Appendix
INTRODUCTION
In April 2004, the Department for Transport (DfT)
published its Departmental Annual Report. The Transport Committee
held an evidence session in November 2004 to discuss the Department's
strategy, Public Service Agreement targets and departmental spending.
The Secretary of State and the Permanent Secretary gave evidence
to the Committee on 17 November 2004.
The Government welcomes the Transport Committee's
Report on the Departmental Annual Report and the recommendations
made by the Committee. This document responds to the recommendations
and represents the Government's formal response to the Committee's
report.
RESPONSE TO RECOMMENDATIONS
1. We recommend that the Department for Transport
reflects on the various documents in which it reports progress.
We believe the Department needs to make sure that they give a
clear view of the Department's aims and its success in fulfilling
them, and that they form a coherent series. (Paragraph 4)
The Government agrees that it is helpful to have
a coherent series of reporting documents. Since the publication
of our 2004 Annual Report, we published our strategy document
'The Future of Transport' which sets out our vision for the next
30 years. The commitments contained in it, along with our PSA
targets, are taken forward in the Department's 2005-06 business
plan and we will report on these in future Annual Reports. The
2005 Annual Report is primarily retrospective and reports on PSA
targets and objectives for 2004-05. Nevertheless, we have attempted
to explain more clearly how the Department's aim, strategy and
objectives fit together, making the distinction between targets
and objectives for previous years and future years.
2. We recommend that the Department considers
a radical restructuring of its report so that chapters are more
clearly related to the Department's strategy and its Public Service
Agreement targets. (Paragraph 5)
The 2005 Annual Report has been structured around
the Department's strategy document 'The Future of Transport'.
Our PSA targets cover only part of the Department's responsibilities
and we have therefore included a table showing where information
on PSA targets can be found in the Report. In addition, the start
of each chapter makes clear if it contains information on the
targets.
3. The Annual Report should give far more information
about the Department's performance. Where possible, performance
indicators should allow the reader to judge the effectiveness
of a particular programme, rather than how much has been spent
on it, or how many schemes have been started. It should also make
far greater use of graphs and charts to show actual and projected
performance. (Paragraph 11)
We have addressed this recommendation throughout
the 2005 Annual Report by including more explicit information
on performance indicators, where available, and greater use of
graphs and charts.
4. We recommend that future editions of the Annual
Report contain far clearer information about each of the Department's
major programmes. This information should cover expenditure and
outputs over a five-year period. For major programmes, expenditure
should be given both on a constant and a current cost basis. (Paragraph
12)
Financial information on the Department's major programmes
over a five year period has been added to certain chapters in
the 2005 Annual Report, including the example given by the Committee.
Expenditure in the core tables has been broken down
by SR 2004 PSA objectives. This is consistent with the published
Estimates.
All expenditure tables in the 2005 Annual Report
give figures on a current cost basis, taking account of reclassifications
(a change in the way spending is recorded) and restructuring (such
as a machinery of government change). In accordance with the Committee's
recommendation we have also included totals adjusted for inflation
in the main expenditure tables.
5. We recommend that future reports should contain
information about transport funding from all public sources, accompanied
by a brief explanation of the funding systems. (Paragraph 13)
Chapters 5 and 6 of the 2005 Annual Report, which
relate to spend by local authorities, contain enhanced information
on funding systems. In particular, chapter 6 provides a breakdown
of local authority revenue expenditure.
6. The Annual Report was an opportunity for the
Department to set out the improvements the Highways Agency has
made in its preparations for severe weather. It missed it. In
future we would like clearer information about how the Department
and its Agencies are handling risks of disruption to the transport
network included in the Annual Report. (Paragraph 14)
The Department's Agencies are required to publish
separate reports and it would not be appropriate for the Department's
Annual Report to cover Agencies' operational policies in detail.
Nevertheless, the 2005 Annual Report includes some information
on handling risks of disruption to the road and rail networks.
