Privatisation of Scottish ferry services

Circular No: NP/081/15


Our ref: S/1/2

1st May 2015

Dear Colleagues

Privatisation of Scottish ferry services

Further to the circular No.020/12 of 9th February 2015 I am writing to update you on developments in the Scottish Government’s re-tender of the 2016-24 Clyde and Hebrides ferry services (CHFS) contract and new information on their handling of the public sector bid for the 2012-18 Northern Isles contract.

On the CHFS, the union, along with the STUC and the other CalMac unions Nautilus, Unite and TSSA have had a number of meetings since December last year with Transport Scotland officials as part of the Pensions Working Group (PWG), agreed to by the previous Transport Minister Keith Brown MSP in September 2012. The PWG is intended to discuss pension and employment protections in the next CHFS contract and the union’s position is that these protections for CalMac workers should be no less favourable than those under the existing contract with CalMac.

The Invitation to Tender (ITT) for the CHFS contract which will contain the non-negotiable specifications in the contract is due to be published next month, in mid-June. CalMac and Serco are the only bidders at this stage, having submitted Pre-Qualification Questionnaires by the 31st March deadline.

However, in addition to constantly delaying the start of discussions in the PWG, the Scottish Government has failed to provide the unions with the exact details of the employment protections they will put in the ITT.

On pensions, the situation is worse, with Transport Scotland trying to impose a mid-November 2015 deadline for agreeing reform of the CalMac Pension Fund. This would render meaningless any reference to pensions in the ITT. In addition, CalMac has chosen to take the highly provocative step of alerting all CalMac employees of the company’s intention to consult over changes to the CalMac Pension Fund but without disclosing what those changes will be.

There is clear political collusion between CalMac and the Scottish Government over the future of the CalMac Pension fund which is due for actuarial evaluation of its affordability and sustainability later this year. It is not in CalMac’s interest, let alone those of workers providing lifeline ferry services to attack members’ pensions during the tendering process for the next CHFS contract and this leaves the union with the impression that the Scottish Government is gunning for privatisation of the CHFS contract.

It is now obvious to the union that the Scottish Government is exploiting the PWG process, to attack our members’ pensions and employment protections, in order to make the CHFS contract more attractive to a private bidder, namely Serco. As a result, the union is considering all political and industrial options open to us, including a strike ballot of CalMac members.

The union will also be working with MSPs in the Scottish Parliamentary Group to highlight the imminent threat of privatisation on CHFS routes and the ongoing threat to CalMac members’ pension and employment rights.

A letter to the Transport Minister, Derek Mackay MSP from the General Secretaries of CalMac unions and the STUC has also been drafted by RMT and will be sent shortly. The letter expresses union and STUC dismay at the Scottish Government’s apparent intention to attack pensions and employment rights of CalMac staff ahead of CHFS routes being privatised through award of the 2016-24 contract to Serco, with the winning bidder announced after the Scottish Parliamentary elections next year. If this is the outcome, it would directly contradict assurances given to RMT delegates at STUC last month by the First Minister, Nicola Sturgeon MSP.

On the Northern Isles 2012-18 contract, press reports suggest that the public sector bid submitted by CalMac in 2012 was returned, unopened by Transport Scotland. Had they looked at the bid they would have seen that CalMac were proposing to operate Northern Isles ferry services at considerably less expense to the Scottish taxpayer than the winning bidder, Serco. This is no surprise, as the Scottish Government bumped up the public subsidy for the contract by nearly £40m (20%) to £243m. In its statement to the London Stock Exchange of 4th May 2012, Serco put the value of the six-year contract at £350m. The Scottish Government has valued the eight-year CHFS contract from 2016 at between £800m and £1 billion.  

I would be grateful if you could bring this to the attention of all members in your branch and I will keep you advised of further developments.

Yours sincerely
Mick Cash
General Secretary