Northern in crisis talks?

[Class37.4]

According to an article in the ‘Telegraph’ Arriva are in crisis talks to renegotiate the franchise due to dwindling passenger numbers. Unfortunately most of the article is behind a paywall, but I guess this should hardly come as a surprise with recent timetable shambles and continuing strikes, The franchise business model must be completely up the spout.

Will the government bail them out or will ultimately be the end of Arriva Northern?

I haven’t used Northern since the new timetable shambles, and few recent Saturday trips i would have made using Northern have gone out of the window with the strikes, I think it’s fair to say I no longer regard them as a useful form of transport.

 

[Starmill]

With no link and no quotes of any kind it is not easy for anybody to make informed comment.

 

[1e10]

https://www.telegraph.co.uk/busines...eks-help-prop-uk-arm-owns-northern-franchise/

Germany's nationalised train operator is locked in crisis talks with the Government as unprecedented levels of disruption cripple the finances of one of Britain’s biggest rail franchises, the Telegraph can reveal.

Northern, whose parent company Arriva is owned by state-backed transport titan Deutsche Bahn, has suffered at the hands of waves of strike action and a bungled timetable overhaul.

Under the terms of the franchise, Northern’s subsidy for operating the line is supposed to come down every year but with passenger numbers dwindling, the Germans are trying to renegotiate the terms, it is understood.

Deutsche Bahn has been angered by Network Rail delays to critical rail infrastructure upgrades....

 

[B&I]

What a surprise. The swashbucklers of free enterprise, rather than take a well-deserved financial hit as a result of their inability to run a rail service, shake their begging bowls at the taxpayer once more. How much longer will we persist with this charade ?

 

[Mag_seven]

Under the terms of the franchise, Northern’s subsidy for operating the line is supposed to come down every year but with passenger numbers dwindling, the Germans are trying to renegotiate the terms, it is understood.

Happy to privatise any profits but want to nationalise any losses.

 

[Harpers Tate]

What a surprise. The swashbucklers of free enterprise, rather than take a well-deserved financial hit as a result of their inability to run a rail service, shake their begging bowls at the taxpayer once more. How much longer will we persist with this charade ?

Well deserved because of circumstances that are substantially or wholly outwith their control?
Or, to put it another way - IF the Northern network were operated by the Governernment (eg by D.O.R.) would it be in any different a position? Would it require greater subsidy than originally planned as a consequence of these factors, or would it miraculously be able to manage without? Would the electrification works and consequent cascade of rolling stock have occurred sooner and the timetable fiasco not happened? And given that DOR was a mandatory part of the Government's franchise tender specification - would they be in any different a position as regards strikes?

 

[yorksrob]

There should be no renegotiation without an explicit instruction for the dispute to be settled. If the DfT reach a new agreement with Arriva that locks in the dispute, it will just illustrate the contempt in which the Government holds passengers in the North of England.

 

[Bantamzen]

There should be no renegotiation without an explicit instruction for the dispute to be settled. If the DfT reach a new agreement with Arriva that locks in the dispute, it will just illustrate the contempt in which the Government holds passengers in the North of England.

This! I was literally about to post the same, you took the words right out of my mouth as it were.

 

[B&I]

Northern are attempting to create this myth that nothing which has gone wrong is their fault. Anyonr who has beem subjected to the usual standard of Northern 'services' since long before May will know that this is a fairy story.

As for the strikes, they knew, or should have known, when they took the franchise on that industrial action was on the horizon. They took a business risk to proceed with the franchise in those circumstances. No-one forced them to take the franchise on.

We are constantly told that Northern is a financial basket case laid on as an act of public largesse to us whippet-botherers. If that's the case, why not run it as a public sector operation, rather than loading onto it the extra costs of a 'private' operator ?

 

[underbank]

What a surprise. The swashbucklers of free enterprise, rather than take a well-deserved financial hit as a result of their inability to run a rail service, shake their begging bowls at the taxpayer once more. How much longer will we persist with this charade ?

