Second Supplementary memorandum submitted
by the Civil Aviation Authority
1. Following the CAA's appearance before
the Committee on 11 January, we submitted further written evidence
on 24 January in answer to the additional questions posed by the
Committee. Since then, the CAA has noted the evidence given by
witnesses at the other hearings and would like to take this opportunity
to provide the Committee with some supplementary information and
views which we hope will be helpful to the inquiry.
2. Several witnesses have commented on the
structure of the CAA and, in particular, on having in one organisation
both safety and economic regulatory functions. While some witnesses
saw no conflict between these two roles, Prospect and BALPA commented
critically in their written submissions on the CAA having the
role as both a safety and an economic regulator. In the evidence
session on 11 January, Captain Granshaw of BALPA went further
and said that: the economic side does have a very powerful and
influencing voice" (page 42 of the uncorrected transcript).
3. We do not see a conflict between the
CAA's safety and economic roles. As the CAA Chairman told the
Committee on 11 January: We will always ensure that we do not
do anything either in economic regulation or in airspace policy
that cuts across the safety objectives that we see as paramount."
The structure of the CAA allows any safety implications of regulatory
proposals in the economic area to be fully discussed and those
proposals to be modified where necessary, but the Economic Regulation
Group is never involved in decision making on the setting and
enforcement of safety standards.
4. We note that, in the aviation industry
generally, companies deal continually with matters of economics
and safety and are successful in keeping such matters in their
proper relationship, as evidenced by the industry's good safety
record. We believe that the CAA has shown itself to be equally
capable of keeping matters of economics and safety in the right
perspective, and no convincing evidence has been presented in
support of separating further the economic and safety regulatory
5. We consider that there are clear advantages
from having the regulation of safety, airspace and economics in
one organisation, because there can be interplay between these
facets of regulation, and provided that the paramountcy of safety
is recognisedas it is by the CAA. We are not aware of any
example in other industries that demonstrates that such matters
are better handled through dividing them between separate organisations.
6. It has been noted that the CAA has begun
to reduce its research activities in areas of safety regulation
that, since 2003, became the European Aviation Safety Agency's
(EASA's) responsibility. It has been suggested that EASA not yet
being in a position to undertake its own research activities will
automatically lead to a diminution of safety standards in the
UK. The CAA has provided the Committee with details of its on-going
research activities and associated expenditure, which demonstrates
its commitment to continue with research in areas for which it
has legal competence.
7. The safety regulatory framework in the
UK is founded on a system of setting safety standards and publishing
requirements, granting licences etc. when the CAA is satisfied
that specific criteria have been met, maintaining an oversight
of those to whom licences etc have been granted to ensure that
the required safety standards continue to be achieved, and ensuring
corrective action is taken when those standards depart from the
established requirements. In support of this regulatory framework,
the CAA's annual Safety Plan highlights the safety improvements
on which the CAA intends to focus in the forthcoming years and
the CAA's safety research programme supplements this work. We
wish to emphasise, however, that the CAA's research programme
is a supporting component of the UK's safety regulatory framework
and not, as has been suggested, a primary element of it.
THE EASA SYSTEM
8. The CAA is committed to the EASA system,
and we recognise it is the way of the future. We are trying to
work towards a future when the Agency is genuinely effective,
when the governance, finance and regulations are fit for purpose,
and when there are sound working relationships between the Agency
and NAAs throughout the EU. That is regrettably not the case today.
9. The CAA, in close co-operation with DfT
officials and Ministers, has been discussing with EASA and the
European Commission the difficulties which EASA has been experiencing.
We have recently proposed an action programme which is aimed at
establishing a strong partnership between EASA and the National
Aviation Authorities, and at dealing with each of the problem
areas we see at present.
10. This programme would take about two
years to complete, with priority being given to the most urgent
issues eg the current Budget crisis, Fees and Charges, and the
associated problems of bureaucracy and delays caused to Industry.
11. The Commission has welcomed these proposals
and has undertaken to study them further, prior to discussion
at the EASA Management Board. EASA has also welcomed the approach
proposed, and has undertaken to come up with plans of its own
to progress an action programme.
12. In our note regarding the CAA being
subject to audit by the National Audit Office (NAO), submitted
to the Committee on 24 January, we stated that The CAA has no
financial relationship with Parliament and is not to be regarded
as acting on behalf of the Crown. This distinguishes it from most
other regulators and bodies to which the NAO already has access,
which are either non-ministerial government departments or are
mainly funded by public money. Where direct public expenditure
is involved, the NAO has a clear role to play, but this does not
apply in the case of the CAA."
13. In determining and setting its charges,
all parts of the CAA carry out detailed annual consultation with
those it regulates on future plans and associated charges. The
recent extensive consultation with industry on the proposals for
revisions to SRG's charges to come into effect in 2006 is a good
example of the effectiveness of the process."
14. The CAA is subject to regular technical
audit by the International Civil Aviation Organisation (ICAO)and
will, in due course, be subject to similar oversight by the European
Aviation Safety Agency (EASA). Such audits influence the CAA's
use of resources and the way in which it operates."
15. Although the CAA is not funded by public
money, we acknowledge the points made by a number of witnesses
that the CAA's cost base should be more open to scrutiny, and
it is clear that those from whom we recover our costs desire a
greater degree of transparency. A number of witnesses have acknowledged
the CAA's efforts in this regard, and our pursuit of the Government's
better regulation agenda reinforces the CAA's commitment to further
improvement. We have sought the advice of, and are currently working
with our external auditors PricewaterhouseCoopers (PwC) to review
the CAA's report and accounts against the criteria used to assess
and benchmark the accounts of public sector organisations as part
of the Towards Best Practice" scheme jointly sponsored by
the NAO and PwC. The Secretary of State is already under a statutory
obligation to lay a copy of the CAA's accounts and any report
of its auditors before each House of Parliament.
16. Developments such as those described
above will help to ensure that we achieve best practice in the
conduct of our affairs and further improve our transparency and
accountability. However, the CAA continues to believe that in
the aviation environment within which we operate, and with the
current climate of regulatory change, it is important that the
CAA retains flexibility in the deployment of its resources while
improving its regulatory efficiency and transparency. In this
regard, we remain of the opinion that oversight by the NAO, creating
an additional layer of accountability, as opposed to the current
commercial" external audit arrangements and the current consultation
with industry, would not necessarily be in the public interest
or in the best interests of those we regulate.
17. The CAA has statutory obligations to
further the interest of civil aviation and to secure the efficient
use of UK airspace. Beyond this the Authority is to take note
of the Environmental Guidance given by the Secretary of State
which requires the environmental impact of civil aviation to be
mitigated to the greatest extent possible. Given the Government's
objectives for aviation it is important that, whilst environmental
matters receive proper consideration, the CAA's statutory obligations
are not fettered.
18. This Guidance on environmental matters
is now due for review, having been delayed by the Clacton Judicial
Review. The Authority would wish to see greater clarity in the
revised Guidance so that proposers of airspace changes and those
that are affected, both in the air and on the ground, are clear
about the balance to be struck between commercial and public benefit
and environmental impact.Civil Aviation Authority.
28 February 2006