News that Network Rail executives are to receive bonuses, despite missing several modest targets, reveals the incompetence the British public can be persuaded to think they’re happy with
Sir David Higgins is a lucky man. He’s the chief executive of Network Rail who, we learned last week, is receiving a £99,082 bonus on top of his £577,000 salary. This wasn’t his first lucky break. He was already lucky enough to be the chief executive of Network Rail, which is a good job. His previous strokes of luck include being appointed chief executive of the Olympic Delivery Authority, the highest-paid quango boss in the UK, and being knighted for “services to regeneration” despite not being a Time Lord.
“But how can you be sure it’s luck?” you may be asking. “Perhaps Sir David is a very capable man.” I’m sure he is. But then he’s lucky to be so. Either way, he’s lucky: either he’s a jammy moron who fails upwards into ever higher-paid government work, or he’s fortunate enough to have been born with the skills to attain those positions by merit – or somewhere in between. It’s pragmatically sensible to give people jobs on merit, but that doesn’t mean that, on any deep level, they merit their own merit – unless you subscribe to some sort of Glenn Hoddle-style theory in which Sir David was a kindly tortoise in a previous life.
Sir David isn’t the only lucky guy at Network Rail. His charmed team, on salaries of about £350,000, are all getting bonuses: there’s Paul Plummer, the strategy director, landing a serendipitous £59,759; Robin “fluky” Gisby, the operations director, and Simon “butter side up” Kirby, the infrastructure projects managing director, who are getting £63,708 each; and, last but not least, group finance director Patrick “the scratchcard wonder” Butcher whose Thank You for Turning Up to Work present this year is £67,658.
What nice amounts to get as a surprise. Clearly, this isn’t a world in which your salary is a small nominal sum and the bonus is the lion’s share of your pay. These are bonuses in the proper sense of the word. Lovely jackpots, on top of extremely good salaries, which they can spend on fun. They can organise their finances based on six-figure incomes which, while Britain needs rail infrastructure, will arrive more reliably than any train. And then a huge five-figure sum turns up just for booze and holidays. An unexpected boon: like the buffet car having any sandwiches left.
The reason I was particularly drawn to this winning table of players in the Grand Casino of Public Money is that the organisation they run hasn’t shared in their luck. Network Rail, which costs the taxpayer more than £3bn annually, has missed important performance targets lately. “Lately” being the key word because that’s how the trains run. It missed its targets on financial efficiency, asset stewardship and, crucially, both freight and passenger train punctuality. Higgins’s guys were supposed to ensure that 92% of trains ran on time, which sounds like a modest aim, and only managed to hit 90.9%.
However, they did achieve their “passenger satisfaction” target of 84.3% which, in my view, is merely a testament to how passengers’ expectations of the train service have been managed downwards over decades of incompetence. Sir David’s team are standing on the shoulders of giants in terms of the crap the British public can be persuaded to think they’re happy with.
I’m not sure what 84.3% satisfaction means anyway. Are 84.3% of passengers satisfied? Are 84.3% of passengers with sufficient time on their hands to fill in a bullshit survey satisfied? Or is each passenger, on average, 84.3% satisfied about the railways within him or herself? If so, what does that mean? If there’s a train at the platform but it never moves, how satisfied are you? It can’t be 0%. It might be as much as 10%. Maybe people’s wonder at the technology of rail travel will lead them to be 60% satisfied just by the fact that it exists at all.
What is certain is that, if passengers are satisfied with a punctuality rate of 90.9% on the most expensive railway in Europe, they’re wrong to be. A target should be something you aim for. In the case of train punctuality, it should be 100%. That’s not to say it’s reasonable to expect every single train to be on time, any more than a darts player would expect to get a triple 20 with every dart. Targets and expectations are different. But the idea that 92% punctuality is the target – that to attain 93% would be to have missed, or overshot, the mark and wasted resources on a level of excellence officially defined as unnecessary – is absurd. If the Network Rail bosses had missed what they should have been aiming for by the same margin as they missed this barn door of a bullseye, then 99.1% of trains would have been punctual and they might deserve some beer money.
Explaining the bonuses, set at 17% of salaries, Richard Parry-Jones, Network Rail’s chairman, said that they could have been as high as 60% if more targets had been hit, but that: “Bonuses are only awarded for achievements significantly beyond what is expected of an executive.” This confused me. How can they have achieved “significantly beyond what is expected” if they missed several targets? Were the targets not expected to be hit? Do they consider 92% punctuality to be a pie-in-the-sky aspiration like my suggested 100% target? It appears these executives have been given bonuses because they did some of the things they were asked to. They were partially competent and consequently are deemed to have exceeded their employers’ expectations. Then again, perhaps that makes sense as their employers are the same taxpayers who are 84.3% satisfied with terrible trains.
Parry-Jones blamed the missed punctuality targets on “a year of extreme weather, the wettest on record” – in other words, bad luck. This means the bonus system is poorly structured; the company isn’t benefiting from their chief executive’s key asset. Sir David doesn’t strike me as a man who has many rainy birthdays. I reckon it would be safe for him to play golf in a thunderstorm – he’d probably get a hole in one. Network Rail needs to make his luck its own. But the weather wasn’t bad luck for Sir David – he got his bonus anyway – only for millions of passengers. The network failed to shelter under Higgins’s lucky star.
Napoleon supposedly said: “Bring me lucky generals” – in preference, the implication being, to talented ones. It’s a sound approach, but it only works if their remuneration packages are index-linked to victory. You shouldn’t get a medal for a defeat even if it wasn’t your fault.
David Mitchell’s memoir, Back Story, is out now in paperback