Railways Bill — Impact Assessments: Impact Assessment from the Department for Transport

Railways Bill Impact Assessment

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Final stage impact assessment

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1. Summary of proposal
The Railways Bill seeks to deliver on the government’s commitment to create a unified and
simplified rail sector with a relentless focus on customers, communities and value for the
taxpayer.
It amends existing rail legislation introduced for and during privatisation to reform the
governance of the GB rail sector, allowing for:
• The designation by the Transport Secretary of a new, operationally independent
body – Great British Railways (GBR) – to act as directing mind for the railway,
responsible for planning and operating passenger services and for managing
infrastructure.
• The establishment of a passenger watchdog to champion improvements in rail
services for passengers.
• Reform of primary and secondary legislation governing access to the railways to give
responsibility for allocation, capacity and charging to the directing mind.
• Implementation of a new rail funding process to facilitate joined-up decision-making
and reflect the directing mind’s role as a single integrated organisation with
responsibility for both track and train.
• A statutory role for Devolved Governments and mayors, so that GBR can draw on
their experiences and expertise to manage, plan, and develop the network.
Impact Assessment supporting the Railways Bill
Primary Legislation
Department for Transport
DfT00501i
RPC-DFT-25057-IA(1)
railreform.bill@dft.gov.uk
5 November 2025

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• A duty to promote the use of rail freight alongside the setting of rail freight growth
targets. Also, a duty to ensure that GBR and all key sector bodies consider the
interests of all passengers, including disabled passengers, when taking decisions.
• Regulations to reduce the costs associated with financing rolling stock.
• Regulations to enable reforms to the train driving licensing and certification regime in
Great Britain.

The measures contained within the Bill are summarised in Chapter 4 of this Impact
Assessment (Description of proposed intervention).
This legislation is a key enabler of the government’s vision for rail reform and component of
the Rail Sector Transformation Programme (RSTP). RSTP’s aim is to transform the rail
sector so it can deliver for the passenger, freight and the economy through a financially
sustainable railway that works for passengers and efficiently moves goods. It aims to
achieve this through the integration of track and train in one organisation, the creation of
clearer accountabilities in the rail sector, and joining up decision making between rail and
areas where decisions are taken locally. Activities being undertaken to deliver these aims
include the redesign of the overall rail sector model (including the rail scope of the
independent passenger watchdog and rail sector devolution); reform of the financial,
accountability and access frameworks to enable GBR to succeed for passengers and
taxpayers, and the design and establishment of GBR. Delivery is intended to bring six
principal benefits to both the rail industry and the economy: reliability, affordability,
efficiency, quality, accessibility, and safety.
The Railways Bill is central to delivery of these aims. It builds upon the Passenger Railway
Services (Public Ownership) Act 2024, which made provision for passenger railway
services to be provided by public sector companies instead of by means of franchised Train
Operating Companies (TOCs).
This document provides an assessment of impacts of the changes that are proposed to be
introduced through the Railways Bill. An assessment of anticipated impacts from the
Passenger Railway Services (Public Ownership) Act 2024 can be found within the Impact
Assessment that accompanied that legislation.
1
2. Strategic case for proposed regulation

Problem under consideration
The government was elected with a manifesto commitment to reform the railways and bring
them into public ownership. Now that the Passenger Railway Services (Public Ownership)
Act 2024 has been passed into law, structural reform is required to end the current
fragmentation of the railways and create clear lines of accountability to provide a railway
that works better for passengers, freight customers and taxpayers across Great Britain.

1 UK Parliament (2024). https://bills.parliament.uk/bills/3732/publications. Note that it was assessed that the
Bill and associated Impact Assessment was not in scope of the Better Regulation Framework.

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Fragmentation has long been identified as a problem by independent reviews of the sector
(Williams 2019,2 McNulty 2011,3 and Shaw 20164), reviews of major rail projects (Bowe
20155 and Hendy 20156, who is now the incumbent Rail Minister) and in the Report of the
Laidlaw Inquiry (2012)7. Summary details of these reports can be found below:
Independent reviews of the sector –
- McNulty 2011 – a report jointly commissioned by DfT and the ORR on how to
improve the efficiency and value for money of the railway. Recommendations from
the report indicated a need to:
o Improve coordination, roles & responsibilities to address fragmentation
o Increase alignment of organisations through reform of interfaces and stronger
incentives to focus on cost reduction and deliver high-quality services.
- Shaw 2016 – an independent report outlining areas of focus on developing a railway
more suited to growth and its users. Recommendations from the report were as
follows:
o Clarify the government’s role in the railway and Network Rail
o Plan the railway based on customer, passenger and freight needs
- Williams 2019 – this review was established to look at the structure of the whole rail
sector and the way passenger rail services are delivered following the 2018 timetable
crisis. There were numerous responses to the call for evidence expressing the need
to overcome fragmentation through clearer roles for government and infrastructure
management; simplification of industry structures; better integration between track
and train; aligning risks and incentives; and setting clear objectives with clear lines of
responsibility.
Reviews of major rail projects –
- Bowe 2015 – a report from a non-executive director at DfT commissioned by the
Transport Secretary to focus on the planning of the rail investment programme. The
report recommended clarifying organisational responsibilities and ensuring
necessary capabilities are in place.
- Hendy 2015 – a report from the Chair of Network Rail at the time (now the
incumbent Rail Minister) which reviewed the deliverability of the enhancement
programme in England and Wales up to the funding period in 2019. This report sets
out the operational plans for these enhancements and sets out the need for rigorous
governance and closer joint working with government to successfully deliver these
projects.
Report of the Laidlaw Inquiry –

2 Department for Transport (2019). https://www.gov.uk/government/collections/the-williams-rail-review
3 Department for Transport (2011). https://www.gov.uk/government/publications/realising-the-potential-of-gb-
rail
4 Department for Transport (2016). https://www.gov.uk/government/publications/shaw-report-final-report-and-
recommendations
5 Department for Transport (2015). https://www.gov.uk/government/publications/bowe-review-into-the-
planning-of-network-rails-enhancements-programme-2014-to-2019
6 Network rail (2015). https://www.networkrail.co.uk/wp-content/uploads/2019/06/hendy-report.pdf
7 Department for Transport (2012). https://www.gov.uk/government/publications/report-of-the-laidlaw-inquiry

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- An inquiry commissioned by DfT into the lessons learned from the InterCity West
Coast franchise competition failure. The inquiry sets out that the organisational
structure and governance frameworks were confusing, overlapping, and unclear,
which hampered efforts to conduct a fair competition.
Further detail on each review and related summaries can be found at the relevant links in
the footnotes. There is a lack of integrated decision-making across ‘track’ and ‘train’ at all
levels, ranging from strategy to delivery of change and day-to-day operations. A lack of
single unified leadership in the sector has resulted in multiple interfaces, each requiring
management, and systemic misalignment of objectives, which holds back innovation,
confuses customers, and leads to inefficient decision making, which in turn inflates the long-
term cost base.
There is also a lack of clear accountabilities, with uncertainty regarding who is responsible
for areas such as integrated delivery or improving passenger experience and no
accountability to passengers themselves. This, combined with fragmentation, means that
there is no whole system accountability and that there is misalignment in incentives across
the sector because each party optimises its own responsibilities. This results in inefficient
outcomes (e.g. a reduced ability to respond to delays, which then impact on journey times
of passengers).
The fragmentation is also evident where rail decisions interact with decisions taken at a
local level. While many rail decisions today are made centrally, decisions in areas outside of
rail, such as in housing and in other transport modes, are made locally. Central government
and other decision-makers in the current rail sector model do not always have access to all
relevant information, local knowledge and context, hampering the railway’s ability to deliver
the best outcome. This issue was identified in the Brown Review (2013)8, which highlighted
failings in the franchising system and recommended, among other things, further devolution
of decision-making and responsibility for specifying passenger rail services to regional
authorities.
Key impacts of fragmentation and lack of accountability include:
• unreliable performance and an inability to address systemic issues
• reduced focus on delivering an effective rail service for passengers and freight
customers
• operational and financial inefficiency which result in non-optimisation of overall
system value
• increased risk of operational and project delay/mismanagement
• duplication of roles, responsibilities and procurement, and a need to manage multiple
interfaces
• lack of coordination and integration between modes at a local level
Economic rationale for intervention
There is evidence that this fragmentation and lack of accountability is impacting the railway
in a variety of ways. These inefficient outcomes derive from market failures within the rail

8 Department for Transport (2013). https://www.gov.uk/government/publications/the-brown-review-of-the-rail-
franchising-programme

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industry, including information and coordination failure, principal-agent issues, externalities,
and productive inefficiency, which are described as follows.
1. Information and coordination failure

Fragmentation across the industry results in imperfect information whereby multiple parties
do not have complete information to inform a decision, resulting in inefficient outcomes.
Fragmentation also provides a coordination challenge and, where imperfect coordination
across the industry results in inefficient outcomes, this represents a market failure.
The timetable change in May 2018 is one example of this. Services across the north and
south-east of England were disrupted for many weeks after the late delivery of infrastructure
improvements by Network Rail (NR), miscalculations by NR and operators in preparing
timetable changes, and a failure of accountability and oversight throughout the process,
which led to material and widespread disruption for passengers in the weeks following the
timetable change. The Office of Rail and Road (ORR) inquiry found that the timetable
change led to a disproportionate level of disruption on services operated by Govia
Thameslink Railway (GTR) and Northern Rail, with some knock-on effects on other
operators.
9 In particular, the report found that:
• T he percentage of trains cancelled increased by 7.5 percentage points for GTR and
by around 6 percentage points for Northern Rail for the two weeks after the
timetable change (compared with the two weeks before the change), before
recovering somewhat in the following three weeks once a revised timetable was
introduced. For both GTR and Northern Rail, more than one in ten trains did not run
in the immediate aftermath of the timetable change.

• For those trains that did run there were considerable performance impacts: the
number of delay minutes (that were attributable to the operator itself) increased by
more than three times for GTR and more than two times for Northern Rail in the first
week after the timetable change.

• These disruptions led to a sharp increase in passenger complaints and delay repay
compensation claims across both operators.

• The disruption to GTR and Northern services had a knock-on impact on services
provided by other operators, particularly TransPennine Express (TPE), East
Midlands Trains, and Virgin Trains East Coast. The number of delay minutes on
TPE’s services that were attributable to other train operators increased more than
three-fold in the first week after the timetable change and did not return to normal
levels until the fifth week after the change.
The ORR’s independent inquiry that followed this found that the crisis was foreseeable, but
that complex accountabilities and weak oversight meant decisions by different parts of the
system lacked due regard for the effects on the network as a whole. It found that no-one

9 Office of Rail and Road (2018). Annex E: ORR service performance data.
https://www.orr.gov.uk/media/17106

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took charge, either to prevent the timetable collapse or to mitigate its effects on passengers
once it had happened.10
Another example is the repeated failure to coordinate to produce new timetables on the
East Coast Mainline (ECML). The May 2022 timetable change on the ECML was intended
to be the first full timetable rewrite since 2011. After being postponed a number of times, it
was announced the timetable would be introduced in December 2024, but that was
subsequently postponed again due to there being too many outstanding issues
11.
This impacts rail users, critical regional connections, and the wider economy, despite the
very large investment provided by taxpayers. In some cases, coordination failures limit
government’s ability to realise benefits from these investments. For example, £4 billion in
new rolling stock and infrastructure upgrades had been invested to enable additional
services to operate on the ECML. However, returns on this investment have not yet been
achieved as a result of postponement of the timetable changes.
12
Ultimately, this has been the result of fragmentation of management of responsibilities for
allocating capacity, where the Office of Rail and Road (ORR) is the de facto "manager" of
track access, but NR bears most of the consequential risk related to track access decisions.
Additionally, the current model results in a lack of long-term thinking, with operators not
having a stake in the success of enhancement investments as they may not see future
benefits of current investment decisions. This fragmentation of responsibilities has led to
unresolved issues that have delayed the timetable change, with a lack of whole-system
decision-making meaning there was insufficient coordination across the series of
interconnected programmes and industry processes which delivery of the timetable change
relied on. This is because the fragmented system has created an environment where there
is no single body that can make informed decisions in relation to capacity because each
relevant party (NR, ORR, Department for Transport Operator [DfTO] TOCs, Freight/Open
Access) have only partial exposure to risk, leading to inefficient coordination. NR is exposed
to performance risk, the government is exposed to revenue risk from operators on the
national network, and the ORR is required to ensure fair competition. An integrated railway
would be exposed to a fuller range of capacity-related risks and would therefore be better
placed to be accountable for the management of these risks in the round.
At a local level, information and coordination failures exist between rail and other public
transport modes. As operators run their own routes, there is a disconnect between services
run by other operators and other modes of transport. Many decisions about other public
transport modes are made at a local level, while rail decisions are typically made centrally.
The National Transport Survey found that for England in 2023, 50% of public transport trips
were multi-modal (involving more than one transport mode, including non-public transport
modes and walking), while 13% of public transport trips involved more than one public
transport mode. Surface rail was the most commonly used public transport mode within

10 Office of Rail and Road (2018). Independent inquiry into the timetable disruption in May 2018.
https://www.orr.gov.uk/sites/default/files/om/inquiry-into-may-2018-timetable-disruption-december-2018-
report-grayscale.pdf
11 House of Commons Library (2024). https://commonslibrary.parliament.uk/research- briefings/cbp-10073/
12 House of Commons Library (2024). https://commonslibrary.parliament.uk/research- briefings/cbp-10073/

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multi-modal trips, indicating the importance of integrating rail with other modes.13 However,
there are often barriers to integration between rail and other modes, such as lack of
multimodal coordination, which is exacerbated by central government not having the
information, local knowledge and context to understand issues at a local level.
2. Principal-agent issues

Principal-agent issues arise where one party (the principal) contracts/hires another party
(the agent) to do something on their behalf, but there are misaligned interests between the
two parties, meaning the agent’s interests do not fully align with the principal’s.
Rail is currently delivered by organisations within the industry, on behalf of the government.
The existence of multiple agents, imperfect information, fragmented accountabilities and the
inability to contractualise all requirements onto the agents, means that government priorities
and objectives are not sufficiently factored into industry decision-making around the
operation of the railways.
For example, operators are incentivised to focus on their own revenue and costs, while NR
is incentivised to focus on infrastructure upgrades and maintenance. Operators and NR are
also subject to very specific incentives, such as performance scorecards and delay
compensation payments, so the incentives faced by the industry are wide-ranging and
complex. Since the pandemic, the Department for Transport (DfT) contracted with private
sector operators through Emergency Measures Agreements (EMAs), Emergency Recovery
Measures Agreements (ERMAs), and, more recently, through National Rail Contracts
(NRCs). Under these contracts, operators bore reduced financial risk and had limited
control over revenue and costs, earning a fixed fee plus performance-based incentives.
While performance mechanisms can help with mitigating principal-agent problems, those
used within the rail sector are difficult to change and are subject to limitations, in some
cases disincentivising desired behaviours. For example, in cases where responsibility for an
incident is allocated to a different party, a train operator can be rewarded financially when
disruption is extended and service recovery is slow. Compensation schemes also
disincentivise the infrastructure manager from maximising system capacity because the
reactionary delay from incidents, and associated regime cost, is greater on a congested
network. This means that such mechanisms do not align incentives between different
parties in the rail sector.
As a result, train operator and NR incentives are often misaligned with each other and with
government priorities in the current system. The ORR’s inquiry found that there was
insufficient consideration of passenger interests when assessing delivery risk in the
infrastructure programme and timetable planning processes ahead of May 2018.
14
Concentrating accountability in a smaller number of organisations will allow better alignment
of incentives within the industry and better enable the achievement of key objectives.

13 Department for Transport (2024). National Travel Survey 2023.
https://www.gov.uk/government/statistics/national-travel-survey-2023/nts-2023-mode-share-and-multi-modal-
trips. NTS09043: Public transport end to end journeys: https://www.gov.uk/government/statistical-data-
sets/ad-hoc-national-travel-survey-analysis#miscellaneous
14 ORR (2018). https://www.orr.gov.uk/sites/default/files/om/inquiry-into-may-2018-timetable-disruption-
december-2018-report-grayscale.pdf

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Additionally, conflicting priorities and lack of accountability can also result in the allocation
of resources towards disputing issues arising from the principal agent problem, rather than
seeking to resolve them. For example, a 2020 report found that NR and TOCs employ
hundreds of full-time staff to establish who is responsible for delays.15 This leads to
inefficiency for users and government.
There is a necessity for clear lines of accountability for GBR so that it is incentivised to
deliver high-quality, reliable, and customer-focussed services, aligned with government
objectives and in the absence of market-driven incentives once operators are brought into
the public sector.
3. Externalities

Where fragmentation and lack of accountability within the industry lead to spillover effects
on external parties such as passengers, freight users, the wider population, or the
economy, this represents an externality that industry has little incentive to correct.
A negative externality refers to the imposition of a negative impact on a party who is not
directly involved in a transaction or economic activity. In rail, passengers and freight users
are negatively impacted (e.g. by delays) which are a result of operational issues within the
industry. According to NR’s Public Performance Measure (PPM), 87.1% of trains were
punctual at their final destination in the latest quarter (April – June 2025). This means that
one in every eight trains is delayed – a figure that has seen little improvement in recent
years – and cancellations have continued to trend upwards.
16 This represents a negative
externality because the costs are distributed beyond the initial cause of the disruption. For
example, delays to a service run by one operator can lead to knock-on delays to other
operators, which can impact a wider set of users and the wider economy. While
performance mechanisms can go some way to addressing these externalities, these
mechanisms are difficult to change, often fail to take account of nuances, and it is not
possible to perfectly estimate the scale and range of impacts on third parties, meaning that
externalities are mis-priced and are not fully internalised within decision making.
Integrating decision making into a single body with clear outcome focused objectives and
holding it to account for delivering them can provide a more powerful mechanism to
incentivise GBR to consider such externalities and internalise them within decision making.
GBR will be the single body responsible for delays and performance impacts from GBR
operated trains, and the knock-on impacts to passengers in terms of delays and
cancellations. Setting passenger experience and operational performance targets for GBR,
in line with the long-term rail strategy, and monitoring key performance indicators will
provide greater certainty that GBR considers the full cost of these externalities. Accessibility
and the environment are other areas where negative externalities of decisions exist within
the rail sector, which could be mitigated through clear objectives and accountabilities for
GBR.

15 Rail Delivery Group (2020). https://www.orr.gov.uk/sites/default/files/2020-09/rdg-delay-attribution-review-
report-2020-09-28.pdf
16 Office of Rail and Road (2025). https://dataportal.orr.gov.uk/statistics/performance/passenger -rail-
performance/

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There are also positive externalities (where there is a positive impact on a party who is not
directly involved in a transaction or economic activity) associated with the rail sector. For
example, increased rail use can lead to reduced road congestion and environmental
benefits (compared with use of other modes). Improved rail services can also support
productivity and contribute to economic growth. Without government intervention,
organisations within the rail sector would not be incentivised to consider these positive
externalities within their decision making.
4. Productive inefficiency

There is overlap and duplication of roles and functions across multiple industry bodies.
Fragmentation between organisations also means that there is duplication in procurement
within the industry supply chain that results in inefficiency. The lack of integration and
coordination, with each organisation focusing on its own success, also drives cost
inefficiencies.
This is supported by econometric evidence (e.g. Mizutani et al., 2015,17 Cantos, 2012,18
Fitzová, 202219) which has studied the impacts of industry structure on cost efficiency for
European and East Asian railways, among which there is a mix of structural types including
full integration, vertical separation, and horizontal separation. These studies found that
vertical separation (separation between track and train) causes cost inefficiencies
compared with vertical integration in highly utilised networks like Great Britain. This
evidence cites coordination issues associated with misalignment of incentives as the
primary driver of these inefficiencies, which drives the result that vertical integration
becomes relatively more efficient as network usage density increases. While transaction
costs between organisations also contribute to inefficiencies, these are relatively smaller in
scale.
Coordination inefficiencies arising from vertical separation can be offset by reduced costs
where privatisation is intended to lead to greater competition and therefore greater
efficiencies. However, operators are not generally competing against each other as they run
their own routes, and the UK rail sector has achieved limited competition at franchise stage.
The government provides considerable funding to the rail industry in Great Britain, which
has increased in recent years, as demonstrated in Figure 1 below. This is particularly the
case since the pandemic, which led to substantial reductions in passenger demand (and,
therefore, industry revenue), while costs remained relatively unchanged as the industry
continued to operate services, as demonstrated in Figure 1 below. Total operational funding
to the railway was £12 billion in 2023-24, over double the level of support before the

17 Mizutani, F., Smith, A.S.J., Nash, C.A., Uranishi, S. (2015). Comparing the costs of vertical separation,
integration, and intermediate organisational structures in European and East Asian railways. Journal of
Transport Economics and Policy, 49 (3), pp. 496-515.
https://eprints.whiterose.ac.uk/id/eprint/82986/3/finalversionNovember2014%5B1%5D.pdf
18 Cantos, P., Pastor, J.M., and Serrano, L. (2012). Evaluating European railway deregulation using different
approaches. Transport Policy, 24, 67-72.
https://www.sciencedirect.com/science/article/abs/pii/S0967070X12001291
19 Fitzová, H. (2022). Has European Rail Policy Improved The Efficiency of European Railways? Journal of
Transport Economics and Policy, 56(4), 445-463.
https://www.ingentaconnect.com/contentone/lse/jtep/2022/00000056/00000004/art00005

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pandemic, placing a significant and ongoing financial burden on the taxpayer. This means
that there is a significant public interest in ensuring efficiency within the rail sector.
In 2023-24, NR spent approximately £1.2 billion on support costs in Great Britain. Support
costs relate to the auxiliary activities NR needs to undertake in order to facilitate the core
business, include HR, utilities, and IT and business services.20 In the same year, TOCs
spent almost £4.1 billion in staff costs, and approximately £2.8 billion in other operational
expenditure not related to rolling stock or access charges.21 These figures demonstrate the
scale of staffing costs and support costs across the industry, and at present, all back-office
systems (e.g. HR and payroll) and functions (e.g. marketing, administration and helpdesks)
are separate across each TOC and NR. GBR will be able to rationalise back-office systems
and increase purchasing power through economies of scale, which has the potential to
drive significant efficiencies. Removal of duplication has the potential to reduce this type of
inefficiency and contribute financial savings to government.
Figure 1. Total operational funding to the rail sector, £bn (2023-24 prices).22

Necessity of government intervention
As described at the start of this section, there have been multiple reviews into the
functioning of the rail sector. Several attempts have been made to address market failures
within the rail sector and there have been several attempts to mitigate market failures within
the franchising model. For example:
• T he use of market mechanisms, such as performance regimes and passenger
compensation, has sought to align incentives across the industry.