In that case, Northern should be able to sue Network Rail/Govt for their failure to provide promised cascade rolling stock and their part in the timetable shambles and electrification delays.

The real problem is that it's not real privatisation - that's not the TOC's fault - it's a pseudo/pretend privatisation where the govt/quangos are in control.

 

[muz379]

Northern are attempting to create this myth that nothing which has gone wrong is their fault. Anyonr who has beem subjected to the usual standard of Northern 'services' since long before May will know that this is a fairy story.

exactly . I think May was if anything the final straw for a lot of people who already had a poor view of commuting by rail .

Whilst some of the circumstances did at least appear to be outside of the TOC's control some of them were entirely the TOC's fault, and the lack of any proper response from the TOC for weeks during the disruption didn't help .

Instead what passengers saw publicly was all parties involved arguing and trying to deny any responsibility . And then eventually a pretty weak compensation scheme was announced which passengers had to jump through hoops to access

Passengers really dont care for this and would have just preferred it if somebody or anybody would have stood up and said yes this is our fault and we will ensure it never happens again .

Lets also not forget that the TPE franchise has woeful levels of service as well , and in some cases reduction in passengers using TPE also leads to reduced income for Northern

 

[Harpers Tate]

...it will just illustrate the contempt in which the Government holds passengers in the North of England.

...or the contempt in which the NUR holds the passengers, or in which the Government holds the NUR. Or both.

....why not run it as a public sector operation, rather than loading onto it the extra costs of a 'private' operator ?

You genuinely believe that the Government can ever be more cost-effective at anything it does, than private companies are? I fail to see any evidence to that effect whatsoever. As soon as Civil Servants are involved in anything, costs skyrocket. One only has to look at the bureaucratic shambles that is the NHS for evidence of that.

The real problem is that it's not real privatisation - that's not the TOC's fault - it's a pseudo/pretend privatisation where the govt/quangos are in control.

Absolutely correct. Just about all that is wrong comes about from areas and factors that the Government is in control of. And yet there are those that want to nationalise the lot. Madness!

 

[B&I]

In that case, Northern should be able to sue Network Rail/Govt for their failure to provide promised cascade rolling stock and their part in the timetable shambles and electrification delays.

The real problem is that it's not real privatisation - that's not the TOC's fault - it's a pseudo/pretend privatisation where the govt/quangos are in control.

Or maybe the problem is that privatised railways don't generally work, no matter how.mich neoliberal dogma says otherwise ?

I'd enjoy watching Northern sue those organisations. The days of evidence of Northern's own can't-be-arsed incompetence would be compulsory viewing

 

[B&I]

.
You genuinely believe that the Government can ever be more cost-effective at anything it does, than private companies are? I fail to see any evidence to that effect whatsoever. As soon as Civil Servants are involved in anything, costs skyrocket. One only has to look at the bureaucratic shambles that is the NHS for evidence of that.

One can also pack a lot of evidence to the contrary into a single word eg Carillion.

 

[yorksrob]

...or the contempt in which the NUR holds the passengers, or in which the Government holds the NUR. Or both.

You say so yourself that the Government are the organ grinders in this.

 

[387star]

Their Facebook is like a parody account

A list of strike days as long as a row in an advent calender and more warnings about reduced Sunday services on top

 

[DarloRich]

Northern are a victim of government policy in its widest sense, a victim of and contributor to wider industry issues and a perpetrator of own goals. The strike wants sorting out as asap and a solution should be obvious if both sides act in a mature and responsible fashion but that is not the only issue that needs to be fixed. Better PR & industrial relations and staff morale would help alleviate many of the other problems but public perception is at a crisis point.

The risk is that the new trains, that should be a game changer, will arrive into service at a reputational low point and any benefit of these new trains will be lost. Personally I think northern have been dealt a weaker hand than they would like but they have failed to play the cards they have been handed as well as they could.

whippet-botherers

love it!

 

[Bletchleyite]

Or maybe the problem is that privatised railways don't generally work, no matter how.mich neoliberal dogma says otherwise ?

