Thousands of jobs could go as part of the government’s planned shake-up of Britain’s railway industry, according to a report.

Under Labour’s plans, a state-owned company, Great British Railways, will run the railway and take every train operator into public ownership as existing contracts expire.

Removing “duplication” of teams, as well as job cuts at the HS2 rail line linking London and Birmingham, will result in several thousand job losses, the Sunday Times reported, quoting an unnamed source.

The Department for Transport and the Treasury hope that bringing track and train together under the same organisation will bring cost savings.

A DfT spokesperson said: “We are delivering the biggest overhaul to our railways in a generation, creating a publicly owned, passenger-focused Great British Railways that will create exciting job opportunities, both for existing staff and those looking to get into the industry.

“Our number one priority is to provide passengers with the reliable, accessible, and more affordable services they deserve, and our plans will save taxpayers up to an estimated £150m every year in fees alone.”

Earlier this month, Keir Starmer announced the abolition of NHS England, “the biggest quango in the world”, with the loss of 10,000 roles, to cut bureaucracy. The government is expected to take a similar approach to rail reform.

Most of the job cuts are likely to be in back-office roles. Among organisations that could be abolished are Transport Focus, a watchdog for transport users, and the Rail Ombudsman, which will become part of a new Passenger Standards Authority.

Ministers have promised a “unified, simplified railway”. The plans include rewiring of the railways to “end decades of poor service, waste and timetable chaos”.

Heidi Alexander, the transport secretary, has suggested that renationalising train companies will not necessarily bring cheaper rail fares for passengers but should reduce train cancellations and delays.

Services will return into state hands as remaining contracts expire over the coming years – or possibly earlier if lawyers advise of potential grounds for breach of contract.

South Western Railway is to become the first train operator to be nationalised under Labour. One of the UK’s biggest commuter services, which operates out of London Waterloo, it will be taken into public hands when its contract ends in May. SWR is run as a joint venture between FirstGroup and MTR, the Hong Kong rail operator.

Two more commuter operations run out of the capital are next, with C2C, the Essex service, set to pass into public hands by July, and Greater Anglia to follow in the autumn.

All operators will eventually be nationalised – probably by late 2027 – under the provisions of the public ownership bill, which became law in December. A railways bill is set to be passed this year.