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Could the unions bid for a railway concession?


Coryton
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I see that the unions aren't impressed with the Williams-Shapps report largely I think because it doesn't call for wholesale re-nationalisation of the railways.

 

I was wondering if in principle they could put their money where their mouth is and bid themselves for a concession to be run as a non-profit organisation?

 

I realise that at the moment the details are a bit vague, but if following similar rules to franchises does anyone know if it would be legally possible for a union to set up a company to bid for one?

 

Of course being technically possible and practical are different things - I have no idea where the money would come from to prepare the bid - but I'm just curious.

 

 

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Let's look at this from an outsiders point of view.

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If, you "re-nationalise" the railway, it follows that the railway employees will become public sector workers.

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Currently, rates of pay amongst most public sector workers fall below those of certain railway employees, especially drivers.

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This is evidenced by the number of police officers leaving larger, urban forces such as the Met, to work on the railway; not having seen a decent pay rise in living memory, seen their pension contributions rise, but the actual pensions plummet,..................but having seen the advertisements in the railway press fro Freightliner or GWR drivers, with salaries far in excess of what they earn.

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The public sector has seen its workers pay, conditions and pensions raped and pillaged by successive governments over recent years; to the extent that the public sector is no longer the attractive employer it once was.

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So, if railwaymen (and women) want to become public sector employees, and subject themselves to the years of financial constraints suffered by other public sector employees; then feel free, vote to re-nationalise the railway.

 

 

This is my view, other opinions are available.

Edited by br2975
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3 hours ago, Coryton said:

bid themselves for a concession to be run as a non-profit organisation?


What’s being planned is not concessions, but contracts, but I can’t see why not.

 

If you or I could assemble the necessary competences, financial backing etc etc, and make it through pre-qualification, we could, so a TU could.

 

It might, as you say, have to create a company to do it, to avoid breaching the rules of association under which it exists, but there are good reasons to do that anyway.

 

 

Edited by Nearholmer
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The whole labour movement is strapped for cash that just gets worse as the opinion polls continue to plummet. So I don't see how they could afford the cash. Anyway, I can't imagine it's within their objectives to run a railway contract.

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1 hour ago, br2975 said:

This is my view, other opinions are available.


You might want to consider the case of many LU employees, which bucked the public sector trend through most of the 2008-18 period. Involved an awful lot of pretty hefty ‘industrial action’ though.

 

It also created some internal division too, between those grades whose salaries progressed at/above inflation through that period, and those grades whose salaries very definitely didn’t.

 

But, overall I agree with you: for most public sector workers, the days of decent, if unspectacular, wages, together with very good  job security, and a decent pension are fast-fading into the past.

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The traditional reason that public sector wages and salaries were lower than equivalent private sector wages and salaries was that the public sector provided job securtiy.  Younger readers will not know what I am talking about and will have to google it.  You made a choice to work in the public sector despite  the lower renumeration because there were advantages; job security counted when you applied for a mortgage or bank loan for example.  Nowadays the public sector provides no more job security than the public, but has retained it's low comparitive wages. 

 

Back in the day, at least on the nationalised railway, the monetary shortfall was made up with bonus schemes, which were supposed to encourage hard work but usually did the opposite, and overtime, which was restricted by the 12 hour rest requirment for footplate grades, guards, and signalmen.  Working rest days and overtime Sundays was particularly renumerative.  The Unions, which should have been campaigning against excess hours and for better core wages, were influenced by their members' greed for more opportunities for overtime at enhanced rates and rest day working, which meant that they failed to ensure adequate manning levels as they discouraged recruitment to preserve overtime and rest day working.  The management happily played along, as the wages bill and staff overheads were reduced in this way.

 

I see no reason why RMT or any other railway union, or anyone else for that matter, why not the Methodist Church or the Disney Corporation, could not bid to run services, but one would assume they would have trouble raising capital for this.  And there would have to be safeguards preserving their employees' rights and wages, as if you are in a legitimate dispute with your employer and your employer is your Trade Union, who will represent your legitimate interests against your employer? 

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5 minutes ago, The Johnster said:

The traditional reason that public sector wages and salaries were lower than equivalent private sector wages and salaries was that the public sector provided job securtiy.

And a very good non-contributory pension and longer holidays. I was told that these made up the shortfall in wages.

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47 minutes ago, ikcdab said:

And a very good non-contributory pension and longer holidays. I was told that these made up the shortfall in wages.