20 Network Rail (2024). https://www.networkrail.co.uk/wp-content/uploads/2016/11/Network-Rail-Regulatory-
Financial-Statements-2024.pdf
21 Office of Rail and Road (2024). GB rail industry finances by country and NR region.
https://dataportal.orr.gov.uk/statistics/finance/rail-industry-finance/table-7214-gb-rail-industry-finances-by-
country-and-nr-region-latest-year/
22 Office of Rail and Road (2024). Government support to the rail industry. Total operational funding was
£12.4bn in 2023-24 and £5.4bn in 2018-19 (2023/24 prices). https://dataportal.orr.gov.uk/statistics/finance/rail-
industry-finance/table-7270-government-support-to-the-rail-industry/

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• T he use of performance monitoring by the ORR has intended to reduce information
asymmetry and increase accountability.
• C ontract design has sought to align incentives through risk sharing mechanisms and
incentives to correct for externalities.
• The introduction of open access operators (OAOs) has encouraged competition in
some parts of the network.

There have also been attempts at franchise reform,23 proposals to increase integration
through alliances,24 and reforms to Network Rail.25 However, whilst activities such as
alliances have delivered some benefits, they have failed to address the fundamental issues
with the structure of the railways and maintained the existing system of misaligned
incentives and complex accountabilities, in which there were repeated franchise failures.
Having implemented legislation to end the franchising model and bring these services into
public ownership it is now necessary to ensure that best public structure to deliver best
outcomes is in place.
Therefore, to address the problems of fragmentation and lack of clear accountability,
structural reform of the railways is necessary. Legislation is required to create GBR and
give it the powers it needs to bring together decisions on infrastructure and operations
(‘track and train’) in a single organisation that will provide strong unified leadership for the
sector and end the current fragmentation. To ensure that GBR is fully accountable to
Ministers and its customers, legislation is needed to change the roles and responsibilities of
the Transport Secretary and the ORR, and establish a passenger watchdog, to be an
independent champion for passenger interests and to help ensure GBR and other rail
operators deliver for, and are accountable to, their customers.
Without further government intervention, the amendments made by the Passenger Railway
Services (Public Ownership) Act would bring private sector operators into public ownership,
but fragmentation of decision-making would remain across ‘track’ and ‘train’, meaning that
the systemic problems identified above would not be addressed.
If legislation was not to proceed, work would need to be done to reverse the preparations
made for the creation of GBR. The existing rail system which was created for a privatised
railway but amended by the Passenger Railway Services (Public Ownership) Act to allow
public ownership would persist. This system was only ever intended as a stopgap measure,
and without the Railways Bill a wider system built around the principle of private sector
franchising would continue, contradictorily without legal possibility for franchises to be
awarded to private sector operators.

23 Department for Transport (2012). Reforming our railways: putting the customers first.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/4216/refor
ming-our-railways.pdf [p.72]
24 Department for Transport (2012). Reforming our railways: putting the customers first.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/4216/refor
ming-our-railways.pdf [p.75]
25 For example, in 2014, Network Rail was reclassified as a Central Government body.
https://www.networkrail.co.uk/industry-and-commercial/third-party-investors/debt-investor-
relations/information-for-investors/ [ Accessed May 2025].

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3. SMART objectives for intervention

The benefits table (Table 13) in Section 8 sets out a range of high-level benefits for the Rail
Sector Transformation Programme, alongside an initial assessment of potential metrics that
could be used to assess the sector’s progress against them. These include, but are not
limited to, metrics that assess passenger experience, freight usage, cost savings and
revenue enhancements. The immediate and direct objective for the proposed intervention is
to resolve the issues around fragmentation, including in decision making at a local level,
and accountability that are identified in section two as these directly impact the high-level
benefits and potential metrics the intervention seeks to achieve. In particular:
i. Integration of track and train in one organisation.

Integrating track and train into a single organisation responsible for managing access
to and use of most railway infrastructure and operating government-funded
passenger train services, will reduce fragmentation in the sector and will address
coordination and information failures within the industry. It will, alongside objective ii,
contribute to mitigating the principal-agent issues identified in Section 2 by aligning
incentives. It will reduce the inefficient decision making that arises from the
fragmentation between infrastructure and operations, which will seek to address the
externalities identified in Section 2. It will give this new organisation the ability to
address systemic issues and performance unreliability to improve passenger
satisfaction. It will also reduce duplication, contributing to greater financial and
productive efficiency.

ii. Clearer accountabilities in the rail sector.

Achieving clearer accountabilities in the rail sector will end the uncertainty over who
is responsible for key decisions and outcomes. It will, alongside objective (i),
contribute to mitigating the principal-agent issues identified in Section 2 by clarifying
incentives, reducing the number of industry bodies, and ensuring each organisation
has its own clearly defined objectives. This will in turn lead to more efficient
outcomes and a clearer understanding for rail users of who is in charge. It will also
reduce duplication across bodies and ensure that there is focus on delivering an
effective service for passengers and freight users.

iii. More joined up decision making between rail and areas where decisions are
taken locally.

More joined up decision making between rail and areas where decisions are taken
locally will address the fragmentation in decision making at a local level. It will ensure
that rail decisions are taken at the appropriate level - aligned to other areas where
decisions are taken locally, such as in housing and in other transport modes. This
will contribute to mitigating coordination and information failures at a local level,
leading to improved passenger experience.
Table 1 below details how these objectives are SMART:

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Table 1: SMART Objectives breakdown
Objective
SMART
Component
i ii iii
Specific There should be
significantly fewer
breaks in the value
chain in the delivery
of services.
There should be a
clear accountability
structure that is
linked to the
provision of services
and exercising of
other sector
functions.
There should be
more opportunities in
the system for
devolved
governments and
mayors to feed into
GBR processes.
Measurable26 The number of
organisational
boundaries that the
value chain needs to
cross.
The number of
overlapping
accountabilities in
the system for the
provision of key
services and in the
delivery of the value
chain.
Evidence that local
transport plans of
(Mayoral Strategic
Authorities (MSAs)
have been
considered by GBR
and the number of
partnerships it has
with Mayoral
Strategic Authorities
(MSAs).
Achievable Industry and
government have
consulted widely and
are putting in place
the resources to
support the transition.
It is possible to
achieve clearer
accountability
through appropriate
systems design,
implementation, and
skills matching.
The new statutory
role for devolved
leaders will ensure
that GBR is set up
and designed in such
a way that facilitates
integrated decision
making that takes
into account local
transport strategies.
Realistic There are multiple
international
examples of
integration between
track and train being
feasible.
Other high
functioning complex
systems have
achieved this level
of accountability.
Much of the decision
making in other
transport modes
already takes place
at a local level.
Time-limited This objective will be
achieved when track
and train are
integrated into a
single body. This is
intended to be
This objective will be
achieved when lines
of accountability are
set within a new
industry structure.
This is intended to
MSAs are already
being engaged on
the Mayoral
Partnerships
Framework and the
right to request

26 Achievement of these objectives can be tracked by comparing models of the industry structure before and
after the proposed intervention. This could be assessed on the basis of diagrams demonstrating the structure
and lines of accountability within the industry. For example, using diagrams of the form that were previously
published in the Williams-Shapps Plan for Rail (2021, p.50).
https://assets.publishing.service.gov.uk/media/60cb29dde90e0743ae8c29c1/gbr -williams-shapps-plan-for-
rail.pdf.

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achieved by 2027,
but it will take some
further time for
benefits to be
realised fully.
be achieved by
2027.
further devolution.
The statutory role will
be delivered upon
legislation being
passed and new
partnerships will be
agreed and benefits
realised on an
ongoing basis once
GBR is established
(intended in 2027).
Current engagement
will enable progress
to be made quickly
once legislation is
passed.

These objectives will be achieved once GBR is set up, the industry structure is in place, and
the statutory role for devolved governments and MSAs is delivered (intended for 2027).
Once achieved, they can be expected to contribute to the wider objectives that were set out
in the government consultation outlining reform proposals A Railway fit for Britain’s
Future27, published by the Government in February 2025, as the key objectives for the
wider programme of reform, which are as follows:
i. Reliability: so that people can have confidence in their journey.

ii. Affordability: so that prices are kept, wherever possible, at a point that works for
both passengers and taxpayers.

iii. Efficiency: so that people know their journey will be as straightforward as possible,
from booking to travel, and to provide better value for the travelling public and
taxpayer alike.

iv. Quality: so that passengers have the service experience they have a right to expect.

v. Accessibility: so that our railways are available for everyone to use.

vi. Safety: so that people do not worry about their safety on the railway and are not in
fear of accidents or crime when travelling.
Section 8 sets out the expected high-level benefits of the programme, the delivery of which
will support the achievement of these six rail objectives. The potential metrics referenced in
Section 8 could be used to measure the delivery of the high-level benefits and to assess the
extent to which the rail objectives are being achieved. It should be noted that, while the set
up of GBR and the new industry structure is intended to be achieved in 2027, it will take

27 The Labour Party (2024). https://labour.org.uk/wp-content/uploads/2024/04/GETTING-BRITAIN-MOVING-
Labours-Plan-to-Fix-Britains-Railways.pdf

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some further time to realise the benefits and rail objectives, and to assess the extent to
which they have been achieved.
Achieving these objectives will support wider government missions. For example, achieving
these objectives will facilitate economic growth by creating an efficient, modern railway that
unlocks the potential of towns, cities, and businesses across the country. An affordable,
reliable railway will bring new markets and job opportunities closer to those who stand
ready to make the most of them, supporting the ‘Place’ pillar for growth. Achievement of
these objectives will also support breaking down barriers to opportunity by supporting
connectivity and promoting rail as a viable public transport option. Achieving the six
objectives for rail reform is also likely to support the net zero pillar of the growth mission, as
mode shift to rail from more polluting forms of transport would reduce carbon emissions and
improve air quality in the longer term.

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4. Description of proposed intervention option and
explanation of the logical change process whereby this
achieves SMART objectives

The Railways Bill will progress reform of the rail sector, building on legislation already
passed through the Passenger Railway Services (Public Ownership) Act 2024. It provides
for:
• Leadership for Britain’s Railways: the establishment of Great British Railways,
responsible for both the management of railway infrastructure and delivery of
passenger services.
Great British Railways (GBR) – will be at arm’s-length from Ministers with real
independence to make customer, planning and operational decisions nationally and
at local levels. It will be steered by the long-term goals, objectives and strategy set
by and with oversight from the Transport Secretary. GBR will be required to balance
key commercial, economic, and social objectives.

• A strong voice for passengers: the creation of a passenger watchdog.
The watchdog will be formed out of Transport Focus (TF), through the issuance of
further statutory powers to TF, namely:
o The ability to issue advice to the Transport Secretary, GBR and other delivery
bodies (with specific roles to advise on strategies, business plans and
policies).
o The setting of minimum standards for passenger experience, to be referred to
in GBR’s licence and that of other operators.
o Alternative dispute resolution (through sponsorship of the Rail Ombudsman).
o A specific role in driving up accessibility standards, by monitoring how
services are delivered to disabled passengers and advocating improvements
where issues arise.

• Making best use of the rail network: establishing a new capacity allocation and
charging framework based in primary legislation governing access to and
management of railway infrastructure
GBR will assume responsibility for access and charging decisions, which it will take
in accordance with a series of statutory duties and measures intended to make best
use of the rail network, aligned with the long-term rail strategy and any guidance
issued by the Transport Secretary and having regard to strategies issued by the
Scottish and Welsh Governments, while ensuring fair access for freight and open
access operators. The role of the ORR will change from that of a decision-maker to
an appeals body, responsible for ensuring the fair and proper execution by GBR of
its role as decision-maker on access and charging.

• The modernisation of rail fares, ticketing and retail.
GBR will take over from train operators as the body responsible for setting fares for
the services it operates and collecting revenue. GBR will also be empowered to retail

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tickets alongside and in competition with third-party retailers. OAOs and devolved
operators will also have the option to continue retailing tickets and rail products as
they do today and will also remain responsible for setting fares for services they
operate. GBR will be enabled to deliver industry-wide modernisation and reform of
the fares landscape inherited from privatisation. Legislative mechanisms will
preserve the effect of existing provisions in the Railways Act 1993 ensuring that fares
are set at an appropriate and reasonable level, and the continuation of provision of
fare discount schemes targeting young, senior and disabled persons.

• Devolution: A statutory role for devolved governments and MSAs in governing,
managing, planning, and developing the rail network.
The Railways Bill will create a statutory role for devolved governments and MSAs in
governing, managing, planning and developing the rail network. The statutory role
will ensure national and local strategies are factored into GBR decision-making. GBR
will also be applied statutory duties that will set out the requirement to regard the
Transport Secretary’s long-term rail strategy, the Scottish Ministers’ Rail Strategy,
the National Transport Strategy of Welsh Ministers, and local transport
plans/strategies of MSAs in England.

• Future facing regulation: Regulations to reduce the risks and costs associated with
financing rolling stock
The Luxembourg Protocol to the Convention on International Interests in Mobile
Equipment on Matters Specific to Railway Rolling Stock (Luxembourg Rail Protocol),
signed by the UK in 2016, looks to implement a new international system which
aims, on a voluntary basis, to provide more security for creditors financing rolling
stock in participating jurisdictions by reducing the level of risk to the financiers
involved in these transactions and providing greater security over their interests. The
Railways Bill introduces a power for the Transport Secretary to make secondary
legislation so that the UK can implement the Luxembourg Rail Protocol, and then
ultimately ratify it using the Constitutional Reform and Governance Act 2010
(CRAG).

• Future facing regulation: Regulations to reform the train driving licensing and
certification regime
The Transport Secretary will have powers to amend, update and revoke provisions in
the Train Driving Licences and Certificates Regulations 2010 (The TDLCR) and
associated train driving assimilated law, which sets out the requirements to be a
mainline train driver in Great Britain. These powers will enable the Transport
Secretary to implement reforms to the TDLCR and keep pace with developments in
this area in the future. The Transport Secretary will be required to consult publicly on
any legislative changes that are proposed to the regime. Subject to any consultation
on future proposals, reforms could improve train driver recruitment and retention,
reduce burdens, support safety outcomes, and improve the operational effectiveness
of the TDLCR. Power will also be given to specified/described persons to make
relevant provisions in a separate document, which will provide the regime increased
adaptability and allow general and technical requirements to be updated
expeditiously when the need arises. This power will also be subject to consultation
and the affirmative procedure.

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Table 2. Summary of proposed changes and contribution

28 Based on definition of regulatory provisions within the Better Regulation Framework (2023, p.6).
https://assets.publishing.service.gov.uk/media/67587ba55a2e4d4b993bfa83/better -regulation-framework-guidance-2023.pdf
Proposed measure
and description
Regulatory
provision?28
Is this an extension of
an existing regulation,
or otherwise applies
tried-and-tested
methods?
How the measure is contributing to objectives
Leadership for Britain’s Railways
Designation of GBR
Creates a power for the
Transport Secretary to
designate a corporate
entity as Great British
Railways through
secondary legislation.
No – only
impacts a
public body
No Integration
One body will be made responsible for both the management of infrastructure and the delivery
of passenger services.

Accountability
A clear point of accountability will be created for delivery in the rail sector. Setting GBR’s
functions out in primary legislation will make it accountable.

Efficiency
The designation of a company within the Network Rail Group as GBR will enable it to be
established swiftly and avoid complex transfers of staff, contracts and assets.
GBR Statutory
Functions and General
Duties
Provides for GBR’s
statutory functions,
including giving GBR the
power to charge for
exercising them,
alongside the proposed
establishment of a set of
‘general duties’ to be
shared, where
appropriate, by GBR, the
ORR, the Transport
Secretary and, subject to
their agreement, by
Scottish and Welsh
Ministers.
No No Integration
GBR’s statutory functions will reflect the integration of track and train within primary legislation
to provide GBR with the required legislative footing to manage infrastructure and deliver
passenger services.

Accountability
GBR’s statutory functions will create a clear point of accountability for delivery within the
reformed rail sector. Further, GBR’s statutory functions, duties and requirements will enable
the organisation to act as the directing mind, while also creating the appropriate accountability
mechanisms and controls to ensure that GBR delivers in the interest of railway users,
taxpayers, network funders and other elected bodies.

Reliability
GBR’s functions and statutory duties will reflect GBR’s role as the directing mind, with
responsibility for both track and train, thereby creating a clear point of accountability. This in
turn should contribute to the improvement of railway reliability through simplifying the
accountability landscape and facilitating improved coordination between infrastructure
management and passenger and freight services.

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NoteGBR will be applied
further duties/legislative
requirements that are not
captured within the
proposed list of general
duties (e.g to support
access reform).

Quality
A general duty on performance will be applied to GBR, which reflects the Rail Minister’s
commitment to the House of Lords on 20 November 2024. This duty is intended to promote
the achievement of high standards of performance in the interests of passengers, users of
freight, and other third-party passenger operator users of the network.

Accessibility
A statutory duty will be applied to GBR to promote the interest of passengers, including those
who are disabled. Moreover, GBR as an Arms-Length Body will be subject to the Public
Sector Equality Duty (PSED). Therefore, GBR will be subject to the related statutory
requirements under the Equality Act 2010, with the Equality and Human Rights Commission
(EHRC) monitoring and enforcing GBR’s compliance with these.

Safety
GBR will be subject to existing safety legislation that supports the operation of the railway. In
addition, the ORR, the Secretary of State and the Scottish and Welsh Ministers will be under a
duty to take into account the need to protect all persons from dangers arising from the
operation of the railway when exercising their functions relating to railways and railway
services. The measures proposed should provide further potential to improve network safety
through establishing GBR as the directing mind responsible for track and train.

GBR Licence
Creates a power for The
Transport Secretary to
issue a single railway
licence to GBR (covering
all its assets) and sets out
the process for modifying
the licence.
No Yes - The licensing of
railway companies is an
established process set
out in the Railways Act
1993 and Railway
(Licensing of Railway
Undertakings)
Regulations 2005.
Integration
GBR will be issued a single licence that can cover activities across the assets it operates as
an integrated rail body, thereby cementing the integration of track and train.

Accountability
The licence will provide a streamlined, transparent and enforceable means of setting GBR’s
accountabilities for priority areas and overseeing GBR’s delivery of these.

Directions and
Guidance
Grants the Transport
Secretary the statutory
power to issue directions
and guidance to GBR to
enable the Transport
Secretary to make
proportionate strategic
interventions to drive
performance
No Yes - Section 118 and
119 of RA93 already
enable The Transport
Secretary to give
directions to owners and
operators of railway
assets and providers of
services to prevent acts
of violence.
Furthermore, it is based
on an equivalent power
Accountability
Directions and Guidance will ensure that GBR’s day-to-day operational independence is
respected, while enabling the Transport Secretary to intervene in response to an unforeseen
exceptional circumstance. They will also enable the Transport Secretary to ensure GBR’s
policies are aligned with broader government objectives, holding GBR to account in an
appropriate and proportionate way. Scottish and Welsh Ministers must consent to the
Secretary of State’s directions and guidance where the direction or guidance is regarding the
railway passenger services designated to Scottish and Welsh Ministers.

