Examination of Witnesses (Questions 620-639)|
BUCK MP AND
1 FEBRUARY 2006
Q620 Mrs Ellman: But who decided
that the CAA should run down safety work before EASA was undertaking
Mr McMillan: The decision was
taken by the CAA in consultation with industry, as I understand
Q621 Mrs Ellman: Did the Government
have any role in that?
Mr McMillan: I honestly do not
know. I do not believe we were consulted. If I am wrong we will
certainly write to you.
Q622 Chairman: You do know there
is a problem with certification, did you not, Mr McMillan? There
is a problem with certification and that is well known, is it
Mr McMillan: There is a problem
with certification in the sense that it has passed to EASA and
they are not doing the research, yes.
Q623 Chairman: No, in the practical
sense that EASA is not performing the role of certification in
the way that the CAA have been doing. It is not providing the
same level of speed and efficiency and performance.
Mr McMillan: I am sorry; I misunderstood
the question. Absolutely, there is a problem.
Q624 Chairman: Then surely Mrs Ellman's
question is even more relevant. Why did the Government, knowing
that there was a problem in this field, not say both to the CAA
and to EASA on the one hand, Why are you running down research?",
and on the other hand, Why are you not appointing sufficient people
to deal with this?".
Mr McMillan: The position is that
we have not encouraged the running down of research. Our expectation
is that research should be continued by the organisation competent,
be that the CAA or EASA. We need to ensure that that is happening.
Q625 Mrs Ellman: Yes, but, Mr McMillan,
can I stop you? The problem we have identified is that the CAA
has stopped doing this work before EASA have taken it on themselves.
Was the Government aware that that was happening?
Mr McMillan: I became aware of
it recently, is the answer to your question.
Ms Buck: We know that this is
at the heart of our dilemma, that we are in a process where EASA
is taking on certain functions but in this first year of operation
it has become apparent very quickly that there are delays and
difficulties in delivering on key areas. The almost day-to-day
balancing act that has to be undertaken with the CAA is how do
you ensure that EASA is brought up to fitness to function and
that there is not a double burden on industry and so forth without
compromising the safety work that is going on in this country?
There is not a magic solution to this, as Mr McMillan has already
said. There is not an unlimited pool of resource and of expertise
out there so this is a very fine balancing act that is going on
at the moment.
Q626 Mrs Ellman: The decision, it
appears, was taken by the CAA but would you not feel that the
Government should have some involvement in this area on the principle
that surely it should be concerned if the CAA is stopping its
safety work before EASA is taking it on itself, and the same could
apply in other areas?
Mr McMillan: Many of the problems
which the Committee is very rightly raising today are problems
of transition. It is absolutely clear that the transition has
not been as well handled as it should have been and that is deplorable.
What has now happened is that a transition working group has been
set up involving all the national aviation authorities in EASA
and it is led by the UK member of the board, I am pleased to say.
The aim of this is to ensure that the kind of lacuna which
you have lit upon here is not allowed to continue, that there
is proper planning as to who is going to be doing what during
this transition period and that it is properly managed. It would
have been excellent had this transition working not been necessary
and had the secretariat of the agency been better able and perhaps
more resourced to do this work for themselves. That is not the
position we have found ourselves in so we are taking urgent remedial
action to put this right. That is the position we are now in.
It is a transitional process which we need to have managed very
Q627 Mrs Ellman: Are there any other
areas of work where you think these transitional problems are
Mr McMillan: The main other area
which is of concern is the central one of manpower planning which
the Chairman and others have been referring to and that is one
which is being tackled, as I say, early and objectively.
Q628 Mrs Ellman: Does the Department
have any concerns about lighter touch regulation? Do you feel
that could compromise safety standards?
Ms Buck: We would argue that that
is not a term we recognise. The CAA regulatory regime is about
being risk focused. Lighter touch" implies a reduction. It
is an appropriate use of resources and a far better way to proceed
to ensure that in general you target your work at those operations
where there are reasons to believe there are risks.
Q629 Mrs Ellman: But could a risk-based
approach not lead to problems even if those problems only manifested
themselves later on?
