Select Committee on Transport Thirteenth Report

2  Management of the CAA

Appropriateness of the CAA's structure


7. The CAA has a statutory regulatory role and set of responsibilities. The Department for Transport's Sponsorship Statement for the CAA specifies the framework within which the CAA must operate, along with the relationship it will have with the Secretary of State, any financial conditions and other guidance relevant to the exercise of its functions, and the mechanisms by which it will be held to account.[10] Box 1 summarises the statutory objectives and functions of the CAA.

Box 1:  Statutory objectives and functions of the CAA
The CAA's objectives

The CAA is required to perform its functions in the manner it considers best calculated:

  • to secure that British airlines provide air transport services which satisfy all substantial categories of public demand (so far as British airlines may reasonably be expected to provide such services) at the lowest charges consistent with a high standard of safety in operating the services and an economic return to efficient operators on the sums invested in providing the services and with securing the sound development of the civil air transport industry of the United Kingdom; and

  • to further the reasonable interests of users of air transport services.

The CAA's functions

The CAA's main statutory functions are:

  • regulating civil aviation safety;

  • advising and assisting the Secretary of State on all civil aviation matters;

  • determining policy for the use of UK airspace so as to meet the needs of all users, having regard for national security, economic and environmental factors, while maintaining a high standard of safety;

  • economic regulation of the designated airports and of the provision of air traffic services, licensing and financial fitness of airlines; and

  • licensing of air travel organisers.

Source:  Department for Transport, Sponsorship Statement for the Civil Aviation Authority, paras 2.2-2.3

8. The CAA is accountable to Parliament through the Secretary of State for Transport. The Secretary of State, in consultation where appropriate with the Secretary of State for Defence, is responsible for setting the policy framework for the CAA, agreeing its overall priorities and objectives each year and monitoring its performance in relation to those agreed objectives.[11]


9. The CAA is run by its Board, and has a group director and a policy committee for each of its major specific responsibilities—airspace policy, safety regulation, economic regulation and consumer protection. Members of the Board are appointed by the Secretary of State for Transport, generally following open competition and in consultation with the Chairman of the CAA. Board members are responsible for all aspects of the CAA's organisation and performance, subject to objectives set by the Department for Transport for the Chairman and executive directors.[12]


10. The Civil Aviation Authority is organised into four groups, reflecting its major responsibilities:


11. A number of witnesses questioned the appropriateness of the structure of the CAA and suggested that there may be a conflict of priorities between the different groups. The British Air Line Pilots Association (BALPA) argued that the CAA's remit had become over-extended, with its increasing oversight for economic regulation leading to a "dilution of focus on its core role as a safety and standards regulator."[17] BALPA suggested that it was possible that the CAA's wide remit prevented it from taking a more proactive and dynamic approach to safety regulation, and therefore keeping pace with changes in the industry.[18]

12. Prospect, the trade union representing professional and specialist employees of the CAA and National Air Traffic Services (NATS), provided us with a specific example of what it believed to be conflicting objectives within the CAA. It contended that the Economic Regulation Group's imposition of heavier delay penalty weightings on NATS during peak morning periods risked increasing air traffic flow rates above target levels, and therefore conflicted with both the restrictions imposed on airspace capacity by the Directorate of Airspace Policy and the objectives of the Safety Regulation Group.[19] However, Ian Hall of NATS countered that he was "absolutely convinced" that NATS was not receiving contradictory signals from separate parts of the CAA.[20]

13. While both BALPA and Prospect argued that the structure of the CAA created potential conflicts of priorities, they disagreed about how best to overcome this problem. Prospect told us that it favoured retaining the different areas of regulation within one body, but with closer horizontal integration, while BALPA advocated removing the economic and commercial activities of the CAA so that it could concentrate on its primary role of safety policeman.[21] BALPA argued that the economic aspects of the CAA's existing remit could be transferred to a single transport economic regulator, which would have responsibility for all issues of transport market access, pricing and economic regulation, claiming that "the pooled expertise and shared experience would be vital to a truly integrated transport policy."[22]