Reliability; Affordability; Efficiency; Quality; Accessibility; Safety

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improvement for
passengers and freight
and respond swiftly and
decisively to unforeseen,
exceptional external
events.
of the Transport
Secretary to give
directions and guidance
to National Highways
(Infrastructure Act 2015,
s.6).
Directions and Guidance will provide the Transport Secretary with last resort levers to make
proportionate strategic interventions to secure delivery of their six key objectives for the
railway. The requirement to seek consent from Scottish or Welsh Ministers will not infringe
these Transport Secretary’s levers as the requirement to obtain Scottish or Welsh Minister
consent is limited to directions or guidance that is regarding the railway passenger services
designated by them under the Bill.

Directions and
Guidance (Scottish
Ministers)
Scottish Ministers will
have the power to issue
and publish directions and
guidance to GBR about
how it is exercising its
statutory functions so far
as they relate to Scottish
Railway activities. GBR
will be required to comply
with issued directions.
No No Accountability
Scottish Ministers powers will relate only to Scottish railway activities in Scotland . The
Secretary of State must first consult Scottish Ministers before revoking a direction.

The Secretary of State will have the power to revoke a direction of Scottish Ministers where it
is inconsistent with directions issued by the Secretary of State; where it appears the direction
will affect railways activities outside Scotland; or otherwise where the direction appears to
affect a reserved matter or matter for which Scottish Ministers do not have functions.

Reliability; Affordability; Efficiency; Quality; Accessibility; Safety
Directions and Guidance will provide Scottish Ministers with last resort levers to make
proportionate, strategic interventions to ensure delivery against their transport strategy and
funding objectives for the railway.
Long Term Rail Strategy
Makes provision for the
Transport Secretary to
publish a Long-Term Rail
Strategy, setting out
strategic long term
objectives, and to which
GBR will be required to
align its activities.
No No Integration
A single strategy which sets out Strategic Objectives to guide how GBR should plan to run
and deliver improvements of both track and train cohesively and align the rail sector with
government’s wider objectives.

Accountability
GBR will be obligated to respond to the strategy setting out how it intends to achieve the
objectives with measurable outcomes. These will be tied into wider business planning and
funding processes (such as the Statement of Objectives and SoFA), setting clear lines of
accountability.

Reliability; Affordability; Efficiency; Quality; Accessibility; Safety
One of the Strategic Objectives within the Long-Term Rail Strategy ‘Meeting passenger and
freight customer needs’ will explicitly require GBR to have regard to these objectives.

Passenger services
responsibilities
Clarifies responsibilities
for passenger rail
services between relevant
authorities (Secretary of
No No Integration
GBR will be enabled through legislation to deliver passenger services, in addition to its role
managing infrastructure, bringing about the integration of track and train.

Accountability

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State for Transport,
Scottish or Welsh
Ministers).

Bringing track and train together in a single organisation will enable that organisation to be
accountable for decision-making across both infrastructure and passenger services, enabling
better whole-system strategic thinking and trade-offs. The Bill will also enable GBR to provide
services on behalf of Scottish or Welsh Ministers if they so choose.

Subsidy control
States that financial
assistance given by the
Secretary of State or
Scottish Ministers to GBR
(or GBR’s subsidiaries /
any company jointly
owned by GBR and
Scottish / Welsh
Ministers) to enable GBR
to exercise its
infrastructure
management function is
not a subsidy for the
purposes of the Subsidy
Control Act 2022. This is
a codification of existing
case law.
No No

Affordability; Efficiency; Quality
This will ensure that GBR (as the body responsible for infrastructure management) (and its
subsidiaries and joint ventures with the devolved governments) can receive funding from
government and Scottish Minsters to carry out GBR’s infrastructure function and it will be clear
that such funding will not be deemed to be a subsidy under the Subsidy Control Act 2022.
This is a codification of existing case law and subsidy control principles (i.e. that the UK rail
network is a closed market so funding for infrastructure activities is not a subsidy ). This
provision complies with subsidy control requirements set out in international agreements (in
particular the EU-UK Trade and Cooperation Agreement).
Updating the role of the
ORR
Makes amendments to
the role of the ORR.
Yes No Accountability
This provision will enable the ORR’s role to be targeted, that interventions are proportionate
and that GBR has clear accountabilities. It seeks to prevent situations where additional
regulatory checks and balances would otherwise impose disproportionate costs or risks. This
will include the ORR having a robust and meaningful access appeals function instead of being
the decision maker on access, having an enhanced advisory role in monitoring GBR’s
business performance, and becoming an advisor in the new Periodic Review process rather
than a decision maker.

Freight Duty
Creates a statutory duty
for Ministers, GBR and
the ORR to promote the
use of rail freight.
No No Accountability
The provision of a duty on Ministers, GBR and the ORR to promote the use of rail freight will
provide protections for freight. GBR will need to act with consideration for both the ‘Duty to
Promote the Use of Rail Freight’ and the Transport Secretary’s Rail Freight Growth Target.

Rail Freight growth
target
No No Accountability
The provision of a duty on the Transport Secretary to set a rail freight growth target and for
GBR to have regard to that target (and any strategy or policy of Scottish Ministers relating to

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Creates a statutory duty
for the Transport
Secretary to set a rail
freight growth target and
for GBR to have regard to
that target.
the use of the network for rail freight) will, together with the Freight Duty on both the Transport
Secretary and GBR, provide protections for rail freight when GBR is acting as the ‘Directing
Mind’. GBR must also regard any Directions issued by the Transport Secretary in relation to
rail freight when exercising its statutory functions. It will ensure that GBR considers rail freight
alongside passenger services when making decisions and that those decisions facilitate the
growth of freight on the network.
A New Voice for Passengers
Establishing an
independent passenger
watchdog
Creates a body,
established from TF, to
act as an advocacy body
ensuring the provision of
a dispute resolution
service for rail
passengers and with a
specific role on
accessibility.
Yes – GBR
and non-
GBR
services will
be in scope
of the
watchdog.
Yes - The watchdog will
be built out of TF so
legislation will add to its
existing functions and
powers. Current rail
provision for Transport
Focus is section 76 of
The Railways Act 1993.
Accountability
As with other aspects of the railways, the consumer landscape is also fragmented. The
watchdog will bring together existing consumer functions so that intelligence on
issues/concerns raised by passengers is better utilised by informing decisions on how rai l
services are delivered by GBR and other operators.

Reliability; Affordability; Efficiency; Quality
The watchdog will have oversight of all issues raised by passengers, including in these four
areas, and will be able to advocate for improvements.

Accessibility
The watchdog will have a specific role on accessibility by identifying themes and recurring
issues raised by disabled passengers in complaints and disputes and advocating for
improvement.

Watchdog standard
setting
Transfers the setting and
oversight of certain
passenger experience
standards, linked to
licence conditions, from
ORR to the new body.
Yes No Accountability
GBR will be monitored on behalf of passengers for its delivery against passenger experience
objectives and standards by advising on key decisions, shining a light on issues they raise,
advocating for improvements and setting standards.

Reliability; Affordability; Accessibility; Efficiency; Quality
The watchdog will have oversight of all issues raised by passengers, including in these areas,
and will be able to advocate for improvements.

Making best use of the rail network
Access framework
Establishes a new access
framework in primary
legislation, under which
GBR will take access and
charging decisions for its
infrastructure in
accordance with its
Yes No Integration
The current system is designed for each part of the railway to act in isolation. T his leads to
inefficiency for both passengers and freight, for example in relation to complex timetable
changes. Reforms to the Access Framework will enable GBR to be the directing mind for
Access, Charging and Capacity Allocation for the GBR infrastructure.

Accountability

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general and access-
specific statutory duties;
guidance from the SoS
and Access and Use
Policy.
GBR will have the operational independence to make decisions relating to capacity allocation,
timetables, access charges and other operational aspects of the railway – in line with its
statutory duties and guidance, directions and long-term strategy issued by the Transport
Secretary. It will therefore provide a key point of accountability for the performance of the
network, accountable to the government. ORR will have a robust appeals role.

Reliability
GBR will plan and implement an achievable, reliable timetable, so that the services promised
to passengers and freight users are delivered. Better coordination of the timetable will reduce
delays, improve reliability and reduce costs.

Affordability
A new simpler framework will enable GBR to take decisions on the best use of its network,
putting the interests of passengers, freight customers and taxpayers first while providing
certainty that the benefits of (publicly funded) investments and enhancements will be realised.

Efficiency
There will be fundamental reform of the existing legislative framework that has led to
fragmentation, inefficiency and multiple decision makers with conflicting priorities, to produce
greater efficiency. Following the consultation, the department has undertaken further policy
development to ensure there is clarity on how GBR will make access decisions to enable best
use of the network and operate services itself. GBR will be required to ensure that it has the
available capacity it needs to run those passenger services that the government has required
it to provide. This requirement will not change the proposition on access and capacity
allocation that was set out in the consultation. GBR will need to work with devolved authorities,
freight and open access operators to consider their aspirations for the services they want to
run, and where these represent ‘best use’ of the network, they can expect to be awarded
capacity commitments. The ORR will continue to oversee GBR’s access and charging
decisions through a revised appeal role.

Quality
Through GBR the government will ensure passengers have reliable, accessible and better-
quality services.

Amendments to the
AMRs
Makes amendments to
the provisions currently
set out in the Railways
(Access, Management
and Licensing of Railway
Yes, as this
will apply to
(other)
Infrastructure
Managers
No Integration
Where deemed beneficial and appropriate, the power to amend will enable amendments to be
made to the AMRs to ensure consistency of approach between GBR and the other
Infrastructure Managers. Any changes will be made under the affirmative process to enable
full scrutiny of proposed changes by Parliament

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Undertakings)
Regulations (AMRs) 2016
so that the arts in relation
to access, use and
charges for the
infrastructure will no
longer apply to GBR and
the GBR network,
alongside the creation of
a power for the Transport
Secretary to amend the
AMRs by secondary
legislation.

Role of ORR in Access
Enables the ORR to
ensure GBR’s decisions
on capacity allocation,
access and charging are
transparent and fair
through a robust and
independent appeals
function, set out in
legislation.

Yes No Accountability
The ORR will play a key role in giving confidence to freight and other non-GBR operators that
capacity allocation, access and charging decisions are transparent and fair. Operators who
believe a GBR decision is unfair, or that GBR has acted unfairly and/or inconsistently with
legislative rules/requirements, will have the right of appeal to the ORR.
Provision for a time
limited power for the
Secretary of State to
amend contracts and
the Network Code

Yes No Integration

A time limited power for the Secretary of State to amend existing access contracts will be a
necessary backstop to ensure that the transfer to the new access and charging regime under
GBR can happen. This is because certain changes to existing contracts must be made to
ensure that they function properly under the new system. A solution is required to ensure that
in continuing to respect existing operators’ schedule 5 access rights, the necessary changes
to contracts are made to implement the new regime.

For example, the Railways Bill will see the ORR’s powers under S17-22C of the Railways Act
1993 and its corresponding Section 4 duties disapplied. As a result, the ORR will no longer be
able to approve changes to existing access contracts and will have no legal basis to amend
an existing contract without an operator’s consent. This would mean that routine and periodic
updates to access charges which are an essential requirement both now and in the future
could not happen properly and existing contracts would become unworkable with no legal way
of updating them.

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Ahead of GBR stand-up, it is proposed that Network Rail will work with the ORR and engage
and consult with operators to identify inoperable clauses and propose replacement wording to
amend contracts.

The clause will provide the Transport Secretary with a time limited power to amend contracts
and the Network Code if they have not been amended following this programme of
engagement and consultation. It is to be used as a backstop measure only to ensure that
existing operators (some of whom have several-year contracts) can transition to the new
model and are not left with unworkable arrangements. The power to amend contracts will not
be exercised lightly and would only be used as a last resort to ensure necessary changes to
contracts, such as to reflect the changing role of the ORR and creation of GBR. We are
committed to honouring ORR’s Periodic Review 2023 final determination, including conditions
on charging and incentives (up to Control Period 8 when GBRs new charging framework will
be applied).

Financial Reform
GBR Funding
Creates a new funding
determination process
and grant funding power
to award a grant for GBR.
This will replace the
current periodic review, a
process through which
the ORR determine the
level NR can charge for
access to its network, as
well as a 5-year grant for
infrastructure.
No Yes – this is intended to
capture the same
benefits long-term
planning and funding
deliver today, but
through a new set of
provisions in-line with
GBR and public
ownership. In practice,
this means major
differences in provisions
but to achieve a similar
outcome. Current
provisions sit across
Schedule 4A of the
Railways Act 1993 and
the AMRs
Integration
This provision will update funding to reflect GBR’s role as directing mind, by mandating it to
develop an ‘integrated business plan’ across track and train. The provision will allow for an
integrated track and train settlement in the future if ministers desire and it’s agreed cross
government.

Accountability
This provision will create more direct accountability of GBR to DfT/HMT and the Scottish
Government over the outcomes bought through funding decisions, transparency over
decisions made which change the funding settlement ‘in-life’, and a single place to set GBR’s
core objectives.

ORR Funding
Creates a statutory power
for the ORR to levy a fee
on GBR to replace the
current licence fee that
NR provides for the
No Yes – the ORR already
raises its funding for its
safety activities via a
statutory levy and this
new legislative provision
will provide an
Accountability
This provision will ensure the regulator’s non-safety activities such as its advisory role in the
new GBR funding process are funded in a stable and predictable manner, in a way that
guarantees the ORR’s independence. This will ensure the ORR has the resources and
authority to hold GBR to account and is simply a technical change to the current system.

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ORR’s non-safety related
activities.

equivalent power for the
ORR to raise its fees
from GBR for its non-
safety activities.

Fares, Ticketing and Retailing
Fares
Provides for GBR to set
rail fares, with the
Transport Secretary /
Scottish Ministers / Welsh
Ministers having the
ability to determine
parameters around
overall fare levels through
directions (in the case of
the Transport Secretary
and Scottish Ministers)
and contracts awarded
under the provision of
passenger services
clause and preserves the
existence of fare discount
schemes targeting young,
senior and disabled
persons.

No Yes - We are broadly
preserving the intent of
existing legislation in
Section 28 of the
Railways Act 1993 i.e. to
allow Ministers to set
overall limits on fare
levels, and to safeguard
the existence of certain
discount schemes. The
only wholly new function
for GBR to set rail fares
is required to clearly
define this critical
function for the new
body.
Accountability
The activity of fares setting will be done in a way which is accountable to oversight by
Ministers.

Affordability
This provision will ensure that fares are set at an appropriate and reasonable level and ensure
the continued provision of fare discount schemes targeting young, senior and disabled
persons.

Accessibility
Specific discount cards targeted at groups for which cost is more likely to be a barrier to rail
travel – young people, older people and disabled people – will continue to be safeguarded in
legislation, as they have been since the Railways Act 1993 Section 28(3).

Ticket Retailing
1) Gives GBR the function
to retail tickets and rail
products; 2) provides for
the management of cross
industry services by GBR;
3) establishes the ORR’s
oversight and complaint-
handling role in relation to
cross-industry services
and the ticket retailing
market.
No No

Quality
GBR retailing alongside and in competition with third-party retailers means that standards will
be continually driven up in the interest of consumers. All retailers will continue to be able to
improve the passenger experience, drive innovation and further encourage competition in
future.

Reliability
Passengers will benefit from a consistent and reliable customer offer, knowing they can
purchase tickets with ease and travel with confidence.

Affordability
Replacing 14 TOC retail functions with a single GBR retailer will increase efficiency, reducing
the overall cost of selling tickets.

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Devolution
Statutory Role
Creates a statutory role
for devolved governments
and mayors ensuring that
national and local
strategies are factored
into GBR decision-
making. Enables
partnership and
devolution options
between GBR and
mayors.
No No More joined-up decision making with areas where decisions are taken locally.
This provision will bring decision-making closer to local communities by requiring GBR to
consult devolved governments and MSAs before making certain decisions that will
significantly affect the interests of the economy of people living in, working in or visiting a
particular area. GBR will also consult and publish the plan for the use of the network before
the plan takes effect. This will enable organisations such as devolved governments and MSAs
to express an interest in their use of the network. In preparing the High Level Output
Specification (HLOS), the Transport Secretary will also be required to consult MSAs, the ORR,
GBR, and Welsh Ministers.

As a nationally integrated network – the railway’s governance must balance local, commuter,
regional, national, international and high-speed services, as well as the role of freight. The Bill
will also ensure decision-making takes into account the transport plans/strategies of MSAs
although GBR will retain overall responsibility for the use of the network

Quality
Legislation will enable GBR to enter into arrangements with devolved leaders and MSAs
based on the needs of the local community in different parts of the country.

Devolved Governments
Enables options for rail
integration in Scotland
and Wales.

No No Integration
The Bill will ensure options for deeper integration of track and train can be agreed between
GBR and the Scottish Ministers and the Welsh Ministers.

Accountability
This provision will ensure that existing devolved arrangements in Scotland and Wales are
respected and has the potential to increase GBR’s accountability to Scottish and Welsh
Ministers.
Future-facing regulation
Luxembourg Rail
Protocol
Creates a power for the
Transport Secretary to
make regulations in order
to implement the
Luxembourg Rail
Protocol.
Yes No Affordability
The Protocol, if ratified, could support increased private sector financing opportunities in the
UK’s railway market, as well as increase opportunities for UK businesses to participate in
overseas financing activities. It may also lead to increased competition in financing options
that would improve the affordability of rolling stock.
Train Driver Licensing
Creates a power for the
Transport Secretary to
Yes No Efficiency; Quality; Accessibility; Safety

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Table 3 below presents a theory of change/logic model for the proposed amendments to legislation. This outlines how this intervention
will achieve the objectives and high-level benefits of these reforms.

Table 3Railways Bill Theory of Change/Logic Model
INPUT (amendment to legislation) ACTIVITY OUTCOME IMPACT HIGH-LEVEL BENEFIT
Leadership for Britain’s Railways Steers from the Transport Secretary
are given to GBR regarding
objectives and strategy.

One body is made responsible for
the management of infrastructure
and the delivery of passenger
services.

Legislation creates a set of statutory
duties for GBR including a duty for
GBR to promote the use of rail
freight.
GBR is established.

A key point of accountability for
delivery in the rail sector is created.

The needs of its own services, open
access, and freight operators are
balanced by GBR.
Cost and revenue, as well as
management and use of the
network, are brought together
enabling an integrated long-term
whole-system perspective which
drives efficiency and better
outcomes for customers and
taxpayers.
• A quality passenger experience
• New collaborative culture
• Contributions to
economic growth
and productivity
• Cost savings
• Revenue growth
• Accessible service
• Safe service for all
• Improved use of freight
• Simpler, more affordable tickets

A new voice for passengers Further statutory powers are issued
to TF, forming the independent
passenger watchdog.
Statutory advice is issued to the
Transport Secretary, GBR and other
delivery bodies by the watchdog.

Minimum standards are set for
passenger experience and referred
to in GBR’s licence and that of other
operators.
Deadlines are set for requests for
information from operators.

Responsibility for Alternative Dispute
Resolution is achieved through the
watchdog’s sponsorship of the rail
ombudsman.

GBR answerable to the watchdog
(on behalf of passengers) for its
delivery against passenger
experience objectives and
standards.
• New collaborative culture
• A quality passenger experience
• Accessible services
• Safe services for all
• Simpler tickets
make regulations to
reform the train driver
licensing regime and keep
pace with developments
in this area.
Subject to consultation, future reforms could improve train driver recruitment and retention,
reduce burdens, support safety outcomes, and improve the operational effectiveness of the
train driving licensing and certification regime.

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Accessibility standards are driven up
due to services being delivered to
disabled passengers being
monitored, and improvements
advocated for.

New access framework

The Railways Act 1993 is amended
so that the ORR’s powers to direct
and approve access contracts under
Section 17-22C and its
corresponding Section 4 duties are
disapplied for the GBR network.

The AMRs are amended so that
large parts will no longer apply to
GBR and the GBR infrastructure.

A new capacity allocation framework
is established in legislation for GBR
to make best use of the network in
accordance with its duties.

A power is created for the Transport
Secretary to amend the AMRs by
secondary legislation.

An independent appeals function is
set out in legislation.

A statutory duty is created to
establish a charging framework and
publish the rules for how GBR will
determine and collect fees from non-
GBR operators wishing to access its
infrastructure.
ORR ensures GBR’s decisions on
capacity allocation, access and
charging are transparent and fair.

Simplifications to the AMRs (under
which the other infrastructure
managers are bound by) using the
affirmative procedure to facilitate
closer regulatory alignment and the
smooth passage of trains between
GBR network and other
infrastructure managers..

Decisions taken by GBR in relation
to timetables, track access and other
operational aspects of the railway
ensure the best use of infrastructure,
reducing delays & costs and
improving reliability.

A key point of accountability for the
performance of the network,
accountable to the government, is
created.

Interests of passengers, freight, and
taxpayers are considered within
access and charging decisions
taken by GBR in the public interest.

The network benefits from whole
system thinking with GBR as the
decision maker for access, charging
and capacity allocation and the
owner of the infrastructure.

Benefits from investment are
realised, services promised to
passengers are delivered, and
decisions are aligned with the long-
term strategy.

