Prior to 1923, the construction and operation of the railways was driven by private enterprise in a largely uncoordinated, heavily competitive and fragmented manner. By 1923, despite some consolidation, more than 120 railway operating companies were still in existence although many were unprofitable and struggling to compete with the development of road transport.
The Railways Act 1921, also known as the Grouping Act, was a UK Act of Parliament aimed to stem the losses by "grouping" 120 companies into the "Big Four":-
The act aimed to move the railways away from internal competition, and retain some of the benefits which the country had derived from a government-controlled railway during and after the Great War of 1914-1918.
The provisions of the Act took effect from the start of 1923.
The act resulted in improvements to the range and quality of services which were well received by customers. The types of improvement included:-
While the act was intended to modernize and streamline the railways with corresponding benefits for customers, it did have some negative effects. The companies placed greater focus on profit rather than investing in the maintenance and improvement of the infrastructure. This led to a decline in the quality of the railway network, resulting in slower and less reliable services.
The 'Big Four' had a near monopoly on rail travel in the UK and this lack of competition allowed them to increase prices without fear of losing customers to rival companies.
Furthermore, the consolidation of railway companies resulted in reduced connectivity between different parts of the country. Smaller railway lines that were not included in the 'Big Four' Grouping were sometimes shut down making it more difficult for people in rural areas to access rail serices.
Some of the impacts on customers may have been temporary and/or a feature of the transition. There were serious problems with the Southern 1923 summer timetable and particularly with the concentration of services for Portsmouth on London Waterloo. Whilst this helped better manage the heavy holiday traffic, it came at the cost of reduced service levels on the alternative London Victoria route to places such as Chichester and Bognor. This was remedied in the subsequent winter timetable.
This led to the following types of customer complaints and concerns:
The Grouping led to a number of positive outcomes for railway staff that were well received:-:
While the 1921 Railways Act aimed and was reasonably successful in modernising and streamlining the UK's railways, it did have several negative effects that impacted customers, railway staff and rural communities. This was reflected in the mixed reaction of customers:-
"I have noticed a considerable improvement in the standard of service since the Railways Act was introduced. The new companies seem to be more efficient, and the staff are better trained and better equipped to deal with passengers."
Others were not so happy. A frustrated colliery proprietor wrote that pits were having to work short time “owing to the inability of the amalgamated railway companies to handle the traffic and to provide empty wagons”.
The act highlights the importance of considering the wider impacts of legislation on various stakeholders and the need for balance between commercial interests and social responsibility.
In 1938 the Rail Executive Committee (REC) which had run the railways during World War 1 was re-formed with a remit to run the countries railways if war broke out.
Management of the railways remained with the Big Four until 1939 when, shortly after war was declared, the REC took control.
REC control lasted until the railways were nationalised in 1948.