1. Supplementary memorandum submitted
by the Department for Transport and the Agencies
Thank you for your letter of 15 February seeking
supplementary information arising from the evidence session on
8 February.
I am advised by Officials that no response is
needed in respect of question 5, under the heading "Generally",
about the job description for the "new Group Finance Director".
As I understand it, this was mentioned in the Memorandum on the
Department's Annual Report 2005 (responding to letter from the
Committee Secretariat dated 11 August). However, this refers to
an appointment in DfT's Central Finance Directorate, not in the
DVO Group.
As regards the remaining questions, the information
is set out in the attached Memorandum and two annexes. In addition,
some supplementary information has been supplied at paragraphs
86-97 inc.
2 March 2006
GENERALLY:
Q1. Latest position on EC Third Driver Licence
Directive
1. The Council of Ministers reached a General
Approach in October 2004. The European Parliament held its First
Reading in late February 2005. Subsequently, the Luxembourg Presidency
put forward a compromise text which it was understood would be
acceptable to the European Parliament at Second Reading, and the
UK Presidency sought to reach political agreement on this compromise
text in the December 2005 Transport Council.
2. Political agreement on the compromise
text has yet to be reached because of continuing worries of a
number of Member States about withdrawal and replacement of old
licences. There is as yet no indication that the dossier will
be raised in the forthcoming March Transport Council meeting.
3. Since the proposed third Directive on
driving licences remains under negotiation in Council and under
consideration by the European Parliament, it is at this stage
not possible to foresee what costs will be incurred across the
DVO Group for its implementation. However, the UK's position in
negotiation has been, and remains, to minimise nugatory cost (including
implementation costs). It will be important, once a text for the
Directive is adopted, to further control costs by ensuring that
implementation is well-coordinated across the Group and that full
advantage is taken of the expected six-year implementation period.
At the point where Political Agreement is reached a further Regulatory
Impact Assessment will be produced.
4. Although now overtaken, on the basis
of the Commission's original proposals, a partial RIA was prepared
in June 2004. This was subsequently updated in December 2004 to
take account of the Council's (then) agreed General Approach. The
updated RIA is attached for information at Annex A.
Q2. Corporate Documents?
5. Details as follows:
— DVO Corporate Plan 2004-05 (£4,000)
— DVO Annual Report (£5,760)
— Business Plan 2004-05 £5,020)
— Annual Report and Accounts (£4,950)
— Annual Report and Accounts 2004-05
(£11,380)
— Business Plan (£5,475.00)
— Strategic Agenda 2004-10 (£2,720)
— From this year onwards DVLA will
be printing corporate documents "in house" estimated
costs:
— Annual Reports and Accounts—£6,000
(saving £5,380)
— Business Plan—£3,420 (saving
£2,055)
— VCA Annual Report and Accounts 2004-05
— (less than £500 for both combined)
— VOSA Business Plan (£18,304)
— VOSA Annual Report (£16,208)
Q.3 Administrative Burdens on companies and
businesses?
6. The "Administrative Burdens Reductions"(ABR)
initiative is a major exercise to measure the burden that Government
regulations impose on businesses, charities and the voluntary
sector in terms of form filling, record keeping, and inspections.
It is being handled via a cross-Government contract with consultants
PricewaterhouseCoopers (PwC)
7. PwC are leading on work to identify and
quantify those burdens. To date, across the Department for Transport
(DfT) a total of 109 Regulations have been identified as giving
rise to 2,050 information obligations (IO). As regards the DVO
Group, this equates to 19 Regulations and 201 IOs. As part of
the ABR project the Department is working directly with representatives
of the businesses affected by our Regulations. A final report
is due to submitted to the Cabinet Office Better Regulation Executive
by the spring. Subsequently DfT, and other Departments, will be
given targets for burden reductions.
8. In parallel DfT has already started putting
together a Simplification Plan which consists of a series of proposals
aimed at reducing the Regulatory burden on businesses, members
of the public, local authorities, the voluntary sector and charities.
This is at an early stage of development; many of the individual
proposals have yet to be agreed by Ministers. The outcomes of
the ABR project will inform the work on the Simplification Plan,
for example by helping to focus specific areas for reform. Simplification
will be taken forward as a rolling programme within DfT, so new
ideas from stakeholders will be welcome at any time.
Q4. Shared Service Project: costs of retraining,
re-location, new software?
Retraining
9. The working assumption has been that
there will be an average of one half day's end-user training for
all staff. Clearly there will be variances within this average
with those staff used to self-service potentially requiring considerable
less than, say, a manager who will be using manager self-service
for the first time. The precise amount of training across the
Department will not be known until the training need analyses
have been completed. The cost of training all staff for one half
day is would be the order of £1.7 million. The cost of the
training team and materials etc is estimated at c £2 million.
Relocation
10. The working assumption has been that
few DfT staff would want to transfer to the Shared Service Centre
(SSC), and mainly those already within commuting distance of the
centre at Swansea Vale. This assumption, however, is based on
information that is now over six months old and it is possible
that now that the SSC is becoming a reality more staff from the
business units will consider career opportunities there and be
interested in relocating. Up to £300k has been allowed in
the business case for relocation expenses and this will be reviewed
in March 2006 as business units develop their plans for retained
organisations and release and retention of staff.
New software
11. The main software element is the SAP
licence. This had a purchase cost of £2.4 million, including
the first year maintenance. Additional software for the development
team and live environment has been estimated at £450k. Over
the next few weeks we will be finalising the business case. The
main activities will be to refine the FTE savings based on the
staffing levels at the SSC and retained organisations, agreeing
business unit migration project budgets and firming the commercial
agreement with the main supplier (IBM). The final business case
is expected towards the end of March.
Q6. A complete list of e-services and costs?
12. Details for DSA are set out at Annex
B. The list of e-services for DVLA and VOSA are as follows:
— Electronic Vehicle Licensing (EVL)—development
costs £35 million. Running costs @ £3 million per annum
rising (as take up increases) to £7 million for 2007-08.
— Drivers Re-engineering Project (
DRP)—£102.9 million for Phases 1 and 2. Average running
costs over 10-year period of live operation amount to £5.1
million
— Operator licence self-service—cost
£10 million (including back office processing system);
— TransXchange—cost £200,000;
— Commercial customer portal; www.transportoffice.gov.uk—cost
£17 million, part rolled-out and part in development;
— E-test booking—cost £6
million;
— MOT status checks and history checks;
www.motinfo.gov.uk—costs are absorbed within the £1.08
vehicle MOT pass transaction payable to Siemens.
DRIVING STANDARDS
AGENCY
Q1. Targets between 2002-03 and 2005-06—figures
supplied in Memorandum . . . indicate that performance and indeed
targets have slipped. Why is this?
13. We have identified three targets which
either changed or where performance badly slipped:
— ADI check tests—in 2003-04
the target was 8,500 but this was reduced to 5,000 in 2004-05.
This was to allow for the re-allocation of resources to achieve
the practical car test waiting time of six weeks. Unfortunately,
because demand for driving tests was even higher than forecast,
further resource had to be withdrawn from conducting ADI check
tests and the reduced target was missed.
— Correspondence—target remained
unchanged at 97% throughout the period. Performance appeared to
dip in 2004-05 because of the incompleteness of data during the
month of changeover in theory test providers. The correspondence
statistics were calculated to include the 11 months worth of data
for the theory test and this influenced the final outturn.
— Bill payment—in 2002-03 and
2003-04 the target was set at 100%. This was regarded as an unrealistic
target as a single missed payment of an invoice would register
as a failed performance. The target was therefore revised to a
still demanding 98% and this was achieved.
Q2. "DSA engaged in gold plating of
the motorcycle test. Is the UK test more prescriptive than the
EU Directive and, if so, why? What weight was given to industry
opinion following consultation?
14. In October 2000, the European Commission
brought into force Directive 2000/56/EC which revised Annex II
to the 2nd Driving Licences Directive (Council Directive 91/439/EEC).
The new Directive introduced new standards for theory and practical
driving tests conducted within the European Union (EU).
15. The new EU standards set extra and more
demanding special manoeuvres that must be included in every practical
motorcycling test by October 2008. In addition to the existing
manoeuvres candidates will have to undertake:
— At least two manoeuvres executed
at slow speed, including a slalom.
— At least two manoeuvres executed
at higher speed, of which one manoeuvre should be in second or
third gear, at a speed of at least 30 km/h (18.75 mph) and one
manoeuvre avoiding an obstacle at a minimum speed of 50 km/h (31.25
mph).
— At least two braking exercises, including
an emergency brake at a minimum speed of 50 km/h (31.25 mph).
16. In order to assess the various manoeuvres
in an efficient manner DSA designed an exercise that includes
all the various special manoeuvres required by the legislation.
The exercise has been developed as a single event that can be
carried out safely before the test moves on to the general on-road
ride. The Agency estimates that this exercise would take candidates
around 10 minutes to complete, including the time needed for the
examiner to brief the candidate on what to do.