• New collaborative culture
• Revenue enhancements
• A quality passenger experience
• Cost savings
• Improved use of freight

Financial Reform Amendment of the Periodic Review
from a review of access charges into
a funding process while retaining the
certainty of the 5-year funding
period.

Creation of a statutory power for the
ORR to levy a fee on GBR to
replace the current Network Rail
GBR is mandated to develop a five-
year ‘integrated business plan’
across track and train, reflecting its
role as the directing mind.

GBR is accountable to Ministers
over funding decisions, changes to
the funding settlement, and core
GBR objectives.
Alignment of accountability and
incentives across track and train
through funding mechanism,
allowing GBR to optimise the whole
system to generate financial
efficiencies and deliver services
effectively.

• Cost savings
• Revenue enhancements

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licence fee to cover the ORR’s costs
for its non-safety related activities.

GBR scrutinised by the ORR during
the development of GBR’s
integrated business plan. ORR will
scrutinise whether or not GBR
effectively and efficiently delivers the
SoS’s objectives.

GBR is accountable for delivering on
Ministerial priorities (e.g. around
passengers and the wider economy)
and economic efficiency.

Stakeholder trust and confidence in
the ORR scrutinising railway costs
and activity is maintained, and
ORR’s funding is kept independent
of direct departmental or devolved
government budget decisions and
independent of the Transport
Secretary-issued licence.

Fares, ticketing and retailing

Provision is made for GBR to set rail
fares, with the Transport Secretary /
Scottish Ministers / Welsh Ministers
having the ability to determine
parameters around overall fare
levels.

Creation of GBR’s role in retailing
and establishment of the ORR’s
oversight and appeals complaint-
handling role in relation to the retail
market.
GBR is able to make decisions
around fares and sell tickets.

GBR is accountable to the Transport
Secretary (or Scottish or Welsh
Ministers, as appropriate) in relation
to fares setting.
The role of the Transport Secretary /
Scottish Ministers / Welsh Ministers
ensures fares are set at an
appropriate level.

A consistent and reliable customer
offer, with potential simplification for
passengers.

Potential cost efficiencies in ticket
retailing.
• Simpler tickets
• A quality passenger experience
• Cost savings

Devolution A new statutory role is created for
Devolved Governments and mayoral
strategic authorities.

A framework is developed setting
out the options for future
partnerships (from strategic
engagement, local collaboration and
investment to local commissioning of
services and devolved control).
GBR is able to engage with local
leaders.

Devolved transport strategies are
given regard by GBR and
DGs/MSAs are consulted on certain
decisions that would significantly
affect the interests of the economy
of people living in, working in or
visiting their area.
• Contributions to economic
growth and productivity
• Local community needs are
better served
• New collaborative culture
• Accessible services
• Safe services for all
• A quality passenger experience
• Improved use of freight

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Regulations to reduce the costs
associated with financing rolling
stock
Following consultation, The
Transport Secretary implements and
ratifies the Luxembourg Rail
Protocol.
The risk creditors financing rolling
stock are exposed to (in the event of
default or insolvency when rolling
stock has crossed a border and is
located in another territory) is
reduced.

The UK’s commitment to implement
the Protocol is fulfilled and the UK
avoids being disadvantaged in
relation to the financing offers in
other countries for domestic rolling
stock and export financing
opportunities.
Private sector financing
opportunities in the UK’s railway
rolling stock market are supported.

UK businesses have increased
opportunities to participate in
overseas financing activities with
lower risk and therefore cost.
• Cost savings
• Contributions to economic
growth and productivity

Regulations to enable reforms to the
train driving licensing and
certification regime in Great Britain
The Transport Secretary lays
secondary legislation to amend,
update and/or revoke provisions in
the Train Driving Licences and
Certificates Regulations 2010 (the
TDLCR) and associated related train
driving assimilated law.
Reforms to the TDLCR ensure the
regime can keep pace with
developments in this area in the
future.
Train driving requirements are
reformed in a dynamic,
proportionate and efficient way.
• Attraction and retention of talent
• Contributions to economic
growth and productivity
• New collaborative culture
• Reduction of burdens on drivers
and/or operators

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5. Summary of long-list and alternatives
As possible ways of achieving the agreed objectives, consideration was given to 3
legislative options (one entailing primary, one alternative primary, and another secondary
legislation), a non-legislative option and a ‘do nothing’ option. The following options were
long-listed:
• Option 0 – Business as Usual Counterfactual (Do Nothing): no intervention to
remedy the key structural issues. The provisions of the Public Ownership Act result
eventually in the transfer of all franchised TOC contracts into public ownership and
operation by the DfTO. Track and train are not integrated into a single body, leaving
DfTO responsible for the delivery of passenger services and NR responsible for the
management of infrastructure, operating within a structure designed to be run
privately, with no streamlining of ORR regulation and no creation of an independent
passenger watchdog.

• Option 1 – Non-legislative Option: intervention short of legislation to improve
collaboration and integrated decision-making within the existing rail structure
established by the Public Ownership Act. This includes impacts resulting from
activities that are legally possible without further legislation but are not proposed by
the Public Ownership Act, such as through alliances between existing industry
organisations or by achieving greater collaboration through Shadow Great British
Railways (SGBR). These would somewhat contribute to streamlining and
efficiencies, but without the creation of a single directing mind - Great British
Railways (GBR). They would not extend to integrating track and train within a single
body, nor delivering additional reforms to transform the sector model to align with a
public ownership model, streamline the existing sector structure, or create clearer
lines of accountability. For example, the role of the ORR on access and charging as
set out in the Railways Act 1993 and the Access and Management Regulations
would be retained, meaning key roles and responsibilities in relation to access to the
network would remain split between the ORR and Network Rail. This would maintain
the existing fragmentation and unclear accountabilities in the system without a
single, directing mind to ensure best use of the network.

• Option 2 – Legislative Measures: introduction of the complete set of measures
proposed in the government consultation ‘A Railway Fit for Britain’s Future’.
Establishment of GBR through legislation to make it responsible for the delivery of
passenger services and management of infrastructure. Also introduces wider reforms
to update the sector model to accommodate a publicly owned and operated railway.
Measures include: creation of a passenger watchdog; reforms to the access
framework to reflect a publicly operated railway; updates to the accountability and
financial frameworks; introduction of a statutory role for devolved leaders; and
introduction of a power to update the Train Driver Licensing and Certification
Regime, among others. These are intended to create a simpler and less fragmented
sector model that will be managed by an operationally independent body – GBR –
acting as directing mind for the railway, responsible for planning and operating
passenger services and for managing infrastructure. The additional impacts of this
option compared with Option 1 are those impacts that are contingent on additional
legislation beyond the Public Ownership Act.

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• Option 3: Alternative Primary Legislation: Introduction of measures akin to those
contained within the draft Rail Reform Bill, published in February 2024.29 This draft
Bill built upon the policy which was consulted on in June 2022 under the previous
government.30 The key policies within the Bill were to create an Integrated Rail Body
(IRB) into which some of the franchising functions of the Transport Secretary would
be transferred alongside Network Rail’s infrastructure management functions. This
model would not deliver full integration nor streamlining of functions present in
Option 2 as services would continue to be operated by independent, private
organisations whilst infrastructure would be managed by the IRB. Additionally, this
legislative option would not deliver wider sector reforms and simplification benefits,
such as through accountability, financial, and access reforms. In addition, it would
not deliver changes for the passenger through the creation of the passenger
watchdog or for devolved authorities through a new statutory role.

• Option 4: Alternative Secondary Legislation: Use of a Statutory Instrument to
create a guiding mind for the sector. For example, a Deregulation and Contracting
Out Act 1994 (DCOA) Order used to authorise an external body to carry out certain
functions on behalf of the Transport Secretary. This would function as a delegated
body rather than a guiding mind for the railway with only the ability to act on behalf of
instructions from the Transport Secretary rather than as an operationally
independent body. The body would only be instructed to manage rail operations as
they are brought into public ownership and not extend to the other reforms necessary
to deliver sector change, such as those mentioned under Option 2.

The legislative options were appraised and the appraisals compared, after which one
legislative option was taken forwarded to be analysed against the Do-Nothing Option and
the Non-Legislative Option.
Options 0 and 1 were shortlisted by default, so that full consideration could be given to both
‘do nothing’ and a non-legislative option. Option 2 was also shortlisted, whereas options 3
and 4 were discarded. Option 3 was discarded because whilst it would deliver the overall
objective of a single body to oversee both track and train, it was created to support a model
in which passenger services would still be operated by private companies under contract
with GBR rather than by GBR itself. This model would therefore not unlock the full
integration benefits under Option 2 and since the passing of the Public Ownership Act has
become impractical due to the overarching purpose of eventually creating a single body to
manage infrastructure and operate passenger services under public ownership. Option 4
was also discarded because the use of only secondary legislation would not deliver all the
desired outcomes for a publicly owned and operated railway. This is due to the fundamental
changes that need to be made, such as the creation of an Integrated Rail Body, along with
access and financial reforms, which are only possible through amending the Railways Act
1993.
Table 4 below scores each option against the SMART objectives, with a scoring rationale
as below:

29 Department for Transport (2024). https://www.gov.uk/government/publications/draft-rail-reform-bill
30 Williams-Shapps Plan for Rail: consultation on legislation to implement rail transformation
(https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1082519/w
illiams-shapps-plan-for-rail-consultation-on-legislation-to-implement-rail-transformation-web-version.pdf)

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1: The option shows minimal or no scope for progress toward the SMART objective. Key
targets are missed or not addressed at all.
2: The option offers limited results. Some progress is made, but it falls significantly short of
the objective’s expectations.
3: The option enables partial achievement of the SMART objective. Some targets are met,
but others are missed or underdelivered.
4: The option enables delivery of most or all of the SMART objective. Minor gaps may exist,
but overall significant progress is likely.
5: The option offers significant achievement or exceeding of the SMART objective, with
clear, measurable success.
Table 4: Assessment of long-listed options against SMART Objectives
Integration of
Track and Train
Accountability Joined up decision-
making at a local
level
Wider Objectives
i. Reliability
ii. Affordability
iii. Efficiency
iv. Quality
v. Accessibility
vi. Safety
0: Do Nothing
(Shortlisted)
Shortlisted by default to ensure full consideration of a ‘do nothing’ option.
1: Non-
legislative option
(Shortlisted)
Shortlisted by default to ensure full consideration of a non-legislative option.
2: The Railways
Bill (Shortlisted)
5/5
Brings about the
integration of
track and train,
with most
passenger
services operated
by the same
organisation
responsible for
managing most
infrastructure.
5/5
Creates a key point
of accountability,
responsible for the
railway and
accountable to
democratically
elected Members of
Parliament.
4/5
Gives scope for a
directing mind which
can be designed to
collaborate with and
respond to the needs
of communities. The
creation of a
statutory role for
devolved leaders
embeds this.
4/5
The intervention in
itself will not achieve
all of these
objectives, but
having a single
directing mind
accountable to The
Transport Secretary
and Parliament, held
to account by a
powerful
independent
passenger watchdog
would greatly
improve the
deliverability of these
objectives.
3: Draft Rail
Reform Bill
(Discarded)
3/5
While this would
increase the level
of integration of
track and train,
fundamentally
under the draft
Rail Reform Bill
(which was
designed for a
privatised rail
industry) GBR
3/5
While this would
create clearer
accountabilities
through the
integration of track
and train into one
organisation, it fails
to fully integrate
decision-making on
infrastructure
(particularly with
2/5
Fails to embed
communities within
GBR’s operations,
due to the lack of a
statutory role for
devolved leaders
and GBR having
more limited levers.
3/5
There would be an
initial benefit from
the positive
integration of track
and train. However,
the failure to give
GBR the levers for
determining access
and delivering
services would limit
the ability to drive up

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would be
responsible for
contracting, but
not delivering,
passenger
services. The
intervention would
therefore fall short
of delivering full
integration.
regard to access)
and service delivery.
Fragmentation would
persist, with the
ORR, TOCs and
GBR all being in
some way involved
and responsible, but
not entirely
accountable, for
delivering objectives.
improvements in
reliability,
affordability and
efficiency. Not
creating and
empowering a
passenger watchdog
would reduce the
scope to drive
improvements in
quality and
accessibility.
4: Alternative
secondary
legislation
(Discarded)
2/5
While it may be
possible to bring
track and train
closer together,
secondary
legislation would
not deliver full
integration
between
infrastructure and
operations. This
approach would
also require
significant
governance and
would generate
delivery risk,
limiting the
benefits of
integration.
2/5
The inability to
create a statutory
body (for which
primary legislation is
necessary) would
result in the inability
to effectively remedy
the problems of
fragmentation and
lack of accountability
in the sector, for
which a fully
empowered body is
necessary.
2/5
Secondary
legislation could be
used to bring about
modest
improvements.
However, without
GBR, there would be
limits to how
regionalised any
responsible body
could be, and it
would not be
possible to create a
statutory role for
devolved leaders.
2/5
Secondary
legislation would not
allow the
fundamental issues
of fragmentation to
be addressed,
therefore not fully
realising the benefits
across these
objectives.

Micro, Small, and Medium Business Assessment
We have assessed the extent to which micro, small, and medium businesses are within
scope of this proposal. A micro business has 0-9 employees, a small business has 10-49
employees, and a medium business has 50-499 employees.31
The Department for Business and Trade’s business population estimates for employers
within passenger and rail freight transportation sectors provide an indication of the size of
employers within each sector. The business size categories do not directly align to those for
medium and large businesses within the sector. However, the tables below indicate that
within the passenger rail transportation sector, there is a relatively high proportion of larger
sized businesses, but that micro, small, and medium sized businesses are likely to be
represented in reasonable proportions. For the rail freight transportation sector, a high
proportion of businesses are small or micro sized, although it is likely that many of these
businesses are within the wider supply chain for rail freight, which are likely to face more
indirect impacts compared with larger organisations within the freight rail sector, such as
freight operators.

31 Department for Business and Trade (2023).
https://assets.publishing.service.gov.uk/media/65420ee8d36c91000d935b58/Better_Regulation_Framework_
guidance.pdf

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Overall, we expect that micro, small, and medium businesses are less likely to be materially
impacted by the proposals set out in this impact assessment compared with larger
businesses. This is because those smaller organisations are likely to be primarily involved
within the sector's supply chain, which will be impacted less directly by the proposed
changes, while the organisations immediately affected by structural changes to the sector
are typically larger organisations, as identified in Table 7 below.
Table 5: business population estimates for employers in passenger rail
transportation, interurban, 202432
Business size Percentage of businesses
1-9 employees 25%
10-49 employees 12.5%
50-249 employees 25%
250+ employees 37.5%

Table 6business population estimates for employers in freight rail transportation,
202433
Business size Percentage of businesses
1-9 employees 81.8%
10-49 employees 9.1%
50-249 employees 0%
250+ employees 9.1%

The organisations most directly affected by this proposal are the 14 DfT-contracted TOCs
and the industry bodies involved in maintaining the railways. This is due to their respective
functions being taken over by GBR. With the exception of the ORR, Rail Delivery Group
(RDG), and TF, these organisations are all large organisations so fall out of scope of this
micro, small, and medium business assessment. The ORR and TF are non-departmental
government organisations and RDG is a private conglomerate of companies set up to
manage cross-industry services and initiatives, funded by businesses and public
organisations within the rail sector.
34
Table 7: number of employees for directly affected organisations:35
Organisation Staff count
Network Rail 41,836
Govia Thameslink Railway 7,339
Northern Trains Ltd. 7,125

32 Department for Business and Trade (2024). https://www.gov.uk/government/statistics/business-population-
estimates-2024
33 Department for Business and Trade (2024). https://www.gov.uk/government/statistics/business-population-
estimates-2024
34 RDG represents and is funded by organisations within the rail sector, including Network Rail, franchised
passenger operators, open access operators, and freight operators. Therefore, some costs to RDG would be
passed through to government (e.g. through Network Rail or as allowable costs for operators), while others
would impact the private sector (e.g. where they are passed through to open access or freight operators).
35 This is calculated as average monthly staff count from Companies House: https://find-and-update.company-
information.service.gov.uk/. DfT data can be found at: https://www.gov.uk/government/publications/dft-
workforce-management-information-january-2025 ( see Payroll staff: Total: Headcount) . ORR also publishes
data on FTE at train operators which can be found here and shows a very similar level of staff at each
operator: https://dataportal.orr.gov.uk/statistics/compendia/toc-key-statistics/.

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Great Western Railway 6,471
South Western Railway 5,415
Southeastern 4,491
Department for Transport (DfT) 3,873
London North Eastern Railway 3,319
Avanti West Coast 3,296
West Midlands Trains 2,953
Greater Anglia 2,776
East Midlands Railway 2,440
CrossCountry 1,866
TransPennine Trains 1,802
The Chiltern Railway Co Ltd 877
c2c 696
Office of Road and Rail (ORR) 374
Rail Delivery Group (RDG) 332
Transport Focus 46

There are, however, multiple smaller businesses that will be impacted by the proposed
interventions, such as Open Access Operators (OAOs), freight operators and rolling stock
leasing companies (ROSCOs). Potential impacts on these businesses include:
• Administrative and familiarisation costs associated with a new access regime
• Administrative costs associated with transfers of existing leasing contracts
• Potential weakening of market power if GBR achieves economies of scale36

While overall it is expected that smaller organisations will be less likely to face direct
impacts of the proposals, where smaller businesses do face administrative and
familiarisation costs, these have the potential to impose a proportionally large burden (when
compared to large businesses). This is due to larger businesses being more likely to have
dedicated processes in place to address large changes such as these. For example,
smaller businesses may be required to devote a greater proportion of their resources to
familiarising with the new legislation and addressing any additional administrative burden.

The government consultation included a question on whether these proposals would have
any impacts on businesses including micro, small and medium businesses. Some
respondents to the consultation raised concerns around these second order impacts. For
example, some raised questions about small and medium-sized enterprises’ future in the
rail supply chain, were GBR to seek economies of scale in procurement in such a way
which led to a few dominant suppliers, reducing competition and opportunities for other
suppliers. Alternatively, the simplification of the rail sector has the ability to provide
disproportional benefits for micro, small and medium businesses as they move from
managing contracts with multiple train operators to one unified operator of track and train.
These prospective costs and benefits have the potential to offset each other for micro, small
and medium businesses.

A table of organisations within the rail sector with fewer than 500 employees is presented
below. We have attempted to identify the scale of organisations that are likely to be directly

36 Note that this is an indirect impact, dependent on how GBR choose to operate, rather than an immediate
consequence of GBR being established.

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affected by the legislative proposals; however, this should not be treated as an exhaustive
list of organisations impacted. For example, there are many organisations within the rail
supply chain that may face some impacts. Many of these are micro, small, or medium sized
businesses: Every year, NR spends £8 billion with 4,130 suppliers, 75% of which are small
and medium sized.
37

Table 8number of employees of micro, small, and medium sized rail
organisations
38:
Business Average monthly
staff count
Size of organisation
Mendip Rail 12 Small
Rock Rail 27 Small
Rail Ombudsman 34 Small
Beacon Rail 37 Small
DC Rail 43 Small
Transport Focus 46 Small
HS1 Ltd 60 Medium
Eversholt Rail Group 106 Medium
Lumo 107 Medium
Hull Trains 109 Medium
Angel Trains 135 Medium
Heathrow Express 146 Medium
Porterbrook leasing company 167 Medium
Grand Central 181 Medium
Caledonian Sleeper ltd 243 Medium
Rail Delivery Group (RDG) 332 Medium
Rail Safety and Standards Board (RSSB) 369 Medium
Office of Road and Rail (ORR) 374 Medium
Direct Rail Services 451 Medium

We have been unable to identify staffing data for trade unions and have therefore been
unable to classify them as micro, small, medium, or large. There is potential that these
organisations would fall into the category of micro, small, or medium businesses. However,
we do not expect that the proposals would lead to disproportionate direct impacts (e.g. a
significant regulatory burden) on these organisations.

TF, RSSB, ORR, and Direct Rail Services have been included in Table 8 above for
reference but fall outside of the scope of this business assessment.
39

37 Network Rail (2024). https://www.networkrail.co.uk/stories/powering-economies/
38 This table contains data sourced from Companies House: https://find-and-update.company-
information.service.gov.uk/. ORR, Transport Focus an d Direct Rail Services are considered out of scope of
the assessment on the basis that they are publicly funded organisations. While RDG in itself is considered
within scope, its function is to act on behalf of businesses within the rail sector, which are predominantly large
businesses.
39 TF, RSSB, ORR and Direct Rail Services are considered out of scope of the micro, small, and medium
business assessment on the basis that they are publicly funded organisations.

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6. Description of shortlisted policy options carried
forward
The short-listed options for appraisal are listed below, including the preferred option.
• Option 0 – Business as Usual Counterfactual (Do Nothing)

• Option 1 – Non-legislative Option (Do Something)

• Option 2 – Legislative Measures (Do Something, Preferred Option)

In order to identify the preferred option, the short-listed options were assessed against
Critical Success Factors (CSFs). These CSFs are outlined and assessed in Tables 9-12
below. These CSFs were chosen by taking the CSFs outlined in the Green Book and
adapting them to ensure they capture the relevant factors required to achieve the goals of
rail sector transformation.

