Why do most things done by Network rail cost so much?

[Grumpy]

A recent report by the Taxpayers Alliance on highly paid Quangocrats includes the following

"The top earning super quangocrat was the chief executive of Network Rail, Mark Carne. His salary band was £745,000 to £749,999.

Network Rail had the most egregious largesse, with 52 employees in the top 1 per cent.

High Speed Two Ltd was a close second with 37 employees in the top 1 per cent. "

The phrase "Egregious largesse" is new to me but perhaps this helps explain the organisational attitude to cost control

The full paper is here-

https://taxpayersalliance.us1.list-...ccd07d854d8da5964f&id=e6b55644cc&e=ef8eb440c5

 

[Llanigraham]

I wonder why a group with such a (known) political bias would publish that?
Perhaps they should compare those figures to some of the salaries of the directors of companies that support "their" party.

 

[yorkie]

The so-called 'Taxpayers alliance' are not exactly a reputable source

ps: don't forget to add a quote Thanks.

 

[AlterEgo]

A clue to the organisation's attitude to cost control might be in this paper by the Taxpayers alliance

https://taxpayersalliance.us1.list-...ccd07d854d8da5964f&id=e6b55644cc&e=ef8eb440c5

You’re quoting from a small-Government, rightwing libertarian think tank.

I’d be very careful about accepting anything they say as gospel. Or even accurate.

 

[Harpers Tate]

I suspect there is some truth in this headline. A non-railway, non-political source once told me, in the context of siting a CCTV surveillance camera somewhere on Railway premises, on a pedestrian route absolutely nowhere near any railway running lines (so, with absolutely zero impact on the operational railway), that the scheme never occurred because the costs were THREE times the cost of an equivalent installation elsewhere.

 

[68000]

That is not a paper, that is just a list of employees earning over a certain threshold

 

[LNW-GW Joint]

The NR Route Managing Directors are worth every penny.
Not sure about some of the others, mind.
These are the people who bungled the electrification projects after all.

High salaries are not really the reason for railway costs being so high.
Almost everything is bespoke, either in design or location, or at an uneconomic volume.
Despite efforts to standardise, we still have a system where virtually nothing can be bought off the shelf (rolling stock, signalling, OHLE etc).
That means high skills, long implementation times, lots of bureaucracy and therefore high cost.

 

[furnessvale]

I suspect there is some truth in this headline. A non-railway, non-political source once told me, in the context of siting a CCTV surveillance camera somewhere on Railway premises, on a pedestrian route absolutely nowhere near any railway running lines (so, with absolutely zero impact on the operational railway), that the scheme never occurred because the costs were THREE times the cost of an equivalent installation elsewhere.

Nothing to do with the remote location of the camera compared to a high street?

 

[furnessvale]

I wonder why a group with such a (known) political bias would publish that?
Perhaps they should compare those figures to some of the salaries of the directors of companies that support "their" party.

Indeed, there are "quangos" that are the equivalent of major companies and there are "quangos" that push paper about.

I would put Network Rail firmly in the former category and the pay of top staff, indeed all staff, should be compared to that in companies with an equivalent turnover.

 

[DarloRich]

A clue to the organisation's attitude to cost control might be in this paper by the Taxpayers alliance

https://taxpayersalliance.us1.list-...ccd07d854d8da5964f&id=e6b55644cc&e=ef8eb440c5

I am unsure of the point you or the tax payers alliance are making. It seems to be that people are paid money. Odd that people paid money ( often a lot more money) is fine when talking about private companies

 

[AlterEgo]

I love their use of “super quangocrat”, a borderline pejorative term.

It’s like reading an RMT press release, but in a mirror.

The author of this list (and that’s all it is, a list), the author worked for Douglas Carswell, a complete hatstand of an MP who was a member of UKIP for a while when it suited him. He also worked for the PRU, which is a very shady organisation which, while being a private company, was funded largely by “membership fees” paid by Tory MPs for “research”, which they...wait for it...claimed back off the taxpayer! Likely to the tune of a few million quid.

 

[XDM]

Do not blame the messenger for the message.
The facts about salaries are correct.
Network Rail has been a disaster for the railway. You only have to look through the forums here to read about endless over running possessions, cancelled projects, cheapskate improvments at sky high prices. I have met some very good Network Rail people,& also arrogant oafs who think a 30 mph psr through a station(when it used to be 50mph)is sensible because that is the speed limit in the town.
The problem is unsolvable as it is.
Track & trains should never gave been split into separate empires. They should be reunited, with the operators in charge. At present the railway is run by NR. It is like putting the man who looks after the freezers & ovens in a restaurant in charge of the whole business.

