30 October 2003 | David Arminas
Up to 15 per cent of purchasing jobs are set to go at Network Rail under its plan to slash several billion more pounds off its operating budget by 2009.
A Network Rail spokesman told SM that the company is embarking on a major reorganisation in all departments, including procurement, and that in the next few weeks 700 middle managers will be made redundant.
"The company is reorganising, and 15 per cent of middle managers in the company will leave in a few weeks. Purchasing will have to shoulder its share," he said.
One of the first to leave is Les Mosco, Network Rail's director of supply chain and a former CIPS president.
The spokesman said Mosco "is leaving by mutual consent".
He joined the embattled operator Network Rail in 2000 when it was called Railtrack - the privatised, for-profit, organisation that was set up to run the UK's rail infrastructure but which was subsequently forced into administration.
Mosco, who was president of CIPS from 1995-96 and who has more than 20 years' experience in the private and public sectors, focused on strategic supply chain issues including contract management.
He finishes at Network Rail tomorrow, and he has said that he will set up his own consultancy.
Network Rail announced in March that its five-year budget was to be cut from £35 billion to £29.5 billion.
Late last month, the company announced a further cut of 17 per cent to £24.5 billion, prompting fears over the quality of its contract management, especially that for rail maintenance.
Network Rail itself has warned that the cutbacks will mean less rail maintenance and track renewal, as well as shabbier stations.
Earlier this month, engineering contractor Jarvis announced it would leave the rail maintenance sector. Then last week, Network Rail announced it was taking back in-house all of its remaining outsourced rail maintenance contracts.
Paul Maltby, a research fellow at the Institute of Public Policy Research and a public-private partnership specialist, said that the Jarvis withdrawal and Network Rail's contract maintenance problems flagged up serious issues for anyone involved in long-term, high-risk partnerships.
He told SM: "I think high-risk partnership contracts such as those with Network Rail will still increase in the next few years, but there is now a serious question over how they are managed."
Maltby added that suppliers and clients needed to reassess risk management and improve lines of communication in the light of the Jarvis withdrawal and the London Underground derailments this month.