multiple existing bodies of very different sizes, and with very different mindsets, its new leadership will need to think intentionally and strategically about the culture that they want to instil in the organisation, and how that is presented both internally and externally. Crucial to that – and to avoid political micromanagement in the day-to-day running of the railway – is a crystal clear sense of GBR’s overarching purpose, as articulated by the Secretary of State and then understood and internalised within GBR, from the boardroom to the platform. That clarity of purpose and culture will help GBR to manage a range of organisational challenges, such as integrating multiple different workforces, engaging with a vast array of stakeholders, mitigating industry skills gaps, building a diverse workforce fit for the future (at all levels), and managing industrial relations.
How will GBR be scrutinised?
The Office of Rail and Road (ORR) has regulated Network Rail for nearly 22 years. But as Network Rail is absorbed into GBR, ORR will be changing too, and will be joined by a new ‘Passenger Council’ in the rail regulatory ecosystem. Part of the ORR’s new role will be more of an appeals body for third parties than it is today, and both regulators will face new challenges. As a public monopoly, GBR has the potential to be both ‘player’ and ‘referee’ in the new system – making decisions on which private train companies (freight and passenger) can have access to the tracks, while also being the dominant train operator itself. It will likewise be operating its own ticketing app while determining the basis on which its third-party competitors can access fares and timetabling data in order to offer their own services.
For that to all operate fairly, without compromising the benefits of integrating track and train into one national body in the first place, getting the right frameworks and relationships in place between GBR, ORR, the Passenger Council and the government will be critical.
Where do the mayors come in?
The devolution landscape is changing rapidly, not least because the Railways Bill is going through parliament alongside the English Devolution and Community Empowerment Bill, which will give mayors the ability to request control over local railway services. Even without these powers, GBR will need to work alongside current and future mayors as partners and help to deliver their transport visions while balancing national priorities. Can this be done just on trust or might we need something more formal in place?
This will be a key difference to the British Rail days, and it’s important to note that the GBR network will just be one (large) piece in the wider transport picture, linking into regional and devolved services like Transport for London (TfL), Scotland’s Railways, and the Core Valley Lines/wider TfW operations in Wales, and tying into a wider network of all different modes of transport – see DfT’s recently published integrated transport strategy. It will be a delicate political and operational challenge to balance the creation of a new centralised GBR on the one hand, with the trend towards ever more autonomy and power at local and regional level on the other.
What’s next?
As FGF’s Dan Corry correctly noted last year, “getting the design of GBR right is not only about building a great new rail system, but about discovering and then showing everyone what a modern, progressive approach to at least one of our great public services is, and how we can then apply that approach elsewhere to (re)build public institutions that are fit for the future.”
That’s the challenge we’ve set ourselves, and we’re working towards publishing our final report in autumn this year. Before then, we’ll publish an interim report next month, laying out our initial findings and potential options for government and GBR, to align with the Railways Bill coming back to the House of Commons. We’re delighted to be partnering with Network Rail as sponsor of this report and to have a fantastic expert steering group, made up of experienced industry and policy figures, who are helping to guide our work. Though, as with all FGF work, this will be an independent report and the eventual recommendations will be our own.
We’re keen for it to be as collaborative as possible, and so we welcome thoughts and opinions on this important topic. Please do get in touch either by emailing [email protected] or by signing up to our newsletter to hear more!
