Northern trains under Government control from today
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From today, it will be run by the Government's Operator of Last Resort (OLR) with the aim of providing a service which passengers "can truly rely on", Mr Shapps said.
Northern has consistently come under fire for systematic delays and cancellations, receiving the lowest overall score for all train companies in a recent survey carried out by watchdog Transport Focus.
Only 72 per cent of passengers were satisfied with their journey with the company, which is britain's fifth-biggest rail operator.
Figures from Office of Rail and Road figures reveal that only 55 per cent of Northern trains arrived at stations within one minute of the scheduled time between February 2019 and this year, as opposed to a 65 per cent average for the rest of British operators.
Following an introduction of new timetables in May 2018, Northern services were plunged into chaos and hundreds of trains were cancelled each day.
A panel of leading Northern politicians has since been appointed to advise the operator, including Leeds City Council Leader Judith Blake and, Manchester Mayor Andy Burnham as well as passenger representatives and rail industry chiefs.
The panel will be led by chairman of the public sector operator Richard George.
The Department for Transport has outlined overcrowded train carriages as being of primary focus for improving services.
Mr Shapps said: "This is a new era for rail in the North, but there will be no quick fix for the network as we build solutions for the future.
"Today marks the beginning of rebuilding of trust in these services, and voices from the region will be essential as we work together to understand and deliver the improvements passengers need."
Mr George said Northern trains must improve performance, and make passengers and political leaders confident that "their concerns are being addressed".
Transport Focus director David Sidebottom said travellers have suffered "years of misery" as he called for "much-needed investment in infrastructure".
Northern operating in April 2016 and was awarded the franchise until March 2025, but Mr Shapps announced in January that its contract would be ended five years early.
Chris Burchell, managing director of Arriva's UK Trains division, has described the franchise as "undeliverable", insisting this was "largely because of external factors".
Problems faced by the firm included cancelled infrastructure projects, delays in the delivery of new trains and prolonged industrial action.
The OLR has operated services on the East Coast Main Line as London North Eastern Railway since June 2018, following the failure of the Virgin Trains East Coast franchise.
A campaign demanding that the operation of Northern Trains services remains in public hands will be launched by rail union RMT, passenger groups and politicians on Monday.
Demonstrations will be held at stations across northern England to send a message to the Government that the private franchise model is "broken" and must be replaced by an integrated, publicly owned railway from top to bottom.
RMT general secretary Mick Cash said: "This has to be a permanent move followed up with the investment and planning needed to deliver the rail services that passengers deserve after years of privatised chaos."
Kate Anstee, of passenger group Northern Resist, told the PA news agency: "We welcome Northern being finally taken into public ownership, but we hope the Government doesn't sell it off at the first possible opportunity."