Government response
Letter from Rt Hon Philip Hammond MP, Secretary
of State for Transport
Attached is the Department for Transport's response
to the Transport Select Committee's report on DfT's 2008-09 annual
report and resource accounts. I understand that you will be publishing
the Department's response as a House of Commons paper.
You will appreciate that many of your Committee's
recommendations referred to policies and objectives pursued by
the previous Government and you will be aware that the Department's
priorities are considered. In modifying our reporting system in
light of these, we will take account of the recommendations of
your Committee.
Government Memorandum
Leadership
Recommendation 1. Governments
should give careful consideration to the frequency with which
they change ministers. The sensible development and implementation
of transport policy requires reasonable stability in the ministerial
team. The Department for Transport should not be used merely as
a rung on the ministerial ladder. (Paragraph 9)
DfT Response.
The appointment of ministers is a matter for the Prime Minister
rather than the Department for Transport.
Recommendation 2. We
welcome the progress made by the Department towards developing
a clear vision for Britain's transport infrastructure. The Government
must ensure that the decisions on future transport infrastructure,
including the prospective North-South high-speed rail line, are
supported in future budgets. A stop-start approach to transport
investment would undermine the credibility of the policy direction
that has now been reached (Paragraph 12).
DfT Response.
The 'Coalition Agreement: our programme for Government' makes
clear the Government regards a modern transport infrastructure
as essential to a dynamic and entrepreneurial economy and includes
a commitment to establish a high speed rail line. The Comprehensive
Spending Review will determine future transport investment priorities
and corresponding funding plans in more detail within the context
of the Government's overarching priority to reduce the public
expenditure deficit.
Recommendation 3. We
commend the Secretary of State and the Permanent Secretary on
giving up their allocated cars, each of which previously cost
over £18,000 per quarter. (Paragraph 13)
DfT Response. The
Ministerial Code for the new Government has set revised rules
and expectations for the use of cars covering all Ministers which
will lead to significant further savings in the cost of the Government
car service.
Implementation and outcomes
Recommendation 4. The
Department for Transport has achieved some important and positive
outcomes as a result of consistent effort and increased government
spending. The reduction in congestion and road deaths, and the
increased use of public transport and freight on rail, are examples.
The Department needs to maintain and build on these achievements,
and to address those areas where trends and performance have been
less satisfactory. (Paragraph 20)
DfT Response.
We welcome the Committee's positive acknowledgement of the Department's
achievements. In our response to the Committee's report we address
in detail the areas of Departmental performance regarded by the
Committee as less satisfactory.
Recommendation 5. The
Department for Transport should publish a comprehensive progress
report against the targets and schemes set out in its spending
plan, Transport 2010, published nearly 10 years ago. It should
do so in its response to this Report. (Paragraph 22)
DfT Response. The
Committee's recommendation referred to the plans of the previous
Government. As we noted in our response to Recommendation 1, the
priorities of the new Government were included in the 'Coalition
Agreement; our programme for Government' and will be set by the
Comprehensive Spending Review.
Recommendation 6. More
than 10 years after the integrated transport White Paper, and
almost 25 years after the Transport Act 1985, which deregulated
local bus services, integrated transport remains an elusive objective
outside London. Although the majority of bus services are privately
provided, there is still a very large amount of public expenditure
involved—some £2.5 billion in 2008-09. The Government
must look hard at the benefits to passengers that might be gained
by more "strong government action" as suggested by Lord
Adonis. We look forward to full implementation of the Local Transport
Act 2008 and trust that the Government will monitor progress and
legislate further if these powers prove insufficient. (Paragraph
26)
DfT Response. Implementation
of the main bus elements of the Local Transport Act 2008 is complete.
The Competition Commission is currently undertaking an inquiry
into the deregulated local bus market in Great Britain outside
London. Any decisions on the future of the bus regulatory framework
will be made in the light of the Commission's findings and possible
remedies, expected next year.
Public expenditure on buses will be reviewed as part
of the Comprehensive Spending Review along with all other elements
of public spending against the Government's overriding priority
of reducing the deficit.
Recommendation 7. We
believe it would be helpful to understand the extent to which
the national concessionary travel scheme is responsible for the
recent increases in bus use. We recommend that the Department
monitor separately the trends in fare-paying bus passengers and
concessionary bus passengers and publish the data at least annually.
(Paragraph 27)
DfT Response.
