Our Ref: GS/kh/NGrid SS
23 April 2009
Mr S Holliday
Chief Executive
National Grid
1-3 Strand
LONDON
WC2N 5EH
Dear Mr Holiday
National Grid – Shared Services
As you know, I wrote to you previously about the Shared Services
Review and in particular the threat that was posed to the Newcastle
office. I am sure you appreciate my misgivings about the way
the whole process was being handled. We remain of the view
that, without the intervention of Stephen Byers MP and the Trade
Unions, it is likely that the functions carried out in Newcastle
would have been outsourced and off-shored.
Lately, the Trade Unions have been working with the Company to
try and identify savings. The workforce has participated in
some 30 workshops and the savings accounted for thus far have been
significant, but I think it is very difficult to meet the challenge
set by National Grid. I know you have raised the issue of the
regulatory pressures that the Company is under from Ofgem and the
GMB will meet with Ofgem to discuss this issue in the next few
weeks.
I recently joined a number of teleconferences with our
local union representatives to get an update on how things were
progressing and to discuss the RFP (Requests for Proposals) which
have now being sent out. When the management who participated
in the teleconference were asked whether the Company had
ruled out the possibility of off-shoring work, a key demand from
the Trade Unions, the Company representatives could not give
us a clear commitment. I think that at this stage in
the process the Company could have assured us that they would not
be off-shoring any work. The Unions have always made it clear
that we are not embarking on a sham of a consultation process, nor
entering into some type of competitive exercise which there is no
chance of winning, because external providers are looking at
using labour from low wage economies such as India.
I believe it would be an abdication of your commitments to act
in a socially responsible way if National Grid was to off-shore
work, particularly in this period of economic turmoil.
Whilst accepting National Grid faces some challenges, the
Company remains very profitable and is far better placed than many
businesses to ride out the economic downturn.
Cont/….
- 2 -
You should also be aware that our members are incredulous that
the Company could even be considering outsourcing more work, given
recent experiences. Our understanding is that the Company is
currently undertaking a major enquiry into fraud and or
misreporting in the contracted out mains replacement
programme. The belief is that this enquiry is considering
sums of many millions of pounds. Presumably National Grid
could also face significant penalties if there has been
misreporting and mismanagement on the mains replacement
programme.
You may not be aware that we have also encountered problems with
the elements of payroll that have been outsourced to More
Pay. I understand that National Grid's internal systems and
those of More Pay do not always marry up. When it comes to
our gas industrial members this has resulted in the Company
breaching our agreements. More significantly there are issues
between the Company internal systems and More Pay which apparently
have caused difficulties over the recording of actual hours worked
and rest periods . We are concerned that the outsourcing of
elements of pay roll has resulted in the situation where the
Company may not be complying fully with Health and Safety
legislation when it comes to measuring hours of work and
fatigue.
I have previously advised you that confidence in senior
management has been severely dented. I look forward to your
response on the above points, it will inform our view on engagement
going forward on the Shared Services Review.
Finally, our members in Newcastle are disappointed that you have
not yet taken up the offer to meet with them.
Yours sincerely
GARYSMITH
NATIONAL SECRETARY
Commercial Services Section