Select Committee on Public Accounts Second Special Report


1 Special Report

Background

1. On 17 October 2007 we took evidence from the Department for Transport and the Driver and Vehicle Licensing Agency (DVLA) on the Comptroller and Auditor General's report on Vehicle Excise Duty, which had been published in July.[1] On 22 January 2008 we published our own report on the subject.[2] In our report we noted that according to the Department's figures the rate of evasion of duty by motorcyclists was 38%, up from 30% the previous year, and recommended that the Department and the DVLA target motorcyclists evading payment of duty. We also recommended that they should work with motorcycle industry bodies to reduce concern about the reliability of sampling methods used in measuring evasion by motorcyclists. On 14 February the Department published new statistics for evasion, based on a survey carried out in June the previous year. This put the figure for motorcycle evasion at 9.8%. The Department's press release about the new figures made clear that a new methodology had been used in the survey, but did not refer to the difference from previous years' figures, saying only that:[3]

"Substantial improvements in the way that the roadside survey data are collected mean that evasion estimates for 2007 are not directly comparable with those from previous years."

2. The Committee's report had received widespread coverage and caused considerable dismay among motorcyclists. After the Department's press release we apologised to motorcyclists for the earlier, incorrect figures.

Our concerns

3. The significant change in the Department's figures caused us concern on two grounds: first, that we had been given figures that were unreliable; and, second, that the Department had not given us any indication either that they suspected the figures were unreliable and were using a new methodology for the survey or that the results would be so different. We therefore wrote to the Department seeking an explanation.[4] Following a reply from the Department,[5] we decided to recall the Department and the DVLA for a further evidence session.

4. In the second evidence session, on 23 April, the Department told us that the basic change between the surveys in 2006 and 2007 was that the use of cameras had increased from 46% of number plates recorded to 98%. This had meant that they were able to introduce new checks on the accuracy of the data.[6] It was only as a result of these checks that flaws in previous surveys had been discovered.[7]

5. The Department also told us that they had not received the processed data from the June 2007 roadside survey until October, "in the same week as" our first hearing, and that the provisional estimates had been produced in early January 2008. These had looked so different to previous years' results that they had been double-checked, a process that had taken until the end of the month, allowing finalised figures to be released in February.[8]

6. The Department thus repeated the arguments, first put forward in their letter,[9] that the changes to the methodology of the report were only changes of degree (in that the use of cameras had increased), rather than changes to the nature of the survey, and that usable results were available to them too late to provide to us before we published our report.

Conclusions

7. While we accept that the Department did not expect the results to be so different from previous years', we are surprised that they had not drawn our attention to the wide variations in figures in earlier surveys, which should, on grounds of common sense alone, have suggested that something was wrong. It was not until our second hearing in April 2008 that we were given the following figures by the National Audit Office:


Roadside survey conducted in June:
Percentage Evasion in Active Stock
All vehicles
Motorcycles
2002
6.3
45.9
2003
no survey
2004
3.7
20.0
2005
4.5
29.6
2006
6.1
38.0
2007
1.7
9.8

8. A fall in the motorcycle evasion rate from 45.9% to 20% between 2002 and 2004, followed by a rise to nearly 40% over the next two years, is so improbable that the Department should have known there were serious errors in the surveys. Indeed we understand that motorcycle bodies had repeatedly made this point to them. Given this, the Department should have made clear to us that their figures for road tax evasion could not be relied upon.

9. We find it disingenuous to suggest that a change in methodology that involved almost exclusive use of cameras and enabled the results to be properly checked for the first time was not a change in kind. Even if they were unable to give us any early indications of the results of the June 2007 survey, the Department should have made clear that the nature of the survey had changed significantly.

10. We also find it incredible that from June 2007, when the data were collected, through publication of a NAO report, a PAC hearing and publication of the PAC report, the Department neither suspected that the figures were wrong nor gave any indication to the Committee, but instead apparently waited until February after adverse publicity to release new figures.

11. We are disappointed that the National Audit Office did not scrutinise the Department's figures more rigorously. The Committee does not have the resources to check the detail of evidence put before it: we therefore expect the National Audit Office to maintain its usual high standards in all cases.

12. Parliamentary scrutiny of the executive is an important part of the constitution. It is dependent in large part on the accuracy of evidence provided by witnesses. Government departments are particularly responsible for ensuring that Members are not misled, even inadvertently, by the evidence they provide. As this case shows, offence can also be caused to law-abiding sections of the community by the provision of inaccurate evidence: this in turn can adversely affect the standing of Parliament in the eyes of the public.


1  
Comptroller and Auditor General's Report, Vehicle Excise Duty 2006-07 Accounts, HC (Session 2006-07) 800 Back

2   Committee of Public Accounts, Fifth Report of Session 2007-08, Evasion of Vehicle Excise Duty, HC 227 Back

3   Vehicle Excise Duty Evasion 2007, Department for Transport press release, 14 February 2008 Back

4   Ev 8 Back

5   Ev 8 Back

6   Qq 3-4 Back

7   Q 7 Back

8   Q 57 Back

9   Ev 8 Back


 
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Prepared 19 June 2008