West Midlands Trains services transferred to join the growing list of failed franchise rail companies

2nd February 2026

West Midlands Trains services are now managed by DfT Operator Ltd (DFTO).

From 1 February 2026, passengers who travel with London Northwestern Railway and West Midlands Railway will benefit from reliable and better-connected services.

services to returned to public ownership on Sunday (1 February 2026), bringing the country one step closer to a simpler, unified rail system under Great British Railways.

more than 8,500 publicly owned rail services are now running daily, helping over 660 million passengers get where they need to go each year.

these services are powering Britain's economy, linking people to jobs and education while strengthening local economies across the Midlands and from Liverpool to London.

Half of all rail journeys that Great British Railways (GBR) will ultimately be responsible for will be on services run by publicly owned operators from Sunday (1 February 2026), as London Northwestern Railway and West Midlands Railway services join the fast-growing family of operators owned by the public for the public.

The milestone marks a further step towards creating an integrated rail network that passengers can rely on and be proud of under Great British Railways, which will deliver reliable, safe and more affordable journeys.

This brings the 2 sides of the West Midlands Trains (WMT) business under public ownership: London Northwestern Railway, which operates services between Liverpool and Birmingham and along the West Coast Main Line to and from London Euston and West Midlands Railway, which serves destinations across the West Midlands via Birmingham New Street and Birmingham Snow Hill.

These services power the Midlands' economy and beyond - connecting people to work, education and opportunities every day. Better connections mean more homes built, more jobs created and stronger local economies from Liverpool to London and across the West Midlands.

WMT is the fourth operator to enter public ownership under the government's Passenger Railway Services (Public Ownership) Act, marking another step towards a simpler, more unified railway under Great British Railways (GBR) and coinciding with the government's decision to freeze rail fares for the first time in 30 years.

GBR will be accountable to passengers and will drive a relentless focus on responding to their needs. Responsible for coordinating the whole network: from track and train, to cost and revenue - GBR will deliver lasting change and build a railway fit for Britain's future, owned by the public, for the public.

Transport Secretary, Heidi Alexander, said, "From this Sunday, the thousands of passengers who travel with London Northwestern Railway and West Midlands Railway will be using services that are owned by the public and run with their interests at heart.

We're working hard to reform a fragmented system and deliver a reliable railway that regenerates communities, rebuilds the trust of its passengers and delivers the high standards they rightly expect.

Ian McConnell, Managing Director of West Midlands Trains, said, "We are proud to be one of the fastest-growing train operators in the country, with millions of passengers travelling on London Northwestern Railway (LNR) and West Midlands Railway (WMR) services every month.

We've introduced more than 100 new trains as well as upgrading our depots and station facilities. We’re looking forward to opening five brand new stations later this year and we’re also rolling out ‘Pay-As-You-Go’ ticketing across 75 locations to enable seamless tap-in, tap-out travel for our customers.

Public ownership is an exciting opportunity to build on this success through a strong culture of collaboration and integration with the wider family of publicly owned operators.

Together, we can drive performance by sharing best practice and accelerating innovation and continue to deliver even better journeys for our passengers across the LNR and WMR networks.

We are now a step further on the journey to Great British Railways - a railway that we can be proud of and one that benefits the passengers and communities we serve.

Sarah Moorhouse, CEO of Black Country Chamber of Commerce, said, "Rail connectivity is crucial for businesses across the Black Country. Our businesses depend on these services to reach customers, access talent and connect with partners right across the region.

Having strong transport links across the West Midlands drives economic prosperity - they attract investment, support job creation and help our communities compete on a regional and national stage.

Richard Parker, Mayor of the West Midlands, said:

For too long, passengers have had to put up with unreliable and overcrowded trains and a confusing ticket system run by companies that put profit before people.

Now we have a government which is delivering on its pledge to take public ownership and fix our broken railways. This is about more than a badge on the side of a train - and I will be working closely with ministers to improve West Midlands Railway services and raise standards.

And with my plans to take back control of our buses making good progress, we have an opportunity to create a truly integrated public transport system offering smooth, reliable and affordable journeys, whether passengers are travelling by train, bus or tram.

Mal Drury-Rose, Executive Director of the West Midlands Rail Executive, said, "We have a strong record of putting local communities at the heart of decisions about the rail network, and we look forward to continuing that work with government and industry, building on our extensive experience and investment in the region.

The transfer of West Midlands Railway services provides a clear platform for aligning customer priorities and regional ambitions to raise performance and improve the overall customer experience.

Passengers in other parts of the country are already experiencing the benefits of public ownership. On average, publicly owned DfT train operators perform better on punctuality and cancellations than those yet to come under DfT ownership.

Publicly owned operator South Western Railway has also quadrupled the number of new trains in service since entering public ownership, offering more comfortable journeys, and passengers can now use tickets across publicly owned operators during cancellations - at no extra cost. Meanwhile, Northern is planning for the future by introducing state-of-the-art simulators to accelerate driver training programmes and is planning their largest ever fleet investment, with up to 450 new trains.

West Midlands Trains joins Greater Anglia, c2c, Northern, TransPennine Express, Southeastern, LNER and South Western Railway, which are currently managed by DfT Operator Limited (DFTO).

Govia Thameslink Railway’s (GTR) services will be next to transfer on 31 May 2026, marking another significant step in the government’s plans to bring services into public ownership.

Chiltern Railways and Great Western Railways services are then expected to follow, with the Secretary of State for Transport due to make final decisions on when exactly this will happen in due course. We expect the full public ownership programme to be completed by the end of 2027.

With the transfer of West Midlands Trains, 8 out of 14 passenger train operating companies that will run under Great British Railways are now in public ownership.

