New Northern Franchise – No improvements again? ….

Posted on October 27th, 2009, by The Chairman

When the Northern franchise was let 6 years ago, it was let on what the Department for Transport (DfT) called “Steady State”. What it meant was the franchise would be run with no improvements to services and on the assumption there would be no growth and no new or replacement trains. Thus at the end of the 7 year franchise, the trains would be on average 7 years older (they were already just about the oldest in the country) and the franchise as well as being the largest in the country would be providing the poorest services.

Northern are currently in their “golden year”. This is the year at the conclusion of which DfT decides whether to extend the franchise by another 2 to 3 years. It does this based upon whether Northern has met or beaten the targets set for the franchise. Northern has done extremely well, not just beating all of its targets, but beating many of them by a huge amount. For example the Public Performance Measure (PPM) has a target for Northern of 82% (that is 82% of trains to arrive at destination within 5 minutes of timetabled time), i.e. almost 2 in 10 could be more than 5 minutes late and that would be OK with DfT (you can tell they don’t live round here!). For most of the rest of the country it was 1 in 10. Northern have achieved what many of us thought would be impossible – they’ve recently consistently exceeded 90%, i.e. less than 1 in 10. That’s better than Virgin, Arriva Cross Country and many others. All this with by far the oldest set of trains in the country, complete with their unreliability issues and problems getting spares. Also, passenger growth is not 0%, it’s well over 30%, and unlike in other parts of the country it’s continuing to grow.

But what happens after the extension?

The best performing franchises in the country, Chiltern and Merseyrail, are long 25 year franchises. Current thinking is to let new franchises as short 7 year franchises. This makes it difficult for incumbents to justify any form of extra investment over and above the basic in their DfT contract, since under 7 years is often not long enough to get the payback required. Thus for example, if you go round many areas of the country there are ticket machines for passengers to buy tickets. On our line …. there are none. Yet places like Knutsford and Altrincham have far more passengers a day than many of those other stations such as Bache and Capenhurst on Merseyrail. So passengers get on trains anxious that they have no ticket, the train is busy and the conductor can’t get to all of them. We get a lot of complaints about this. Also, on our line only Altrincham has electronic customer information displays. In places like the South East of England and Scotland even tiny halts have them.

There are arguments for and against longer franchises. Franchises are expensive to let since much preparatory work needs to be carried out. The work for a 25-year franchise is more than for a 7 year franchise, but nothing like 3+ times more. However, the Treasury likes 7 year franchises since they feel they can control the privatised train companies better. Value for money, they say. The franchised railway costs about 3 times as much to run in real terms as when British Rail ran it, but the service is much the same. Is this value for money for UK plc?

So what’s right for the travelling public of the UK and for the economy? With the forthcoming election there will be lots of opportunity for discussion on subjects like this. Is the current system good or are there areas for improvement? Let us know what you think.

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  1. Andrew Macfarlane Says:

    It’s interesting that ATOC (the Association of Train Operating Companies) has followed our lead and is itself calling for longer franchises!

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