Remember, remember, the fifth of November: a new Railways Bill

Earlier this year, the Department for Transport (DfT) undertook an eight-week public consultation on its proposed approach to the reform of the railway in Great Britain and the creation of Great British Railways (the Consultation). You can find our thoughts on the Consultation here. The response to the Consultation was massive, with businesses, individuals and consultants interested in the future of the railway responding in droves. Over 2,300 responses to the Consultation were received – and understandably this has taken the DfT some time to review and carefully consider.

After months of reflection, we finally now know the government’s plans for the future railway. On 4 November 2025, the Government published its response to the Consultation (the Response). The “once in a generation” Railways Bill was published the following day, on 5 November 2025, with Secretary of State for Transport Heidi Alexander presenting the proposals to a packed room at the Railway Industry Association’s annual conference.

Whilst the proposals are similar to those set out in the Consultation, in listening to the views of the industry, a number of subtle changes have been made. We take a look at some of those changes, and the future Great British Railways, in this piece. Will 5 November 2025 be remembered as a day of sparkling fireworks lighting up the night sky or gunpowder being laid in the foundations of the railway? We offer our initial thoughts.

A new rail system under Great British Railways

DfT’s Response makes clear that the primary purpose of the new Railways Bill is to establish Great British Railways (GBR) as a single unified organisation to be the “directing mind” of the reformed rail industry. “Directing mind” is consistent with the proposals in the Consultation, and indicates a much more interventionist approach than earlier proposals which had suggested GBR would be a “guiding” mind for the railway. The ability to direct rather than guide is a subtle but important nuance aligned with delivery of an integrated railway.

GBR has been given a clear set of functions under the Railways Bill, aligned with the Consultation outcomes. These are:

managing, operating, maintaining, renewing and improving railway infrastructure;
providing railway passenger services;
determining the fares payable for travel on the railway passenger services GBR provides (which therefore will not include open access services, or services where devolved authorities specify fares);
selling tickets for travel on railway passenger services or securing that tickets are available for sale;
providing services to facilitate the provision and use of railway services, including where the railway services are provided by persons other than GBR;
carrying out research and development and supporting innovation in relation to railways and railway services, and
publishing advice and standards on matters related to railways and railway services.

General duties

The Railways Bill also sets out the broad general duties that GBR must consider when carrying out the above functions. These duties will also apply to the Secretary of State, Scottish Ministers, Welsh Minister and the Office of Rail and Road (ORR) but we focus mainly on GBR in this section. The duties are intended to align with the government’s six key objectives for the railways as set out in the Consultation (i.e. reliability, affordability, efficiency, high quality, accessibility and safety) and include:

promoting the interests of users and potential users of railway passenger services, including the needs of disabled persons;
promoting the use of the railway for freight services;
promoting high standards of railway service performance;
enabling persons providing railway services to plan the future of their businesses with a reasonable degree of assurance (which is an existing duty in the Railways Act 1993);
promoting the public interest; and
taking into account the costs that will need to be met from public funds and the need to make efficient use of those funds (which we think has particular implications for open access operators).

Interestingly, the DfT has chosen not to include an express duty relating to the environment, or a duty to grow passenger numbers or improve the passenger experience. This is explained on the basis that these are already covered elsewhere, although the reasoning seems relatively weak.

Notably, the Railways Bill does not create a hierarchy between GBR’s general duties and GBR will have the freedom to consider which duties are most relevant and what weight it gives to each duty when exercising its functions. Whilst the duties themselves are different, the process of weighing up a number of duties is not new. In reality, this means that there is quite a bit of flexibility and discretion in the decision-making process.

Understandably, feedback provided in response to the Consultation has queried how GBR will fairly and effectively balance the needs of different users of the railway. These general duties impact on a variety of different interests in the sector and GBR will ultimately have discretion as to how it will exercise its functions to fulfil these duties. We suspect that there will be a lot of focus in future about how much weight GBR has placed on each of its duties in reaching a particular decision and whether that was the right balance.

