Posted 26th April 2011 | 8 Comments
Job cuts feared following leaks of crucial rail report
Sir Roy McNulty believes rail costs can be reduced
LEAKS of the forthcoming McNulty report into railway finances have raised fears that many jobs could be at risk, and have already triggered union opposition. It's claimed that the report, due to be published during May, will also recommend drastic reforms at Network Rail.
It's reported that fares have come under particular scrutiny, with ticket pricing criticised as 'too complex, too subsidised, over-regulated and inadequate at managing rush-hour demand'. Fare caps could be lifted or abolished after a proposed ministerial review.
The report is also understood to be saying that staffing of trains and ticket offices can be 'significantly reduced', while 'changing terms and conditions, especially for drivers, will reduce costs'.
An industrial Rail Delivery Group will be set up to focus on costs and making the best use of existing capacity. The report is also said to recommend 'deregulation of ticket office opening hours, balanced by the introduction of modern technology'.
The study sets out 'barriers to efficiency', including 'unproductive relationships' with the unions, the present largely centralised structure of Network Rail and 'too much government interference'.
Suggestions that staff levels could come under review have prompted immediate opposition from the RMT general secretary Bob Crow, who said that he would "fight this attack on jobs, safety and service quality every step of the way".
Sir Roy McNulty, who has branded the present state railway subsidy of £5 billion annually as 'unsustainable', was commissioned to investigate railway finances by the previous government in December 2009, and his project was maintained by the incoming transport secretary Philip Hammond following last year's general election.
His report should have been published by now, but Sir Roy said some of the initial work had raised more questions, so that more time had been needed to answer them as well.
However he has already spoken about his preliminary findings, which were also presented in more detail to senior industry figures a few weeks ago.
As long ago as last November he told the annual conference of the Derby and Derbyshire Rail Forum that there was certainly scope for cost reductions, which could amount to £1 billion annually within less than a decade.
At the time he denied reports that a list of possible closures had already been prepared. "That's not true," he insisted. "That would be Plan B, and we are concentrating on Plan A."
He questioned whether the industry was perhaps too obsessed with 'standards', and whether there are too many bodies responsible for developing and maintaining them, adding that he had never found an industry in which costs could not be reduced, and that cost reduction was not simply a case of 'slash and burn', although "unit costs have not improved since privatisation and there is room for improvement".
The McNulty study is focusing on eight themes: industry objectives, strategy and outputs; industry leadership, planning and decision-making; interfaces, incentives and structure; revenue; asset management; supply chain management; innovation, standards and safety; and people.
It is just over 48 years since Dr Richard (later Lord) Beeching unveiled his highly controversial report into the 'reshaping' of British Railways. Most of his recommendations were put into practice during the rest of the 1960s.
They included the closure of 8,000km of route and more than 2,000 stations, but also provided the foundations of the future InterCity passenger business and the introduction of Freightliner trains.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Philip Russell, Carlisle, United Kingdom
I believe a number of Train Operators have signed agreements with the unions on things like promising never to extend or introduce driver only operation during the life of their franchise ,therefore its perfectly reasonable of a report like this to ask questions on all sides about efficiencies and value for money especially when we are told we allready have the most expensive rail fares in Europe
H Harvey, Birmingham
McNulty is due to report this month no doubt we will get the usual irrelevant rubbish about frontline staff being overpaid and under worked with no mention of the exorbitant and unearned pay and bonuses of the upper management grades.
Nothing will be said about the high profits 'skimmed' from the fare payer and taxpayer boosting the balance sheets of holding companies that can only see the bottom line and are totally unconcerned about the welfare or service provided to long suffering passengers.
These same companies all have their own lawyers, accountants, consultants each duplicating the efforts of the others studying the fine detail of contracts to see just how they can maximise their profits at the expense of someone else and damn the passenger and taxpayer.
Then of course we still have the Transport Department and politicians second-guessing the professionals and still the railways cannot get the capital they need to meet expected growth and restore the decades of under investment.
They told us the private companies would invest in the railways, just where is that investment? All I see is TOCs claiming they spend £millions on upgrading this or that and then the truth comes out that the TOC transferred (did Network Rail buy the asset?) the asset to Network Rails books. Then we hear this TOC has invested in so many new trains but then learn the ROSCO bought the trains and the TOC just rents them i.e. the asset belongs to the bank.
All in all Privatisation has been a milch cow for those who simply line their pockets and has been a burden and not a solution to investment or function of the rail system.
Brian, Plymouth, England
The rail privatisation chickens are now certainly coming home to roost.Sad that even now the government still refuses to accept the clear evidence that Britain's psuodo privatised fragmented rail system has been a financial disaster from the beginning with Sir Roy McNulty painting a bleak picture for passengers if the railway's finances are to be reformed and warning that “annual state funding for the industry of £5bn is unsustainable “ and “that industry costs are a "major problem" and need to be reduced by up to 35 per cent to match competitor countries in Europe.”
As we all know most of those competitor countries in Europe are state owned but as the old saying goes “theres nowt so blind as those that dont want to see”.
I am not opposed the privatisation in general but rail privatisation was clearly a privatisation too far.
Sam Green, Bournemouth, uk
Beeching Mark 2 and major job losses.The old school tie at work.Smash the drivers union and increase profits, make your old school chums richer! B++ger the consequences of more traffic on the roads ,more deaths through road accidents and the death of the Earth through pollution! I had 24 years on the railway and I`m now glad I`m away from it!Away from the managers who don`t know what they are doing or anything about the railways(But mainly glad to be away from the stress!)
Lorentz, London
The problem with Sir Roy McNulty's report, perhaps due in part to lack of direct relevant experience, is that he envisions the structure of the air travel industry being applied to the rail industry. Unfortunately, the two are not quite the same and if enacted, the proposals in this report will take us off at a tangent. A case of more meddling by 'old school chums'.
Geraint Griffiths, Chester, England
The fact that the idea of line closures was (or is) being entertained is completely outrageous. To think after the calamity of the Beeching report such a thing is being proposed again is unbelievable, especially at a time when passenger numbers are fast increasing.
T J Bailey, Bristol, UK
This feel as if we are moving towards a scenario in which the railways are to be regarded as a business which must be profitable, cost-effective and largely unsubsidised. These are laudable aims for a private sector business but is that what the railways are meant to be? Surely, whilst we need the railways to be run on a financially sound footing, to be well led and managed and whilst in appropriate practices need to be changed we also need them to play a key role in our national life and in our efforts to reduce our over dependence on road transport and internal air travel. That fundamental driver means that subsidies may well be necessary in the medium to long term but that is a price worth paying if, as a nation, we wish to emulate our neighbours in Europe and place rail at the heart of our transport strategy. An obsessive drive to remove subsidies and to rein in railway finances that leads to retrenchment and a reduction of the contribution of rail to our national transport strategy would be tragic. A drive to manage costs intelligently, to streamline operating practices and to develop and improve our railway building on the gains made in recent years with partnership between the public and private sectors is to be encouraged.
Rob, West Yorkshire
I think this is not concentrating on the real issues. The drastic fragmentation and associated adding of layers of profit making companies added costs. Before there was one company trying to make profit, now there are hundreds-that's why costs have gone up so much!