Agreed, and on the railway you got free travel as well.  These are also no longer guaranteed features of public sector work.

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55 minutes ago, The Johnster said:

I see no reason why RMT or any other railway union, or anyone else for that matter, why not the Methodist Church or the Disney Corporation, could not bid to run services, but one would assume they would have trouble raising capital for this.

 

It takes a fair amount of cash to prepare a bid I'm sure, but my understanding was that (at least with the previous system) taking on a franchise doesn't require much in capital. 

Edited by Coryton
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1 hour ago, ikcdab said:

And a very good non-contributory pension and longer holidays. I was told that these made up the shortfall in wages.

Bullsh*t

The pension was contributory, just like any other pensionable job.

Both myself and my wife worked in so called "public sector" jobs, myself a later de-nationalised industry and my wife in a local authority and we both contributed to our pensions.

Edited by melmerby
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Absolutely right.

 

I've just removed my ‘agree’ from that post, because I ‘read past’ the non-contributory part.

 

The other common misunderstanding about traditional public sector pensions is that a ‘final salary’ pension meant a pension equal to final salary. It never did; it means a pension calculated as a proportion of final salary, the proportion being based on length of service and capped at some value, 40/60, 40/100 or the like, the cap varying between schemes.

Edited by Nearholmer
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I wish the terminology would get sorted out.:scratchhead:

A Franchise is when you put up capital to run a branch of a parent industry complete with all the the branding etc. e.g. Costa coffee houses

You take the profits and also pay the parent company for the privilege of using their branding/advertising etc.

Are the current TOCs doing this ? No

 

A Concession is where you sell your product in another company's "space" E.G. Cosmetics in a department store or a WH Smith in a railway station.

Are the current TOCs doing this? Yes, they are selling their railway service in Network Rail's space.

 

A management contract is where you get someone to run your specified service for you. This appears to be what Great British Railways is appearing to be going to do. (Like Scotrail & Transport for Wales ?)

Edited by melmerby
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In this case it’s not even a ‘management contract’, which implies narrowly  ‘a contract to manage’, it’s a ‘service contract’, a contract to provide specified services (as opposed to goods).

 

No different in essentials from letting a contract to a firm to paint your house. You define what you want to buy, and pay someone to provide it. Simple (actually, often not, but ......).

 

 

 

 

Edited by Nearholmer
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41 minutes ago, Nearholmer said:

Absolutely right.

 

I've just removed my ‘agree’ from that post, because I ‘read past’ the non-contributory part.

 

The other common misunderstanding about traditional public sector pensions is that a ‘final salary’ pension meant a pension equal to final salary. It never did; it means a pension calculated as a proportion of final salary, the proportion being based on length of service and capped at some value, 40/60, 40/100 or the like, the cap varying between schemes.

I can't remember what mine was - 43 eightieths sound familiar, which got you a pension of one eightieth of final year salary for every year's contributions up to a max of 43.

That meant even if you did more than 43 years, you still paid in but got nothing for it, so very few stayed on and did any extra years (where they were possible)

I left before then, after only 31 years service so got less. IIRC the redundancy packaged added a few years to my basic contributions.

Edited by melmerby
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35 minutes ago, melmerby said:

I wish the terminology would get sorted out.:scratchhead:

A Franchise is when you put up capital to run a branch of a parent industry complete with all the the branding etc. e.g. Costa coffee houses

You take the profits and also pay the parent company for the privilege of using their branding/advertising etc.

Are the current TOCs doing this ? No

 

Agree fully that rail franchises aren't/weren't franchises by the usual definition.

 

But that's what the government chose to call them so that's how I would refer to them.

 

 

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29 minutes ago, Nearholmer said:

In this case it’s not even a ‘management contract’, which implies narrowly  ‘a contract to manage’, it’s a ‘service contract’, a contract to provide specified services (as opposed to goods).

 

No different in essentials from letting a contract to a firm to paint your house. You define what you want to buy, and pay someone to provide it. Simple (actually, often not, but ......).

 

 

 

 

And that is where the problems will start because the 'service' will have to be very carefully defined and that opens teh r to thinsg like safety validation, safety cases and all sorts of things all of which will cost money to prepare before someone bids for a contract.  bidding for franchises has got ridiculously expensive but will bidding for a contract shed very many of those costs?  Effectively the putative contractor will have minimal scope to manage costs and n chance at all of securing additional revenue outside teh core train service requirement of the contract - all they will get is a rather poisonous chalice where they will inevitably get the blaim when things go rwrong.

