Network Rail to cut 4,000 jobs and save £250m a year by centralising operations

Network Rail has unveiled huge investment plans to develop the UK’s railway infrastructure between 2014 and 2019, involving the centralisation of its signalling operations to save millions of pounds and drastically reduce its frontline workforce over the next fifteen years..

The mammoth Strategic Business Plan for England and Wales places heavy emphasis on the role of technology in improving the railways for customers and stakeholders, as well as driving down costs and increasing efficiency for Network Rail.

One of the core technology changes that the document highlights is Network Rail’s plans to centralise its control of the network.

Currently, the railway is operated from over 800 disparate locations using a range of technologies from computer workstations to mechanical lever frame signal boxes.

Network rail plans to bring these all together under 14 operating centres that use common technology platforms, which will save the company £250 million a year once complete.

“We have developed an operating strategy that will transform the way in which we control and operate the rail network. By centralising operational control and introducing modern control system technology, we will reduce our annual operating costs by £250 million over 15 years and deliver significant improvements in performance, capacity and customer service,” reads the document.

“This strategy has been informed by benchmarking our approach with other railways. Our operating strategy is a long term programme which will see us migrating operational control into fourteen modern rail operating centres.”

It continues: “This will allow us to reduce our frontline operations workforce from 5,600 to less than 1,500 in the longer term. To date, eight of the new rail operating centres have been built with the remaining six to be completed early in CP5 (2014 to 2019).”

A spokesman for Network Rail said that the reduction in the workforce will occur through ‘natural waste’, such as people retiring and not being replaced. However, he was also unwilling to guarantee that redundancies would not take place over this period.

The spokesman also said that these are plans that Network Rail has been pursuing itself for some time, but has asked the government for funding in order to accelerate implementation. Detail of how much funding the government is being asked for was not provided by time of publication.

The savings estimate of £250 million a year kicks in once the centralisation plans are complete.

The strategy document also outlines that company’s overall IT expenditure for the period between 2014 and 2019, where previous estimates, which were detailed in September 2011, were “significantly below the average levels experienced by other organisations”.

It has therefore set aside £337 million over this period and Network Rails states that “continued investment in IT will be essential if we are to continue improving the service that we deliver to our customers as well as reducing costs.”

During 2014/15 it will invest £66 million; £94 million in 2015/16; £67 million in 2016/17; £54 million in 2017/18; and £55 million in 2018/19.

Network Rail is also developing plans to increase its research and development spend between 2014 and 2015, which it plans to complete during summer 2013.

The five year strategy also recognises that consumers will need to interact with the railway network differently to how they do currently, with the increasing rise of smartphones.

“Technology will transform delivery and the way customers interface with the railway. The proliferation of smart phones and mobile devices over the last decade has set a trend for increased real time interaction from consumers that looks set to continue. This is resulting in demands for new information systems and smart ticketing,” says Network Rail.

Finally, the document also states that Network Rail will be investing £100 million in new technology to provide remote alert of approaching trains in order to improve the safety of employees working on the tracks.

The document reads: “Protecting the safety of our people when they are working on the track is of critical importance. Historically, a significant number of workers were killed each year working under lookout protection whilst trains were still running.”

“The move towards more so-called ‘green-zone’ working has resulted in an improvement in the safety of our people. However a combination of reduced access time for blocks and a recognition that ‘green zone’ working also contains risks means that we need to introduce new technology to make a step change in the safety of those working trackside.”

RMT, Britain’s largest specialist transport union, has said that cutting staff will put consumers’ safety at risk.

“Whilst RMT supports any plans to expand and invest in Britain’s railways to meet the demands identified by Network Rail you cannot seriously expect to safely increase capacity whilst at the same time the Government is looking to axe key front-line staff on trains, track and stations,” said RMT General Secretary Bob Crow.

“If the Government press on with the jobs cuts plans they will simply be cramming more and more people into an overcrowded and unreliable service where safety is compromised and the profits of the private train operators are prioritised . That is a recipe for disaster and would make a mockery of the work that Network Rail have done as a publicly owned body in identifying future capacity needs as rail demand continues to increase year on year.”

He added: "It would make far more sense now if Network Rail were given the opportunity to take over rail routes and to run them in the public interest as a public service without the corrosive pressure of delivering a dividend to shareholders."

Copyright © 2013 IDG Communications, Inc.

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