Memorandum by the National Union of Rail,
Maritime and Transport Workers (PRF 29)
PASSENGER RAIL FRANCHISING
RMT once again welcome the opportunity to submit
comments to the Transport, Local Government and the Regions Sub-Committee.
Unfortunately we do not believe that the proposed
new set of Strategic Rail Authority (SRA) guidelines will resolve
the current problems of the Rail Industry. At the current time
taxpayers and passengers have the worst possible deal. Whilst
the financial risk and responsibilities still remain with the
taxpayer there is no effective control over the industry.
The position has improved a little in the last
few years, in so far as the Regulator is far more rigorous in
his approach than his predecessor. However the fundamental problem
remains. The current structure of the rail industry, whereby competing
private rail companies all operate with a primary objective of
making a profit, mitigates against running an integrated service
existing for the benefit of all. The current fragmented system
suffers from a lack of overall control that severely impacts upon
operations and safety. We shall provide more details to illustrate
our case in this submission.
The Environment, Transport and Regional Affairs
Committee decided to hold an inquiry into rail investment in May
2000. The inquiry considered all matters relating to the operation
of the industry. RMT submitted a detailed paper and a report was
produced in March of this year. The Committee made a number of
recommendations as to how the rail industry could be improved.
They were not radical suggestions that suggested a complete overhaul
of the current structure of the industry, but if implemented we
believe they could still deliver improvements for passengers.
We are pleased that the Regulator is endeavouring
to secure from Railtrack far better information on the state of
the network. However Government show little sign of taking heed
of other recommendations. The two most important recommendations
made by the Committee related to Government acquiring more control
over the network, and secondly the effective management by Railtrack
over essential renewal and maintenance work. Little progress has
been made. The Committee has asked about the implications for
the Industry of the revised Strategic Rail Authority guidance.
The amendments proposed by the Government will unfortunately do
little to achieve the objectives as desired by the Committee following
its last investigation. We will refer to each of the objectives
now listed in the latest inquiry.
The committee has stated that it is seeking
rapid improvements in safety, punctuality, reliability, comfort
and frequency of services. These are all desirable objectives
but we believe are not all necessarily achievable given the current
state of the network.
It is of course acknowledged that the rail network
is suffering from decades of under investment and the situation
has further deteriorated following the poor stewardship of the
network since privatisation. RMT believe that significant improvements
in safety and reliability of services can only be achieved through
sustained long-term investment in the network. Indeed concentrating
too heavily upon running more services to tighter timetables is
not necessarily the right objective for the industry at the present
Investment to improve services in the long term
is the priority. Whilst disruptions to services should be kept
to a minimum RMT believe this may be inevitable if long-term network
benefits are to be secured. At the current time the existing network
is struggling to cope with even the existing number of services.
In our last submission to the Committee we stated
that the current unwieldy regulatory system was completely unsatisfactory.
At the moment Railtrack derives the overwhelming majority of its
revenue from fixed asset charges. There is often little incentive
to work with train operating companies to increase the capacity
on the network. Indeed in order to boost profits Railtrack has
in the past strived to reduce costs in maintaining the network.
The problem with this is of course that they are custodians of
a public service.
The company have been guilty of presiding over
a deteriorating network and not effectively managing maintenance
and renewal work. The tragic consequences of this were witnessed
at Hatfield. RMT believe that the industry cannot continue in
its present form. As the committee recommended earlier this year
there must be greater public control of the network provider so
that the desire to increase profitability can no longer impinge
upon the safety of the network.
However RMT do have sympathy with Railtrack
in respect of the pressures that are brought to bear upon the
company for reducing train delays. It is recognised that train
operating companies wish to ensure that they meet performance
targets and generate additional revenue by running their passenger
services as reliably as possible. Consequently a complicated set
of contracts has been set up governing the conditions relating
to Railtrack gaining possession of the track for renewal and maintenance.
As RMT reported in last year's submission, track
workers were experiencing greater difficulty in securing safe
access to the railway for maintenance. Consequently work was being
undertaken under more dangerous conditions, that is "red
zone" working whereby a "lookout" was required
to warn fellow workers of oncoming trains. Needless to say this
problem has not gone away. In July 2001 a track worker was killed
whilst working under red zone conditions at Purley Oaks.
