A DECISION on the future of the Northern franchise was expected by the end of January.
In a ministerial statement on 9 January, Transport Secretary Grant Shapps confirmed there was concern over the company’s financial position, saying the franchise will only be able to continue ‘for a number of months’.
Mr Shapps confirmed in October last year that he had issued a request for proposals to the current operator Arriva Rail North and to the Operator of Last Resort, which would result in termination of the current deal. He said in his most recent statement that the proposal from ARN is being evaluated, after which either ARN will be awarded a short-term management contract or OLR will be asked to step in. Mr Shapps added that longer-term decisions on the franchise will be made in the light of the recommendations of the Williams Rail Review, which had been due to report in the autumn.
The Transport Secretary said the decision on which option is chosen will be based on key principles including protecting the interests of passengers, ensuring business and service continuity, preserving the interests of taxpayers by ensuring value for money, and the continued quality of the franchise proposition. A decision on the preferred option was expected before the end of January.
Arriva took over the Northern franchise in April 2016 on a nine-year term. Following Mr Shapps’ confirmation in October that he had issued the request for proposals, Arriva had called for ‘a new plan’ to address the issues facing the franchise. Challenges have included late delivery of new trains, which has required Pacers to remain in service into 2020, poor performance caused by the inability of the infrastructure to handle planned timetables, and a series of industrial disputes.
Responding to the statement, Chris Burchell, Arriva’s Managing Director of UK Trains, accepted that Northern’s performance has not been good but repeated the view that many of the issues affecting the franchise are outside the direct control of Northern, commenting: ‘Assumptions were given when the plan for the franchise was developed that critical infrastructure projects would be delivered to enable growth and support capacity demands. Many of these have either been delayed or cancelled. This, along with unprecedented levels of strike action, has had a significant impact on the franchise, both in terms of service and financial performance. Mr Burchell concluded: ‘These challenges will continue to affect services irrespective of who is running them. What is needed is a new plan, and, in that analysis, we are fully in agreement with Government. That is why the Government asked us to prepare a business plan for a shorter direct award.
Modern Railways understands the Operator of Last Resort has pointed out to DfT that it would indeed face the same challenges as the current operator. Insiders note that this places the DfT in a difficult position, as if it brings the business under its direct control and performance does not improve passengers will see it as directly responsible rather than it being allowed to place the blame on a private operator.
However, Transport for the North has called for the Government to bring in the Operator of Last Resort. Its Strategic Rail Director David Hoggarth said: ‘We’ve been clear that putting an Operator of Last Resort in place of Northern would be the only way to rebuild trust and confidence, and secure the right outcome for passengers.
‘The North’s leaders have said that a Direct Award to Northern, even on a short-term contract basis, is likely to be seen by rail users as a reward for failure.
Questioned further by Modern Railways, TfN pointed out that it is obliged to reflect the views of its members, hence the call for the transfer to OLR, with David Hoggarth adding: ‘Our focus throughout this process will be on outcomes for passengers. It has become absolutely clear to us that both passengers and our Northern leaders do not feel, based on the last 18 months, that the existing team has the trust and respect needed to be able to deliver effectively. We recognise that Northern has faced some challenges that have been outside its control – but, as our members have said repeatedly, there have also been issues within their control which should and could have been managed better.