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RAILTALK July 2007

Out of touch

Back in 1981, modern Railways shadowed the late Sir Peter Parker, then British Rail Chairman, on a two day tour of the North West . It revealed PP to be a consummate captain of industry, whether reassuring customers, schmoozing local politicians, in interviews with the local press, lobbying the great and the good and, at every opportunity, encouraging staff on platforms, in offices and at group meeting.

Sir Peter's programme reflected his management philosophy, expressed with characteristic embellishment over lunch on the first day at Preston . ‘Get out there and be gat-atable: no emperor wears even a jock strap these days'.

Which brings us to today. Much may seem to have changed but on the working railway, as PP knew well, the industry still depends on ordinary people, carrying out their quotidian tasks which make the railway run. And the best railway managers have always known this and made sure that their staff out in the real world get personal recognition of their importance.

But when we look at Network Rail we find it hard to imagine Chairman Ian McAllister, or any of his board, come to that, running a tour of inspection with the aplomb and passion shown by Sir Peter. Suppose Mr McAllister, or any of the board went up to the Northwest now for a couple of days with the business.. One thing is certain, where back in 1981 the groups of staff meeting the Chairman were initially sceptical, today there would almost certainly be a hostile reception.

If you needed an example of the Network Rail Board's remoteness from the working railway, the withholding of bonuses from those working within the area including the Grayrigg derailment site provided evidence in abundance. We do not know whether it was crass insensitivity or the arrogance of power that led to the Board Members accepting bonuses of £50,000-70,000, these sums after being cropped by 15% in recognition of the Grayrigg accident, while withholding £400 from each of 119 track staff.

We certainly think it was crass of Mr McAllister, in pointing out that all bonuses across the workforce had been affected to say ‘Every single employee at Network Rail has paid a personal price for the Grayrigg derailment'. What he was really saying was ‘Every single employee at Network Rail has lost money because of the Grayrigg derailment'.

Nor should we forget the Executive Directors only took the money they were offered by the Network Rail Remuneration Committee which obviously thought it was the right thing to do. And we note with disappointment that the committee includes former railwaymen who once embraced the PP ethos. Acton refers.

But either way, the decision handed the RMT union, which has always made much of the bonuses paid to the Executive Directors, not so much a cloak as a three piece suit and overcoat of righteousness. The immediate protest and threatened strike ballot saw a same-day climb down by Network Rail – with the Executive Directors agreeing to show solidarity with the Grayrigg 119 and not accept their bonuses until the cause of the derailment had been pinned on someone who then, presumably, wouldn't get their bonus.

Yes, of course, we are being deliberately coarse in our choice of words. But we feel that one of the problems is that the rationale for bonuses is not taken at face value.

Bonuses, we are told, are needed to attract world class managers to work for Network Rail. Without the prospect of boosting their basic pay by 50% or so, John Armitt, Ian Coucher, Ron and Peter Henderson would be doing a more attractive job somewhere else.

And it is true that running Network Rail is not an easy berth. And we know that some of the Board have been shocked at personal vituperation following fatal accidents.

But, as they say in the forces, you shouldn't have joined up if you can't take a joke. And when you are world class, you should be able to cope with world class problems. That's why bonuses are offered to sooth the pain.

Now, the Association of Train Operating Companies has added to that pain. Its individual members have been bashing our editorial ears for months now about the disproportionate contribution the Train Operators are making to the improvement in the Public Performance Measure (PPM).

Network Rail tends to measure its performance by the improvement since Railtrack was brought out of administration in 2003. By their own lights they have done a reasonable job.

But the TOCs don't buy this ‘year zero' approach and remember a better world before the Hatfield derailment brought Railtrack crashing down.

They point out that compared with Period 1 2000/01 (effectively April 2000), the TOCs' had reduced their Moving Annual Average ( MAA )delay minutes for the last Period of 2006-07 (March this year) by 27.9%. TOC-on-TOC delay minutes are 11.8% better.

In contrast Network Rail is 23.9% worse. If these are world class managers paid world class money, where is the world class performance, the Operators ask?

As a company limited by guarantee, Network Rail does not have the discipline of shareholders. Instead its industry and public ‘Members' are intended to hold the Network Rail Board to account.

As an industry Member ATOC is able to hold its infrastructure supplier's feet to the fire at the Annual General Meeting. This year it has tabled a critical resolution which says that ‘members are concerned that in the fundamental matter of punctuality the delays for which the company is responsible are substantially higher than in 1999/2000. Members consider that this poor performance is not acceptable and urge the board to ensure that the company remains properly focused on improving delivery of all its core activities and avoids any unnecessary new activities'.

You might think that the Government, and DfT is also a Member, would be glad to see its private (sic) sector creation being held to account for its shortcomings as intended. We were only teasing.

When DfT Rail saw the Resolution, Director General Mike Mitchell got on the phone to ATOC Director General George Muir sharpish. His message was that while DfT Rail wholly agreed with ATOC holding Network Rail to account over performance (of course) he didn't want to see disagreement between Network Rail and the TOCs aired in public. And certainly not at the AGM on 18 July, because the High Level Output Specification was to be unveiled the day before.

As we go to press it looks as though ATOC is standing up to DfT Rail and the resolution will still be tabled. In its response to the hoo-hah Network Rail ran the currently fashionable ‘time to move on' PR gambit saying ‘we are concentrating on reducing delays for this year not worrying about what happened last year'.

Well, it should worry. Because until last year, delay minute reductions had been running a year ahead of the Rail Regulator's trajectory for improvement. But in 2006-07 there was no improvement on the previous year, meaning that in the current year Network Rail has to reduce delay minutes by 7.5% or face regulatory wrath.

Central to these problems, and we have not touched on project over-runs and the total lack of customer awareness reflected in wholesale route closures, is the Governance of Network Rail. Public members, in general, are from pressure groups and community representatives and lack railway knowledge. Until ATOC stirred, industry members have been anxious not to make waves for fear of retribution from their paymasters. And as we now see the Government doesn't want the structure to work.

We hesitate to add another item to Gordon Brown's ‘to do' list, but…