Examination of Witnesses (Questions 80
- 98)
WEDNESDAY 17 OCTOBER 2007
MR BOB
RIXHAM, MR
BRIAN HARRIS,
MR GERRY
DOHERTY AND
MR ANDY
YOUNG
Q80 Mrs Ellman: Is there any difference
in dealing with Metronet or Tube Lines?
Mr Young: Well, one is in less
crisis than the other, I think! Other than that, I have had limited
experience with Tube Lines thus far, but in terms of safety mechanisms,
if you like, on London Underground then no, I do not think there
is any difference. In terms of the companies, then yes, they are
somewhat different, but one at the moment is completely driven
by the fact that it is financial meltdown, clearly.
Mr Harris: The difference I have
experienced between the two companies is that one is vastly bigger
than the other. One seems to be much more focused on delivery
and the other seems to be much more focused on its profit margins
for its previous shareholders.
Q81 Clive Efford: Name names!
Mr Harris: The five shareholders
as are listed in the report, so the five shareholders of Metronet,
if I can recall them, are Balfour Beatty, WK Atkins, Thames Water,
Bombardier, and the fifth one escapes me. The difference between
the two companies, despite the fact that they are doing very similar
jobs, is that Tube Lines just seem to be leaner and just seem
to be able to respond quicker and better than Metronet. Whether
one is in a worse financial state than the other—if you
believe the press reports, they are both obviously in serious
financial difficulty. I think the main difference at the moment
is that one is in PPP administration and one is not. Whether that
will happen, time will tell.
Q82 Mrs Ellman: What do you think
should happen to Metronet now?
Mr Harris: Without a doubt, in
Amicus Unite's opinion, it should be brought back under a public
umbrella of some sort, back into TfL. That is our view.
Mr Doherty: From our point of
view, as far as Metronet is concerned, we would like to see Metronet
coming under the auspices of Transport for London and therefore
under the Mayor. There is another model. We have had experience
of what happened in the mainline railway where both performance
in terms of delivery and performance in terms of finance was turned
round specifically when Network Rail came in and ran the business
on a not-for-profit basis. So that is another model that is a
possibility. What we certainly do not want is Metronet being handed
back to the private sector on a different model where we still
have the profit margin being built in, because it is quite clear
that as far as infrastructure is concerned and our railways it
is a failure. It has happened in both the mainline and now it
has happened in the Underground.
Q83 Mrs Ellman: Would you leave Tube
Lines as it is?
Mr Doherty: At the moment nobody
knows what is happening with Tube Lines. If we believe what is
being said in the press, as my colleague says, if we believe what
is being said from our own members from within, then they are
not that far behind Metronet. But I cannot give you any concrete
proof to that effect, I can only tell you what has been said.
Mr Rixham: From the Unite Amicus
point of view, I just confirm that we, too, would really look
at the Network Rail model as well. We think that has been successful.
Obviously Brian has already mentioned TfL, but either of those
two options, we think, has got to take the programme forward.
Q84 Clive Efford: I just want to
go back to something that was asked earlier on, because the Office
of the Rail Regulator has concluded in the evidence they have
given to the Committee that overall safety on LUL continues to
improve. "We have no evidence that the PPP has or is having
a detrimental effect on safety performance." Is what you
are saying about the communication that we could improve safety,
or are you actually saying, contrary to what we are being told
by the Office of the Rail Regulator, that safety has actually
got worse under the PPP?
Mr Doherty: We have given you
some examples this afternoon as to specific incidents. Safety
is one of these things that you either have your finger on the
pulse and you learn the lessons from near-misses and you get the
structures right to prevent any accidents, because accidents,
whether it is on the mainline railway or on the Underground, are
huge, huge incidents. There is a big loss of life. There is a
lot of interest in it. What we are saying is, do not wait until
you get the same specific instances that you had on the mainline
railway through fragmentation and through privatisation before
we do something about bringing the railway infrastructure back
to where it should be and get proper control of it. What we are
saying is that what has happened on the Underground is a mirror
of what happened on the railway before we had all of those accidents
and before we took action by bringing infrastructure and maintenance
back in-house. Do we really want to wait until we actually have
an accident before we say these structures are not delivering
and we have to change them? There are some instances there. We
have given you some of the instances. At the end of the day the
more near-misses there are, one of these days it will not be a
near-miss, it will be a big hit. We say learn the lessons beforehand,
and we have got a model. We have seen what has happened on the
mainline. Certainly safety has improved since Network Rail has
come in, so has performance and so has financial performance.
