Do Northern Rail’s problems make a case for wider renationalisation?

Last weekend I had a boneshaking ride on one of Northern Rail’s notorious Pacers. These trains, dating from the mid-1980s, were built cheaply in the last days of British Rail. They are essentially buses on rails, using a Leyland Motors bus body mounted on a modified freight vehicle. They are often fitted out with the sort of old-fashioned two-person seats which have long vanished from modern buses.

Planned as a stop-gap with an expected life of 20 years, Pacers have been kept on far longer than intended and only now, after considerable delay, are they being phased out. They  have become emblematic of the poor experience of travelling on Northern Rail, one of the country’s largest rail franchises.

Since the franchise – covering hundreds of miles of track and over 500 stations – began in 2016, passengers have suffered from a host of problems. Far more cancelled or delayed trains than the national average, overcrowded and uncomfortable coaches, a timetable fiasco in May 2018, delays to the introduction of planned new rolling stock and months of industrial action last year which closed many services completely at weekends: it’s a depressing litany.

Grant Shapps, the new Transport Minister, has declared himself so dissatisfied with the company’s performance that he is planning to end the franchise (intended to run until 2025) early. The consequence could either be handing it over to the government’s Operator of Last Resort, which currently runs the failed East Coast franchise, or giving Northern Rail a short-term ‘management contract’ to run trains under direct Department of Transport control.

These options are being presented by some as supporting the Labour Party’s case for wholesale renationalisation of the railways. Andy Burnham, Greater Manchester’s mayor and a longstanding critic of Northern Rail, wants to municipalise commuter lines into the city. He is involved, as are other would-be nationalisers, in Transport for the North, a pan-regional pressure group. Its vision is one of ‘a thriving North of England, where world class transport supports sustainable economic growth, excellent quality of life and improved opportunities for all.’

Whether such a vision is best served by a nationalised railway system is a moot point, however. In point of fact the problems with this franchise are long-standing and owe as much to government as to the private sector.

Parts of the Northern network are in poor condition, and have been neglected for years. Many stations are visited by just a handful of trains a day – the Ormskirk to Preston line in Lancashire, or the Esk Valley line to Whitby, for example. Some routes are single-track, which means average speeds are low, services are thus necessarily sparse, and passengers are few. Elsewhere better-patronised Northern services on busy routes into or between major cities compete for very limited track space with faster Trans-Pennine trains and are prone to delays.

The franchise terms are set by the government and involve a massive £250 million a year ‘social railway’ subsidy. There is little ambition in the targets that the government has set, and little opportunity for innovation and development of new services. Passenger numbers have been falling on the franchise, unlike the numbers nationwide. Most Northern trains still run on polluting diesel, as electrification has been very limited.

The publicly-owned Network Rail has fallen months or even years behind its planned completion dates for major projects. Delays to electrification and the rebuilding of platforms at the key hub of Manchester Piccadilly severely disrupted plans to improve Northern Rail services. These were important elements in the complex of problems the company met in implementing the new May 2018 timetable set by Network Rail.

Northern Rail was not alone in this, incidentally: many other operators also were unable to meet the demands of the new timetable. But Northern was faced with having to retrain and recruit new drivers at short notice because of the infrastructure failings. It might have done better in handling the long dispute over guards on trains, but there was union intransigence on maintaining overstaffing. There were also problems with new rolling stock which failed tests and required modification before it could belatedly be introduced – this was why Pacers continue to be in use.

Northern Rail could have done better, no doubt. But many of its problems were not entirely of its own making, and it’s not apparent that a government-run body would have done much better. The management has been making great efforts to improve, with new rolling stock finally being introduced and some new routes and services now becoming operative.

Interestingly, Northern Rail’s parent company, Arriva, also runs two of Britain’s most popular and successful rail services. Chiltern Railways is one of the longest-running franchises and is consistently near the top of performance tables. It has a high level of passenger satisfaction. Arriva also owns Grand Central, a pioneering ‘Open Access’ service which gets high consumer ratings and offers lower-cost competition with the East Coast main line services. It also, paradoxically, competes with some of Northern Rail’s own services in the Northeast and is rated more highly where it does so.

So it is not obvious why Arriva should have done so badly with this service; it suggests that there are deeper problems to do with this particular part of Britain’s huge railway network. I hold no brief for Northern Rail. But those who think that nationalisation will of itself resolve all the problems of this Cinderella franchise need to examine the issue more closely.


Editorial and Research Fellow

Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham. He was previously Dean of the Royal Docks Business School at the University of East London and prior to that was Dean of the Westminster Business School. He has also taught at Queen Mary, University of London and worked as an economist in the Civil Service. His research interests are primarily in the economics of labour markets. He has worked with many think tanks, most closely with the Institute of Economic Affairs, where he is an Economics Fellow. He edits the journal Economic Affairs, which is co-published by the IEA and the University of Buckingham.

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