West Midlands Trains’ transfer comes as legislation to establish Great British Railways moves through Parliament, paving the way for a simpler, more unified railway that delivers reliable, safe and more affordable journeys for all.

Note: Tables 3124 and 3138 in the ORR performance data shows on average, publicly owned DfT train operators perform better on punctuality and cancellations than those yet to come under DfT ownership.

As of early 2026, the UK government has taken control of a growing number of passenger rail companies (train operating companies) in Great Britain, bringing them into public ownership — either permanently or as part of a staged plan to form Great British Railways (GBR). This doesn’t include the infrastructure owner (Network Rail) or freight companies, which remain separately managed.

Passenger Train Operators Now Under UK Government Control
Already under public ownership:
These companies are currently operated by the government (often through DfT Operator Ltd, the public operator of last resort) rather than private franchisees:

London North Eastern Railway (LNER) - government-owned following franchise collapse.

Northern – returned to public control.

Southeastern – government-owned following performance issues.

TransPennine Express – taken into public ownership (and now run by a government body).

South Western Railway (SWR) – nationalised and in public control since 25 May 2025.

c2c – nationalised and taken into public ownership on 20 July 2025.

Greater Anglia – nationalised on 12 October 2025.

ScotRail – owned by the Scottish Government (and publicly operated).

Transport for Wales Rail – owned/operated by the Welsh Government.

Services in Transition to Public Ownership
These operators are scheduled to transfer into government control as part of the programme to unify services under Great British Railways:

West Midlands Trains (including West Midlands Railway & London Northwestern Railway) – transferred on 1 Feb 2026.

Govia Thameslink Railway (Thameslink, Great Northern & related services) – expected to transfer on 31 May 2026.

Chiltern Railways – expected to transfer once dates are confirmed.

Great Western Railway (GWR) – expected to transfer once dates are confirmed.

Others Still Private (for Now)
Some major operators have not yet been taken into public control (but are scheduled under the current renationalisation plan):

Avanti West Coast – private franchise scheduled to be brought under public ownership by late 2027.

CrossCountry – similarly slated for later transfer.

The UK government now controls many of the UK’s major passenger rail operators, with others set to follow as part of a planned transition to public ownership and consolidation under Great British Railways — a restructuring intended to simplify the rail network and centralise management.

UK rail companies were brought under government control mainly because the franchising system stopped working properly. The key reasons are:

1. Financial failure of private operators

Many rail companies lost money or collapsed because:

Passenger numbers fell sharply (especially after COVID)

Costs rose faster than revenue

Some franchises were based on over-optimistic profit forecasts

When operators could no longer run services reliably, the government stepped in as the "operator of last resort" to keep trains running.

Poor performance and reliability

Several companies were taken over after:

High levels of cancellations and delays

Staff shortages and industrial disputes

Failure to meet performance targets set by the government

Bringing them into public control allowed the government to stabilise services quickly.

The franchise model was broken

Under the old system:

Companies bid to run routes for profit

The government carried much of the financial risk anyway

When things went wrong, taxpayers still had to step in

This meant profits were private, but losses were public, which became politically and economically unsustainable.

COVID changed rail travel permanently

The pandemic caused:

A collapse in fare income

Long-term changes in commuting (more working from home)

Private franchises were not designed to cope with this level of uncertainty, so emergency government contracts replaced them — and many never returned to private hands.

Policy decision to reform the railways

The government decided it was better to:

End complex franchising

Bring operators under public control as contracts expire

Prepare for a unified system under Great British Railways

This aims to make railways:

Simpler to manage

More accountable

Less fragmented

Keeping services running

Crucially, companies were not taken over to "punish" them, but because:

Trains are an essential public service

Allowing operators to fail outright would disrupt millions of passengers

Public control ensured continuity and safety.

Rail companies were brought under government control because:

The private franchise system failed financially

Performance was poor

COVID exposed structural weaknesses

The government was already carrying the risk

A new, more stable model was needed

UK rail franchise companies did not pay large dividends, and in many years paid none at all. But there are important nuances.

Dividends were generally small or irregular

Some money still flowed to parent companies, often in indirect ways

When franchises failed, shareholders usually lost money, not gained it

Why dividends were usually low

Rail franchises were low-margin

Passenger rail in the UK typically ran on very thin profit margins (often 1–3%, sometimes negative). That left little spare cash for dividends.

Many franchises lost money

A significant number of operators:

Underperformed financially

Needed extra government support

Eventually collapsed or were taken over

In those cases, no dividends were paid at all.

Examples:

Virgin Trains East Coast – paid no dividends, collapsed twice

Northern – loss-making for years

TransPennine Express – paid no dividends before takeover

Contracts restricted dividends

Later franchise and emergency contracts:

Capped profits

Required performance targets to be met

Limited or banned dividend payments

After COVID, most operators were on management contracts, where dividends were effectively impossible.

But: how money still went to parent companies

Even when dividends were low or zero, some companies benefited through:

Management fees

Parent companies were paid to:

Provide senior managers

Offer expertise and systems

These fees were legal but controversial, as they came even when performance was poor.

Dividends at holding-company level

Some rail operators were owned by large transport groups (e.g. FirstGroup, Go-Ahead, Stagecoach).
While the rail subsidiary might not pay dividends, the group as a whole could still pay dividends funded by other activities (buses, overseas rail, etc.).

How much money are we talking about?

Compared to other industries:

Rail dividends were small

Far less than utilities or energy companies

Often tens of millions over many years, not billions — and frequently zero

Meanwhile:

Taxpayers absorbed most of the financial risk

Especially when franchises failed

Why this became a political issue

Even though dividends were usually modest:

Public perception was that private firms were extracting value

While service quality declined

And government support increased

This helped drive the move to public control.