Welcome to today’s evidence session. It is a one-off session to question the chair of shadow Great British Railways, Laura Shoaf, and the Minister for Rail, Lord Hendy, on the work of shadow Great British Railways. Would you introduce yourselves a little bit more, please?

I am Peter, Lord Hendy of Richmond Hill. I am the Minister of State for Rail in the Department for Transport.

My name is Laura Shoaf. I am the chief executive of the West Midlands Combined Authority, but here today in my capacity as independent chair of shadow Great British Railways.

Welcome. In simple terms, Laura, what is Great British Railways? What is its purpose?

Is it okay if I give you a little bit of background about myself?

That would be great, yes.

It might be helpful in light of what we are going to say here today. It is important for me to highlight that my whole career, and my degree, is in urban planning. Most recently, I have spent the past two decades in the west midlands working in urban regeneration, but more specifically in transport. I was asked, along with one of my colleagues, to be a national champion for tackling violence against women and girls on public transport. I raise that because I am particularly passionate about it. It means a lot to me, and it means a lot to what I want to bring to this role. I have experience in building capital projects, most recently including the seven new rail stations we are building in the west midlands, and in operations. We own and operate our tram system. Critically and importantly for this Committee, I understand just how important rail is to a place. I believe that it plays a huge part in an integrated network, but it is there to support jobs. It is there to support economic growth, the building of homes, sustainability and social cohesion. Critically, as a daily user of the network myself, I have a relentless focus on what could be better for the passenger. What are we here to do as shadow GBR? It is to deliver the benefits of closer integration and much better partnership working against what is a quite highly fragmented sector at the moment, with the aim to make some real improvements before Great British Railways is stood up formally. We are here to provide collective insight and challenge to the direction of rail reform, to emerging legislation and to the set-up of GBR. We are here to provide leadership on culture, the workforce and the capability that will emerge into GBR, and to work now on some of the challenges of bringing a number of very large organisations together. We work as leaders—that is, the chief executive of Network Rail and I, the DfT Operator and the DFT itself—to try to identify some very practical steps that we can take now to work towards a better integrated railway, and how we can work differently and model that difference in behaviour into the sort of culture that we want in GBR. When we come together, as we do weekly, we are there to act as one team and to put passengers at the absolute heart of the railway; to put freight at the heart of the railway; now to integrate decisions on track and train, which as you have heard in previous sessions is a huge opportunity; and to think about the things that benefit, as I said, passengers, freight and, importantly, the taxpayer. We also think about what can be done to radically improve customer experience. Most importantly, it is to unite and try to simplify what, as I mentioned before, is very fragmented decision making with collaboration and importantly, to me, to make sure that everybody leaves blame behind. That is just a little bit more about my background. I hope that is helpful.

That is helpful. It describes aspirations about our rail system that I think we can all sign up to. What is the actual role for you, as chair? What is your day-to-day work, which as you said is only part time, and what level of resources do you have to do just this role?

In this role I have been asked very specifically to be the convener of those three organisations, and to make sure that we are collectively working together. They are three very large organisations that, in and of themselves, have tremendous resources. It is not about setting up another organisation at all. It is about making the most of the talent and the teams that we have across three organisations and really challenging them to think very differently about the way that they are working. Where we have operators that are now with DfT Operator, it is how we start to make some of the improvements that can model what we want to do going forward. It is about support, convening and challenging. It is also about ensuring that, as we move towards GBR, we are able to make some changes now. I don’t think anybody wants to wait to see improvements in the railway. It is a matter of working with those organisations, which, as I said, between them have quite large teams themselves and to help them focus on the priorities of this Government, of the Secretary of State and of the Rail Minister, so that we are sure we are delivering for them in the short term.

You convene a meeting of three men, no doubt knocking some heads together. What resources do you have for that role?

For me, in my role?

How big is shadow GBR?

I simply call on the resources of those three organisations.

What do you think that shadow GBR will look like in three years’ time?

If we have a GBR in three years’ time, there won’t be a shadow GBR. As I say, we are here to exist and to help through the transition as we move into GBR. When it is established, I hope it has some very real successes that it can look to and that it has some examples of those better ways of working. I hope we will have made some progress on the culture challenge, about making sure that we work as one team. When you model that from the top and from a board that is made up of the people who have the responsibilities for that, it is a good way to start to get the message down through the organisations that we expect to be working in a fairly radically different way as we go forward.

Have you been given specific outcomes by Ministers—one of whom is obviously sitting next to you—and have the outcomes you have been asked to address changed since the appointment of the new Secretary of State?

I would not say that they have necessarily changed, but I have now had some very clear direction from the Secretary of State about the immediate focus. It might be helpful to go through what those areas of focus are. First, it is about integration and identifying opportunities for integration between track and train. I am keen that we drive out duplication; that we reduce operational costs; that we break down silos; and that we do not miss the benefits, especially with the train operating companies that are in public control, to try to grow and change in how we use them as an example of what this can really be and what it means for passengers. There is a definite focus on standards. We all want to align around what the key passenger-focused metrics are. We want to focus on a very safe, high-quality passenger experience. We want to be robust and careful about what kind of performance data we have. We want to make sure that passengers understand their local stations, what the performance of their train services is and, more importantly, what is going to be done to improve it, and that we bring together more customer insight from across the sector. There is a big focus on how we are going to develop and share those standards across the industry. Hugely important are fares and ticketing reform—how we are going to influence, implement and innovate around fares and ticketing reform. There are opportunities to harness technology and respond to the way that people use the services in a post-pandemic world, and to build off some of the great work that has already been done. That is definitely a huge priority.

Are there milestones for those outcomes?

Absolutely, there will be.

There will be. But not yet?

We are in the process of working through a delivery plan, which I will be delighted to share with you when it is finished. Obviously, what you measure is what you value and how we will be able to be held to account by the Secretary of State and the Rail Minister for the progress that we are making against those milestones. Those will be forthcoming. Strategic innovation is another short-term priority for us. How are we going to harness technology? In line with the guide strategy that the Government have released as well, how do we use technology to help drive integration and modernise and innovate the railway? There has been some fabulous work done at GBRX for us to build on. As I said, in some cases there is great work happening in different parts of the system. It is bringing those pieces together on behalf of everyone and harnessing them. Finally, it is maximising the social and environmental value of the railway. How do we use our collective resources to make sure that we provide social and environmental benefits and outcomes? How are we going to make sure that we have a trained workforce for what we need to deliver? How are we going to make sure that our workforce are diverse and represent the country that they are there to serve? How are we going to deal with issues around accessibility and raising standards around accessibility? How does that work align with our transition to net zero? Those are the priority areas that we have been asked to focus on. I don’t think they are wildly different from where we were, but it is helpful for us to have that clarity and vision from the Secretary of State.

Laura, picking up on the theme about the engagement work that you are undertaking at the moment, in your current role do you have the scope to engage with the sector beyond that group of three which meets regularly? If so, what does that programme of engagement look like?

I do, and I have. I have spoken to all sorts of different groups over the past few months since I was appointed. It is really important to listen to and understand the many different advocacy groups, and many different industry groups and the supply chain, as to what they want from the programme. What has been fascinating is that no one I have spoken is not supportive of rail reform. Every group I have spoken to would recognise that if you were going to design a rail system, you would not design it from here. This is where we are, but it is definitely not where anybody wants to be. I have been able to sit down with lots of different stakeholders, groups such as the RDG, Passenger Focus and the freight industry, to try my best to understand what role they can play. Of course, it is not just the three bodies that sit on shadow GBR. There is a vast network of people who are really keen to help promote this agenda. It is important that we harness that effort, energy and enthusiasm to get them pulling in the same direction as well. Yes, it has been a big part. Given my day job, I have had a good opportunity to speak to some of the other regions and some of the other Mayors to understand their vision for devolution, and their vision for the role that rail plays in their area and some of their ambitions for this programme as well.

On the operational side, is there a close relationship at the moment between shadow GBR, albeit in its very early form, and operators? I am particularly thinking about DFT direct operations. Clearly, that will be a very important part of the early work of GBR once it is on a statutory footing. How integrated are you able to be in your approach at this early stage?

To be very clear, the roles and responsibilities of the three bodies that make up shadow GBR are still very much with them to deliver. I don’t have any responsibility for the delivery of services. That being said, they are one of the key players sat round the table and we spend quite a lot of time talking about how we can all work together to better improve services. To be very clear, it is the responsibility of DfTO to operate the services that are in public control, and then the Department, through its contractual obligations, works with the existing operators still in private control. We have influence through a convening role, but, to be very clear, those responsibilities do not sit with shadow GBR.

Finally, Laura, you spoke about ensuring accountability to the Secretary of State and having scrutiny around this programme of work. The Government have been quite clear that shadow GBR is not a public body in its own right. I am curious to tease out, if we can, what those accountability mechanisms look like. It is very welcome that you are giving evidence and are subject to scrutiny in the Committee. Is accountability to Parliament likely to be put on a more formalised footing? On quite a narrow point, what do the records of the body look like? Are they kept within the Department? Down the line, once we are past the policy development stage, are the minutes of meetings going to be accessible so that we can look back at the early intentions of shadow GBR and then compare them to later performance?