Table 9Critical Success Factors
Critical Success
Factor 
Description 
Strategic fit and
business needs
How well the option:
• Meets the agreed spending objectives:
o Integration of track and train in one organisation
o Clearer accountabilities in the rail sector
o More joined up decision making between rail and
areas where decisions are taken locally
• Meets business needs and service requirements – six
objectives from the government consultation that the railway
of the future is:
o Reliable
o Affordable
o Efficient
o Quality
o Accessible
o Safe
• Provides holistic fit and synergy with the government
missions:
o ‘Investment, infrastructure and planning’ pillar of
growth mission
o ‘Place’ pillar of growth mission
o ‘People, skills and workforce’ pillar of growth mission
o ‘Net zero’ pillar of growth and clean energy missions
• Provides holistic fit and synergy with DfT strategies and
programmes:
o Improving performance on the railways and driving
forward rail reform (Transport Secretary priority)
o Rail Public Ownership Programme
Value for money  How well the option:

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• Optimises social value in terms of potential costs, benefits
and risks. This is assessed in this IA primarily through
switching value analysis for the net present value of the
preferred option and qualitative assessment of the extent to
which benefits can be achieved in the non-legislative option.
Affordability  How well the option:  
• Can be delivered within the Department’s funding position
and improves the long-term affordability of rail for the
Department
Achievability  How well the option:  
• Is likely to be delivered, given the ability of DfT, NR and
DfTO to respond to the changes required
• Matches the skills and capacity in the three organisations
that is required for successful delivery

Tables 10-12 below assess the short-listed options against the Critical Success Factors.
The options were scored as follows based on policy analysis:
1: The option fails to achieve the Success Factor
2: The option delivers limited achievement of the Success Factor
3: The option somewhat achieves the Success Factor
4: The option substantially achieves the Success Factor
5: The option fully achieves the Success Factor
Table 10: Option 0 – Do Nothing
Success Factor Assessment Scoring
Strategic fit and
business needs
Option neither meets business needs nor addresses long-
term cost pressures.
1
Value for Money Option does not optimise social value given lack of
directing mind in a position to do so or legislative
mechanisms to ensure this. This is the counterfactual
against which other options are assessed.
1
Affordability Option is affordable insofar as existing source can fund
existing arrangements; however it does nothing to improve
the affordability of the railways.
3
Achievability Option is very achievable but retains the status quo, which
is widely agreed to be unsustainable.
3

Table 11Option 1 – Non-legislative Option
Success Factor Assessment Scoring
Strategic fit and
business needs
Option improves financial sustainability by some reduction
in duplication and fragmentation but does not address long-
term cost pressures or meet agreed spending objectives,
for which the establishment of a directing mind and the
streamlining of the regulatory framework are necessary.
2
Value for Money Option leads to improvements in but not optimisation of
social value given the lack of directing mind with the levers
2

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to do so. While the Net Present Social Value (NPSV) has
not been quantified for this option, the description of each
impact within the evidence base section includes an
assessment of the extent to which impacts of the preferred
option will also be realised by this option. While costs are
expected to be smaller in this option compared with costs
of Option 2, large parts of key benefits would not be
realised without legislation because the option does not
mitigate the fundamental market failures within the system.
Affordability Option is affordable insofar as existing source can fund
existing arrangements; however, it does relatively little to
improve the affordability of the railways given the
continuance of duplication and failure to streamline through
legislation and the fact that there is no clear incentive to
drive revenue so the financial sustainability of the railway
will not improve.
3
Achievability Option is achievable but would lack the long-term
sustainability that could be provided through legislation and
is sought by the supply chain.
4

Table 12Option 2 – Legislative Option (preferred)
Success Factor Assessment Scoring
Strategic fit and
business needs
The creation of GBR as a key point of accountability
creates a level of strategic decision-making well-positioned
to deliver this success factor. This option also aligns with
the wider government strategy of streamlining regulation
and public bodies by consolidating currently fragmented
functions under one accountable body. Doing this also
directly supports the government’s growth mission -
particularly the investment, infrastructure, and planning
pillar, as GBR improves the quality of services and
infrastructure, increasing customer confidence in the
sector. This supports increased demand for rail while also
supporting growth and investment in local communities by
connecting people to jobs and opportunities. In addition, it
enables the introduction of a new statutory role for
devolved leaders to deliver more joined up decision-
making. Finally, it also aligns with the priority of the
Transport Secretary to improve performance on the
railways and drive forward reform by maximising the
potential of the Passenger Railway Services (Public
Ownership) Act 2024 and creating a single accountable
body responsible for driving change and improving
passenger experience.
5
Value for Money This option is expected to deliver Value for Money. While
set up costs are incurred, these are expected to be offset
by the benefits of the proposed approach. This is
discussed in detail in the ‘Evidence Base’ section, which
presents switching value analysis. This demonstrates that
small percentage improvements in revenue and service
4

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performance or small percentage cost reductions, would
ensure that benefits would exceed costs of the proposals.
Affordability Despite initial set up costs, this option supports long-term
affordability by facilitating integration efficiencies and
potential reduction of duplication.
5
Achievability This option is challenging but achievable and greatly
improves sustainability of industry resources. Initial
necessary legislation has already been delivered and
parliamentary time has been secured for the further
legislation needed for this option. With this in mind our
current projection is that GBR can begin operations in
2027.
4

The preferred option has been selected on the basis that it best delivers on the CSFs above
and the SMART objectives assessed in Section 5. Option 1 does not deliver on the CSFs
as well as Option 2. Some of the necessary reforms to adapt the current model to the new
one cannot be achieved without changes to legislation, such as reform of the access and
financial frameworks.

It is expected that the preferred option (Option 2) will unlock much more significant benefits
compared with the non-legislative option (Option 1). This is particularly demonstrated by the
‘strategic fit and business needs’ critical success factor, as Option 2 goes furthest to
addressing the market failures within the sector and achieving the SMART objectives
specified in Section 3. For example, removing organisational barriers within a single
directing mind will:
• Reduce coordination and information failure by breaking down barriers between
organisations.
• Eliminate principal-agent issues and internalise externalities by simplifying incentives
and ensuring that GBR is held to account on wider outcomes.
• Improve productive efficiency by generating coordination efficiencies and having
oversight of the whole system through a single profit and loss.

Some coordination and integration benefits could be achieved without legislation, but this
would be challenging to sustain in practice without legislation and would maintain
fragmentation of roles and responsibilities between multiple different sector bodies. This
would also not unlock the full benefits of track and train integration, nor enable one body to
act as overall directing mind for the sector. Additionally, Option 2 is the only option that
creates a statutory role for devolved governments and MSAs, which achieves SMART
Objective 3. This is supported by Option 2’s delivery of the other critical success factors, as
described above. Please see the evidence base section below, which describes evidence
to support the preferred option, including key trade-offs and alternatives considered within
policy design. The evidence base section also describes the impacts of the proposal and
the extent to which these can be realised without legislation. The evidence annex includes
a table (Table 14) which sets out expected impacts under option 2 and the extent to which
these could be realised under option 1. A key justification for the preferred option is its
ability to meet the critical success factors and the evidence base.

Micro, Small, and Medium Business Assessment

It is not possible to exempt micro, small, and medium businesses from the impacts of this
legislation. The purpose of the Bill is to create a single organisation to maintain and run

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track and train, which cannot be done without significant sectoral changes. As a result of
this, small and medium businesses cannot be exempted from structural reform and will
have to adjust to this change. It is therefore important that any policy decision surrounding
the implementation of this legislation should give due regard to business impacts identified
in this Impact Assessment so that they do not disproportionately burden micro, small, or
medium businesses. This will be factored into ongoing engagement and implementation.

We have assessed the extent to which micro, small, and medium businesses are likely to
be affected by the proposals. In general, we do not expect the administrative costs for these
organisations to be significantly different than the administrative burden they currently face.
This is because many of the current functions and operations will remain the same in the
short-medium term. For example, OAOs and freight operators will still have to bid and pay
for track access charges, and ROSCOs’ rolling stock contracts will remain in their current
forms until new stock is procured. Regarding access and station contracts, we have
committed that all existing rights to access the network that were approved by the ORR will
continue under GBR until they expire. Any changes to the contracts to amend inoperable
clauses and account for the new industry structure will be negotiated with operators, with a
last resort to amend contracts if an agreement cannot be reached, although this is not
expected to be used.

However, we do expect that many organisations will face a familiarisation cost as a result of
this proposal, a certain level of which will be unavoidable within the new industry structure.
The majority of these businesses are likely to be large businesses, however there are also
micro, small, and medium sized businesses, such as freight operators, OAOs, and
ROSCOs, that are likely to face a familiarisation cost. We expect OAOs and ROSCOs
would need to undertake similar activities to other organisations affected by the provisions,
These would fall under familiarisation and administrative actions that are mentioned in
section 5. The specific activities might be different based on the types of contracts in place
so there will be nuance in how organisations are affected.
In order to minimise the burden of these changes, the government has arranged close and
targeted engagement with affected parties and set out detail on the proposals in the related
public consultation, government response, and other technical policy documents published
alongside legislation to aid familiarisation. This close engagement will continue in the lead
up to, during, and after the transition to the new structure. Many anticipated changes in
responsibilities represent transfers, whereby existing administrative activities are transferred
from one organisation to another, rather than representing an incremental increase in the
total administrative burden.

Additionally, integration into GBR is anticipated to simplify interactions between multiple
bodies within the industry, which is expected to support reductions in administrative tasks
for industry over the medium/long-term. The government consultation included a question
on whether these proposals would have any impacts on businesses including micro, small
and medium businesses. However, limited specific additional evidence around impacts on
micro, small, and medium businesses was received on this question, beyond that set out in
Section 5 above. There could also be wider impacts on micro, small, and medium sized
businesses within the supply chain, which are not captured here. However, these supply
chain impacts are likely to be smaller and/or less direct than the immediate impacts on
businesses captured within our assessment of administrative and familiarisation costs. This
is because the focus of the legislation is making structural change among organisations
responsible for train operations and infrastructure management, rather than the wider
supply chain.

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7. Regulatory scorecard for preferred option
The scorecards presented in this section provide a brief summary of the impacts assessed
within this assessment. Detailed evidence to support each of the impacts described here is
provided in the Evidence Base section later in this document.
Part A: Overall and stakeholder impacts
(1) Overall impacts on total welfare Directional rating

Description of
overall
expected
impact
The NPSV has not been quantified, as only a small proportion
of the impacts have been monetised due to the nature of this
primary legislation.
The scale of many impacts is currently uncertain and is
subject to the detail of policy development, including after
primary legislation has been introduced. We have used the
government consultation to help gather evidence on the
expected impacts of the proposals.
While we have been able to monetise the direct costs to
government and businesses (set-up costs, administration and
familiarisation costs), the potential benefits have not been
monetised.
The regulations are expected to have a positive impact on
social welfare, largely driven by enhanced performance of the
railways and cost efficiencies as a result of improved
management by GBR and the creation of the independent
passenger watchdog.
While there will be significant set-up costs (largely for the
creation of GBR), these are likely to be offset by the intended
benefits of the proposals, as per the below points and the
switching value analysis in the ‘Evidence Base’ section. This
switching value analysis assesses what would need to be true
for the benefits to outweigh the costs, in central, low and high-
cost scenarios. Based on the results we deem a positive net
impact most likely due to a combination of the benefits
described in that section and below.
These reforms will facilitate greater integration of track and
train across the rail network, leading to reduced fragmentation
in the system and clearer accountabilities. This is expected to
lead to improved whole-system decision-making.
For consumers, this may lead to improved performance of the
network with fewer cancellations and delays for passengers,
along with improvements to accessibility and local transport
networks. This includes businesses that are users of the rail
network.
For businesses, this may lead to improved long-term certainty
for the rail supply chain, leading to improved business
confidence, lower costs and greater investment into the
railways.
Positive
Based on all
impacts (incl. non-
monetised)

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These measures will lead to initial set-up costs for the
government, although will lead to efficiency savings for the rail
system which may reduce taxpayer burden.
Improved rail performance and connectivity, as well as
supporting growth of rail freight, may also facilitate economic
growth and associated wider benefits to the economy.
The balance between performance benefits and efficiency
savings will be dependent on future decisions by GBR and the
government, who will need to make trade-offs between
reducing taxpayer support and improving performance/service
levels.
Monetised
impacts

While direct costs have been monetised, monetised benefits
have not been presented given significant uncertainty
regarding the scale of these. The scale, timing and form of
benefits will be sensitive to future decisions regarding GBR
design and implementation as the programme matures.
The GBR design programme is continuing to develop and test
options for the GBR operating model. GBR will bring together
a fragmented industry into a single directing mind which we
expect to drive significant benefits. Additionally, a large share
of potential efficiencies is expected to derive from improved
coordination in day-to-day decision making. Detailed design
decisions will influence how these benefits are realised and in
what form
The quantified impacts therefore represent only a partial
assessment. As described above, we expect that the net
impact will be positive on the basis of the switching value
analysis conducted within the ‘Evidence Base’ section.
Monetised costs
Administration and familiarisation costs:
Monetised costs include the cost to public sector
organisations to familiarise themselves with the new
legislation and industry structure, and administration costs of
new ways of working, such as for devolved administrations
requiring greater resource to support their enhanced role in
managing the railways.
Familiarisation costs to public sector bodies: £0.43-3.01
million
Administrative costs to public sector bodies:
£1.97-3.07
million
Administrative and familiarisation costs to businesses are
additional to these and are covered in the next section.
GBR set up costs:
Set up costs relate to costs over and above existing spend
within the rail sector required to support the transition and are
expected to be one-off transitional costs that do not persist
beyond the immediate set-up phase. Over the longer-term,
Negative
Based on monetised
impacts (note that
benefits have not
been monetised)

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GBR is expected to work with existing resources to deliver the
operation of the railways.
Estimated set up costs for GBR and the passenger watchdog:
£200-400 million
Costs and benefits to businesses and households are listed in
the following sections.
Non-
monetised
impacts
While it was not possible to monetise these, non-monetised
impacts of the preferred option are expected to be positive.
These measures will lead to:
• G reater accountability and reduced fragmentation in
the rail industry.
• I mproved management and performance of the
railways.
• B enefits for users, such as fewer delays and
cancellations.
Whilst not possible to quantify these benefits given
uncertainty, the switching value analysis in the ‘Evidence
Base’ section provides an indication of the potential scale of
these benefits, such as reducing journey times for
passengers.
These measures will also support efficiency savings for the
government, including:
• E nsuring that planned NR efficiencies, which are at
risk should planned reforms not go ahead, are not
lost.
• H orizontal and vertical integration efficiencies
achieved through the integration of track and train
and multiple operators.
The NR efficiencies attributable to reform have been
presented in the evidence base section (Table 24) which
show that NR are expected to achieve £876 million of
efficiencies relating to structural reform within CP7 (2024/25-
2028/29).
Econometric academic evidence from European and East-
Asian railway systems finds that vertical integration (between
track and train) is expected to be more cost efficient
compared with vertical separation for rail networks with high
network usage intensity, as is the case for the rail network in
Great Britain.

Positive

Any
significant or
adverse
We do not anticipate any significant or adverse distributional
impacts on specific groups within society.

Neutral

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distributional
impacts?

(2) Expected impacts on businesses
Description of
overall
business
impact
The total business NPSV/EANDCB has not been quantified,
as only a small proportion of the impacts to businesses have
been monetised due to the nature of this primary legislation
and the significant uncertainty regarding the scale of costs
and potential benefits to businesses without further policy
development. Whilst we have been able to estimate the
potential administration and familiarisation costs to
businesses, the potential benefits are not monetised.
The switching value analysis in the ‘Evidence Base’ section
highlights how benefits to businesses may outweigh the
monetised costs. However, the overall impact is uncertain and
dependent on GBR design and future decisions to be made
on access, as explained below.
Expected impacts on businesses include:
• A dministration and familiarisation costs as a result of
changes to the structure of the industry.
• G reater long-term certainty for the rail supply chain
within the new rail structure, as well as reduced costs
and complexity of interacting with the rail industry as
a result of there being a single point of contact in
GBR. Simplification may also contribute to reducing
future costs for businesses associated with tendering
and supplying goods or services.
• Potential initial uncertainty for OAOs and freight
operators as a result of reforms to the access regime.
The longer-term impact on these businesses is
uncertain and is dependent on future decisions to be
made by GBR.
• Businesses who are users of rail, such as those who
rely on the transportation goods and corporate travel,
will also benefit from improvements to rail
performance.
Uncertain

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Monetised
impacts

The total familiarisation cost for businesses is estimated to be
£0.33-2.29 million. Familiarisation costs to business relate to
one-off costs to familiarise themselves with the new legislation
and industry structure after the establishment of GBR as the
single directing mind for the railway.
Total administrative cost to businesses is estimated to be
£0.18-0.28 million. Administrative costs to business relate to
tasks that would be required after the stand-up of GBR. These
involve both one-off tasks immediately after GBR stand-up,
and ongoing tasks that will need to be completed on a
recurring basis after stand-up. This includes one-off costs for
freight and OAOs to set up new processes and agree on new
policies for access and charging. Administrative costs
associated with contractual changes as train operators are
brought into public ownership are out of scope of this Impact
Assessment as they are a result of the Public Ownership Act.

Negative
Based on monetised
impacts (note that
benefits have not
been monetised)
Non-
monetised
impacts
Businesses are expected to see various benefits as a result of
these measures, including:
• Greater long-term supply-chain certainty and
business confidence.
• Lower bidding costs, as companies currently
supplying TOCs may no longer need to bid for
contracts with multiple individual TOCs to provide
their services. This is dependent on the design and
structure of GBR which is still to be developed.
• Improved productivity for businesses who are users of
rail.

The wider supply chain may also incur some familiarisation
costs; however, we have not monetised these here. This is
primarily because any such familiarisation costs are more
likely to be second order (indirect) impacts than for the
organisations immediately affected by the proposals.

The impact on open access and freight operators is uncertain
and dependent on any changes to future access charges,
guidance from the Transport Secretary, the new access and
use policy, and decisions to be taken by GBR.
A time limited power for the Secretary of State to amend
existing access contracts will be a necessary backstop to
ensure that the transfer to the new access and charging
regime under GBR can happen. This is a necessary
mechanism to ensure a workable system, and is therefore not
expected to lead to any additional impacts to those described
above.

Uncertain

Any
significant or
adverse
distributional
impacts?
No.
These measures will largely only impact businesses within the
rail sector, such as ROSCOs, Train/Freight Operating
Companies, and OAOs. While this may incur costs to them,
this is proportionate and unavoidable as it is the only way to
meet the objective of the measure and will likely be offset by
Neutral

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the benefits described above. These businesses are not
significantly clustered within one specific area, so no major
adverse geographical impacts are expected.
These measures are not expected to result in significant
material direct impacts on small, micro and medium
businesses. This is covered in more detail in section 5 and 6.

(3) Expected impacts on households
Description of
overall
household
impact
These measures are not expected to impose any costs to
households. The transition will be carefully managed and
therefore transitional impacts, such as disruptions, are
expected to be limited. This is because the industry is
maintaining the capability and expertise across organisations
to continue to manage the railways.
These measures are expected to lead to improvements in
passenger experience as management and performance of
the railways improves.
Positive

Monetised
impacts

The total household NPSV/EANDCH has not been quantified
due to the nature of the primary legislation meaning the scale
of benefits to households/consumers are uncertain without
further policy development and decisions to be made by GBR.

Neutral

Non-
monetised
impacts
Consumers may benefit from improved performance of the
railways leading to fewer cancellations and delays, as well as
greater integration with local transport networks. This may
lead to time-savings for passengers, although the extent of
this is uncertain and depends on future decisions to be made
by GBR.
Consumers may also benefit from greater passenger
experience such as improved accessibility, information and
safety of the railways and a simpler ticketing system.
Positive

Any
significant or
adverse
distributional
impacts?
We do not anticipate any significant or adverse distributional
impacts on specific groups within society.
We do not expect detrimental impacts on certain groups.
However, those that use rail most are likely to be impacted
more by the proposals. For example, evidence from the 2024
National Travel Survey40 shows that younger age groups tend
to travel more frequently on rail than older age groups. The
21-29 age group travels by rail the most (averaging 39 trips
per year), decreasing by each age group with those aged 70+
travelling least often by rail (averaging 7 trips per year).
Similarly, ethnic minorities tend to travel more frequently by
rail (averaging 24 trips per year) than passengers of white
ethnicity (averaging 20 trips per year). These groups that
travel by rail more are therefore more likely to be impacted
Neutral

National Travel Survey (2024). NTS 2024: Introduction and main findings - GOV.UK

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more frequently. Conversely, those with disabilities or mobility
issues tend to use passenger rail services less frequently.
Therefore, they are expected to be impacted less frequently
by improvements to rail performance, but may see
disproportionate benefits as a result of accessibility
improvements.
The National Travel Survey also indicates that rail usage
differs geographically, with the frequency of trips greater in
urban areas such as London, and fewer services in rural
areas and regions such as North East England and the East
Midlands. Passengers in areas with greater rail connectivity
are expected to be impacted more by changes to the railways.
The overall intention of the regulations is to deliver
improvements across the rail network that enhance service
quality, accessibility, and customer experience for all
passengers, regardless of their background or circumstances.
Whilst this would lead to more frequent positive impacts to
those who utilise rail more often, it is possible that they may
also experience more negative impacts should there be
issues with the reforms. These expected variations in
frequency of impact are a result of passenger usage, which
pre-dates the introduction of the regulations and therefore
cannot be attributed to the regulations.