14. Rick Haythornthwaite, Chairman of the Better Regulation Commission (BRC), told us that, although the BRC favoured simplicity, he would take "a lot of convincing" that there was any great merit in creating a single economic regulator for all the transport industries.[23] He argued that any debate about whether an economic regulator should be housed within the same organisation as a safety regulator should focus on two things: first, the quality of the outcomes; and secondly, the simplicity of the structure. He argued that the strong record of safety in UK aviation suggested that the status quo was performing well in relation to the first of these, and that any changes should therefore only be considered if the system was shown to be over-complex.[24] Karen Buck MP, the then Parliamentary Under Secretary of State for Transport with responsibility for aviation, told us that the Government did not favour the establishment of a single transport economic regulator. She argued that, by being incorporated in a single body, the key responsibilities of safety and economic regulation could act as checks and balances against each other.[25]

15. The CAA told us that it did not experience any difficulty balancing its safety and economic roles and pointed out that the Economic Regulation Group was never involved in decision-making on the setting and enforcement of safety standards. It argued that the structure of the CAA provided clear advantages, by allowing for interplay between the objectives of safety, airspace and economic regulation while ensuring that safety considerations remained paramount. It told us that it was not aware of any examples in other industries that demonstrated that such matters were better handled by dividing them between separate organisations.[26]

16. This position was supported by Manchester Airports Group, which argued that the CAA achieved a good balance between the four areas of regulation, "to the benefit of airlines, airports, air transport users and the wider community."[27] In oral evidence, however, Rowena Burns of Manchester Airports Group admitted that this balance required "constant review."[28] Similarly, Dr Graham Braithwaite of Cranfield University told us that the CAA appeared to have reconciled the conflicting pressures of its different regulatory responsibilities well, but that it should not be assumed that this would always be the case. Dr Braithwaite pointed to the example of Australia, where the Civil Aviation Safety Authority had found it difficult to execute both its safety regulation and its other duties, leading eventually to a separation of these responsibilities into separate bodies. He concluded, however, that at the present time he did not see the same problems within the CAA.[29]

17. It is highly unlikely that the CAA, with its four major functions of ensuring safety, determining airspace policy, economic regulation of aviation and licensing of air travel organisers, would be created in its current form, as a single Authority, today. It is a tribute to the professionalism of the CAA's current staff that the potential conflicts inherent in the Authority's structure have been avoided. Nonetheless, the potential for conflict remains and the Government should keep the CAA's structure under review. We recommend no changes in the present organisational structure. However, we recommend that the CAA, in formulating its policy and communicating its instructions, should seek to deepen the level of co-operation between its different regulatory groups, to ensure that the message it delivers to those it regulates is consistent and clearly conveys the primacy of safety considerations. It is also vital that the CAA, and those who hold it to account, remain vigilant against any potential conflicts developing in the future.


18. The Royal Aeronautical Society proposed that, in order to encourage enterprise and innovation in commercial and general aviation, the CAA should have a wider range of responsibilities, similar to those of comparable agencies in some other countries, and that it should report to the Department for Trade and Industry as well as the Department for Transport. It suggested that these responsibilities could include: encouraging innovation to create jobs and exports; encouraging development of skills by pilots and aircraft engineers; encouraging sport and recreational flying to create jobs in airfield operations and maintenance; and encouraging businesses to use general aviation aircraft to enhance business performance.[30]

19. The CAA told us that it would not welcome such an extension of its remit, because it feared it could detract from the clarity of its existing objectives. It said that, while the United States Federal Aviation Administration (FAA) had previously had a mandate to promote the growth of the airline industry, this had been repealed in the aftermath of the ValuJet crash in 1996, when questions were raised about possible contradictions between the promotion mandate and the FAA's safety obligations. In addition, it pointed out that, while the French Direction Générale de l'Aviation Civile had support for the aircraft industry as one of its objectives, this was set against the background of its role in providing launch investment and research and development funding for the French aviation industry—a position which was not mirrored in the UK.[31]

20. We do not recommend any widening of the CAA's remit to include a duty to promote enterprise and innovation in the aviation industry. We agree with the CAA that this role is better filled in the UK by the Department for Transport and the Department of Trade and Industry.