As the report points out, we have been collecting data on concessionary
patronage separately from fare-paying passengers since 2007-08
as part of the Department's annual statutory survey of bus operators.
Publication of the results has been delayed by a methodological
review but separate data will be published later in the year as
part of our annual Bus and Light Rail Statistics bulletin.
Recommendation 8. We
find it hard to understand how the Department for Transport can
have ignored for so long the legitimate requests of the Traffic
Commissioners for resources to undertake bus punctuality monitoring,
as they are expected to do. We urge the Department to ensure that
the Traffic Commissioners are given adequate resources to undertake
this important role. We reiterate our past recommendation, that
this role should be transferred to local bodies such as Integrated
Transport Authorities where these exist. (Paragraph 28)
DfT Response. Responsibility
for enforcing bus punctuality rests with the Traffic Commissioners
as part of their statutory functions. The use of electronic data
provided by operators to monitor services should gradually reduce
the need for on-street punctuality monitoring.
On 25 February 2010, DfT launched a revised bus punctuality
regime based on partnership working between local authorities
and bus operators. This new approach has been developed by the
Bus Punctuality Working Group, which brings together key partners,
including the Traffic Commissioners, local authority representatives,
industry representatives, Passenger Focus and the Vehicle and
Operator Services Agency (VOSA). The Department continues to work
with the Traffic Commissioners and VOSA to identify the changes
required to ensure the approach to enforcement reflects the revised
punctuality regime, and is considering the type and level of resources
needed as part of this process.
The intention is that bus punctuality partnerships
should become common practice, rather than a reaction to punctuality
problems. This reflects a fact recognised by Traffic Commissioners
that the running of punctual services is not only in the hands
of the operator but that local authorities have responsibilities
for traffic management issues which affect the ability of bus
services to run to time. The Local Transport Act 2008 enhanced
the Traffic Commissioners' enforcement powers so that local authorities
can be held to account for their contribution to the performance
of local bus services.
The key to the revised approach is to encourage partnerships
and the sharing of data between bus operators and local authorities.
Operators and authorities will use this data jointly to identify
and agree actions that can be taken to secure a high standard
of punctuality. The approach allows for local monitoring of services
to measure progress.
Recommendation 9. The
Government must take some hard decisions about managing demand
for road use. If it does not, the economy, environment and public
finances will suffer. We support the Department's ongoing research
into finding acceptable methods of charging for road use, perhaps
involving voluntary charging schemes as we have suggested. We
urge the Department not to shy away from this difficult but important
issue, and to address it with renewed focus and determination
early in the next Parliament. (Paragraph 31)
DfT Response. The
Secretary of State has made it clear that the Government has ruled
out a national road pricing scheme.
The Government has not ruled out the use of tolling
approaches as part of the delivery of new road infrastructure,
but draws a very clear distinction between the existing road network,
which is publicly owned by the taxpayer, and the future extension
of that network.
The Coalition Agreement also outlines plans for the
introduction of a new system of HGV road user charging to ensure
a fairer arrangement for UK hauliers.
The wider role of transport
Recommendation 10. The
Government has maintained a substantial programme of investment
in the transport network which has supported economic growth and
competitiveness. In the more difficult public expenditure environment
that lies ahead, it is vital that transport spending is focused
on schemes that deliver most in relation to the Department's strategic
objectives. These cannot necessarily be determined by simple benefit-to-cost
ratios. We have previously pointed to the importance of transport
investment in assisting regional economic growth and tackling
regional economic disparities. We note the recent report by the
Cabinet Office and the Department for Transport, The Future of
Urban Transport, which shows the economic need to tackle a range
of transport-related problems, including congestion, accidents
and poor air quality. We recommend that the Government reviews
its procedures for assessing and prioritising transport spending
to take account of these wider issues and the need to reduce regional
economic disparities. (Paragraph 38)
DfT Response. The
Department shares the Committee's view that transport investment
decisions cannot be determined solely on the basis of simple benefit-to-cost
rations, which are only one factor in our current decision-making
process. The Coalition Agreement also contains a commitment to
reform the way decisions are made on which transport projects
to prioritise to ensure that the benefits of low carbon proposals
are fully recognised and this work will also consider the wider
issues raised by the Committee.
