Labour rail plan ‘won’t fix delays’ as Northern gets worse under public ownership
The North’s biggest train operator is performing worse than ever four years after it was taken under government control, i can reveal, prompting concerns about Labour’s plans to fix the railways.
Northern, which runs around 2,500 services a day connecting cities including Manchester, Liverpool, Leeds and Newcastle, cancelled 140 trains a day last year despite being under the ownership of the Department for Transport via an arms-length business called the Operator of Last Resort (OLR).
Cancellations have become so bad Northern was issued with a “breach notice” warning by the Government in June, though the move was not announced publicly.
The situation has emboldened critics who believe Labour’s plan for nationalisation is not the answer to Britain’s beleaguered railway system.
Northern has been under public ownership since March 2020 after transport giant Arriva was stripped of the franchise due to poor performance.
The previous Conservative government pledged this would “stabilise performance and restore reliability for passengers” but i analysis shows cancellations are around four times higher than in 2014 when the franchise was under private ownership.
In the year 2023-24, Northern part-cancelled or fully cancelled 51,204 trains, more than 6 per cent of services planned. The operator said it was “sorry” for the disruption and blamed its poor performance on staff sickness and low availability on Sundays.
The OLR is also responsible for three other train companies – LNER, TransPennine Express and Southeastern.
In its latest accounts, OLR said all four of its operators had suffered “a very challenging year” in terms of performance, with punctuality and cancellations “adversely impacted by industrial action, extreme weather events, increased trespass, and challenges from infrastructure reliability”.
Subsidies of more than £1.2bn were paid to the companies of which £648m went to Northern.
Under Labour’s plans for nationalisation, the OLR will gradually bring the remaining ten operators into its ownership as their contracts expire in the coming years. All passenger services and railway infrastructure currently maintained by Network Rail will eventually be folded into the new, publicly owned body Great British Railways.
The Government has explored whether to move earlier on nationalising some high-profile operators who are performing badly, including Avanti West Coast, but has had to take a step back after concluding the company is not in breach of its contract, the Financial Times reported.
Speaking in the Commons earlier this month, shadow Transport Secretary for the Conservatives Helen Whately expressed concerns, arguing that the OLR has had “mixed results” in its stewardship of the four franchises and that asking it to take on a further ten is a “huge risk”.
Andy Bagnall, chief executive of Rail Partners which represents private operators, has called the move a “political rather than a practical solution”.
He told i: “Public and private operators face exactly the same issues of industrial relations, reliability and infrastructure constraints.
“Simply changing who runs the trains isn’t going to solve these problems, in fact, it’s likely to be more costly over time.”
Johnbosco Nwogbo, lead campaigner for rail at the lobby group We Own It, admitted that public ownership will not be “a panacea” for the problems on Britain’s railways.
“It’s a really important first step, because it’s important to align incentives within the railway system,” he told i.
“It’s taken 30 years for private companies to create the mess that we now have, it would be unrealistic to expect the Government to flip the switch and fix it overnight.
“We think that public ownership works but they have to make sure it does.”
Earlier this month it emerged former transport secretary Mark Harper quietly issued Northern with a “breach notice” due to its poor performance.
This means the operator is being warned it is in breach of, or is likely to breach, the terms of its contract and must come up with a plan for how it is going to fix the issue as soon as possible.
No public announcement was made by either the Government or the Department for Transport about Northern’s breach notice when it was issued in June, just weeks before the general election.
i understands Northern bosses have already been hauled in by Transport Secretary Louise Haigh and told the level of performance is unacceptable.
Labour is confident it can push through vital reforms with rail unions and change outdated working practices by hiring more workers.
Though both the Aslef and RMT unions have settled their national pay disputes in recent weeks and are supportive of nationalisation, i understands issues related to Sunday and Rest Day Working are yet to be fully resolved and are likely to continue to affect cancellation levels.
Speaking of her vow to take on the unions, Ms Haigh told the Evening Standard last week: “We will look to recruit more staff so that we can be negotiating from a position of strength.
“At the moment our railways are completely understaffed which means that the unions have a lot of influence because they have more leverage. They can withhold their drivers, or their staff, and withhold their overtime.”
Northern’s plan for how it will improve its performance was outlined at the Transport for the North committee but members of the media and public were excluded.
However, before the meeting was made private, Northern’s chief operating officer Matt Rice admitted: “Our underlying offering is poor at the moment, particularly in terms of cancellations at the weekends.
“There’s lots of systemic reasons for that, some of our own making.”
Mr Rice added that “a lot of the efforts” being made by Northern are centred on trying to have “a far more progressive, harmonious and colleague-focused relationship with the trade unions.”
Andy Burnham, the Labour Mayor of Greater Manchester and chair of the Transport for the North committee, told Mr Rice that Northern’s performance this summer has been “nowhere near good enough” with up to 35 per cent of trains cancelled on some weekends.
He highlighted that over the August bank holiday weekend Northern was forced to issue a “Do Not Travel” warning to customers due to a lack of services.
“That is really unfair on places that rely on that bank holiday traffic, that really shouldn’t be something that is ever happening again,” Mr Burnham added.
Transport Secretary Louise Haigh said: “The Conservatives were content to sit on their hands and do nothing while standards went through the floor and rail operators let down passengers again and again. These figures are the latest example of that acceptance of failure.
“Not on my watch. Labour will always put passengers first – and we will demand a much higher standard from poor performing operators.
“That’s why this Government has summoned in Northern and other operators who are failing passengers to demand improvements. And it’s why we’re delivering root and branch reform – including modernising outdated working practices – with publicly owned Great British Railways.
“Currently, our railways are fragmented, with 14 different operators and Network Rail all working to different incentives. Publicly owned Great British Railways will be a gamechanger – acting as a single directing mind to deliver a unified railway which puts passengers first.”
A spokesperson for Northern told i: “Our customers have experienced higher levels of cancellations in recent weeks and for that we are sorry.
“The underlying reason for services being cancelled remains traincrew availability – and the root causes of that are high levels of employee sickness and Sundays being contractually outside of the working week.
“The breach notice issued by the Department for Transport is being taken incredibly seriously and improving the reliability of our timetable remains our top priority.”
North’s biggest train operator cancelling more trains than ever
Northern has been under the ownership of the Department for Transport via the Operator of Last Resort since March 2020
The staff headcount in 2024 was 7,125, up from 6,907 in 2023.
A service agreement runs until March 2025 and in its most recent set of accounts, the OLR said it received a subsidy of £648.4m in 2024 from the government, up from £597.7m in 2023.
According to the most recent OLR accounts, the directors “anticipate that new service agreements or extensions of the current agreements will be granted”.
The OLR also owns TransPennine Express, LNER and Southeastern railways.
The government-owned companye declared a profit after tax of £22m for 2024.
Chief executive Robin Gisby was paid a salary of £236,000, though no dividends have been paid out for the past two years.