Ms Buck: It is a question of where
the balance is struck always, is it not? The CAA has to balance
a number of competing interests and pressures, safety being absolutely
paramount. I think we all agree, and I am sure the Committee would
agree, that the industry is certainly concerned that there needs
to be a recognition of costs and that those costs are not passed
on and borne by the industry, and therefore having an equal regulatory
regime for some of those areas of service that have a distinguished
record and where there are no reasons to believe that they are
falling into a high risk category would not be a reasonable use
Q630 Mrs Ellman: How is this required
6% annual rate of return from the CAA justified?
Ms Buck: The 6% rate of return
is predicated upon the capital resource that the CAA has and its
exposure to its pension entitlements and its other liabilities
and we consider that to be reasonable for the nature of the business.
Q631 Mrs Ellman: When was this last
Ms Buck: We will check and let
Q632 Mrs Ellman: The CAA is the only
European aviation regulator that is self-funding, is it not? Are
there any plans to look at that again?
Ms Buck: My understanding is yes,
but what we understand to be the case is that a number of other
European countries are beginning to look at that, and obviously
EASA itself is a kind of step in that direction because those
costs are passed on to industry.
Mr McMillan: Funding models do
vary across Europe and it is true to say that the CAA is at one
end of the spectrum where all costs are recovered from those entities
which enjoy the benefits of their regulation. For example, the
French Government, the DGAC, is now charging the French industry
for certification activities, for safety regulation activities,
and I know that other countries are looking at the same thing.
Of course, to the extent that EASA does come into play there is,
there is a fees and charges regulation which will apply across
the whole of Europe, so for many countries they will be facing
charges and fees for the first time for these activities. The
tendency is to move towards user paying as opposed to government
Q633 Chairman: So the simple answer
to the question is yes, it is true that the CAA are the only people
who are charging?
Mr McMillan: Fully, yes that is
Q634 Mrs Ellman: How do you know
that the CAA are efficient?
Ms Buck: The CAA is tasked with
a number of responsibilities, including ensuring that it bears
down on costs. It has set a number of objectives in that respect,
and indeed in the current period the expectation is that costs
will be kept below the current level of inflation, so that is
a requirement, and industry itself expresses a view on costs and
does so both directly to the CAA and to me. The CAA also was a
party to the Hampton Review of Regulation and is playing a very
important role in the whole Better Regulation framework.
Q635 Mrs Ellman: It has been put
to us that the CAA is over-reliant on the airlines because of
the funding structure. Would you share that view?
Mr McMillan: I do not know if
that evidence has been put to you by the airlines. I rather doubt
it. The fact of the matter is that the CAA has a strong reputation
for independence and integrity. It gets its revenue from a variety
of sources. Yes, clearly, a very large proportion of it comes
from the airline industry but I think the airline industry would
consider that they have a robust regulator atop them.
Q636 Mrs Ellman: Would you say that
general aviation has been given a fair deal?
Ms Buck: I think that question
is partly springing from the fact that they expressed a number
of concerns about the safety charges review. General aviation
I think is a very welcome and very important strand of the aviation
sector and what I do think is very helpful is the fact that the
CAA has decided to proceed with the regulatory review and also
the general review of general aviation over the coming months.
I think that is very helpful. It is a very good time to take stock.
In the representations that have been made to me by general aviation
there was a sense of, We are making an important commitment here
to the economic activities that we undertake through training
and so forth but nobody really recognises and appreciates what
it is that we do". That is anecdotal but it is important
that that evidence is marshalled and put forward and I think that
the review that the CAA will undertake will be very helpful in
benchmarking that cost.
Q637 Mr Wilshire: Can I go back to
the safety issues? Mr McMillan has told us that in respect of
the rundown of the safety issues research he only became aware
of that recently, I think were the words he used. Could he tell
us exactly when he became aware and how he became aware?
Mr McMillan: You are testing my
memory, Mr Wilshire. I think it was in connection with this inquiry.
Q638 Mr Wilshire: So until we conducted
an inquiry the department was blissfully unaware that there were
Mr McMillan: I do not think that
is what I said, Mr Wilshire. I said I was unaware of the particular
fact of the rundown of safety research in relation to the matters
which we were talking about earlier.
Q639 Mr Wilshire: Have you given
instructions to the CAA to resume that work until somebody else
is able to do it?
Mr McMillan: No.