Select Committee on Transport Seventh Report

2  Objectives, structure and effectiveness

6.  The Department's aim is 'transport that works for everyone', which is understood to be a transport system that balances the needs of the economy, the environment and society. During 2006-07, the Board revisited the Department's aims and objectives in response to the Eddington study, the Stern review and in anticipation of the Capability Review, which was published in June 2007. In January 2007, the Department introduced four strategic objectives, which had been agreed with HM Treasury. The new objectives focused on the core areas of the Department's business:

  • to sustain economic growth and improved productivity through reliable and efficient transport networks;
  • to improve the environmental performance of transport;
  • to strengthen the safety and security of transport; and
  • to enhance access to jobs, services and social networks, including for the most disadvantaged.[6]

7.  In April 2007, the Department was restructured into four groups, based on the core areas. This new structure mirrors the priorities highlighted in the Eddington study, but also includes wider responsibilities. The groups are: the City and Regional Networks Group, the Rail and National Networks Group, and the International Networks and Environment Group. A fourth group is responsible for delivering and transforming driver and vehicle operator services.[7]

8.  However, in the Command Paper, Towards a Sustainable Transport System, published in October 2007, the Department defines 5 goals that it will use when determining its investment plans to 2014:

  • maximise the competitiveness and productivity of the economy;
  • address climate change by cutting emissions of carbon dioxide (CO2);
  • protect people's safety, security and health;
  • improve quality of life, including through a healthy natural environment; and
  • provide greater equality of opportunity.[8]

9.  We are unclear as to the Departments' motive for having a set of five goals, as well as a set of four strategic objectives, given that there seems to be a degree of crossover between the two. We are particularly concerned that the Department was restructured in order to better align with the four strategic objectives, only to shift its priorities by introducing the five core goals less than a year later. The second strategic objective is divided between two of the five goals, for reasons that remain obscure. We question whether this restructuring of the Department's goals and objectives has led to any actual increase in the quantity or quality of its work.

10.  When she gave evidence to the Committee on 30 January 2008, the Secretary of State explained:

    "Following both the Capability Review and Rod Eddington's analysis, which suggested we should be less modally focused and look across modes to try to identify what the problems were before we jumped to conclusions, what we did was reorganise both the ministerial team as well as the management team."[9]

    Furthermore, with regard to electrification on the railways, the Secretary of State told the Committee that: "What we have tried to do is keep our options open along the way so that we take the best value-for-money judgement at the right time."[10]

11.  We have noted a number of areas of policy where the Department seems to be stalling in making a clear decision - examples are electrification versus diesel on the railways, a national ports policy, the viability of a national road pricing scheme. While we recognise that the Department is trying to ensure that policy decisions are made on the basis of thorough cross-modal analyses and considerations, there is a danger that the policy-making process could become bogged-down. The Department clearly has substantial issues that need to be resolved, but at the moment there appears to be a lack of clear, tangible vision - at least none that is communicated to the wider world.

Shared services

12.  The Shared Services Project is intended to improve the efficiency and effectiveness of the Department by bringing together support services—including human resources, finance, procurement, estates and their associated ICT services—from across the Department and its agencies into a single centre. Last year, we were critical of the fact that the Department had allowed the cost of the shared services programme to over-run, with the overall cost of the project escalating from the original estimate of £50 million.[11] Firm, revised cost estimates were not available at the time, but the then Permanent Secretary, Sir David Rowlands, told the Committee that the project had been put together on the basis of a "very conservative business case", and even with some increase in costs the business case would "still be positive". The Permanent Secretary stated that "over a 10 year period, starting this year, the value of the headcount and other savings is estimated to amount to £129 million from the implementation of Finance and HR. We consider that the cost of incremental investments to complete the implementation of Finance and HR, which will be below the estimated benefits, do not threaten the case for shared services". The new Permanent Secretary, Mr Devereux, confirmed that the most recent estimate of the cost of the entire project now stands at £113 million.[12]