At the moment, shadow GBR is held to account by the Secretary of State and the Rail Minister. We meet fortnightly to update on progress. We have been given those five priorities and, as I said, we will be working through milestones in the delivery plan, which we will be making public. We are very happy to be held to account on that. I am very happy to come to this Committee at any point, should the Committee want to see me. At the moment, we do not keep detailed records of our meetings. As you might imagine, they are challenging. I want to keep a space at the moment where we are allowed to have rather challenging conversations, challenging each other and challenging on behaviour. As it moves further towards GBR, I don’t know whether that will change, but at the moment that is how we are governed and how we are held to account. As I said, I am happy to be in front of this Committee, or any other, should they want to know more about what we are doing. At the moment, that is how we are planning to produce something that will let the public and parliamentarians know what we are here to deliver.

Thank you. I must say, given the importance of this particular policy area, that I find it a little surprising to hear that detailed records are not being kept at the moment, but perhaps we will get to that point.

Do you think that shadow GBR is an effective model for driving reform of the railway?

Yes, I do. As I think everybody recognises, at the moment the system is not incentivised to work together. As I said, that is something that has been inherited. One of the most important things that shadow GBR can be doing is demonstrating the collective power and impact of what working together looks like. Before we have something in statute to allow that to happen, being able to demonstrate to the industry, partners and organisations the power and the change we can make by working differently is hugely powerful. I do not underestimate the scale of the challenge and the time it will take to embed different cultures and different behaviours in what will eventually be such a large organisation. It is incredibly important between now and when it is established to set the direction of travel, to model behaviours and to identify the things that can be done. It has been my experience as leader of my own organisation that you need to model that from the top. As things start to change, and the people sat around the table can unlock change in their own organisation, it can be quite a galvanising force to try to change the mindset and to get people’s heads into what it will be in the future, getting them thinking about what their role is in it and other people thinking about what they can do differently themselves to start making some of the changes across the railway.

What levers do you have at your disposal? It sounds like you are having some chats among the different organisations, but what levers do you actually have for achieving that reform? I am interested in one specific thing. Obviously, there are the four railway operators that have come back into the Department that have all failed. What are you doing to talk to those that are perhaps less problematic about what works? It feels a little bit like you are modelling on fixing four that have broken rather than taking the things that have worked and using that as your framework for setting up. There are two questions. What levers do you have at your disposal? How well are you using the stakeholder of the existing operators that are not necessarily the ones you are trying to reform in quite the same way?

Absolutely. If you don’t mind, I will take those in reverse order. It is incredibly important for us to learn from the operators that are doing a great job. We have a number of examples, and a number of examples that are within the control of DfT Operator, which is delivering an excellent service. We have a number of really good examples too of where integration across track and train is starting to take real effect, and where modelling different behaviours across that integration is yielding better decision making and savings. We absolutely want to make sure that we capture the learning from that, and that that learning can be shared with other operators who are in a different place from some of the operators that are working really well. We spend quite a lot of time talking about that learning, those teams and how we can roll that out further. In terms of levers, I like to think I have the levers of the chief executives of those three organisations. I assure you that there is some real, robust challenge in that room. It is a place where robust challenge can happen. We all feel a responsibility for making sure that the railways are improving. While each of us does not necessarily have a collective set of levers, individually the three other people on shadow GBR have huge resources to move. Again, it is about collective influence and drive to make improvements, and working together. Historically, the chief executive of DfT Operator would not sit down for an hour or two hours a week with the DFT and Network Rail to talk through big challenges and issues. Those are the kinds of levers that we have to drive some of that change. I assure you that I am wholly committed to making sure that we get some different outcomes there. There can be very robust conversations, but so far they are yielding some better outcomes which we are quite proud of.

Are there any additional powers that you feel you might need? It is one of these things where you have a short timeframe to get to grips with what needs to change. Do you have enough powers within that for what you are trying to achieve to deliver that?

At the moment, absolutely. It is really important that we do not set up yet another organisation to hold something to account. That is the job of this Committee, the Secretary of State and the Rail Minister. It does not require another group of people to be holding to account. Yes, at the moment I absolutely feel I have the levers. I feel we have the clarity. Hopefully, soon we will be able to produce a delivery plan that sets out practical milestones of what we hope to achieve. At the moment I feel I have enough of the power and the levers to drive some of the change that we are talking about.

Can you do that without resources yourself, but depending on the resources of one of the three bodies or even the DFT? You don’t need your own staffing to support you in holding the three organisations to account.

At the moment, I do not need a huge team or department to do that. Let me give a couple of examples. Where we have been asked to think about, for example, fares and ticketing reform, we have a fabulous team that has been working at GBRTT in conjunction with the Department looking at some of that stuff. What I am keen not to do is to set up another team to look at that stuff. I am very keen to work there, or with GBRX—Great British Railways Innovation—or some of the great teams in the DFT. It is about driving them forward with clear ambition about what needs to happen. It is not about replicating work that is already housed helpfully in a number of those bodies. It is about harnessing them and allowing them to deliver collectively and in a better way.

We have been consulting with the wider sector in the lead-up to producing the plan. As I said, I do not think that it is just those three organisations that have a role to play. Obviously, organisations like RDG have a lot of capability and capacity. It is about working with them to understand their aspirations for delivery, and then helping align them to the programmes that I have talked about and defining a role for them. We do, of course, want to move fast. It is only fair and right. I am a daily user of our rail service in the west midlands. Do I want to see improvements? Of course I do; I think everybody who uses the railway absolutely wants to see that. We are trying to identify, as I said, some of the things that we can do in the short term to set that direction of travel. What are the short-term improvements we can make that passengers will really feel? Some of those ideas are sat within the organisations that are around the table with me. Some of those ideas are sat outwith, in terms of the different sorts of partners, stakeholders and supply chain, who all have their own ideas about the things that we can be doing in the short term. We do not want to miss those out. The engagement bit has been really important to me, which is why I have given it such a focus in the first few months that I have been in post.

Indeed. Good morning, everybody. GBRTT was a creature of the intent of the previous Government to set up GBR. One of the things that may get slightly forgotten in this is that we have been on this reform agenda—I have been on it in two different jobs—for the last six years. Despite the fact that the last Government did not actually produce anything in Parliament that was implementable, GBRTT was a manifestation of the need to do some work in various areas. I would say now that, broadly, it splits into two. One part of GBRTT is doing some of the work that Laura described, particularly on fares and ticketing reform. It is not only that. There has been some excellent financial work looking at the whole finances of the railway, for example. That can be taken forward under one or other of the wings of the three organisations that comprise shadow GBR and chaired by Laura. The other part of it was preparing for GBR. Creating GBR has to be a job for the Department because it needs primary legislation. Those people have not wasted their time, but what they have done will need to be adapted and built on, in order to create the organisation that will be created as a result of the legislation that we are going to bring forward. No part of what they have done has been wasted, but taking it forward will be in a slightly different form. That is fair enough because this Government have, I would say, a more inclusive view about what GBR actually is and what it will do. GBRTT has been helpful, but it did not have the leverage that Laura has very eloquently described to you this morning, about bringing the industry together, for example; whereas in the new circumstances we will manifest that by the production of a major railway Bill in this calendar year. Prior to its introduction we can approach all the issues that Laura has described.

As always, the actual people doing that work have to be properly treated. As ever, they are decent employees, and they work hard. That work is going on now. In light of the subject matter that Laura has described to you, and which the Secretary of State has asked her to do, GBRTT can now be looked at with a view to the individuals there going in an appropriate direction, whether it is to the Department or one of the other two constituent bodies of shadow GBR in order to carry on what they are doing.

As previously mentioned, we have had a change of Secretary of State, so obviously timescales have had to shift to make sure that we are able to focus on the priorities of the Secretary of State. As I mentioned, we now have the five areas, which have been made very clear to us. The delivery plan will focus on the five areas that we have been tasked to focus on, with underneath each of those some of the workstreams and milestones. I don’t have a date that I can give you today. We are working on it. It is something that I want to make sure is right. I am one of those people who is very conscious of plans being written and then sitting on shelves. This plan is really important to all of us and to me to get right. We have clear direction now. We are working on it, and I hope it will not be too long until we have something that we are proud to publish.

The aim is to have the minimum amount of disruption in order to deliver the things that Laura has talked about. If you look at this in context, in due course we will have GBR itself. We do not want umpteen organisational changes on the way up there. We have good people doing good stuff. It just needs to be aligned to the areas that Laura has talked about, with the people doing it put in the most appropriate of the bodies that exist and getting on with it. I am much more concerned about that. I want to look after them personally because they deserve respect and consideration. I want to look after the work in order that nothing we are doing that is good stops, and indeed that we produce some results.

Forgive me if I should already know this. How will DfT Operator interact with Great British Railways once it is completed? Do they remain two completely separate organisations, or are they the same thing?