 

[takno]

The taxpayers alliance is an economically far-right pressure group. It is sometimes made to look like some kind of mass-membership group advocating for the interests of taxpayers, but really represents the interests of a tiny number of people in having a minimal state. Pretty much everything they say is designed to discredit public sector organisations by using highly selective statistics and weird false parallels. Nothing they produce is at all worth reading.

 

[thejuggler]

This bunch were discredited as soon as they announced as ‘fact’ that 25% of Council Tax pays Council pensions.

 

[yorkie]

Do not blame the messenger for the message.
The facts about salaries are correct.....

Then I am sure there will be a better source to quote from!

 

[matthewmacleod]

The facts about salaries are correct.

That's totally irrelevant, because it's not the message being communicated.

What's the point that you are trying to make? Are these salaries unreasonable? Is the term "super quangocrat" even close to neutral enough to indicate that this might be a reliable source?

Network Rail has been a disaster for the railway

Please cite some actual numbers to support this assertion.

 

[adamello]

It is like putting the man who looks after the freezers & ovens in a restaurant in charge of the whole business.

or another way of looking at it, if maintained by the operator, its like putting the chef and waiter in charge of the maintenance of the kitchen equipment

 

[Bromley boy]

A recent report by the Taxpayers Alliance on highly paid Quangocrats includes the following


The phrase "Egregious largesse" is new to me but perhaps this helps explain the organisational attitude to cost control

The full paper is here-

https://taxpayersalliance.us1.list-...ccd07d854d8da5964f&id=e6b55644cc&e=ef8eb440c5

These people are actually earning a good deal less than their equivalents in the private sector (ie people in senior roles in organisations with revenue of several £bn similar numbers of employees to oversee, similar budgets etc).

Network Rail is comparable in size to some FTSE 100 companies, average pay for a FTSE 100 director is in the region of £4.5m which puts the figures into perspective somewhat.

Of course if these people aren’t doing a good job there should be accountability, but the figures suggest the level of pay their roles attract isn’t outrageous compared to other sectors.

 

[Carlisle]

I am unsure of the point you or the tax payers alliance are making. It seems to be that people are paid money. Odd that people paid money ( often a lot more money) is fine when talking about private companies

That’s probably because many of those private companies aren’t monopoly providers supported by billions annually from the state (taxpayers)

 

[EM2]

Track & trains should never gave been split into separate empires. They should be reunited, with the operators in charge.

The initial report into the Wimbledon derailment, where the section of track hadn't been maintained for years because both Network Rail and TfL believed the other was responsible, suggests that this could be a very bad idea.

 

[matthewmacleod]

That’s probably because many of those private companies aren’t monopoly providers supported by billions annually from the state (taxpayers)

Why does that matter? That is, why should employees at publicly-owned businesses expect to be paid less than equivalent roles in the private sector?

 

[bastien]

How much are Taxpayers Alliance staff paid, and are other, more efficient lobbying organisations available?

Oh, and before anyone tries the 'private' schtick: thanks to their utter lack of transparency on funding, you have no way of knowing what you pay them.

 

[Barn]

That’s probably because many of those private companies aren’t monopoly providers supported by billions annually from the state (taxpayers)

Why does that matter? That is, why should employees at publicly-owned businesses expect to be paid less than equivalent roles in the private sector?

It's actually the 'monopoly' bit which is most relevant here.

FTSE100 CEOs have to trouble themselves with raising lots of money and spending it wisely.

CEOs of monopoly providers only really have to worry about spending. It is only half the job.

 

[DarloRich]

Do not blame the messenger for the message.
The facts about salaries are correct.

no one seems to be suggesting they are not correct. People are asking what the point of the list is

Network Rail has been a disaster for the railway. You only have to look through the forums here to read about endless over running possessions, cancelled projects, cheapskate improvments at sky high prices. I have met some very good Network Rail people,& also arrogant oafs who think a 30 mph psr through a station(when it used to be 50mph)is sensible because that is the speed limit in the town.
The problem is unsolvable as it is.
Track & trains should never gave been split into separate empires. They should be reunited, with the operators in charge. At present the railway is run by NR. It is like putting the man who looks after the freezers & ovens in a restaurant in charge of the whole business.

