UK: BR signals profitable routes. (4 of 4)

UK: BR signals profitable routes. (4 of 4) - To make its future work, BR managers recognise that they have a crucial battle to motivate staff. As a first step, a huge training programme to improve customer care has been introduced. BR's structure is also

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Last Updated: 31 Aug 2010

To make its future work, BR managers recognise that they have a crucial battle to motivate staff. As a first step, a huge training programme to improve customer care has been introduced. BR's structure is also being fettled. Individual managers will be responsible for complete lines, and staff and public alike will know exactly who is in charge.

BR's unions remain a potential problem despite record improvements in productivity which have comfortably outstripped the European rail average. In 1989 BR was forced to back down on its plans to scrap national pay bargaining, after a series of bruising strikes which cost £70 million. It needs the flexibility to be able to reflect local labour conditions, especially the shortage of staff in the South-east. BR managers are treading warily on this issue now. "What we're doing now is to sit down in a constructive manner to develop and change the negotiating arrangements in the light of new circumstances," Welsby says guardedly.

One way to motivate the staff would be to offer them shares in the business, which though worthless to start with could become valuable as it prospered. Certainly this is supported by Professor Bill Bradshaw, a transport expert at Salford University. "It would have the biggest effect on staff and management motivation possible. But I would go further and sell shares to commuters," he says. Former transport minister Sir David Mitchell also favours what he says is "the magic ability of share incentives to motivate staff in a privatisation".

The privatisation issue has been lurking around the railway for the past three years. But despite a huge volume of City advice, the Government is no nearer finding a formula. "If the Government gave BR's workforce 25% of the shares over a three-year period, the 75% left would be worth more than the 100% if they had kept all the shares. It would be an incentive for the staff to perform," says Richard Hannah of stockbroker UBS Phillips and Drew.

The case of the highly successful National Freight Consortium, where lorry driver millionaires were created by a privatisation and subsequent flotation, is an example not lost on BR managers. "An interesting idea," says Welsby, adding: "For shares to be attractive we need greater financial robustness. We have made enormous strides. Ten years ago we were six feet under water. Now we've got our head above the water level, and are perhaps gasping for breath. We really need to get right out of the water."

Sitting in their new headquarters building next to Euston station, Sir Robert and Welsby can feel confident about the future in a way that few other British executives might, notwithstanding the recession. In the run-up to the election the Government is expected to be more generous in its support for rail, always mindful that its majority is dependent on MPs representing the London commuter belt. But even if disaster strikes the Conservatives, a change of government would probably mean more money, if John Prescott, the Labour transport spokesman, is to be believed. He promises to double the Government grant and to bring spending more in line with the European average.

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