Gosh, no. The thing I have been reflecting on as you have been asking Laura all those good questions is that this industry has been desperately fragmented for over 30 years. Many people of an age not much younger than me have known nothing else but an industry that grinds in these contractual interfaces and does not work together. Indeed, if you wanted me to—but you don’t—I could tell you some stories about how relatively independent Network Rail has been of either of the other two constituent parts of what Laura is bringing together and starting to collaborate. GBR needs to be a coherent whole. It cannot be comprised of organisations that are independent within it. The structure of what Laura is doing has to be like it is because we do not have the legislation to do anything different. When we do, Network Rail will not exist and neither will DfT Operator. Indeed, one of the challenges for DfT Operator is to be sufficiently resourced and capable to take in the operations that it will take in over the coming two-and-a-bit years but not form itself into another great beast like Network Rail when, actually, the job of GBR is to take those things apart and run them in a coherent way. One other thing is really important. It is too easy to conclude that, therefore, GBR will be some megalithic eastern European organisation with a massive office with thousands of people in it. If it is, it will fail. The railway runs best at a level at which people can be in individual control of routes at train operating company level. What we want, as GBR gets formed and all this good work is done, is some results. That is what Laura is talking about. Passengers deserve to have better, sooner. We also want to create an organisation that works at a level at which passengers can see the result. I have talked separately, as you might expect, to the chair of DfT Operator. We are agreed that philosophically he needs just enough people to do what DfT Operator should properly do in order to run those train companies, but not to set up another massive structure that then has to be taken apart and put into another structure. We cannot spend all our time reorganising everything. One of the answers to that is to get it right at the level at which the train service is actually delivered to passengers, and have a bit of pressure upwards as well as building it downwards.

That is useful and raises other questions, which we will come to shortly.

Laura, we touched a little bit on fares and ticketing. If I were to be cynical, if I had a pound for every time the industry or Government talked about reforming fares and ticketing, I could probably just about afford an All Line Rover. We have been told by a few Ministers that reforms to fares and ticketing do not need to wait for the legislation to establish GBR. What progress do you think is being made on it? What role have you been asked to undertake in relation to that as chair of shadow GBR?

There are things happening. Forgive me for being parochial, but I will refer back to the west midlands, where we are in the process of working with the Department to roll out a pay-as-you-go product. Manchester is not far behind in that process. Those are examples of some very long fought for changes to fares and ticketing that we think can come ahead of legislation. How those integrate into places, as I mentioned before, is really important. It is an aspiration of many areas outside London to have that same sort of ticketing, which is capped, multimodal and refers to a place. Some great progress is being made there. What we have been asked to do as one of the five areas of focus, as I said, is to influence and implement innovation, and to build on some of the good work that is already happening. It is also to challenge some of the work that is happening, coming from a passenger perspective about whether it works. As Lord Hendy mentioned, we have some great teams that are leading on some of this innovation. They are working with partners in different parts of the world to try to understand how we harness technology. They are working with experts in this country who have been able to simplify fares and ticketing. It is about how we do systems innovation. We have been able to make some progress with some of the operators that are currently in DfTO, even on some very basic changes like ticket acceptance across different operators. That is another example of some of the small, incremental things that are able to be done. We know what an important issue that is for passengers. We know how fragmented and confusing it can be to try to buy rail tickets. We are absolutely committed to trying to put some of that stuff in place. We have some truly excellent people, as Lord Hendy said, in a number of different organisations who are working on this. Our job is to bring them together and give them the direction of travel. Coming back to somebody else’s question earlier, it would be a great sign of success in our meetings if people came in to talk about one of the key priorities and we could not identify who their employing body was. That is the ethos we are trying to get to. We are all trying to make things better; it does not matter who you work for. The point is what you are doing to try to make some of those incremental improvements now.

This is very much related to what you have just said. To me, the scale and complexity of this organisational change programme is fascinating. I know that both the Secretary of State and you have mentioned culture change. It is one of those concepts that risks staying up in the clouds and nobody understands what it means practically. For me, it is very much about the way people think and behave now, and then changing it so they think and behave in a different way in the future. Can you give me any examples from your experience so far of what you have identified as the old behaviour and what you hope the new behaviour might be?

Yes, I can. To go back to what you said, I absolutely believe that that is right. I think I started by saying that people believe what they can see modelled. It is how we behave as the shadow GBR and what we choose to measure. I mentioned some of the performance targets and being specific about what we think we want to measure. From a leadership level, that starts to set the direction of change. I believe it mostly comes from the people who know more than I ever will about what it takes to run the railway. Some of the best ideas that come from my organisation do not come from our leadership team. They come from people who are on the frontline. They come from people who are serving passengers every day. They come from people who are running stations every day. They see the small changes that could make a big impact for people. One of the best things we can do in working towards what you rightly point out is a long-term programme and process, is to make people feel empowered to make those decisions. Lord Hendy referred to that a little bit earlier in terms of how operations work best when people feel empowered locally or regionally to take those kinds of decisions, and to be held accountable and responsible for them. It has been my experience that people want to be able to be empowered to make those sorts of changes. We have identified a couple of areas so far where we have been able to work with some exemplar operators where they are empowering their staff, and using that as an example to roll out to other operators. I do not underestimate the challenge of the culture change. I am not sure that we will deliver it ahead of GBR, but I think the way we behave, the kind of signals we send and the way that we treat passengers and staff, and the way they feel that they are treated, goes some way to starting to drive that journey. It will be a very big journey, as are all culture change programmes.

May I add something to that? At its simplest, one of the prevailing cultures in the whole railway is that when something goes wrong you look for somebody else to blame. It is almost an automatic reaction. I cannot remember whether I said this last time I came here, but in Network Rail when I used to look at the morning’s performance and felt tired and weary, I would think, “Oh, thank God it’s not our fault.” That is completely hopeless for passengers and for late-running freight trains. What you want is for people to think, “How do we get this fixed?” This is a complex, interactive system where seldom does one actor in the three big organisations that Laura chairs, or indeed the rest of the railway, have all of the remedial things to do under its control. That is true even of simple infrastructure failures or staff shortages around the system. They are things that need to be interactive with more than one organisation. Laura is absolutely right in saying that one of the things you need to do is to drive behaviours from the top. The three chief executives that she sees on a regular basis should be shown to the industry to be working together to solve some of the problems. What she talked about on shared standards is a particular example. Network Rail has been asked to manage its performance with different metrics from train companies. How do you resolve that issue? It’s bonkers—a technical term from the balkanised railway industry. If everybody knows what you are measuring, there is a fair chance that you can at least agree on what has gone wrong, or the quantum of what has gone wrong. I am absolutely passionate about that, if only because in my previous life I ran an organisation, at Transport for London, where everything that went wrong was my fault, and we fixed it, or we tried to fix it, simply because there was nowhere else to go. This railway has to get into the habit of saying, “This is our problem, and we fix it.” I can be passionate about that because I believe in it. I think it is Laura’s passion. I am very supportive of both her personal role and the organisational role. To be frank, the previous Secretary of State was absolutely right; it needed somebody to come into the role she is doing with some knowledge, but from the outside, and say “Let’s work together, friends, to make this better.” That is not the habit of the industry. It is not the learned habit of most of the industry, because it has been fragmented for so long.

Thank you.

Laura, do you have a role in the development of the Department’s wider rail strategy?

I think I will say that we have a role in that the Department sits around the table, and in what the railway wants to achieve. Absolutely. Do we have a statutory role? No, because we are not a body. Do we have a collective vision for where the railway wants to be, that we think should be part of the strategy? Absolutely. We have a role in that way. It is tricky when you are not an entity in your own right, but I think the collective visioning for a better railway that is done around the table, with colleagues from DFT in the room, should play a role in the strategy; of course, ultimately it is at some level for the Government to help set that direction of travel.

Unsurprisingly, we have been talking about railways and a lot of railway stakeholders. What stakeholders from other forms of transport are you engaging with at the moment, particularly buses? Rail replacement services, one day, will be a big issue; and ticketing is an issue of real concern to passengers who want to go from bus to train to bus. Is that being thought about at the moment?

That is very close to my own heart. It is about delivering integrated networks, as we see here in London. I have to think about all networks in terms of the different roles that different modes play, and I am a huge fan of bus. If we want to drive more patronage on the railway, which everybody wants to do, and we want more revenue on the railway, there are things we can do on the railway to make it more pleasant for passengers, including things we have talked about today, which we know matter to people: safety, reliability and integration. Also, as areas look to move towards different models for managing bus services, we should work with regions to make sure that buses feed the fixed lines of the railway. An integrated, joined-up service would allow us to try to drive more demand on to the railway. When modes are not competing with each other, but are complementary to each other, there should be a much better outcome for the railway. We are talking to regions. Whether it is TfL, West Midlands, Greater Manchester, Liverpool or Leeds, all those regions have a vision for how they want their integrated network to be, whereby ticketing is simpler, capped, and multimodal. They almost all have a vision by which the modes feed each other so that it is one seamless network to the passenger. Absolutely, that is a huge critical part. Rail does not stand alone in a place. For us, it links up with our tram, bus, cycling and walking networks. How it lands in a place is hugely important. If you will indulge me for a second, stations are hugely important to people and places. Where we are able to have interchanges between modes that are really effective, it will all help to drive passengers on to the railway. Ultimately, what we all need and want is for the railway to be successful. In short, am I talking to people about it? Yes, but probably not as much as I like to talk about it. We absolutely see it as critical. It is a critical part for places to get the most out of the railway, and for the railway to drive the kinds of economic benefit it needs to.

