It's worth remembering that the reason for DfT taking direct control of the railways in 2006 was because the Lab government was incensed that the ORR could "pick the Treasury's pocket" by allocating more money to Network Rail than they wanted, in the Control Period process.
Also that the semi-independent SRA was perceived as a pointless middle-man which was in the industry's pocket.
A recommendation to restructure the industry has to square the circle of government providing the funding but not being in control of services or costs.
Sadly, Network Rail has not demonstrated a capability of staying within its budget in CP5. The TOCs do rather better in the "value for money" stakes.
People also forget that while NR is "nationalised" it is also licensed and its funding determined by an independent regulator, so DfT can not simply direct it to do its bidding.
The fully private parts of the railway (ROSCOs, freight and open access) will also not take kindly to government interference.
We haven't heard anything from the nationalisation lobby as to how it would square this particular circle.
The BR model was that it was allowed to do pretty well "as it liked", but within draconian annual budget settlements.
