A number of passengers and MPs claim Northern Rail should have been stripped of its franchise years ago.
It comes as the Government is examining the operator - it's asked Northern to submit plans on how it'll improve the service for passengers.
In a statement, a spokesperson from The Department for Transport said:
“We are developing contingency plans for the replacement of the current franchise with either a new short-term management contract with Northern or the Operator of Last Resort (OLR).
“In the context of significant challenges facing the operator, such as delays to infrastructure upgrades and historic underinvestment in the northern rail network, issuing a Request for Proposal enables the Department to examine whether the contract is properly aligned with current operating challenges in the North. It also allows us to determine whether the franchise owner or an OLR would be best placed to tackle these issues and deliver for passengers.
“If we find the operator to be in default of its current contract and that default was material and not capable of remedy, we have the right to terminate the current franchise. If such a right is exercised a decision on next steps will be based on a full and rigorous analysis into what delivers the best outcomes for passengers and taxpayers, and what would best enable the implementation of the forthcoming recommendations of the Williams Review.
“We will take a decision once we have the full information, and will provide Parliament with a full update on these next steps at an appropriate time.”
Northern could be handed a short term contract if it meets requirements - or, alternatively, another operator would be brought in to look after the trains or the service would be nationalised and run by the government.
Some passengers and MPs have tweeted, saying they welcome the announcement. Meanwhile, Labour's Shadow Transport Secretary - MP Andy McDonald - responded. He said:
“Northern Rail’s incompetent operator should have been stripped of its contract years ago over its abysmal performance record. The government’s refusal to do so has meant massive inconvenience for rail passengers and damage to the region’s economy.
"The service should be taken into public ownership at the soonest opportunity, but so should the rest of the railway. A railway is an interconnected system that will work best when it is integrated under public ownership, as Labour will do.“
Northern Rail says many of the challenges its faced over the last few years have been outside the franchise's direct control, and it's committed to making improvements.
David Brown, Managing Director at Northern, said: “It’s on record that the Northern franchise has faced several material and unprecedented challenges in the past couple of years, outside the direct control of Northern. The most significant of these is the ongoing, late delivery of major infrastructure upgrades.
“The North West electrification was more than two years late, which meant we could not use electric trains on that route or cascade diesel trains from that route to run more services elsewhere on our network. More recently, new and longer platforms at Leeds stations are delayed, which means we have had to postpone our plans to run longer trains.
“These factors – alongside the damage caused by strike action and lower than expected economic growth – have had a significant effect on the revenue expected in our original franchise business plan agreed with government back in 2015.
“That’s why the Government has asked us to prepare a business plan for a shorter ‘Direct Award’. We are well underway with the development of that plan, which will see the completion of our transformation programme.”
David added: “Arriva and Northern remain fully committed to delivering the transformation of the North’s railways and improving customers’ experience. We are delivering the biggest transformation of local rail for a generation, with 29 of our 101 new trains in service from Monday and driver training taking place on dozens more trains right now. Alongside 2,000 extra services per week, this is part of a £600 million investment in improving customers’ experience; we are continuing to invest in better stations, better offers for customers and more recruitment.
“These discussions have no impact on rail services for customers. Our job is to continue to provide the best service possible for our customers whilst any discussions are taking place.”