Q85 Clive Efford: When you raised
those concerns—and you raised them with LUL, not with the
Infracos—you are saying those concerns, where you feel you
could contribute to improving safety, are just not being heard?
Mr Doherty: When we speak to perhaps
two individual companies, individual companies will say they are
not responsible for the structure. They will deal with us under
the ambit of their own responsibility. They will not say, "We'll
go off and talk to people and try and get a better structure in
place." The structure that they have is the structure they
will deal with. They are not interested in changing the structure;
we are.
Q86 Clive Efford: So that I am clear,
just specifically how would you change that structure?
Mr Doherty: Hopefully, we will
get some sort of report coming from this Committee which gives
us some political leverage to say, "Can we learn the lessons?"
I would love to be able to go to the Secretary of State for Transport
and say, "We have spoken to the Transport Select Committee.
The Transport Select Committee agree with us," and you do
agree with us on a lot of things we have said about the mainline
railway. Unfortunately, because of the changes in the number of
Secretaries of State for Transport that we have had, by the time
they catch up with what is going on in the mainline railway they
have moved on again.
Chairman: I think this Committee has
quite enough troubles without micro-managing the Underground,
but that is only a personal view.
Q87 Clive Efford: Just to move on,
if we are to proceed, if London Underground were to be both the
provider and the contractor side of it, do you see similar problems
continuing in that relationship?
Mr Doherty: If London Underground
were to have both, I can see, for example, the communication problems
that have been exposed here this afternoon at least being addressed,
if not resolved. It is one body then.
Q88 Clive Efford: What I am trying
to understand is where the problem lies in the communication.
I think people who are actually doing the job have probably a
lot to contribute towards highlighting deficiencies in the system.
If that is not being listened to, that seems to be a serious problem.
Where do we actually have to go to improve those lines of communication?
Going through the Secretary of State or this Committee is a very
disjointed way of doing it. How do we improve communication within
the industry, within the service itself?
Mr Doherty: If you are not going
to change the structure of the industry, then certainly we could
put some sort of pressure in the industry to some overarching
body as far as safety is concerned. There are other issues as
well, but as far as safety is concerned, when all of the representatives
from all of the companies are coming together and sharing information—because
that is not going on either.
Mr Harris: From Unite Amicus's
perspective, in terms of improving safety there are always margins
on safety that can be improved. Where I see the main issues are
at the top level of the company, that you speak to the directors,
the senior vice-presidents, et cetera, on safety, and that we
are all singing off the same hymn sheet. There is no difference
in our approach, it is that as it filters down, somewhere from
the top level to the operational level, the message is lost and
the issues of safety are not being made clear. Also, from the
bottom up the issues being raised by our safety reps locally with
their management are not getting to the appropriate level. One
piece of legislation that would focus senior executives' minds
on safety is a corporate manslaughter bill, which would enable
unions and people who do get injured and the families of those
who get killed to attribute blame at the top level of companies
so that individuals who make the profits out of these companies
are brought to book when safety issues cause a major loss of life.
Q89 Clive Efford: So if one of your
safety officers raises a serious concern with their line managers,
because of the structure of the PPP that just gets lost and no
one responds?
Mr Harris: I am not saying every
single individual issue, but it seems to me, looking at an overview
of it, that a lot of issues which are raised take either an inordinate
amount of time to get through the system and resolved or they
just never get resolved, they get swept to one side.
Q90 David Simpson: Now that Metronet
has gone into administration, and listening to your comments,
I take it that you have not a lot of time for Tube Lines either.
I do not know why I have come to that conclusion! However, if
you had a clean sheet of paper, what would you say would be the
best way forward, the most appropriate way forward from here on
in? Secondly, are you concerned that the withdrawal of private
investment, the long-term funding arrangement, will have a negative
effect on your members?
Mr Rixham: I think immediately
we have got a situation where the administration in itself is
costing a lot of money and the sooner we can pass through this
phase and focus the operation on what it should be doing, the
better. I think we have already indicated that we believe the
contract should be taken in-house by TfL. There are other options,
as indicated earlier. In respect of the money put in by the private
investors, then quite clearly each company had a hit of something
in the order of £70 million when they lost, but if you have
a look at the £2 billion worth of debts then it really is
not a shared risk basis that the PPP was founded upon. So although
we do recognise that the PPP up to now has pushed forward in some
areas the improvements that are required on the Underground, the
fact of the matter is that the risk has not been equally shared.