Relationship with the Department for Transport

21. Several witnesses told us there was a need for a greater degree of integration and co-ordination between the CAA and the Department for Transport. The Airport Operators Association told us that, in conducting a recent consultation on bringing foreign-registered aircraft into the UK, the Department had failed to discuss the likely costs of the associated regulatory requirements with the CAA, and had therefore estimated the cost to be £0.25 million when the real cost was more likely to be "in the order of tens of millions of pounds."[32] It argued that it was important both that CAA specialists were given the opportunity to contribute to Government thinking, and that Department officials had a thorough understanding of the CAA's regulatory approach and practice. It called for greater efforts towards joint working and the earlier involvement of the CAA in policy-making.[33]

22. Mike Toms of BAA told us that he thought the CAA had not been "wholly engaged" in the determination of the policies contained in the Government's Air Transport White Paper.[34] He cited the CAA's reaction to the White Paper's commitment to building a new runway at Stansted as soon as possible, in which it said that its statutory duties may cause it take a different stance from the Government. He argued that this potential conflict could cause problems for BAA:

"If it was to lead to a different position on the right date for the development of Stansted's runway that would create a significant policy tension for us because we could build the runway to one date, we could build it to the other, but we [could not] build it to both."[35]

23. Barry Humphreys of Virgin Atlantic argued that, as the CAA was an independent regulator, there were bound to be differences of approach and view with the Department for Transport, but that those differences were "overwhelmingly" managed satisfactorily.[36] The CAA similarly argued that its occasional differences of view from the Department were rare and that, in the vast majority of cases, there was close alignment on policy positions. It felt that its advice was generally well received by the Government and that the Government's subsequent actions were usually consistent with that advice. It detailed its role in influencing the Government's White Paper, arguing that much of its detailed technical advice had been instrumental in shaping the outcome of it.[37]

24. The Minister for Aviation told us that she firmly believed that the Government's policy of integrated working with the CAA was very good. She said that the CAA had played a critical role in the development of all aspects of the White Paper and explained that, in addition to the Secretary of State meeting with the Chairman of the CAA on a quarterly basis, officials from the Department and the CAA also met on a "very regular basis" to discuss development and policy.[38]

25. The latest version of the Sponsorship Statement for the CAA, which was published in May 2006, includes a specific reference to communication between the CAA and the Department—reproduced in Box 2—which was not present in the previous November 2002 version.Box 2:  Reference to communication in the CAA's Sponsorship Statement
The Department and the CAA recognise that working together successfully requires effective two-way communication at many levels. In practical terms this means that both the Department and the CAA agree to operate a policy of 'no surprises' in relation to particular issues and cases likely to generate media, business or public interest or lead to significant announcements. To achieve this, the Department and the CAA will in particular:
  • keep each other informed in general terms about live issues, the timing and progress of significant issues, well ahead of announcements but without jeopardising effective enforcement or revealing the substance of individual investigations; and

  • give short-notice advance warning of any significant or sensitive announcements in relation to matters affecting each other.

The Department and the CAA will respect the requirements of confidentiality of any information which they share.

Source:  Department for Transport, Sponsorship Statement for the Civil Aviation Authority, para 2.13

26. Although we welcome the inclusion of a reference to communication between the CAA and the Department in the latest version of the CAA's Sponsorship Statement we are concerned that it might not be explicit enough to address the issues effectively. There is a perception of a lack of clarity about the role and status of CAA advice in policy-making within the Department. We recommend that the critical review we have suggested the Department undertake should give consideration to the Department's channels and processes for communicating with the CAA to ensure greater transparency about the expected role of the CAA in policy-making.

10   Department for Transport, Sponsorship Statement for the Civil Aviation Authority, para 1.1 Back

11   Department for Transport, Sponsorship Statement for the Civil Aviation Authority, para 3.4 Back

12   Ev 189, paras 13-15 Back

13   Civil Aviation Authority, Corporate Plan 2006/07-2010/11, April 2006, Section 3.2; Structure of the Civil Aviation Authority,; "Licensed aerodromes" are aerodromes/airports licensed by the Civil Aviation Authority under an Air Navigation Order for the landing and take-off of aircraft which can be used for the public transport of passengers, or for giving instruction in flying to a person, or for conducting a flying test. Back

14   Structure of the Civil Aviation Authority, Back

15   ibid. Back

16   ibid. Back

17   Ev 64, para 1.2 Back

18   Ev 64, para 1.3 Back

19   Ev 68, para 5 Back

20   Q 280 Back

21   Q 157 Back

22   Ev 64, para 7.4 Back

23   Q 528 Back

24   Q 483 Back

25   Q 586 Back

26   Ev 60, paras 3-5 Back

27   Ev 83, para 2.5 Back

28   Q 235 Back

29   Q 404 Back

30   Ev 148, para 4.1.2 Back

31   Ev 39, Q 2 Back

32   Ev 89 Back

33   ibid. Back

34   Q 234 Back

35   Q 230 Back

36   Q 308 Back

37   Ev 39, Qq 42-43 Back

38   Q 593 Back

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Prepared 8 November 2006