Long Term Rail Strategy

The actions and objectives of GBR in the short and medium term will be guided by the Long-Term Rail Strategy (LTRS) set by the Secretary of State for Transport. The LTRS will be the government’s future vision and desired outcomes for the railway. Various stakeholders provided feedback during the Consultation that it is not entirely clear how GBR will “have regard” to the LTRS in fulfilling its duties (as this is a low hurdle to meet) and that further public engagement is required in relation to the specific targets and goals of the LTRS. Concerns were raised in relation to growing freight traffic, improving accessibility and the need to integrate rail with other modes of transport in particular.

In the Response, the government referred to the five overarching objectives of the LTRS. These are:

meeting customer needs;
financial sustainability;
long term economic growth;
reducing regional and national inequality; and
environmental sustainability.

No further expansion is given at this stage on the specific ways in which these objectives will be realised or implemented by GBR. Given current capacity constraints on the railway, it is likely that GBR will be forced to make decisions with respect to access that will be unpopular with some stakeholders. Therefore, more guidance about the government’s priorities for the railway network will need to be made clear in the LTRS if GBR is to successfully deliver this strategy.

DfT’s Response also reiterates the commitments made by the government in the Consultation with respect to promoting rail freight, the ongoing role of devolved governments, the new financial framework aimed at making the railway more financially sustainable, establishing a new passenger watchdog to set standards for the benefit of rail customers and the continuing support of the private sector through open access arrangements (albeit, only where such adds value that benefits the public and is not misaligned with GBR’s own strategy for growth).

What is the new framework proposed?

As part of the Consultation, the government asked respondents to consider the proposed duties and responsibilities of GBR, ORR and the Secretary of State for Transport. The Response provides for the following framework and split of responsibilities:

Secretary of State for Transport: Will set GBR’s remit and strategy to ensure GBR’s actions are aligned with the government’s wider transport and economic objectives (including the LTRS), sign off on GBR’s Business Plans, set parameters for fares, oversee the closures regime alongside the ORR (as is currently the case), appoint the Chair of GBR’s Board, set the LTRS for GBR to frame its planning and decision making and issue GBR with its licence (the exact contents of which are not yet clear) and issue directions and guidance to GBR with respect to day-to-day operations. In relation to freight, the Secretary of State for Transport will also set and issue a rail freight growth target.
GBR: Will broadly align incentives and rewards by bringing track and train together, working with all parties in the rail sector to support growth, improve performance and deliver the objectives set by the Secretary of State for Transport. More specifically, GBR will take over from publicly-owned train operating companies in the delivery and operation of passenger services, including setting fares and timetables, selling tickets (including ticketing functions currently held by the Rail Delivery Group) and allocating capacity and access to the network, including track, stations and depots. Effectively, all of Network Rail’s existing functions will be subsumed into GBR, and further functions then added in.
ORR: Will adopt a more streamlined role focused on safety regulation and competition law, monitoring and enforcing the GBR licence issued by the Secretary of State for Transport, hearing access appeals on GBR decisions. As noted above, the ORR will relinquish its decision-making power over network capacity, planning and access rights to GBR (although the existing legal framework will continue to apply to non-GBR infrastructure, including High Speed One, the Core Valley Lines (owned by the Welsh Government), and parts of the network in London operated and managed by TfL.). Similarly, most of the ORR’s consumer functions will move to the new passenger watchdog established under the Railways Bill. As noted above, the ORR’s powers will be curtailed under the new structure and only time will tell whether it offers an effective check and balance on GBR in the exercise of its functions and duties.

Notably, responsibility for and ownership of rolling stock sits outside of GBR and will therefore continue to be provided by the private sector and an ongoing cost that GBR will have to meet through taxpayer and passenger funding.

