Privatisation of British Rail in 1996 totally restructured the industry. Railtrack is now at its heart, a public company listed on the Stock Exchange which owns Britain’s rail infrastructure – the tracks, signals, tunnels and stations. The core of its business is selling train paths, essentially time slots on the various routes, to the 26 train operating companies (TOC) which run the trains. But despite owning the 2,500 stations, Railtrack itself only runs 14 of the network’s major stations, while remaining ones are managed by the lead TOC in each area. The continuing large public subsidies go to the TOCs, not to Railtrack directly.
Railtrack employs over 10,000 people, half in signalling. Turnover in 1997/98 was ?2.5 billion, mainly from the track access charges, and pre-tax profits were nearly ?400 million. Although very much in the public eye, Railtrack has few direct public customers whose impressions of the rail industry are now largely formed from the performance of the TOCs. Industry privatisation proved controversial and this was inevitably reflected among staff too. So a key management task has been to restore morale and a sense of commitment, and this is reflected in the importance given to employee involvement in the community programme.
The community programme
For the 1997/98 financial year, Railtrack’s community contribution was valued at ?1.4 million, equivalent to 0.35% of pre-tax profit. However this understates the company’s current contribution, for two reasons. First, Railtrack is one of the 18 companies supporting the ‘Getting the Measure’ initiative to develop and promote the London Benchmarking Group model. It has begun the process of applying the model and already another ?200,000 of previously unrecorded contribution has been identified.
Second, as a new company, Railtrack had to devise a whole new approach to community involvement and the first formal policy on charitable donations, sponsorships and matched giving was introduced only part-way through the year, in July 1997. Called ‘Partners in Giving’, this has a budget of ?1.5 million in the current financial year, for projects which must fit three key themes:
– donations to disability issues;
– sponsorships either to disability issues or disadvantage;
– matching of employee fundraising (pound-for-pound to disability, 50 pence for other projects).
After careful consideration, six partner organisations were chosen, with the first four being granted ?100,000 each for disability access projects:
RADAR (the Royal Association for Disability and Rehabilitation) – for example, holding opportunity days on career options for school leavers with special needs;
the ADAPT Trust (Access for Disabled People to Arts Premises Today) – for example, seminars and an awards scheme;
Special Olympics UK – setting up eight new inner city sports clubs;
the National Trust and National Trust for Scotland – a range of projects to improve access and volunteering;
Business in the Community;
the Prince’s Trust Volunteers.
The latter two organisations are helping to enable employee involvement. Staff are offered up to five days leave a year in paid time for voluntary work, or longer if involvement is linked to a personal development plan, subject to operational requirements. Matched fundraising includes money donated through Give As You Earn, up to the ?1,200 maximum. However, in the first six months of the scheme only ?4,000 was raised and so the approach is being reviewed.
As an interesting addition to the programme, the merits of donating to Special Olympics is promoted to shareholders. More than one in three takes dividends in the form of extra shares, leaving a residual fraction which is not enough to acquire a whole share. They were invited to donate this and in 1997 over ?26,000 was raised.
Wider community support
As an essential public service, Railtrack sees itself very much as part of the community in a way that goes well beyond the formal community involvement and charitable giving programmes. For example, a central fund offers a maximum of ?100,000 per project to match local improvement projects in partnership with local authorities and others, without the need for a business case to be made. In London, ?4 million is being contributed to a ?20 million scheme with the Millennium Commission and other funders for a new Hungerford pedestrian bridge across the Thames; in Cardiff, ?1 million is helping to open the central square in front of the station, in partnership with the Welsh Development Agency. These are not counted as part of the community contribution total but equally well are not part of the commercial investment programme.
Management
Responsibility for the community programme sits with Caroline Oakley, who is part of the head office corporate affairs team. She reports to the head of investor relations and then to the director of corporate affairs, Philip Dewhurst, who is a member of the ‘chairman’s meeting’, the main executive committee of the company. A new public policy subcommittee of the main board, with participation by non-executive directors, is soon to assume oversight of corporate responsibility issues.
Down the line, Caroline Oakley liaises with the seven geographical zones where a combination of managers in human resources, external relations and internal communications hold responsibility for the issue. Funds are held centrally, with the zones making bids for support. A ten member community panel, chaired by Caroline and with representatives from the zones and various head office functions, meets quarterly to consider funding decisions.
Corporate responsibility
Having established the formal community involvement programme, Railtrack is now putting in place a broader approach to corporate citizenship, with a commitment to reporting externally. The first ‘corporate responsibility’ account was published in the summer of 1998, with some trend data on the environment and a descriptive account of social issues such as access for disabled people, safety and staffing. An acknowledged halfway house, the chairman, Sir Robert Horton, has pledged to publish a set of targets and timetables and then to report back regularly on progress, starting in mid-1999.
A crucial component of this emphasis on social responsibility is on access and disability. A dedicated disability strategy manager was appointed in March 1998. The largely Victorian network was not built either with today’s public expectations or legal responsibilities under the Disability Discrimination Act in mind. The community programme helps to support mainstream action to address these issues, and offers good points of contact for consultation, for example on priorities for renovation. Indeed RADAR was engaged through a commercial contract to assess accessibility of stations.
Forward issues
In a short space of time, Railtrack has researched and got going a wholly new community programme. The commitment to measure and report on wider social responsibility issues too is commendable. For the future, three issues should take priority. The first is deepening the community programme’s links with the mainstream business, a process which should be easier once the key targets for social accountability are set and measured.
The second priority is employee involvement, where take-up of matched funding and the ‘five days leave’ option are still low. There will always be limitations on engagement in paid time when half the employees are staffing signal boxes and clearly cannot easily leave their posts. A strong lead from senior managers will help, as will greater imagination on devising suitable options by the charity partners. In one area already, for example, the community foundation in south east London has asked not just for a donation but has offered a selection of practical projects for staff involvement with local community groups situated along one rail route.
Thirdly, Railtrack needs to publicise its community programme and wider responsible business behaviour with the general public, when options such as gifts in-kind and cause-related marketing are not open to it. This is under active review.
Whatever else privatisation achieved, it has freed Railtrack to get involved in a way British Rail could not and by planning action to tackle these priorities issues, the company will do more. But what of the rest of the industry, where too few of those 26 train operating companies have yet shown the same degree of commitment to meeting their social responsibilities as private providers of a vital public service?
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