Government sets out process for transferring rail operators into public ownership

New Transport Secretary Heidi Alexander has released plans to overhaul the rail network and confirmed that South Western Railway will be the first to transfer into public ownership next year.

The move follows the government’s first major pieces of legislation, the Passenger Railway Services (Public Ownership) Act 2024, receiving Royal Assent and paving the way for a major shake-up of Britain’s railways.

The transition to a publicly owned railway is intended to improve reliability and support the government’s “number one priority of boosting economic growth by encouraging more people to use the railway”.

Government says the changes will fix the foundations and deliver change with reform and investment to deliver growth. It will also clamp down on unacceptable levels of delays, cancellations and waste “seen under decades of failing franchise contracts and will save up to £150 million a year in fees alone by ensuring every penny is spent on services rather than private shareholders.”

Under the announcement a wide area of southern England and East Anglia will come back into public control by autumn 2025 and delivering on manifesto commitment to bring contracts with existing operators into public ownership as they expire without costing taxpayers “a penny in compensation”.

Transport Secretary, Heidi Alexander, said, “For too long, the British public has had to put up with rail services that simply don’t work. A complex system of private train operators has too often failed its users.

“Starting with journeys on South Western Railway, we’re switching tracks by bringing services back under public control to create a reliable rail network that puts customers first.

“Our broken railways are finally on the fast track to repairing and rebuilding a system that the British public can trust and be proud of again.”

The Transport Secretary also announced that publicly run services will be managed by DfT Operator Limited – previously known as DfT Operator of Last Resort Holdings Limited (DOHL) – whose functions will eventually be integrated into Great British Railways (GBR). The DfT’s Operator will continue to focus on transforming the railways into a more reliable, affordable and accessible system.

The department expects the transfer of all passenger services operated under contracts with the Department for Transport (DfT) to complete over the next three years.

Railway Industry Association (RIA) Chief Executive, Darren Caplan, commented, “Today’s announcement is an important milestone on the journey to a restructured railway. The UK supply chain will work with and support the government’s plans to deliver improved rail performance and reliability, as we together develop world-class rail, both track and train.

“There is now a real opportunity to provide more certainty and visibility over work plans, which will help a reformed railway be a catalyst for boosting growth and connectivity across the nations and regions of the UK, with better services for rail customers – passengers and freight – and ultimately ensure enhanced value for money for the taxpayer.”

CEO of Campaign for Better Transport, Paul Tuohy, added, “This is the first real step towards the government’s plan to bring the railways under public control. There is an urgent need for action to give more people access to an affordable, reliable rail network. The government must work collaboratively across the sector and continue prioritising passengers by keeping them front and centre of its plans.”

Under the government’s broader plans to reform the railways, GBR will bring track and train together under one “directing mind”, with a “relentless focus on improving services for passengers and customers”. Until legislation for this is in place, Shadow GBR will make progress on ensuring the sector works together better under a publicly owned railway.

Government says it will be setting out plans for how Shadow GBR will deliver on its initial priorities in the new year.