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Northlink and Caledonian Sleeper staff to receive £200 each in parent company’s £9m bonus

Serco chief executive Rupert Soames.
Serco chief executive Rupert Soames revealed Northlink and Caledonian Sleeper employees would share part of £9m windfall.

Workers at Caledonian Sleeper and on Shetland and Orkney ferries are each due to receive a £200 one-off payment as part of a £9 million bonus with parent company Serco looking to ease the effects of rampant inflation and surging energy bills for its employees.

The bonus will apply to employees “outside management grades” with workers at Serco’s sea and rail divisions seeing the extra money deposited in their pay packets in “the coming weeks.”

The news came as Serco unveiled 2022 first-half year results which it said were “much better than expected”, showing operating profit rose 6% to £123m.

However the firm warned the bonus, which will be shared out among 45,000 workers, along with rising costs will lower profits in the second half of the year.

A spokesman for Serco said: Our employees on both Caledonian Sleeper and NorthLink Ferries are included and will receive a £200 payment per person. This is in addition to any pay increases.”

Inflation impact

In a statement, Serco Group chief executive Rupert Soames explained some of the difficulties caused by rising inflation which reached a 40-year-high in June.

He said: “As a result of the recent surge in inflation we are increasing pay faster than we budgeted and we will be distributing an additional £9m in the coming weeks in one-off payments to all our colleagues outside management grades, recognising the pressure many people, particularly the lower paid, are under at this time.

Northlink ferry at sea.
Northlink Ferries is part of the Serco empire.

“Increasing pay is one of the reasons why costs are expected to be higher, and profits lower, in the second half than in the first.

“We do have mechanisms in many of our contracts which will over time help us mitigate the effects of cost increases, but inflation that goes from 2% to 10% in 12 months, and is then forecast to fall back to 2% by the end of 2024 makes it hard for companies, customers and employees to balance their long-term interests and expectations.”

How ‘black swans’ affect ferry and train operator

Mr Soames specifically highlighted the two “black swan” or completely unexpected situations which have dominated world events in the past few years, namely Covid and the war in Ukraine.

The Northlink and Caledonian Sleeper boss noted due to Covid “up-ending the world” and the turmoil resulting from rampant inflation to a large extent triggered by the Russian invasion of its neighbour, governments needed the innovation of the private sector as they looked to bounce back.

Caledonian Sleeper train.

Mr Soames added: “These two catastrophes will shape public policy for years to come.

“Governments are struggling to square promises to invest in energy transition and to ‘build back better’ with the realities of materially increased levels of public debt incurred mitigating the impact of Covid-19.

More stability among workforce

“In squaring these circles governments will need more than ever the innovation, efficiency and skilled operational management the private sector can bring to the effective delivery of public services.”

Serco notes it has seen more stability among its 57,000-strong workforce as more people return to work and the number of vacancies reduces.

However, staff turnover remains high in some contracts and unpredictable absence levels driven by waves of Covid-19 are proving challenging.

Rupert Soames is a grandson of former prime minister Sir Winston Churchill.

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