Laura, you have talked a lot about the need for real cultural change, and Lord Hendy was talking about concerns around blame and fragmentation, and different metrics. What is your assessment of what has gone wrong with the railways in Great Britain?

I think the word “fragmentation” is probably the best way to sum it up. Over the past few years there has been quite a lot of change in the direction of travel. That has not necessarily been helpful for the industry. As Lord Hendy said, it is easier for the operators to blame the infrastructure, and the infrastructure to blame the operators, than it is for people to come together to say, “What needs to change to make this better for passengers?” I feel that some of the focus on what matters to passengers has been lost. You can travel on other systems around the world and see a much better passenger experience. As a passenger, I feel that, in terms of support and operation information. As I mentioned before, I am particularly passionate about safety on the railways, so one of the challenging questions I like to ask is why one of the measurements that we have not yet been considering is the number of last trains cancelled, which puts people in a really unsafe position. To me, on the network that we are responsible for running in the west midlands, it is critically important not to leave people at a station at the end of the night. Every bit of the industry is incentivised to look at its bit, and it has lost its ability to think in the round about how to creatively problem-solve together, and make things genuinely better for passengers, and for freight users as well. People up and down the country certainly give that feedback; they feel like an afterthought, after the industry, and that because the industry is so fragmented it can easily default to a complicated answer to what many people hoped was a simple question.

Thank you. You talked about the need to model behaviours, but, practically, what can shadow GBR, you and the constituent organisations do to address those kinds of issues in the interim?

As I think we have said before, there are some great examples of where those are already being tackled. On some of the well-run operators that we have mentioned before—some of those that are already in public ownership—teams are coming together to challenge that kind of behaviour, to unite under one vision for what they are there to deliver, and to challenge each other not to walk into that culture but to think differently about how they align resource together, and work together, to solve problems. I am quite inspired by some of the great innovation we see on the ground. Our job is to bring that together, harness it and model it. It is to drive some of that through the rest of the systems and operators that we have in-house. For me it is really important to bind that innovation as close to the passenger as we can, and to allow the people who know best about what influences passengers, stations and railways to bring some of those ideas forward. Where they are successful, it is important for us to be able to roll them out across different bits of the network. Some fabulous work is going on. If I was going to say one thing, it is that we don’t shout enough about some of the successes happening in the railways. They get drowned out by some of the challenges that are happening in the railways.

In making sure that you enable those successes to come to the fore, and move away from the silos we have seen, how can the design of what GBR will look like address those issues?

It is absolutely paramount to how you get the institution set up in a way that does not institutionalise those behaviours, if that makes sense. The design of what GBR needs to be is something that we are working to influence. The responsibility definitely sits with the Department. As a board we work to try to influence the thinking about it. There are consultation documents and bits that need to go through primary legislation. The whole industry needs to be involved, under the DFT’s leadership, in what the future design needs to be. Lord Hendy has made some points already about how important it is to get that right. We can design something that crystallises the kinds of behaviours we would like to see, or we can design something that builds the wrong incentives in place. That is in the forefront of our mind, and is one of the things that we have been asked to look at, to help influence and shape.

Will that design then be fixed in the legislation?

The legislation will allow GBR to be set up. In its internal design, to produce the outcomes that you need, you are not going to define the structure of how it operates at a granular level in the legislation. Indeed, if you look back in history, no previous set of legislation for the railways has ever designed the organisation underneath it. I think what Laura is describing is influencing, and I think her influence, and the influence of the people she sits with regularly, is very important. Actually, the design of GBR ought to be to deliver the outcomes that people want from the railway, not to be constituted by the inputs. That is why I was so determined when I talked about DfT Operator and, indeed, about Network Rail. Those organisations, if you are not careful, are designed with the inputs needed to produce the functional parts of the railway. What we need is an organisation that is designed with the outcomes for passengers and freight, and works backwards, if you like, from that. The influence of shadow GBR on that, while it is only influence, because it has to be properly formulated in the right legislation, is very important for having the outcomes properly in mind throughout the whole process.

Thank you. To follow up from that, a lot of the focus of what we have been discussing has been on passengers, but you have both mentioned freight. Certainly, looking at outcomes, the previous goals for freight were not considered particularly ambitious. In terms of what the Secretary of State, I think, will set out as the ambition for growth when it comes to freight, how will GBR fulfil its duty to ensure that there is growth in freight, and what levers can you pull in relation to that?

You are right that it is terribly important. The only way to do this is proper interaction with freight operators. You can look at the map of the network and say that conceptually freight ought to be on all parts of it, but, realistically, the freight that it is economic to carry by rail is composed of some clear sectors—containers, intermodal, aggregates and other things like that. I would like a structure for GBR that enabled those flows, run by commercial operators, to be properly accommodated on the network, with the train paths that they need on the network. That has to be a function of GBR, which is allocating space on the network; and that is a whole subject in itself. The forthcoming consultation, which, I assure the Committee, will be out very soon, and is the preliminary to the Bill, will have a lot to say about access and charging. Those are the things that will determine the ability of freight to serve its own market. There is a bit of “Watch this space” here. It is not as if nothing is happening now, because in the past 18 months or two years, both the Department and Network Rail have been a lot more active than they previously were in talking to the freight industry, and seeking to understand where it thinks it is going next. Indeed, I have probably met the freight industry more often, since I have been in this job, than I have met some of the passenger industries, simply because it is really important. It is really important for them, and they will be paying particular attention to what the consultative document says about access and charging, because they want a railway that makes their businesses work and is capable of expanding the markets that make sense for rail.

Do you anticipate greater ambition for growth in freight than we have previously seen?

It has to be measured over time. The previous Secretary of State, and the present one, I think, have both reiterated the obligation that will be there for GBR to grow the freight market. It has to be realistic, simply because the freight market is not likely to double in a year. It needs its own expansion plans. It has to have wagons, track access and freight terminals to function, but I expect it to be demanding, and I expect the operators to be demanding.

Thank you. We are going to go back to the legislation.

We talked a bit about what shadow GBR is doing now. There is going to come a point when it is time to set up GBR proper. I imagine that setting up Great British Railways has quite a big to-do list attached to it. There will be hiring a chief exec and senior managers; there will be answering the question about the operating model and organisational structure, which is a really interesting opportunity to look, if you are taking outcomes first, at what sorts of structures serve those outcomes. I imagine that it might look quite different, organisationally, even from a typical rail operating company at the moment, and any of the agencies you mentioned. I am interested in what shadow GBR’s role is in getting ready for the creation of GBR. Are you looking to build the organisation around you? Are you looking to make it redundant when it is done? Will you be involved in operating principles, organisational design, hiring the chief exec and setting up ways of working, or is that something that comes later? What do you hope to have achieved by the time shadow GBR finishes, if it is possible to know that at this stage?

Maybe I should start. Some of what you have described is clearly the function of the Department itself—hiring a chair and a chief executive. We should start from first principles. You cannot hire a chair and chief executive until you know you are going to have an organisation, so we have to go through stages. We have the consultation on the Bill, which will, as I said, be out shortly; I am learning already not to be too definitive about weeks and months, but it will be out very shortly. We have to go through that process. This is going to be a very substantial piece of legislation, changing things, as I said, that have been largely unchanged for over 30 years. Then we have the legislation itself. There is a point, I am advised, in the passage of the legislation through both Houses, when it is possible to start recruiting people to run the organisation. You cannot pre-empt Parliament’s absolute right to make those decisions. Those things necessarily have to be a job for the Department, and the creation of what will be a very large public body will necessarily involve many people. That is the work of a Government Department. I would say—I am sure Laura can follow up—that what SGBR and her group of chief executives can achieve in the meantime, in terms of her agenda and what we have talked about, and making the railway better, ought to be a very substantial influence, in how GBR does its work. If you detect a little bit of direction in my passion about it working right, at a level at which somebody can control it, that is because it seems obvious to me that while, conceptually, you want the railway to run everywhere—we all do—if you are a passenger you want your train to run and your station to be okay. I want to see somebody who believes when they wake up in the morning that it is their job to fix it, and that they don’t have to enter a meeting with 30 people and look at 400-page contracts to work out what you do when things go wrong, but that they have the power to make the railway service better for the people on the ground this morning, this evening and tomorrow morning.

Lord Hendy did a good job of delineating responsibilities, but you asked what kind of influence we think we can have. I think it is that bit about challenge, as the Department starts to think about the shape and structure of it. Our challenge has to be whether it is going to deliver material benefits to passengers, freight and taxpayers. That is the right challenge to ask of any bit of work. Does it allow innovation? Does it allow people to improve the customer experience? Does it give accountability and responsibility to the people who run the railway? I think that is important. Is it going to unite and simplify the fragmented decision-making systems that we have now? Will the design genuinely help to foster collaboration? Will it try to drive out a blame culture? Those are the areas of provocation and challenge that it is SGBR’s role to deliver. It is convening the people who know so much about it and run such massive aspects of it, and to ask ourselves and the Department challenging questions as it develops, and to help keep that focus. That is really what we are here to do. It is the focus from the Secretary of State and the Rail Minister on constantly provoking and challenging on what it is going to deliver. Will it really make the kind of meaningful change that is set out in the vision, and that we know passengers desperately want?

