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Franchise Lessons Learned From The Northern Rail Takeover

February 20, 2020
Franchise Lessons Learned From The Northern Rail Takeover

Manchester and the North West were reported to have lost £38 million as a result of Northern Rail delays in the summer of 2018. Sadly for the notorious franchise, this marked just the beginning of their downfall.

Between summer 2018 and winter 2019, constant delays and unfulfilled promises to upgrade infrastructure helped to slowly devastate Northern’s image. In the four weeks leading up to the 7th December 2019, 1 in 16 Northern Rail trains were cancelled.

In truth, anyone could have seen this coming. The franchise was ineffective in their operation and routinely cut corners as opposed to creating a well-architected framework which staff could adhere to.

The fall of Northern has provided a textbook example of what not to do when running a franchise, providing three actionable insights that all franchisees should bear in mind:

1. Demonstrate leadership in times of crisis

These delays didn’t appear out of thin air; in May 2018, Northern attempted to roll-out a new timetable. This resulted in up to 300 services being cancelled each day instead of the supposed improved punctuality the change was set to bring.

The first problem was that there weren’t enough drivers to deliver the enhanced service. While the Department for Transport (DfT) had signed off the timetable despite warnings that it was impossible to action, Northern pressed ahead with the plan and set themselves a deadline they couldn’t meet.

The second problem was the changing roles of the train guards. The DfT had arguably forced Northern’s hand in this area as they had decided the roles should be radically different. Naturally, strikes occurred and Northern took the flack – some would say poorly.

Northern’s main mistake? Their mishandling of the fallout. The operator had turned to the Advisory, Conciliation and Arbitration Service (Acas) to help improve talks with the National Union of Rail, Maritime and Transport Workers (RMT). However, the talks quickly fell apart – with RMT accusing Northern of not moving an inch in regard to addressing the changes.

The arguments were now more public than before. Northern’s name was plastered all over the news. After refusing to take responsibility, the franchise had achieved a unique level of vilification.

As Northern customers used their services out of necessity, it’s easy to see why regular commuters felt that they held them in contempt – especially given their lack of an outspoken voice and an apparent disregard for broadcasted staff disputes.

2. Adapt to industry challenges and technological advances

Quite tactlessly, while these problems continued to plague commuters, the franchise increased their prices. This stoked the ire of more than just passengers – Greater Manchester Mayor Andy Burnham called for the operator to either update their trains or slash their fares.

At the time, Northern was still running Pacer trains. These bus-like locomotives are widely considered to be poorly ventilated and outdated – a criticism justified by the vehicle’s recent display in museums.

Northern had attempted to purchase 100 new models from a Spanish supplier in order to modernise their service. However, as a result of a delay on the supplier’s end, this was pushed back to February 2020.

To further complicate matters, Northern’s track system was in desperate need of an upgrade. Through no fault of its own, the franchise was now having to address delays caused by poor connections and bottlenecks – problems created by Network Rail.

At the same time, lines across the North West were undergoing a process of electrification, and additional work was being performed on the Blackpool to Manchester line.

It’s true that Network Rail and the government had promised to support the franchise and failed to deliver on sorely needed rail improvements. But it was the franchise who chose to increase rail prices and leave various updates until the last minute.

3. Be transparent with stakeholders

Had Northern perhaps been upfront with the public, and spoken with consistency about attempts to modernise their services, commuters may have stood by the organisation until their facilities were updated in February 2020.

Instead, they had lost their respect by July 2019 – when their passenger numbers had already significantly declined.

The firm argued that, despite what government was seeing, there had been a 15% increase in services since the beginning of the franchise in 2016. The government countered by stating that Arriva had taken no profit from the franchise at all since its inception.

Now being assaulted on all sides, the franchise had lost every ally. The government had to pay the group £120m after the timetable chaos, Northern’s staff had witnessed their numbers take a sharp decline, and the public were paying staggeringly high rail fares only to find their services delayed.

In January 2020, Transport Secretary Grant Shapps stated that he would allow the franchise to continue for a number of months before likely nationalising it.

Transparency may not have saved the beleaguered franchise from certain price hikes or staffing issues, but it could have kept them in favour long enough to potentially turn their fortune around. “Delays today will allow for future improvements to your journey”, “Changes to staffing are designed to improve your experience” or even “We do not control ticket costs” are all examples of explanation underused by the franchise.

As a franchise business, you are governed by a higher body. It is part of your role to take instructions on board and deliver them in a way that is tangibly beneficial for stakeholders.

We’re keen to hear your thoughts on Northern’s renationalisation and how you think it reflects on franchising. Let us know by reaching out to us on our Facebook, Twitter or LinkedIn pages today!