Part BImpacts on wider government priorities
Category Description of impact Directional
rating
Business
environment:
Does the measure impact
on the ease of doing
business in the UK?
These rail sector proposals aim to boost investment and
innovation by increasing accountability and supply chain
certainty. GBR’s unified decision-making will support
business confidence, encouraging private sector
investment and new technologies. The Long-Term Rail
strategy and Rail Freight Growth Target will signal the
need for clear goals relating to innovation and efficiency.
GBR may simplify private sector participation in rail
markets through creating a unified point of engagement
for businesses.
Investors in freight and open access operations may be
deterred by the reforms to the access framework and
fears of GBR favouring its own operators. However,
investors may be reassured by the independent appeals
role of the ORR and by inclusion of statutory duties to
ensure that GBR’s access decisions are transparent and
accountable; that it ensures fair treatment for all operators
wishing to access the GBR-managed network; and the
statutory duty to promote rail freight taking into account
the overall growth target(s) set by the Transport Secretary
and any freight strategy / policy set by Scottish Ministers.
GBR must also regard any Directions issued by the
Supports

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Transport Secretary in relation to rail freight when
exercising its statutory functions.
The actual impact on open access and freight operators is
uncertain and is dependent on future decisions to be
made by GBR, driven by guidance from the Transport
Secretary. The future competitiveness of the ticket
retailing market could be questioned, as those with an
interest in the market might expect GBR’s retailer to
occupy a significant market share and take steps to
preference its own retail business over others. However,
the government is bringing forward safeguards to ensure
a vibrant and competitive market, some of which are
included in these proposals. These include provision for
ORR to issue codes that will govern GBR’s activity (in
particular, when operating retail industry management
functions) and an ability to challenge GBR decisions that
is overseen by the ORR.
Improving rail system efficiency and reliability can reduce
operational costs and facilitate improved use of the
railways for businesses who rely on rail, such as those
who require transport of goods or employee travel.
International
Considerations:
Does the measure
support international
trade and investment?
These measures are not expected to have any significant
implications on international trade or investment. These
measures include a power for the Transport Secretary to
make regulations to implement the Luxembourg Rail
Protocol, which may support increased private sector
financing opportunities in the UK’s railway market.
However, the impacts of this measure are subject to
secondary legislation and are uncertain, so are not
assessed in detail in this IA.
There could be indirect impacts on international attitudes
to investment in UK rail, however it is difficult to determine
what these are as they depend on attitudes to GBR,
which are uncertain.
Neutral
Natural capital and
Decarbonisation:
Does the measure
support commitments to
improve the environment
and decarbonise?
These measures are expected to have a positive impact
on decarbonisation of the economy. This is a result of
proposals to promote rail freight and improved
performance of the railways, supporting modal shift
towards rail from more polluting modes such as road.
Supports

8. Monitoring and evaluation of preferred option
Many of the intended impacts are expected to be achieved through a combination of
reforms, i.e. through the Railways Bill in combination with the Passenger Railway Services
(Public Ownership) Act. As a result, we intend to evaluate wider reform to assess the
overall impact.

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An evaluation scoping study has been considering how to deliver the evaluation of the Rail
Sector Transformation programme. We expect to develop an evaluation strategy following
the scoping study to identify how evaluation will be applied proportionately across the
programme and where the priority areas are to deploy evaluation resource. This will look
across the whole of the rail sector transformation programme to schedule evaluations at a
time that not only spreads evaluation activity in a manageable manner but also seeks
learning from interventions that are available in a timely manner to inform the ongoing
development of other elements of rail reform. Overall, the evaluation is expected to aim to
answer the following primary evaluation questions:
• Is the programme being delivered optimally and as planned?
• To what extent has the p rogramme achieved the expected outcomes for its intended
beneficiaries?
• To what extent can the outcomes be attributed to the programme?
• Has the programme been cost effective, compared to alternative approaches (or doing
nothing)?
The overall evaluation is expected to take a theory-based approach, as there is a lack of a
counterfactual due to the programme consisting of whole industry reforms, limiting the
potential to draw on experimental designs. This approach will examine the mechanisms by
which the programme is expected to deliver its outcomes. As well as providing a way for the
broader context to be considered including potential unintended consequences and
external factors, such as other policy changes or changes in economic, social and
environmental factors which may influence outcomes or pose challenges to assessing
causality of impacts.
There are established data sets in rail which will enable programme level evaluation, such
as LENNON data, which captures all rail journeys and tickets sold and can be used to
assess impact on demand and revenue. Performance statistics are also published regularly
by the ORR and customer experience data is expected to be available via the Rail
Customer Experience Survey (RCXS).
The Railways Bill is an enabler for key delivery mechanisms, and we therefore expect to
assess the extent to which a process evaluation would add value. A process evaluation
could capture how these mechanisms such as GBR are being delivered using qualitative
methods to understand perceptions of how well it is operating as well as administrative data
on delivery. This could provide important context for how the overall impacts being captured
at programme level are progressing.
Additionally, some functions GBR will deliver lend themselves to bespoke evaluations, such
as changes to fares and ticketing, for which it may be possible to use quasi-experimental
designs to assess the extent to which expected outcomes are being achieved. We have
been working with industry to develop their evaluation capabilities to enable them to embed
evaluation into the design and delivery of interventions and report on the impact these are
having before deciding whether to scale interventions up.
We expect the evaluation, alongside benefits monitoring, to encompass the SMART
Objectives and Critical Success Factors outlined in Sections 3 and 6.

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Post Implementation Review
There is no legal requirement to conduct a Post Implementation Review (PIR) at this stage,
in accordance with the Small Business, Enterprise and Employment Act 2015.41 However,
the need and timings of PIRs for any further proposals at secondary legislation stage will be
determined in accordance with that policy’s requirements and logistics. DfT will take a
proportionate approach to monitoring and evaluation of the policy to meet ministerial
priorities. Performance statistics are also published regularly by the ORR.

Potential metrics for assessing progress of sector
The proposed interventions are expected to lead to a range of high-level benefits for the
Rail Sector Transformation Programme, which are described in the table below, alongside
an initial assessment of potential metrics that could be used to assess the sector’s progress
against them. These metrics are not all currently available to the DfT but provide an
indication of the type of data we would intend to use to assess progress of the sector. The
below pillars (customer, financial, sector and society) are expected to cover the main areas
of benefit for the programme. Further scoping of the evaluation activity (and associated
metrics) needs to be guided by alignment with the long-term rail strategy to support the
identification and prioritisation of areas where evaluation can deliver the greatest value.
Table 13. Rail Sector Transformation Benefits and Metrics
Benefits
pillar
High level
benefit
Benefit description Potential metrics for assessing
progress of sector
Customers A quality
passenger
experience
Exceeding passenger
expectations with a
reliable end to end
service, and a quality
customer offer both on
the train and at the
station.
Public Performance Measures
(PPM)
Cancellations and Significant
Lateness (CaSL)
Trains per hour
Platform wait time
Number of interchanges required
and interchange time
Number of services or
connections (stops)
Number of places (stops) that can
be reached within a defined time
of origin stations
Number of seats available on
trains
Number of carriages on trains
Standing space on trains
Customer satisfaction scores
(including cleanliness, station
facilities, staff
helpfulness/availability,

41 UK Government Legislation. https://www.legislation.gov.uk/ukpga/2015/26/part/2/crossheading/secondary -
legislation-duty-to-review [Accessed June 2025]

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frequency/punctuality of trains,
provision of information etc.)
Simpler, more
affordable tickets
Delivering
straightforward and
better value ticketing via
a clearer, more
consistent customer
offer.
Satisfaction with ticket buying
facilities
Journey Value for Money
satisfaction score from Customer
Experience Survey
Improved use of
freight
Realising the long-term
potential of the freight
market, with more
companies choosing to
deliver goods by rail.
Number of paths available to
freight operators
Freight net tonne kilometres
moved
Volume of freight transported
across the network by commodity
type
Safe service Ensuring safety and
employee wellbeing
standards are
maintained, tackling
crime and wider
passenger safeguarding.
Number of slips, trips and falls
etc. at stations and on board
trains
Number of reported criminal
incidents at stations and on trains
Number of stations with 'Secure
Stations Scheme' accreditation
Number of train accidents by
severity
Accessible
service
Creating trust and
confidence in the railway
with strategic
interventions to improve
accessibility for all
passengers.
Number of stations with step-free
access to and between all
platforms
Compliance with industry
standards
Financial Cost savings The most cost-effective
use of the network, with
teams and roles
designed efficiently to
deliver value for money
and a sustainable
railway.
Changes in DfT rail funding
Maintenance and operating costs
Revenue
enhancements
A fully utilised network
that delivers optimal
revenue, balancing the
competing goals of
delivering a public
service while enabling
GBR to act with
commercial autonomy to
grow revenue and make
effective trade offs.
Passenger and freight revenue
Station/commercial revenue
Changes in business activity
Sector Attract and retain
talent
Improved working
environment, with
Number of jobs/apprenticeships
created

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increased skills and
capabilities across the
workforce.
Number of individuals with certain
qualifications/skills in the industry
New collaborative
culture
A collaborative one team
approach to working
together to provide a
high performing service.
Effectiveness improvements
Society Local community
needs are better
served
A rail network that is
responsive to the needs
of local communities,
and efficiently integrated
with the wider public
transport system.
Number of interchanges required
and interchange/dwell time
Integration of fares and ticketing
between modes of transport
Number of communities with pay
as you go ticketing
Enhance rail’s
contribution to
environmental
sustainability
Focussing on the actions
that will have the
greatest impact on
meeting the
government’s net zero
and wider environmental
commitments.
Change in Greenhouse Gas
emissions
Change in noise pollution
Passenger and freight modal shift
Contribute to
economic growth
and productivity
The rail network
contributes its full
potential to local
economies both in its
provision of services and
in the use of its estate.
Number of houses/homes built
Radius/catchment area to jobs
Property price trends

By targeting these benefits, it is expected that the proposal will contribute to meeting the rail
sector objectives described above. In doing so, the proposal will also contribute to the
government’s wider missions to kickstart economic growth, break down barriers to
opportunity by providing better access to jobs for working people, and also provide support
to making Britain a clean energy superpower. These are underpinned by a benefits
framework that categorises the impacts against key stakeholder groups: Customers,
Financial, Sector and Society, enabling impacts to be better understood based on who will
be affected.
Timing of benefits will be dependent on the pace that this is delivered, but it is likely that
several key benefits of the change will take time to be fully realised. Many benefits will only
be delivered once GBR is established and the changes to the roles of other bodies and the
governance arrangements have been in effect for several years.

9. Minimising administrative and compliance costs for
preferred option

Within the Evidence Base section below, we have described and provided indicative
estimates for the anticipated administrative and familiarisation costs associated with the
preferred option.

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The preferred option will introduce a significant change to the structure of the rail sector,
which does not impose a significant direct regulatory burden but will introduce a non-trivial
time cost associated with familiarisation with the new industry structure.

These costs include activities relating to understanding how the industry structure will
change, how organisations will interact differently within this new structure, and how ways
of working and responsibilities between organisations will change. These represent a one-
off cost associated with the transition to the new industry structure, which will fall to
organisations within the rail sector, its supply chain, and organisations outside the rail
sector that interact with rail:
• A significant burden of this familiarisation cost will fall upon the government or
publicly-owned organisations, including publicly owned operators and infrastructure
managers, and local governments.
• Private sector businesses, including private sector passenger and freight operators,
and businesses within the rail supply chain, will also face some familiarisation costs.
• There are limited anticipated familiarisation costs for households.

In addition, there are some ongoing administrative costs associated with the proposal. For
example, where an organisation takes on new responsibility, this is likely to be associated
with an increased administrative burden.

A certain level of costs associated with administration and familiarisation within the new
industry structure is unavoidable. However, the government has sought to minimise the size
of this burden through close and targeted engagement with affected parties and by setting
out detail on the proposals in the related public consultation, government response, and
other technical policy documents published alongside legislation to aid familiarisation. This
close engagement will continue in the lead up to, during, and after the transition to the new
structure. Many anticipated changes in responsibilities represent transfers, whereby
existing administrative activities are transferred from one organisation to another, rather
than representing an incremental increase in the total administrative burden.

Additionally, integration into GBR is anticipated to simplify interactions between multiple
bodies within the industry, which is expected to support reductions in administrative tasks
for industry over the medium/long-term. Minimising the administrative burden in this way will
support the commitment to reducing regulatory administrative burdens by 25% by the end
of the Parliament.
42 As announced in the Prime Minister’s speech of 11 March 2025, this
forms part of the government and the Prime Minister’s drive to review and streamline the
entire regulatory landscape as part of a wider effort to kickstart economic growth by
reshaping the state and making regulation work for the country, rather than block progress.
In order to minimise the impact on businesses, the government will provide clarity to the
industry about the new structure to aid familiarisation and any ongoing administrative tasks
for businesses.

42 UK Government (2025). https://www.gov.uk/government/news/radical-action-plan-to-cut-red-tape-and-
kickstart-growth

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Declaration

Department:

Contact details for enquiries:

Minister responsible:

I have read the Impact Assessment and I am satisfied that, given the available evidence,
it represents a reasonable view of the likely costs, benefits and impact of the leading
options.

Signed:

DateDepartment for Transport
railreform.bill@dft.gov.uk

Secretary of State for Transport

04/11/2025

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Summary: Analysis and evidence
For Final Stage Impact Assessment, please finalise these sections including the full evidence base.
Price base year:

PV base year:

0. Business as
Usual (Do Nothing)
1. Non-Legislative
Option
2. Legislative Measures (Preferred Option)
Net present social value Not quantified. Not quantified. Not quantified. While we expect significant
benefits from the reform, the scale of those
impacts is currently uncertain and is subject
to the detail of policy development, including
after primary legislation has been introduced.

Public sector financial costs No additional costs
to public sector.
Government
continues to provide
net operating
subsidies to Network
Rail and franchised
Train Operators.
Costs to support the
transition and greater
integration under
shadow GBR.

Set up costs for the creation of GBR and the
passenger watchdog: £200-400 million

Familiarisation costs to government (one-off)£0.43-3.01 million

Administrative costs to government (10-year
appraisal period): £1.97-3.07 million

2024
2025

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Significant un-quantified
benefits and costs
N/A Expected to have
similar types of impacts
as the preferred option,
but to a smaller extent.

Benefits from horizontal
integration can be
achieved through
integration of operators
into DfTO as a result of
the Public Ownership
Act.

Some benefits of
vertical integration can
be delivered without
legislation, for example
through alliancing
between track and train.
However, these impacts
would be more costly
and take longer to
achieve without the
accountability and
reduction of
fragmentation that GBR
would bring.
Improved management of the rail system with
greater accountability and reduced
fragmentation, leading to more efficient
decision-making and use of the network,
fostering greater economic growth.

Integration efficiencies as a result of reduced
duplication, economies of scale and whole-
system decision-making due to the integration
of track and train and merging of TOCs. This
is expected to be a net benefit against the
costs of vertical integration, which include
loss of competition and reduced
specialisation.

Improved passenger experience, possibly
including more punctual and reliable train
service, simpler ticketing and improved local
transport networks.

Potential short-term uncertainty during the
transition period, potentially disrupting
business-as-usual activities. Likely to be
outweighed by greater long-term certainty and
supply chain confidence, potentially leading to
improved long-term planning, lower bidding
costs for suppliers and increased investor
confidence.

Higher business certainty and supply-chain
confidence, leading to lower bidding costs
and greater investment.

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Key risks No specific risk
costs have been
monetised.

Without the
proposed legislation,
the current
fragmented rail
system will continue.
This creates
continued risk of
inefficient
management of the
railways, potentially
leading to further
cost inefficiencies
and pressure on
public finances.

No specific risk costs
have been monetised.

Potential risks of this
option are uncertain as
they depend on
undetermined non-
legislative activities.

Nevertheless, the risk of
not achieving the
desired objectives
through this option is
higher, as there will be
greater complexities
and barriers to
achieving integration
benefits without
legislation. There would
remain a continued risk
of inefficient
management of the
railways, potentially
leading to further cost
efficiencies and
pressure on public
finances.
No specific risk costs have been monetised.

Potential risks include unintended
consequences, union action, reduction of
competition, and short-term uncertainty.

Further detail is provided in the risks and
assumptions section.
Results of sensitivity
analysis
No sensitivity
analysis conducted
as impacts not
monetised.
No sensitivity analysis
conducted as impacts
not monetised.
Central, low, and high estimates were
produced for administrative and familiarisation
costs where inputs/assumptions are
uncertain. Further detail is provided in the
risks and assumptions section. Central, low
and medium estimates for these costs are
below:

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Familiarisation costs (one-off):

Low£0.76 million
Central: £1.97 million
High: £5.30 million

Administrative costs (10-year appraisal
period):

Low£2.15 million
Central: £2.75 million
High: £3.35 million

Switching value analysis was also conducted
to assess what would need to be true for the
benefits to outweigh the costs, given the
significant uncertainty in estimating the
benefits of these proposals. This is included
in the ‘Evidence Base’ section below. Based
on the results of this analysis we deem a
positive net impact most likely.

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Evidence base
This section sets out the rationale and evidence to support the assessments made within
previous sections of the document.
First, we have set out the justification for the preferred option, including the key
considerations and trade-offs around each of the key policy proposals.
Next, we have summarised evidence to support the assessment of impacts. This includes
quantitative evidence to support the quantification of some impacts, as well as qualitative
evidence for impacts that have not been monetised. As several impacts have not been
monetised, we have used switching value analysis. This has included monetising direct
costs (set up costs, administrative costs, and familiarisation costs) and assessing what
would need to be true for these costs to be outweighed in order to deliver a positive Net
Present Social Value. We have provided evidence to assess the benefits and disbenefits of
the proposals, including financial benefits to government, improvements in the passenger
offer, impacts on businesses, and economic and wider impacts.
Finally, this section considers wider impacts (such as impacts on the business environment,
impacts on the environment, and equalities impacts), and key risks and assumptions.
Justification for the preferred option
The preferred option of establishing GBR through legislation includes the introduction of a
package of legislative measures. These are described in detail in Section 4 above.
Rationale and evidence that informed key decisions and trade-offs about the preferred
option are presented below. In addition, the preferred option has been tested through the
government consultation, from which evidence has been used to further refine and assess
the impacts of the preferred option.43 We have also assessed other sources of evidence
such as case studies from the rail industry, both in the UK and internationally.

Leadership for Britain’s Railways
Legislation will establish GBR as an arm's-length body with independence to make
customer, planning and operational decisions nationally and at local levels. GBR will be
fully integrated with no functional separation of infrastructure management and passenger
services delivery functions required by statute or regulations.
This proposal has been designed so that the establishment of GBR meets the key
objectives of integrating track and train and providing clear accountabilities. Other options
to achieve this were considered, including increasing collaboration within the existing rail
structure, establishing GBR with different powers and establishing GBR with functional
separation of infrastructure and passenger services delivery.
Increasing collaboration within the existing rail structure without legislation was discounted
as, while it would have some benefits, these would be limited. Full coordination of decision-

43 The government’s response to the consultation can be found at:
https://www.gov.uk/government/consultations/a-railway-fit-for-britains-future

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making across infrastructure and services would remain impossible, given that existing
legislation (e.g. the Railways Act 1993, Railways Act 2005, Access, Management and
Licensing of Railway Undertakings) Regulations 2016) is designed around separation of
track and train, in support of a privatised model, and produces unclear accountabilities and
misaligned incentives. As noted above, existing legislation means NR is exposed to
performance risk, the government is exposed to revenue risk, and the ORR is required to
ensure fair competition. Moreover, any potential collaboration would be costly / inefficient,
given the multitude of organisations that currently make up the rail sector landscape.
Designing GBR with a different balance of powers could have been achieved by allowing
the Transport Secretary to use directions and guidance alone, rather than a licensing
approach, and changing the approach to strategy, including by giving GBR full control or
giving the Transport Secretary more scope for regular review. Depending on the approach
taken, these would have given the Transport Secretary greater scope for intervention or
GBR greater autonomy. The approaches that would have necessitated more frequent
intervention and brought the Transport Secretary closer to operational decision-making
were discounted as it was considered that these would not meet the government’s position
to establish GBR as a directing mind for the railway and would fail to provide the long-term
certainty and industry expertise that is required to deliver the government’s wider
objectives. Conversely, the approaches that would have given GBR greater autonomy were
discounted on the basis that there would not be sufficient space for the Transport Secretary
to intervene and set the long-term strategy, thus failing to achieve the objective of
accountability, or the Prime Minister’s objectives to invite the British people in as partners in
the business of change and to ensure that all funding, decisions, and regulations must
deliver for working people and be held accountable for doing so.
Establishing GBR with separation of infrastructure and passenger services delivery was
considered and could have been achieved by creating subsidiary companies beneath GBR,
with separate responsibilities for infrastructure management and passenger services
delivery. This was discounted on the basis that it would not achieve the key objective of
integrating track and train in a single body. The DfT discounted the option of locking in a
particular corporate structure in legislation (in this case, by not removing existing barriers to
integration in legislation) and the final corporate structure of GBR will be confirmed outside
legislation as part of GBR design.
Consultation feedback

In ‘A railway fit for Britain’s Future’, the government consulted on its proposed intervention.
There was broad recognition among respondents from across the sector and members of
the public of the need for a directing mind across both passenger services and
infrastructure, and of the fragmentation and unclear accountabilities in the current system.
There was considerable support (73% of respondents) for the proposal that GBR should be
empowered to deliver through reformed incentives – with only 9% of respondents
disagreeing – and strong support (82%) for a simplified and streamlined regulatory
framework, with only 5% of respondents disagreeing. The government has therefore
decided to continue with the proposed approach as set out in the government consultation -
streamlining the regulatory framework and integrating track and train under GBR to create
clearer lines of accountability and reduce fragmentation. There were concerns from a

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number of respondents, in particular accessibility stakeholders and passenger groups, that
streamlining the regulatory framework could come at the cost of protections for disabled
passengers and/or the public interest. GBR will be subject to a range of statutory duties.
This will include duties intended to protect the interests of passengers (including those who
have disabilities). GBR will also be subject to duties intended to ensure that GBR will
consider the public interest in its actions.
The preferred option, as set out in section 4, was considered to best enable a functionally
autonomous GBR while maintaining an oversight role for the Transport Secretary, in line
with the key objectives of integrating track and train in a single organisation and having
clearer accountabilities across the sector.

