Call for removal of DfT from assessing GTR contract breach

Call for removal of DfT from assessing GTR contract breach

11 July 2017

RMT Press Office

RMT calls for removal of Department for Transport from assessing Govia Thameslink Railway contract breach claim ahead of Thursday deadline

RAIL UNION RMT is calling for the removal of the Department for Transport from assessing Govia Thameslink Railway’s contract breach claim amid evidence of conflicts of interests and institutional bias in favour of GTR.

The Secretary of State must make a decision by this Thursday, 13 July, on whether he agrees with GTR that their poor performance on Southern and breach of the franchise agreement is due to industrial action and also that the industrial action could not be foreseen and could not be averted. (Known as Force Majeure).

In advance of this decision the Department for Transport (DFT) has claimed that a report by Chris Gibb which blamed the unions as the primary cause of Southern’s problems was “independent”.

Yet it has now been revealed that far from being independent Chris Gibb was actually contracted to GTR to write the report. Page 27 / 28 of the Gibb report says:

“We have undertaken this project for CLGR Limited, a consultancy company owned and operated by my family and I, and CLGR Limited has been contracted to Govia Thameslink Railway, as facilitated by the DfT. Discussions have been held under the terms of a confidentiality agreement between CLGR Limited and GTR.”

In a letter to be sent to MPs the union will also point to a number of other factors which demonstrate that the Department for Transport is biased or conflicted and therefore cannot make an impartial assessment of  GTRs claim including:

•        The Gibb report on which the Department is relying has already made recommendations for changes to  the franchise agreement, but these have been kept commercially confidential (appendix 9  of  the Gibb report).

•        The senior civil servant, Peter Wilkinson who called for a “punch up” with the unions to introduce driver only train’s heads up the department that will be assessing GTR’s claim (see parliamentary answer below). Peter Wilkinson’s previous consultancy also produced a report calling on the government to “stand by” train companies and share “revenue risk” if they wanted to push through driver only operation.

•        Even the Gibb report has admitted that Chris Grayling is determining the “strategic direction of the southern dispute.”

•        Although GTR  have to demonstrate that they took reasonable efforts to avert the dispute the Secretary of State for Transport has refused to meet the unions to discuss their views on the dispute or the validity of GTRs force majeure claims. Importantly, no account appears to have been taken that a dispute was in fact entirely avoidable and in the gift of GTR to resolve if an agreement with the unions had been reached on a similar basis to elsewhere on the network (for example Transpennine Express and Scotrail)

•        The details of GTRs claim and assessment process have not been made public including unsubstantiated claims that disruption was caused by unofficial action.

RMT General Secretary Mick Cash said,

“GTR have already been let off once by Ministers for being in breach of their contract for failings that predate the industrial dispute. Now we see evidence of another stitch up emerging with the news that the author of the so called independent report into Southern was actually all the time contracted to GTR to write it.”

“There is clear evidence that Ministers and civil servants have been directing this dispute, and are up to their ears in cosy relationships with the company and their consultants. That means they are clearly unfit to impartially assess whether GTR are at fault and whether or not GTR should be stripped of the franchise.

“We are therefore calling for the full publication and disclosure of GTRs claims and for the assessment of those claims to be taken away from the DFT and given to an independent body.”



Notes for editors:

•        The definition of force majeure in the GTR franchise agreement allows claims for “any strike or other Industrial Action by any or all of the employees of the Franchisee” it is also incumbent that “the Franchisee used and continues to use all reasonable endeavours to avert or prevent the occurrence of the relevant event and/or to mitigate and minimise the effects of such event on its performance of the Passenger.” This is entirely subjective and in effect allows the DfT to decide what is “reasonable” and does not act as an incentive for the company to settle an industrial dispute. RMT has reached agreement with a number of companies in very similar disputes. Is GTR being reasonable by not reaching an agreement with RMT?

•        When the department’s Director of Passenger Services, Peter Wilkinson, gave evidence on 7th November 2016 to the Transport Select Committee on the Rail Franchising Inquiry, he admitted DfT did not consult with the unions prior to mandating GTR to push ahead with Driver Only Operation.  

•        It was also abundantly clear from comments made in February last year by Peter Wilkinson that this industrial action was planned by the company and DFT in advance and therefore not unforeseen by either. “Over the next three years we're going to be having punch ups and we will see industrial action and I want your support.”

•        The Gibb report said of the Secretary of state that “you are already determining the strategic direction of this dispute.” How then can the government impartially assess whether GTR are being reasonable when GTR are doing what the government want them to?


Parliamentary answer


Asked on: 13 December 2016

Department for TransportSouthern: Industrial Disputes 57460>

To ask the Secretary of State for Transport, what responsibilities the Director of Rail Passenger Services [Peter Wilkinson] in his Department has in (a) processing and (b) advising on each of Govia Thameslink Railway's claims for force majeure in relation to industrial action on Southern rail services since 26 April 2016.


Answered by: Paul Maynard< Answered on: 20 December 2016

The team processing Govia Thameslink Railway’s force majeure claim sit within the command of the Managing Director of Rail Passenger Services. However, the Managing Director of Rail Passenger Services has had no involvement in processing or advising on the Department’s assessment of the claim


Extracts from First Class Partnerships consultancy 2011 (Peter Wilkinson a director at the time) Value for money report for Department for Transport


5.1.3 Almost universally, the attitude has been that it will require full Government support to risk industrial action. TOCs argue that at typically £1m per strike day, the cost of industrial action will not be recoverable in any contemporary franchise term. As staff costs generally form only around 30% of total TOC costs, the marginal savings that can be achieved are not sufficiently high for Train Operators to take such action. Furthermore, the current design of money flows are also an inhibitor in that effectively the TOCs can ‘buy their way out of trouble’ and simply pass the costs back to Government.

5.1.6 What has struck us is the commonly expressed expert opinion that longer franchise terms will not in themselves incentivise TOCs or Owner Groups to tackle IR issues any more or less than current arrangements. The principal incentive to do so expressed universally during our research to be the absolute commitment of politicians to stand behind the industry in any dispute, both with political will and through sharing the revenue risk which operators would have to bear. 


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Tagged with: Govia Thameslink, GTR, Contract