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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.

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