Select Committee on Transport Minutes of Evidence

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 functions.

  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 recognised—as 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.


  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

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