17. The content of the new riding test is
no more prescriptive than is required by the European Directive.
The proposed means of delivery has been developed in the light
of discussions with motorcycling interests and responses to public
consultation. The views of the motorcycling stakeholders were
crucial to the development of these proposals and they played
a key role in trialling the new test. DSA is continuing to work
with a wide variety of motorcycling stakeholders (including those
who represent motorcyclists with disabilities) to refine the proposals
for delivering the new test.
Q3. Outline the main continuous education
programmes and estimation of the most recent take up rate. Have
you collected evidence on the efficacy of these programmes? Cost
information for these schemes would also be useful?
Pass Plus
18. Developed to improve the safety record
of inexperienced drivers it is designed to help young people become
better drivers by allowing them to gain confidence and to increase
their skill levels. Participating novice drivers pay for six modules
covering driving on motorways and dual carriageways; driving at
night and in all weathers; driving in town and in rural areas.
Certificate holders may qualify for a discount on their first
insurance policy from insurers representing over 63% of the car
insurance market.
19. The scheme is available to anyone who
has passed a driving test but is particularly focused upon the
needs of novice drivers. The scheme syllabus has been recently
revised to adopt a competency based approach and all accompanying
literature has been developed and reissued to advertise these
changes.
20. DSA has registered over 28,000 Pass
Plus approved instructors. There has been a sustained increase
in participating drivers, year-on-year, over the last seven years
of the Pass Plus Scheme. Take up for the Pass Plus scheme increased
to over 16% of all car practical test passes in 2004-05, with
over 115,000 certificates issued in the year.
21. Dft is currently carrying out research
into the effectiveness of the scheme. DSA research carried out
by ORC in March 2005, found that 90% of novice drivers who took
Pass Plus felt more confident on the road and 85% felt it had
improved their driving skills. DSA intends to establish a Pass
Plus scheme for motorcyclists.
Arrive Alive
22. DSA's main continuous education programme
is the "Arrive Alive Road Safety Programme".
This programme has six modules. The first one is delivered to
the pre-young driver age group in schools, colleges, places of
employment, scout groups and any other venue where groups this
age range are found. Modules two and three are delivered to Young
Offenders. These are adjusted to suit working with Young Offending
teams and visiting Young Offenders' Institutions.
23. The "Arrive Alive Motorbike"
presentations launched on 1 September 2005, not only focuses on
the vulnerability of the new young rider, but also the dangers
of taking drink and drugs when riding, and the use of speed and
the consequences if it is not used correctly. The presentation
uses DVD footage showing the results of road accidents and the
consequences of rider error.
24. "You can drive too" was also
launched on 1 September 2005, and is aimed at the young driver
with mobility problems. The presentation includes information
about facilities at both theory and practical driving test centres.
25. The sixth module is the "Arrive
Alive Classic". This is aimed at the 50+ age group and encourages
the more mature driver to think about their driving standards
and how the environment has changed since they passed their test.
The Agency's aim is to help drivers to continue to drive more
safely for longer. It is planned to extend this programme drastically
in 2006-07. Recent figures show that for the first 10 months of
this financial year overall audience figures have totalled nearly
90,000.
26. There has not been a recent evaluation
of the presentations, however it is planned to put one in place
this year. It will probably be held in the same format as the
one held previously by the British Institute of Traffic Education
Research (BITER) in 1998. This showed attitudes towards driving
before seeing the presentation, immediately after and six month
later. The result of this survey showed that there was an improvement
in the attitude towards safe driving. Currently each Arrive Alive
presentation costs DSA around £155.
DSA Learning Materials
27. DSA produce learning materials for each
category of learner driver. These are created within a competitive,
business environment with distribution through the retail market
into high street shops, on line and telesales. They are therefore
self funding with any surplus fed back into new product development
or initiatives such as our Arrive Alive road safety programme,
as described above.
28. The printed products are the market
leaders, with electronic products sales increasing rapidly. Research
through focus groups is carried out constantly to receive feedback
about existing and planned products. Correspondence from customers
regarding the products, both positive and negative, is also monitored
and regarded as an important contribution to the constant improvement
of the products.
29. Whether the source material for the
theory tests is efficient is difficult to monitor as the material
has been available since the introduction. There has never been
a theory test without the supporting material.
Other Learning Materials
30. Access to the Crown Copyright material
(which is needed for other publishers to offer learning materials
to educate learner drivers) is offered under HMSO's IFTS (Information
Fair Trader Scheme). There are four main licences available from
DSA:
— Crown Copyright licence entitles
the licensee to allow the licensee to reproduce the Official DSA
Theory Test question bank and/or the official DSA Hazard Perception
Test clips within a product or products of their choice.
— Translation licence allows the licensee
to translate the official DSA Theory Test question bank into a
foreign language and to reproduce it for sale.
— ADI licence allows registered Approved
Driving Instructors to use DSA Crown Copyright material on a licensed
basis to facilitate the preparation of their pupils for both the
DSA Practical and Theory Tests.
— Educational licence gives educational
establishments (mainly schools and colleges) access to Crown Copyright
material on condition that students are not charged for access
to the material.
Q.4 A major element of DSA's contribution
to DfT objectives is promoting fuel efficient driving and reducing
congestion through education. Please explain how you do this.
Is information available on the website?
31. Following extensive research and development
work DSA has identified a comprehensive range of techniques which,
when honed and developed by the driver, lead to a style of driving
which is both safer and more environmentally friendly. These techniques
have been demonstrated to representatives from driving instructor
groups, advanced driving test organisations and the media. Presentations
have been given on this subject to driving instructor groups at
both local and national level over the past three years.
32. A chapter on environmentally friendly
driving had been included in several of our publications used
by driving instructors and those learning to drive. DSA's interactive
DVD The official guide to learning to drive also contains
a section on using and driving a car in a safe and environmentally
friendly way. Regular articles have appeared in the quarterly
DSA magazine Despatch which is sent free of charge to driving
instructors and other road safety professionals.
33. The theory test taken by learner drivers
and riders contains questions about minimising the impact of driving
and riding on the environment. Since October 2005, new driving
instructors have been assessed on their ability to demonstrate
eco-safe driving whilst qualifying as Approved Driving Instructors
and plans are being developed to introduce a similar assessment
into other categories of licence acquisition test over the next
two years.
Q5. Miss Thew mentioned a forecasting tool
which was ineffective. Can you provide us with more information
about this? What was the tool, how did it fail, were there cost
implications?
34. Miss Thew referred to the tool used
to forecast demand. We selected the business plan forecast for
2004-05 in September 2003 using statistical analysis of recent
trends and population predictions. The forecast of 1.56 million
practical car tests was exceeded by 7%, with actual demand of
1.67 million. Since then we have reviewed our forecasting methodologies,
in consultation with the Operational Research Unit (ORU) of the
Department for Transport and developed a suite of statistical
models to predict car practical test demand. The suite produces
a forecasting range which typically spans 400,000 tests, reflecting
the unpredictability of demand. There are many factors affecting
demand including waiting times, time that candidates elect to
wait between tests, practical test pass rate, theory test pass
rate, etc We have seen a reversal of the previous declining trend
in 17 year olds as well as continued growth in the 21-25 year
old sector. These two factors combined could explain the high
demand this year.
35. This suite of models was independently
reviewed by Professor Gerard Whelan of the Institute of Transport
Studies at the University of Leeds in January 2005. He concluded
that the current methodologies were valid, and suggested some
possible improvements which we are pursuing with the ORU. David
Leibling, one of our non-executive directors, has also reviewed
and supported our approach to forecasting.
36. The cost implications for DSA of higher
demand include higher revenue from test fees which covers the
additional cost of recruiting, training and paying the extra examiners
needed to deliver the higher volumes. This takes about six months
to increase capacity in this way, adversely affecting our service
performance. Conversely, if demand falls below predicted levels
then reduced fee revenue might not be sufficient to cover committed
costs. DSA manages the uncertainty by planning for a range of
demand and manages the business risk by putting contingency plans
in place. For example, the range for 2005-06 (predicted in September
2004 before the full increase for 2004-05 was apparent) was between
1.49 million and 1.84 million and current forecast outturn is
at the top of the range. The business plan of 1.7 million was
chosen as it was in the upper half of the range, reflecting the
rising trend. The plan contained contingency arrangements to deliver
up to 6% year on year growth using existing and standby or on-call
resource, with the mitigating action of recruitment should the
growth exceed 6%. Growth has exceeded 6% and we have recruited
extra driving examiners. Forecasts are reviewed monthly and customer
behaviour is monitored to identify any changes. The business plan
forecast for the year is set six months before the start of the
period, but we continue to plan our business based on the latest
monthly forecast which takes into account the latest customer
behaviour and trends.
37. Our annual modelling tools are based
on historical behaviour of candidates, and are only able to predict
the effects of anticipated changes. In recognition of this and
to try to improve our ability to react to changes in customer
behaviour, we have developed our annual modelling tools to run
based on quarterly data, and developed a simulation model to predict
short term demand patterns up to 18 months ahead.