And if it doesn’t in your opinion, who do you go to then?

I have fortnightly meetings with the Secretary of State and the Rail Minister.

It is not a sort of arm’s length scrutiny function. It is you in the room talking about it.

Absolutely. It was a huge privilege to be asked to do this—to help shape something on behalf of the Government. I don’t take it half lightly. I will give my opinion readily when it is asked, and I think I am forthright in challenging what I see. We are all committed to making that difference, and I would not sit quietly in a room if I thought something was headed in the wrong direction. I assure you I take very seriously my responsibilities and the great privilege that has been given to me of having a role in this. I will be robust.

I have never seen Laura sitting quietly in a room. That is why she is there.

Forgive the clumsy metaphor, but when all the bright lights come on and GBR exists, the shadow disappears.

Yes, indeed.

Right. Go ahead and fix the health service.

Back to the shadows.

And, I might say, the three organisations that comprise it. It is important not to presume; as my colleagues said in a previous session of the Committee, there are functions in the Department that have wound up there in the 30 years of balkanisation that ought to be back in the railway. It is very important. That of course implies some structural change and some changes for individuals. I am mindful of all the individuals in the three organisations for which the Secretary of State and I are responsible. It creates some wonderful opportunities as well. It is a challenge because it involves change, and the industry is sometimes quite resistant to change, but the opportunities for individuals will be brilliant as a result.

I have a couple of follow-up questions. Minister, you said that there will come a point during the passage of the legislation when it is possible to recruit. Would it be possible for the Committee to have an explanation in writing of what the barrier is? When the old shadow Strategic Rail Authority was created—I accept that it may not be an exact parallel—it started with a staff of some 160 people, which had doubled by Royal Assent. Secondly, there has been some focus on the appointment of the chief executive and other senior leadership roles, but once that point is achieved, when hiring to SGBR can start, do you see its wider capacity scaling up quite quickly, and do you see it establishing its own identity? I suppose a concern would be that, if that does not happen, we could get the modern equivalent of vesting day and those three organisations will come under a new banner but might continue much as they were before, in a way none of us would want.

There are three things in there. First, I am very happy to write to you about the precise process, if only because although I know what it is I would have to look for it. The point at which you can do it is quite clear. Secondly, there is a real difference here. Shadow GBR is already bringing together some enormous bodies. I don’t think any of us, in a railway whose net cost after revenue is far more than it was pre-covid, wants to recruit hundreds more people. One of the opportunities is to reduce duplication in an intelligent fashion and get things done that turn out to be normal business much more easily than setting up another vast army of people. I am sure that the Secretary of State would have the same instinctive reaction, which is that we do not want to see, in this process, the necessary recruitment of hundreds of people. We want to rationalise what we have, and get a better result from it. The third thing is that throughout the whole process—I am sure that I can speak for the Secretary of State in this—the thing that matters most is what happens at ground level for passengers and freight. If we get that right, the evolution of GBR into a functioning organisation will be much better. We do not want it to be all show and lights, and not produce anything at the bottom. We want the production at the bottom to get better, prior to it coming. We want the three things it really needs to do, which are to improve performance, drive revenue and reduce costs, to be working as normal, and standard business; and then we want GBR to take that over. That is what I would put in lights—the results of it for passengers, freight and taxpayers, and not some grand slam of logos and what have you. It will have to have all of those, but that is not the point of it.

We have some questions about where we go from here on governance and the legislative process, but it would be useful to have some specifics on what you have actually done. We all agree with the overarching objectives of passenger experience, reducing costs and so on. Laura, could you give us some examples of specific things you have either achieved or asked one of the constituent stakeholders to do, since you have been in this role, preferably something that was not already under way, like ticketing?

I have been in the role since October, so we have not been meeting for a huge amount of time. To think about one specific example, I would take how we are co-designing, across the multiple stakeholders that sit round the table, some principles about where we want to take integration, potentially. We have an opportunity in front of us; we have some examples about where that is being taken forward. Together we have worked on a set of ideas about where we could see better integration into some of the train operating companies, over the next three, six and nine months. That is about eliminating duplication of roles, and how we are going to target and align resources. Historically, it might have been the responsibility of only one of those bodies to design that, without consultation with the others and without having to think about whether there is collective resource that we could apply to get better outcomes, and how driving that would make a change for each of the organisations. Without wanting to be too precise, as it is not agreed, those are the kinds of changes that we are starting to see. I would not suggest that things happened without people discussing them with each other. In the meantime, there are some great cross-working groups: at the most senior level, a really strategic conversation about what we are setting up, and what we want to achieve; the agreement in that room that we all sign up to those principles and that that is a working arrangement that we think we can make work, and that is how we think we want to resource it; and the timescale, is, I think, a step change from what could be done before. I hope that if I get the privilege of coming back to see you after I have been in post a little bit longer, I can point to things that have then come to fruition that we would be there to do, because, of course, I am as anxious as everybody else to start to deliver tangible benefits that we would all feel very proud of.

We look forward to that.

Might I add a piece to that? Laura is being a little bit too modest about it. The agreement between the parties, the three people she sits with, about a shared approach to performance measurement is hugely important. We would never have got there before. We would never have got there because Network Rail was institutionalised with the regulator, and the Department setting the franchises out and DfT Operator were on a different plane. If you are going to fix performance, you at least have to measure it on a basis where everybody is measuring it in the same way. That sounds absurd, but it is a huge step forward and it has been achieved through collaboration. It has not been forced on anybody. That is one of the things that you could properly say is the result of the collaborative working.

Thank you. Scott, you had a question.

Apologies.

Scott has come from a Bill Committee.

I am sorry I was late.

That’s okay.

When do you expect to start the consultation on the way forward? I attended an RIA meeting yesterday, where they made the point that GBR is going to be the second biggest employer in the country, which is absolutely incredible in terms of the scale. With just those jobs alone, let alone the economic impact it will have, it is quite incredible. Another meeting I attended recently was with open access operators. As you know, some of them have concerns. I have to say I have a slight conflict of interest because the east coast main line is quite well served by Lumo. There are other operators, of course. I mostly use LNER, I have to say. There is lots happening. Lots of people are concerned and interested and want to have a say. How is consultation going to work?

I will say very shortly again.

This is on the Bill.

This is on the Bill. I think we are on the same page. As I have said before, this is a major structural change to an industry that has been balkanised for over 30 years. The consultation raises for comment by interested parties some really important issues, of which, to refer particularly to open access, access and charging are two of the most important. GBR will be a large public body, but it will have work running on its network, with commercial train services, both the open access operators and freight services. I would not say that there has been any dilatory activity since the Government took office in July. An enormous amount of work has gone in, and they are still dotting the i’s and crossing the t’s on the consultation in order to put something forward, which open access operators particularly will pore over and make sure that they feel that it is fair. To the extent to which GBR takes decisions, which you will see in the document when it comes, we know that there has to be an appeals process because they have real commercial businesses to sustain, and likewise with the freight operators. The consultation document itself will be pretty meaty. I am very optimistic this morning, with some cause, that it will be out very soon. We have to go through that process properly. It would be quite wrong to introduce a Bill to both Houses that dealt with those subjects without hearing from people about what they are going to see and what they think of it, and how reasonable it is for their businesses.

Good. It is good to hear there is progress being made. I didn’t mean to imply that there wasn’t, so thank you.

It is a very reasonable question, because the Bill process, of course, depends on consultation being issued, a proper length of time for people to reply, a proper length of time to consider what they said, and then the Bill will get introduced.

I know regulation is coming up later in the questions, without giving too much away. As part of this consultation, you will be considering regulation quite carefully. While there are concerns, there are also opportunities. I guess what a lot of people are looking for is a regulator that has real insight into what is happening. I was going to say “teeth” there, but that is too strong. There is a feeling that because this is going to be a Government operation it means we need stronger regulation rather than weaker regulation. Is that something that is being considered as well?

It certainly is being considered. In the light of the Government’s proposals, the ORR will have to change, but that is not an indication that it would be weaker in any way. Its statutory responsibilities have to reflect what the Bill does to the industry both in economic regulation and to the extent to which it might need to change in safety terms. That has to be part of it, yes.

Thank you.

To be clear, are you expecting that the Bill will come through in this parliamentary Session? Time is getting on.

Yes.

It will.

Yes.

Okay. It was promised in the King’s Speech.

It was promised in the King’s Speech, and we are anticipating that. I cannot see today any reason that I know about why it should not be there.

Okay, thank you.

When we were talking about some of the things that needed to change, an issue that was not raised but I hear regularly when talking to different rail bodies is concern that part of the delays has been created by micromanagement from the Department and the Treasury. With that in mind, I would be interested, Lord Hendy, if you could give some more clarity at this stage about the relationship between GBR and Government in terms of political oversight and powers of direction. I would find it very useful if you could divide between shadow GBR and what happens before, and then what we expect when GBR is actually in place.

