Memorandum submitted by Prospect
INTRODUCTION
1. Prospect is the trade union representing
all air traffic controllers and air traffic systems specialists
employed by National Air Traffic Services (NATS), which is regulated
by the Civil Aviation Authority, and also represents professional
and specialist employees of the Civil Aviation Authority, including
the safety inspectors and other specialists employed within the
Safety Regulation Group of the CAA. All the members we represent
in NATS and the CAA have a direct interest in the remit of the
Transport Committee's Inquiry, and we therefore welcome the opportunity
to submit evidence to this Inquiry.
2. We note that the scope of the Committee's
Inquiry is wide-ranging rather than focussed on any specific aspect
of the CAA's role and responsibilities. Prospect's primary interest,
on behalf of the members we represent in NATS and the CAA, is
in relation to the regulation of air traffic safety. However,
we also have a direct interest in how the CAA discharges its statutory
responsibilities in relation to the economic regulation of NATS;
also the CAA's role in airspace design, in relation to capacity,
and changes being driven by the Single European Sky legislation.
3. Prospect welcomes the timing of this
Inquiry, which comes at a crucial juncture in the development
of the Civil Aviation Authority, given the external influences
that will have a direct bearing on the regulatory functions of
the CAA, including:
— Single European Sky legislation and
its impact on National Supervisory Authorities such as the CAA.
— Increasing commercial pressures on
National Air Traffic Services (NATS), following the PPP of 2001.
— Current Government policy towards
regulation following the Philip Hampton review of March 2005 and
the impending Government Bill for Better Regulation".
Against these developments it is essential that
the CAA is sufficiently prepared to meet the challenges posed
by these developments in terms of:
— Independence from Government.
— Respect of those it regulates.
THE REMIT,
STRUCTURE AND
POWERS OF
THE CAA
4. Since its inception under the 1972 Civil
Aviation Authority Act, the Authority has evolved its role and
responsibilities and been required to fulfil its statutory functions
in an ever changing and rapidly growing aviation industry. Since
the separation of NATS from the CAA in 2001 the residual regulatory
functions of the CAA have been divided between four distinct groups:
— Safety Regulation Group.
— Economic Regulatory Group.
— Director of Airspace Policy Group.
— Consumer Protection Group.
Whilst this division of responsibilities within
the CAA may appear logical, Prospect is becoming increasingly
concerned that the organisational independence of each Group undermines
the over-riding requirement for cohesion in the way that the CAA
discharges its statutory responsibilities. There is a possible
risk that the current Group structure perpetuates independent
organisational structures that are not joined up" to provide
coherent regulation, particularly in respect of air traffic control.
5. The comment later in this submission
on the relationship between the Economic Regulator and the Safety
Regulator arises from specific proposals within the price control
framework for NATS during Control Period 2, as published in September
2005. These proposals in themselves highlight some of the conflicting
objectives from within which the CAA has to operate. For example,
the Economic Regulatory Group of the CAA is seeking to incentivise
NATS to reduce air traffic delays that occur during the peak morning
periods by applying a heavier weighting of delay penalty in that
period; whereas NATS ability to reduce delays by increasing airspace
capacity is constrained by the restrictions imposed by the CAA's
Directorate of Airspace Policy; and the economic pressure on NATS
to reduce delays during that peak period would compromise safety
if air traffic flow rates were increased above target levels during
peak periods, thereby compromising the safety case required by
the CAA's Safety Regulation Group. In this example three arms
of the CAA are pursuing regulatory policies that would in certain
circumstances be contradictory to each other. It is in that context
that we seek greater coherence in regulatory policy delivery so
as to horizontally integrate the separate organisational structures
of the CAA.
THE PERFORMANCE
OF THE
CAA IN RELATION
TO ITS
STATUTORY OBJECTIVES
AND FUNCTIONS
6. The performance of the CAA in relation
to its statutory objectives and functions can, in part, be assessed
by its reputation. Historically the CAA has a proud and enviable
reputation as an effective independent organisation with the highest
standards of aviation safety in the world. It is highly respected
within the aviation industry, and there is a widespread perception
that the CAA's promotion of high safety standards has enabled
the UK to have the safest airspace in the world—a fact that
can be verified by all available Air Accident Performance Indicators.
7. However, no organisation can rest on
past laurels, particularly in the safety critical aviation industry
which is continually changing and vulnerable to many external
developments. It is essential, therefore, that the CAA is visibly
committed to a process of continuous improvement to ensure that
it is capable of maintaining the highest standards of air safety.
There should be no dilution of those standards arising from a
combination of economic cost pressures coupled with industry pressure
on Government for much less regulation.
LIGHTER TOUCH"
REGULATORY FRAMEWORK
8. Senior CAA officials are on record as
referring to the CAA adopting a lighter touch" to regulation.