That sounds like a hobby horse being ridden into town. Why should the operators be in charge? Will they make decisions for the good of the network as a whole or for their own narrow commercial interests? Will they undertake work that benefits them only marginally but benefits another TOC more substantially?

Personally, I feel the alliance model, as evidenced in Scotland, is the way forward. Devolved authority to a local level delivering improvements local people (or at least their operators/politicians) want coupled with joint responsibility and joint accountability for delivering those upgrades.

That’s probably because many of those private companies aren’t monopoly providers supported by billions annually from the state (taxpayers)

And how does that preclude paying people managing multi billion pound businesses a decent wage?

CEOs of monopoly providers only really have to worry about spending. It is only half the job.

That is not entirely true though is it? They have to win funding from central government for their industry. It is a different skill to raising money from the bank or finance market but not a given. The treasury could easily decide to transfer DfT funding for rail to schools or hospitals or the police or the army or any number of publicly funded bodies. The fact that rail investment remains high is a reflection of the ability of the people leading NR to win over central government. Is that political management not a skill worthy of reward?

 

[furnessvale]

Track & trains should never gave been split into separate empires. They should be reunited, with the operators in charge. At present the railway is run by NR. It is like putting the man who looks after the freezers & ovens in a restaurant in charge of the whole business.

Which of the multiple operators on most lines will be in charge, and how will you safeguard the rights of the other operators?

 

[matthewmacleod]

It's actually the 'monopoly' bit which is most relevant here.

FTSE100 CEOs have to trouble themselves with raising lots of money and spending it wisely.

CEOs of monopoly providers only really have to worry about spending. It is only half the job.

The job, if you want to look at it from that perspective, is to successfully manage the costs and revenues of the company – regardless of where that revenue comes from.

But let's pretend you're right. A monopoly state service provider only has to concern themselves with spending money, not making it. That means that when revenue dries up – because of whatever the political mood of the day is – there are fewer options for maintaining a stable cashflow. Funding is subject to political interference and whims of ministers. All spending and revenue is subject to heavy regulation.

It sounds to me like a total nightmare to manage that – I'd say that managing the operation of a monopoly public service provider with all of its political and regulatory complexity could reasonably be the same amount of work as managing a private company. "Half the job" just seems obviously not true.

 

[YorkshireBear]

Network Rail has been a disaster for the railway.

And yet we operate the safest railway in Europe, you only have to look at the statistics. Hardly a disaster.

 

[CharlieSpotted]

Interesting, in the current climate of debate over equal pay, that the highest paid woman on the list, Susan Cooklin, appears quite a way down the list...

 

[Barn]

That is not entirely true though is it? They have to win funding from central government for their industry. It is a different skill to raising money from the bank or finance market but not a given. The treasury could easily decide to transfer DfT funding for rail to schools or hospitals or the police or the army or any number of publicly funded bodies. The fact that rail investment remains high is a reflection of the ability of the people leading NR to win over central government. Is that political management not a skill worthy of reward?

Yes, it is to an extent, although much of the 'blame' in a cuts scenario would fall on the ministers making the spending cuts rather than on the public CEO for somehow not fighting hard enough.

But a FTSE100 CEO doesn't just raise funds from banks and markets (which requires much of the skills of pitching, persuasion and negotiation that the public CEO requires). The largest part of the job is taking ultimate responsibility for the trade of the business so that it generates discretionary revenue from customers and counters the threats from competitors. These huge parts of the job are not really present in a public sector monopoly provider.

 

[takno]

Yes, it is to an extent, although much of the 'blame' in a cuts scenario would fall on the ministers making the spending cuts rather than on the public CEO for somehow not fighting hard enough.

But a FTSE100 CEO doesn't just raise funds from banks and markets (which requires much of the skills of pitching, persuasion and negotiation that the public CEO requires). The largest part of the job is taking ultimate responsibility for the trade of the business so that it generates discretionary revenue from customers and counters the threats from competitors. These huge parts of the job are not really present in a public sector monopoly provider.

There isn't a great deal of evidence that private sector leaders do much of any of that. They generally just keep turning up to the office and firing juniors who threaten them for as long as possible, and if the shareholders are lucky they don't completely destroy the company before they are pushed out. Mark Carne is responsible for negotiating the success criteria with a complex mix of the regulator, the DfT, operators and public opinion. Determining strategy for a large company in the public sector isn't any easier

If you think Mark Carne has done a bad job of it then you've got to concede that they might have been able to find someone better if they were willing to pay the going rate, which is around 5x his salary.