Transport Secretary Grant Shapps has stated that he will take action on the Northern franchise, but will not decide until end January 2020 exactly what that action will be - either an Operator of Last Resort or a direct contract. Railfuture analyses the causes of Northern’s poor performance and recommends what action the Transport Secretary should take. Insufficient time was allowed between letting the franchise and the PRM compliance deadline for procurement, delivery and testing of new trains such as these class 195 units. Image by Geof Sheppard under CC by SA 4.0.
The problems that Northern has experienced, and the impact on their finances, had already prompted Deutsche Bahn to try to sell Arriva, which owns Northern, and ‘handing back the keys’ for Northern must have been a possibility. In fact the Transport Secretary’s announcement is just getting in first, so that Northern rather than the government takes the media criticism. However, the problems are not just a matter of poor management by Northern. A new operator will not have a magic wand, but will have the same services, rolling stock, staff, and pretty much all the same managers – so the same problems.
The root cause of Northern’s problems
- It is important to remember that Northern was let at privatisation in 1996 and again in 2003 as a financial ‘basket case’ on the basis of no investment and no growth (and in 2016 on the basis of only limited growth, with only 105 new vehicles). Therefore until now there have been no new trains and no significant investment in infrastructure. This meant that unlike many train operators, Northern had virtually no trains compliant with the PRM (persons with reduced mobility) standard. In other words it started from a very low base, which the Department for Transport (DfT) were well aware of.
- However, Northern proved to be surprisingly good at sweating the assets (all old, of course), and with relatively low fares in the former PTE areas (compared for example to those London commuter routes where Oyster is not available) grew the volume of business very considerably, particularly on commuter routes to the large northern cities. This was not the DfT’s plan at all!
- The growing issue of overcrowding at last forced the DfT to recognise that something needed to be done on capacity: the two flagship schemes were North West electrification and the Ordsall Chord (a new link between Manchester Victoria and Piccadilly stations).
- The Ordsall Chord project was pared down to a price, for example by removing the extra platforms at Manchester Piccadilly station from the plan, so that it failed to deal with the capacity constraints of the Castlefield Corridor. Network Rail now accept that the train plan they approved is not robust. On the other hand we understand that Network Rail rejected train plans for new and additional services between Yorkshire and Newcastle, which cannot be delivered robustly.
- North West electrification overran and was cut back ( including the Windermere branch and Wigan – Bolton) just like the Great Western electrification project, but because it is ‘north of Watford Gap’ nobody in high places really cared (until now, of course!) The consequences of the reduction in scope of the project, and the late delivery of live running has meant that the planned cascade of PRM compliant vehicles (mostly refurbished ex-Thameslink class 319s and 769s) has not happened. Driver training has been compressed into a shorter and shorter timescale and the loss of useable vehicles to make them PRM compliant, coupled with the late delivery of new trains has meant that availability of units and drivers for passenger services has been seriously affected.
- DfT delayed the franchise competition for Northern by about 2.5 years, and changed the franchise specification during the competition to require new trains instead of continuing the use of Pacers, albeit refurbished. Whilst requiring new trains was the right decision, the delay in making it reduced the time available to order and deliver new trains so that everything had to go right for the PRM compliance deadline of midnight 31st December 2019 to be met.
- Everything did not go right. New and refurbished trains have not been delivered in the timescales quoted by the manufacturer and there has been a serious safety-related issue with the new trains being built by CAF, which stopped the entire fleet in the spring of 2019. Not only did this affect commissioning rates, but also again compressed the driver training period as no training was done for about six weeks at a critical time in the plan. The considerable delays in class 769 introduction have affected not only Northern but also Great Western and they have similar problems of getting non-PRM-compliant vehicles out of service (funny how nobody has joined the dots on that one).