This is a theme gaining credence in Government, and positively
recommended in the Philip Hampton report on regulation published
in 2005, which will be a key influence in the Government's new
proposed Bill for Better Regulation". The rationale for lighter
touch" regulation is based on a belief that inspection and
enforcement should not be done without good reason, and that all
regulation of industry should be targeted and focussed. In other
words a risk-based approach to inspection and enforcement rather
than a one size fits all" blanket approach of regular inspection
and enforcement.
9. Prospect is concerned that as the CAA
moves towards this new lighter touch regulatory regime there is
a very real risk that the highest standards of air safety in the
UK will diminish. The other external pressures bearing down on
safety—particularly the financial squeeze of economic regulation
and the economic pressures driven by low cost budget airlines,
will combine to undermine the CAA's ability to lead regulatory
development and continued enforcement of the highest standards
on which its reputation has been built.
10. As the airlines continue to cut their
costs to meet growing competitive pressures, and openly challenge
the cost recovery charges required by the CAA and NATS, the pressure
on Government to cut regulation" will continue. It is often
stated that safety is a given". This could be complacent—safety
is not a given". It can only come about through a framework
of high standards based on best practice, set out in clear regulations,
updated by research, and effectively enforced throughout the industry.
Developing concepts of lighter touch" regulation runs a real
risk of compromising effective standards of safety and encouraging
greater pressure to reduce costs in all areas, including safety
enforcement within the aviation industry. Airlines seeking to
cut costs through, for example, outsourcing catering sources has
shown to introduce an element of risk to continuous operations.
Similarly, cost cutting in safety critical areas, if left unchecked,
would have risks of a far greater magnitude.
11. The Civil Air Transport Regulations
are there for a purpose, and it must be an absolute rule that
there would be no exemptions from the regulations as published.
Yet, we have had recent experiences of the CAA being consulted
by operations at NATS London Area Control Centre for dispensation
to overcome the essential SRATCOH (Scheme for the Regulation of
Air Traffic Control Officer Hours) regulations relating to the
hours worked by operational air traffic controllers. Dispensation
to not comply with the regulations as published was readily given.
That could be the unacceptable consequences of allowing lighter
touch" regulation.
THE EFFECTIVENESS
AND EFFICIENCY
OF THE
CAA'S REGULATORY
FRAMEWORK
12. A key question in assessing the effectiveness
and efficiency of the CAA, is whether it has the necessary capability
and resources to discharge its statutory objectives and duties.
In order to be an effective safety regulator, the CAA is required
to employ teams of highly skilled professionals with sufficient
credibility within the industry and the necessary depth of civil
air traffic experience. There continue to be unfilled professional
posts in the Air Traffic Services Investigation arm of the CAA,
which it is required to investigate, report on and initiate follow-up
action in respect of civil air traffic aspects of aviation accidents,
incidents and airprox reports. As the Transport Committee observed
in its 1999 report on civil aviation, the CAA must be in a position
to attract the best quality candidates for recruitment. Despite
a number of separate initiatives for recruitment and market pay
supplements, there continues to be a gap between the resources
required and the staff in post.
13. A common factor in the recruitment difficulties
is that CAA salaries are lower than those available in comparable
posts within the larger air traffic service units of NATS. Within
the past 18 months there have been two separate recruitment exercises
which failed to attract sufficient suitable candidates, leaving
the posts unfilled. Whilst the CAA is aware of its need to pay
comparable market rates, it has consistently allocated insufficient
resources to match equivalent salaries in NATS for such posts
as air traffic area inspectors and air traffic systems engineers.
It is essential that the CAA has the necessary resources and commitment
to attract the best quality professional staff and retain them
within the CAA.
14. As indicated earlier in this evidence,
Prospect has a specific concern about the relationship between
economic and safety regulation as applied to NATS. The Economic
Regulatory Group within the CAA has now confirmed its final decision
to apply heavier financial penalties for aggregate air traffic
delays that occur during the peak morning period (5am to 9am).
Prospect maintains that this decision based on economic criteria
will impact on air traffic safety, and thus conflict with the
over-riding requirement of the Safety Regulation Group of the
CAA to maintain the highest standards of air traffic safety.
15. Prospect has expressed its concerns
directly in written submissions to the CAA Economic Regulator
during the extensive consultation on the price control proposals
for CP2. We have argued that there is a direct correlation between
air traffic delay and safety considerations. Delays attributable
to air traffic control normally arise as a consequence of enforced
reductions in traffic flow within particular sectors in order
that air traffic controllers and the systems can cope with the
given level of air traffic movements within the available capacity
at that particular time. Reducing the flow of traffic is, therefore
a safety tool to minimise the risk of loss of separation or overload.
In that context, the proposal to double the financial penalties
tied to NATS delay performance maybe perceived as a pressure to
compromise safety by increasing traffic flow when capacity is
limited, in order to avoid incurring significant financial penalties.