Therefore, it is our belief that taken in-house with TfL and given
the proper management structures and good management, then it
could go forward and be successful. Obviously, that is what the
workforce, our members, want to happen.
Q91 Mr Leech: Do you think if the
risk had been more equally shared there would have been better
performance by Metronet?
Mr Harris: No.
Mr Rixham: I think we are star-gazing.
I do not know. I am sorry, just repeat the question.
Q92 Mr Leech: If the risk had been
properly shared between the private and public.
Mr Rixham: Would it have been
more focused on actually delivering? Yes, we think it would have
been. Quite clearly, as Brian said earlier, as an officer dealing
with it on a hand to hand basis you can see the difference in
focus of the two companies, Tube Lines and Metronet.
Q93 Mr Leech: You do not believe,
though, that if the new contract was won by another company, or
Tube Lines for that matter, where the risk was shared, that could
produce better outcomes than taking it in-house?
Mr Harris: No.
Mr Rixham: It may do. We believe
that the right way forward is to take it in-house within TfL.
Q94 Chairman: Can I just ask you
one or two things? I take it you do not really think the private
sector has contributed a great deal?
Mr Doherty: I do not think it
has contributed to anything as far as the passenger is concerned
and as far as the public purse is concerned.
Q95 Chairman: Why do you think Tube
Lines were able to reduce the time taken to refurbish an escalator
by nine months to around nine weeks when they took over?
Mr Doherty: From our perspective,
Tube Lines is a better run company than Metronet, but being better
does not mean good, and it certainly does not mean best. We think
there are better ways to deliver contracts than either Tube Lines
or Metronet. I am repeating myself, but we have had the experience
in the mainline and we have seen the money that has been wasted
in the public purse. We have seen the deterioration in services
and we have not yet even touched on the effect on the employees,
and it has been quite enormous as far as Metronet is concerned.
Even when Metronet went into liquidation there were still threats
hanging over a number of employees of redundancies in one instance,
of being transferred to Bombardier in the maintenance contract,
and it was only the threat of industrial action that has managed
to stave that off. Coming back to Mr Simpson's question about
what we think should be done, we think the sooner Transport for
London—and their view is that they should take it back in-house—the
sooner that is done, the better we can quickly get on with what
needs to be done. We are less than five years away now for looking
to try and upgrade the Underground as far as the Olympics is concerned.
London is going to be on show to the rest of the world and unless
we get our act together rather quickly, because a lot needs to
be done, then we do not think that trying it out in the private
sector is an option or even a luxury that the country can afford,
because if you give it time and it fails again, how near are we
going to be to the Olympics then and what is this country going
to look like to the rest of the world at that time?
Q96 Chairman: Can I ask you very
specifically, when you say, "We've got an example that works.
We know what we can and cannot do," are you referring very
specifically to taking back infrastructure in the sense of lines
and stations, or are you referring to a wider recovery by the
public sector?
Mr Doherty: There is the infrastructure
side and there is the stations side, but there is also the train
maintenance side. Bombardier are still at this stage saying they
have a contract. That is a contract they signed while they were
a partner of Metronet. They were an integral part of it and that
is the way that Metronet operated. Whatever contracts it had,
it did not put them out to tender in the private sector, they
dished them out amongst themselves and that was an integral part
of the problems, I think. Bombardier are still saying they have
got this contract. We have managed to control the situation as
far as Metronet in administration is concerned, but if we end
up with it back in the private sector and if we end up with Metronet
still insisting that we are going to have 500 people, or whatever
it is, transferring across to Bombardier in order to fulfil these
contracts, then I am afraid we will have further industrial relations
problems in the future. The way to get around that, in our view,
is to give control of the Underground to the Mayor via TfL.
Q97 Chairman: There is the suggestion
that Tube Lines invested £10 million in the training facility
in Stratford. Do you think that would have been possible if they
had been publicly owned?
Mr Doherty: It is about priorities,
Chairman. We would always argue for investment for the training
of staff. Staff is the biggest cost that any company has and if
you value your staff, as most companies tell us they do, then
why would you not want to invest in them, whether in the private
sector or in the public sector? Trades unions would always argue
for that investment.
Q98 Chairman: So if I say that your
view is that the original contracts were flawed, that there were
very clear problems of communication, particularly in terms of
Health & Safety, that these continue in one form or another,
and that you assume that were there to be a re-letting of these
contracts under the same sorts of conditions you would have continuing
problems, am I misrepresenting what you say?
Mr Doherty: Not my view, Chairman.
Chairman: Gentlemen, you have been very
helpful. Thank you very much indeed.
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