38. We continue to invest in the development
of improved and informed demand forecasting techniques (during
2004-05 we invested £57,000 with ORU, this year we expect
to spend £48,000 and we employ two full time staff members
to concentrate on this work). To reduce the range and improve
our forecasting confidence, and in recognition of the effect customer
behaviour has on demand, we have conducted focus groups with 21-25
year olds to better understand this sector and this year we are
about to launch an online survey of 17 year olds to track their
intentions and experiences of learning to drive.
Q6. In terms of sickness absence, can you
provide figures which exclude any long term absence due to accidents
that happened on the job?
39. During the 2005 calendar year, DSA recorded
858 accidents on test, 90 non-test accidents, 386 near misses
on test, 33 physical assaults and 348 verbal assaults.
40. In order to assess what long term
absence is due to accidents that happened on the job, we have
applied our 30 day definition of long term absence and assessed
whether those absences can be linked to accidents. Where the absence
is due to psychological reasons (eg stress, anxiety, depression)
it is only related to an accident if a medical practitioner has
specifically related it to the after effects of the accident,
such as post-traumatic stress disorder, and in such cases trauma
counselling is provided.
41. Applying those criteria, 3,643 days
of absence would be accounted for in 2005 out of a total of 33,318
days recorded as sickness absence using the DVO specified calculation
method, and thus represents 10.93% of total absence.
42. Excluding these long term absences due to
accidents on the job would reduce our average absence for 2005
from 13.1 to 11.79 days average per full time equivalent employee.
Q7. Can DSA explain how it manages in-year
surpluses and deficits to ensure that break-even over the long
term. In what situations might it plan a deficit; and in what
a surplus?
43. In planning the target level of surplus
or deficit for a year the agency takes into consideration the
3.5% Return on Capital Employed (ROCE) target for the year, together
with accumulated over or under achievements from previous years,
financial risks, and longer term strategy. As the annual ROCE
target currently equates to around £2 million per annum it
would be usual to plan for a surplus, however, where the level
of over achievement against this target has accumulated to significant
levels and it is judged that the position of the agency is financially
robust then deficits may be planned in order to reduce the accumulated
surplus (contingency).
44. By March 2003 excess surplus had accumulated
to £9.6 million and therefore the agency took steps to reduce
this through the next business plan and fee setting round, deficits
were planned for the next two years and by March 2005 the excess
surplus had reduced to a more acceptable level of £7.6 million.
Financial risk around demand forecasting and investment then led
to a return to a strategy of planning surpluses to achieve its
in-year ROCE target. In light of high levels of surplus being
achieved in 2005-06 and 2006-07 fees are again being held in April
2007 and deficits will be planned again for 2007-08 and 2008-09.
Q8. DSA is due to go "live" with
"Shared Services" in April. What has DSA done to prepare
for this? What key messages does DSA have for other members of
the DfT family who will be commencing Shared Services later?
45. The Shared Services initiative is a
DfT-wide programme led by a programme team based in London and
Swansea. DSA is due to go live in August together with DVLA. We
have provided four staff to participate on a full time basis on
the Process Design and Business Change and Transition workstreams
of the project. We have also provided part time input by some
11 subject matter experts, overseen by two directors, to facilitate
DSA's needs in the process design of Finance, Payroll and HR systems.
This has been assisted by the coordination of two full time internal
DSA staff.
46. We have now established a DSA Project
Board for the migration of DSA to the shared service from August
based on the DfT wide design and technology. This will be supported
by a project team which is currently being put in place, and will
include some of the skills which have worked on earlier phases.
The project board includes a member from the DfT-wide programme
team to ensure that lessons learnt from the DSA and DVLA implementations
are fully utilised in the migration of the other DfT business
units.
Q9. Has DSA made any assessment of the driving
tests that might be lost due to examiners self-serving. Is this
likely to impact on waiting times for tests?
47. The benefits of a shared service model
can be best achieved by maximising automated processes, Manager
Self Service and Employee Self Service. However DSA is conscious
that this would be counter productive if it interfered with the
delivery of tests and customer service, thus reducing efficiency.
48. DSA therefore requested that one of
the imperative design principles for the new processes must be
that it does not take longer for an examiner than current processes
and must therefore not affect any driving tests.
49. We can confirm that all of the processes
are being designed with paper and telephone options based on current
systems, with the exception that such communication will then
go to the shared service centre, not to DSA as at present. The
electronic option will be used by other staff, and we will continue
to consider ways of examiners doing so in the longer term provided
that tests are not affected.
DVLA
Q1. Can you please supply a copy of the figures
Mr Bennett was working from in response to Qs 184—187? The
figures he quoted do not appear to tally with the figures provided
in the Departments' Memorandum
50. The figures are as follows:
Telephone Response:
— target is 95% answered within 30
seconds exceeded for last three years (last quarter 2005 at 97.13%
in spite of increased demand);
— 2002-03—12.2 million calls
(99.4% answered with 96.8% in 30 seconds);
— 2003-04—16.1 million calls
(99.0% answered with 96.9% in 30 seconds) = 31.9% growth;
— 2004-05—18.4 million calls
(99.5% answered with 95.3% in 30 seconds) = 13.9% growth and 50.2%
over three years.
E-mail response:
— target revised from 95% in seven
working days to 95% within three working days from April 2002;
— 87.1% volume growth between 2002-03
and 2004-05;
— old e-mail system constrained performance;
— in December 2005 with new system
99.1% answered in three days, with 86% in 24 hours.
51. In question 181 the Chairman quoted
the following statistics, "For 2002-03 you answered 91%
of telephone calls within 30 seconds, but by 2004-05 that was
83% . . . ". These statistics appear to refer to those
customers who chose to opt out of the automated system in order
to speak directly to a member of staff, and not to the total number
of calls received by the Agency.
Q2. Does the DVLA have plans to increase
data sharing with partners such as the Post Office? If so, can
you please explain?
52. One of the main purposes of the DVLA
is data sharing to assist in law enforcement. There are long-standing
and effective structures in place to provide data to trusted partners
where it is legal to do so and where there are adequate safeguards
in place for personal data. Examples include the Police, other
DVO agencies, Local Authorities, the department for Work and Pensions
and HM Revenue and Customs. We will listen to any requests from
the Post office and consider how best to meet their needs but
we do not have any current high volume requests from them.
Q3. What was the thinking behind the proposed
introduction of the annual registration charge? We assume that
you still intend to go ahead with the new fee structure. Will
it still include the ARC?
53. The annual registration charge (ARC)
was proposed in the November 2004 Fees and Charges Consultation.
There are a number of reasons why DVLA have considered the introduction
of such an annual charge:
— Responses to this and previous consultations
appear to support the principle of "user pays". Since
only around 62% of the adult UK population can be classed as motorists
(see below) then the consensus appears to be that motorists should
pay for DVLA's activities rather than these being funded through
taxation. This aligns with the responsibility that DVLA has as
an executive agency and as a Trading Fund to be self sufficient
in funding its statutory activities (excluding tax collection)
through levying fees for services.
— Currently only approximately 10%
of motorists (vehicle keepers or driving licence holders) contribute
to the costs of running and maintaining the DVLA registers. The
bulk of the DVLA fee income that covers its costs comes from just
two fees: the first vehicle registration fees at £38 (around
3 million each year) and the first provisional driving licence
also at £38 (around 1 million each year). The vast majority
of motorists who have passed their tests and do not buy new cars
do not contribute to the road safety objectives of DVLA through
paying fees.
— This distribution and dependence
on a small proportion of the motoring population makes the fee
income unstable and seems inequitable (especially in terms of
dependence on new/young motorists) so that expansion of the fee
bearing burden across the wider motoring population seems desirable.
— There are constraints over how DVLA
can extend this fee recovery of its costs, since it appears undesirable
to levy fees for many of the services delivered. These fees might
be seen as counterproductive and impose burdens that might discourage
compliance with regulations: for example, notification of address
changes, changes in vehicle keepership, notification of medical
conditions etc.
— The conclusion, therefore, has been
that spreading the burden through an annual charge across the
majority of motorists, but not to attach this to any of the transactions
that DVLA needs to keep its registers as accurate as possible,
is the best way forward. The costs of these non-fee-bearing transactions
have been grouped together as a total cost of register maintenance
and spread across the majority of motorists. It does not seem
sensible to establish a new transaction to collect this on its
own. The low level of the fee brings to mind the "dog licence"
approach that was widely ignored because of the low cost and hence
low enforcement impact, so this fee would need to be "attached"
to an existing transaction both to make it collectable and cost-effective
to collect.
— This approach was adopted in the
last consultation and was the best supported of the options proposed.
A new consultation to further explore this is imminent and now
awaits ministerial approval before it is made public.
54. The new fee structure will be the subject
of a second consultation that builds on that made public in 2004.
The feedback received has been incorporated into the new options,
supplemented by a high level of stakeholder consultation and discussions
in the interim.
