NORTHERN Rail will receive a £632m Government subsidy after signing a 22-month extension to its current franchise contract.

The region’s biggest rail operator is to face tough new targets on punctuality, reliability and passenger satisfaction as a result of the deal which will run until February 2016 when a new longer-term franchise will be let.

But there was criticism from Labour and specifically Middlesbrough South and East Cleveland MP Tom Blenkinsop.

The extension is thought to be partly in response to the Government’s desire to stagger franchise competitions in the wake of the fiasco over the West Coast Mainline, which is estimated to have cost taxpayers £50m.

It comes after a number of the region’s MPs lambasted ageing ‘Pacer’ rolling stock leased by Northern as “shocking” and “little more than cattle trucks” in a Commons debate earlier this month.

Middlesbrough South and East Cleveland Labour MP Tom Blenkinsop said a “blasé approach” had been taken with the franchise extension and it was not a Government priority to make improvements.

He said: “This announcement just seems to have slipped out with a number of other written ministerial statements.

“The competition model frequently sees the Government signing off huge contracts, while at the same time making no guarantees about rolling stock.”

Mr Blenkinsop was critical of what he said was the hour-and-a-half journey between Middlesbrough and Newcastle with Northern and also claimed transport was just another area where the Government was sending existing resources and cash to the South at the expense of the North.

A Department for Transport spokesman said: “The agreement with Northern Rail Ltd will see the franchise receive a subsidy of £632.7m over the 22 months of the contract. This is a reduction on the current level of subsidy.

"The deal also includes a programme of heavy maintenance work to ensure the continued reliability of the rolling stock worth £8.7m, which further demonstrates value for money for passengers and taxpayers.”

Rail Minister Stephen Hammond said the Government was insisting on “even tougher” targets for Northern Rail and would also work with the company to deliver additional electric trains across its network.

Northern, which is part-owned by international services company Serco and Dutch partner Abellio, plans new passenger information screens at a 100 stations as part of the franchise extension.

Northern Rail managing director Alex Hynes said: "We are already delivering enhancements across our network. Our services are more punctual and reliable, and the commitment is there to drive further efficiency with our partners.”