Network Rail, train operating companies and unions have agreed to undertake “meaningful discussions” over how emergency government funding can be reduced.
Since the start of the pandemic, the Government has stepped in to provide more than £10 billion of public money (up to £800 million a month) to offset the significant funding gap caused by the collapse in passenger numbers.
According to a joint statement released today (June 15) by the Rail Industry Recovery Group (RIRG), ministers have now decided that cuts must be made.
The announcement does not give details about when support will end or how much government is willing to spend, but it makes clear that current levels are neither “unlimited nor sustainable”.
“Taxpayer support for rail services has increased significantly while the industry’s operating costs have broadly stayed at pre-pandemic levels,” said the RIRG.
“The Government’s position is that the current financial commitment is not unlimited or sustainable. As a result, industry representatives have worked with the four recognised trade unions to agree an Enabling Framework.”
The Enabling Framework reveals that service levels (currently running at approximately 85% of pre-pandemic levels) are likely to be “curtailed, reduced or flexed in the future”, to align with current and future passenger demand.
Strengthening existing services will also take priority over increasing service frequencies, as demand returns.
Alongside service reductions, the Framework recognises that workforce reforms and reductions in staff costs must also now be identified as part of a rail industry-wide review.
The Enabling Framework will therefore focus on five “common principles” and key areas to underpin how those discussions will now be held.
The key areas include employment security measures to mitigate the need for compulsory redundancies while headcounts are reduced. Voluntary severance schemes, a recruitment freeze and an industry-wide deployment scheme are all proposed instead, while employers have committed to not making any compulsory redundancies before December 31.
Revised working arrangements and practices is another focus area, with proposals to review the basis for future annual pay reviews and to introduce a “modern seven-day railway” with “robust working arrangements for Sundays”. The Government has also advised the RIRG that it will not fund any outstanding pay reviews for 2020 or 2021, with the exception of a £250 annual increase for those who earn less than £24,000 per annum.
According to the RIRG, the discussions have the support of Secretary of State for Transport Grant Shapps. The next step will be to establish industry-wide workstreams and sub-groups and “to take forward detailed proposals for local discussion and implementation”.
Trade unions responded to the announcement by setting out some of their own principles to underpin their continued participation in the Framework Agreement.
TSSA General Secretary Manuel Cortes said that he would not “tolerate any compulsory redundancies now or in the future. That is our red line.”
The RMT said it also had a policy of no compulsory redundancies. It added that it would oppose pay cuts and did not accept the proposed pay freeze.
- Full coverage of the Enabling Framework document will follow in RAIL 934