55. The new fee structure does include the
ARC as one of the three options. But adoption is dependent on
reaction to the consultation paper, subsequent discussions with
HMT and ministers—and indeed for the ARC primary legislation
will be needed. This is not the easy option for DVLA but we do
believe that this provides both the most equitable solution and
a more stable and less variable fee regime because of the spread
of cost recovery across all the motorists that use the DVLA services
overall.
Q4. Is there a conflict in the fact that
the Agency both administers the transfer, retention and sales
of registration mark facilities and at the same time sells registration
marks? Is retention of registration mark responsibilities in-house
actually the most cost-effective and efficient solution?
56. There is no conflict whatsoever between
the Agency administering the transfer, retention and sale of registration
marks and at the same time selling registration marks.
57. The legislation to facilitate the sale
and transfer of marks is enabled under the Vehicle Excise and
Registration Act 1994 (VERA). The regulations and rules surrounding
the processes are in place not only to enable that process to
take place, but also to maintain the integrity of the vehicle
record and to prevent fraud. The regulations are necessary to
aid in the detection and prosecution of those who choose to operate
in such a manner as to both deprive the Government of saleable
assets and defraud the public as customers. Evidence of this is
clear from the recent successful prosecutions of two members of
the secondary market and current investigations into the legality
of the operations of a number of others.
58. There has always been a secondary market
operating in the area of personalised numbers. Such dealers buy
numbers that have already been issued and are on vehicles to sell
at a profit, or by acting as agents to facilitate this. The DVLA
sale of numbers does not impinge upon this as it deals solely
with numbers that have never been issued. They are sold by a telesales
scheme or by auction.
59. The DVLA scheme has raised the profile
of personalised numbers and has provided additional opportunities
for dealers and the public alike. Dealers are able to obtain a
far larger range of stock and commission sales and the public
can buy direct from a trusted Government source if they wish.
When the secondary market operated only with issued numbers, there
were around 20 dealers. The opportunities provided by the DVLA
scheme have seen a large expansion in dealer numbers (currently
at least 150). Many of these have concentrated solely on buying
and selling DVLA scheme numbers. Without the DVLA scheme, most
of these businesses would not exist.
60. Numbers purchased from DVLA do not stay
on the same vehicle indefinitely. As a result, transfers from
one vehicle to another have increased significantly, again providing
more potential business for dealers.
61. The Agency scheme is not exempt from
legislation and operates under exactly the same strictures as
any other business operating in this area. The Agency also complies
fully with aspects of the Competition Act and Distant Selling
Regulations. The propriety of its operation is scrutinised on
a regular basis by both DVLA's Internal Audit and the National
Audit Office.
62. The Agency has maintained the cost-effectiveness
of its sales operation by means of regular market testing. Both
the sales functions, telesales and auctions, are out-sourced to
the private sector and have been re-tendered on a regular basis
in the 16 years that the scheme has been operating. Specialist
functions such as media buying and creative design are also out-sourced
and re-tendered regularly. In this way, over the past 10 years
the Agency has been able to increase the revenue gained from its
Sale of Marks Scheme from around £32 million in 1994-95 to
£119 million in 2004-05 with minimal increases in cost.
Q5. What efforts have been made to accommodate
the specific circumstances of rental and leasing companies, particularly
in terms of reducing administrative burden?
63. DVLA has taken measures to assist car
leasing and car hire companies by reducing the burden of process
so that they can deal with customers on their premises:
— DVLA operates a dedicated premium
rate telephone service solely for the use of car hire companies.
— The car hire company will suffer
reduced business if their potential client is unable to produce
the driving licence and counterpart (which includes endorsement
history).
— To mitigate this, DVLA will with
the permission of the driver reveal to the car hire company relevant
information from the driver record.
— The dedicated telephone line operates
the following hours:
8 to 20.30 hours Monday to Friday;
8 to 17.30 hours on Saturday.
— This service facilitates the business
of car hire companies
Q6. Please clarify why the £23 million
to the Post Office and the £8 million to IBM that we raised
with you were paid up front?
64. Under the terms of the contract we have
with the Post Office and in order to benefit from the favourable
rates negotiated, we pay them in advance twice a year. Thus the
prepayment of £23 million shown at 31 March 2005 will cover
the service delivered by the Post Office from 1 April 2005 to
30 September 2005.
65. The service charge paid to IBM includes
amounts relating to assets used by DVLA in delivering our services
but owned by our service delivery partners, IBM/Fujitsu. On advice
from the National Audit Office, and in order to match the cost
of those assets with the service delivery they underpin, we recognise
a deferral of that element of the expenditure which relates to
those assets with the amount being amortised over the assets'
useful life.
Q7. Had DVLA done any scenario analysis or
detailed economic risk assessment in order to plan the level of
contingency it holds?
66. Yes. Before it became a Trading Fund
in April 2004, DVLA undertook a major risk appraisal exercise
jointly with HMT. At that stage, the major point of instability
in terms of funding was identified as the first registration fee.
The sales of new vehicles is one of the key lead indicators for
the economy and in the mid-90s this activity dropped by nearly
12% (this had a major fee income impact on DVLA that took 24 months
to recover).
67. Because of the scope of the changes
DVLA is now undertaking (new legislative requirements, moving
to electronic services, process improvements and Gershon changes),
costing for its activities is becoming more complex, but the basic
instability remains. The response to Q3 provides one major way
in which we are attempting to address this.
68. In our future cost projections, we have
calculated the impacts of the changes noted above and the significant
systems investment we need to make to redress the position inherited
from the 1990s. These have been factored into our fees calculations
and the level of contingency we need to hold to ensure our future
operations are not compromised through running out of funds. Clearly,
these levels are under ongoing discussion with HMT and we do not
wish to charge motorists higher fee levels than necessary so that
the level of contingency is balanced with the need for safety
and operational continuity.
Q8. Non-VED income for 2004-05 was estimated
at £566 million in the DfT Departmental Annual Report. The
published accounts however reveal the actual amount to be £364
million. What is the reason for the shortfall? What has DVLA done
to ensure that future predicted income is achieved? How can we
be sure the planned income for 2005-06 will be accurate?
69. We do not recognise the differences
from the DfT reports. The published DVLA Business Plan for 2004-05,
approved by the Minister, predicted non-VED income of £360.5
million and income from SLAs for VED collection and enforcement
of £192.2 million—a total of £552.7 million.
70. The audited outcome as reported in the
2005-05 Accounts was non-VED income of £363.8 million and
income from SLAs for VED collection and enforcement of £198.7
million—a total of 562.5 million. This represents a variance
of only 1.8% of outturn from the budgets set some 18 months earlier
and the increases are explainable almost entirely by increases
in volumes above those forecast in the original budgets.
71. The DVLA has been extremely close in
its estimates over the last years and has continued to refine
its forecasting tools and estimates. The latest forecasts for
2005-06 suggest that DVLA will again be within 2% of its original
budgets at the end of the year. We believe that the Trading Fund
reporting regime that DVLA entered in 2004 is far more transparent
in terms of plans and performance than that of an on-Vote agency,
so that the DVLA Annual Report and Accounts now provide a much
more open account of its planning and performance.
72. Internally, DVLA has developed an operational
and finance planning cycle operating with a 24 month horizon that
is updated and refreshed on a monthly cycle—we call this
our Integrated Resource Management (IRM) process. This is reported
to the DVLA Board as part of the monthly cycle and decisions/actions
taken during the monthly meetings. Together with the quality of
forecasts noted above, DVLA believes that this IRM cycle will
assist in delivering the financial results needed from its activities.
73. The track record noted above and the
management controls in place should provide a high level of confidence
that both income and costs will be delivered to a close degree
of tolerance for DVLA in 2005-06. In support of this view our
year-to-date figures as at the end of January 2006 provide additional
confidence that we are very close to our Business plan projections.
The IRM planning horizon of 24 months is now providing the projections
for 2006-07 and 2007-08 to be included in our next Business Plans
about to be published.
VCA
Q1. In the evidence session Mr Markwick said
VCA would be in surplus next year but the accounts say it will
take three years. What evidence are the predictions based on?
74. VCA plan to make a surplus in 2006-07.
This is based on an expected increase in income over 2004-05 of
30% combined with an estimated increase in expenditure of 20%.
The income prediction is based upon a continuation of the growth
in business seen in 2005-06. A factor in this increase is VCA's
expansion in overseas emerging markets; in April 2005 the Agency
opened an office in China and plan to open an office in India
during 2006. The cost prediction has regard to the Value for Money
programme already implemented with further planned measures to
be introduced over the next two years. The Agency has prepared
a detailed Business Plan for 2006-07 setting out how the business
is to be developed and delivered to customers and how that will
lead to a surplus being earned.
Q2. Figures in the Department for Transport
Annual Report indicate that VCA expects to double its expenditure
by 2007-08 against a 44% predicted increase in income. In particular,
it expects there to be an 80% increase in expenditure in 2007-08.
