DfT Operator

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DfT Operator Limited
Company typeGovernment-owned holding company
IndustryRail transport
PredecessorDirectly Operated Railways
Founded24 May 2018; 7 years ago (2018-05-24)
FateGreat British Railways (planned merger)
HeadquartersLondon, England
Area served
England
Key people
Services
RevenueIncrease £3.5 billion (2024)
Decrease £29.4 million (2024)
Decrease £22.2 million (2024)
Total assetsIncrease £834 million (2024)
Total equityDecrease £51.3 million (2024)
Number of employees
Increase 16,737 (2024)
ParentDepartment for Transport
Subsidiaries
WebsiteOfficial website
Footnotes / references
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DfT Operator Limited (DFTO), formerly known as DfT OLR Holdings Limited, is a government-owned holding company established in 2018 by the Department for Transport (DfT). It was created to act as the operator of last resort for rail franchises in England, taking over train operating companies (TOCs) that are either financially failing or being returned to public ownership at the end of their contract terms.

DFTO’s role has significantly expanded since its inception, particularly following the passage of the Passenger Railway Services (Public Ownership) Act 2024, which enabled the government to assume ownership of passenger rail services without buying out private contracts. Under this framework, the government has announced that it will not renew existing private rail operating contracts, instead transferring services to DFTO as they expire. This policy forms part of the Labour Party's commitment to renationalise passenger rail, a key pledge of its 2024 general election manifesto.

Acting under the direction of DfT, DFTO now oversees several major rail operators, making it the largest operator of passenger rail services in Britain by passenger revenue and mileage. It is expected to play a transitional role in the government's long-term rail strategy, ahead of the launch of Great British Railways, a planned public body that will integrate both operations and infrastructure across the national network.

History

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DfT Operator Limited was established in May 2018 under the name DfT OLR Holdings Limited, as a subsidiary of the Department for Transport (DfT). It was created to meet the Secretary of State's obligation under section 30 of the Railways Act 1993 to ensure continuity of rail services in the event of franchise failure.[2] The company serves as the legal vehicle through which the DfT takes ownership of train operating companies (TOCs) when a franchise is either terminated early or not renewed.

The first use of this model occurred on 24 June 2018, when London North Eastern Railway replaced Virgin Trains East Coast following the collapse of the InterCity East Coast franchise.[3][4] This was followed by the transfer of Northern Trains on 1 March 2020, after Arriva Rail North was deemed financially unsustainable.[5][6] In October 2021, Southeastern took over the South Eastern franchise from Govia after financial irregularities were uncovered.[7][8] On 28 May 2023, TransPennine Express was transferred to public ownership after the franchise operated by FirstGroup was not renewed, following repeated complaints of cancellations and poor service.[9][10]

By mid-2023, DFTO had become the largest rail operator in Britain, accounting for 23% of all passenger revenue and 26% of passenger mileage.[11] Later that year, the Labour Party won the general election with a manifesto commitment to renationalise the railways. This was formalised through the Passenger Railway Services (Public Ownership) Act 2024, which allowed for passenger rail services to be returned to state control without requiring the purchase of private contracts. The legislation marked a shift in rail policy: rather than offering new private franchises, the government announced it would allow contracts to expire and transfer them to DfT Operator.

In December 2024, then Secretary of State for Transport Louise Haigh announced that the company would be renamed DfT Operator Limited, reflecting its expanded purpose and long-term strategic role.[12] The announcement also confirmed the transfer of additional TOCs: South Western Railway on 25 May 2025, c2c on 20 July 2025, and Greater Anglia on 12 October 2025.[13]

These changes form part of a wider restructuring of the UK rail system under the planned launch of Great British Railways, a new public body that will integrate train operations, infrastructure, and planning across Britain. DFTO is expected to be absorbed into Great British Railways as part of this transition, with the aim of creating a unified, publicly accountable railway network.

Subsidiaries

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DfT Operator currently has several active rail subsidiaries and has previously held other rail assets. These companies operate under public ownership following the expiry or early termination of private franchises.

See also

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References

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  1. ^ "DfT OLR Holdings Limited Annual Report and Accounts: Year Ended 31 March 2024". Department for Transport. 29 July 2024.
  2. ^ About us – DfT OLR Holdings
  3. ^ "Transport minister ends Virgin East Coast franchise". The Railway Magazine. No. 1407. June 2018. p. 7.
  4. ^ "LNER brand revived for East Coast". Rail Express. No. 266. July 2018. p. 10.
  5. ^ "Government takes over Northern franchise". Rail Express. No. 286. March 2020. p. 6.
  6. ^ "Arriva stripped of Northern franchise". Railways Illustrated. No. April 2020. p. 7.
  7. ^ "OLR taking over Southeastern". Modern Railways. No. 878. November 2021. pp. 8–9.
  8. ^ Lancefield, Neil (17 March 2022). "Govia slapped with £23.5m penalty over Southeastern scandal". Evening Standard. Archived from the original on 17 March 2022. Retrieved 16 September 2023.
  9. ^ "TransPennine Express loses contract over poor service". BBC News. 11 May 2023. Retrieved 11 May 2023.
  10. ^ Topham, Gwyn (11 May 2023). "TransPennine Express nationalised for catalogue of failings and poor service". The Guardian. ISSN 0261-3077. Retrieved 11 May 2023.
  11. ^ "First last, or last first". Modern Railways. No. 897. June 2023. p. 6.
  12. ^ Alexander, Heidi (4 December 2024). "Written statement to Parliament: Public ownership: railway passenger services". Department for Transport. Retrieved 4 December 2024.
  13. ^ "Greater Anglia to be nationalised from October". Greater Anglia. Retrieved 10 May 2025.
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