National Grid nationalisation raises big issues

11 Sep 2019

Prospect has warned that if the government is indeed serious about renationalising parts of National Grid, then it would need to think carefully about the ramifications, not just about the operational risks, but pension liabilities and the future of engineering in the UK.

Energy minister, Kwasi Kwarteng, recently suggested that the government was looking again at whether the National Grid should be stripped of its role as Britain’s Electricity System Operator (ESO).

The chief executive of National Grid, John Pettigrew, then told The Times that any such move would cause “a massive amount of disruption in the industry if you move to an independent system operator.”

The comments from the energy minister follows one of Britain’s worst blackouts for years on 9 August, which crippled the railway system and left millions of homes without power.

Prospect national secretary Steve Thomas said that the issue raised a number of questions that would require careful scrutiny.

“If the Government is serious about looking at public ownership and moving to an independent system operator, then it’s important that it recognises that it will be accepting a wide range of liabilities and issues,” Thomas said.

“The National Grid is asset light, but, operationally, a risk heavy organisation. Not to mention one with a significant pensions liability.

“If public ownership is to be the answer then we would want to have clear commitments to recruiting, retaining and rewarding a highly skilled engineering workforce. This is especially important given the shortfall of, and age profile of, engineering in UK.”

Thomas added that the current split structure of National Grid, with engineers across two organisations, helps with career development, and warned that a smaller pool could stifle the transferring of skills, and increase the reliance on contractors.

Engineering

Interestingly, Mr Pettigrew mentioned the strength of its engineering as a key reason why the National Grid should keep its ESO status.

Pettigrew said: “The capability it gives us as an engineering business is quite important. We have some great engineers in National Grid who understand not just how to maintain and develop networks but also how to operate them.”

In response, Thomas said:

“While there has been investment in graduates and apprenticeships in National Grid our members’ feedback is that the company, and in particular its HR practices, has moved away from feeling like an engineering business.

“On that basis we welcome John Pettigrew’s statement and encourage him and the Board to  improve engagement with Prospect over engineering career pathways. That could start by having a conversation about the graduate and apprenticeship schemes – currently the company refuses to collectively bargain over these.”