Great British Railways risks repeating costly mistakes as competition stalls

Concerns are mounting that the government’s state-owned railway framework, Great British Railways, is heading down the same route as the former British Rail. A newly published report by the Centre for Policy Studies warns that without decisive action to foster competition and unlock additional income streams, the system could mirror the inefficiencies of the past. With railway revenues currently at just 89.1 per cent of their pre-pandemic levels and a sharp fall in season ticket sales, taxpayers now shoulder £12.5 billion a year in subsidies. This is despite rail journeys comprising only 2 per cent of all travel made by the public.

The report, authored by Tony Lodge and titled ‘Rail’s Last Chance’, delivers a four-point plan for the future. Lodge critiques the government’s resistance to open access rail operators—private companies running services without public subsidy or government contracts. Recent applications from Virgin Group, FirstGroup’s Lumo, and Wrexham Shropshire & Midlands Railway for new open access services were blocked by the Office of Rail and Road, citing limited capacity on the west coast main line. Lodge argues that at least 10 per cent open access should be established on intercity routes by 2030 to drive up standards, deliver more routes, faster trains, and cheaper fares. He points to the east coast main line, where competition alongside state-backed LNER has seen passenger numbers rise by 28 per cent since 2019. In contrast, Avanti continues to struggle on the west coast where a monopoly persists.

Examining ancillary income potential is the next recommendation, with the suggestion that the sector’s 52,000 hectares could support new retail, property development, and green energy projects. Development of solar facilities across just 34 identified sites could provide enough power for 140,000 homes, and station-based health hubs would serve communities while generating revenue.

Lodge also stresses the importance of regulatory oversight. The Office of Rail and Road must remain independent, able to scrutinise Great British Railways’ operations effectively rather than deferring to internal assessment. Maintaining a checks-and-balances approach is crucial for accountability within this evolving sector.

Shifting focus to the customer experience, the report advocates for a user-friendly, cost-effective ticketing application encompassing features such as a rail miles loyalty scheme. As British Rail previously demonstrated, state control alone cannot guarantee improvement without innovation and genuine competition to spur better outcomes.