More generally, the Department is fully engaged in
planning and preparing to deliver its part of the Government response
in the event of major disruption in the transport sector. Emergency
plans covering the Department's own actions are regularly updated.
The degree of planned involvement in incident handling varies,
from a support role where the prime responsibility for contingency
involvement rests with private transport operators, to a more
direct operational role in the case of Highways and Maritime and
Coastguard Agencies.
In combination with other parts of Government, the
Department seeks to identify and communicate risks, so that appropriate
preparations can be made. This is facilitated by strong links
between the Department and its stakeholders. The Department works
with its stakeholders to ensure lessons from previous disruptions
are identified and acted upon.
In the event of significant disruption, the Department
utilises these links with stakeholders to ensure that they are
dealing with the incident and to establish what assistance they
may require. In the event of disruption which would require a
cross-Government response the Department would be involved, representing
the sector at the central level, ensuring good information flows,
and aiding the speedy resolution of the disruption.
7. Where the Department is relying on delivery
through others, it should make its role explicit, and provide
more explanation about how the performance of others is being
supported, and monitored. (Paragraph 15)
The 2005 Annual Report includes more detailed information
on the Government's role and how relationships with delivery partners
are being managed.
8. It is helpful that both the Annual Report 2003
and Annual Report 2004 clearly set out not only the current Public
Service Agreement targets, but those from earlier spending rounds.
We welcome the fact that this approach has been continued in the
Autumn Performance Report. The Autumn Performance Report notes
that although the London Underground targets are no longer contained
in the Public Service Agreement, the Underground's performance
indicators will still be monitored. We recommend that reports
on the indicators continue to be included in future departmental
Annual Reports. (Paragraph 19)
We will continue to monitor regularly the performance
of London Underground (LU) against the six key performance indicators
agreed with the Mayor until 2010-11, as set out in Focus on: London's
Tube.[1] The Department
has included information on LU in its 2005 Annual Report and will
do so in future wherever relevant to its responsibilities. Both
Transport for London and LU also publish performance information
on their websites.
9. We consider the range of measures of congestion
that the Department is developing is likely to be more satisfactory
than the previous measure. We recommend that the Department ensures
that there is full and regular reporting against the new congestion
reduction target as soon as possible. (Paragraph 22)
Progress against all Public Service Agreement targets
is reported every spring in departmental reports, with updates
provided in autumn performance reports.
10. We note that a longer-term target for modal
shift has been replaced by a short term tactical target to improve
the performance of the railways. Once the reorganisation of the
railway is complete, we expect to see more strategic targets setting
out the role that rail can play in an integrated transport system.
We also recommend that future Annual Reports contain figures on
rail passenger usage and rail freight so that trends in rail use
can be easily monitored. (Paragraph 25)
Figures on rail passenger usage and rail freight
are published quarterly in National Rail Trends (published by
the Strategic Rail Authority up to 24 June 2005 and thereafter
by the Office of Rail Regulation) and in the Department's annual
publication Transport Statistics Great Britain. We shall continue
to publish such figures in future Annual Reports wherever these
are relevant to the Department's responsibilities.
11. The Secretary of State emphasised that a "coherent
transport solution" would be needed before bus quality contracts
were approved; we see no reason why such coherent plans should
not include rail services which are maintained, or even strengthened,
if local authorities think it appropriate. (Paragraph 30)
We agree with the analysis in paragraphs 29 and 30
of the report. However, it should be noted that local transport
authorities cannot directly influence the provision of heavy rail
services outside the Passenger Transport Areas.
12. Transport produces one fifth of all domestic
carbon dioxide emissions; we welcome the extension of the Government
target to reduce greenhouse gases to the Department for Transport.
(Paragraph 31)
No response necessary.
13. While the Autumn Performance Report sets out
how the Department is working with local authorities to produce
improvements, and mentions that there is an interdepartmental
review of the Air Quality Strategy, it does not explain how DfT
and DEFRA work together or how the Department identifies and manages
its own performance against its joint target. It should do so.
(Paragraph 32)
The 2005 Annual Report gives more information on
these points in chapter 9.
