Memorandum by TSSA (LU 02)
PERFORMANCE OF LONDON UNDERGROUND
As agreed recently, I am writing to provide
some details which the Committee might find useful to consider
prior to the oral evidence session on Wednesday 8 December 2004
with the Transport Salaried Staffs' Association's General Secretary
Gerry Doherty.
The Transport Salaried Staffs' Association (TSSA)
is a modern, growing trade union for people in the transport and
travel industries in the UK and Ireland. We have over 32,000 members
working for the railways and associated companies, London Underground/Transport
for London, the travel trade, and in shipping, ports and buses.
1. INTRODUCTION
1.1 TSSA's 2004 Annual Delegate Conference
carried a resolution detailing its transport policy which made
the following specific reference to London Underground and the
Public Private Partnership :
1.2 "Conference notes the report
in December 2003 that following the transfer of infrastructure
and train maintenance on LUL early in 2003 to Tube Lines and Metronet
both failed to meet their performance targets. Conference notes
that whilst train failures increased by 23%, track problems by
20% and points failures by 38%, the two consortia had been fined
a total of £32 million for not reaching their targets yet
still gained £12 million in bonuses for good performance."
1.3 "Conference condemns the fact
that in the three years to 2002-03, as LUL reorganised for Public-Private
Partnership, the average number of track failures and signal failures
increased by 46% and 67% respectively. Conference calls on the
EC, where possible, to work with the Mayor and the London Assembly
to deliver an integrated public transport network that meets the
needs of London. "
2. PPP—LEVEL
OF PERFORMANCE
FOR CUSTOMERS
2.1 Before commenting on the levels of performance
for customers it needs to be recognised that many of the improvements
promised by PPP, including line upgrades and increased capacity
are not meant to be delivered until after the end of the first
7.5 years of the contract. Even if the PPP is fully implemented
as promised existing assets will not be fully restored to a state
of good repair until the year 2025.
2.2 London's population has been growing
steadily since 1989,and was estimated to be more than 7.3 million
people in 2003. According to the Mayor's Development Strategy,
published earlier this year London's population will continue
to grow with the most plausible scenario suggesting an increase
of 810,000 to 8.1 million by 2016. Not only is London's population
growing, the city 's working age population is forecast to grow
by 516,000. Such growth figures will put a severe strain on London's
transport infrastructure, not least of all London Underground,
and the TSSA seriously doubts whether the timetable agreed for
the delivery of improvements under the PPP is sufficient to meet
the projected needs of London.
2.3 In terms of evaluating performance,
the shortcomings of the Underground over the last two years have
been demonstrated, to all intents and purposes, by:
— Rolling stock and infrastructure
failures in deep tunnels in London that have been the cause of
a series of health scares as a result of increased temperatures
and reduced ventilation encountered by passengers on delayed and
overcrowded carriages, especially during summer months.
— The continued imbalance between passenger
demand and the ability of the fragmented underground to supply
a service, made worse by train, signal and track problems which
do not seem to have diminished to any degree since the introduction
of PPP.
2.4 The PPP contracts define three primary
output performance measures:
1. availability—day-to-day service
reliability;
2. capability—the potential capacity
of the assets to reduce journey time; and
3. ambience—the quality of the travelling
environment.
2.5 There is clear evidence to show that
all of the Infraco's did worse than their projected bids in terms
of availability but better than expected on ambience (TfL—London
Underground and the PPP, The first year 2003-04—June 2004).
With little if any improvement having been recorded in terms of
capacity it is difficult to understand why more focus is not being
made in delivering the necessary improvements in reliability and
capacity ahead of ambience.
3. PPP—LEVEL
OF PERFORMANCE
SAFETY
3.1 London Underground is effectively responsible
for the safety of the underground at all times via its safety
case which is approved by the HSE. Each of the Infracos has its
own safety case that it is contractually required to comply with
whilst also co-operating with London Underground to allow it to
meet its statutory obligations. As the Infraco safety cases are
contractual rather than statutory it should be understood that
these can and have been amended with little meaningful consultation
with trade representatives.
3.2 The accidents at Chancery Lane, Hammersmith
and Camden Town, when train derailments again thrust LUL into
the public eye amid fears over employee and public safety, provide
ample evidence that there is room for improvement in safety performance.
The investigations into these incidents highlighted areas where
all four organisations could deliver improvements.