A new voice for passengers
Legislation will establish a passenger watchdog alongside GBR. The watchdog is intended
to act as a single body for passengers which protects their interests and rights, provides
advice, moderates unresolved complaints, monitors service standards and reports these
publicly and transparently. To achieve this, the watchdog needs the capability to:
• Protect the interests and rights of passengers by acting as a watchdog.
• Conduct research, analysis and investigations on rail passenger experience to
support the watchdog function.
• Advocate for better service standards and empower it to become a statutory advisor
with its views being taken into account in key decisions affecting passenger
services.
• Ensure operators/GBR deliver against established passenger focused standards by
monitoring complaints and performance, highlighting where improvements are
needed.
• Ensure the provision of an alternative dispute resolution function to passengers
where they have unresolved passenger complaints.
• Set standards for minimum requirements for passenger experience on GBR and
other operators’ services and hold them to delivering these.
Four options were considered for establishing the watchdog:
1) do not establish the independent watchdog;
2) build the watchdog out of TF (the preferred option);
3) build the watchdog out of the ORR; or
4) create a new body.
The current landscape of passenger rights, standards, and redress is complex and unclear.
Passengers dealing with poor performance are faced with a lack of clear routes to raise
concerns or reliable mechanisms to bring about change. The creation of the passenger

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watchdog is therefore linked to the key objective of clearer accountabilities across the rail
sector, specifically on passenger standards. This links to the Prime Minister’s objective to
deliver an active government that delivers and serves working people by creating a
passenger advocate that holds GBR to account to deliver for the passenger.
Option one (not establishing the independent watchdog) was discarded as it would leave
the current fragmented landscape in passenger rights, standards and redress in place.
While there would still be a watchdog in place in the form of TF, it would not have the
necessary size and scope to create the clear passenger accountabilities that the passenger
watchdog set out in ’A Railway Fit for Britain’s Future‘ requires to fulfil its envisioned role.
The preferred option (option two) is to build the watchdog out of TF. This is because TF is
already an independent watchdog for passengers, with cultural values that closely align
with the single-minded passenger focus desired of the watchdog. It also has existing
powers to assess and publish information about performance on the Great Britain’s railways
and England’s bus and major road network, investigate issues affecting customers and
make recommendations for improvement, providing advice to the Transport Secretary,
regulators and others to act where needed. While some of these powers may need
strengthening to make it more impactful and some expansion will be required, such as
transferring the sponsorship of the Rail Ombudsman (RO) and most consumer functions of
the ORR to the watchdog, TF would require the least change to take on the envisaged roles
of the watchdog. Additionally, this option would also be quickest to implement of the three
options for change.
Option three would require the transfer of the rail watchdog functions from TF to the ORR,
alongside internal reorganisation within the ORR. While this would provide the simplest
governance and oversight arrangements for the rail sector, it was discarded because the
ORR would not be able to focus solely on the passenger while retaining wider regulatory
roles or financial obligations towards service providers (for example, as the independent
appeals body for operators including rail freight to ensure fair and transparent network
access). Building from the ORR would also have negative impacts on TF, which would need
to continue to act as the statutory passenger watchdog for other transport modes. Carving
out TF’s rail functions would add complexity to the overall transport consumer landscape
and make the longer-term aspiration of a multi-modal passenger body more difficult to
achieve, reducing the potential for the passenger benefits a multi modal body could provide.
The final option of establishing a new body (Option 4) would have the benefits of providing
the ability to create the necessary culture for the watchdog from the start. However, it was
discarded on the basis that it would lead to the most costs through impacts on staff and the
costs associated with setting up an entirely new body. The scope limitations of a Railways
Bill would mean it would not be possible to transfer the entirety of TF due to its multimodal
functions (as with Option 3).
Consultation feedback
In ‘A Railway Fit for Britain’s Future’, the government consulted on its proposed
intervention. The proposal received considerable support, with 69% of respondents
agreeing with all of the proposed functions for the independent passenger watchdog, while
only 5% disagreed with all. Many respondents recognised that the current passenger
landscape is fragmented and overly complex. There was also considerable support for the
independent watchdog being a statutory advisor with regulatory functions; 66% of

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respondents supported this approach, with only 14% supporting a statutory advisor without
regulatory functions. A key theme among respondents was the need for the independent
watchdog to have “teeth” to ensure meaningful outcomes for passengers. Suggestions for
what exactly this should look like varied, but common themes were around standards-
setting and enforcement powers, as well as ensuring the watchdog’s independence.
However, key stakeholders including NR, the RO and TF expressed concerns that having
two sector bodies with enforcement powers (both the independent watchdog and the ORR)
could create duplication and risk introducing more fragmentation into the regime. The
government recognises these concerns and in the interest of creating clear lines of
accountability has therefore decided that the watchdog should have the power to set
standards (with consent from the Transport Secretary and the ORR), undertake compliance
monitoring and take action short of enforcement to highlight issues it finds and encourage
improvements. However, where it is considered formal enforcement action is needed the
watchdog would refer issues to the ORR to consider and take action, thereby avoiding
potential duplication and/or conflicting enforcement action.
Making best use of the rail network
Access and Capacity Allocation
Legislation will be amended to enable GBR to become the decision maker for decisions on
access terms that are currently led by the ORR: the duration and form of access rights,
developing and setting the access charging framework, and the design of performance
schemes. This is the preferred option for access because the current legislative framework
is non-responsive, inflexible and rigid. This results in inefficient use of expensive national
infrastructure, with service patterns that do not make best use of our assets; major delays to
new timetables; and slower, more expensive projects that fail to deliver expected benefits,
ultimately resulting in overly congested infrastructure and poorer services for passengers
and freight operators. Establishing a new capacity allocation and access charging
framework that is fit for purpose, based in legislation, and on which GBR is the key
decision-maker, is fundamental to empowering it as a directing mind.
Following the consultation, the department has undertaken further policy development to
ensure there is clarity on how GBR will make access decisions to enable best use of the
network and operate services itself. GBR will be required to ensure that it has the available
capacity it needs to run those passenger services that the government has required it to
provide. This requirement will not change the proposition on access and capacity allocation
that was set out in the consultation. GBR will need to work with devolved authorities, freight
and open access operators to consider their aspirations for the services they want to run,
and where these represent ‘best use’ of the network, they can expect to be awarded
capacity commitments. The role of the ORR as an independent appeals body overseeing
GBR’s access and access charging decisions (as set out later in this chapter) is also not
impacted.

Charging
A new charging framework established in legislation will enable GBR to set the charges for
use of its network, give discounts to support delivery of strategic priorities for the network
and charge mark-ups where the market can bear it. The preferred option is to amend the

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AMRs to remove GBR from the scope of these and any connected regulations. The AMRs
will, however, continue to apply to other infrastructure managers (OIMs), including HS1 and
the Channel Tunnel, where concession and international agreements are dependent on the
continued application of these regulations and the role of the ORR. The preferred option is
to include a delegated power in the Railways Bill to resolve any future inconsistencies and
discrepancies between the two systems as processes under GBR continue to evolve.
Role of the ORR in access & charging
In the preferred option, the ORR will no longer be required to approve access or direct the
sale of access rights for the GBR railway and will not set standard access terms for GBR.
The ORR will act as the appeals body for access and charging decisions made by GBR on
the GBR-managed network. Where non-GBR operators affected by a GBR statutory
decision believe they have been treated unfairly or disadvantaged, they will have a right to
appeal to the ORR. The ORR will determine whether GBR’s decision is consistent with its
legislative duties, any guidance from the Secretary of State and its own Access and Use
Policy. If an appeal is successful, the ORR will select remedies on a case-by-case basis,
determined in a way that proportionately considers the specific appeal in question. The
ORR will be able to dismiss the appeal and support GBR’s decision, send the decision back
to GBR to reconsider or substitute GBR’s decision with its own. The independent appeals
function established in legislation will give GBR the space and authority to take long-term
strategic decisions to ensure best use of the network while the ORR‘s independent role as
an appeals body ensures robust oversight. This was the preferred option as it gave GBR
the levers to be a directing mind for rail, in line with the key objectives of bringing track and
train together and clearer accountabilities across the sector.
Provision for a time limited power for the Secretary of State to amend contracts and the
Network Code
A time limited power for the Secretary of State to amend existing access contracts will be a
necessary backstop to ensure that the transfer to the new access and charging regime
under GBR can happen. This is because certain changes to existing contracts must be
made to ensure that they function properly under the new system. A solution is required to
ensure that in continuing to respect existing operators’ schedule 5 access rights, the
necessary changes to contracts are made to implement the new regime.
The Railways Bill will see the ORR’s powers under S17-22C of the Railways Act 1993 and
its corresponding Section 4 duties disapplied. As a result, the ORR will no longer be able to
approve changes to existing access contracts and will have no legal basis to amend an
existing contract without an operator’s consent. This would mean that routine and periodic
updates to access charges which are an essential requirement both now and in the future
could not happen properly and existing contracts would become unworkable with no legal
way of updating them.
Ahead of GBR stand-up, it is proposed that Network Rail will work with the ORR and
engage and consult with operators to identify inoperable clauses and propose replacement
wording to amend contracts.
The clause will provide the Transport Secretary with a time limited power to amend
contracts and the Network Code if they that have not been amended following this

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programme of engagement and consultation. It is to be used as a backstop measure only to
ensure that existing operators (some of whom have several-year contracts) can transition to
the new model and are not left with unworkable arrangements. The power to amend
contracts will not be exercised lightly and would only be used as a last resort to ensure
necessary changes to contracts, such as to reflect the changing role of the ORR and
creation of GBR. We are committed to honouring ORR’s Periodic Review 2023 final
determination, including conditions on charging and incentives (up to Control Period 8 when
GBRs new charging framework will be applied).

Alternative option (discounted)
During policy development an alternative option was considered. This option would have
retained the existing architecture on access, especially the role of the ORR in the Railways
Act 1993 (RA93), to grant and direct access on GBR’s network. The legal framework that
underpins today’s access regime was originally set out in the RA93 and in 2005, issues and
processes that sat at industry level such as capacity allocation and timetabling were
transposed by the AMRs. This would mean that we would retain a complex and duplicative
set of regulations designed for a privatised, vertically separated railway (i.e. where track
and train are overseen by separate organisations) – making process change incredibly
challenging and difficult to progress. This option would not have allowed GBR to be the
directing mind needed to properly bring track and train together and would miss out on the
opportunity to realise the benefits that could be derived from the collaboration, cooperation
and simplification of a directing mind - moving towards a more strategic planning process
for capacity allocation which can manage complex and significant timetable changes.
This alternative option was discounted for the following reasons:
Under this option, the role of the ORR on access and charging as set out in the Railways
Act 1993 and the AMRs would have been retained. The ORR would remain the decision
maker on access and charging on the GBR managed network, able to direct GBR to grant
access where spare capacity exists, in line with ORR processes such as the Not Primarily
Abstractive (NPA) test (a test developed by the ORR to help weigh duties to consider the
Transport Secretary’s funds, the promotion of competition to benefit passengers and value
for money). The ORR would also retain its existing role in setting charges for use of the
network at Control Periods (the 5-year timespan over which Network Rail receives
Government funding for financial, operations and maintenance planning purposes). GBR
would be subject to the AMRs. However, while GBR would be able to plan how its network
was used, it would not be the directing mind as the ORR would remain in overall control of
use of the network. This would not be consistent with the government’s ambition to
establish GBR as a directing mind.
The reforms made to primary legislation would have been limited, including;
• Widening the scope of the ORR’s existing competition duty to ensure the impacts on
taxpayers were considered alongside benefits to rail users of new Open Access
applications.

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• A lthough this option included a duty to promote rail freight, that is consistent with the
government’s rail freight growth target – it is important to note that maintaining the
existing role of the ORR (as this option proposed) would have meant a lack of levers
for GBR to grow rail freight.
Consultation feedback

In ‘A railway fit for Britain’s future’, the government consulted on aspects of its proposed
reforms to the access framework. The proposals received considerable support, with 62%
of respondents agreeing that the proposed framework enabled GBR to be an effective
directing mind that can ensure best use of network capacity, while only 14% of respondents
disagreed. The government consultation yielded significant inputs from certain stakeholder
groups, notably rail freight operators. These stakeholders gave evidence in support of
providing for a strong role and wider scope for the ORR in its capacity as an appeals body,
indicating through their evidence that any less of a role for the ORR would have a negative
impact on the freight industry and its businesses. The stakeholders suggested the ORR
should be enabled to issue directions to GBR and oblige GBR to act in a timely fashion
when there is a successful appeal. This evidence has been considered and reflected in
policy design, as was communicated through the Government’s response to the
consultation. The ORR will be able to issue remedies in instances where GBR is found to
have acted in an unfair or discriminatory manner, not in accordance with its duties, its own
published policies and criteria or any guidance from the Secretary of State. These remedies
will be enforceable and proportionate to the specific offence.
Some stakeholders suggested that the ORR, rather than GBR, should continue as the body
responsible for access decisions, rather than being an appeals body. The government has
considered this evidence but will not proceed with the suggestion, as having the ORR
rather than GBR as access decision-maker would not support the objective of a single
directing mind able to take decisions on the best use of the infrastructure in the public
interest, and ultimately better services for passengers and freight users and better value for
money for the taxpayer.
Financial framework
NR is funded today through a process called the Periodic Review. This process is run by
the ORR and sets out the amount Network Rail can charge railway operators for access to
its infrastructure, as well as how much money government is willing to grant for the
operation, maintenance, and renewal of railway infrastructure over a 5-year period.
Legislation will amend the current Periodic Review process from a review of access
charges into a cyclical funding process for GBR. GBR’s financial control framework will not
be included in legislation but will be developed in parallel, this is typical of financial
frameworks as it allows flexibility to set the terms as circumstances change.
Drawbacks to the new proposals are inflexibility for government, as this process will sit
outside of the Spending Review process, and a substantially long lead time for the planning
and analysis needed to develop a long-term settlement, necessitating a significant amount
of work across GBR, the ORR, and the new PR Funders (the Transport Secretary and
Scottish Ministers). This is the preferred option, however, because it best enables the

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efficiency, safety, and value for money benefits of longer-term funding commitments
through economies of scale and supply chain certainty. It also allows GBR to take a long-
term view unconstrained by mid-settlement uncertainty, leading to better outcomes over
time.
Today, the ORR has a role in resisting changes to the determination made at the end of a
Periodic Review to ensure a settlement is as stable as possible. Following the new Periodic
Review, there will be a mechanism to ensure the ORR is notified of proposed material
changes to the level of infrastructure funding agreed during the settlement period. We
considered maintaining a strong role for the ORR, however this would not have enabled nor
been consistent with the wider policy objectives related to changing ORR to fit its new
enhanced advisory role.
The new Periodic Review will initially fund infrastructure operations, maintenance and
renewals (OMR), but there will be the flexibility to determine all of GBR’s ‘public interest’
activity funding (i.e. including delivery of passenger services and railway enhancements)
through the process if Ministers decide this is appropriate. It was decided that only OMR
would be covered initially because of the clear value for money and safety proposition. We
considered funding all of GBR’s ‘public interest’ activities through this process from the
outset but decided against this due to a combination of increased uncertainty around
passenger services budgets from factors such as demand and revenue forecasts, and the
disruption caused by the creation of GBR necessitating increased funding flexibility for the
government.
Other options considered include: discontinuing the periodic review to fund GBR exclusively
through the Spending Review; and indefinitely maintaining the existing system, i.e. separate
funding processes for infrastructure OMR (periodic review), and passenger services and
enhancements (Spending Review). While these would have had the benefit of increased
funding flexibility for government allowing for more reactive reprioritisation of funding, they
were considered sub-optimal because these arrangements would not have met, or been
able to in the future meet, the government’s aim of an integrated GBR with the ability to
take a system wide view when making decisions. With regard to the option to fund
exclusively through the spending review, this reduction in funding certainty would have also
reduced both the economic benefits that the periodic review brings to OMR related activity
today and heighten the challenges around determining a well-informed settlement given the
scale of the railway network and the lack of ORR involvement in the determination process.
This would have made the delivery of the benefits of integrated planning and decision-
making more challenging to realise in the long term.
Consultation feedback
In ‘A railway fit for Britain’s future’, the government consulted on its proposed intervention.
Overall, it received considerable support; 67% of respondents agreed with our proposed
approach, 20% disagreed, and 13% were unsure. Therefore, following this feedback, our
overall approach has not changed. However, we have provided more detail to clarify
elements of our proposals which caused particular concern among certain stakeholder
groups.
The majority of individuals and key stakeholder groups agreed with our approach. This
included Devolved Governments, freight operators and rail trade unions. They cited the

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success of the current regime and were supportive of mirroring this once GBR is
established. There were positive reflections on the certainty this provided to the sector and
the wider supply chain, noting stability and confidence were key to investment.
Of the 20% of respondents who disagreed with our approach, there were two key areas of
concern which were raised repeatedly: the length of the settlement and the possibility of
mid-period changes.
The length of the settlement
Concerns that the settlement period of 5 years was too short were raised by individuals and
stakeholder groups such as Owning Groups and businesses in the Rail Supply Chain.
These stakeholders felt this period should be longer to provide greater stability to the
industry and allow for longer-term strategic planning. A minority of responses were also
received suggesting the period should be shorter. However, these responses were much
more infrequent.
Having analysed this feedback, we have proposed to keep the settlement period at 5 years.
5 years has long been established as the proportionate middle ground between stability,
political change, and changes in the operational environment. Up to 5 years, the
government can provide a robust settlement and objectives for GBR to deliver against
without needing to review funding. If funds were to be committed for longer, external factors
would more than likely require that the settlement be reopened. This rationale was
recognised by the majority of respondents, with many highlighting the success of the
established settlement length.
Mid-period alterations
Concerns that the settlement could be altered during the 5-year period were raised by
individuals and stakeholder groups such as businesses in the rail supply chain, rolling stock
companies, and regional governments. These stakeholders expressed concerns that mid-
period alterations would lead to a lack of certainty for both the private sector and devolved
partners, and requested clarity on this issue.
Having analysed this feedback, we have clarified our proposals on mid-period alterations in
the government’s response to the consultation. We have detailed that we are proposing a
transparency requirement on mid-period reductions in the grant awarded through the new
Periodic Review. This proposal will be committed to in legislation to provide additional
reassurance for stakeholders. This means that material reductions to the funding settlement
will be made public, with the potential for scrutiny. Outside of legislation, government aims
to set out in advance how it plans to manage changes to the settlement grant. This should
provide an extra layer of assurance to stakeholders.