Government has forecast rail passenger demand
to increase by 34 per cent in the next decade. Greater usage of
the network means more wear and tear, and therefore an even greater
need to do the necessary maintenance and renewal work. There seems
to be no strategy for dealing with this problem.
We also reported that in the previous year Railtrack
was fined £10m for failing to reduce train delays, whilst
a fine of only £1.5m was imposed on Great Western following
the Southall crash. The current regulatory system gives insufficient
priority to the importance of securing a safe network.
We would ask the committee to take careful note
of these considerations when deciding what should be the priorities
for the railway.
10 YEAR PLAN
The tragedy at Hatfield and its aftermath revealed
just how serious is the plight of the rail industry. RMT welcomed
the 10-year plan and the associated investment planned by the
Government. However the £60 billion of rail investment was
based on an injection from the private sector worth £34 billion.
It is now acknowledged that the private sector will not be able
to deliver anything like this figure. However of even more concern
is the parlous state of Railtrack who are currently eating into
the funds available for rail investment from the taxpayer. We
have so far seen little return for the considerable public subsidies
and we see no evidence that this will change.
Since Hatfield the Government has already forwarded
Railtrack an advanced payment of £1.5 billion, and the company
are now seeking a further £2 billion. RMT have grave doubts
about the suitability of Railtrack to oversee the more limited
role of maintaining and renewal of the network given their record
so far. They certainly seem incapable of delivering any major
infrastructure projects. In our last submission to the committee
we made reference to the West Coast Main Line modernisation. We
make no apologies for doing so again because it is by far the
most significant project that they have been asked to undertake.
Reports now advise us that the cost of the project
has increased from £2.2 billion to £6.3 billion. The
cost to the taxpayer will be £4 billion. In addition the
first stage of the project is now unlikely to be delivered to
the already revised timetable for completion of October 2002.
The final cost of phase one and two is now unofficially put at
£10 billion and again there seems no prospect of meeting
the 2005 target date for completion of phase two without a further
substantial injection of public funds.
The outgoing Chairman of the Strategic Rail
Authority has already warned that the Government's 10-year plan
could not take 15 years without significant extra funding. It
is apparent that additional money for investment will need to
be provided, however we believe value for money will never be
obtained under the current fragmented system. The enhancement
projects need to be co-ordinated in a structured way so that they
are planned as part of one overall strategy for the railway. According
to an analysis by Roger Ford of Modern Railways investment schemes
now cost between two and three times as much they did under British
Rail. This is because of the need for rail companies to make profits
and to pay compensation for disrupting the services of the train
If Railtrack are to retain the responsibility
for maintaining the rail network, the infrastructure and renewal
projects also need to be properly planned with an permanent core
of workers undertaking projects under central command. The current
set of competing contracts is not satisfactory and indeed the
Committee recognised this during the last inquiry.
SRA LEADERSHIP OF
The Government have very recently published
a revised set of directions and guidance for the Strategic Rail
Authority. In July the Government also announced that the SRA
should concentrate on improving services within existing franchises,
or by negotiating two-year extensions. The early replacement of
franchises should be the exception rather than the rule.
RMT can only see logic in this decision if the
intervening period is used to carry out a far-reaching review
the whole industry. If as a result of this full operational and
financial control can be restored to the industry then the short
delay will be worthwhile. However we fear that this is not the
Governments intention. This being the case we see little merit
in short term improvements to services. As stated above the priority
for the industry should be long-term investment. This is the only
way to deliver a lasting improvement to both existing services
and to generate the additional capacity that the industry so desperately
RMT intend to respond directly to the DTLR in
respect of the SRA draft directions and guidance. However we will
make brief comments in this section. First of all the plan makes
reference for the need to provide clear strategic direction to
the railways. The fact that no comprehensive plan has yet been
produced is a matter of real concern. We note that this is now
timetabled for November 2001.
The Directions and Guidance also makes reference
to the targets outlined in the 10-year plan. We believe that all
of these are no longer achievable without significant Government
investment over and above that already announced in the 10-year
plan. There is no reference to new investment in the document.
There are many references to the need to achieve value for money
but hardly any reference to enhancement of the existing railway.
