Pay up for punctuality!
RMT: May 25 2006
In-house maintenance helps deliver better train punctuality - now deliver pay justice for signallers and operational staff, says RMT.
IMPROVED TRAIN punctuality reported today by Network Rail is largely the result of bringing rail maintenance back in-house, and underlines the need to finish the job by taking back renewals contracts too, Britain?s biggest rail union says today.
"The decision two and a half years ago to kick private contractors off rail maintenance and bring the work back in-house has continued to reap improvements," RMT general secretary Bob Crow said today.
"However, the 86 per cent achieved over the last year is still behind the 91 per cent achieved by British Rail, and points to the need for Network Rail to go the final mile and bring renewals back in-house and under direct control.
"That would not only give a further boost to safety and efficiency, but could free up around half a billion pounds each year for further infrastructure improvements.
"It is only right that Network Rail staff should be rewarded for the improvements that their hard work has delivered, but there is a big difference between the modest bonuses paid to our members and the 50 per cent paid to senior executives on top of their already huge salaries.
"Some of our members still see less than £15,000 a year, and it is astonishing in the light of these punctuality gains that Network Rail is still delaying implementation of a 35-hour week for signallers and operational staff and mucking around with a pay offer of just 3.2 per cent.
"The irony of these figures coming out on the day that ballot papers start arriving on doormats will not be lost on our signaller and operational staff members, who have been offered one of the worst deals in the industry this year.
"They will know that they have helped to deliver an improving railway, and that the executives have handed themselves princely bonuses while offerering a pauper-sized pay increase to those who get out there and do the work.
"Network Rail should get around the table and offer a better pay increase and a firm date for the implementation of the 35-hour week for signallers and operational staff," Bob Crow said.
ends
Notes to editors:
The Catlyst Forum's briefing, The Railways in a Third Term, analysed the potential savings of restoring Britain's railways to public ownership. The section on Network Rail is extracted below. To read the full report go to http://www.catalystforum.org.uk/pdf/railways2.pdf (pdf file).
Extract from 'The railways in a Third Term', published by the Cataylst Forum:
c) Network infrastructure
Network Rail was established by the government following the final debacle of Railtrack as a "public interest company" that would be better geared to social objectives and relieved of the need to pay dividends to private shareholders. Following the government's 2004 rail review and the impending abolition of the Strategic Rail Authority, Network Rail is to take a stronger role in leading the industry, assuming responsibility for overall performance from April 2005.
There is no doubt that Network Rail is a major improvement on its predecessor. Investment has increased, performance is improving, and important steps such as bringing network maintenance back "in house" have brought us closer towards the integrated, strategically coordinated, and cost-effective railway that we need.
But this remains unfinished business. In legal and financial terms Network Rail remains a private monopoly, autonomous from government and dependent upon private finance for its investment. Whatever the merits of "public interest companies" and "mutual enterprises" in other areas of social provision, even their enthusiasts have questioned the applicability of such models to the maintenance, operation and development of the railway network.[1][1]Because of the level of investment needed and the risks associated with it, the government has had to back the company with £21b in contingent loans, provoking controversy as to its "private sector" status for the purposes of national accounts.
And their remains confusion over Network Rail's accountability and the extent to which it can be relied upon to act in the "public interest". This has been dramatised by arguments over the role of the Rail Regulator - some have argued that there is no longer any need for independent economic regulation "to protect taxpayers from shareholders",[2][2]while the outgoing Regulator viewed Network Rail as a "monopoly provider" with its own corporate interests. What is clear is that, as the Transport Select Committee noted, the attempt to arbitrate this potential conflict is "inefficient and highly expensive", with the regulator "duplicating the work of the company's management" by undertaking "parallel exercises assessing renewals' requirements of the rail infrastructure".[3][3]
For these reasons "it is being increasingly recognised that the whole pretence of NR being in the private sector is costing a lot of money and has led to a situation where it cannot be adequately policed".[4][4]The Transport Select Committee concluded that "it is time for the Government to cut through this tangle of responsibilities and take direct ownership of Network Rail on the grounds that a Railways Agency, incorporating the rail infrastructure, will ensure both the lowest borrowing costs to meet the necessary funding requirements and direct, democratic accountability".[5][5]
What would be involved in such a move?
* Network Rail's current debts of £21b would be added to the government balance sheet, marking a one-off nominal increase in total public sector debt equivalent to 1.75 per cent of GDP - nominal because this is already widely regarded and treated as debt for which the government has already taken responsibility
* in 2003 it was calculated that bringing the rail infrastructure into the public sector and financing its investment by issuing gilts could have saved £80m in annual interest charges[6][6]- a figure that was likely to increase as its debt increased.[7][7]The latest figures show Network Rail's annual interest payments running at around three times the level for 2002-3,[8][8]suggesting that the saving could be as much as £250m a year
* reconstituting Network Rail as a public corporation would also have the effect of obviating the need for independent economic regulation. Abolition of the Office of Rail Regulation would save around £14m a year - running costs currently covered by a "license fee" paid by Network Rail
* a public corporation, owned by government and accountable to parliament, would be the best vehicle for achieving the overall focus and coordination of the industry envisaged for Network Rail under the government's rail review
A first task for a publicly owned infrastructure company would be to address the fragmentation and cost-escalation set in train by privatisation by bringing track renewals back in-house. Already Network Rail has stopped contracting out maintenance work, calculating that £300m a year could be saved through improved coordination and no longer needing to meet contractors and subcontractors margins.[9][9]The results have been impressive.[10][10]The obvious next step is to reintegrate track renewals and enhancement, whose separation from "maintenance" is another artificial legacy of privatisation[11][11]and makes up the majority of Network Rail's annual expenditure.[12][12]Even if costs were reduced by only half the proportion estimated for maintenance work, we could expect savings in the region of £400m a year or more.