Of course, it is a germane point, if only because the railways following covid now consume a much greater level of public subsidy than they did, so it cannot be a surprise that the Government, the Treasury and the Department are going to be interested. You meet people in the railway who say, “Well, if only we were left to get on with things on our own, we’d be okay.”

You do.

Well, you are not going to be left with things on your own if you consume large quantities of public money. You are going to have to be accountable for how it is spent and why it is so large. I do my best in my own way to defuse those people. You are not going to be left alone to run a railway that requires billions of pounds-worth of public subsidy. The Government, rightly, have to have a role. They also have to have a role, because running the railway is in order to produce the benefits that Laura talked about to start with, and so will I, which are growth, jobs and housing. That is the aim. Better connectivity delivers all those things. Certainly, after the experience of recent Governments, this Government are committed to doing things about that in their plan for change and growth. There will always have to be a close relationship with Government, but the question is where some of the decisions are taken and who by, and whether they are the best placed for it. I found, not really to my surprise doing this job, that after years of endless discussions about the east coast main line timetable for July, in the end the person who took the decision to take it forward for December 2025 was me. I don’t think that that is the right place to decide which timetable should operate on the east coast main line. I think the right place to do that is within a body that is responsible for running the railway and can take responsibility for the individual decisions that go into making a timetable. The consequence of the history of the railway in this 30-year period is that a lot of those decisions have been drawn very closely into Government in a way that I don’t think has suited the public interest or passengers’ interest. We are seeking to set up an organisation that has the capability of doing well those things and the things that Laura talked about, and doing them for Government. That is not to say that the Secretary of State and the future occupant of this role will not want both to direct it to do some things and to have regard to the impact of what it does for the economy, because, quite rightly, it will. That relationship would be much better if there were not several hundred people in the Department working out whether I get four trains an hour from Richmond in the peak hours or six. The operators ought to be in quite a good position to do that.

Yes please.

I am in favour of about 20, actually, Chair.

Some go on the Hounslow loop line as well.

Yes, there is a balance. It is not a bad example actually, because I would expect a competent operator to devise both the philosophy and the detail of the timetable in order to serve passenger demand in the best way. There are also some trade-offs, and those trade-offs have to be done on a periodic basis because the market changes. There also has to be a degree of transparency because people are interested in them. That could well be done in a body that has responsibility for running the railway and has a balance between the costs and the income. My colleague, Alex Hynes, said when he was here last time that we are making some progress already, because the business plans for the train companies in the financial year commencing this April will have a balance between cost and income in them, and that is the right thing to do. You cannot just take cost out of the industry. If an additional £1-worth of cost brought you more than £1-worth of income, that is a hopeless decision. Actually, we already have some of that freedom. Regarding the limits on the freedom of GBR, we need to give it some to start with and we need it to earn some by its performance. It would not surprise me to discover that probably the people who run it will say, “Oh, well, if only we had more freedom, we could do X and Y.” That itself would be a welcome change because there is no such interaction going on now. If you are the holder of a contract with Government to provide one of these services in the private sector now, the Government just tell you what to do, and then for anything that you might think is bright you have to negotiate your way through quite a long process. That is not right either. That suppresses initiative and does not bring it out. I hope that that gives you some clue. The Secretary of State in the end will have to have some power of direction. It is quite inevitable. If you run a body of that size covering the country, with its economic, political and social responsibilities, that must be right, but it must have the capability of making many of those decisions itself. I go back to what I said about local and route management, which is that you would feel much more assured—I am addressing this to the Chair because she and I are on opposing sides of the Hounslow loop line—if somebody was responsible for the whole of the train service and infrastructure on South Western who was identifiable, who could come and rationalise why they had taken the train service decisions they had, and they knew that it was their decision to take.

It is one thing for the Secretary of State to set direction, and absolutely that is right, but it is anticipated that GBR will be arm’s length, isn’t it?

Yes.

Some of the concerns arise from the view that when you are talking about taxpayers’ money more is being spent because of delay and micromanagement at lower levels rather than setting the direction at the top. Is that something you recognise? Do you feel that there will be progress away from that?

I certainly recognise the view. Indeed, I referred earlier to the east coast main line timetable. The purpose of the timetable change in December 2025, we have to remember, is to produce the train service that was promised for an investment of several billion pounds in the east coast main line. The failure to be able to agree between all the parties about what it was has delayed those benefits over months and months. That is a decision that I would not expect a Minister to take. I would expect GBR to take it, and I would expect it to take it in the knowledge of the individual markets that the train companies serve, of the balance between the cost and revenues on the east coast main line, and to take into account the enormous sum of public money that has been put into investment that will allow faster train services to Edinburgh. That is a really good example of a decision that has taken a long time and should have been done faster but could not be done in a balkanised railway, and will be able to be done in GBR.

In light of this Government’s key interest in regional devolution, are there plans to regionalise the structure of GBR. If so, how will that work?

I would say that it must be regionalised and it must be run at a level where you can have people in charge who are responsive to local and regional needs. When I was here before, Alex Hynes, who ran both elements of Scotland’s railways, was sitting next to me. Scotland is of course a devolved Administration. We also now have the increasingly powerful position of the combined authority Mayors across England. My colleague here works for one of them. They will have a statutory role in the development and operation of train services in their areas, and quite right too. That will be the means by which we produce the integrated transport that they need to produce economic growth, jobs and houses in their own areas. Laura, I am sure that you want to say more.

Absolutely. This Government’s devolution White Paper is quite specific about the roles of regions in rail. There will obviously be more information and specifics to come through the railway Bill. It suggests that there will be a more powerful role regionally for thinking about how we govern regional railways, how we manage, plan and develop them, and the role in and around stations, which I think I mentioned are important assets to place. I know, referring to the job I do in the west midlands as a co-signatory to our rail operator, just how important that is. Our Mayor chairs that board. We are holding to account on performance for our region, for passengers and for important issues around accessibility. Lots of regions have very clear visions about how accessible they want their networks to be—their whole network, as you say, from bus to tram to train to walking and cycling—and how we can work with regions to deliver their views for how it fits into their network. It does not stand alone in the day-to-day running of our economy or where we think about where we are planning houses or wanting to see economic growth. Rail is absolutely integral to that, so it has to have a bigger role for regions and Mayors who are themselves democratically accountable and all have a vision for what the role of rail is in making their place a success both for themselves and for UK plc.

Following on from that, in terms of the structure of GBR, are you suggesting, therefore, that it would be structured around MCAs that exist at the moment and further bits of devolution? At the moment, if you look at a Network Rail region, it is very different. There are triangles that go into London, whereas Mayors have an area that they surround. How would the structure of GBR work with the regionally elected Mayors that you are talking about? In your own region, you have Transport for West Midlands. How do you think regions that don’t have the equivalent of passenger transport executives would be able to feed in the same way that the regions do?

In terms of railway geography, it is self-evident; local authority and combined authority boundaries seldom replicate railway geography, which by and large emanates from London. Let’s use a practical example of which I have personal knowledge. Transport for London took over parts of the national railway network 15 years ago, and those parts were distributed through various train operators and Network Rail regions. We found a way of working together by having an informed client at our end and working with willing railway people at the other end. There will be some combined authority areas that happily sit within a natural railway geographical boundary, of which the west midlands is one, and there will be some that do not. In the cases where they do not, in particular in the north of England where there are several combined authorities on each side of the Pennines, one of the responsibilities of GBR is to find a way of running the railway that both respects its operational boundaries such that they make sense for the train service and is able to address the absolutely legitimate needs of the Mayors in the furtherance of their local economies. It is not impossible. It is always going to be a bit messy at the edges. There is nothing new in history. The important thing is that, when GBR is sitting down with each Mayor, the Mayor is facing somebody who is actually capable of being responsible for what the Mayor wants to execute in their own area. There is a great geographical history of different route boundaries and so forth, but at working level you just have to find an arrangement that works, of which London is the most complex example, but it works quite well, because there is an informed client on one side and a willing supplier on the other.

The devolution White Paper is trying to grapple with some of those questions around geography, the emerging mayoral combined authorities and the differences between some of them in terms of maturity. On having a passenger transport authority, Transport for West Midlands is part of the West Midlands Combined Authority. A number of the other major metropolitan areas have the same. However, I recently met with the new chief executive of the East Midlands Combined Authority, which of course does not have a passenger transport authority from which to build. Obviously, they have ambitions in the east midlands about what they want to achieve, but in the meantime the bodies, whether they are counties or mets, that have the transport authority roles, whether or not they are themselves the transport authority, should, and probably do, have a vision of what they want to achieve, so we will continue to work with them as they evolve. It is interesting where the devolution White Paper seems to be taking some of this. It has been my experience that most Mayors find a very firm voice in and around transport, as we said earlier, because of how absolutely critical it is to them, to economic success and the other things that they want to achieve in enabling infrastructure. Alongside energy, digital and transportation, those are the things that help build up those areas, so I know that they will be of primary importance to Mayors of all types of combined authorities. It is about meeting with them early and understanding how to work with them and how to get their ambitions together. As Lord Hendy said, the nature of the railway means it will be messy at the edges. There are always going to be decisions that have to be made about trade-offs. That goes back to the ways of working. Collaboration and early conversations to make sure that everybody’s ambitions are heard and understood and then the rationale for why decisions are taken is how you get to the best decision making. It is really important. I look forward to seeing what happens with the next stage of the White Paper because it has a major influence in terms of where SGBR, and eventually GBR, goes.

