Transport Committee
Oral evidence: Travel Disruption, HC 661
Wednesday 12 October 2022
Ordered by the House of Commons to be published on 12 October 2022.
Members present: Huw Merriman (Chair); Mr Ben Bradshaw; Ruth Cadbury; Robert Largan; Karl McCartney; Grahame Morris; Gavin Newlands; Greg Smith; Christian Wakeford.
Questions 8–47
Witnesses
II: Richard Scott, Director of Corporate Affairs, West Coast Partnership; and Tim Shoveller, Chief Negotiator, Network Rail.
Witnesses: Richard Scott and Tim Shoveller.
Chair: Would anyone like to declare any interests for the entire session?
Grahame Morris: I am a member of Unite the Union. I am chair of the Unite parliamentary group. I am a member of the RMT parliamentary group, too.
Q8 Chair: We have four panels and 30 minutes with each panel. I will invite two Members to lead and then, if there is time, other Members will be able to follow on. Our next panel is on rail. I will ask the two witnesses to introduce themselves, and then I will hand over to Christian Wakeford.
Tim Shoveller: Good morning. I am Tim Shoveller. I am the managing director of Network Rail’s north-west and central region. For the purposes of today, I am the lead negotiator for Network Rail.
Richard Scott: Good morning. I am Richard Scott. I am the director of corporate affairs for the West Coast Partnership. The West Coast Partnership is comprised of two halves. It has Avanti West Coast, the current train operation, and West Coast Partnership and Development, which is a shadow operator for HS2. I am here because I have a broad remit across the business, including sustainability, accessibility and managing our contract with Government.
Chair: Good morning to you both. If you could give us direct and quite succinct answers, it would be appreciated. Equally, could Members ask quick-fire questions?
Q9 Christian Wakeford: I have a couple of questions for Avanti first, and then I will go on to the negotiations. Richard, the Office of Rail and Road has said that less than 50% of trains are arriving on time. We have roughly one in 13 trains being cancelled. It is not good enough, is it?
Richard Scott: No, it is not good enough and I am not here to tell you that it is. It is not good enough. We are absolutely focused on making it better. We need to deliver a better service for our passengers, our communities and the businesses we serve, and drive regional economic growth. That is entirely what we are focused on.
I am pleased to say that we have made progress. In the last week, the cancellations were down to around one in 20. That is still much higher than we would like, but it is significantly better than it was at the start of the summer. We are continuing to work with a sole focus on improving the timetable, making it robust and sustainable for all of our passengers. That is what we want; that is what they want; and that has to happen.
Q10 Christian Wakeford: The 08.55 from Piccadilly this morning had a platform dedicated for the train. It was cancelled with next to no notice. When is the progress going to start?
Richard Scott: We are making progress. I am sorry about that individual case. There will, of course, always be short-notice cancellations, but the percentage of short-notice cancellations has dropped by two thirds since the start of this particular problem. I hope that shows the Committee that we are making progress. There will always be short-notice cancellations. Train faults, unfortunately, occur. We get short-notice sickness as well, which, of course, results in a cancellation if it is a safety-critical member of staff, but we are making progress on that. As I say, the number of cancellations as a proportion of our services has reduced as a result of the actions we have taken. We are not there yet by any stretch of the imagination, but we are making progress.
Q11 Christian Wakeford: I think I must have been very unlucky, Chair, because every train I have tried to book for the last couple of months has always been cancelled.
Consumer confidence is at an all-time low. You have just had your contract renewed for six months. What message do you think that sends to consumers, considering the level of service there is at the moment?
Richard Scott: The message that I would send is that we are absolutely focused on this. Everyone in the business is working on making the timetable more resilient, more robust and more sustainable. We need to get to a place where we are not reliant on rest-day working and overtime, and can deliver a robust, dependable service. That is what we are working on. The level of cancellations is falling. We are gradually increasing the number of services that we offer. On the base timetable that we introduced in the middle of August, we have introduced an extra 10 services a day to Manchester and an extra four services a day to Birmingham. We are continuing to add to those over the coming weeks. In December, we will have a significant step-up of our timetable which will get us back to a near normal service, pretty much to pre-covid levels and to absolutely pre-covid levels on much of our route. That is what we have to work towards. December is where the focus is within the business. I can promise the Committee that everyone is absolutely on this.
