Network Rail has decided not to renew the Amey rail maintenance contract for the track between Paddington and Reading. Instead, says Mr Armitt, he is going to do the £50m works in-house. Put another way, Network Rail is going to become the main contractor as well as client. The notion is not only to manage the work but to do the work that would ordinarily be sublet beyond Amey. So Network Rail is angling to become a real old-fashioned building and maintenance contractor. Crumbs! That means they will be taking on bricklayers, carpenters, even painters and decorators.
Can you imagine the shift in construction as a whole if Armitt's idea works? It might be the end of construction management and management contracting. We shall shortly see fee-earning construction managers abandoning their hush puppies to don wellington boots and become, dare I say it, actual builders. The union boss Mick Rix of ASLEF agrees with all this. He wants to reverse out of what is called "contract culture". He puts up the idea that once numerous organisations become involved in one task, nobody "takes ownership", nobody wants to really take responsibility.
There is an element of truth in this, although main contractors will rubbish the idea. They take responsibility for the errors and omissions of their subcontractors. That's true. But they pick up the contractual pieces after the mistakes have been made, and that's too late on the railways. And, yes, there is a huge difference between a builder whose own bricklayers are on the job and a contractor who sublets the bricklaying to a brickwork subcontractor, who sublets the labour to a labour master, who sublets the hod carrying to a bloke he met in the pub last night. The subcontract package is not just getting someone else to buy and lay bricks; it is confused with subletting "ownership" of the brickwork.
Does Armitt really mean to employ tradesmen as employees and buy dumpers, the odd cement mixer, a bucket or two? It is a stunning move
Mr Armitt is going to do the whole lot himself. It is, of course, an experiment. Until now the rail company linked arms with its term contractor and managed its way through broken rails, replacement parts, repainting station … to say nothing of maintaining tunnels, bridges, viaducts and more besides. He is taking on 500 Amey staff but says he will also take on the men who wield the pick, paintbrush and plasterer's trowel. As I said, he is not only elbowing the contractor off the pitch, but the subcontractors and their sub-subcontractors, too. Does he really mean to employ tradesmen as employees and does he really mean to buy dumpers, the odd cement mixer, a bucket or two? It is a stunning move.
It is not as if Mr Armitt is an outsider to construction. He must know full well that contractors have backed away from actually doing the work over the past 30 years. It is better to work for a fee and better to earn that fee by managing the subcontractors. Let these lower order chaps take the risks. Better to invest in beating the subbies down on price. Better to invest in compiling a homemade subcontract. And much better to scout around for which subbies made a poor fist of the job and then run out the contractual claim. That is what "contract culture" is all about.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on firstname.lastname@example.org.