I think it is fair to say that West Midlands Trains is working, as is Merseyrail, as is Virgin Trains West Coast. They have their foibles and problems, of course, but so did BR. (Some people have very short memories, rose tinted spectacles or are simply not old enough to remember just how dire parts of BR were).

The problem with Northern appears to me to be gross incompetence at multiple levels of management - it needs a total clear-out, retaining only the front-line operational staff and the first management level. Because of TUPE, that clear-out never seems to able to occur, so it just becomes "same ****, different franchise".

 

[Class37.4]

The expanded timetable which was meant to happen in May but much of it being cancelled which had also been delayed from December must have had a major impact on the Northern business model, and clearly the fault for that can be clearly laid at Network Rail door, and as such Arriva need to be compensated for that.

In terms of the complete shambles in the north west that happened at the start of the new timetable, I find difficult to believe that Arriva were not aware that they couldn’t adequately recourse that time table from day 1, and the temporary timetables should have been in place from day 1, at the very least the response from northern should have much better and quicker, and so I think there’s a strong argument to say that Arriva shoud not be compensated for that shambles.

The strikes well that’s a whole can of worms as to who should really take the blame for that one and not wishing to turn into a DOO debate but clearly that must have also had a major impact on Arriva’s business plan.

Will a DOR be better I think that’s debatable, will the government want another DOR you would imagine not, as that flags up another failed franchise and bringing the DOO question closer to the governments door.

 

[yorksrob]

]
The problem with Northern appears to me to be gross incompetence at multiple levels of management - it needs a total clear-out, retaining only the front-line operational staff and the first management level. Because of TUPE, that clear-out never seems to able to occur, so it just becomes "same ****, different franchise".

I'm not sure you can really lay the blame at TUPE'd in management. Old Serco/Abellio Northern seemed to run like clockwork most of the time, and was actually pretty good in some respects.

And as I've mentioned before on threads, I've travelled on BR and it was never as bad as the situation up here now.

 

[johntea]

The rot with Northern set in pretty much as soon as Arriva took over, before which Northern were actually doing a very good job with the limited resources they had.

Generally the ‘old’ Northern had a friendly feel about it but now it all feels like the passenger is an inconvenience rather than a customer! Quite hard to explain in written form but as a passenger that travels on at least four services five days a week the difference becomes very noticeable!

Arriva’s top priority these days seems to be revenue,revenue,revenue, yet if you need to get some money out of their pockets for any reason expect to be waiting up to 3 months!

Whilst I fully support trying to sort out the issue of fare dodgers their ‘promise to pay’ scheme is almost laughable in how rushed through it seems to have been thought out and how a lot of staff don’t seem to fully understand it let alone passengers!

Most of the guards seem to be trying their best but their morale must be virtually non existent these days.

 

[ainsworth74]

The strike wants sorting out as asap and a solution should be obvious if both sides act in a mature and responsible fashion but that is not the only issue that needs to be fixed.

The strike will continue until the DfT decide otherwise. The RMT seem willing to accept a Greater Anglia or ScotRail style solution. Northern probably would offer that but they can as their political overlords (that same Government everyone wants to take charge) won't let them. So we're stuck....

 

[scrapy]

I'm not sure you can really lay the blame at TUPE'd in management. Old Serco/Abellio Northern seemed to run like clockwork most of the time, and was actually pretty good in some respects.

And as I've mentioned before on threads, I've travelled on BR and it was never as bad as the situation up here now.

Many of the old Serco Abellio managers jumped ship or were pushed out. Senior management teams are very different now.

 

[Class37.4]

I'm not sure you can really lay the blame at TUPE'd in management. Old Serco/Abellio Northern seemed to run like clockwork most of the time, and was actually pretty good in some respects.

And as I've mentioned before on threads, I've travelled on BR and it was never as bad as the situation up here now.

I would agree the previous franchise on the whole probably ran better pity about the appalling state of the rolling stock and some of the overcrowding, as for BR try commuting between Leeds/Dewsbury/Huddersfield in the mid to late 80’s to name one example Railbuses with dodgy gearboxes, sprinter shortages and complete shambles of a timetable. I was at Huddersfield uni at the time and one of my lecturers at one point refused to believe the service was so unreliable, in the end I made alternate arrangements.

