[6] Since the franchise began in April 2016, it had been beset by worsening punctuality,[7][8] perceived poor customer service,[9] frequent industrial action by staff,[10] and delays in introducing new rolling stock.

The future of the franchise was first reviewed by the Department for Transport (DfT) in July 2019 deeming frequent weekend cancellations due to insufficient staff to be "unacceptable".

[16][17] Conversely, Arriva contended that there had been "collective system inability",[18] citing Network Rail's inadequate timetabling to absorb delays and the DfT's unwillingness to proceed with improving infrastructure which were part of the Northern franchise bid prospectus in 2014,[19] such as two new "through" platforms at Manchester Piccadilly; these would have eased congestion through the Castlefield corridor[nb 2] and enabled the planned increase in services over the course of the franchise.

From this date onwards, the franchise became directly operated by the DfT under the brand name Northern Trains with an objective to "stabilise performance and restore reliability for passengers".

[25] In May 2016, the Competition and Markets Authority launched an investigation into the transport department's decision to award the Northern network to Arriva.

[34][35] Network Rail and Northern announced an independent inquiry to learn lessons and identify route alterations in readiness for the next timetable change in December 2018.

[49] Statistics published in December 2018 showed that between April 2017 and March 2018, many Arriva Rail North managed stations recorded a drop in passengers – this period did not include the May 2018 timetable change or the increased Saturday strikes by conductors.

[50][clarification needed] The Mayor of Greater Manchester, Andy Burnham, also reported that the failing railways in the region were resulting in increased congestion on the roads and Metrolink system, as passengers were abandoning the rail service as it had become less reliable since May 2018.

It was confirmed in October 2019 that the Department of Transport were formulating a stabilisation strategy for the franchise which could entail supervising its workings whilst letting Arriva operate the day-to-day services – an arrangement akin to special measures.

[65] Grant Shapps, the Transport Secretary, was critical of regular Sunday cancellations given Arriva had committed to legally adhere to ensuring minimum service requirements as part of the franchise agreement.

[citation needed] Following this announcement, Arriva UK Trains expressed its regret and had adopted the view that 'collective system inability' had rendered the 2015 franchise agreement invalid.

[20] They referenced infrastructure upgrades which were reneged upon by the Department for Transport and unworkable timetabling by Network Rail – illustrated by consistent delays on the certain routes.

[66] In the same month, RAIL magazine cautioned against an Operator of Last Resort (OLR), arguing that problems ran far deeper than just Northern and OLR would not be a panacea – citing Network Rail implementing a timetable with little resilience against delays, the Department of Transport (DfT) not releasing funding for infrastructure upgrades and interfering local mayors.

[72][76][77] The transfer would include Barrow Haven, Barton upon Humber, Goxhill, Great Coates, Grimsby Docks, Habrough, Healing, New Clee, New Holland, Stallingborough, Thornton Abbey and Ulceby stations.

[79] Places that would be served by Northern Connect routes include Bradford, Chester, Halifax, Leeds, Liverpool, Manchester, Middlesbrough, Nottingham, Newcastle, Preston, Sheffield, Barnsley, Lincoln, Wakefield, Wigan and York.

To provide additional peak time capacity on the Calder Valley Line, one Class 180 unit was sublet from Grand Central to Arriva Rail North per weekday.

Although Northern had said they would be willing to guarantee that a second member of staff would be on board, the use of DCO could theoretically make it possible to run a train without a guard, and as a result, the union called industrial action over the change.

[90] On 6 February 2019, the RMT announced that following "a guarantee of a conductor on all trains, including the new fleet, for the duration of the current franchise" it had suspended further industrial action on Arriva Rail North, bringing an end to consecutive strikes on Saturdays since 25 August 2018.

[95][96] This led to local figures, including Greater Manchester mayor Andy Burnham, calling for Arriva to be stripped of the Northern franchise.

[97] Arriva Rail North's fleet was maintained at Allerton, Botanic Gardens, Heaton, Newton Heath and Neville Hill depots.

[99] Arriva Rail North had depots for its train crew at Barrow-in-Furness, Blackburn, Blackpool North, Buxton, Carlisle, Darlington (drivers), Doncaster, Harrogate, Huddersfield, Hull, Liverpool Lime Street, Leeds, Manchester Piccadilly, Manchester Victoria, Middlesbrough (conductors), Newcastle, Sheffield, Skipton, Wigan Wallgate, Workington and York.