Concerns over Northern Rail finances revealed in Transport Secretary statement

Transport Secretary, Grant Shapps MP, has issued a statement regarding the performance of Northern Rail, revealing that the most recent information available from Arriva Rail North (ARN) indicates the franchise may only have finances to continue for a number of months.

While the Transport Secretary sought to reassure Northern Rail passengers that there would no impact on the day-today running of services as a result of ARN’s finances, he also outlined potential courses of action for the future of the rail franchise.

Mr Shapps announced that he set the wheels in motion for Northern to lose its franchise earlier this month, citing the rail operators ongoing poor service. The statement outlines that a decision on what action will be taken is to be announced before the end of January 2020.

In the short-term, either ARN will be awarded a short-term management contract for Northern Rail, or the Department of Transport will step and provide services via its Operator of Last Resort.

In his statement, Grant Shapps said:

In order to inform this decision, the department will assess the extent to which each option performs against these principles. Our value for money assessment will be based on a number of criteria, including which option returns most money to the taxpayer, the risks attached to each, and the value of any improvements in passenger services. I intend to announce my decision before the end of January 2020.”

Recommendations of the Williams Rail Review will inform any longer-term decisions on the Northern Rail franchise.

In light of the Transport Secretary’s comments, Arriva’s Managing Director of UK Trains, Chris Burchell, has issued a response on the company’s Northern Rail services, defending the franchise’s finances and performances. He said:

We accept services on the Northern network are not yet good enough and we sincerely apologise to our customers for our role in that.

“Many of the issues affecting the franchise however are outside the direct control of Northern. 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.

“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’.”