Sell-off

sparks

shake-up

Exclusive report

by DEREK DOUGLAS

A REORGANISATION of administration at senior level within British

Rail, being undertaken against a backdrop of threatened privatisation,

could end years of internal tensions and rivalry by returning fiscal

powers and real authority to a Scottish supremo operating from Glasgow.

BR replaced autonomous geographical regions four years ago with five

business-identified sectors. This neutered the real power of the

regional general manager.

The lines of command operating under the sector management system have

led to internal tensions. Senior railwaymen in Scotland, with the

backing of the Scottish Office, are known to have been lobbying hard for

a return to the pre-1985 set-up with the Scottish general manager being

master in his own house. Negotiations are said to be at a particularly

delicate stage.

In Scotland, the current general manager, Mr John Ellis, who has

13,000 staff, ostensibly controls the network north of the Border.

However, unlike his predecessors before reorganisation, he has no

absolute input on strategy and spending.

In reality, the UK railway network is run from London where the

directors of the five divisions -- InterCity, Freight, Parcels,

Provincial and Network South East -- are based.

The case for the Scottish general manager to be given back some of the

financial power enjoyed before 1985 is based on the principle that

Scotland is a nation and that it is preferable -- in negotiations with,

for instance, the Secretary of State for Scotland and senior local

authority figures -- for the officials to know that they are dealing

with an individual wielding power.

The Scottish general manager is sidelined at present on the strategic

issues because under the five-sector plan the major decisions are taken

by the sector directors operating in London. They base their decisions

on advice provided by sub-sector directors in the provinces.

There are four senior officials in Glasgow, ostensibly operating under

Mr Ellis but reporting to directors in London.

Mr Iain Maclean and Mr Neil Atkins are responsible for InterCity in

Scotland; Mr David Clayton oversees freight; and Mr Chris Leah, also

reporting to his director in London, is the provicial network sub-sector

manager in Glasgow. Under such a structure, it can be seen that, in

terms of strategic input, there is very little for the hitherto

all-powerful general manager to get his teeth into.

The internal review is being conducted by the BR board chairman Sir

Robert Reid whose idea the sector management system was. It has been

prompted by the Government's aim, albeit rather muted of late, to sell

off the rail network.

Sir Robert, who retires in March, is set against piecemeal

privatisation and favours the formation of a holding company overseeing

the entire network. This would make it more difficult for the profitable

parts of the package, such as Inter-City, parcels and freight to be sold

off leaving the unprofitable, grant-aided parts like provincial (which

includes Scotland) and to a lesser extent Network South East, still in

the public sector.

Scotland receives about one third of the Public Service Obligation

grant which the Government makes available to subsidise loss-making

routes. If under privatisation this grant were to cease -- and it is

currently worth in the region of #600m -- then the provincial network,

including Scotland, becomes a distinctly unattractive proposition for

potential buyers.

Railway insiders were speculating yesterday that renewed autonomy for

a Scottish region could mean that in the event of privatisation, however

distant, Scotland could be left out of the equation.

Mr John Boyle, director of public affairs for British Rail in

Scotland, said last night: ''Railway organisation is a matter for the

British Railways Board and I can offer no comment on this.

Unquestionably, our present business-led orgainsation has been a

remarkable success, witness the #125m we can now afford to invest in new

trains for Scotland.

''The general manager is the railway's chief officer in Scotland. His

job is to run the entire operation to specifications agreed with

individual business managers here and, in the case of Strathclyde, with

the regional council. This arrangement has worked well under successive

general managers.

''Privatisation is a matter for Government, not British Rail, to

decide in the best interests of our customers.''

Mr Ian Dick, secretary of the Transport Users' Consultative Committee

in Scotland, said he was aware of criticisms being voiced about the

sector management structure.

''I know, for instance, that there has been a lot of debate about

general managers 'not being what they used to be.' Chris Green, for

instance, when he was general manager up here was God. Whatever he said

was done.''

* TRANSPORT Secretary Cecil Parkinson is struggling to find a new

chairman for BR even though the salary on offer is at least double Sir

Robert's #92,000. Mr Michael Bishop, chairman of British Midland

Airways, is the latest to turn down the post. He rejected the job

because his airline has just struck a deal with the Scandinavian carrier

SAS which was dependent on Mr Bishop staying at the airline.

Leader Comment 10