 

Short term 'operator of last resort' is oen thing but longer term contracts will I suspect become thing which are more likely avoided rather than being sought out.  Overall of course Benito Shapps seems to be answering the wrong problems rather than the right ones.  The fault with the franchising system lies almost entirely with DafT and the way they decide how to acceptt bids seemingly more on a basis of profit rather than reality.  The main. reason services have more recently in some instances started off, or continued,  in a shambolic manner has also usually been down to DafT and the nonsense  it has put in the bidding documentation or its failures to match things to timetable development schedules.   Punctuality shortcomings often owe as much to NR as they do to operators so that won't change and neither will the and that won't change.

 

 Timetable service amendent failures and incredibly late publication of Bank Holiday programmes have been 100% down to NR's persistent failure to comply with timetable process deadlines.  And art of that is dow to teh way they plan engineering work with far too much being done outside whatever they now call Rules of the Route (engineering Planning Rules was its title at one stage).  Contrary to Benito Shapps' earnest expressions the new arrangement will no more make the trains run on time than what has gone before and the blame game will still be there. 

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2 hours ago, The Johnster said:

 

I see no reason why RMT or any other railway union, or anyone else for that matter, why not the Methodist Church or the Disney Corporation, could not bid to run services, but one would assume they would have trouble raising capital for this. 

I don't know about the Methodists, but this lot seem to be able to overcome any problems raising the money to runs trains.

image.png.6a4b74b766e96057cfd0d7bb98347a07.png

 

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20 minutes ago, The Stationmaster said:

And that is where the problems will start because the 'service' will have to be very carefully defined and that opens teh r to thinsg like safety validation, safety cases and all sorts of things


As per my input in the other thread, one of my biggest worries about GBR is how/whether it will be able to secure the competence to set and effectively manage contracts, and another is about the regulatory regime.

 

The safety case regime is particularly important to how this will work, because the industry has got used to all sorts of participants needing to have regulator-approved safety cases, whereas a perfectly viable alternative under the intended system is for only ‘the railway company’ (GBR) to need regulatory approval, that approval being conditional upon the railway company adequately managing the safety of all the services that it buys-in. But that, of course, hangs on the railway company’s competence to do that, and bringing together such competence, and putting in place all the necessary safety controls, is a non-trivial task, and very time consuming.

 

 

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18 minutes ago, Michael Hodgson said:

I don't know about the Methodists, but this lot seem to be able to overcome any problems raising the money to runs trains.

image.png.6a4b74b766e96057cfd0d7bb98347a07.png

 

 

Don't know about that one, but I believe the Disneyworld one uses real preserved steam locomotives.

 

What did amuse me was travelling on a train in the Animal Kingdom in Disneyworld and seeing a lamp on the back with "BR(W)" on it.

 

(Not somewhere I ever expected to go, but I once went to a conference that bizarrely was in a hotel in Disneyworld and it seemed a bit silly not to visit the theme parks while I was there).

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8 hours ago, Coryton said:

I see that the unions aren't impressed with the Williams-Shapps report largely I think because it doesn't call for wholesale re-nationalisation of the railways.

 

I was wondering if in principle they could put their money where their mouth is and bid themselves for a concession to be run as a non-profit organisation?

 

I realise that at the moment the details are a bit vague, but if following similar rules to franchises does anyone know if it would be legally possible for a union to set up a company to bid for one?

 

Of course being technically possible and practical are different things - I have no idea where the money would come from to prepare the bid - but I'm just curious.

 

 

Imagine the chaos there'd be.

We think the service is bad now!  :)

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2 hours ago, The Johnster said:

I see no reason why RMT or any other railway union, or anyone else for that matter, why not the Methodist Church or the Disney Corporation, could not bid to run services, but one would assume they would have trouble raising capital for this. 

I'll forgive you for lumping the Methodists

with Disneyworld and the RMT but with

my tongue now firmly in the other cheek,

you might find it difficult getting an

alcoholic drink on a Methodist run train

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3 hours ago, The Johnster said:

 Nowadays the public sector provides no more job security than the public,

How true. 

 

Some of us chose to work on the railway because it interested us, whereas insurance and banking etc certainly didn't. The contributory pension scheme was part of the deal, as were the travel facilities. The splintering effect of the 1996 Privatisation made it an almost unfamiliar place to work. I was still treated very well, but it felt quite odd. 

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