3.3 The fact that there is no mechanism
whereby safety representatives from LUL meet their counterparts
in the Infracos on a regular basis to share information and concerns
is seen as a major weakness and the TSSA continues to believe
that much would be done to enhance both public and employee safety
were such a structure to be put in place. Consultation across
an interface, where each employers consultative duties are specific
to their own employees only, remains an issue and our view is
that these processes should be widened to deliver joint consultation
across the interface.
3.4 As a result of cost control measures
initiated by the Infracos there is currently a six month waiting
list for safety and fire training. Decisions have been taken to
reduce necessary overtime that would allow this backlog to be
partly addressed prior to recruiting more people to fill the vacancies
that necessitated the overtime in the first instance. The safety
training delivered by the Infracos is no longer the same as that
delivered by LUL for operational staff. It is difficult to see
why individuals doing similar work should be receiving different
safety training.
4. PPP VALUE
FOR MONEY
4.1 TfL reported in June 2004 that there
had been some delays in securing additional services and works
through the Infracos. There have been disputes over on-costs and
profits for additional works that London Underground considered
to be excessive (TfL—London Underground and the PPP, The
first year 2003-04—June 2004). The extent to which such
problems have been resolved remains unknown but the fact that
they are in the public domain and that LUL were willing to look
at alternative ways to have such services provided certainly indicates
that they were serious enough to question the extent to which
the PPP delivers real value for money.
4.2 London Underground has accused Tube
Lines and Metronet of producing "non-existent, incompetent
or inconsistent" work plans and of frequently failing to
finish engineering work on time (Guardian 6 October 2004).
4.3 With train failures increasing, track
problems increasing and points failures also increasing, the two
consortia being fined a total of £32 million for not reaching
their targets one is left to ask how it is possible for them to
obtain £12 million in bonuses for good performance. Tube
Lines revealed earlier this year that it made a pre-tax profit
of £41.6 million in the year to March 2004. Metronet BCV
reported it made a pre-tax profit of £24.1 million, whilst
Metronet SSL reported it made a pre-tax profit of £26.5 million.
With Metronet and Tube Lines effectively controlling the performance
of the Underground's operations one can only question how it is
possible to amass profits in excess of £92 million in light
of the operational performance described above. In this respect
TSSA is inclined to agree with the National Audit Office that
there is only "limited assurance" that the PPP represents
value for money. The profits being delivered certainly raise questions
as to whether the performance benchmarks set under the PPP contracts
were challenging enough in terms of the extent to which they allocate
risk between the Infraco's and the public purse.
4.4 The merging of directorates across BCV
and SSL, ie Human Resources and Procurement, is an interesting
development as under the PPP bidding process it was made clear
that no company could win all three contracts and that Metronet
could not combine the two contracts. It is difficult to see how,
if one of the Metronet contracts were to fail, LUL would not end
up paying more as a result given that there would be a need to
redesign the support services for each contract.
4.5 Transform is a joint venture between
four of the Metronet shareholders—Balfour Beatty, Thames
Water, EDF Energy and WS Atkins—who are working together
with Metronet to deliver station and civil renewals and some maintenance.
TSSA believes that the arrangement has not been without its problems
with the stations programme for instance running up to three months
behind schedule. We are led to believe from our members that a
major ingredient in the delivery problems being faced is the development
of a blame culture when things do go wrong as opposed to joint
working to resolve the issue, ie when engineering works overrun
there is a clear imbalance between LUL's desire for certainty
of service and the desire of the Infracos to maximise the engineering
time available, the need to pinpoint blame for the overrun and
protect the interests of the respective organisations effectively
means that they both struggle to meet their objective. This replicates
the TSSA's experiences of project management problems on the privatised
national rail network where more time has often been spent identifying
who was at fault rather than finding solutions.
4.6 There is evidence to suggest that relations
between LUL staff and Infraco staff are at best strained. This
can be evidenced by the failure to provide sufficient notice to
LUL staff that stations will be closing early to allow work to
take place by the Infracos only for no one to actually turn up
at the planned time to do the work.
4.7 As per our experience with the privatised
national rail network it would appear that staff turnover is increasing
dramatically particularly amongst those with marketable skills
that are in short supply and easily traded elsewhere. The levels
of staff turnover in the Infracos will, if our experiences of
the national rail network are a guide, lead to a two tier workforce
with staff being employed on differing terms and conditions and
rates of pay. There is already evidence to support such a development
with the question of travel facilities and performance bonuses
now being raised on a regular basis by different group of staff
during team meetings.
Frank Ward
Policy Advisor
November 2004
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