As we have already stated the Government will not achieve value
for money under the current fragmented railway system in the UK.
RMT believe that more detail should be given
regarding the wider social objectives of the railway. For example
travel for all age ranges and social groups should be facilitated,
and the argument for increasing rail capacity on the basis of
social inclusion and environmental benefit also needs to be made.
There is insufficient detail on how the industry
may be made to work together more effectively. The current structure
of the industry works against cross industry co-operation, for
example there are no surplus drivers that can be utilised to prevent
the cancellation of train services due to staff shortages. This
has happened on several occasions, most recently with Arrivia
RMT have noted with concern the section on fares.
In considering the caps on fares the Government have placed the
emphasis on covering the costs through increased fares, or by
increasing the cost of travelling at peak times thereby redistributing
peak demand. We do not believe that pricing passengers off the
railways at the times they wish to use the trains is a serious
way of tackling current difficulties. The SRA should be encouraging
more, not less people, to use the railway. Recent figures have
shown that for every pound of subsidy the Government puts in,
the passenger contributes more than double. In 1999-2000 passengers
paid £3.3 billion whilst the Government spent £1.4 billion.
The passenger already contributes enough revenue to the railway.
Finally the SRA should have a duty to consult
all interested parties within the industry, not least of course
the trade unions representing the staff. We will make more reference
to staff issues in the next section on industrial relations.
Industrial relations are not as harmonious as
they should be on the railway. Railway staff continually make
representations to the RMT about how the industry no longer works
as a cohesive unit. They are no longer part of an industry working
together but instead an employee of a particular company.
Many rail workers jobs are dependent on re-tendering
or refranchising. A possible career in the industry could be curtailed
by being undercut through the lower pay and conditions of a competitor.
Rail workers believe that employers are primarily interested in
the generation of profits. Investing in staff is seen as a low
priority and staff numbers are kept at the very minimum levels,
often with very little regard for passenger comfort or assistance.
The most glaring example of this is the complete
absence of staff at many stations. On the trains themselves RMT
members at c2c have recently felt that they have had to carry
the can for safe working in the dispute over the retention of
guards on trains. Fortunately other train companies have agreed
with the RMT position on this matter. However it is undoubtedly
the case that public pressure for a more visible staff presence
has played a part in many of these decisions. Railways have a
big image problem in terms of personal security. Closed circuit
television cameras are no substitute for a staff presence and
we are sure that many more women would use train services if they
felt more secure.
All these factors contribute to lowering morale
within the industry and this can obviously cause industrial relations
problems. We should also mention that as staff grapple with keeping
train services running with ageing track, rolling stock and equipment
the effects on services has led to rising anger among passengers.
In 2000-01 assaults on railway staff increased by 22 per cent,
those resulting in major injuries increased by 45 per cent.
Finally the industry is facing an increasing
problem of skills shortages that needs to be tackled. The rail
companies now operating on the network have been guilty of short-term
thinking. In the past apprentices and management trainees were
hired on a regular basis so that the skills base was protected.
There are now real shortages of staff with signalling and signal
design expertise. Restrictions on the recruitment of overseas
nationals have therefore been relaxed. The SRA and the DfEE are
investigating this but a plan of action must be implemented quickly.
The rail industry is suffering from a crisis
in confidence. The momentum gained from the announcement of the
10-year plan has gone. Hatfield exposed the problems of a fragmented
No serious commentators seriously believe that
the £60 billion of proposed investment, over half of which
was meant to be funded by the private sector, can now be delivered.
Railtrack is easily the most significant player in the industry
and they clearly can no longer deliver their side of the bargain.
New money is now needed, but value for money
will not be obtained unless Government can actually retain greater
control over the network. We are concerned that the Government
show no signs of acting upon the recommendations made by the Committee
earlier this year. The proposed SRA Directions and Guidance will
make little impression.
RMT believe that if Government can be brave
enough to grasp the nettle and provide some clear leadership then
a sense of confidence can be restored to the industry. At the
current time the industry is drifting along with no overall control,
either operationally or financially. Many are agreed that action
needs to be taken, and the only serious argument against restructuring
the industry seems to be that more upheaval would not be welcome.
However the costs of keeping the status quo will be far greater
in the long term.