Northern franchise announcement / changes

kristiang85 · 9 Jan 2020

Sorry I couldn't add to existing threads as they were locked, but Andrew Neil just tweeted this:

Andrew Neil
@afneil
·
3m

Big announcement coming today on underperforming Northern Rail. One by one the government is taking the train operators under state control/ownership.

Stealth nationalisation by the Tories may be starting? Or has he got the wrong end of the stick?

RailUK Forums

Nicholas Lewis · 9 Jan 2020

Daily Mail ran this article last night and it quotes "Mr Shapps had been listed as attending on the agenda for Wednesday afternoon's Transport for the North meeting, but rail minister Chris Heaton-Harris took his place, with the Transport Secretary instead set to visit Leeds on Thursday" so expect an announcement maybe then?

https://www.dailymail.co.uk/news/ar...failing-Northern-Rail-says-Boris-Johnson.html

OvergroundMatt · 9 Jan 2020

The Northern Rail announcement is out - link here.

The main new development is that the DfT believes Northern is on its last legs financially and a a new arrangement will be needed within a few months. Grant Shapps will decide by the end of the month whether that will be the Operator of Last Resort or a short-term management contract for Arriva. Either way, Northern will come under some form of public control.

Here's the full statement:

Passengers in the north have had to put up with unacceptable services for too long. We understand how frustrating this has been for people and we are taking action to make sure that performance improves.

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 (ARN) 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. The proposal I requested from ARN is being evaluated. Following completion of this process I will consider whether to award ARN a short-term management contract or whether to ask the Department of Transport’s own Operator of Last Resort to step in and deliver passenger services. Longer-term decisions on the franchise will be made in the light of the recommendations of the Williams Rail Review.

My decision on which short-term option to choose will be made in accordance with the key principles set out in the statement on how I use my rail franchising powers. This includes:

protecting the interests of passengers
ensuring business and service continuity
preserving the interests of taxpayers by ensuring value for money
the continued quality of the franchise proposition;

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.

To clarify, the current financial position of the Northern franchise will not impact on the railway’s day-to-day operations. Services will continue to run and there will be no impact on staff.

AndrewE · 9 Jan 2020

OvergroundMatt said:
The Northern Rail announcement is out - link here.

The main new development is that the DfT believes Northern is on its last legs financially and a a new arrangement will be needed within a few months. He'll decide by the end of the month whether that will be the Operator of Last Resort or a short-term management contract for Arriva. Either way, Northern will come under some form of public control.

So what's new then? Maybe their financial position hasn't been explicitly (officially) mentioned before, but I don't see that we are any further forward (or closer to a resolution.)
Maybe it's time to lock this thread too until there actually is some news!

Mathew S · 9 Jan 2020

AndrewE said:
So what's new then? Maybe their financial position hasn't been explicitly (officially) mentioned before, but I don't see that we are any further forward (or closer to a resolution.)
Maybe it's time to lock this thread too until there actually is some news!

The new element is confirmation that the franchise will actually be ending - as opposed to it being an 'option' that ministers are 'considering'.
That's all.

arfortune · 9 Jan 2020

OvergroundMatt said:
The Northern Rail announcement is out - link here.

... Northern will come under some form of public control.

Here's the full statement:

The railways are already under public control!

Djgr · 9 Jan 2020

It's just the inevitable next stage in the Northern "car crash" that has been obvious for at least the last twelve months. (A phrase like privatise the profits and nationalise the losses springs to mind)

Mathew S · 9 Jan 2020

arfortune said:
The railways are already under public control!

It's a ministerial statement; facts, accuracy, and morals are purely optional.

sprinterguy · 9 Jan 2020

AndrewE said:
So what's new then? Maybe their financial position hasn't been explicitly (officially) mentioned before, but I don't see that we are any further forward (or closer to a resolution.)

Yes, it would seem that today's "big announcement" is that there won't be a big announcement until later in the month!

Bantamzen · 9 Jan 2020

Djgr said:
It's just the inevitable next stage in the Northern "car crash" that has been obvious for at least the last twelve months. (A phrase like privatise the profits and nationalise the losses springs to mind)

Maybe its time to accept that for many franchises the kind of profits that successive governments have hoped for are simply not possible.

LNW-GW Joint · 9 Jan 2020

Shapps knows quite well that changing the name on the front door doesn't automatically fix Northern's problems.
The election took out 6 weeks at least of planning time within DfT.
It's embarrassing that the Williams (and Okervee) reports are not published and decisions made on their findings.
DfT has to avoid doing something stupid in the short term, with all the public pressure, and before the new regime has got its act together on transport policy.
Either way, the franchise has failed financially, so there will have to be a new plan.
Like VTEC, I expect Arriva will be forced to absorb the maximum parent guarantees until a handover is agreed, then the costs will fall on DfT.

setdown · 9 Jan 2020

There’s been a lot of announcements without anything actually happening!

AM9 · 9 Jan 2020

So have the DfT registered a name for the OLR to use? It could be L&Y unless there is an east and west division.
Maybe this outfit which was established in December 2015:
https://beta.companieshouse.gov.uk/company/09930873/filing-history

AndrewE · 9 Jan 2020

Mathew S said:
The new element is confirmation that the franchise will actually be ending - as opposed to it being an 'option' that ministers are 'considering'.
That's all.

Will it? the quote says

Following completion of this process I will consider whether to award ARN a short-term management contract or whether to ask the Department of Transport’s own Operator of Last Resort to step in and deliver passenger services. Longer-term decisions on the franchise will be made in the light of the recommendations of the Williams Rail Review.
My decision on which short-term option to choose will be made in accordance with the key principles set out in the statement on how I use my rail franchising powers. This includes...

which says to me that the franchise holder might still trundle on

Bletchleyite · 9 Jan 2020

AM9 said:
So have the DfT registered a name for the OLR to use? It could be L&Y unless there is an east and west division.
Maybe this outfit which was established in December 2015:
https://beta.companieshouse.gov.uk/company/09930873/filing-history

Northern is a generic name so there is no reason they couldn't continue to use the brand as-is, just putting white insulation tape over the "by Arriva" bit.

