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29 January 2020

The real problem with Northern Rail is the government, not the train companies

Despite what Grant Shapps wants you to think, he, not Arriva, are to blame for poor rail services.

By Stephen Bush

Grant Shapps has taken Northern Rail back into public ownership, stripping Arriva of the franchise in response to prolonged poor performance and passenger dissatisfaction with the railway.

It’s true to say that Northern has consistently finished at either the bottom of the pile, or second to the bottom, as far as passenger satisfaction is concerned: only Southern Rail, run by Govia Thameslink, which operates commuter routes to the south of England, is competitive with it as far as the cherished last place as far as overall satisfaction is concerned. (Averaged out over recent years, Northern’s net satisfaction rating of 71 per cent just beats Southern’s 72 per cent rating.)

It performs similarly in terms of cancelled and delayed trains. On any metric you care to name, Northern is at or near the bottom of the pile as far as performance is concerned. But is Arriva to blame? Arriva also runs Chiltern Railways, which tends to top the tables as far as passenger satisfaction is concerned, as well as CrossCountry, both are consistently midtable or higher. Their franchises other than Northern also perform well as far as cancelled and delayed trains are concerned. Arriva also runs London Overground as part of a concession agreement with Transport for London, a rail network that is consistently ranked highly by passengers and performs exceptionally well as far as delayed and cancelled trains are concerned, too.

When you examine the performance of Govia Thameslink’s franchises, a similar pattern emerges: they run some transport networks very well, and some very badly. In fact, when you compare passenger satisfaction and railway performance within each individual company, no franchise-holder performs any better (or worse) than any other. That’s not particularly surprising when you consider that the Department for Transport already sets train fares, mandates the level of return that the companies running it must provide to the Treasury and sets service levels and timetables. It is a misnomer to speak of Northern Rail, or any other part of the British railway network, as “privatised”: they are state-owned, but run by private operators under strict direction from the government.

Private operators perform well when providing services for a strong and effective state-run body like Transport for London, or when they have established, effective management structures like Chiltern Railways, but in both cases, they also require the helping hand of investment from local or national government.

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Contrary to the easy myth that the story here is of private companies failing to provide adequate services to the north of England, the real problem here is a failure to manage the terms of franchises well by the Department for Transport (take the troubled East Coast line, back in public hands again after a second successive train company found that it could not meet the punishing financial obligations imposed upon them by the government) and a long-running failure to invest in public transport by successive political parties.

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The real problem of private companies on British railways isn’t the services they provide – it’s that their existence, outside of London, has facilitated a long con where successive secretaries of state for transport have been able to deflect blame for their own failures away from the Department of Transport and the Treasury, where it belongs, and to the train companies. In the case of Northern, Conservative governments have been aided and abetted by tactically maladroit Labour MPs, who have opted to blame Arriva for the inevitable consequence of cuts to rail infrastructure projects in 2010 rather than attacking the government.

The only reason for nationalising the parts of the railway network that are not already state-run is that it would effectively locate blame where it belongs: the Department for Transport. The financial benefits are illusory, however: the dividends paid out to private companies are astonishingly large to you and me, but they are peanuts as far as infrastructure projects are concerned – and because bringing the railways into central government’s hands means that the railways have to directly compete with schools, hospitals and other more electorally important parts of the public realm, not least roads, it comes at a cost as far as the amount spent on them too.

We can see that in London, where Sadiq Khan’s pledge to freeze fares has seen reduced spending on transport infrastructure in London and with it a reduction in service performance (albeit a reduction that still makes London best in the country and a global leader as far as urban public transport is concerned).

But the benefits of greater accountability are non-trivial, too. One reason why public transport in London runs well is that control, if not ownership, is firmly within the hands of the elected mayor. That the mayor runs few other essential services means that the accountability is actually real, because the most important powers Khan has relate to transport.

We see this with local councils. They have few powers, but one reason why one of the things that can cause freak results outside the national tide is refuse collections is that it is an important power that resides directly in the hands of local authorities. The problem with nationalising national rail services is that national government is not a particularly effective location for accountability.

Very few people who voted Conservative, Labour or Liberal Democrat did so because of their transport policies. In fact, I imagine the number of people who could name the Liberal Democrats’ transport spokesperson, outside of their Bath constituency and the party membership, can be counted on the fingers of one hand. It doesn’t matter how good you think a party’s policy on buses is, if you are also voting in an election in which income taxes can go up or down, or Brexit can be halted or delivered.  

The good news in the case of Northern Rail is that there is an obvious home for transport policy to be devolved and run from: the Greater Manchester metro-mayoralty. If improving transport is the aim, Grant Shapps has one obvious solution: to invest control over infrastructure decisions and the operational management of local railway services in the hands of Andy Burnham, the metro-mayor. If he doesn’t want to do that, he has another solution: to leave Arriva’s franchise well alone and instead to use all of his energies to lobby the Treasury for more funds.

The problem though is that the government looks likely to end up doing neither of those properly: instead having neither the financial benefits of the franchising model nor the democratic benefits of local control.