UK will take Northern Rail franchise back into state ownership

Boris Johnson’s U.K. government said it will take the troubled Northern Rail franchise back into state ownership from March 1, in the latest sign that his Conservative administration is willing to intervene in the running of ailing private companies.

“The service provided by the rail network in the north has failed to meet the needs of passengers,” Transport Secretary Grant Shapps said as he made the announcement in a written statement to Parliament on Wednesday. “People across the north deserve better, their communities deserve better and I am determined to achieve that.”

The Northern franchise is currently run by Arriva group, part of Deutsche Bahn. From March, it will be operated by the U.K.’s so-called operator of last resort, owned by Shapps’s Department for Transport. That operator has managed another franchise, the East Coast Mainline, for 19 months.

The move shows Johnson’s government is ready to intervene to prioritize the needs of voters in pro-Brexit districts of northern England who backed his Conservatives in last month’s election, even at the expense of private companies.

Johnson has pledged to “level up” the regions of the U.K. and the government stepped in two weeks ago to rescue airline Flybe from a collapse that threatened to shutter regional airports and reduce connectivity to badly served parts of the country.

Privatization

Shapps said today’s decision will “inevitably raise questions about the future of rail privatization,” and suggested the performance of further franchises is being scrutinized. He also said the government-backed Williams Review is looking at what reforms can be made.

“Over the past twenty years, privatization has reversed over two decades of declining passenger numbers and passenger journeys have almost doubled to nearly 2 billion,” he said. “However, it is clear that the current model is now struggling to deliver. Across the country a number of franchises are failing to provide the reliable services that passengers require. We know change is needed, and it is coming.”

In recent weeks, Shapps has also said that FirstGroup and MTR Europe’s South Western rail franchise, which runs commuter trains into London, isn’t sustainable and has criticized FirstGroup’s TransPennine Express for unacceptable services.

Arriva apologized for the problems with the franchise and said it will co-operate with the transfer to government control.

“The scale of the challenges we faced outside of our direct control were unprecedented, particularly around delayed or canceled infrastructure projects and prolonged strike action,” Chris Burchell, managing director of the company’s U.K. rail unit, said in a statement. “We recognize however that overall service improvements have not come quickly enough, and passengers deserve better.”