Please explain this pattern. How does it fit in with VCA's prediction
that it will return to an operating surplus within three years?
75. As stated in the previous answer, VCA
plan to make a surplus in 2006-07. This pattern is expected to
continue in to 2007-08, with planned income growth of 44% over
2004-05 and a corresponding increase in costs of 29%. These latest
projections are consistent with Mr Markwick's evidence to the
Select Committee that the Agency aims to return to a surplus in
2006-07 and continue in surplus through 2007-08 but this, of course,
is subject to external economic factors.
Q3. Why is VCA an Agency rather than a Trading
Fund (or even a public corporation)?
76. A number of years ago the Department
considered the possibility of VCA becoming a Trading Fund (Public
Corporation status has been actively considered as an option).
HM Treasury guidance advises against small Trading Funds that
might lack the range or scale of income necessary to insulate
against an unexpected drop in demand for one product or service.
77. VCA turnover is relatively modest, below
the threshold Treasury advises as sustainable for a Trading Fund.
VCA is working to grow its turnover.
VOSA
Q1. More information on the VOSA test booking
system would be helpful. In particular, what came out of the experience
in terms of lessons learned, sharing across the DVO Group etc,
how it impacted customers
78. VOSA's e-test booking system provides
for booking of heavy vehicle tests in VOSA test stations. The
first stage commenced last August in VOSA's test stations and
call centre, allowing customers to book tests by phone or in person.
The second stage; currently being developed, will go on-line to
enable customers to book tests on the Internet.
79. A lessons learned review was conducted
by two VOSA Non-executive Directors (with support from other key
DVO personnel). The main issues identified in the review were:
— insufficient time given to testing
in an end-to-end test environment;
— the need for more robust implementation
of Prince2 methodology, including training for individuals with
executive responsibilities;
— the need for more robust business
modelling to underpin change projects; and
— the need to review contract construction
and management ie ensuring good solution design, risk management
and strategic reward structure.
These lessons are being communicated in more
detail across the Group.
80. The e-test booking system has not impacted
on VOSA's Secretary of State Key Target of providing HGV and PSV
test appointments within 15 days of the requested date, 95% of
the time. The residual impact relates to:
(a) VOSA's ability to reconcile statements
for pre-funded account holders; 3% of statements are affected
(of a total of c 9,500). VOSA are in regular contact with the
customers impacted.
(b) Delivery of the second stage will be
delayed, impacting on the availability of external on-line booking
to customers. Having heeded the lessons learned, VOSA will ensure
that the system is stable and robust before launch.
Q2. Please provide details of the measures
taken to ensure that changes in vehicle requirements are communicated
to operators quickly and efficiently, particularly given the fast
moving nature of EU Regulations?
81. Communication styles used by VOSA to
ensure operators are aware of changes in vehicle requirements:
(2) Workshops/consultations/focus groups
(4) Publications—Moving On, Matters
of Testing, Special Notices, Safe Operators Guide
(7) Quarterly policy and technical working
groups
(11) Specialist ad hoc support for specific
changes
(13) Web publishing—www.vosa.gov.uk,
links to/from other sites, specialist sites eg www.digitaltachograph.gov.uk
(15) VOSA representatives are members
of various European working groups so we are able to contribute
to changes and pass details on to relevant customers at the appropriate
time.
The above are completed as either VOSA only
communications or in conjunction with other agencies as appropriate.
Q4. One of the Agency's long term targets
is to implement recommendations of the TAN/VI merger subgroups.
Given that the merger took place in 2003, why are merger issues
still being considered?
82. There are no outstanding merger issues
being considered. "To successfully implement the agreed recommendations
of the TAN/VI merger subgroups" was one of the underpinning
measures for Key Target 6 in 2003-4 which we entitled "Long
Term Development". The measure was achieved in that year.
Q4. Has VOSA done any research into how it's
operations, as they currently work, affect small, independent
operators? If so, please provide an overview
83. The annual MORI surveys for Operators
and Drivers, Fitters and Presenters covers a cross section of
operators representing different sizes but does not target small,
independent operators specifically. VOSA are able to request that
the data for small operators alone is extracted. This would be
at an additional cost. For reference an overview of the existing
survey results is:
Satisfaction with operator licensing markedly
improved.
A general improvement in ratings such as no delay
at test sites, opening hours that reflect business needs and operators
understanding of pass or fail criteria.
Driver Standards and Training—
Stronger awareness of EU Working Time Directive.
Enforcement and Compliance—
Overall satisfaction with enforcement procedures
is similar to last year. However, there is a general acknowledgement
that compliance improves road safety and better vehicle maintenance
and a rejection of the notion that it places an undue burden on
Operators.
Increased proportion are satisfied with DfT
agencies' efforts to improve road safety. The relative treatment
of non-compliant and overseas drivers remains a contentious area.
On-line and Other Communications—
On-line O Licensing self service is particularly
well received.
Most Operators are fairly clear of VOSA's role.
Q5. Because of the delay to the new MOT system,
VOSA has collected a lot of "extra" money from MOT fees,
over and above that needed to fund the non-computerised system.
Is this money ring-fenced? Has VOSA spent any of this money and
if so what on?
84. Yes, the money is ring-fenced for the
MOT scheme. Since roll-out of the live system began in April 2005
VOSA have paid Siemens as per the negotiated contract. VOSA's
expenditure by the time the service is in all MOT testing stations
is estimated to be £30.5 million. This is based on our costs
for resource, external specialist advice about software integrity
and business continuity, accommodation and legal advice.
Q6. Do any of the DVO Board Members have
a financial qualification?
85. Stephen Tetlow has an MBA which included
financial and management accounting. Geraldine Terry is a qualified
chartered accountant. In addition, the Board also has access to
advice on financial issues from S&R Directorate's Finance
and Planning Director, Leslie Gilbert, who is a Certified Practising
Accountant.
SUPPLEMENTARY POINTS
IN RESPECT
OF EVIDENCE
SESSION OF
8 FEBRUARY
Shared IT systems (Q32 in evidence session transcript)
86. The IT systems of the DVO Group fall
into three categories: (1) operational systems (eg driving test
bookings), (2) support systems (eg finance and HR) and (3) office
systems (eg email).
87. The DVO ICT Strategy which was agreed
by the DVO Board in 2003, and updated in January 2005, defines
the ICT Architecture for the group, based on the industry standard
service oriented architecture (SOA) approach. Its key principles
are:
— common use of applications;
— technical independence;
— effective data management; and
— leading to value for money.
88. The ICT Strategy ensures a common infrastructure
across the group and that business services are delivered only
once (eg driving licence data is held by DVLA and they provide
the services to enquire on and maintain that data. These services
are used by the rest of the DVO Group, as well as external data
partners where appropriate). Since October 2003 all DVO ICT projects
delivering operational systems have been required to confirm to
the ICT Strategy.
89. The Department for Transport is moving
to shared services for Finance and HR, including the sharing of
the supporting IT systems. The completion date for DVO is the
end of October 2007.
90. Office systems vary across the group,
having been established prior to the formation of the group. The
centre of the Department is about to refresh its office systems
and DVO is actively involved in this work. DVO will be pushing
for commonality with one of our agencies, and ideally a common
provision of the service. As each agency's office systems come
up for refresh they will be required to move to the standard adopted
by the Department.
MoT fees (Q217 in transcript)
91. VOSA are responsible for implementing
the fee increases for the annual tests on HGVs and buses/coaches
as it is VOSA that carries out the tests on these vehicles. The
fees for these tests will not be further increased until April
2007.
92. The Department for Transport (DVO C)
is responsible for implementing the MOT fee increases for all
other classes of vehicles, including cars, as these tests are
not undertaken by VOSA but by around 18,500 private garages around
the country. The fees for these classes of vehicles may be increased
from the end of July 2006 to take account of inflation and any
increase in the time needed to carry out an average test (VOSA
are currently carrying out a test timing exercise to determine
whether the introduction of MOT Computerisation has had an effect
on the time it takes to conduct an average test.)
93. Although the overall test fees may be
increased in July this year, there will be no increase to the
"pad fee". The pad fee is the small element of each
test fee—currently £1.44—which garages pay to
VOSA to cover the Agencies costs in supervising and administering
the MOT scheme.
Vehicle recalls in 2004 (Q272-274 in transcript)
94. On vehicle recalls there was an increase
of some 250,000 vehicles that were the subject of a recall campaign
in 2003-04 compared to the previous year.
95. Vehicle recalls are very largely preventative,
precautionary measures. The fact that a vehicle is subject to
a recall does not necessarily mean that it is dangerous to use—in
the vast majority of cases it means that it has the potential
to develop a defect which the manufacturer would prefer to remove
as soon as reasonably practical. Neither does it mean that the
defect is necessarily very serious in itself; or, that all of
the vehicles that are subject to recall will ever develop the
defect or indeed, develop the defect in circumstances in which
a danger to the vehicle or its occupants might arise. In the vast
majority of cases manufacturers initiate recall campaigns on their
own volition, and in response to a relatively small number of
reports—from various sources including VOSA—about
potential rather than necessarily actual problems.