Independent Passenger Watchdog

As part of the Consultation, DfT also asked for views on the new passenger watchdog proposed to be established. Most respondents were in favour of a passenger watchdog, and so the Railways Bill proposes the establishment of this new entity from the existing watchdog Transport Focus. The new entity (officially called “The Passenger’s Council”) will be responsible for the existing consumer functions of the ORR, Transport Focus and the Rail Ombudsman and will be a non-departmental public body. In particular, the watchdog will set industry standards which (once approved by the ORR and Transport Secretary) will be binding on all GBR and non-GBR train operators, monitor passenger experience across all rail services and investigate passenger complaints against operators.

Consultation respondees rightly expressed concerns as to whether this entity will be sufficiently independent from the Secretary of State for Transport, particularly given that its funding for the purposes of fulfilling its duties is ultimately determined by the Secretary of State. It remains to be seen whether this new watchdog will have any teeth or if it will take a backseat to the views and decisions of GBR.

Capacity allocation and charging

GBR will issue a new “simple” access framework under the Railways Bill, known as the Access and Use Policy (AUP). The AUP is intended to assist GBR in making the “best use of the network”. Whilst GBR is required to include criteria in the AUP for how it will determine the allocation of access and capacity on the network, ultimately these criteria will be determined by GBR. There are competing demands for infrastructure capacity and strong guidance will be needed about how competing demands will be prioritised and resolved. Whether this comes from GBR itself, or needs to be a political decision, remains to be seen.

An initial consultation on the proposed AUP is likely in the coming weeks. We expect it to be a framework within which decisions on best use of the railway network can be made. Getting the AUP right for the industry is essential, as GBR will then be making decisions within its framework and will be held to account against how it has applied the AUP. Anyone with an interest in accessing the rail network should carefully consider the AUP and feed into its development.

Consultees raised concerns in the Consultation centred around GBR’s ability to fairly balance the interests of passengers, freight operators and open access operators. Of particular concern was the potential for GBR to favour its own nationalised passenger services considering the pressure – and related statutory duty – it will be under to increase revenue and manage government spending.

In a subtle change from the Consultation, the ORR appears to be given more of a role than originally envisaged – but the dial has moved only marginally. Persons aggrieved by access decisions made by GBR will be able to appeal to the ORR. Whilst the ORR will assume this “independent” access appeals role, the Response makes clear that, in instances where a GBR decision is found to be inconsistent with the legal framework, the ORR will not propose remedies that conflict with existing capacity allocation and will be expected to consult with all parties to agree an “alternative remedy.” Notwithstanding the parameters on the provision of access and ORR’s role in hearing appeals, the position remains that GBR will have the discretion to allocate access rights in accordance with its broad statutory duties, and it is not entirely clear how future capacity will be “fairly” shared between GBR and non-GBR operators. The Response indicates that existing track access contracts for non-GBR operators to the network will be honoured until they expire. Interestingly, however, the Railways Bill gives the Secretary of State broad powers to pass regulations to amend existing access agreements, as well as the management and operation of non-GBR infrastructure. On the face of it, these broad rights appear somewhat draconian as they can fundamentally change how all parts of the railway are operated.

In relation to ORR rights to review decisions of GBR more generally, there has been another shift. The Response states that the ORR can either confirm GBR’s decision, send it back to GBR for further review (which may not change the outcome) or substitute its own decision, but only where an error of law has been identified. The ORR will be expected to apply the judicial review standard, which is a high bar to interfering with decisions of public authorities. It will therefore be difficult, but not impossible, to challenge a decision, which offers a bit more of a check and balance on GBR’s broad powers.

Whilst the Railways Bill sets out the parameters for GBR charging private freight and open access operators for access to the network, it otherwise gives GBR broad ranging powers to decide which services will be granted access to a railway that is already at or nearing its existing capacity. Charging to non-GBR operators will be based on apportionment of the costs of operating the network across all operators (including GBR operators). Understandably, GBR will not charge itself for use of the railway. This will be an important area where freight and open access will need more detail to ensure the costs of accessing the GBR network are fair and proportionate.

