Ailing train operator Northern Rail is to be renationalised, the government has announced.
It will be taken back into public ownership on 1 March, transport secretary Grant Shapps announced.
The “operator of last resort”, part of the Department for Transport (DfT), already manages the LNER franchise, which runs services from London to cities in north east England.
The decision follows the transport secretary’s announcement at the start of January that the beleaguered train operator would be stripped of its franchise following “unacceptable” performance.
The Government said it would nationalise Northern Rail after the company running trains between cities like Manchester and Leeds was blamed for years of delays, cancellations and strikes on the service.
Britain privatised its railways in the 1990s, but over the last three years some contracts with private companies have become problematic, and this is the second renationalisation in two years.
Transport Minister Grant Shapps said on Wednesday that the current model was struggling and needed to change.
The coming weeks could will be critical for the UK’s rail network, as a government decision on whether to proceed with the country’s biggest rail project, HS2, is expected, and the way rail contracts work is revamped.
As a result of poor performance on Northern Rail, Shapps said that a public-sector operator would take over its running from March 1, axing a contract with Arriva, owned by Germany’s Deutsche Bahn, five years early.
Northern Rail passengers have had to endure years of delays and cancellations due to strikes, driver shortages, timetable issues, plus problems associated with delays to the delivery of new trains, and old, creaking infrastructure.
But commuters would now see an improvement, promised Shapps, adding that a shake-up of the whole sector was on the way.
“It is clear that the current model is now struggling to deliver…We know change is needed, and it is coming,” he said, referring to a review by former British Airways boss Keith Williams.
A decision on HS2, an 80 billion pound-plus project to improve the UK’s rail links, is due to be made by the Prime Minister on Thursday, BBC political editor Laura Kuenssberg said on Twitter.
Critics of the railways say investment is needed to improve rail lines, which in some areas are old and neglected, and in others are full-up to bursting with no capacity to add services.
HS2 would build new track between London and northern England, adding capacity and slashing journey times, and allowing the UK to catch up with European countries like France and Spain which have extensive high-speed rail networks.
Meanwhile the Williams review of the railways is also due to be published in weeks, with the aim of overhauling a system of failing contracts, where private companies are too dependent on rising passenger numbers and fail to meet financial targets.
Northern‘s nationalisation follows that of the London to Edinburgh route, known as the East Coast Mainline, in 2018, and more could follow. Another franchise, South Western, operated by British transport company FirstGroup and Hong Kong-based MTR Corp, is also in financial difficulty.
Arriva won the Northern franchise, which mainly provides commuter services in the north of England in 2015, and the contract had been due to run until 2025.
The company apologised to Northern Rail passengers. “The scale of the challenges we faced outside of our direct control were unprecedented, particularly around delayed or cancelled infrastructure projects and prolonged strike action,” it said.
Northern passengers are right to be angry at the Rail North-South Divide.
The north still uses old Pacer trains, built from the body of buses, that were intended to be merely a short-term solution to a shortage of rolling stock in the 1980s. While we see the new electric Class 710 trains gliding across the southern skylines commuting workers into the capital. The massive investment continually rolled out favouring London gives little chance for any respite in building a modem infrastructure outside London.
The disproportionate investment makes a mockery of the concept and creation of a Northern powerhouse again reality shows in the amount of investment the North is set to receive £2,389 less per person than London on transport
The North is set to lose out compared to London when it comes to transport funding, according to a report we see the continued let down.
Northern rail passengers are rightly angry at this latest revelation. But they should be even angrier at the long history of neglect, underinvestment and duplicity from ministers in London.
The Government plans to spend almost three times more per head on London than the north. Revealed: North set to receive £2,389 less per person than London on transport
- New analysis of the government’s planned transport spending shows that, unless investment in the Northern Powerhouse goes ahead, London is set to receive almost 3 times more per person than the North; and 7 times more per person than in Yorkshire and the Humber or the North East
- While the capital will receive £3,636 per person, the North will receive just £1,247 per person and within the North, Yorkshire and the Humber will see just £511; the North East £519; and the North West £2,062 per person
- Meanwhile, analysis of past transport spending shows that if the North had seen the same per person investment as London over the last decade, it would have received £66 billion more
IPPR North has published a new independent analysis of regional transport spending in England. It sets out the true extent of underfunding in Northern transport infrastructure both in the past, and under government’s current plans for the future.
The report shows a comprehensive picture of planned spending included in the most recent edition of the National Infrastructure and Construction Pipeline – a list of the government’s planned infrastructure projects between now and 2033.
Examining the government’s own figures, the leading think-tank found that planned transport spending on the capital is set to be £3,636 per person, compared to £1,247 on the North. Yorkshire and the Humber will receive the least of all of England’s regions at just £511 per person, followed closely by the North East at £519 per person; the North West will receive £2,062 per person. This does not include Northern Powerhouse Rail or recent overspend on Crossrail, which were not included in the pipeline.
In contrast, the government’s own analysis of the same pipeline includes just £40.2 billion of the £117.6 billion total transport investment it contains*, meaning the government exclude two thirds of planned transport spending from their own calculations. A disproportionate amount of the government’s excluded spending is in London– their analysis only includes 14.2 per cent of planned spending in the capital. Read More…
Last week it was announced South Western Railway ‘not sustainable’ and could come into public sector
South Western Railway’s (SWR) finances indicate it is “not sustainable in the long term”, Transport Secretary Grant Shapps has said.
The operator’s financial performance has been “significantly below expectation” since the franchise began in August 2017, he said, blaming poor punctuality and reliability combined with slower revenue growth.
Whilst warning that SWR, which made a pre-tax loss of £139m in the year to March 2019, has “not yet failed to meet their financial commitments”, Mr Shapps said his department “must prepare suitable contingency measures”.
That could mean issuing a new short-term contract to SWR’s owners – FirstGroup and MTR – or transferring the operation of trains to public sector body the Operator of Last Resort.
Many will see that as a form of nationalisation, part of the Labour Party’s manifesto at last month’s election.
In some instances, the government has been able to negotiate for the existing franchisee to continue to operate the franchise on a management contract until it can be relet, as happened when GNER defaulted on the InterCity East Coast franchise in 2007.
Should this not be possible, the Department for Transport (DfT) is required to step in as the operator of last resort.
Since privatisation in the mid-1990s there have been four occasions when an operator of last resort has been required to step in:
- South Eastern Trains operated the South Eastern franchise from 2003 until 2006 after Connex South Eastern was stripped of the franchise by the Strategic Rail Authority
- East Coast operated the InterCity East Coast franchise from 2009 until 2015 after National Express East Coast defaulted
- London North Eastern Railway has operated the InterCity East Coast franchise since 2018 after Virgin Trains East Coast defaulted.
- Northern Rail was stripped of their franchise on 29 January 2020 with the operator of the last resort stepping in from 1 March 2020.