Northern Rail is to be renationalised from 1 March, and the government has acknowledged that the current model of rail privatisation across the country is “struggling to deliver” and that major infrastructure investment is required to tackle failing services.

Operation of all Northern services will transfer from Arriva Rail North to Northern Trains Limited, a subsidiary of DfT OLR Holdings Limited (DOHL). All tickets, including season tickets, will still be valid, and all Arriva Rail North passengers, employees and suppliers can expect operations to continue during the transfer period. 

The Northern franchise was awarded to Arriva in 2016, but plans to improve services have foundered on the back of delays to infrastructure and a long-running dispute with unions leading to widespread strikes. Punctuality and reliability collapsed around the introduction of the May 2018 timetable and have largely failed to recover, and potential renationalisation was announced as a serious option earlier this month.

Transport secretary Grant Shapps said: “Today’s announcement will inevitably raise questions about the future of rail privatisation. Over the past twenty years privatisation has reversed over two decades of declining passenger numbers and passenger journeys have almost doubled to nearly 2billion.

“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. The Williams Review is looking at reforms across the railway to ensure customers are at the heart of the system.”

Shapps added: “It’s no surprise that passengers have lost trust in the north’s rail network. The service provided by the rail network in the north has failed to meet the needs of passengers. People across the north deserve better, their communities deserve better and I am determined to achieve that.

“This is a new beginning for Northern, but it is only a beginning. Northern’s network is huge and complex, some of the things which are wrong are not going to be quick or easy to put right. Nonetheless, I am determined that Northern passengers see real and tangible improvements across the network as soon as possible.

“I have asked Robin Gisby and Richard George, who lead the public-sector operator, to prepare a plan in their first 100 days, to make sure we leave no stone unturned in improving this franchise for passengers.

“Many of Northern’s problems are due to inadequate infrastructure. That, too, must change - though inevitably it will take longer than some other improvements. 

“The action we’re taking today is in no way a reflection on Northern’s dedicated and hard-working staff. I want to reassure them that their jobs are safe and they will be transferred to the public-sector operator on their existing terms and conditions.”

Responding to the news, Chris Burchell, Arriva MD UK Trains said: “We had a clear vision for the Northern franchise that would better connect the cities of the North with more frequent, reliable and modern services and unlock economic growth. It was clear however that, largely because of external factors, the franchise plan had become undeliverable.  A new plan is needed that will secure the future for northern train services.  As such, we understand government’s decision today.

“The scale of the challenges we faced outside of our direct control were unprecedented, particularly around delayed or cancelled infrastructure projects and prolonged strike action.  

“We recognise however that overall service improvements have not come quickly enough, and passengers deserve better. For that, we wholeheartedly apologise. We now stand ready to support government and the operator of last resort to ensure a smooth transfer for our passengers and colleagues alike.

Henri Murison, Northern Powerhouse Partnership director said: “In stripping Northern of their franchise in favour of a return to public ownership under the Department for Transport’s Operator of Last Resort, the transport secretary is dealing with the symptoms, but not necessarily the root causes of the problems on our railways, which relate to infrastructure.

“While the forthcoming Williams review will rightly address issues with the franchising process in the north, government should urgently act to undertake the engineering works needed to allow operators to run services more effectively. Otherwise we risk a situation where the north faces years more misery on its rail network – regardless of who runs the trains. The only permanent solution is to give the oversight of both upgrade schemes and services to the north for our leaders here to take responsibility for them.”