- All of this has been going on against a background of industrial unrest over several years. The TUC supported a better work life balance in the form of a four-day working week covering the seven days of operation (rather than relying on overtime for Sunday working). Some train operators, including Arriva Trains Northern, which held the original franchise for the North East, had negotiated such an agreement but First North Western had not, leading to staff on different terms and conditions in different parts of Northern and so service cancellations primarily in the North West (and services into Yorkshire using NW crews). The RMT have resisted harmonisation on this rather than negotiate a balanced solution on behalf of both staff and passengers. There has also been industrial action as a result of the franchise commitment to introduce DCO. The DfT seem completely oblivious to the way that franchise remapping has played into the hands of ASLEF and the RMT. They seem equally naive when it comes to accepting bids that will only be delivered if everything goes exactly to plan. This is a direct result of the way bids are evaluated. If you make a sensible bid with realistic contingency, you don’t win.
- The problem with Northern illustrates an issue within the whole rail industry in Britain. Whilst Northern has some very good managers who have worked miracles to keep a service going, there is a desperate shortage nationally of competent managers at senior level, indeed at any level. One of the unintended side effects of privatisation is that it destroyed industry management development in all of the railway disciplines.
- Many people don’t realise the sheer complexity and scale of change that is going on in the Northern franchise area. This is comparable to what is going on with Great Western. The DfT had the sense to recognise that the last few years needed political and financial cover for the franchisee to get these changes done (and it has by no means been all smooth running) on Great Western with a series of direct award extensions to the franchise and another still to come. They clearly did not see the need in the North.
The North needs an expanding railway fit for the purpose of playing its part in the economic, social and environmental future of the North. This requires investment in doubling the capacity of the rail network in the North, electrification of Trans Pennine and other routes, and Northern Powerhouse Rail.
Rail staff must be motivated to the part that they can play using new equipment and enjoying terms of employment that provide service availability and better overall conditions. This includes sorting the question of how trains should be staffed to maximise benefits for the passenger eg customer service, quicker journeys, personal security and fare collection.
What the government should do now
So what happens now? In the short term the Transport Secretary will decide whether to strip Northern of the franchise and hand it to a Government-appointed Operator of Last Resort, or to award a direct contract to Arriva (the current franchise holder). Longer term he might run a competition for a new operator (or separate North East and North West operators), he might devolve responsibility to Transport for the North, or he might divide devolved responsibility between the Northern cities.
Division of responsibility between the Northern cities (where the mayors have shown no insight into what is required to restore the service) would create conflict for services between those city regions and the risk of peripheral areas being ignored; division into North-West and North East, which has been suggested, would leave Yorkshire (which is geographically east of the Pennines but has services connections provided by Northern primarily with the North West) in an ambiguous position; whilst Transport for the North has yet to develop the client experience needed to procure and manage an operator concession.
Therefore Railfuture agrees that the DfT should award a short direct contract to an operator and recommends that the DfT gives that operator the political and financial cover to complete the new train roll-out, resolve the industrial relations issues, and temporarily reduce the number of services on the most affected routes to what can be run reliably. That operator must recognise that operational managers who are fighting the alligators will not have time to drain the swamp, so it should set up a separate team, not distracted by the day job, with the freedom to consider different approaches and the responsibility to define an operational solution which will work.
This short direct contract will give time for Transport for the North to be equipped to act as client with a view to the provision of an integrated transport system responsive to regional and local needs, and for matching enhancements to the timetable and network to be planned and implemented so that an enhanced timetable can be delivered reliably. When these are complete, responsibility should be devolved to Transport for the North for operation of the services via a concession (like Transport for London and Arriva’s London Overground operation), but in a Network Alliance between the new Northern operator and Network Rail in the north, with a single Managing Director (like the ScotRail franchise).
The irony is that things will get better as the new trains come in and the peak of driver training commitment passes on Northern, so the real lessons may never be learned. A cynic might say that Mr Shapps will be told by his officials at DfT that a good “kick up the backside” solved it. This must not be allowed to happen as it would be deeply insulting to many of the people on Northern who are very capable and who have been dealt a rotten hand of cards to play, when the dealer was in many cases the DfT itself.
All parties should reflect on and remember that it is the passengers and the voters who are suffering. Simply searching for scapegoats is hardly likely to provide a sustainable solution to providing a fit-for-purpose transport system for the North. It is therefore up to the DfT to ensure that the lessons are learned and the issues are not repeated. The government’s response to the Williams Rail Review will be an early test.
Department for Transport announcement
Williams Rail Review
Railfuture Blueprint for the North
Murder on the Thameslink Northern Express