Examination of Witnesses (Questions 1-19)
DEPARTMENT OF
TRANSPORT AND
DVLA
23 APRIL 2008
Q1 Chairman: Good morning and welcome
to the Committee of Public Accounts, where we are having a supplementary
hearing on our Report on the Evasion of Vehicle Excise Duty. The
Committee published its fifth Report on Vehicle Excise Duty Evasion
on 22 January 2008 and then the Department of Transport published
new national statistics estimates of evasion on 14 February, shortly
afterwards, based on a roadside survey in June 2007. This caused
the Committee enormous embarrassment because we based our Report
on the fact that nearly 40% of motorcycles were apparently evading
duty and when the Department published their survey it fell right
down to 9.8%. Obviously, that covered the Committee in embarrassment.
The reason we have summoned you back, Dr Hickey—I should
say, by the way, that you are the Director-General of Safety,
Service Delivery and Logistics Group at the Department of Transport
and you are joined by Anthony Boucher, who is the Head of Statistics
Travel Division at the Department of Transport and Noel Shanahan,
who is the Chief Executive of the DVLA. Really, in the seven years
that I have been Chairman of this Committee, Dr Hickey, I think
this is one of the most serious issues that we have had to deal
with. Frankly, Parliament and particularly this Committee, if
it is going to do its job, has to have some confidence in the
figures supplied to it by the Department, and there was such an
extraordinary mismatch between these two figures that we really
want to know what went on. What we cannot understand and what
I now want to ask you, Dr Hickey, is why on earth, when the Committee
had its hearing, did you not tell us? You must have known that
there were serious reservations about the reliability of the statistics
available to you for 2006 and earlier? It is inconceivable that
you could not have had these reservations and therefore we want
to know why you did not tell us.
Dr Hickey: Thank you for the invitation,
Chairman. As I said in my letter to you, I do regret the embarrassment
which I know the changes caused to you and to the members of the
Committee. I appreciate that and I am sorry about that. I am afraid
the answer is that we did not know when we appeared before you
last October that the change was likely to have anything like
this effect. We did not know until we ourselves saw the results,
which, obviously, was just before they were published, so we could
not have told you because we simply did not have any basis on
which to suggest that such a change was likely to happen.
Q2 Chairman: I know you said that
in that letter but I do not, frankly, believe that because it
was completely implausible, surely, that there should be such
a variation, even on the basis of existing figures, between 2006
and earlier years? Somebody must have realised something was wrong,
and that is why you decided to do a different roadside survey
for 2007 and why you used cameras and not people on the side of
the road with clipboards. You must have realised that it was completely
implausible to have this kind of variation going down from 40%
to 20%. In 2004 a 20% evasion for motorcyclists, in 2006, 38%.
In the real world this simply could not have happened. You must
have realised this. In fact, Mr Bacon and others have made this
point. You were warned by the motorcycle community that there
must be something wrong. Why did you not come clean with us and
say "Clearly there is something wrong there and we cannot
place any reliance on these figures. That is why, Mr Chairman
of the Public Accounts Committee, we are carrying out the survey
in a different way and hold back your report until we get it?"
Why did you not say that to us?
Dr Hickey: Because we did not
expect that sort of change. We said at the time that the 2006
figures had come as a surprise to us compared with the figures
for the previous year but the methodology itself had been subject
to quality assurance, if you remember, by the University of Southampton,
who looked over the methodology. The change which happened between
2006 and 2007 was actually a different change from some of the
issues that had been raised and it was about the data accuracy.
Would it be helpful if I outline in summary what those changes
were?
Q3 Chairman: Yes, but it is very
important that you do not just try and get into a level of statistics
that we might find difficult to understand. We are primarily concerned
with transparency and openness and honesty in front of Parliament.
That is all we are really concerned with.
Dr Hickey: Can I confirm that
we too are absolutely committed to that. The last thing we would
want to do or would contemplate doing would be in any way to mislead
the Committee and, if we had reason to think that a big change
of this nature, because of a statistical change, was likely, then
of course we would say so. I put my hands up; we did not know.
The basic change that happened between 2006 and 2007 was that
we moved from a majority of the sightings being collected manually.
The methodology, as you know, is that we collected in 2006 roughly
1.3 million sightings at the roadside. In 2007 it was a bigger
sample, I think 1.7 million sightings. The methodological change,
going way back, used to be all by men with clipboards standing
by the road, catching a line and writing down a number plate.
Over the last few years we have begun to use cameras and I think
the Committee is aware of that. Last time round we used cameras
for, I think, 46% of the sightings and manual methods for the
majority. In 2007 the use of cameras increased quite significantly.
Q4 Chairman: I understand that.
