It does seem a direct award to Arriva could play out in the press as rewarding failure .At the same time , it could be spun as a punishment as they are not keeping the franchise for the long term originally granted but to abruptly change direction during a time of existing uncertainty would be more damaging . The DFT could further spin it by saying under the terms of the direct award themselves or TFN will be paying much closer attention to and approving operational matters .
the DFT could be coy and place it under TFN control but without significant funding this would lead to no real world improvement making TFN look like the bad guys .
DFT themselves taking some control leaves it looking embarrassing if they did not manage to resolve the issues of which there are multiple complex ones .
One thing I can see is loads of money being thrown at a short term incentive to work Sundays for drivers which would resolve that long standing issue , some stripping back of timetable enhancements to produce a more reliable timetable so that the government can claim some success going into an election , but with no long term solutions and more short term thinking like that you are only holding off the pain for so long . Some of the things that are needed to make the service better like widening the scope of electrification , negotiating a proper Sunday contract , decision about long term strategic stock plan , resolution of the issues over the castlefield corridor capacity are long term things , the longer those decisions/actions are put off the longer its going to take to reap the benefits .
The problem is that if bringing it under either TfN or DfT control and or still is failing then it would still be a bad thing for the government as they were planning for it to be something better.
Personally I'd or moves to state control at any level then there is going to have to be some extra money spent to improve things beyond the current situation. If that doesn't happen then it would become a real political hot potato.
Let's say that Tories gave it to the TfN (who are mostly backed by Labour local government), if TfN do well then Labour claim that it was due to the local government. Whilst if they do well then they claim the nasty Tories for not providing the funding that they needed.
Either way it may help the Tories in the very short term (possibly only <6 months of oppression, as anything much more than that and if there's been little improvement then it's going to be seen as they haven't been able to fix it), but it's likely to harm them longer term. Even then few are going to be impressed at a General Election by the government (read Tories) having passed the buck (to TfN) and not provided extra funding to fix the mess.
Basically if this is going to be a vote winner then there's going to have to be extra money promised as well as bringing under the control (at some level) as the state. As without extra funding there's going to be little change.
Personally I would suggest something like:
- Leasing extra trains to try and add capacity to a few major cities (probably aimed at electrified lines)
- platform lengthening works to allow longer (say 8 coach train running for the above)
- an infill electrification project to remove the need for so many DMU's
The first should be aimed to bring some benefits as soon as possible. The second would be best timed to cause some works to start in about 6 months time so that if the first doesn't make much difference the politicians can point (very quickly) to the fact that clearly the extra trains will only work their best with the extra works which are just about to start. Then finally have the electrification set to start circa 2 years down the line (sooner if possible) so that again of the first two don't make much difference you've got a nice shiny project to point at and say "look this is coming and clearly this is the thing which is going to make the big difference". Especially if the electrification is likely to take a few years to finish.
By doing so you give yourself until the next General Election to them come up with a plan with what to do next, as you'll always have something just around the corner which is why things haven't improved just yet. By adding in engineering works you can blame them for some of the loss of Sunday services (i.e. plan to cover up the lack of services by then being planned to be run by buses as there's engineering works, rather than it being a failure of those running the trains).
It's what First Great Western did with their Cornish branch lines about 10 years ago when they had a shortage of rolling stock, they effectively closed one and then add they returned that closed another (they didn't actually have energising works so the locals weren't fooled, but it did get them out of a hole and did mean that no one line was ever impacted for very long so they didn't really loose many customers).
Of course that won't be cheap, but if it will cost the DfT a few tens of millions over the course of the next parliament but gains the Tories a few extra seats so that they stay in power then that's an easy win for them.
Of course that's no certainty, as another party may come along and state that they are going to copy that and rule ot out to the East & West Midlands and the South West as well as improve on the offering for the North (say reopen a line closed by Beeching, such as the Ripon reopening which is popular and known about beyond the local area, with some clause or another so that you can kick the can down the road for a few years and not actually do it just yet).
However the above is all far too sensible and it is likely that there will be a desire to make improvements without actually spending anything extra (even though the above may actually reduce the ongoing subsidies and therefore be less costly overall) and so look forward to promises based on hot air and slight of hand (even more than the above).