Leaders welcomed more devolution but were cautious over the plans which would hand them control of schedules, stations, fares, and rolling stock.
Manchester Mayor Andy Burnham said: “We’ve got to make sure it comes with the right funding that we will need, all the powers that we will need. We have to come up with the right relationship between ourselves and Transport for the North because obviously some of the routes concerned might go between different city regions.
“But this is what we wanted. There was one thing missing though, and that’s the stepping stone to get to this new approach, and that is sorting out the chaos that is Northern Rail and the franchise.”
Mr Burnham and Liverpool Mayor Steve Rotheram have called for the franchise to be ended before it is due to run out in 2023.
Mr Rotheram said: “We’ve been in negotiations for the last 14 months with Chris Grayling for something that the Prime Minister announced today.
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"But we have to get indemnified, we’ve got tunnels for instance and if one of those had a catastrophic collapse, that would bankrupt the whole city region if we had to fix it, so of course we’re saying to the Government they would pick up the tab normally now.
“If the responsibility and accountability was passed over to us to run the service, then they would need to ensure that we are insured against any huge loss on the network.”
Judith Blake, Leader of Leeds City Council and West Yorkshire Combined Authority Transport Lead, said: “We would welcome the opportunity to have a greater say in how local rail services are delivered but this significant responsibility must come with the associated powers and funding to address historic under investment in the North’s rail network which as at the root of its current failings.”
While IPPR North Senior Research Fellow Luke Raikes said: “If it goes ahead this would be a big and important change for the North’s creaking transport network. But it’s a promise that must be kept to all parts of the North, not just its cities.
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“The Prime Minister must now follow through on this and the other promises he has made to the North, including on investments to sit alongside these powers. We need to go even further than today’s promises too, so that the Northern Powerhouse can be truly led by the North.”
Barry White, Transport for the North Chief Executive, added: “Commitments to more devolution should be warmly embraced. We’ve made the case to the national Williams Review that both the city regions and the North should have greater command of their rail networks as part of a progressive pathway to devolution. The devil will be in the detail of how decision-making, funding and the structure of the rail industry can put passengers first. But any change must be led by the North.”