The future of the privatised rail system was thrown into further doubt on Wednesday as the government announced the renationalisation of the struggling Northern rail franchise.
The decision to end Arriva’s contract was welcomed by many in the north of England, with the mayors of Manchester and Liverpool branding it a “victory for passengers” after years of widespread train cancellations and delays. The state operator of last resort will take over running of the services from 1 March.
The UK transport secretary, Grant Shapps, said: “This is a new beginning but it is only a beginning. Northern’s network is huge and complex and some of the things that are wrong are not going to be quick or easy to put right. But I am determined that Northern passengers see real and tangible improvements across the network as soon as possible.”
He added said that the current privatised model was not working, saying: “We know change is needed and change is coming.”
Unions and campaigners welcomed the move but said it should be followed by broader nationalisation, while the rail industry demanded the urgent publication of a government review spelling out plans for reform.
The Northern franchise has been run by Arriva, a subsidiary of Germany’s state-owned Deutsche Bahn, since 2016 but the operator’s ambitious plans to modernise and expand train services gave way to a grim reality of worsening punctuality and reliability, and a failure to achieve promised improvements.
Northern is the biggest franchise in England by the length of its route network and serves more than 500 stations north of Derby. It also receives the biggest state subsidy for its operations, running at £763m last year, including indirect funding for track access.
In a written ministerial statement, Shapps said a cross-industry rail taskforce would be set up to help north-west England’s railways recover, while the new state operator would produce a masterplan of local infrastructure improvements needed to help services run smoothly.
The transport secretary had announced earlier in January that Northern’s finances meant that the current franchise arrangement could only last months. Shapps eventually decided against accepting proposals from Arriva for a short-term management contract, which northern transport authorities had described as a “reward for failure”.
Arriva said many of the problems were unprecedented and out of its control, such as postponed infrastructure upgrades that affected the rollout of more electric trains, leading to the prolonged retention of the infamous Pacer trains. Meanwhile, a long-running dispute with the RMT union led to widespread strikes.
Chris Burchell, Arriva’s managing director for UK Trains, said: “We had a clear vision for the Northern franchise that would better connect the cities of the north with more frequent, reliable and modern services and unlock economic growth. It was clear however that, largely because of external factors, the franchise plan had become undeliverable.
“We recognise however that overall service improvements have not come quickly enough, and passengers deserve better. For that, we wholeheartedly apologise.”
The Greater Manchester mayor, Andy Burnham, and the Liverpool mayor, Steve Rotheram, welcomed the news, saying: “Today’s news is a victory for passengers who have had to endure almost two years of misery and mayhem on Northern rail.”
But they said it was “only the start of fixing the north’s railways”, calling on the government to commit to investing in modern rail infrastructure required.
The decision means the Conservatives have nationalised two major rail franchises in less than two years, after taking over the east coast line in June 2018, now run as LNER after the collapse of Virgin Trains East Coast.
Shapps last week said that the future of another, South West Railway, was in doubt, after the First Group-MTR joint-venture said it was running out of cash. Questions also hang over the TransPennine Express and West Midlands Trains franchises.
Unions said Northern would need “significant investment” to turn it round. Mick Whelan, the general secretary of Aslef, the train drivers’ union, said: “We welcome today’s decision because we want the railway in public ownership but let’s do it properly, with a clear, long-term, strategic vision, not just as a short-term response to the years of franchised failure.
“There won’t be an immediate improvement because many of the systemic failures at Northern cannot be remedied overnight.”
The RMT union predicted the decision would “open the floodgates” for other franchises to be taken in to the public sector.
Mick Cash, the general secretary, said it should not be a short-term fix: “This has to be a permanent move followed up with the investment and planning needed to deliver the rail services that passengers deserve after years of privatised chaos.”
A root-and-branch review of the rail industry, which will recommend replacing the current system of franchising, has been completed by the former British Airways boss Keith Williams but is yet to be published by the Department for Transport.
The industry body the Rail Delivery Group said that Northern had been “hamstrung by a flawed industry structure”. Their chief executive, Paul Plummer, said: “The industry’s proposals to the review set out a radical alternative to the status quo. This review must be published urgently.”
Passengers in Manchester had few good words to say for Northern but were mixed in their view of whether nationalisation would help.
Simon Kendall, 45, a freelance IT consultant, said his 30-minute commute from Littleborough to Salford Central was often “nothing but appalling”, with trains often delayed, cancelled or overcrowded, with fewer carriages than usual. “I was on a train last year and rain was coming in through the roof, and newspapers were used to mop up the water.”
However, he said: “I’m not sure whether public ownership will work unless they decide to invest in the infrastructure. Northern rail has had no real investment for years and it’s a service that is used heavily by the public. Why spend money on HS2 when it’s the local rail networks that really need investment? Northern transport has been neglected for far too long.”
Ursula Katz, 75, who travels three times a week from Hebden Bridge into Manchester to look after her grandchildren, said her service was often delayed or cancelled, especially at weekends. “The trains only run hourly and then they’ll cancel it and you have to wait an hour for the next one, and then it’s standing only,” she said.
“I’m all for nationalisation of the trains. These franchises make life difficult for commuters, profit a lot and don’t reinvest. I hope that nationalising will make things better.”