What sort of railway will GBR be?

A "return to British Rail" is on the cards under reform plans, but which version will it be? 

As the first TOC returns to the public sector this month under the government's renationalisation scheme, I am wondering what sort of organisation will emerge from the rail reform plans - and I have been delving into British Rail's history to see if it offers any clues.

When the government launched its consultation on the creation of Great British Railways (GBR) in February this year, it was not Whitehall’s first trip round this particular loop. The previous Government had launched its own, very different, version early in 2022, announcing the necessary legislation in the Queen’s Speech delivered in May of that year. However, following the double change of Prime Minister in the autumn, the momentum behind the reform stalled, as the new PM Rishi Sunak expressed his indifference. The proposed legislation did not appear in the King’s Speech in November 2023, but Transport Secretary Mark (now Lord) Harper promised pre-legislative scrutiny on a draft rail reform bill as preparation for when legislation could be taken forward. That appeared, but was overrun by last summer’s General Election.

Following the change of government, rail reform was once again high on the agenda, and an immediate start was made with the passage of The Passenger Railway Services (Public Ownership) Bill which provided for the return of all passenger rail franchises to the public sector. This was part of the then Transport Secretary Louise Haigh’s “move fast and fix things” approach, and the bill received Royal Assent on 28 November 2024. This prohibited the letting of new franchises or the extension of existing franchises except by direct award to a public sector company. A day later, Louise Haigh had resigned over a previous conviction for “fraud by false representation”. She was succeeded by Heidi Alexander MP.

It was she who launched the new consultation on the bill in February this year, telling the Commons that the planned Bill would “establish GBR as a new arm’s length body, bringing responsibility for train services and rail infrastructure together into one integrated organisation.” This would mean that most passengers would “travel on GBR trains, running on GBR tracks, and arrive at GBR stations – all delivered by a single organisation in line with the clear strategic direction set by government”. GBR would, she promised, “be empowered with the expertise and authority to run the railway in the public interest, delivering reliable, affordable, high-quality, and efficient services; alongside ensuring safety and accessibility”.

It many peoples’ eyes, the shorthand term for this would be “back to British Rail” – a view given added traction by the return of the original BR ‘double arrow’ logo, albeit in modified form. However, it is clear that the new organisation will be a very different animal.

GBR will be a passenger train operator and an infrastructure provider – merging the functions carried out at the moment by Network Rail and 14 English Train Operators, four of which are already in the public sector. Taken together, they employ some 90,000 people.

In addition, six train operators are currently owned and run by devolved governments or regions, including the Scottish and Welsh Governments, Transport for London, Liverpool City Region Combined Authority (combined workforce 13,000). Then there are the four non-franchised operators – Grand Central (Arriva), Heathrow Express (HAL), Hull Trains and Lumo (both FirstGroup).

GBR will not be a freight operator, a parcels company, a rolling stock engineer, a rolling stock manufacturer or a research company – much less a ferry operator, hotel company, road freight company and bus company shareholder, as its predecessor was back when it was formed in 1962.

Though it will be smaller than before, any organisation with a workforce of 90,000 plus and an annual income of around £20 billion is a pretty major enterprise. The question will therefore be how it is then organised and what precisely is meant by arm’s length. In other words, will it have real power and authority or will Lord Hendy or his successor as Rail Minister still have to sign off on timetables?

Organisation first. There are a number of basic ways in which a large company organisation can be devised and run – and over the years between 1948 and 1992, BR tried most of them. Terry Gourvish, in his magisterial books British Railways 1948-1973 – a Business History and British Rail 1974-1997, reviews these in some detail. The most obvious and visible was a geographical structure. In 1948, the four businesses inherited from the private sector were reorganised into six regions – Southern, Western, London Midland, Scottish, North Eastern and Eastern. Each reported to a central Railway Executive, which in turn reported to the British Transport Commission. This massive organisation was also responsible, through a series of Executives, for London Transport, the provincial bus companies it acquired, Road Freight, British Waterways, British Transport Docks and British Transport Hotels.

The resulting structure resulted in much conflict and many arguments – between the Railway Executive and the Commission, between the regions and the Commission and between the regions and the Railway Executive. The result was the abolition of the Railway Executive in 1953, whilst the Regions became “Area Boards” with a good deal of functional independence, reporting to a relatively small BTC central staff. However, the failure of the Modernisation Plan in the late 1950s, and ongoing industrial relations problems undermined the work of BTC, and – after several committees of enquiry – the Commission was abolished in 1962 and replaced a series of separate bodies, one of which was the British Railways Board. The new chairman, Dr Richard Beeching, reduced the autonomy of the regions and introduced a much more functional, vertically integrated style of organisation, in which head office staff numbers went from 1,723 in December 1962 to 4,052 three years later. This was the era of “British Rail”, the corporate blue and grey livery and the famous “double arrow” symbol.

After Beeching, direct ministerial intervention in the operation of the railway increased and a whole series of changes were made after numerous consultancy reports and committees of enquiry throughout the sixties and seventies. These affected the composition of the Board and its functions, and the relative autonomy of the regions against the centre. One of the most radical changes, though, came in 1981, with the introduction of sectorisation by chairman Sir Bob Reid. This created a market-led passenger organisation based on three sectors – InterCity, London & the South East (later Network South East) and Provincial (later Regional Railways). Thus began the first separation of infrastructure – which remained controlled by regions – from operations and commercial, which became the responsibility of the sectors.

The conflicts that arose from this split were resolved in 1990 by the “Organising for Quality” (OfQ) programme, espoused by the next chairman, the second Sir Bob Reid. This saw the abolition of the regions, and the transfer of asset ownership, infrastructure management and net revenue responsibility to seven businesses – the three passenger sectors, two freight companies, and two new businesses covering telecommunications and European services. Each business would be sub-divided into a series of ‘profit centres’ – shortly to form the basis of the passenger franchises.

However, hardly had the OfQ reorganisation been completed (not without internal controversy, it has to be said), the Government’s plans for privatising the railways were published in the July 1992 White Paper. The plans, later enacted in the 1993 Railways Act, featured the separation of track and train under separate ownership – which is of course one of the aspects now thought to have been a mistake, and which the current plans are design to tackle.

This very brief essay on railway history highlights the point that renationalisation of part of the industry is the beginning of the story, rather than the end. Ultimately, ownership is not the issue, but how such a complex business can be organised and effectively managed. Sir Stanley Raymond, British Rail Chairman from 1965 until sacked by Barbara Castle in 1967, reflecting on his career later said, “In my twenty-one years in public transport, I calculate that at least half my time has been devoted to organisation, reorganisation, acquisition, denationalisation, centralisation, decentralisation, according to the requirements of the now regular political quinquennial revaluation of national transport policy.” There would be many in today’s industry who would recognise that sentiment, perhaps only questioning the proportion: “only half?”