Railways Bill: a new framework for Great British Railways

As expected, the Bill’s main objective is the establishment of Great British Railways (“GBR”) as the central body responsible for bringing ‘track and train’ together, replacing the structure that has existed since privatisation in the 1990s.

The Bill seeks to create a more integrated and accountable railway system by reflecting in legislation the roles of GBR, the Secretary of State (“SoS”), devolved administrations, and local authorities, while ensuring independent oversight of the industry through the Office of Rail and Road (“ORR”) and the new Passengers’ Council.

The Bill is broad in its approach and covers a number of areas – we have examined the key aspects below:

GBR’s Strategy and Structure

The Bill positions GBR as the focal point for reform of the rail industry – with GBR taking on responsibilities for and making strategic decisions on infrastructure investment, operation and management of infrastructure and the operation of passenger services, as well as various strategic matters such as setting fares, granting of access rights to the GBR railway network, private investment and performance management.

GBR will need to take those decisions within a framework established by the SoS and the Scottish and Welsh Ministers. Through various statutory mechanisms, they will be able to set GBR’s strategic direction, including by way of:

• the SoS’s ‘rail strategy’, which will be a long-term plan detailing the SoS’s strategic objectives for rail, that the SoS will have the right to revise at any time. This will sit alongside equivalent strategies published by devolved governments in Scotland and Wales to which GBR must have regard when discharging its functions;
• directions issued by the SoS and the Scottish Ministers, which GBR must comply with, and guidance (also published by the SoS and Scottish Ministers) which GBR must have regard to;
• in respect of the passenger services that GBR will operate, the terms of public service contracts which will continue to be awarded by the Secretary of State to GBR or a subsidiary of GBR with respect to those passenger services designated by the SoS under the Bill (equivalent to designation under the 1993 Act);
• GBR’s licence that will be issued by the SoS and which may impose conditions on GBR proposed by the ORR and approved by the SoS;
• GBR’s own business plan which will be prepared by GBR but approved by the SoS.

Separately, the Government has confirmed that GBR will be established by using existing Network Rail rather than creating an entirely new corporate entity. The Bill itself provides for a good deal of flexibility as to how GBR may choose to structure itself in the long term, with the potential for GBR to discharge its functions through subsidiaries. The door is left open for the Scottish and Welsh devolved administrations to enter into joint ventures with GBR to deliver passenger services designated by them under the Bill. GBR will also have the power to enter into agreements with mayoral combined authorities in respect of the carrying out and/or implementation of specific functions of GBR.

Funding and Financial Arrangements

GBR will be required to prepare and publish business plans that outline its financial strategy, operational priorities, and investment needs for five-year funding periods. These plans must align with the long-term rail strategy established by the SoS and take into account guidance from the devolved administrations. Funding for GBR will primarily derive from a five-year funding estimate process (similar to the existing Control Period arrangements), supplemented by income from access charges, fares, and other commercial activities. The ORR will continue to have responsibility for setting the timetable for and overseeing the review process through which the SoS and Scottish Ministers will set objectives for the five-year funding period and provide a statement of available funds, by reference to which GBR will then prepare its five-year business plan.  

The SoS will have powers to provide financial assistance to GBR, including grants and loans, to support GBR’s statutory functions. Similar powers are given to Scottish Ministers in relation to GBR’s activities in Scotland. Note that during the funding period, the SoS and Scottish Ministers have the power to increase or reduce the amount of funding that may have been committed at the beginning of the funding period.

The Bill also introduces requirements for transparency in financial reporting, ensuring that GBR publishes information on costs, revenues, and performance. This is intended to promote accountability and enable effective oversight by regulators, government bodies, and the public. In addition, the Bill includes provisions relating to subsidy control and compliance with wider public finance rules.

Access and Performance

The track access regime will be reformed to designate GBR as the primary controller and decision-maker for access rights across GBR’s rail network. GBR will be responsible for determining which operators are granted access, the terms of that access, and the associated charging and performance arrangements.

