THE headquarters for the Northern Rail franchise will remain in York, it was disclosed today.

That was the decision of the new licence holder Serco-Ned Railways, which from December formally takes over the running of many of North Yorkshire's trains for the next nine years.

It is understood that in a toss-up between keeping the executive support office at Station Rise - the base for the former licensee, Arriva Trains - and Manchester, York has won out.

The news, which ends uncertainty for the 284 Northern Rail HQ staff, was broken by Peter Smith, communications manager for the new Northern Rail's mobilisation team.

He said that York would remain the centre of an operation, which currently employs 4,500 staff, responsible for 60 million passenger journeys per year. Mr Smith said that York was also one of six proposed city locations for separate offices for four area directors planned by Serco-Ned, along with Manchester, Leeds, Sheffield, Newcastle and Carlisle.

Serco-Ned bosses are committed to keeping all Northern Rail staff when it takes over on December 12. It is also committed to improving the rail experience for passengers, including those on the York-Harrogate and York-Leeds routes. Under terms of the franchise there would be no money available to invest in new rolling stock.

"But we have been working with the industry to explore the possibility of a solid business case for new rolling stock," said Mr Smith.

Asked whether it would attract new passengers, make the service more reliable, cost less to maintain and be cheaper to operate, he said: "We will explore whatever is feasible."

Updated: 11:00 Monday, October 25, 2004