Q12 Christian Wakeford: We will keep an eager eye on that one. Chair, I will move on to the negotiations. Tim, what is the current state of the negotiations?
Tim Shoveller: Negotiations have continued during the summer. We continue to talk with all the trade unions. There are meetings planned for later this week. I think there is a real focus, as there has been all the way through, to try to find common ground.
Stepping back, remember that these negotiations started 18 months ago at Easter 2021 under the Rail Industry Recovery Group to try to find a way forward collaboratively between the employers of the railway and the trade unions—working collaboratively together so that we could reduce the cost of running the railway. There is an economic crisis. We have a huge challenge and change as a result of covid, not that the railway was cheap before that, as we have seen reflected through various things like the Williams report.
We have been working for a long time to try to get to a collaborative agreed position. That is the only way this is ever going to be resolved. There is no way of resolving a dispute without some form of agreement.
Q13 Christian Wakeford: Has that position improved since the last time you appeared in front of the Committee?
Tim Shoveller: It has been a very slow summer. There has not been as much movement as I think we were hoping for. The fact that the industrial action has been under way has really been very consuming and has hardened positions, as I see it, in some places. Throughout that, certainly we have been working very hard to try to make sure that we are building bridges, looking for opportunities for common areas that we can find a way forward from.
Q14 Christian Wakeford: Has the change of Secretary of State and the change of approach to the negotiations had any benefit so far? I believe the new Secretary of State has actually met with the unions. That sounds like a step forward.
Tim Shoveller: Yes. Of course, that has to be the right thing. It is not unusual for a Secretary of State to meet trade unions. Certainly, I welcome that. Fundamentally, this is an issue the railway industry has to resolve among itself. We cannot ask passengers to pay higher fares to pay for wage rises. We cannot ask Government and taxpayers to pay more. The rail industry has enough money, but only by working together are we able to find ways of spending our money more wisely so that we can save enough money to run the railway cheaper and invest some of that back into employee pay.
That said, the fact that the Secretary of State recently called for a compromise is something I absolutely welcome and echo. That has been our narrative all along.
Q15 Christian Wakeford: Richard, as an operator what role are you—Avanti—and other operators playing directly in the negotiations?
Richard Scott: We are playing an extremely limited role. We support Tim and his team if they need any information, but we are not directly involved.
Q16 Christian Wakeford: If there is a framework agreement reached between the unions and the delivery group, what happens next? What are the further steps from there to get to the point where everybody is happy and we can move forward with no disruption?
Richard Scott: Tim would be the expert on this, but I hope that if we can reach a deal, obviously both sides will be happy, and we will move forward. From our perspective, that will underpin the recovery of the timetable and the rebuilding of good will and staff relations. It is vitally important. I know that people like Tim and his team are absolutely focused on this.
Q17 Chair: Mr Scott, we are referring here to the dispute with the train operators. There are two disputes. It is a question of the train operators’ dispute rather than the RMT one.
Richard Scott: Yes. We are not directly involved in those discussions.
Q18 Chair: Your parent company, and Mr Montgomery, have been before us.
Richard Scott: Yes. Steve is heavily involved in the negotiations. I am not party to those, I am afraid, at Avanti.
Q19 Robert Largan: Good morning to the witnesses. I want to go back to the situation with Avanti and the west coast, if I may, Mr Scott. Why did you remove so many services from your schedule?
Richard Scott: At the end of July, there was a sudden and very dramatic drop-off in the number of drivers, in particular, volunteering to work rest days—overtime essentially. The industry as a whole—Avanti is no different—has always relied on rest-day working to deliver timetables, so that drivers can cover for other drivers who are out for training or are mentoring colleagues, and so on.
At the end of July, that abruptly changed. I want to emphasise that our members of staff are perfectly entitled—obviously, it is overtime and they do not have to volunteer for it. Nevertheless, they all stopped, pretty much to an individual, from volunteering for overtime. That resulted in many short-notice cancellations, which is absolutely what we need to and must avoid.
