Is Great British Railways finally on track?

It was May 2021 when we first heard the name Great British Railways. The Williams-Shapps Plan for Rail unveiled it to parliament as key to addressing issues uncovered in the Williams Rail Review, which had been launched in response to significant issues surrounding timetable changes three years earlier.

The then transport secretary Grant Shapps and review chair Keith Williams acknowledged a need, exacerbated by a collapse in rail passengers during the pandemic, for ‘radical change’ in the sector’s operating model.

As a new public body, the ambition for Great British Railways is to absorb management of the rail infrastructure, network, fares and timetables under the remit of a single organisation.

After several delays, it has now been brought into the legislative agenda by the new Labour government via the King’s speech, which introduced two transformative bills.

Key legislation

The Passenger Railway Services (Public Ownership) Bill removes the presumption in favour of franchised passenger railway services being provided by the private sector across the UK. Instead, it allows train operators to be provided by a public sector company when existing franchise contracts end or reach a break point.  

Several clauses in the legislation mean the secretary of state would only be able to extend existing franchises, or agree to new franchises, in ‘specific limited circumstances’, such as to avoid overwhelming the public sector company should several franchises end around the same time. However this power stands to be repealed once all franchises have transferred to the public sector.

The bill amends specific provisions in the Railways Act 1993, which created privately run train operating companies to deliver franchised railway services, and the Public Service Obligations in Transport Regulations 2023.

Effectively, it makes the appointment of public sector operators the default position rather than merely a last resort, as we saw when LNER took over the InterCity East Coast franchise after the previous operator Virgin Trains East Coast returned it to government in 2018 following sustained financial difficulties.

It also paves the way for further reform via the Railways Bill, which brings sweeping reform to governance of the railways by bringing track and train, as well as planning services, under a single authority: Great British Railways. This bill also features changes to ticketing and introduces a passenger watchdog, the Passenger Standards Authority.

Employment law  

Any move to bring a private sector operation into public control brings a wide range of practical considerations.

There are currently 28 major train operating companies in the UK, including Avanti West Coast, CrossCountry, East Midlands Railway and Northern.

These organisations range in size and, operating in a competitive market, each has its own employment packages. This means everything from salary and holiday allowance, to flexible working arrangements and parental leave allowance, may vary from one employer to another, not to mention differ to those offered by the new public body.

Any organisation that absorbs the employees of another during a transaction must comply with Transfer of Undertakings (Protection of Employment).

These protect employees’ rights during their transfer by ensuring the new employer accepts existing employment conditions. Any changes the new employer wishes to make would require detailed consultation with both the employee and, potentially, their trade union.

Consultation will of course be required too if there is a need to make redundancies once certain departments are centralised.

While it will be easier to establish standardised contracts for new staff joining over time, a strong focus on developing a harmonised organisational culture will be required to assimilate teams joining from different organisations with their own workplace cultures.

As public sector pay information is made publicly available, the employer should also consider what impact this might have on workplace relationships.

Insourcing procurement

Given that a wide range of third-party suppliers will likely be involved in any public operation – in the case of trains, there will be caterers, cleaners and replacement bus services – a public body taking over operation will need to consider procuring these services again when existing arrangements end.

In many cases, the contract will expire when the franchise ends, but this means the public body must then consider how these services will be fulfilled.

Securing those new services will be subject to public procurement regulation, though the government will have more flexibility under the new Procurement Act when it comes into force in October.

Decisions will also be required on whether to bring fragmented IT infrastructure – which will host back-office functions such as HR information – under a single system or to retain existing systems. Many NHS trusts, for example, use different platforms.

Ultimately, there is plenty of food for thought among decision-makers when insourcing private sector operations into a single public body. 

Bradley Martin is a partner in Browne Jacobson’s government and infrastructure team, Manchester