The modernisation of rail fares, ticketing and retail
Legislation will enable GBR to set fares for its own services and the Transport Secretary will
continue to have oversight of GBR’s fares policy, as this is the key mechanism through

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which the balance of taxpayer and passenger financial contributions to the railway will be
managed. Open access and devolved operators will remain responsible for setting fares for
services they operate. This is the preferred option because it empowers GBR to act with an
agreed level of commercial independence – managing its own operating budget, growing
revenue and driving reform, while balancing that with the need for the Transport Secretary
to hold GBR to account. Together, these were judged to best meet the objectives of
integration and clearer accountability.
We also considered where the oversight role for fares setting could sit instead of with the
Transport Secretary, for example with an industry regulator or the planned passenger
watchdog. However, these options were both discounted due to the ongoing need for
taxpayer subsidy of the railway and therefore the need for the government to have
oversight of fares policy as a lever to balance the contributions of taxpayers vs passengers,
which is itself a political choice that only the Transport Secretary and wider government is
equipped to take. Given we also do not think it advisable for an industry regulator or
passenger body to take on revenue risk for the railway, they would lack the correct
incentives to manage fares parameters and in turn rail revenue effectively to manage the
ongoing subsidy burden.
Legislation will also enable GBR to retail at stations, ticket vending machines (TVMs),
online and, in some places, onboard trains - all the channels through which TOCs sell
tickets today. This will ensure that GBR can provide a high-quality retail offer that
maximizes value for passengers and taxpayers. Additionally, legislative provisions
contribute to ensuring a fair and open market for all retailers – such that they can deliver for
the public benefit and in line with business objectives.
GBR taking over station and on train retailing will ensure that passengers who cannot use
digital ticket purchasing and fulfilment methods can still buy tickets e.g. those without
access to a smartphone or the internet. GBR will also be able to leverage efficiencies e.g. in
future procurement of TVMs or other equipment where currently individual TOCs each have
separate contracts with suppliers.
Consultation feedback
In ‘A railway fit for Britain’s future’, the government consulted on its proposed approach to
fares and ticketing, receiving considerable support. When asked if they agreed with our
proposals to preserve the Transport Secretary’s role in fares, and continuing to protect
discount schemes, 74% of respondents agreed,15% disagreed, and 12% were either
unsure or expressed no preference. Therefore, following this feedback, our overall
approach to these aspects has not changed.
Both the majority of individuals and key stakeholder groups agreed with our approach. This
included regional governments, passenger rights groups and private sector companies in
the rail sector.
Of the 15% of respondents who disagreed with our approach to fares, there were two key
areas of concern which were raised repeatedly: affordability of fares and the role of the
Transport Secretary in our proposals.
Affordability of fares

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While the government consultation did not explicitly seek views on affordability, this theme
was raised by both individuals and stakeholder groups such as companies in the rail supply
chain and local councils. Having analysed this feedback, we have clarified in the
government response to the consultation that legislation is not the right avenue for
addressing the level of fares charged as it would be too rigid and difficult to adapt. We also
provided more detail on how railcards and discount schemes will be protected in legislation
to ensure individuals can still access these to reduce the cost of their fares.
Role of the Transport Secretary
While many individuals and stakeholders such as regional governments and TOCs
supported our proposed role for the Transport Secretary in securing overall affordability of
fares, some individuals and a small number of organisations raised concerns about this.
Primarily these concerns focused on the fluctuations and changes that could occur during
the electoral cycle. Therefore, some respondents felt either GBR or the passenger
watchdog should take on this role. Having analysed this feedback, we clarified the benefits
of having this role sit with the Transport Secretary as part of the government response to
the consultation. We highlighted it is important that there is a democratically accountable
figure with levers to influence and manage the overall level of fares to balance the interests
of passengers and taxpayers. This rationale was recognised by the majority of respondents,
with many highlighting the importance of having a democratically accountable figure
overseeing the process.
Retail market
Our consultation approach to the retail market was more qualitative as we sought views on
how the government could ensure a thriving private retail market operating alongside GBR.
We received responses to this from individuals, key stakeholder groups such as existing
third-party retailers, and an organised campaign. Third party retailers welcomed the
importance the government consultation placed on ensuring a thriving private sector retail
market but asked for further protections to be included in legislation to ensure this.
Conversely responses from individuals and the organised campaign questioned the need
for a third-party retail market and raised concerns this would encourage profit to be
prioritised over passengers.
Having analysed this feedback, we decided our proposals balanced the interests of
passengers, taxpayers, and third-party retailers. By ensuring that GBR has a strong retail
offer that operates alongside a continued third-party sector, we can ensure passengers
receive the benefit of the competition these organisations bring to the industry. Our
proposals will ensure the current fragmented system is streamlined, simplified, and
accessible, aligning with both our objective to improve and reform the sector for passengers
alongside wider government objectives on addressing fragmentation and duplication.

Devolution
Alongside maintaining existing devolved arrangements in Scotland, Wales, London and the
Liverpool City Region, legislation will create a statutory role for Devolved Governments and
Mayoral Strategic Authorities (MSAs). GBR will have regard to devolved transport plans and
strategies. GBR will consult Devolved Governments and Mayoral Strategic Authorities when

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making certain decisions that will significantly affect the interests of the economy of people
living in, working in or visiting a particular area; namely, significant changes to GBR
services that stop in the relevant consultee’s area or additions to the GBR network in that
area. Outside of legislation, GBR will agree partnerships with MSAs to enable greater local
influence and control over the local rail offer. Partnerships will range across a spectrum and
will be flexible to the ambitions and capability of MSAs, recognising the evolving devolution
picture across England. A mayoral partnerships framework has been developed which sets
out the options for future partnerships, ranging from strategic engagement, local
collaboration and investment, through to local commissioning of services and devolved
control.
Existing legislative mechanisms to allow further devolved control will remain in place,
enabling the ‘right to request’ devolution for Established MSAs, as outlined in the English
Devolution White Paper. Although partnerships do not require specific legislation and the
framework is not being included in statute, amendments to legislation will support it,
including enabling GBR to enter into arrangements with MSAs to fund GBR services and
wider activity should this be agreed in future. Not legislating in this area was therefore
discounted as it was felt that partnerships would not otherwise fully achieve their intended
benefits. A broader role in legislation for mayors would have further strengthened their
formal role in the railway but was discounted because it would risk inhibiting GBR in its
ability to act as a directing mind for the network, recognising that GBR will need to balance
local and regional interests with what is right for the national network. Therefore, the
preferred option was taken forward because it was considered to strike the right balance
between empowering devolved leaders while not overly restricting GBR in carrying out its
activities.
In Scotland, we intend to legislate to allow the relationship between GBR, public operators
in Scotland, and the Scottish Ministers to evolve over time to enable integration of track and
train. Options here include GBR operating services on behalf of Scottish Ministers or
services being operated through a body jointly owned by both governments. A similar
approach is being taken in relation to Wales, with the intention that as a minimum there will
be a close partnership between GBR and Transport for Wales.
This approach to Scotland and Wales is the preferred approach as it respects existing
devolved accountabilities and provides the flexibility to further engage with the devolved
governments on future arrangements with GBR. Merely enabling GBR to operate devolved
services closes off options and limits the scope to adequately collaborate with the devolved
governments on next steps.
Feedback from the Railways Bill Consultation
In ‘A railway fit for Britain’s future’, the government consulted on its proposed interventions
for devolved leaders.
Overall, there was considerable support; 64% of respondents agreed with our approach,
14% disagreed, and 22% were unsure. Therefore, following this feedback, our overall
approach has not changed. However, we have provided more detail to clarify elements of
our proposals which caused particular concern among certain stakeholder groups. The
majority of individuals and key stakeholder groups agreed with our approach.

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Liverpool City Region Combined Authority, the Mayor of London, the Urban Transport
Group, and Greater Manchester Combined Authority all expressed the desire for MSAs to
have control over their local railways, as well as taking on responsibility for revenue risk and
managing delivery locally. Further devolved control supports the SMART objective of
increase joined up decision making between rail and areas where decisions are taken
locally but there is a risk that it would come at the expense of one of the core principles of
GBR of integrating track and train into one organisation and also the objective of creating
clearer lines of accountability. Primarily, MSAs will agree partnerships with GBR which will
enable elements of local influence and control. These will be appropriate to the capability
and ambition of the MSA and shape of the local railway, delivering on SMART objective
three. The government has also committed to a right to request further devolution for
Established MSAs where they feel they could more effectively run services or assets.
Guidance will be published to outline the process and criteria that will be considered,
including the wider national network implications of devolution.
Other tiers of local government also expressed concern that there should be a broader
scope to the statutory role for devolved leaders and that it should be extended to local
authorities without mayors. While again that would support SMART objective three of linking
the railway more closely with local communities, it would affect the objectives for better
decision making across the rail network and clearer lines of accountability. The government
will therefore not be progressing with this measure. The intention is that GBR will engage
with all levels of local government and further detail will be provided on how that will operate
as part of GBR design development.
Devolved Governments

In ‘A railway fit for Britain’s future’, the government also consulted on its proposed
interventions for Wales to enable the benefits of rail reform to be felt there while respecting
existing devolved responsibilities. Overall, 60% of respondents agreed with our approach,
13% disagreed, and 27% were unsure. Therefore, following this feedback, our overall
approach has not changed, and we will continue to engage with the Welsh Government on
future arrangements.
Concerns were raised that the Welsh Government was not responsible for most
infrastructure in Wales and would need to rely on GBR for its management, meaning that
track and train would not be fully integrated. The importance of not impacting freight flows
and cross-border services, including devolved services operated by Transport for Wales,
was also highlighted. This was expressed by freight, local authorities, supply chain, and
other private sector stakeholders. These points will be considered in discussions with the
Welsh Government and wider rail industry on the future model for GBR in Wales & Borders.
In ‘A railway fit for Britain’s future’, the government also consulted on its proposed
interventions for Scotland to respect existing devolution and build on progress made on
track and train integration. Overall, 62% of respondents agreed with our approach, 11%
disagreed, and 27% were unsure. Therefore, following this feedback, our overall approach
has not changed, and we will continue to engage with the Scottish Government on future
arrangements. Some respondents, including business representative groups and other
private sector stakeholders highlighted the importance of maintaining cross-border services
and freight connectivity, as well as building on progress made by the ScotRail Alliance.

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Having analysed this feedback, we will ensure that such matters are considered in
developing for the future model for GBR in Scotland.

Other amendments
Freight
Legislation will create a statutory duty for GBR to promote the use of rail freight. GBR, as
the sole decision maker for the vertically integrated railway (track and train), will be the
’directing mind’ over the use of the network, balancing the needs of its own GBR operators,
as well as Open access and freight operators. The duty will ensure freight operators are
treated in an equitable manner in relation to passenger services (GBR operators and other
open access services) and incentivise the growth of rail freight. GBR will be required to
consult on how it fulfils its duties and legal obligations for access to and use of the network.
This will be done through the development of GBR’s Access and Use Policy. GBR will also
have a duty to regard any freight growth target issued by the Transport Secretary or freight
policy / guidance of the Scottish Ministers (in relation to Scotland) and must regard any
Directions issued by the Transport Secretary in relation to rail freight when exercising its
statutory functions.
An alternative option could have been to maintain the current access regulations which
state that a rail operator must be granted access to the network on ‘equitable, non-
discriminatory and transparent conditions’. However, as detailed above in ’Approach to
access, charging and capacity allocation’, the changes were necessary to give GBR the
levers to become the Directing Mind for rail. The preferred option of a statutory duty for
GBR to promote the use of rail freight therefore allows GBR to act as a directing mind while
providing protections for rail freight alongside the Transport Secretary’s Rail Freight Growth
Target to incentivise the growth of rail freight on the network.
Luxembourg Rail Protocol
Legislation will give the Transport Secretary the power to implement and ratify the
Luxembourg Rail Protocol. The purpose of the Luxembourg Rail Protocol clause in the
Railways Bill is to give the UK the power to lay secondary legislation in due course to
implement the Luxembourg Rail Protocol to the Convention on International Interests in
Mobile Equipment (the “Cape Town Convention”). This is a new opportunity for the UK to
support and boost private sector financing opportunities in the UK’s railway rolling stock
market, as well as increase opportunities for UK businesses – for example, lenders or
lessors – to participate in overseas financing activities with lower risk, and therefore cost.
Without the legislation, creditors financing rolling stock continue to be exposed to risk in the
event of default or insolvency when rolling stock has crossed a border and is located in
another territory – the Protocol aims to address this risk.
Alternative options would have been to either do nothing and maintain the status quo or for
the government to seek other legislative opportunities to implement the Protocol, outside
the Railways Bill. However, it is worth noting that the UK made a commitment to implement
the Protocol by signing up to it in 2016. If we did nothing, there would be a risk that the UK,
reputationally, was seen as unreliable and not prepared to fulfil its international obligations.
Additionally other countries are implementing the Protocol, and we would potentially be

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disadvantaged in relation to the financing offers available in those countries both for
domestic rolling stock and export financing opportunities. Further, the Railways Bill is the
logical legislative vehicle via which to bring forward powers to implement the Protocol.
Regulations to reform the train driving licensing and certification regime
Legislation will give the Transport Secretary powers to lay secondary legislation to amend,
update and/or revoke provisions in the Train Driving Licences and Certificates Regulations
2010 (the “TDLCR”) and related train driving assimilated law, which sets out the mainline
requirements to be a train driver in Great Britain. These powers will enable the Transport
Secretary to implement reforms to the TDLCR and keep pace with developments in this
area in the future. This follows the findings of the second post-implementation review
(“PIR”) of the TDLCR published on 19 May 2023 that identified areas for improvement in the
regime and made several recommendations for change, which the Department for
Transport plans to explore with the rail sector. The Transport Secretary is currently unable
to make the types of changes that we envisage are necessary to address the issues
identified by the PIR using existing powers in a practicable and efficient way.
Alternative options have been considered. One of these would have been to depend on
primary legislation to amend the regime, but this would be sub-optimal as the main
mechanism for reform. There is a need to reform the TDLCR not only in respect of the
current issues as identified in the PIR, but on an enduring basis, to keep pace with
technological advances as well as changing methods and best practice. If amendments
were only to be made via primary legislation, a Bill would be required for each and every
amendment, regardless of how minor.
The administrative burden of primary legislation, as well as the additional difficulties of
finding space in the Parliamentary timetable, could lead to delays in making functional
improvements to the regime, which could in turn have commercial or safety implications for
industry and the public. For this reason, primary legislation is not the most appropriate place
to make these types of regulatory amendments. Secondary legislation, on the other hand, is
a simpler legislative process, with a lower administrative burden, and allows more flexibility
in how and when legislation can be amended. This is particularly relevant in the context of
the train driving profession where there is an ongoing need to periodically revisit the TDLCR
to take account of the experience gained in the application of the law and respond to the
changing technological environment.
The second alternative option would be to lay secondary legislation under powers available
in the Retained EU Law (Revocation and Reform) Act 2023, but these are unsuitable for the
needs of reforming the TDLCR, which require amendment both now and in the future. The
reasons for this are two-fold; firstly, the ‘one-shot’ nature of the powers, meaning they can
only be used once; secondly, the fact they expire on 23 June 2026. These limitations
preclude any possibility of amending the TDLCR on the enduring basis required by both the
government and the rail sector and would not therefore be an appropriate mechanism for
implementing ongoing reform.
For this reason, securing new powers to lay secondary legislation to amend, update and/or
revoke provisions within the TDLCR and related assimilated law will equip the Transport
Secretary with the ability to reform train driving requirements on the railway in a dynamic,
proportionate and efficient way.

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To enable the train-driving regime to be updated effectively, power has been given to the
Transport Secretary to empower specified or described persons to make provision about
matters relating to the regulations, such as the medical examination requirements in the
Schedules, in a separate document. This increased adaptability will allow for such
requirements to be updated expeditiously to ensure that the regime remains effective.Under
these powers, the Transport Secretary will be required to publicly consult on any legislative
changes that are proposed to the regime. Subject to any consultation on future proposals,
reforms could deliver cost-savings, reduce burdens, support safety outcomes, and improve
the operational effectiveness of the train driving licensing and certification regime.
Consultation feedback
In ‘A railway fit for Britain’s future’, the government consulted on its proposed intervention.
Overall, 64% of respondents agreed with our approach, 8% disagreed, and 28% were
unsure. Therefore, following this feedback, our overall approach has not changed.
Greater Manchester Combined Authority, Manchester County Council, and the Urban
Transport Group expressed a desire to be statutory consultees on any changes proposed
by the Transport Secretary to this licensing regime. While this suggestion would align with
the objective increase joined up decision making between rail and areas where decisions
are taken locally, it will not be progressed as the government is committing to a statutory
public consultation on any use of the powers, and as such interested MSAs will naturally be
able to provide their views.

NPSVmonetised and non-monetised costs and benefits of each
shortlist option (including administrative burden)
Summary of impacts of the preferred option
Table 14 below summarises the groups of impacts that are expected to arise as a result of
the measures included under the proposed option (Option 2) in comparison with the
Business as Usual Do Nothing (Option 0). Table 14 specifies the party (government,
households, businesses, or wider society) that is affected by each impact, whether the
impact is direct or indirect, and whether the impact is realised within the non-legislative
option (Option 1).
The classification of direct and indirect impacts is based on RPC guidance,44 whereby
impacts are direct if they are first-order consequences of the measures within the Railways
Bill. Second order impacts have been classified as indirect. As a result, many impacts are
classified as indirect on the basis that they will be facilitated by the sectoral changes that
this legislation will enable but will not be immediately imposed or realised by passing this
legislation.
Table 14. Summary of anticipated impacts.

44 Regulatory Policy Committee (2019). https://www.gov.uk/government/publications/rpc-case-histories-direct-
and-indirect-impacts-march-2019

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Impact Sub-impact Direct or
indirect
Impact
realisation
under Option 1
Monetised
A. Set-up costs GBR establishment
costs
Direct Partial Yes
Passenger watchdog
establishment costs
Direct None Yes
B. Administrative
and familiarisation
costs
Familiarisation costs Direct Partial Yes
Administrative costs Direct Partial Yes
C. Financial
benefits to
government
Vertical and horizontal
integration efficiencies
Indirect

Partial No
Network Rail
efficiencies
Indirect Partial Yes
Improved
management of the rail
system
Indirect Partial No
Changes in cost of
retailing
Indirect None No
Revenue
enhancements
Indirect Partial No
D. Improvements in
the passenger offer
Improved passenger
experience, including
accessibility
improvements
Indirect Partial No
Improvement of local
transport networks
Indirect Partial No
Retail and fares
simplification
Indirect Partial No
E. Impacts on
businesses
Impacts of future
access decisions
Indirect None No
Increased investment Indirect Partial No
Reduced cost of
bidding
Indirect Partial No
F. Economic and
wider impacts
Economic growth Indirect Partial No
Positive environmental
impacts
Indirect Partial No
Devolution impacts Indirect Partial No
Potential workforce
diversification
Indirect Partial No
Additional Transport
Secretary powers
Indirect None No

Some of the impacts of the preferred option (Option 2) may be realised without legislative
changes. Option 1 is a non-legislative change which largely comprises what could be
achieved by Shadow Great British Railways (SGBR) by achieving greater collaboration, and
efficiencies delivered by NR as part of NR’s Control Period 7 plans (further discussed in the
section below).

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Establishing SGBR brought together leading figures in the rail industry to collaborate and
start to bring together track and train ahead of legislation to create GBR, with a focus on
delivering for passengers and freight users45. SGBR aims to lay the groundwork for a
properly integrated, customer-focused national rail network, and work closely with industry
partners to deliver better services for passengers and tackle the financial challenges facing
our railways.
Under Option 1, we assume that SGBR will continue in the absence of GBR to improve
collaboration and integration of track and train without legislative reform.
SGBR will focus on five key areas of improvements46, as described in Table 15 below.
Table 15 also provides some examples of the types of initiatives that SGBR may be able to
facilitate, illustrating what may be possible to achieve under Option 1 without legislation.
Table 15. Description of SGBR focus areas.
Focus Area Definition Potential Initiative
Integration Identifying opportunities for
early integration of
management across track and
train, driving out duplication,
reducing operational costs and
breaking down silos to
promote growth.
Facilitate greater alliancing between DfTO
Operators.
Consolidation of industry payrolls
Support production of whole-system risk
picture to better collectively mitigate and
manage financial risks
Standards Creating alignment on key
passenger-focused metrics
and bringing together
customer insights from across
the industry to ensure focus on
a high-quality passenger
experience.
Implement customer-experience standards
across the industry
Adopt the same train performance metrics
covering punctuality and reliability across
the industry
Fares and
ticketing
Trialling new technologies to
improve the customer
experience and ensure
customers are getting the best
prices available
Expansion of Pay-as-you-go trials
Support development of revenue protection
processes and technology to simplify
ticketing terms and conditions for refunds.
Strategic
innovation
Harnessing technology to help
drive innovation and
modernise the railway.
Identifying major opportunities for strategic
innovation
Encourage greater innovation across the
rail sector.
Creation of working group across major rail
organisations’ Innovation teams to ensure
alignment of whole-system priorities
Maximisation of
social and
environmental
value
Exploring how to provide
social and environmental
benefits, such as creating a
more diverse workforce,
Develop Accessibility Roadmap to identify
and implement whole-system improvements
Create a cross-industry social mobility
network for rail

45 Department for Transport (2024). https://www.gov.uk/government/speeches/establishing-a-shadow-great-
british-railways
46 UK Parliament (2025). https://committees.parliament.uk/event/22745