The way we tackled it was to reduce the timetable, so that we could plan, on a more robust and sustainable basis, for our passengers and ensure that the trains that were scheduled were much more likely to run. That has improved. It was not perfect straightaway, but it dropped the percentage of cancellations and they are continuing to drop, as I mentioned.
We are not running the frequency that we want to run, or that our communities want us to run, and I am very clear on that, but we are working towards it. We are increasing the frequency on an almost weekly basis incrementally and working towards December, which is the big step-up and will see a return to normality for our communities along the west coast.
Q20 Robert Largan: Other operators have also had issues with not having enough drivers and that has impacted them. However, it would seem that Avanti has been much more severely affected than the vast majority of other operators. Why is it that you are affected so much worse?
Richard Scott: I do not know why we are so much more seriously affected. We are the most high-profile train company, so we are certainly getting the most scrutiny, but that is absolutely right. It is right that we are held to account. The drivers in particular have decided that they are not willing to volunteer for rest days at this stage. They will all have their own individual reasons for doing that. We have nearly 600 drivers on the books. We have recruited drivers. We have more drivers on the books than we had under the previous franchise—about 10% more.
There was a significant problem during the pandemic, when training was more or less suspended for about two years, and we were unable to train fully. We are catching up with that backlog now. In addition, we had drivers who were clinically extremely vulnerable and obviously could not work during the pandemic. They had to have refresher training as well. We are getting through that now. We have 100 drivers entering service between April and December this year. The pipeline is continuing, and that is what will support the step-up in December.
Q21 Robert Largan: Would you concede that perhaps the business model of having too few drivers and relying too much on drivers working overtime has been a mistake, given the impact that has had on the service?
Richard Scott: We absolutely want to move away from it. Now, there is a fundamental shift within Avanti West Coast, and our timetables are not, and will not, be predicated on rest-day working. That is what December is working towards. It is what we are on now. We are not based on rest-day working, and December will not be based on rest-day working. We are doing all of the numbers and there is a huge amount of work going on behind the scenes to make sure that we have the right people in the right places to deliver a reliable service that is not predicated on rest-day working.
Q22 Robert Largan: I will take that as a yes. What is the financial impact of the reduction in services and who is funding the loss in revenue that you are experiencing? Is that you or the Government and the taxpayer?
Richard Scott: As you may know, the contracts for all train operators fundamentally changed when the pandemic hit. Costs and revenue risk are borne by the Department now. In return for their stewardship of the business, the parent companies are paid a small margin. That margin is dependent on the scores that we are given for our performance in a variety of areas—including operations, finance and customer experience—by independent evaluators employed by the DFT. They are independent of us and they are independent of the DFT. Those scores directly impact the remuneration of the parent companies. The revenue and cost risk in the new contract model is borne by the Government.
Q23 Robert Largan: You have been given this six-month extension. What can you tell the Committee about how confident you are that you will turn things around by the end of that extension period?
Richard Scott: We are absolutely focused on December. There are traditionally two significant timetable changes during the year—May and December. December is when we are planning to step up to a near normal service across much of our route. It will restore, for example, three trains an hour to Manchester, whereas at the moment we do not have that. Everyone in the business is focused on doing what is required to get to that point. There is an awful lot of work that needs to be done to ensure that it is not based on rest-day working, as it has been in the past, and to make sure that we can do it reliably and sustainably for our communities. The best bit of confidence I can give you is that there is no doubt that that is the top priority for the business and there is no stone being left unturned.
Q24 Robert Largan: Finally, what would you have done differently if you could go back to the start of all of this process and the way that Avanti operated? How would you have done things differently? What lessons can we learn for the future?
Richard Scott: The key lesson that we want to learn is the one that we are learning the hard way now. We are moving our timetables on to a basis where they are not based on rest-day working. We need to make sure that it is reliable, sustainable and robust for the short, medium and long term. Unfortunately, you cannot turn that around overnight, but we are working day and night on it. December is our absolute target.