Neither we nor the Mayors are waiting for this. You can see, published only yesterday, the rail ambitions of Mayor Burnham of Manchester, which are granular in their detail and have been discussed with both the Department and the constituent parts of SGBR. He is not waiting for GBR, and he doesn’t need to. We are joined up enough to be able to work with him to deliver what he wants, hopefully, over the time periods that he has set out.

Thank you.

All of us who support this policy agenda would still recognise that there are success stories to be drawn from London Overground, Merseyrail and some historical examples of how regionalisation worked under the British Rail days. I want to ask about where disputes might arise. We all hope that most problems could be resolved through careful planning and collaboration, but in circumstances where regional and national priorities were in conflict—an example might be local aspirations to integrate rail and bus timetables that might come into conflict with intercity and freight priorities—and those problems could not be resolved through discussion and planning, how would you envisage dispute resolution of that nature working?

I cannot quite believe that you would get disputes over the level of railway services in modal integration, because the railway, sadly, even in this new world that we are devising, is going to be relatively inflexible in the use of trains and so forth, and the bus networks are naturally more flexible. The difficulty, which Laura can describe and so can I from a past life, is making people talk to each other. If you talk about the interaction of local services with regional and national services, as I said, there may well be disputes, but they are solved not by some massive arbitration mechanism but by interaction between an informed client and an informed railway. I can quote you some very practical examples. When we extended the Overground to Crystal Palace and West Croydon, you might have envisaged a circumstance where it prevented enough trains running from London Bridge to Brighton that it would disrupt long-distance travellers. Actually, if you have an informed discussion between people who understand what the capability of the railway is, you come to a compromise about what can be done that will serve both markets. The interesting thing about that was that the net result of the discussion was not a diminution in the long-distance services on the main line to Brighton; it was an improvement in the timekeeping of those that ran because there was sufficient interaction to devise a train service that operated better than the one that was previously there. You can get some answers out of that. If you look at the position particularly of combined authority Mayors, they must also have an interest, as indeed Mayor Burnham does and Mayor Parker in the west midlands and others, in long-distance travel. They are not islands that do not need connectivity with London. In the absurd, extreme example, both Mayors could insist on a local service that devastated the long-distance services to London, but they would not do that. We want to interact with a dynamic railway that can help devise the right service patterns to service both markets.

I am going to ask our witnesses to make their responses a little bit briefer, please. We like specifics.

I am only trying to be helpful.

On the principle that anything that can happen will happen, would you accept that there needs to be some dispute resolution mechanism even if it is of a last resort?

I suppose I would, although I don’t see that happening very often.

On the whole idea of regionalisation and devolution, it strikes me that there is a potential fly in the ointment, which is that the devolution for the non-existing mayoral combined authorities, which are the ones that always get mentioned in this Committee and are the big cities, do not reflect the devolution packages and what the outcomes are going to be in quite a lot of the peripheral parts of the UK. All of those deals are not likely to be determined before, potentially, shadow GBR runs its course and is finished. Without meaning to be difficult, how can you figure out what it is going to need to look like for the south-west or the far bits of East Anglia or something that is not Birmingham, Manchester or Bristol? That devolution is not even going to exist for another two years. How do we make sure that we don’t then end up with a two-tier system where the existing combined authorities get plenty of gold-plated cash and are already miles ahead, and everyone else is made to fit within GBR as it has been formed, and it does not quite mesh? What would you think on that?

The south-west is a really good example. Without testing the Chair’s direction over time, in Cornwall, which has developed an exceptionally good bus network, they have also been very active to make sure that the railway in Cornwall delivers their objectives. Indeed they are sponsors of the Mid Cornwall Metro project, which is probably in recent history a surprising development from a relatively distant and quite small part of the country. I am seeing the transport lead for Devon quite shortly. They have had their own successes in terms of opening stations. The key to that is for the transport authorities, whoever they are, to produce reasoned cases for investment and improvements in services, which have to deliver in the end the growth, jobs and housing that we are talking about, and for the railway to be organised in a way that is responsive to them. Those are two quite good examples of things that are going on now that I would expect to carry on happening. Of course, you are absolutely right; not everywhere is a massive conurbation with a powerful urban Mayor. The railway organisation has to adapt, and that is again why I am so keen to emphasise the need to run the railway on an integrated basis and, as you would see it, a present route and train operating company basis. You need people there who are sufficiently granularly knowledgeable about those areas to be able to respond to the legitimate demands of local transport authorities.

Can I give a brief follow-on? One of the things that we need to focus on in shadow Great British Railways is that the railway matters to all parts of the country. In some rural areas, it is the only transport option, the only transport choice, so it could arguably be even more important than in areas where there is a vast range of options of different ways and modes to travel. Counties all over the country have local transport plans themselves. They have their own visions, and they will have just as much of a voice as everybody else. We cannot have a two-tier—

Arguably, with local government reorganisation, those counties are not going to exist in the same form. Finally, are you talking to MHCLG? Is it a key stakeholder? Ultimately, the model of local government that we currently have is not what it is envisaged to look like in 18 months. Those stakeholders and decision-makers are going to move. Are you in conversation with that Department to make sure that what you are developing works in tandem with what they are suggesting?

Yes.

Great.

Olly, do you want to come back some more on regulation?

Yes. Lord Hendy, what role do you anticipate the Office of Rail and Road playing in the regulation of GBR?

Let’s deal with its two principal activities separately. The first is safety. Safety on the railway is absolutely paramount. There is a long and very good history of safety regulation. That must continue. The thing that will have to be adapted is that individual parts of the railway have licences to operate in safety terms, and, as we evolve into GBR, that evolution will have to happen. I referred earlier to building up DfT Operator. One of the reasons that DfT Operator needs to be built up currently is that it is in practical terms the public sector owning group for now four, but shortly more, train companies, and it has to have the right safety resource and the right safety board, and the ORR has to see that through. That is one of part of it. There clearly still needs to be economic regulation because GBR, as we said, will own the infrastructure and be a very major operator, but not the only one, and operators that are not part of GBR will rightly expect GBR to make fair and reasonable decisions, and they will also expect an appeal mechanism if they think it has not. In order for GBR to make its fair and reasonable decisions, it will have to have its own codes of practice. It will have to show how it has worked out that what it has done is fair and reasonable in order that it can be appealed. The role of ORR will have to evolve to embrace that. We have not talked yet today about the Passenger Standards Authority, which will also be created, at least for the railway, by the railways Bill. There must be a question, if it is to be a body with teeth, about who does its enforcement. I expect that currently the ORR would be proposed to do its enforcement because it is an enforcement agency rather than a passenger agency. As you see the consultation and as you see the Bill, those functions in the ORR will evolve. It will still be necessary. From memory, it has 21 statutory obligations currently. We don’t want it to do anything that it does not need to do simply because the other danger of this, as was true in Network Rail, at least in some of its previous iterations, is that you want GBR to face the customers and not face the regulator. Famously, when one of Andrew Haines’s predecessors at Network Rail was asked who his customer was, he said it was the regulator. That is not right. The regulator is there for a purpose, but it cannot replace the customers on platforms and the consigners of goods. That is a balance that we have to achieve. When the consultation is published, I expect there to be enough detail in it for people to respond to it in that way.

What you said in relation to open access passenger services sounds very reasonable. Speaking of customers, a lot of the open access operators have very high levels of customer satisfaction and have driven growth, but a recent letter from the Secretary of State to the ORR, I felt, had a somewhat ambivalent vibe in relation to open access operators giving a bit of a steer to the ORR in terms of concerns about revenue abstraction and capacity allocation. What role do you see the ORR having in holding GBR to account in relation to the potential for open access and indeed their existing access rights?

To save time, I think I just answered most of that in the previous question. I thought the Secretary of State’s letter—you would expect me to say this, wouldn’t you?—was a perfectly reasonable exposition of the balance that needs to be adopted, because, after all, the public purse is ploughing money into the railway in a huge sense, and we know that open access has provided some very valuable connections to places that would not otherwise have direct connections. It was in fact no more than a statement of the obvious about what the balance needed to be. In the consultation, and indeed in the Bill, we will have to show that we have devised processes that allow both a fair process for the open access operator and a fair deal for the taxpayer.

Finally, I want to expand a little bit the earlier discussion about freight. A report published today by Rail Partners called “A Greener Track” suggests that rail freight costs have risen three times more than road since 2015. What role do you see ORR and GBR having in creating or reforming the regulatory environment to enable rail freight to thrive, perhaps particularly from an access pricing perspective?

Clearly, there have to be some access pricing rules that allow freight to flourish, and there probably needs to be a bit more flexibility in access pricing to allow new flows. There is a fund. There are some arrangements now that give new flows a fighting economic chance of being established, and a bit more of that would be very helpful. Again, you will have to see in the consultation and then in the Bill itself mechanisms that allow that to happen. I have not seen that report, but clearly the comparison with costs is in two areas, one of which is railway costs and the other of which is road costs. In that respect, we can only be concerned with railway costs, but we need to demonstrate flexibility in access and access charging that allows the freight industry—we talked earlier about growth—both to be commercially successful and to grow.