14. We recommend that the Department ensures that
when it reports performance against targets it says a great deal
more about what it is doing to improve or secure future performance,
and describes the impact of this work on its expenditure plans.
(Paragraph 33)
Where relevant, the 2005 Annual Report includes more
information about work to improve or secure future performance.
The core tables of the Annual Report set out the
Department's expenditure plans. These plans were agreed taking
into account the priorities at the time. In accordance with the
annual financial and business planning cycle, any changes required
to improve or secure future performance will be reflected in future
plans. Any changes required in the current financial year will
be set out in Supplementary Estimates, along with an assessment
of impact upon targets.
15. We recommend that when it reports progress
against its efficiency targets, the Department notes how that
progress has been independently validated. In addition, we expect
the 2005 Departmental Report to demonstrate that the expansion
of efficiency targets to cover the whole Departmental Expenditure
Limit, as opposed to purely the administration cost element, has
not affected the quality of service delivery. (Paragraph 35)
Progress against the SR 2002 PSA target will be validated
through Internal Audit processes. In addition, the National Audit
Office has carried out a review of the data systems underlying
the PSA target. Reference to this method of validation has been
made in the 2005 Departmental Report.
For the Gershon Efficiency Target, the Department's
Efficiency Technical Note (ETN), which is published on the DfT
website, sets out how each of the workstreams within the Programme
will validate the efficiency gains being made. For the majority
of workstreams, this validation is expected to be carried out
independently by either the National Audit Office or the Audit
Commission. The Department will publish a revised ETN later in
the year, providing updated information on the validation methods
that will be used to assess progress. The 2005 Departmental Report
makes reference to the Efficiency Technical Note and the proposed
validation methods to be used. When progress for 2005-06 is reported
in the Autumn Performance Report, the method of independent validation
for each workstream will be detailed.
The Department has set out in its 2005 Annual Report
how it will ensure the quality of service delivery has not been
affected by the expansion of efficiency targets to cover the whole
of the Department's expenditure. The Department has set a number
of wider objectives for the Efficiency Programme to ensure it
is focused on achieving genuine efficiency improvements rather
than economy cutbacks. Furthermore, in developing measures to
quantify efficiency gains, the Department will also develop a
series of accompanying balancing measures, which can be used to
demonstrate links to service quality. More detail on these measures
will be given when progress is reported in the Autumn Performance
Report.
16. We believe including receipts from fixed penalties
among departmental savings sends the wrong signal. Fines are a
penalty for lawbreaking, not a tax. Including that revenue in
the efficiency savings gives comfort to those who claim that law
enforcement is about raising money rather than saving lives. It
should be removed. (Paragraph 38)
The Government accepts the Committee's view and we
have removed this section from the Efficiency Delivery Plan. The
DVO Group's overall target is to increase tax yield by £75m
by 2007/08 which included some £2m from fixed penalties and
deposits. The 2004 roadside survey indicated that this target
has already been exceeded through the reduction of Vehicle Excise
Duty evasion, amounting to some £77m per annum. This has
been achieved through the success of Continuous Registration.
17. We welcome the Highways Agency's new realism
about the nature of the projects for which PFI is sensible, and
its change of policy on PFI accounting; they may appear to increase
public expenditure in the short term, but they give a more realistic
assessment of public expenditure on roads. (Paragraph 42)
No response necessary.
18. The Department must ensure that the Highways
Agency takes the needs of non-motorised users seriously, and provides
the crossings they need. This target should not simply be abandoned.
(Paragraph 44)
The Highways Agency does take the needs of non-motorised
users seriously and will improve crossing points as part of its
programmes of major and small schemes, as resources allow.
In 2005-06, Ministers have agreed that the Highways
Agency will allocate £10m under its small schemes programme
to improve accessibility, including crossing points for non-motorised
users.
The Highways Agency will monitor its progress in
addressing the crossing sites that have been identified for improvement
in conjunction with non-motorised user groups.
1 Published in July 2003 by Transport for London Back
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