To promote transparency and ensure fairness, GBR will be required to prepare and publish a  number of policies and schemes that will provide the framework within which it is to grant and charge access to the network and manage capacity on and performance of the network. Although these documents are to be prepared by GBR, any person aggrieved by the terms of these documents can appeal to the ORR. However, the ORR will not have the right to amend the terms of these documents itself but can require GBR to reconsider the relevant provisions.  

With respect to managing capacity, GBR must take into account the needs of passenger services, freight operators, maintenance activities, and open access services. The Bill specifically requires that when GBR is manging capacity, it must allow for not only the operation of existing GBR passenger services, but also those passenger services that it expects to operate in the future; it will be interesting to see how this duty to consider future GBR services (without reference to a specified look-forward period) might be balanced against more immediate aspirations of open access operators to make use of existing capacity.   

In recognition of the strategic importance of rail freight, the Bill confirms that GBR will establish a dedicated freight team and appoint a board-level representative to champion freight interests. GBR must also have regard to freight targets set by the SoS and Scottish Ministers.

The ORR will continue to act as the appeals body for any access and charging decisions. Where the ORR upholds an appeal with respect to access, timetabling and charging decisions made by GBR, the ORR will have the right to substitute GBR’s decision with its own.

Fares and Retail

GBR will have the right to determine its own fares and fares structures, supporting the Government’s aim for simplified fares arrangements. However, GBR’s freedom to set fares will remain subject to honouring discount schemes referred to in the Bill as well as those that might apply by way of regulations made by devolved governments. The SoS (and the Scottish Ministers in Scotland) will also have the power to influence GBR’s fares policy through the issuing of directions or guidance as well as through the public service contracts between the SoS and GBR (as is currently the case).   

An important aspect of the Government’s reforms in this area is that  responsibility for the operational arrangements that underpin the sale of train tickets in Great Britain  will be transferred from RDG to GBR. However, it was also made clear in the Railway Bill consultation that there would continue to be a role for independent retailers to sell national rail tickets. The Bill seeks to safeguard their interests through the requirement for the ORR to develop a document (or code of practice) with the SoS’s approval relating to GBR’s activities connected to the sale of tickets by others. GBR will be required to comply with this ‘code of practice’ as part of its licence conditions. Additionally, the Government is proposing that GBR will be structured in a way that will ensure decision making in relation to GBR’s retail industry management function will be kept separate from its operational and commercial arm.

Passenger Watchdog

The Bill also introduces a new watchdog for the industry, to be called the “Passengers’ Council”. Far more than a complaints body, this independent watchdog is tasked with championing passenger interests. Its remit goes beyond GBR - it will hold all rail operators in Great Britain accountable for service standards, accessibility, and fair treatment, but its responsibilities will not extend to services in London (which will remain under London TravelWatch).

It will also assume the role of setting and monitoring standards which operators will be required to comply with as part of their licence conditions. These standards will relate to accessibility for disabled persons, information to be provided in the event of disruption, processes for paying delay compensation and the handling of complaints.

The Passengers’ Council will have statutory powers to investigate any matter relating to the provision of railway passenger services or station services which is referred to it by a range of stakeholders.  It will be able to require an operator to disclose any information that it requires in connection with its investigation. Failure to comply may result in enforcement action by the ORR. Where an investigation reveals breaches of a licence, the Council may require the operator to provide a remedial plan with enforcement action being taken by the ORR.   

GBR, the SoS and Scottish Ministers will also owe duties to the Passengers’ Council to consult it where their duties and activities under the Bill impact on passenger interests.

Conclusion

The Bill is a significant step forward in the establishment of GBR, and gives the industry its first real insight into the potential future structure and operating model for a reformed railway industry in Great Britain. While it marks significant progress, the Bill remains subject to parliamentary scrutiny before it can be enacted as the Railways Act 2026. As such there may still be changes to come. Stakeholders will be particularly interested in how the outstanding, yet-to-be defined finer details evolve and influence the future structure of the industry.