Posted 27th January 2020 | 6 Comments
Northern franchise likely to end within days
TRANSPORT SECRETARY Grant Shapps is reported to be preparing an announcement about the ending of the Northern franchise, which seems likely to be made on Thursday.
The chances of the present Arriva Trains North contract being replaced by a shorter-term alternative are now being discounted in favour of a complete return to public ownership under the Department for Transport’s Operator of Last Resort, which is already responsible for LNER after the collapse of Virgin Trains East Coast in 2018.
A return of Northern to public control is set to be welcomed by politicians in the north of England, some of whom have been voicing opposition to a new, shorter management contract staying in the hands of Arriva.
Northern has been besieged by industrial relations problems, the late arrival of new rolling stock and delays in the completion of infrastructure upgrades by Network Rail, particularly in connection with electrification.
In a written statement to Parliament earlier this month, Mr Shapps had warned that time was running out for Northern.
He said: ‘On 16 October 2019 I informed the House, through the Transport Committee, that I had issued a request for a proposal to the current Northern franchisee, Arriva Rail North and to the Operator of Last Resort as the first phase of securing options for the continuation of passenger services on the Northern franchise.
‘This was triggered by concern over the financial position of ARN. It has now been confirmed to me from the most recent available financial information that the franchise will only be able to continue for a number of months.’
If the termination goes ahead it will be a blow to Arriva, which is currently owned by Deutsche Bahn but is up for sale to plug a funding gap in DB’s finances. The loss of the Northern franchise seems set to affect the asking price for the whole business, which had been reportedly valued at some £4 billion Euros.
Northern’s problems are not unique. Mr Shapps has also warned that South Western Railway is ‘not sustainable’, while prime minister Boris Johnson recently told MPs that the ‘bell is tolling’ for West Midlands Trains. Meanwhile, the Scottish Government has decided to end the present ScotRail franchise, which is run by Abellio, at the first available opportunity in 2022.
Other unfinished business on Mr Shapps’ desk includes the fate of the South Eastern and Great Western franchises, both of which are currently due to end on 1 April, while he has also yet to publish the Williams Review, which is already known to say that franchising in its present form cannot continue.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
david c smith, Bletchley
Franchising has been an attempt to give accountability , through Whitehall / Westminster. Trouble is that in reality, this is slow, lugubrious , inefficient and costly.
Franchising, together with concessions, makes much more sense on a more local scale, where direct democracy can act more effectively, quickly and cheaply in the cause of accountability.
National services, though, where competition can generally be effective, should be freed from the shackles of franchises and allowed to innovate and compete, in order to give accountability.
Andrew Gwilt, Benfleet Essex
Good. About time that Northern franchise should be stripped.
Jez Milton, Manchester
There is so much nonsense written and said about Northern's problems since Arriva took over.
Everything can be traced back to public sector Network Rail's inability to deliver enhancements. Electrification came late, very late. Meanwhile NRs ballooning costs (as usual!) caused four-tracking of the Castlefield Corridor to be abandoned, with Mark Carne's laughable 'digital railway' held up as a miraculous alternative. Yes, the May 2019 timetable change fiasco could probably have been handled better, but NR was the real culprit.
Meanwhile the RMT has set out to sabotage everything, with strikes aimed at having 21st century trains operated with 1930s working practices. The high sickness rates pre-xmas should tell passengers everything they need to know about the dedication of staff.
However things proceed, Castlefield needs 4-tracking, asap, and the RMT need putting in their place, once-and-for-all, using the proposed new legislation, if necessary.
Andy Burnham, and his counterpart in Liverpool, need to face the reality of the situation.
Neil Palmer, Waterloo
So Northern is to return to "public ownership", and probably SWR too. Great news for everyone because as the RMT and the totally not just "spouting off in the hope of votes" politicians in the north (Greater Manchester mayors in particular) constantly tell us that's the solution to everything, just like taking Network Rail into public ownership has solved all the problems with signalling, track & on-time delivery of enhancements like electrification.
So if this is happening Thursday I guess we can all look forward to 100% on time performance and 0% cancellations and an end to union disagreements over DCO of doors by Friday?
Oh, and I have some sea view cliff front property in Norfolk for sale too.
Chris Jones-Bridger, Buckley Flintshire
From the customers perspective the Northern franchise has been in dire straits ever since the collapse in performance following the ill fated May 2018 timetable. That operational performance has failed to improve to a satisfactory level is both a reflection on the incumbent operator Arriva & also the inherent inflexibility of the contractual framework of the franchise system which inhibits flexibility that would enable TOC's & NR to initiate remedial action between planned timetable changes in Dec & May.
However the tipping point with the Arriva Northern franchise would appear to be the unsustainable financial position. In plain terms it is running out of money to keep running in it's present form and without financial restructuring Arriva's parent DB is unwilling or more likely unable to pay for the continuing privilege of supporting the franchise.
As Northern isn't an isolated case it is to be hoped that the William's Report, when it eventually sees the light of day, provides the Secretary of State with both the answer & the remedy for what has gone wrong. Perhaps though he should look to the officials in his own department who created & implemented the current batch of failing franchise contracts which are increasingly operationally & financially unsustainable. As the ongoing court cases from rejected franchise applicants are revealing a lot of the rot lies within the DfT.
Martin Marrison, Haywards Heath
Looks like where the current government has been running the franchises "chasing the Money" it looks like some of the money isn't there or is being redirected to try and improve the current service to get it to perform....
If the franchise system is to continue it look like bids need to be examined to ensure that are more credible and will make the money that they are proposing. Then the companies running them can have their feet help to the fire? If a company losses it franchise should it be allowed to bid for one in the future.... ?
It will be interesting to see where this goes...