Published for pre-legislative scrutiny: the draft Rail Reform Bill

The long-awaited Draft Rail Reform Bill (the “Bill”) was published on 20 February 2024, alongside the government’s response to its consultation on legislative reform. The Bill sets out what the government considers to be the primary legislative measures needed to implement the reforms envisaged in the Great British Railways: Williams-Shapps Plan for Rail.  

The Bill has been published for pre-legislative scrutiny. During this stage the cross-party Transport Select Committee will take evidence from interested groups and individuals before producing a report setting out its conclusions and recommendations for the government to consider before finalising the proposed Bill. 

What does the Bill cover?

• The Integrated Rail Body (“IRB”) – The Bill provides that the Secretary of State for Transport (“SoS”) may designate a body corporate as the IRB. The expectation is that Network Rail Infrastructure Limited will initial be designated as the IRB and then renamed as Great British Railways (“GBR”).   
• Role of the IRB – The Bill amends the Railways Act 1993 (as amended) to enable the IRB to act as an infrastructure manager and also to specify railway services and manage operator contracts where the SoS is the current franchising authority. The hope is that by increasing integration in this way costs will be reduced and whole-system thinking encouraged.  
• Business planning and reporting - The IRB will be required to publish a business plan setting out how it will exercise its functions and when doing so it must have regard to the impact of its plan on businesses in the private sector.  The IRB must also prepare an annual report setting out what it has done during the financial year to increase the involvement of businesses in the private sector that carry on activities connected with the provision of railway services.
• SoS controls over the IRB - The SoS is conferred broad powers over the IRB, including the power to issue directions or guidance about how the IRB exercises its functions. These directions may provide that a function can only be exercised after consultation with the SoS or with the SoS’s consent. 
• Devolved bodies – The Bill provides that the Scottish Ministers and the Welsh Ministers may make arrangements for the IRB to exercise any of their franchising functions on their behalf.  However, this is not mandated.

The Bill carries forward most of the proposals set out in the consultation on legislative reform published in June 2022.  However, it does not include changes to:

• s25 of the Railways Act 1993 which prohibits public sector operators from being ‘franchisees’; 
• prevent the ORR from imposing a financial penalty on the IRB in the event of a licence breach; or 
• enable the IRB to issue directions regarding the sharing of information and collaboration between operators. 

It seems highly unlikely that the Bill will become legislation before the impending UK General Election. That being said, there is cross-party recognition that reform of the rail sector is necessary and inevitable. 

It will be interesting to see how Labour reacts to the proposed Bill (the publication of its report on the future of the rail sector is expected soon) and how smoothly the Bill proceeds with pre-legislative scrutiny over the coming months. 

The draft Rail Reform Bill contains the primary legislative measures, which form a key part of delivering rail reform in Great Britain.

https://www.gov.uk/government/publications/draft-rail-reform-bill