Q25 Chair: I am going to bring some other Members in—Karl in particular—but perhaps I could ask Mr Scott and Mr Shoveller a couple of questions first. Mr Scott, first of all, we appreciate the emphasis on getting more drivers trained up. I want to probe a little further and ask you to be completely straight with us as well. As Mr Largan pointed out, you seem to have been more impacted than other train operators. The fact is that drivers work four-day weeks and for the remainder you are reliant on rest days. Is it not the case—going back to the Virgin days—that that was an arrangement that the train operator and the drivers were very happy with? Effectively, you are more vulnerable when industrial relations break down. Level with us.
Richard Scott: I think that is a reasonably fair summary. The industry has always been based on rest-day working and overtime. Until this point, we have never faced a problem of this magnitude. It is extremely unusual and unprecedented, frankly.
Q26 Chair: I appreciate that the industry has relied on it, but it appears that Avanti, and previously Virgin, relied on it more than other operators—hence the reason why you have deeper issues than other train operators.
Richard Scott: I do not think that is the case, actually. The whole industry relies on rest-day working. If it was withdrawn overnight from every train company, they would all be facing the same situation. It would be extremely difficult—in fact, impossible—to run the normal timetable. Other train companies have been facing difficulties. They are facing short-notice cancellations—
Q27 Chair: But not anywhere near as acute as yours.
Richard Scott: I agree—not as acute as us—but they are facing that, and it is not as high profile as us.
Q28 Chair: There has to be a correlation, unless there is another issue you need to tell us about, as to why your performance has been so impacted compared with others.
Richard Scott: We have without doubt suffered a greater withdrawal of rest-day working than anyone else. We are bearing the brunt of that; there is no doubt about it.
Q29 Chair: But if you had those 100 drivers that you are now training up, you would not have been impacted because they would be covering that shift.
Richard Scott: Actually, prior to July we had about 400 services a week covered by rest-day working. That is a lot of services that we reliably had. Remember that the drivers coming out are also dealing with the continuous churn. We have nearly 600 drivers. You can imagine that you need a constant pipeline of drivers to replace people who leave the industry, retire, and so on. That was interrupted for nearly two years, as I say, during the pandemic.
Q30 Chair: We certainly appreciate that, but there is also a question that morale has been particularly poor among your workforce as well. Is that a fair reflection?
Richard Scott: There are a number of factors at the moment that are making it difficult for our people. The overall pay negotiations are putting pressure on people. I was talking to a member of staff the other day who was saying how difficult it is to go without the pay for strikes. They are missing out on that. There is a lot of pressure on our staff at the moment. That is why we need to get through it. We need to work with the unions and reach a resolution on all of these issues as soon as we possibly can. Ultimately, it is the passengers who are suffering, and it is them that I think all of us want to get back to serving.
Q31 Chair: My understanding is that the Rail Delivery Group provides a baseline for the number of drivers that one should have in place. Then it is a baseline plus X percentage in order to make sure that you have coverage seven days a week. Are you below where the Rail Delivery Group would suggest you should be?
Richard Scott: I am not aware of that particular calculation. We had no problem at all before the end of July, when there was the sudden drop-off, with 90% of drivers suddenly saying they were not available for rest-day working. We did not have a problem before that point. Now we are in a new world where we need to make sure that the timetable is robust without that, without basing our timetable on rest-day working and getting back to a new way of working to serve our communities.
Q32 Chair: Mr Shoveller, we have chatted with you before. You had put a pay offer down at that point. It then got rejected. It did not get passed to the members. Why have you not done as one of our witnesses to come has done, which is just make the pay rise?
Tim Shoveller: Why have we not implemented the pay rise?
Q33 Chair: Yes. I believe there was some talk before of that being one of the options. I recognise that part of it is performance-related, so you cannot do that bit, but why not the remainder?
Tim Shoveller: There are several reasons for that, not least the law. There was a case determined during the summer that applied to a previous company—Virgin Trains East Coast—that had implemented a pay rise. I think that has subsequently been found to be not a wise thing to do. There are lots of legal issues—
Q34 Chair: Felixstowe has done just that.