13.  We also raised concerns about the suitability of the Department for Transport to be in the vanguard of the shared services project. It is Cabinet Office policy that shared services are desirable only for organisations ranging from 20,000 to 50,000 staff.[13] But the entire Department for Transport group has just 19,000 staff. Sir David told the Committee that 3,000 volunteers in the Coast Guard Rescue Service took the total number of staff over the minimum threshold. In our report on the Department's 2006 Annual Report, we remained sceptical about this argument.[14]

14.  The first business units scheduled to implement shared services were the Driver and Vehicle Licensing Agency (DVLA) and the Driving Standards Agency (DSA). To allow more time for testing before roll-out, the Department rescheduled the target date for DVLA/DSA to 'go live' from August 2006 to April 2007. The Department's Annual report 2007 stated that details on the planning and preparation for the implementation of the central Department and remaining agencies would be available in the Department's Autumn Performance Report.[15] However, the Autumn Performance Report, published in December 2007, did not include any reference to the shared services programme.[16]

15.  In its written evidence to us, the Department confirmed that the DVLA/DSA 'go live' took place in April 2007 as planned.[17] There were some initial problems relating to system stability and the processing of purchase orders and invoices. The Department reported a very high level of error in payment runs made during the April to June 2007 period. However, the system then bedded in, and performance improved rapidly over the last few months of the year. The Department undertook a 'lessons learned' exercise, which arrived at five key recommendations for the continued roll-out of the programme.[18]

16.  We are pleased to hear that the Department has learnt lessons and acted rapidly to implement changes to its shared services programme by appointing a new board director with experience of running shared services in the private sector. We are also reassured by the fact that the contract between the DVLA and IBM, their partner in the shared services arrangement, has been refined. But we are deeply disappointed that the estimated cost of the project has risen from an initial figure of £50 million to the most recent estimate of £113 million - a 126% increase. We remain unconvinced that the Department is of a sufficient size to reap the benefits of the shared services approach. We reiterate our encouragement for the Department to actively seek clients for its shared services from parts of Government outside the Departmental group, in order to secure the long-term viability of its shared services programme.

Data loss by Driver and Vehicle Operator Group agencies

17.  In December 2007, the Department revealed several incidents involving the loss of significant tranches of personal data, both in the United Kingdom and the United States. The details lost included names, addresses, phone numbers and dates of birth, as well as detailed vehicle information. There was no financial information included in the lost data. The Department has since put in place a number of procedures designed to safeguard personal information, at least on an interim basis, whilst it awaits the findings of the Cabinet Secretary's review.[19]

18.  We were concerned to learn that the Department had been involved in several separate incidents where significant amounts of personal data were lost. We are pleased that the Department has since then put in place measures to prevent similar incidents happening in future, but would urge that the systems surrounding the storage and transfer of any kind of personal data by the DfT or its agencies be kept under review for the time being. We expect the Department to implement the recommendations now awaited from the Cabinet Secretary regarding personal data fully and speedily once these are known.

6 Back

7   Department for Transport Annual Report 2007, Cm 7095, p. 18 Back

8   Cm 7226 Back

9   Q102 Back

10   Q166 Back

11   Fourth Report from the Transport Committee, Session 2006-07, Departmental Annual Report 2006, HC 95, page 4  Back

12   Q274 Back

13   Transformational Government 2006, Cm 6970, page 16 Back

14   Fourth Report from the Transport Committee, Session 2006-07, Departmental Annual Report 2006, HC 95, page 5 Back

15   Department for Transport Annual Report 2007, Cm 7095, page 47 Back

16   Department for Transport Autumn Performance Report, Cm 7266 Back

17   Ev 52 Back

18   Q264. Since we took evidence from the Secretary of State and the Permanent Secretary, the National Audit Office has published a Report on Shared services in the Department for Transport and its Agencies, HC 481, Session 2007-08 (23 May 2008). Back

19   Q115 Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2008
Prepared 13 June 2008