THE latest shake-up of the North's railway offers passengers hope of a better service. But it could also deal a double blow to our railway city.

There is some good news. Yesterday we revealed that the FirstGroup and Keolis consortium had signed contracts to run the TransPennine Express - and to buy £260 million-worth of new trains.

They should offer greater comfort and efficiency on a network not known for either. Meanwhile 40 jobs will be created at a York depot to maintain the fleet.

Unfortunately, while the outlook for passengers and rail maintenance workers was improving, the future for administrative staff is much less certain. The franchise announced that its headquarters would no longer be in York, but in Manchester.

This is a mistake. York is at the hub of the TransPennine route, with trains travelling between Liverpool, Scarborough and Sunderland all going through the city. Manchester is out on a limb by comparison.

Another York rail headquarters is also under threat. The Strategic Rail Authority (SRA) is to merge the Northern and North Western areas into one.

That immediately shunts York away from the centre of the North East network to the fringes of the bigger franchise.

Of the four bidders, two have York connections. Neither First nor Arriva Trains Northern, which has its HQ at Station Rise, will promise to keep the head office in York. They cite commercial confidentiality for staying silent, but bosses must realise that keeping staff in the dark is the quickest way to breed unhappiness and resentment. Already the Rail, Maritime and Transport union is promising a fight.

Aside from staff peace of mind, and the serious erosion of York's railway city status, there is another consideration. money.

Moving the headquarters will cost a fortune, on top of the cash needed for rebranding and the rest. When the SRA is demanding serious cost-cutting across the heavily-subsidised new franchise, this would be an unjustified waste of money.

Updated: 10:15 Thursday, September 25, 2003