Tim Shoveller: The advice that I have is that implementing a pay rise before negotiations are complete is legally tricky. We have not followed that action.
The approach we have taken has been to do two things. This is rooted in the financial issues that the industry has. We have continued with the consultation to make some changes to the working practices associated with how we do our maintenance. We talked about that last time. That is the key area where, as part of a whole significant plan to reduce the cost of the industry, we need to be more efficient.
We have not been able to reach agreement on that so far. We have continued, with all the trade unions, to consult on those changes, as opposed to doing it by agreement. We continue to hope that, at some point, it may be possible to reach an agreement around those changes, but we cannot stop because the money has literally disappeared from next April. We have to have reform one way or another.
Chair: Karl, apologies. It took longer than I had intended.
Q35 Karl McCartney: Back to you, Mr Scott—unfortunately for you maybe. You are a wordsmith, and a very good one at that, looking at your CV. Obviously, you have been sent out to cover for your senior management team. You have contradicted yourselves at various times. You have been very eloquent in what you have said, but kind words butter no parsnips.
There was a two-year pandemic. You knew there was a shortage of drivers. It does not seem that the senior management team did anything about that, whether that is the HR director, your CEO or whoever. If I was in the unions, I would have exploited that. It seems that you, as a company, did not see that coming.
You have told us that from April to December this year there are going to be 100 new drivers. Is that 50 by now and 50 by December, or is it backloaded much more towards the end of December when you are looking to bring back more services? Ultimately, you knew there was a problem. Your senior management team did not seem to tackle that problem. When the problem was exacerbated, it seems that you sat on your hands waiting for somebody else to do something.
Richard Scott: I do not recognise that characterisation. Driver recruitment, or the training, crucially, had to be paused, as you rightly understand, during the pandemic. There was no suggestion that we were ever not going to recruit drivers, or somehow save costs by not recruiting drivers. That is not the case. We have more drivers on the books than the previous franchise, but we have been unable to get them into passenger service because of the pandemic.
We are getting ahead of that now. It started in earnest in April. They started coming out into productive passenger service in April. We will have 95, to be exact, by December. If you want the exact breakdown of which months they come out in, I am of course happy to furnish that to you. It is not the case that we have wilfully or neglectfully not recruited or trained drivers. It is absolutely, categorically, not the case.
Q36 Karl McCartney: But it is fair to say that blaming the pandemic is a catch-all for all sorts of things. For two years, surely you as a company saw that the numbers of drivers were falling and knew that you were going to have to do something about it. Surely your own intelligence told you that the unions were going to try to exacerbate that problem and issue for you, which they have successfully done.
Richard Scott: I will leave you to take a view on that, but we have trained drivers and we have recruited drivers. We have a new recruitment campaign coming in the coming months.
Q37 Karl McCartney: But not quickly enough.
Richard Scott: Because of the 18-month training regime for a driver, it takes 18 months to train—
Q38 Karl McCartney: We all know those lead times, yes.
Richard Scott: We know those lead times, but if you have an 18-month lead time and a two-year hiatus, you cannot just turn it round overnight. That is just simple maths, I am afraid. We are turning it round now. We have a continuous pipeline of drivers entering passenger service. We have a new recruitment campaign for more drivers that is coming up soon. We need to have recruitment campaigns all the time, as you will appreciate, with nearly 600 drivers. That is just the way we run it.
I do not believe that there were mistakes or errors made in the recruitment or training. We are just facing a very difficult, unprecedented situation.
Chair: The two Members who want to come in are concluding where they started. We will start with Rob and then go over to Christian.
Q39 Robert Largan: Thank you, Chair—back to you again, I am afraid, Mr Scott. I want to dig a little deeper into the issue of drivers not working rest days or working to rule. Would you say that this has been entirely legitimate—not working rest days—or has it at any point stepped over the line into unofficial industrial action?
Richard Scott: All I can say is that we were reliably having rest days worked and services worked with rest days. Almost overnight almost all drivers decided that they did not want to work rest days. I want to emphasise that that is entirely within their right. They can individually say “I am no longer available for rest days.” That is the situation we were faced with. That is why we had to cut the timetable to remove the short-notice cancellations and why, as we build it back up gradually and significantly in December, the new timetables are based on no rest-day working.