96. The increase in the number of vehicles
affected by recalls in 2003-04 is explained by two key factors.
Firstly, the number of recalls varies from one year to the next
in any event. (This sort of increase is not unusual—for
example 2.3 million vehicles were the subject of recall campaigns
in 2000-01). Secondly, because manufacturers are increasingly
aware of their responsibility, formally, both to identify, and
to notify, recall campaigns to the Department. This is a legal
requirement of enhanced EU legislation on the subject of product
safety generally, which took effect in January 2004 (2001/95/EU).
97. Vehicles are subject to type approval
inspection by a certification authority. The purpose of the type
approval process is to check that the design specification of
each new vehicle type complies with internationally agreed key
standards of safety and environmental performance. The process
is undertaken in part by reference to technical information submitted
by a manufacturer, and in part by witnessing a certain selection
of type vehicles being subjected to various performance tests
prescribed in type approval legislation. The process also involves
checking to see that the manufacturer has systems in place to
ensure that type approved vehicles will be built in conformity
with the approved type vehicle(s). However, the type approval
process does not look at every aspect of design, construction
and manufacture. Type approval provides the assurance that new
vehicle types produced by manufacturers meet current international
requirements of safety and environmental performance. And it allows
the manufacturer to produce new types approved to these standards
and to market them freely in the international community.
Annex A
PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL ON DRIVING LICENCES, RECASTING COUNCIL
DIRECTIVE 91/439/EEC
UPDATED REGULATORY
IMPACT ASSESSMENT
Purpose of the measures
1. In December 2003, the European Commission
published its proposal for a Directive to update the existing
European Union ("EU") requirements for Member States'
driving licences by "harmonising", that is in general
tightening, them. We produced a Partial Regulatory Impact Assessment
on that text in June 2004.
Timetable and state of play
2.1 Following negotiations in its working
group, the Transport Council reached a General Approach on the
proposed Directive at its meeting on 7 October 2004. The resulting
text differs substantially from the Commission's original proposal.
This Regulatory Impact Assessment assesses the potential impact
of the Council's General Approach, not that of the Commission's
original proposal.
2.2 The European Parliament ("EP")
is expected to have its First Reading on 22-24 February 2005.
Council and the EP must then agree a final text before it can
become law. Publication of the Directive is therefore unlikely
until late 2005 at the earliest. Member States would then have
four years to transpose the Directive into national law, and a
further two years to implement it. This implies a likely date
of 2011 for the provisions to come into effect in national law.
Intended effects of the general approach
3.1 New licences only. The proposals
would explicitly affect only driving licences issued after the
new measures came into force.
3.2 Plastic card and microchip. In
future, all new driving licences would have to be issued as a
plastic card, in line with present UK practice, bearing a photograph
of the individual concerned; with the option available to Member
States to include a computer chip.
3.3 Harmonised periods of administrative
validity. A new concept of "limited administrative validity"
of driving licences would be introduced. Licence documents would
have their administrative validity renewed periodically, and the
periodicity would be the same throughout the EU:
— every 10 years for drivers of mopeds,
motorcycles, cars and light vans; and
— every five years for drivers of medium
and heavy goods vehicles, minibuses, buses and coaches.
3.4 Medical checks. New medical checks
or revisions to the medical standards setting out the physical
and mental conditions for fitness to drive would not be part of
the measures.
3.5 Driving examiners—qualification
and training. A Community-wide obligation is proposed to harmonise
the requirement for initial qualification and periodic re-training
of driving examiners.
3.6 Combating driving licence tourism.
"Driving licence tourism" is the practice by which a
driver disqualified in one Member State may establish usual residence
in another, then be issued with a licence after test passed in
his new state of normal residence. To combat this, Member States
would be forbidden from issuing a new or renewed driving licence
to a person already holding a valid EU driving licence (that is,
a licence issued by one of the EU Member States) or whilst his
or her driving licence is withdrawn by any Member State.
3.7 Harmonised vehicle sub-categories.
The existing Driving Licence Directive obliges the Council to
consider Commission proposals to harmonise vehicle sub-categories.
So the Commission proposed a more detailed alignment across the
EU of the types of vehicle for which entitlement to drive may
be granted by the national authorities: much of the Commission's
original proposal was concerned with this aspect. However, the
General Approach would reject many of the Commission's proposals,
majoring on omitting those for which there are no clear road safety
benefits.
Risks addressed by the measures
4.1 The Directive is intended:
— to improve road safety through the
implementation of common transport policy; and
— to facilitate the free movement of
persons changing their place of residence from one Member State
to another.
Fraud
4.2 In the newly-enlarged EU, some 110 different
models of driving licence are currently in use, in a variety of
paper, card and photocard formats, languages and even alphabets.
This diversity creates a wide variety of opportunities for impersonation
and for forgery.
4.3 It is proposed to simplify enforcement
by issuing all future new licences in conformity with the single
common photocard model already adopted across the EU. This has
been in use for new licences issued in Great Britain since 1998
and in Northern Ireland since 1999. It is also proposed to enhance
the security of the system by permitting Member States the option
of including a computer chip on the card. This may hold further
information to confirm that the person holding the licence really
is the person who has the entitlement to drive.
4.4 The introduction of limited periods
of administrative validity would also reduce fraud by providing
for update of the driver's photograph and details, and for inclusion
of the most up to date security and anti-fraud features.
Road safety
4.5 In the United Kingdom ("UK"),
the Government is committed to reducing the number of road deaths
and serious injuries by 40% by 2010, compared to the average for
the years 1994 to 1998. In the EU, the UK has agreed to the European
Road Safety Charter, which commits the Member States to halve
the number of road deaths by 2010.
4.6 We have resisted many of the Commission's
original proposals for changes to vehicle categories, where we
saw little or no resultant road safety benefit. However, we have
encouraged and sought to strengthen proposals from which road
safety benefits may be foreseen, for example from the proposals
to harmonise driving examiner training, and from proposals to
combat driving licence tourism.
Diminished mobility
4.7 The principle of "mutual recognition"
of Member State driving licences was introduced by the current
driving licence Directive. Differing national validity periods
for driving licences, as at present, impede the application of
this principle. Citizens who take up residence in another Member
State have significant uncertainty about their driving entitlements.
This uncertainty hinders free movement. Administrative harmonisation
should, by helping free movement, help to improve the functioning
of the internal market.
Options
5.1 In principle the UK had three options:
— oppose the current Commission's proposals
in their entirety;
— support the Commission's proposals
in their entirety; or
— influence the drafting of the Directive
through negotiation.
5.2 In practice, the first two options are
not realistic. The UK has negotiated very actively, achieving
a General Approach which we can regard as a success, even if it
would not fully reflect every detail of our wishes.
Progress in negotiations
6.1 The UK has negotiated very actively
along lines set out in our partial RIA of June 2004. We have resisted
many of the Commission's proposals for changes to categories for
which we saw no road safety benefit. We have opposed proposals
which would have imposed undue burdens on the public, industry,
enforcers or Government with little or no compensating benefit.
Partly as a result of the strong representations which the UK
has made, most of our key objectives, as outlined in the Partial
Regulatory Impact Assessment of 2 June 2004, have been achieved
at this stage and are reflected in the General Approach.
6.2 Vehicle categories. Many of the
Commission's less justifiable changes to vehicle categories have
been omitted or amended, either to align with existing practice
or to address a real road-safety concern.
— Most of the proposed changes affecting
truck and bus drivers would be omitted or amended. For example,
the General Approach now proposes to retain at 7.5 tonnes the
maximum vehicle weight at which a medium goods vehicle licence
would apply (the Commission proposed to reduce this to 6 tonnes).
This improvement alone would avoid very substantial costs to industry,
to the voluntary sector and to others which were referred to in
the June RIA.
— The General Approach on cars with
trailers would replace the Commission's very restrictive proposal
with a measure similar to that currently in force. This would
permit a maximum combination weight of 3.5 tonnes on an ordinary
car licence.
— On motorcycles, the rigid "staged"
approach proposed by the Commission would be made more flexible,
with some national derogations to permit Member States to adopt
older or younger minimum ages as they deem appropriate. Whilst
this would not enable the UK to continue exactly as now, we should
have a good deal of freedom to determine the conditions under
which access would be permitted to the very largest machines.
6.4 Drivers' "grandfather rights".
The Commission claimed that the new measures would not change
entitlements to drive already granted or acquired before the new
Directive comes into force. The General Approach now includes
language which explicitly defends the entitlements of existing
drivers.
6.5 Member States' rights. The General
Approach text would allow Member States to implement the new measures
in ways relatively well-suited to their own national conditions.
For example:
— Commission proposals obliging medical
checks every five years on young truck and bus drivers have been
replaced with a requirement that their licence would be renewed
only if the applicant continues to fulfil the medical standards.