Incentive schemes designed to regulate service delivery by reducing
air traffic delays should be focussed solely on increasing airspace
capacity not through the direct measurement of air traffic delay
at particular times or on particular individual delays. Prospect
does acknowledge that it is not the intent of ERG's proposals
to influence day to day operational decisions on traffic flow.
However we would emphasise that such delay penalties designed
on economic criteria do in themselves create a culture of avoiding
air traffic delays at peak penalty periods at all costs, and thereby
will inevitably influence day to day decisions taken because of
the new focus taken on reducing delays so as to avoid financial
penalties. As a result of the Economic Regulator's proposals,
NATS has already committed itself to finding £132 million
of savings compared to its 2004 Business Plan for its en-route
business; and is now required to find a further £50 million
of cost savings to meet the Regulator's final proposals. Our fear
is that undue pressure will be placed on en-route operations to
avoid any risk of further financial pressure through having to
pay delay penalties.
16. The Economic Regulator has assured Prospect
that these proposals were assessed by the Safety Regulation Group.
It is not clear how this assessment was undertaken, and how the
CAA can effectively reconcile its economic regulatory remit with
its over-riding safety remit.
SAFETY RESEARCH
17. An essential capability of the CAA's
Safety Regulation Group is the ability to undertake research into
emerging aviation technologies as well as investigating new innovative
approaches to safety management systems. Yet, there is clear evidence
that the Research Department of SRG is being run down, on an expectation
that this would become a European-wide capability, even though
the newly formed European Aviation Safety Agency (EASA) will not
have its own research facilities. We invite the Committee to enquire
how this research gap will be filled by EASA.
EFFECT OF
GROWING INTERNATIONAL
AND EUROPEAN
UNION CO
-OPERATION ON
THE WORK
OF THE CAA
18. One of the greatest challenges facing
the CAA at the present time is how it responds to developments
in Europe. The Single European Sky legislation is now in place
which will have a significant impact on air navigation service
provision across Europe over the next 10 years. Whilst there will
now be growing collaboration between air navigation service providers
(ANSPs) such as NATS, in developing cross border Functional Airspace
Blocks (FABs); there will still be a single National Supervisory
Authority (NSA) for each country to regulate the air service providers
and ensure common standards throughout Europe. In addition, and
more significantly for the CAA, the new European Aviation Safety
Agency will be given the power to impose its own European-wide
standards.
19. EASA expects to take on many of the
roles previously undertaken by professional staff in the CAA's
Safety Regulation Group. This is having a considerable negative
effect on recruitment in the roles that SRG will continue to fulfil
as the National Supervisory Authority in the UK. It is in that
context that the CAA must be able to clearly define its role,
purpose and future within the new European framework for air traffic
management.
20. Prospect's over-riding concern is that
as EASA is established the high standards of aviation safety on
which the CAA has built its reputation will be diluted in order
to meet the average of all European National Supervisory Authorities.
It is essential that the remit of EASA supports the very high
standards of aviation safety established in the UK by the CAA.
21. We suggest the Committee consider the
funding of the CAA, with the suggestion that this should be at
least partly from departure tax to create more financial independence
from those that the CAA regulate—significantly the airlines.
This will increase UK airline competitiveness and allow the CAA
to operate with clearer objectivity.
22. As joining EASA was a political decision
supported by DfT, CAA staff should not be financially disadvantaged
as a consequence. There should be no reduction in terms and conditions
of service as a result of the new European dimension. CAA transition
costs, which are significant, should come from DfT, not from the
CAA.
23. EASA is inadequately resourced in some
areas of national interest. The CAA should retain the power to
intervene where EASA fails to address the issue, for example offshore
helicopter operations, important for the UK oil and gas industry.
CONCLUSION
24. Prospect appreciates the opportunity
to submit evidence to the House of Commons Transport Committee's
timely Inquiry into the work of the Civil Aviation Authority.
Our principle concerns relate to the inter-relationship between
economic and safety regulation, and ensuring that there is a joined-up"
coherent Civil Aviation Authority. The CAA must be able to meet
the challenges of a rapidly changing aviation industry and economic
framework. To meet those challenges, the CAA must have:
— Independence from Government, particularly
in respect of Better Regulation initiatives".
— Independence financially from those
that it regulates by moving to funding based on departure tax.
— Capability to meet the challenge
it faces.
— Sufficient resources to fund its
work.
— Effectiveness in what it does and
to protect UK specific interests.
— Specific DfT funding for CAA transition
costs as rulemaking responsibilities transfer to Europe.
— CAA staff terms and conditions to
be maintained.
25. We would welcome the opportunity to
elaborate on these points in oral evidence to the Transport Committee.
14 November 2005
Witnesses: Mr John Eagles, Technical
Chairman, Executive Committee, Association of Licensed Aircraft
Engineers; Captain Mervyn Granshaw, Chairman, British Airline
Pilots Association; and Mr David Luxton National Secretary,
Prospect, gave evidence.
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