Examination of witnesses (Questions 280
- 299)
WEDNESDAY 17 MAY 2000
LORD MACDONALD
OF TRADESTON,
MR WILLY
RICKETT, MR
DAVID ROWLANDS,
MR RICHARD
BIRD and MR
PETER MCCARTHY
280. Apart from that they were doing alright!
(Lord Macdonald of Tradeston) What they have said,
Madam Chairman, is they have a project now in place that should
sort out the problems identified by the NAO and that should ensure,
they tell us, that their 1999/2000 accounts will be acceptable
to the NAO.
281. To be serious, Lord Macdonald, that is
pretty frightening because the four areas that have been highlighted
are the four areas which the Highways Agency spends most money
on.
(Lord Macdonald of Tradeston) They do assure us, Madam
Chairman, that the project which will rectify the problem is underpinned
by detailed plans and regular monitoring and the Agency tell us
that they are confident that the deficiencies spotted in 1998/99
will be rectified in time for the next audit which is taking place
later this month and runs to July.
Mr Bennett
282. But the whole idea of resource accounting
is to get a better idea of whether things are value for money.
What it amounts to is that for a lot of these road schemes put
on hold particularly, we do not know whether they were value for
money because this new system was not applied to them at all,
was it?
(Mr McCarthy) I think it is fair to say that the deficiencies
identified by the NAO relate entirely to the application of accounting
practices to these figures.
283. But the whole idea of changing the accounting
practices is for people like me to be able to understand them
a bit better. If the Highways Agency could not understand them
are you realistic in thinking that Members of Parliament and other
people who should be holding you to account are also going to
be able to understand them better?
(Mr McCarthy) Indeed, and it is clearly unfortunate
that the Highways Agency was not able to produce a perfect set
of accounts but the whole purpose of this dummy run was to expose
just that sort of problem.
Chairman
284. It was very successful, was it not, Mr
McCarthy?
(Mr McCarthy) To see what issues needed to be tackled
for the Highways Agency to move to resource accounting and budgeting
proper which they will be required to do in future years.
Mr Bennett
285. Can I take you on to another happy area
for the Department, air traffic control and the new en-route centre
at Swanwick. How much is it going to cost and when it is going
to be working?
(Mr Rowlands) In terms of cost, I think it is expected
that it will cost of the order of £625 million.
286. 25?
(Mr Rowlands) £625 million, from memory. In terms
of when it will be operational, the Committee knows as well as
I do the problems there have been. I think it was John Reid in
front of this Committee who said the expected operational date
of the project, having been fully reviewed, was now the winter
of 2001/2002. The project was rescheduled on 1 January last year
against that operational date and since then the project has hit
every milestone as they have gone along. They are on course for
technical handover by the end of this year. Technical handover
means that they will hand over a fully working system for there
then to be of the order of 12 months' training for air traffic
control operators on a fully working system before it goes live,
as I say, in the winter of 2001/02.
Chairman
287. Before you leave that one, does that mean
you are seeking to do a deal on the possible privatisation of
it before you are absolutely certain it is going live with a workable
system?
(Mr Rowlands) Yes.
288. So it is caveat emptor? Anybody
who comes forward should be aware that what they are buying is
a system that may indeed not work?
(Mr Rowlands) Certainly in any sale the Government
makes we would expect all prospective buyers to conduct due diligence
and no doubt they will want to conduct due diligence on Swanwick.
289. Will that not have an effect on the price
of the assets? If one sells something as seen, it does have a
minor effect on the price, does it not?
(Mr Rowlands) The Committee will also remember—
290. The Committee has a very long memory for
this.
(Mr Rowlands)—That the report from DERA was
quite explicit in terms of the confidence which they as an independent
scrutineer had that this system would work. We have moved on quite
a number of months since then. I have every confidence that any
prospective buyer of the 46 per cent share we are selling in the
NATS PPP will be equally confident that they are buying something
that works. Remember, I said a timetable for handover by end of
the year with a fully operational system on which people simply
need to be trained. This sale will come after the handover point
and by then the ATCOs will be training on a fully workable system.
Chairman: I might remind you, Mr Bird, how often
the Department has been totally confident about air traffic control
in the Swanwick centre but that would be extraordinarily unkind
at this juncture.
Dr Ladyman
291. Could I ask an aviation question. In your
Annual Report you say that you intend "to encourage regional
airports within sustainable development principles." I cannot
find anywhere in the report what form your encouragement is going
to take or, in particular, how much money you have set aside for
such encouragement.
(Lord Macdonald of Tradeston) Encouragement of sustainable
development?
292. "Regional airports within sustainable
development principles". I presume what you mean by that
is instead of having thousands and thousands of aeroplanes coming
into Heathrow it might be possible to have some of them going
into, plucking a name out of the air, London Manston, which happens
to be in my constituency. What I want to know is whether you are
prepared to put any money into encouraging that type of development?
(Mr Rowlands) Perhaps I can try and help. We have
been conducting a series of regional airport studies. We got underway
fairly recently a study of airports in the South East which would
include the place of London Manston International. Those studies
encompass quite explicitly sustainable development and we would
be happy to send the Committee the terms of reference for these
if they would like to see them.
Chairman
293. I think something slightly wider than the
terms of reference, perhaps a little bit of information beyond
terms of reference?
(Mr Rowlands) I am very happy to do that. We will
draw all those together on the regional side really towards the
end of this year when we will pull together both the economic
aspects of developments, and the environmental and indeed social
aspects as well.
Dr Ladyman
294. As far as I can see, you have not made
any estimate for funding to do this encouragement. Your encouragement
is going to take the form of warm words.
(Mr Rowlands) These are private sector companies;
we are not in the business of subsidising private sector companies
to develop airports.
Chairman: That is a clear statement. We only
had to wait how long? Mr Bennett, you were going to go on?
Mr Bennett
295. I was going to go on to the Marine and
Coastguard Agency, this project, can you tell us when the benchmarking
testing was completed and what is happening?
(Lord Macdonald of Tradeston) The project remains
on time and within budget. Although we accept that we are at an
early stage in the development of it the contract was awarded
to Securicor Information Systems in January. A detailed project
plan and payment profiles are all in place and the development
in training systems was delivered to the MCA Training Centre in
February and has been extensively tested since then. The systems
manager training for staff at Clyde and Stornoway, the first stations
to receive the new equipment, has already been delivered. The
systems for Clyde, Stornoway and Shetland have been built and
installation has commenced at MRCC Clyde. Comprehensive staff
training is scheduled to commence at Clyde mid-July with completion
in early August. The MRCC Stornoway installation commences in
early June with an August completion. Oban should be ready for
closure by late September 2000. This is all in line with the project
timetable agreed at the contract stage.
(Mr Rowlands) It is at that point that the flank stations
around Oban will be fully kitted-out and fully trained. At that
point Oban will close.
Chairman
296. Flank stations.
(Mr Rowlands) Oban, Pentland and Tyne-Tees are scheduled
to close.
297. Where will you put all of the equipment?
(Mr Rowlands) The equipment is going to a roll-out
programme. At the moment there are twenty-one rescue centres,
three are scheduled for closure and this equipment is progressively
being rolled into the eighteen remaining stations. Amongst the
first stations in this programme are the flank stations either
side of Oban, Pentland and Tyne-Tees.
298. The flank ones, quite some distance away.
(Mr Rowlands) Radio waves are no respecter of distance.
299. One hopes not.
(Mr Rowlands) Those three will close progressively
as the flank stations have been fully equipped and staff trained
in their use.
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