Latest Rail News

04.01.19

Northern under fire over £31m government subsidy ‘secret payments’

The RMT union has criticised “secret extra payments” funded by taxpayers given to Northern Rail after it was found that the government paid the train operator a total of £31m more than previously announced since the franchise began.

The figures come from the new Arriva North annual financial statement, showing that it received an extra £11m than originally announced back in 2016 when the franchise began— as well as revealing a fall in profits for the company.

The accounts revealed that the German state-owned company was given an extra £31m of taxpayer-funded payments since April 2016, allowing the company to make profits of £33.7m over the same period.

This is based on the previous figures from rail minister Andrew Jones, who told MPs in a written parliamentary answer in 2016 that Arriva Rail North were to receive £537m in real terms; compared to the £568m that was actually received.

The DfT strongly deny the claims, with a spokesperson stating: “The RMT claims are completely misleading and erroneous and show a total misunderstanding of the figures.

“Their needless strikes have nothing to do with jobs or safety, and are deliberately causing maximum disruption for passengers and damaging local economies.

“We urge them to stop putting out inaccurate stories such as this, put passengers first, call off strikes, and get around the table.”

Northern slammed the criticism from the RMT, saying that the union ignored inflation, adding that the extra payments were for changes to services.

Richard Allan, the deputy managing director of Northern, said: “It is wrong to say these additional franchise payments are 'secret' and subsidise profits for Northern.

“The additional franchise payments are due to changes in services and other policy areas that Northern has been asked to deliver on behalf of Transport for the North and DfT since its bid for the franchise was submitted in 2015.

“The payments are based on the additional costs or lower revenue for Northern arising from these changes.”

Allan also stated that last year Northern had lower than anticipated passenger revenue growth, which was largely due to delays preventing the introduction of new services and the RMT’s strike action.

RMT general secretary Mick Cash commented: “As well as bailing out Northern Rail on strike days these new official company figures reveal that ministers have misled MPs about the extent of taxpayer support the company is receiving.

“Without informing parliament, ministers have authorised secret extra payments of £31m, which have only just come to light and which have been used to subsidise profits of £33.7m. That is nothing short of a scandal.”     

All this follows a long and bitter dispute between Northern and the RMT over the future role of the second person on Northern train services, with the latest update coming when the train operator called for a formal independent ACAS inquiry to help resolve the issue.

In the wake of the DfT and Transport for the North publicly confirming that a second person would be retained on Northern services, the RMT has said that strike action will continue as it prepares for the 43rd day of strike action.

Image credit - Danny Lawson

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

Government gives ‘hugely important’ £208m Belfast Transport Hub the green light

22/03/2019Government gives ‘hugely important’ £208m Belfast Transport Hub the green light

A new £208m Belfast Transport Hub with major rail and bus connections has been granted planning permission by the Department of Infrastruct... more >
New to-the-minute measures for train punctuality introduced to tackle delays

22/03/2019New to-the-minute measures for train punctuality introduced to tackle delays

New measures of train punctuality are to be released by train operators and Network Rail next month in a bid to improve performance. The Rai... more >
FirstGroup finalises £100m order for Hitachi trains as plans for London-Edinburgh rail link move forward

22/03/2019FirstGroup finalises £100m order for Hitachi trains as plans for London-Edinburgh rail link move forward

FirstGroup has finalised a £100m order for Hitachi AT300 electric trainsets in a partnership between the two companies to create a new Lond... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

rail industry focus

View all News

interviews

Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >
TfN Strategic Transport Plan: not just for transport's sake

22/01/2019TfN Strategic Transport Plan: not just for transport's sake

Peter Molyneux, Transport for the North’s (TfN’s) strategic roads director, has been leading on the development of the seven economic... more >
Exclusive: Midlands Connect and WMRE talk collaboration and investment in the Midlands' railway

22/01/2019Exclusive: Midlands Connect and WMRE talk collaboration and investment in the Midlands' railway

In the jigsaw puzzle of regional transport decision-making, there must be collaboration and compromise. Midlands Connect media lead James Bovill ... more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. ... more > more last word articles >

'the sleepers' daily blog

The West Midlands 30-year strategy

19/03/2019The West Midlands 30-year strategy

Malcolm Holmes, executive director of West Midlands Rail Executive (WMRE), outlines the West Midlands Rail Investment Strategy 2018-2047. Th... more >
read more blog posts from 'the sleeper' >

comment

26-30 Railcard: taking advantage of opportunities

19/03/201926-30 Railcard: taking advantage of opportunities

After a nine-month national trial, the rail industry launched its seventh National Railcard for 26-30-year-olds on 2 January 2019. Rail Delivery ... more >
Caledonian Sleeper: a railway icon re-imagined

19/03/2019Caledonian Sleeper: a railway icon re-imagined

The world-renowned Caledonian Sleeper, due to begin operations at the end of spring 2019, completed its first Scotland to London journey earlier ... more >
East West Rail: the next steps

19/03/2019East West Rail: the next steps

In January, five route options for the central section of East West Rail were published as part of a public consultation on the next phase of the... more >
Rail's role in transit-orientated developments

19/03/2019Rail's role in transit-orientated developments

Jonathan Bray, director at the Urban Transport Group (UTG), argues that transit-oriented developments are the future – and that rail has a ... more >