Whilst this would mean a new requirement for periodic renewal
every five years for the younger drivers, the medical procedure
is in line with present UK practice.
— The age of 65 at which, under the
Commission's proposals, entitlements to drive would in effect
have expired, has now been deleted, leaving it to Member States
to determine at what age entitlement would lapse.
— Member States may issue licences
for periods shorter than the harmonised validity period, for example
for medical reasons. There would be no obligation to withdraw
and renew longer-term licences already issued (eg the pre-photocard
models).
— Member States may store additional
data on the optional microchip, so long as it does not interfere
with the use of the chip for driver licensing.
6.6 Road safety. The General Approach
text on requirements for driving examiner training and testing
concentrates on competences gained rather than prescribing merely
the duration of training, which was the focus of the Commission's
proposals.
6.7 Nevertheless, there remains scope to
refine and focus the Directive in some areas, and we will continue
to negotiate accordingly. Details are provided below.
Benefits and costs
7.1 The greatest potential of the Directive
to tackle current problems lies in proposals:
— to combat fraud by measures to tighten
driving licence security;
— to create a framework of improved
measures for driving examiner qualification and training which
may ultimately impact beneficially on road safety; and
— to recognise the trans-frontier mobility
of drivers through harmonised periods of licence validity and
through measures to combat "driving licence tourism".
Driving Licence Security
7.2 The proposed Directive provides an opportunity
to improve the security of the driving licence system against
forgery and fraudulent use. The mandatory photocard for new-issue
licences, the proposed computer chip on the licence, and the introduction
of harmonised periods of limited administrative validity are particularly
relevant.
7.3 Photocards and microchips. The
General Approach would move all Member States exclusively to the
photocard format for newly-issued licences, in line with existing
UK practice. It would also allow (but not oblige) Member States
to insert a microchip on the licence.
— These measures provide for increased
security of the licence and would help Member States to counter
the growing threat from fraudsters.
— If DVLA opted to include a microchip,
there would be a marginal production cost increase to DVLA, but
(more importantly) the costs, benefits and justification for such
a step would be evaluated nationally on their own merits.
7.4 Any microchip would be permitted to
hold information which is not already held on the face of the
card, if so desired by the UK.
— This could have a number of benefits.
For example biometric data could support validation that the person
claiming to be the licence-holder is the person to whom the claimed
driving entitlement has been issued.
— It would allow costs to be spread
over several functions. The microchip could also function, for
example, as a tachocard, hazardous goods certificate, or as an
access key to other databases, with practical advantages for licence
holders. Licence-holders might not have to pay for several different
cards and carry them around, and they might be enabled to include
useful information such as blood-donor group, organ donor or other
medical information on the chip.
7.5 Harmonised periods of administrative
validity. As amended, the proposed new measure would have
both benefits and costs.
7.6 It would have potential administrative
and customer service benefits.
— It would facilitate greater accuracy
of records, including the data on the licence, thus reducing the
potential for fraudulent use and counterfeiting.
— It would give greater clarity for
EU citizens of the rules regarding licence renewal when they move
from one Member State to another.
7.7 On the other hand, there would be some
additonal administrative cost to bus and truck drivers and to
DVLA, through the new need to renew such licences five-yearly
at ages under 45 (see paragraph 10.10 below). In the UK, we see
no scientific justification for the Commission's original proposal
for regular medical checks under the age of 45, and we believe
that the General Approach would require no changes to our current
medical procedures.
7.8 The General Approach text does not oblige
Member States to withdraw old format paper licences. The UK is
neutral about this. We see the advantages of withdrawing old model
licences to the security of the whole EU driver licensing system:
the EU system will be only as secure as its weakest member. But
we recognise there would be significant costs, especially for
Member States which offer lifetime driving entitlement. We have
secured the inclusion in the General Approach of text which would
protect existing drivers' entitlements so that they would not
be adversely affected by any future decision to withdraw old model
licences, whether taken nationally or internationally.
— This is partly by allowing Member
States some freedom to administer EU standards in accordance with
national conditions, as set out at paragraph 6.5 above.
— Any decision to withdraw old model
licences in the UK would (as the text presently stands) be for
the UK authorities, and it would be taken only after a detailed
regulatory impact assessment backed up by full consultation.
Driving examiner qualification and training
8.1 The General Approach on driving examiner
qualification and training would help to improve road safety.
Competence-based criteria are now included, to enable the required
training to be targeted so as to address any examiner failings,
and to deal with changes in the law and with new technological
developments (as in UK practice).
— In this way, the road safety benefit
would be secured by the effective guarantee that driving examiners
all have the necessary skills.
8.2 There should be no need for DSA to change
their procedures fundamentally, as in the UK we already train
driving examiners and we are well-advanced towards introducing
a more rigorous competence-based approach.
— However, there would be an increase
in costs. Currently periodic training is provided on an ad-hoc
basis following annual observation of the examiner's performance
to identify any training requirements or if an examiner has been
absent for a period of 6 months. The Commission's proposals would
make periodic training mandatory and so would increase the Agencies'
costs by at least £2 million pa. Every examiner would have
to undertake on average three days training per year, at a cost
of £200 per examiner per day. In addition, DSA would have
to hire some 30 additional driving examiners to cover absences
due to the increased training requirements. Costs would also be
incurred by non-DSA examiners such as the MOD, Bus Operators,
Fire and Police forces.
— That said, the detailed requirements
set out by the proposed Directive for driving examiner training
and testing would be subject to review by Brussels official comitology.
We should expect the UK to gain early experience of the practicalities
of implementing the Directive and, as and if necessary, to come
forward with proposals to amend the requirements in the light
of experience long before the Directive would come into force
in Member State law.
Combating "driving licence tourism"
9. The Commission's proposals to combat
"driving licence tourism" could have real road safety
benefits and we are keen to see appropriate measures put in place.
— We should prefer to see a more fully-considered
text, better focussed on achieving real benefit and on avoiding
nugatory cost. We continue to pursue this goal.
Changed categories of vehicle and related measures
10.1 Many of the Commission's original proposals
to change the categories of vehicle have been omitted or amended
in order the better to focus on road safety benefit whilst removing
costly measures with little or no road safety justification.
— We believe that there is still scope
for substantial improvement in some areas as set out below.
10.2 Mopeds. We welcome the
proposed inclusion of mopeds in the EU driving licence system.
— However, we believe that a mandatory
practical test should be the norm throughout the EU for new moped
riders. Statistics show alarming death rates amongst moped riders
on EU roads, and huge disparities between Member States in the
proportions of moped riders killed. The rate of rider deaths per
thousand mopeds is very high in some Member States where mopeds
are popular. In 1997 over 2,500 people died on mopeds in what
are now the 25 EU countries. This was some 4% of all road deaths.
In some countries, more than 10% of fatal accidents involve mopeds.
In UK experience, the introduction of appropriate training and
testing requirements can cut the death-rate by about two-thirds.
Nor do we wish to have to accept on UK roads moped riders who
have not proved their competence in a practical test.
— We therefore continue to negotiate
for a mandatory practical test for moped riders to be the EU norm.
— We should also prefer to see mopeds
defined so as not to exclude a category of even smaller vehicles
which would fall outside driver licensing. Such exclusion would
encourage abuse, and we would probably wish to introduce a new
national category of sub-moped machines, thereby incurring some
administrative cost in DVLA and DSA. And we seek to exclude small
three- and four-wheeled vehicles from the moped definition, since
these are more like small cars or vans in their handling characteristics
than like two-wheelers.
10.3 Motorcycles. The rigid "staged"
approach proposed by the Commission has, in the General Approach,
been made more flexible, with some national derogations to permit
Member States to adopt older or younger minimum ages as they deem
appropriate. This would not enable the UK to continue exactly
as now. But it would leave us a good deal of freedom, for example
to determine the conditions under which access will be permitted
to the very largest machines.
— Direct access to the largest machines
(a category which we should like to see broadened to include all
machines over 25 kW, that is the more powerful 500cc range machines
as well as those even larger) would be optional, not mandatory
on Member States as in the Commission's proposals. A Member State
would therefore be free to decide that access to the largest machines
for its own licence-holders could be only after experience on
smaller motorcycles. The General Approach would also allow freedom
between the ages of 21 and 27 as to the minimum age at which to
permit direct access to the largest machines.
10.4 On motorcycles generally, we understand
that MEPs may seek a more tightly-structured approach, and accordingly
we are encouraging MEPs to consider the possibility of allowing
flexibility particularly where the Member State adopts a rigorous
testing and training regime for moped riders.
— We should prefer to see the maximum
power of medium sized motorbikes retained at the present lower
limit of 25 kW. We believe that the 35kW limit is too high and
that it would allow relatively large motorbikes to be ridden by
18 year olds with very little experience. UK experience is that
competence, not age, is the prime consideration. Given the right
size range for medium-sized motorcycles and proper training and
testing arrangements, we see no reason to oppose access to them
at age 17 (as at present in the UK). Therefore we continue to
support the lower (25kW) limit, with national derogation in appropriate
circumstances to minimum age 17.