In the early 90’s I had a period commuting from Shirley to Perry Bar but the service was so unreliable particularly on the Walsall route that I soon opted for buses instead.

 

[Clarence Yard]

Once again, the national newspapers don't know how the franchising system works. The last time it was The Times with SWR.

In a franchise agreement there are Change mechanisms if certain things occur or do not occur. One is Infrastructure delay. Most " new" franchises have an "IAD" (Infrastructure Assumptions Document) or "IRAD" (Infrastructure and Rolling stock Assumptions Document) appended to it. This lays out when certain key infrastructure (or rolling stock, if it procured by the DfT) is assumed to be delivered.

If it isn't delivered by that date, Change occurs and the franchisee is financially held harmless through the Change mechanisms. This is because NR Infrastructure delivery (and consequential timetable/stock effects) cannot be a risk that a TOC can take on under the present structure.

The timetable bidding delays have been at the behest of the DfT and the Secretary of State has had to write to all affected TOCs saying that his decision to delay timetables is a "Change" event and therefore the franchisee will be held harmless through the Change mechanisms.

How this works is quite simple. The franchise financial models are re-run to take account of the revised inputs. Negotiating these changes is far from simple as the DfT (and the Treasury) go into some detail here, to ensure they are not getting conned and the TOC isn't trying to load the Change with events that were under it's own control, or had no Change protection for.

We don't see key sections of franchise Agreements (the sensitive bits always get redacted) so we don't know if Northern have strike protection from the DfT for any DOO/DCO dispute. If they have, they will be covered, if they haven't, they will be losing mega bucks.

There are some TOCs that are in near perpetual re-negotiation at the moment, such is the divergence from the original Franchise or Direct Award. GWR is a good example of this.

There is no such thing as a fixed price Franchise these days. Change events are very likely to happen in the majority of franchises so "in-franchise" re-negotiations are becoming increasingly common and, of course, these have to be reported as financial results are declared. The newspapers pick up on this and, for a story, assume the worst.

 

[Bantamzen]

The rot with Northern set in pretty much as soon as Arriva took over, before which Northern were actually doing a very good job with the limited resources they had.

Generally the ‘old’ Northern had a friendly feel about it but now it all feels like the passenger is an inconvenience rather than a customer! Quite hard to explain in written form but as a passenger that travels on at least four services five days a week the difference becomes very noticeable!

Arriva’s top priority these days seems to be revenue,revenue,revenue, yet if you need to get some money out of their pockets for any reason expect to be waiting up to 3 months!

Whilst I fully support trying to sort out the issue of fare dodgers their ‘promise to pay’ scheme is almost laughable in how rushed through it seems to have been thought out and how a lot of staff don’t seem to fully understand it let alone passengers!

Most of the guards seem to be trying their best but their morale must be virtually non existent these days.

Like you, I use at least 4 Northern services a day during the week but I have to say I've noticed anything particularly different on my part of the network. In fact services have generally improved, & we have more Sunday services. Yes the Penalty Fare scheme has rolled out here, but from a causal observation there doesn't seem to be much in the way of difference from a customer point of view. Of course we haven't suffered the timetable meltdown that parts of the North West has, but interestingly on social media some passengers who use the same services as me seem to be eager to join in with experiencing problems. I've even seen people bemoaning late or cancelled services that I've actually been on & run to time!

Of course the ongoing dispute is not helping, but this is much more a Mexican standoff as opposed to a basic employer vs employee one, with the government seemingly unwilling to allow concessions to allow all sides some face saving, and bringing the dispute to an end.

 

[DarloRich]

The strike will continue until the DfT decide otherwise. The RMT seem willing to accept a Greater Anglia or ScotRail style solution. Northern probably would offer that but they can as their political overlords (that same Government everyone wants to take charge) won't let them. So we're stuck....

agreed - that should read all sides not both!

