First steps taken by Transport Secretary Grant Shapps to renationalise Northern Rail

Speaking to MPs on the Commons' Transport Select Committee this morning, Mr Shapps revealed he had taken the first step towards potentially stripping train operator Northern of its franchise.

There had been fears that the issue could be shelved until next year after rail reforms were included in the Queen’s Speech earlier this week.

But Mr Shapps said: “You may have seen recent speculation in the press about the sustainability of the Northern franchise.”

He told MPs he has issued a "request for proposals" from the firm and the Operator of Last Resort (OLR), which could lead to services being brought into direct government control and run by the OLR.

He went on: "I entirely believe we cannot carry on just thinking it's OK for trains not to arrive or Sunday services not being in place. That simply has to change."

Jake Berry, Northern Powerhouse Minister, said: “It is exceptionally clear that the current Northern franchise is not working. After months of crippling delays and poor customer service, the Government will step in and act.

“Clearly there’s a legal process to follow, but my colleagues in Government are aware of my overwhelming preference for the current franchise to end as soon as possible.

“The Government is absolutely serious about improving rail services in the North and we stand ready to work with Northern leaders and mayors to make this a reality.”

It is understood that if the franchise is handed over to the OLR, the running of the franchise could go to Northern leaders through Transport for the North (TfN).

David Hoggarth, Strategic Rail Director for TfN, previously said: “In order to rebuild confidence with the travelling public we are of the view that, should it be necessary, putting in an Operator of Last Resort would be the only feasible solution for any interim arrangement. We’ve been clear that, in establishing any such arrangement, Transport for the North – and its members including city leaders and metro mayors – should have a strong involvement in the scope of this and in the oversight of the interim operator.”

The Department for Transport later issued a statement explaining that it is "developing contingency plans" for replacing the franchise with a new short-term management contract with Northern or the OLR.

It said it has the "right to terminate" Northern's existing deal if it finds it is "in default of its current contract and that default was material and not capable of remedy".

Any decision on the next steps will take consideration of the forthcoming recommendations of the Rail Review, which is due to be completed this autumn.

Mr Shapps told the committee he looked up "on time" statistics showing the percentage of scheduled stops at stations which trains are making within a minute of the timetable.

He said: "Northern's current performance sits at 57 per cent, literally just better than a one in two chance of a train arriving on time.

"That has actually fallen in the last six months from 61 per cent in March, while the UK average sits at 65.1 per cent.

"Nearly two-thirds of all trains arrive on time but if you're on Northern it's not much over half. That is a big gap.

"I've started to take action."

German-based Arriva holds the franchise, which is due to run until March 2025, but the operator has been under fire in recent years due to widespread disruption.

The chaotic introduction of new timetables in May 2018 saw up to 310 trains a day cancelled.

Andy Burnham and Steve Rotheram, the mayors of Greater Manchester and the Liverpool City Region, have repeatedly called for Northern to be stripped of its franchise.

In May, the pair issued a joint statement claiming the firm had "consistently failed" to deliver its legally binding requirements.

Andy McDonald MP, Labour’s Shadow Transport Secretary, said: “Northern Rail’s incompetent operator should have been stripped of its contract years ago over its abysmal performance record. The government’s refusal to do so has meant massive inconvenience for rail passengers and damage to the region’s economy.

"The service should be taken into public ownership at the soonest opportunity, but so should the rest of the railway. A railway is an interconnected system that will work best when it is integrated under public ownership, as Labour will do.“

David Brown, Managing Director at Northern, said: “Arriva and Northern remain fully committed to delivering the transformation of the North’s railways and improving customers’ experience.

"We are delivering the biggest transformation of local rail for a generation, with 29 of our 101 new trains in service from Monday and driver training taking place on dozens more trains right now.

"Alongside 2,000 extra services per week, this is part of a £600m investment in improving customers’ experience; we are continuing to invest in better stations, better offers for customers and more recruitment.

“These discussions have no impact on rail services for customers. Our job is to continue to provide the best service possible for our customers whilst any discussions are taking place.”

The Department for Transport's OLR began running East Coast Main Line services in June last year under the London North Eastern Railway brand.

This followed the failure of the Virgin Trains East Coast (VTEC) franchise.