During the First World War, all rail, rolling stock and railway staff had been administered as a single unit, this suggested that major economies could be achieved through an integrated system. In August 1919, a Ministry of Transport Act brought together the various branches of transport under a single minister, who was given wide-ranging control over railways until a firm policy was worked out. The Railways Act of 1921 provided for the rationalisation and reorganisation of the sector under private ownership. The 130 or so individual railway companies were now reorganised into four regional groups (Southern, Great Western, London and North Eastern, and London, Midland and Scottish). The Minister of Transport had the power to require any company to conform to standardisation and to adopt the necessary methods for the cooperative use of rolling stock. The act eliminated competition, as each group now had a regional monopoly. It established standard fares and charges for particular services.
In 1939, the government took control of railways as a matter of necessity. The four railway groups continued in existence, but were placed under a Railways Executive Committee comprised of the representative general managers. Following the election of a Labour government in 1945, the railways were nationalised by the Transport Act of 1947. The act created a British Transport Commission to oversee an integrated and efficient system of transport. Railways passed into public ownership on 1 January 1948, and were now organised into six regions; London Midland, Southern, Eastern, Western, North Eastern and Scottish.
Following their victory in the 1951 election, the Conservatives wanted a return to competition, commercial policy and administrative decentralisation. Most of all, they were determined that the network should be profitable. The Transport Act of 1953 abolished the Railways Executive Committee and established autonomous area boards. These boards were empowered to set fares and seek the maximum charge.
In 1956, the government considered an extensive review of the financing and structure of the British Transport Commission and produced a White Paper on the subject. The 1950s were a period when much investment flowed into the railways as the industry shifted away from steam to electric and diesel engines.
By 1960, the Conservatives believed that the British Transport Commission, which had by then built up large deficits, was a failure. In response to the report of the Guilleband Committee, which recommended wage increases for rail workers, the government produced a White Paper planning an extensive reorganisation of railways administration and the possible closure of uneconomic routes.