Q40 Robert Largan: I asked that because I am aware that there are other operators who have taken successful legal injunctions against ASLEF in relation to this. Is that something which Avanti is considering?
Richard Scott: That is not something we are considering, no.
Q41 Christian Wakeford: Mr Scott, you mentioned that the company’s margin is paid for by the DFT, so obviously, at the moment taxpayers are paying for—I will be diplomatic—a ridiculously poor service. With that being measured against performance scores, has your margin from the DFT been subsequently reduced? If not, do you think as consumers, as taxpayers and as voters that we should be happy about that?
Richard Scott: The way that the scoring and the margin works is that there are six-month blocks on which it is calculated. There are obviously two review periods a year. We are in the first for this financial year at the moment, and we will not get the scores for that period until January. We will be submitting our final report in about three weeks to the Department and the evaluators. They will come back with any questions they have and work through the process. We will get the scores for this period, from April to October, in January.
Q42 Christian Wakeford: Given the service disruptions, the delays and the complaints, would you expect it to go down?
Richard Scott: I will leave that to the independent evaluators to decide. They are independent of us. They are independent of DFT, which is the way it should be. They will make a judgment based on the evidence that we give them and that the DFT gives them and determine the scores accordingly.
Q43 Chair: Mr Shoveller, to finish with you—I may have missed this while I was writing notes, so my apologies—when was the last time you actually sat down with the RMT and the unions to try to bring negotiations forward?
Tim Shoveller: The last meeting on the maintenance changes was yesterday. My team was there. I was not there yesterday but that meeting took place with the lead negotiator for the maintenance changes. I am expecting that we will meet with what we call the general grades pay meeting, which is all the trade unions, to talk about the pay, on Friday afternoon.
Q44 Chair: Are you seeing signs of progress? This has been going on a long time. If you are not, just say so.
Tim Shoveller: I am trying to reflect on the question carefully. I am continually hopeful. I think it may be that in this last week or so we are seeing a slight change. I am going to look for every opportunity I can to find a way out of this dispute. We know it is causing huge damage to our industry, to our passengers and to prospective freight customers. We are very keen to find a way out of it. Maybe within this last week conversations are starting perhaps in a way that we have not had for a while.
Q45 Chair: We know that ultimately, to conclude this, there will be a settlement. What do you believe the unions need to do just to move a little more to where you are in order for that to happen?
Tim Shoveller: I think it is absolutely a discussion about how an agreement around how the working practice changes that need to be made can be implemented quickly. Frankly, we are running out of money, certainly in terms of maintenance. We must make sure we have those changes in place so that we have security for our people and that those who want to leave under voluntary severance can do so, with a condition of no compulsory redundancies, which we have offered, so that the change is not something people need to fear but something our employees can embrace and recognise as essential to a future healthy and financially viable railway.
Q46 Chair: What do you think that you—therefore needing the assistance of Government—need to do to move a little to where the unions are?
Tim Shoveller: We have made huge movements towards where the unions are.
Q47 Chair: But when we speak to the unions, they will say that they have. I like to reverse it to say: what would you like to be able to do a little more of in order to reach a settlement?
Tim Shoveller: I think our challenge is to continue to be imaginative and to hear what the unions have to say and propose. For example, in terms of pay, we have not had a counterproposal for pay. We made our offer. We made a very similar offer to the management teams, who accepted that, with a 71% vote from TSSA members in favour. We think the fundamental of that is a good offer.
We have not had anything back from the unions to say, “Look, we think that is a rubbish offer but we’d like this instead, and this is how we propose to pay for it.” I would welcome that. Ultimately, we have to make more use of the money we have. This is not about additional funds from Government or from passengers. It is about us working collaboratively and more efficiently so that we can have a better and more sustainable railway for the future.
Chair: Thank you very much, both of you, for the evidence. We wish you all the very best in getting through the issues that you have just touched on. We are very grateful for the amount of evidence you have given us. We will let you go back to your pressing work.