Financial framework

The Railways Bill proposes to replace the existing 5-year periodic review process with a new funding process intended to deliver value for taxpayers. Five-year settlements will still apply, and the ORR will assess GBR’s business plans. However, the final determination of funds allocated to GBR will now be determined by the Transport Secretary instead of the ORR. It is positive for the supply chain in the railway industry that the five-year settlement period remains as this offers greater certainty as the opportunities for investment in the sector. To optimise collaboration between GBR and the supply chain, greater transparency on pipelines and timings would also be welcomed alongside retaining the five-yearly process.

GBR will honour the ORR’s Periodic Review 2023 final determination, including conditions on charging and incentives, up to Control Period 8, after which GBR’s new charging framework will apply. At a high level, the new funding framework will:

require the government to provide GBR with a statement of objectives for its vision for the railway over the five-year funding period (akin to the current High Level Output Specification);
require GBR to create integrated business plans setting out its proposed plans for delivery across all its statutory functions;
facilitate the ORR scrutinising GBR’s business plans and providing comments to the DfT; and
after considering ORR feedback, the government will sign off on GBR’s business plans and the five-year funding period will commence.

This covers funding of the industry. Of course, one of the key themes of the reform agenda is cost savings and efficiencies from the railway. From the Response and the draft Railways Bill, we are struggling to see where savings are likely to come from through the creation of GBR, particularly in an environment where consistency of terms and conditions for GBR employees will become highly politicised. It may well be that with the level of detail available at this stage, any savings are not yet obvious and no doubt will emerge over time.

Ticketing and fares

Similar to the Consultation proposals, GBR will set up its own, centralised, ticket retailing platform for the industry, which will combine the ticket platforms of the existing 14 rail operators. GBR will also allow third party ticket retailers to continue selling tickets to customers and open access and devolved operators will remain responsible for setting and selling fares for the services they operate.

GBR will be responsible for setting fares and collecting revenue. Existing discounting schemes for young, elderly and disabled passengers will also continue to apply. GBR will also take over functions currently performed by the Rail Delivery Group, such as managing centralised systems. Whilst the Response provides that fare simplification remains a key focus for the government under GBR, it is not entirely clear how fares will be “simplified” under the new structure other than being sold on the one platform maintained by GBR. Perhaps entirely reasonably, the Secretary of State has famously not committed to fares becoming cheaper under GBR – and to ensure public trust in the railway increases, there will need to be real focus on ensuring customers feel they are receiving value for money.

Devolution

The Response provides that devolution has a vital role to play in supporting the government’s mission to “kickstart economic growth” and ensure that “every nation and region realises its full potential.” The Railways Bill includes a new statutory role for devolved governments and Mayoral Strategic Authorities in governing, planning, managing, and developing the railway under GBR. This is intended to balance GBR’s directing mind role by ensuring devolved and local priorities are given significant separate consideration. The Railways Bill also upholds the current devolution settlements in Scotland and Wales and allows for Mayoral Strategic Authorities to seek further devolution of rail responsibilities through raising a “right to request” under the legislation. Devolution of the railway remains partial and complex and it remains to be seen how devolved authorities will collaborate and/or coexist alongside GBR under the new structure.

Conclusion

Our view is that the Response and the Railways Bill represent progress over perfection. There is much detail still to come, and this sets out the first steps in a long journey to deliver reform which is an almost universally accepted need. The Railways Bill does align with the government’s election promise to reform the railway industry by bringing it back under public ownership. Initial steps quickly followed the general election and resulted in the Passenger Railway Services (Public Ownership) Act 2024. The next step is to set the industry up for the future and put the right structures in place, with the bringing back together of track and train and improving a fragmented system where no one body is responsible for delivering value for money and reliable services for the benefit of all users.

There is some way still to go, but what is clear is that the government has listened to the views of the industry and sought to respond to them in the Railways Bill. Issues still remain to be worked through, and there will be winners and losers. What is needed though is a fair framework, developed by the industry, within which GBR can operate and decisions can be made. In the Consultation and the Response, we see the start of that. Perhaps the first few fireworks in a back garden rather than a full-blown New Year’s Eve fireworks display.

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