I am interested in the social and environmental outcomes that GBR will be focused on. What role will GBR play in addressing the concerning skills shortages in the rail industry?

GBR or SGBR?

GBR would be addressed maybe more to Lord Hendy, and then certainly what SGBR is doing in preparation for that.

I can answer that. In terms of what SGBR can do, this is really important, even just talking about the societal impact of freight as well as the environmental value. I do not want to lose the bit about the role that freight on rail plays in helping to deliver some of our environmental aspirations as well. There is quite a lot of work that can be done and there is quite a lot of good work already happening in thinking about the future skills requirement. In my day job, making the link, I hope, between Departments as well as the Government and looking at a national skills agency, one thing I would like to do is to start to think about how we work across different Government Departments on how we make the case for the future needs of the rail industry and how as a country we come together to try to deliver some of that. There is the rail campus in Derby. A huge amount of work is going on there with the supply chain opportunities in Derby that we would all like to see recognised and built on in order to deliver on some of that. Accessibility and the transformation to net zero need to be fleshed out into a number of deliverables that we can start to work on in all of that. It would be quite shameful, given that we know the ambition of the railway and we know some of the challenges facing young people across this country, if we were not able to start to work together. That is not just one thing for the Department for Transport, but cross-government in an ambition to bring young people to understand the skills that they can help develop now to work as part of the workforce of the future. Those will change in the way that things inevitably change through technology and harnessing technology to do that. That has to be a massive opportunity for the country to think about making sure it has the skills for the future of the railway. Accessibility is a big bit of that.

Can I follow up on skills for one moment? Do you envisage a specific role that GBR will have on skills? Certainly, one element when you are talking about workforce planning is that you get a lot more investment in workforce when there is a clear pipeline of work. One of the inquiries that this Committee will be looking at is to seek to end boom and bust and have clear pipelines of work. Are you seeing that need to drive skills from private companies, or will GBR itself have a very clear role in ensuring that we are meeting that demand?

There are two things. One is in respect of rolling stock, which is, I think, one of the areas that you are looking at.

We definitely have a vested interest.

Indeed, and quite rightly, too. One of the things that we are already thinking about in advance as usual, and that GBR will be directly concerned about, is the long-term future of the rolling stock industry in a way that fragmented decisions taken by individual franchise holders have not been able to achieve. We would all like very much for the whole industry to see what the order book will look like over a period long enough to allow individual manufacturing and assembly plants to invest in both skills and necessary equipment. That work has started already and is, of course, highly desirable, because the boom and bust stuff in rolling stock manufacturers has put previous plants out of business and created new ones that have uncertain futures. We are on that case already, and GBR being established will only make it stronger. The other point that we have not mentioned at all but that is hugely important, and is the cause of quite a lot of poor performance at the moment, is the shortage of drivers across the industry. It has not been the case for over 30 years that anybody has looked at that in the round. In this year’s business plans, one of the specific things that we insisted that Alex looked at—to be fair, he was going to do it anyway, whether we insisted or not—is the maximum output of driver training for every train company in Britain for next year, because all over the network there are large shortages of drivers that are impacting the real performance for passengers. GBR must take a view on that. It must take a view because it is part of the future of the railway. It should also take a view because there are many jobs to be occupied by a diverse collection of younger people. My memory is that over half the drivers on the railway are over 50, so you can see that there is an enormous pipeline to be filled with good jobs for people. We want to stop people having to work rest days. I agree with the trade unions that it is not desirable for people to do that; a railway should employ enough people that it can run five days a week out of the seven that it should run. There is a big job to be done. GBR will be well placed to make some real strides. The third and last thing is that some of the train companies have been very good at doing things like giving school leavers who do not come out with many qualifications some coaching and help in writing CVs and getting them a job. I saw 20 or 30 of them in a long-running scheme by GTR last week, which was great. The question you have to ask is: if that is good there, why is it not done all over Britain? We could get that done all over Britain by a GBR that says, “This is a job that we can do.”

Would acknowledging the real value of pipelines also apply to looking at how we progress electrification and ensuring that we retain and increase the skills involved in that?

Yes, I am sure that you pressed into my hand no less than a letter from Network Rail that appeared to be rather disjointed. Indeed, I have a question to answer in the other place this afternoon about just that. Yes, we should be doing that too, in all the areas of railway supply. There are two reasons for doing it: one is not to waste skills when there is a downturn in work, and the other is to make sure that we have a good domestic industry so that we can sell it abroad. It is hard to do, and it is hard to do in circumstances where there will not be nearly enough money to do everything we want, but I think we can do better in the future than we have done in the past.

Scott, you have a quick question on skills.

Yes, very quickly. First, it is great to hear there are so many drivers who are over 50. It means there is hope for me yet.

It’s a secure job with good pay.

Yes, more secure than this one, some would say. I am old enough to remember when HS2 first started to gain momentum and there was real engagement with colleges, if memory serves me right, in Derby, Leeds, Birmingham and, where I used to work, at Heriot-Watt. A lot of those institutions recruited people and built capacity. It seemed as though there was a focused effort to have a real discussion with the sector for training, from the private sector right the way through universities, even university research. In GBR or shadow GBR, are you looking at a level of engagement where you look at the whole breadth? What you described to Catherine seemed like quite a lot of fragmented responses. Are you looking in a coherent way and engaging with the sector right from early-start training through driver training right the way through to driving the research agenda as well? There is a lot there.

There is a lot there. The other thing that you are bound to say is that a long-term infrastructure plan, which is a real aim of Government, not only has within it the production of better infrastructure to make the economy work better but is a real driver of investment in skills and technology in a way that fragmented decisions are not. One of the great sadnesses about the peremptory decision to abandon phase 2 of HS2 is that the second-order consequences of that in the construction and equipment industries were clearly not thought through, because it was a decision taken in very short time. Every time you do that, you damage the confidence of the industry to invest in people and skills to do more later. We are working in very straitened economic circumstances on plans for the railway that will look out over a number of years, and the Government more widely have committed to do that across the whole of the infrastructure industry. The consequences will be enormously beneficial for skills and employment. Those companies have to have the confidence in the future market to want to invest in skills and employment now.

Thank you. I will pass you back to the Chair. I am sure you have triggered her by talking about HS2.

We have not covered future rail capacity issues because presumably that is not relevant to GBR. It will be for Government in association with Parliament on whether it is HS2 phase 2 or other rail capacity improvements.

The only thing I say about that, Chair, is that a GBR that has people at the right levels thinking about what investment the railway needs will put forward a much more coherent view about what needs to be invested.

That will be good.

One of the weaknesses about the current structure is that if you are at Network Rail, which I was, your answer to everything is infrastructure because that is what you do. That is not the answer to everything. There is a sequence that is quite clear in an integrated body. If you want more train services, the first thing you do is to see whether you can do it with the same number of staff and trains. You might then have to employ more staff. You might have to buy more trains. You might have to expand some of the stations. You might have to fix the signalling. Only at the end of it would you buy more track. Actually, in this country that is not the way we have thought about it for a long time. We have grandiose schemes for installing vast quantities of new railway across Britain without anybody seriously considering whether the transport and economic effects of that could be delivered in a more economical way by the existing system. If we get that right, the investment propositions that come forward will be those that deliver the most for the country and will be far easier for the Chancellor and the Treasury to accept.

That is a very sensible answer, but I don’t think there are many people who dispute that we need more rail capacity north of Birmingham towards Crewe and Manchester, and so on. The Ely junction is the other one that keeps coming up.

I agree. That is not an argument for not investing. It is an argument for producing a more coherent list of investments.

I don’t think anybody would disagree with you on that.

Absolutely.

One last question from Baggy.

Not as much as you would want. I imagine that you and your colleague would be hugely interested. It will emerge from the processes that we have discussed this morning, I think.

It has been decided that that will be the headquarters, and that is fantastic. There are a number of workstreams ongoing with the county council. I know that this is of primary importance to the East Midlands Combined Authority, and potentially the Mayor of the East Midlands in making it happen. As we just said, Derby is the headquarters. It has 40,000 supply chain jobs located there. The vision and the ambition for the rail campus is really exciting, and one I think everybody wants to see realised. The plans for what GBR looks like—size, scope and shape—will help to influence that. I suspect it will be an iterative process. What could happen there around skills, training, opportunity and innovation as a cluster and a centre for excellence is certainly at the forefront of the thoughts of the people sitting around the table of SGBR, and there is full commitment to work with Derby and with you to understand the scope of that opportunity and how it gets delivered.

I don’t live too far. I have been there many times. I would absolutely love that. I specifically would like to come on a day when I could meet you both there.

Thank you very much, everyone. Laura Shoaf and Lord Hendy, thank you very much for your evidence. Please feel free to write to us if there is anything you would like to add or you think that we did not touch on today. We found the session really valuable. I think others listening or watching will, too. That concludes today’s meeting.