Transport secretary Grant Shapps said the Northern Rail franchise can only “continue for a number of months” based on financial information.

Shapps announced to Parliament in October 2019 that he was issuing a request for proposal to Arriva Rail North, which runs the services, and the Operator of Last Resort after months of poor performance on the franchise.

Northern has come up against a number of issues in recent years, including widespread disruption caused by the introduction of new timetables and a large volume of strike action by members of the RMT union.

Earlier this month, Shapps said he would consider all options including stripping Arriva Rail North of the contract, saying the service being provided to passengers is “completely unacceptable”.

He said today that he has now had it confirmed based on “the most recent available financial information” that “the franchise will only be able to continue for a number of months”. However, he stressed that these details will not effect services or impact staff.

“The proposal I requested from Arriva Rail North (ARN) is being evaluated,” Shapps added. “Following completion of this process I will consider whether to award ARN a short-term management contract or whether to ask the Department for 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.”

Shapps said his decision will be based on “the key principles set out in the statement on how I use my rail franchising powers”, including protecting the interests of passenger, ensuring business and service continuity, ensuring value for money, and “the continued quality of the franchise proposition”.

He is due to announce his conclusion by the end of January.

Responding to Shapps’ comments, Chris Bell, Arriva’s MD of UK trains, said: “We accept services on the Northern network are not yet good enough and we sincerely apologies to our customers for our role in that.

“Many of the issues affecting the franchise, however, are outside the direct control of Northern. Assumptions were given when the plan for the franchise was developed that critical infrastructure projects would be delivered to enable growth and support capacity demands. Many of these have either been delayed or cancelled. This, along with unprecedented levels of strike action, has had a significant impact on the franchise – both in terms of service and financial performance.

“These challenges will continue to affect services irrespective of who is running them. What is needed is a new plan and, in that analysis, we are fully in agreement with government. That is why the government asked us to prepare a business plan for a shorter ‘Direct Award’.”

RMT general secretary Mick Cash has called Shapps’ comments “another fudge” on Northern, “but it still proves without a shadow of a doubt that [the government’s] private franchise model for running our railways is finished”.

Cash also said the transport secretary’s decision “makes a mockery of the imminent Williams Review which didn’t even consider the public ownership model”. “The spivs and speculators who have spent 25 years bleeding Britain’s railways dry should be told that the game is up for every single one of them and should be instructed to pack their bags and clear out.”

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