Dr Hickey: The introduction of
the cameras, and the near universal use of cameras—it was
actually 98%; we still used clerical methods for 2%—the
introduction of cameras as the mainstream method for collecting,
as distinct from an add-on, meant that we were able to introduce
additional checks which had not been possible previously on the
accuracy of this raw data.
Q5 Chairman: I am going to interrupt
you there because the fact is Mr Touhig asked you about this in
our hearing in October. He said specifically that there was a
difficulty and you said in a long answer "Might I say something
about the methodology? I apologise. It is complex. It is for the
Committee perhaps. The way the survey is done is by standing by
the by the roadside." Now, in this long answer, which is
question 69, nowhere did you tell us what you could easily have
told Mr Touhig, that "clearly there is something wrong with
the methodology and that is why we are going to no longer just
be standing by the roadside and we are going to be using cameras
and, by the way, we did this in June 2007 and we are awaiting
the results"? Why did you not tell us this?
Dr Hickey: I think the fact that
we were moving to cameras was mentioned, if I remember correctly,
but the impact of the use of cameras was not clear to us at that
time. We did not expect this particular change to happen as a
result of that. The change that has happened was discovered when
we then introduced additional checks which would not have been
possible until we had the cameras, and we were surprised ourselves
at the scale of the impact those changes made.
Q6 Chairman: All right. Mr Boucher,
why did you not appreciate the effect of these misread number
plates in the past? Obviously, something was going badly wrong
with these number plates being misread. As a statistician, did
you not smell a rat?
Mr Boucher: No. The survey had
been operated in the same way for many years and there had always
been an element of quality assurance in the previous surveys up
until 2006, primarily checking on the—
Q7 Chairman: With these wide variations,
clearly we now know that there was a problem with misread number
plates in the past. We know that. Why did you not jump on it?
Mr Boucher: Because I did not
know until we did the detailed quality assurance checks with the
2007 survey. It was only through having the video evidence and
being able to check that video evidence against the Automatic
Number Plate Recognition (ANPR) read-outs that we were able to
determine that there had been a bias in previous surveys.
Q8 Chairman: I must ask Mr Burr on
behalf of the NAO why you did not spot this? We rely on you as
well. Why did you rely on the Department to the extent that you
did?
Mr Burr: It is part of the audit
process to test the plausibility of numbers as well as how they
are made up, and I think we could have asked more questions than
we did. We did not however have any better numbers and they were
national statistics, and we would normally assume that we could
rely on national statistics.
Q9 Chairman: I would have thought
the whole process depends on that, does it not? That is why I
think it is very important. The Treasury, why did you not address
the results for 2007 roadside survey in your Treasury Minute?
You just ignored it. I think you are going to have to issue a
new Treasury Minute, are you not?
Ms Diggle: We certainly will issue
a new Treasury Minute.
Q10 Chairman: But why did you ignore
the results of the 2007 survey as if it never happened?
Ms Diggle: We did not actually
have them at that point.
Q11 Chairman: Did the Department
not tell you what was going on?
Ms Diggle: Not at that point,
because they did not have them either.
Q12 Chairman: Sorry. Your Treasury
Minute was published in late March 2008. How can you say you do
not have this when this Report was released in February 2008?
Ms Diggle: I am sorry. What actually
happened was the Treasury Minute should have been held back.
Q13 Chairman: It should have been,
should it not? Are you going to apologise as well?
Ms Diggle: I do apologise. We
should not have done that.
Q14 Chairman: It sounds like incompetence
on the part of the Treasury ...
Ms Diggle: It was.
Q15 Chairman: To base a Treasury
Minute on something which had been completely superseded by events.
Ms Diggle: If I could explain
what did happen, Mr Chairman, I asked my staff to hold it back
and somehow my firm instructions were overlooked.
Q16 Chairman: Sorry?
Ms Diggle: My firm instructions
were overlooked. It will not happen again—not on my watch
anyway.
Q17 Angela Browning: I wonder if
I could just ask you, Dr Hickey, you have imposed more stringent
quality controls on the current contractor's work. Could you just
remind the Committee, previously, when these other figures, these
unusual figures, particularly involving motorcycles, came out,
what was the nature of the contract that you had with this contractor?
On what basis where they paid? Was it the numerical amount of
information they provided?
Dr Hickey: Can I ask Anthony Boucher
to answer that question?
Mr Boucher: The contractor's payments
were staged so that the contractor would be paid some of the payment
when we had received a data file and another chunk of payment
at the very end of the process, when we had produced a report
on how they had done the survey and how it had gone on each site.
Q18 Angela Browning: Was any of their
remuneration based on the numbers or the quantity of information
they provided within a certain timescale?
Mr Boucher: No.
Q19 Angela Browning: So there was
no question that if they were rather lax in the way they were
taking down numbers and things like that, there would not have
been any additional financial reward for meeting targets?
Mr Boucher: We did not have targets
on accuracy.
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