House of Commons - Public Accounts - Twenty-Eighth Report

Select Committee on Public Accounts Twenty-Eighth Report

2 The Agency's Vehicle Excise Duty enforcement activities

10. The Agency tackles the problem of Vehicle Excise Duty (VED) evasion through a variety of enforcement activities. Police and traffic wardens have been reporting unlicensed vehicles to the Agency for follow-up action for well over a decade.[25] Within the past five years, wheel clamping and the use of Automatic Number Plate Reader (ANPR) equipment have been introduced.[26] More recently, various partnerships with local authorities and other enforcement agencies have been established and piloted, and these have had some further success in attacking evasion.[27] The Agency has also examined the possibility of including adhesive decals or electronic chips in the number-plates of certain vehicles. If feasible, this would allow the Agency to use its ANPR system to provide live information on actual evasion from traffic sightings.[28]

11. Taken in isolation, wheel clamping apparently offers poor value for money as an enforcement activity. In 2002-03 the Agency clamped 40,000 vehicles at a cost of £8.7 million or £218 per vehicle.[29] Every £1 collected from wheel clamping costs the Agency £4.25.[30] The Agency explained that it is the deterrent effect on the motoring population that is the primary purpose of its wheel clamping activities.[31] The Agency aims wheel clamping at the hardened evader and believes that when the value of 'induced' relicensing from the deterrent effect is taken into account, the overall VED return far exceeds the cost.[32]

12. The Agency was unable to allay the suspicion that a proportion of the Agency's wheel clamping efforts are being used by the public as a means to dispose of old, un-roadworthy vehicles without incurring the costs of scrapping. The Agency conceded that, in the main, it is the very oldest vehicles that are wheel-clamped which go unreclaimed by the keeper, and which ultimately have to be crushed at the Agency's expense.[33]

13. The cost of the Agency's new wheel clamping contract let in 2002-03 rose by 75%. Under the old contract the cost was on a fixed-price basis. The new contract has an increased number of wheel clamping teams and an incentive mechanism linked to performance.[34] The Agency was unable to offer evidence to support its contention that the deterrent effect would increase proportionately with the additional costs of the new wheel clamping contract, nor could it give satisfactory assurance that there was a robust financial case to support the Agency's plan to almost double its wheel clamping activity from 55,000 vehicles in 2003-04 to 100,000 vehicles in 2004-05.[35]

14. The other primary VED enforcement activity used by the Agency is Automatic Number Plate Reading (ANPR) equipment. The Agency currently operates 15 vans to keep a check on around 31 million vehicles.[36] ANPR activity yields £1.50 of direct revenue for every £1 of cost.[37]

15. The Agency needs a variety of VED enforcement activities to tackle different types of evasion. VED evaders who have not kept their records up to date, or who display false number plates cannot in practice be pursued by the Agency despite being sighted by ANPR equipment or by police and traffic wardens.[38] Wheel clamping is effective in these cases, as it is not reliant on tracing vehicle keepers from records. The physical immobilisation of the vehicle forces keepers either to declare themselves, or to have their vehicles confiscated -ultimately being sold or crushed.[39]

16. The Agency acknowledges that on-the-road enforcement is an expensive option, but stressed that it worked in partnership with other agencies whenever possible.[40] A new offence had recently been created of being the keeper of a vehicle that is not either correctly licensed or covered by a SORN declaration. This removed the previous requirement on the Agency to actually observe the vehicle on the road before enforcement action could be taken. The Agency is now able to enforce VED compliance from the relicensing information held on its vehicle database.[41]

17. The Agency's partnerships with police forces, local authorities and other central government agencies in tackling VED evasion have been successful but could be expanded at little cost.[42] By working together the Agency and local authorities can use their combined powers to speed up the removal of abandoned untaxed vehicles which are often a magnet for arson or vandalism.[43] Despite the significant benefits for both the Agency and local authorities, fewer than 2% of local authorities are working with the Agency on removing abandoned vehicles.[44] More than half of all local authorities do not take part in the Agency's Car Park scheme.[45] Figure 2 illustrates that there still remains considerable scope for the Agency to increase the extent and scale of its partnerships with local authorities.Figure 2: Partnership working between the Agency and local authorities

There are 442 local authorities in England, Wales and Scotland.

Car Park Schemes: Only 189 (43%) local authorities forward to the Agency details of untaxed vehicles sighted in council operated car parks.

Adoption of Devolved Agency Powers by local authorities:

At 31 March 2003, only 7 (1.6%) had adopted Devolved Powers.
A further 7 (1.6%) intended to adopt Devolved Powers within 2002-03.
An additional 16 (3.6%) were in discussion with the Agency at 31.03.03 about adopting Devolved Powers.