 

[Class37.4]

Once again, the national newspapers don't know how the franchising system works. The last time it was The Times with SWR.

In a franchise agreement there are Change mechanisms if certain things occur or do not occur. One is Infrastructure delay. Most " new" franchises have an "IAD" (Infrastructure Assumptions Document) or "IRAD" (Infrastructure and Rolling stock Assumptions Document) appended to it. This lays out when certain key infrastructure (or rolling stock, if it procured by the DfT) is assumed to be delivered.

If it isn't delivered by that date, Change occurs and the franchisee is financially held harmless through the Change mechanisms. This is because NR Infrastructure delivery (and consequential timetable/stock effects) cannot be a risk that a TOC can take on under the present structure.

The timetable bidding delays have been at the behest of the DfT and the Secretary of State has had to write to all affected TOCs saying that his decision to delay timetables is a "Change" event and therefore the franchisee will be held harmless through the Change mechanisms.

How this works is quite simple. The franchise financial models are re-run to take account of the revised inputs. Negotiating these changes is far from simple as the DfT (and the Treasury) go into some detail here, to ensure they are not getting conned and the TOC isn't trying to load the Change with events that were under it's own control, or had no Change protection for.

We don't see key sections of franchise Agreements (the sensitive bits always get redacted) so we don't know if Northern have strike protection from the DfT for any DOO/DCO dispute. If they have, they will be covered, if they haven't, they will be losing mega bucks.

There are some TOCs that are in near perpetual re-negotiation at the moment, such is the divergence from the original Franchise or Direct Award. GWR is a good example of this.

There is no such thing as a fixed price Franchise these days. Change events are very likely to happen in the majority of franchises so "in-franchise" re-negotiations are becoming increasingly common and, of course, these have to be reported as financial results are declared. The newspapers pick up on this and, for a story, assume the worst.

I hear what you are saying but one way or another the losses compared to the original business model must be massive now regardless of how Much the franchise may be adjusted, you’ve got to wonder if Arriva are looking to walk away if they don’t get what they want.

 

[B&I]

I think it is fair to say that West Midlands Trains is working, as is Merseyrail, as is Virgin Trains West Coast. They have their foibles and problems, of course, but so did BR. (Some people have very short memories, rose tinted spectacles or are simply not old enough to remember just how dire parts of BR were).

The problem with Northern appears to me to be gross incompetence at multiple levels of management - it needs a total clear-out, retaining only the front-line operational staff and the first management level. Because of TUPE, that clear-out never seems to able to occur, so it just becomes "same ****, different franchise".

That's why I inserted 'generally', though perhaps I had Japan more in mind

 

[yorksrob]

I would agree the previous franchise on the whole probably ran better pity about the appalling state of the rolling stock and some of the overcrowding, as for BR try commuting between Leeds/Dewsbury/Huddersfield in the mid to late 80’s to name one example Railbuses with dodgy gearboxes, sprinter shortages and complete shambles of a timetable. I was at Huddersfield uni at the time and one of my lecturers at one point refused to believe the service was so unreliable, in the end I made alternate arrangements.

In the early 90’s I had a period commuting from Shirley to Perry Bar but the service was so unreliable particularly on the Walsall route that I soon opted for buses instead.

With regard to the previous franchise, find me one that doesn't involve overcrowding. Old Northern's trains generally turned up, usually on time. Their rolling stock didn't seem to be poorly maintained or looked after in comparison to any other franchise. Their facelift of the 144's for example, gave them quite a nice ambience. They even got some additional ones, which isn't bad for a no growth franchise.

In terms of BR, I travelled regularly in the South East in the late 1980's and 90's and at the time:

• There wasn't an industrial action that lasted over a year and ballsed up every weekend service for several months.
• There weren't engineering works that blocked off every route between my home town and London (as an example) for every weekend for over a year (and they were rebuilding the lines from my home town to London for channel tunnel services at the time).
• There wasn't a timetable change that saw services regularly cancelled/short formed/turned back early leaving passengers stranded for hours on end half a year later.

I reiterate, I have never experienced a year of railway travel as woeful as this one.