10.5 We are aware of concern in the driver
training industry about the motorcycle minimum test vehicles (MTVs).
MTVs need to reflect the categories of vehicle finally adopted.
They also need to match up with the vehicles that are on the market.
— Changes to the MTV definitions could
have significant cost implications, because they might require
training and testing organisations to buy and insure expensive
new fleets of vehicles. We aim to have MTVs defined appropriately
in the text as adopted in due course. However, the MTV definitions
are also subject to official comitology procedures, so that they
may be amended by the Commission after adoption of the Directive.
We shall take any necessary opportunity to review the MTVs through
official comitology, well in advance of the date of implementation
of the Directive in Member State law.
10.6 Three- and four-wheelers. The
General Approach text would include tricycles and quadricycles
in the moped and motorcycle categories.
— We believe that they would all be
better included in a re-defined category B1 (light vehicles) as
their handling characteristics are more like those of a car than
of any two-wheeled vehicle. If a Member State chooses not to apply
this optional category, they ought to be included in category
B (normal car or van).
— If we are obliged to include three-and
four-wheeled vehicles in the moped and motorcycle categories,
this will involve administrative costs for DSA who may have to
change testing arrangements, and for DVLA as the category definitions
will change.
10.7 Cars, light vans and trailers.
The Commission's proposals for cars and light vans with trailers
(including caravans) have been almost entirely rejected in the
General Approach, which reverts to text similar to that in the
existing Directive, with two projected changes.
— The current provision for cars or
light vans to tow small trailers of less then 750kg on a category
B driving licence (even if this takes them above the category
B combination limit of 3,500kg) would be removed. This removal
has no clear road safety benefit, and it would affect utility
companies and others who tow light equipment (eg small pumps)
using vans. We are therefore negotiating to reinstate the present
provision for small trailers whilst preserving the general 3,500kg
limit in combination weight (see 10.9 below).
— For B+E licence holders (who have
to take a special car- or van-with-trailer test) the absence in
present law of an upper limit to the trailer size has caused freak
articulated vehicles to proliferate in some Member States. The
Council text therefore provides an upper limit to the trailer
mass at 3.5 tonnes, so long as, in effect, the trailer weighs
less than the tractor. To drive larger combinations would need
a C1+E (medium commercial vehicle with trailer) licence, even
if the tractor alone was in category B (car or light van). We
believe that there is good road safety reason for imposing this
limit. There might be some cost to commercial operators relying
on freak articulated combinations, but we believe that the size-limit
is set sufficiently high to avoid most if not all leisure use.
10.8 The Council chose not to make a general
extension of category B to cover single vehicles (motorhomes)
or trailers (caravans) up to 4.25 tonnes. This was to avoid the
overlap which would result between leisure-use and commercial-use
vehicles, with resulting impossibility of enforcement on the road.
We believe such an extension would have had detrimental effects
on road safety by encouraging widespread abuse. In effect it would
raise the size of vehicle which could commonly be driven on a
B licence. It would also raise the spectre of "white artic
man" who would find himself able to drive articulated vehicles
on an ordinary car licence as large as some rigids for which a
C1 (medium commercial vehicle licence) is needed.
10.9 Medium and heavy goods vehicles,
minibuses. buses and coaches. Most of the Commission's proposed
changes to these categories have also been rejected in the General
Approach text.
— It is proposed to retain at 7.5 tonnes
the maximum vehicle weight at which a medium goods vehicle licence
would apply (the Commission proposed to reduce this to 6 tonnes),
so avoiding the very substantial costs to industry which were
foreseen in the June RIA.
— A minibus driving licence would apply
to vehicles up to 8 metres in length (as opposed to 7 metres as
proposed by the Commission). This would avoid needless burdens
on voluntary organisations and others transporting disabled people.
— The Commission proposed linking the
minimum age requirements for truck and bus drivers with the minimum
age and professional training requirements of Directive 2003/59/EC
(the recent Training Directive). We identified potential difficulties
for the Ministry of Defence, emergency services and vehicle recovery
operators and have secured in the General Approach suitable exemptions
for them, thus potentially avoiding substantial costs.
— We have successfully resisted on
road safety grounds the Commission's proposal to make driving
licences interchangeable between minibuses and medium goods vehicles.
We received little or no indication of support from industry for
this measure.
10.10 The requirement for five-yearly medical
checks for category C and D drivers under the age of 45 has been
successfully opposed. Nevertheless, these drivers will still have
to renew their licences every five years. This will impose some
administrative costs on the industry and on DVLA. DVLA will have
to undertake over 100,000 extra transactions per year, which will
require approximately 10 new staff members, at an annual cost
(very roughly) of around £300,000. However, the periodicity
of renewal is the same as that governing Certificates of Professional
Competence (already required under Directive 2003/59/EC), so that
there may be scope to minimise this by combining the two exercises.
10.11 Whilst we have successfully resisted
most of the Commission's proposed changes to categories, there
will inevitably be some changes to categories and minimum ages
resulting from the implementation of this Directive. This will
incur some administrative costs on DVLA in terms of system changes,
but these can be quantified effectively only when the final text
of the Directive is agreed and the detailed changes are known.
Summary and recommendation
11.1 The Council's General Approach is a
great improvement on the Commission's original proposals. It would
remove most of the potential undue cost burden that could have
fallen on drivers, industry, enforcers and the Government. However,
there are some areas where improvements can still be made and
we are continuing to negotiate on them.
11.2 We also see two areas in which we intend
to use the official Brussels comitology process as and if necessary
to refine detailed requirements so as to maximise benefits and
minimise burdens: these are: the minimum test vehicles for motorcycles;
and the detailed training requirements for driving examiners.
Benefits
12. The proposed Directive should benefit
the UK by providing appropriate measures:
— to combat driver licensing fraud
and impersonation;
— to improve drivers' performance through
an improved regime of driving examiner qualification;
— to tighten international arrangements
to combat "driving licence tourism" by persistently-offending
motorists;
— to extend the categories of vehicle
for which driving licences are needed, so as to cover mopeds and
very light motorised three- and four-wheelers; and
— in a few instances to refine the
existing vehicle categories so as to make it harder for drivers
to drive vehicles on an inappropriate licence.
Potential costs
13. There are still some areas of the Directive
in which the potential costs may outweigh the benefits. These
include:
— Lack of a mandatory practical test
as the EU norm for moped riders, and an impractical moped definition;
— Inclusion of three-and four-wheeled
vehicles in moped and motorcycle categories;
— Lack of a fully-coherent approach
for the motorcycle categories; and
— Excessive administrative requirements
to combat driving licensing tourism.
RECOMMENDATION
14. We shall build on our substantial achievement
so far in Council by continuing to seek to maximise the potential
benefits and to oppose measures from which undue cost will arise
.
15. We are pursuing these goals by three
complementary routes:
— We are already actively briefing
MEPs to consider measures which would refine the text to good
effect. This applies to:
— Well-specified requirements
on the Member States and on the Commission to combat driving licence
tourism;
— Mopeds: proper definition,
and practical test as a mandatory EU norm;
— Motorcycle categories; minimum
ages and staging arrangements.
— Inclusion of three wheelers
with light cars/vans or with cars/vans, rather than with motorcycles.
— We are already using the official
comitology process to fine-tune some of the details on which expertise
needs to be marshalled and practical experience brought to bear.
This applies to:
— Detailed training requirements
for driving examiners.
— The minimum test vehicles for
motorcyclists.
— We intend, where flexibility has
been achieved to empower national authorities to make decisions,
to exercise our usual practice of thorough detailed regulatory
impact assessment, backed up by full consultation, before decisions
are taken or measures implemented. This would apply if we were
to think of taking steps to:
— introduce the optional microchip;
— withdraw old model licences;
or
— change the driver training
and testing regime, within the framework established by the proposed
Directive.
LRI1/DfT
17 December 2004
Department Name:
Project Name |
Driving Standards Agency
Project Description |
Amount (£) |
Date entered Service |
| Internet Booking Service—Practical Test—Phase 2 |
To further enhance web-based booking service enabling cancellation, amendment and refunds and contributing to the DVO's corporate objective to e-enable core customer facingservices. |
0.5m | Jul 2005 |
| Automated Speech Recognition | To enable practical test candidates to change their test booking date at the same venue on a like for like basis using automated telephone service.
| 0.8m | Jun 2004 |
| Internet Booking Service—Practical Test—Phase 1
| To enable the booking ofa practical driving test over the Internet providing customer choice and cost savings.
| 1.3 | Oct 2003 |
| Internet Booking Service—Theory Test—Phase 2
| To introduce the facility for candidates to check, cancel or change Theory Test bookings on line.
| N/A | Jan 2003 |
| Hazard Perception Testing (HPT) | To deliver an IT based hazard perception test to be used in determining driving test candidates hazard perception skills.
| 2.6m | Nov 2002 |
| |
| |
| 