Bantamzen · 9 Jan 2020

AM9 said:
So have the DfT registered a name for the OLR to use? It could be L&Y unless there is an east and west division.
Maybe this outfit which was established in December 2015:
https://beta.companieshouse.gov.uk/company/09930873/filing-history

Well if it is we'd better not annoy the Chinese....

(See the registerable name)

LeeLivery · 9 Jan 2020

I cannot see Arriva, the very same operator, being awarded a new short term contract. That would probably be the biggest political own goal possible concerning the North at this moment in time.

Boris Johnson doesn't care too much for rail franchising. He knows full well the unpopularity of 1993 franchising and popularity of devolution, seeing he championed the London Overground model being expanded as Mayor. Even at PMQs a Tory MP called for West Midlands to go.

I expect SWR, SE, Northern and TPX to be gone, nationalised by the end of the year, with the intention to at least partly devolve. They can say: "right thing to do, being tough on operators that are letting down hard working people". He'll get praise from the right-wing media who hate the idea that foreign operators run our railways. Sorted.

Edit: Even if it isn't the magic bullet, he'll be seen to do be doing something and will promise improvements to infra in the budget.

Darandio · 9 Jan 2020

AndrewE said:
Will it? the quote says which says to me that the franchise holder might still trundle on

Well yes, but it would be the end of the competetive franchise. A management contract is a different kettle of fish completely, as i'm sure you are aware.

Mathew S · 9 Jan 2020

AndrewE said:
Will it? the quote says which says to me that the franchise holder might still trundle on

The franchise is ending. The announcment today is pretty clear that it's now a choice between a direct award to Arriva, or take over by DOR.

AM9 · 9 Jan 2020

Bantamzen said:
Well if it is we'd better not annoy the Chinese....

(See the registerable name)

However, he left the company and was replaced by Paul Francis Hanley in January 2019, by which time it might have been forseen that the company name could be used in anger.

Darandio · 9 Jan 2020

Mathew S said:
The franchise is ending. The announcment today is pretty clear that it's now a choice between a direct award to Arriva, or take over by DOR.

Not a direct award, a management contract. Both are very different things.

LNW-GW Joint · 9 Jan 2020

AndrewE said:
Will it? the quote says which says to me that the franchise holder might still trundle on

But not with the same delivery plan/financial objectives.
A management contract is just that, no responsibility for revenue or fares (they may possibly have some for cost and performance).
But then, an OLR arrangement would be similar, as is the case with LNER.
OLR for LNER even kept on the same management team as VTEC had.

Carlisle · 9 Jan 2020

Bantamzen said:
Maybe its time to accept that for many franchises the kind of profits that successive governments have hoped for are simply not possible.

Very true, along with a realisation that what an astute bid team promises they’ll deliver within the confines of a plush office, suite, isn’t necessarily comparable with actual implementation on the real world operational railway

syorksdeano · 9 Jan 2020

Interesting that the refusal to work Sundays is now classed as strike action by Northern.....

Nicholas Lewis · 9 Jan 2020

AM9 said:
However, he left the company and was replaced by Paul Francis Hanley in January 2019, by which time it might have been forseen that the name could be used in anger.

DofT have a number of companies registered as subsidiaries to DFT OLR HOLDINGS LIMITED the main one being London and North Eastern Railway Ltd but also has DFT OLR3-7 LIMITED. Interestingly DFT OLR 2 Ltd was renamed SE TRAINS LTD last year. The others were renamed last year from other TOC names but Northern wasn't amongst them. DFT OLR 4 Ltd was previously TRANS PENNINE EXPRESS.

Bletchleyite · 9 Jan 2020

syorksdeano said:
Interesting that the refusal to work Sundays is now classed as strike action by Northern.....

Actually using that phrase or "industrial action"? If it is coordinated by a Union, it is "industrial action short of a strike", is it not? If it's not coordinated, then it's just people not volunteering.

thejuggler · 9 Jan 2020

Can't disagree with this:

“Ministers trumpet the Ordsall Chord as a significant achievement, but in reality – without the associated infrastructure improvements around Manchester Piccadilly, the Castlefield corridor and around Sheffield to name but a few – this should have just been the start of the major improvements we should have seen as part of the Northern Hub. Indeed, the Ordsall Chord has arguably made things worse without associated improvements.

https://www.yorkshireeveningpost.co...says-transport-secretary-grant-shapps-1359486

Bletchleyite · 9 Jan 2020

I've been saying that all along, Ordsall was negative on its own (but would be positive with other works). Given that 15/16 would be beneficial with no other works at all (simply by providing extra platforms for resilience so a "stuck" train didn't block the line entirely), that should have come first.

Bantamzen · 9 Jan 2020

Bletchleyite said:
I've been saying that all along, Ordsall was negative on its own (but would be positive with other works). Given that 15/16 would be beneficial with no other works at all (simply by providing extra platforms for resilience so a "stuck" train didn't block the line entirely), that should have come first.

Perhaps it should have. However now we are were we are, and it is time for the DfT to stop procrastinating and get on with the job as a matter of priority.

Bletchleyite · 9 Jan 2020

Bantamzen said:
Perhaps it should have. However now we are were we are, and it is time for the DfT to stop procrastinating and get on with the job as a matter of priority.

Agreed (for once!

)

Northern franchise announcement / changes

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