Recommendation 11. The
Department for Transport needs to be clearer in the way that it
presents the level of carbon emission from transport, its track
record and its targets for emissions reductions. (Paragraph 41)
DfT Response. "Low
Carbon Transport: A Greener Future" stated that greenhouse
gas emissions from domestic transport had increased by 12% between
1990 and 2007, and would be likely to continue to increase in
the absence of our policies. The transport carbon reduction delivery
plan, published in March 2010, said that future progress in reducing
transport emissions would also be measured against the 1990 baseline.
The document also forecast that the policies set out in the strategy,
together with existing policies, would lead to domestic transport
emissions being 14% lower by 2020, compared to the year before
publication of the strategy (2008). 2008 is also the first year
of the first carbon budget period.
The most recent emissions data were released by the
Department of Energy and Climate Change in February 2010 for 2008,
and show a 3% reduction in transport emissions between 2007 and
2008. Provisional data for 2009 show a 7% reduction between 2008
and 2009. These reductions represent movement in the right direction.
Nevertheless, we are not complacent in meeting targets to 2020
and beyond.
Recommendation 12. The
Department needs to produce a strategy evaluating the implications
of climate change and extreme weather events for the transport
system, and setting out what it is going to do to enhance the
resilience of the networks to withstand such events. (Paragraph
43)
DfT Response.
- DfT published its Departmental
Adaptation Plan (DAP) in March 2010, in conjunction with its Carbon
Reduction Delivery Plan. The DAP sets out the Department's plans
for embedding the consideration of climate change risk into its
decision-making processes. This will help ensure climate resilience
is routinely factored into investment decisions and policy developments
across all transport policy areas.
- The Department is also working
closely with the Cabinet Office on civil contingency planning
and contributing to the National Risk Assessment, as well as delivering
the Department's response to the recommendations in the Pitt Review.
The aim is to ensure that the Department and the transport industry
are effectively prepared for, able to respond to and recover from,
emergencies such as those resulting from natural hazards.
Assessing performance
Recommendation 13. It
is quite right that the Department for Transport should have strategic
objectives and we endorse the five core objectives adopted in
January 2009. It is also right that the Department should regularly
report its performance against these objectives. However, we question
the reporting system used to assess performance on complex and
important matters on the basis of a handful of indicators, some
of which cannot be measured or are of only tangential relevance.
We recommend that the Department provide a clearer, more rounded
assessment of progress against its strategic objectives in its
next Annual Report (Paragraph 47).
DfT Response. We
continually strive to improve our reporting system, which will
be modified to reflect the new Government's priorities following
the Comprehensive Spending Review. We will carefully consider
the committee's recommendation and specific comments as part of
this work.
Recommendation 14. We
welcome the measures proposed by the Department for Transport
to improve the accuracy of road casualty statistics. We call on
the Department to implement the actions fully and to make use
of the wider sources of casualty data in future statements and
reports. (Paragraph 51)
DfT Response. The Department is pleased that
the Transport Committee approved of our plans. While the police
data are still the single most useful and detailed source to identify
the causes of road accidents and provide evidence to improve road
safety, we continue to make use of information from a range of
sources.
We set out in Annex B of the 2008 Review of Reported
Road Casualty Statistics (STATS19) Summary Report, published on
4 February 2010, the work we are doing in response to the UK Statistics
Authority Assessment Report 4 to improve the quality of road casualty
statistics. The report can be found at: http://www.dft.gov.uk/pgr/statistics/datatables
publications/accidents/2008reviewreport.pdf.
Our key publication 'Reported Road Casualties Great
Britain 2008', published in September 2009, included information
on road safety from a range of sources, including estimates and
analysis from the National Travel Survey and Hospital Episode
Statistics.
Recommendation 15. The
UK Statistics Authority assessed the overall adequacy of the Department
for Transport's casualty statistics. We invite the UK Statistics
Authority to now undertake a specific investigation into the extent
to which the Department for Transport has sought an explanation
for the unexpected divergence between the number of people killed
and those seriously injured. (Paragraph 52)
DfT Response.
This recommendation is for the UK Statistics Authority.
Efficiency and resources
Recommendation 16. The
Committee, like the NAO, is concerned that such a high proportion
of claimed savings could possibly be overstated. We support the
NAO's view that the baselines against which savings have been
reported should be recalculated, and that all claimed savings
should, in future, be carefully reviewed before publication to
ensure that they are defensible and real. (Paragraph 56)
DfT Response. All
savings were calculated entirely accurately and in accordance
with HM Treasury guidance; a point acknowledged by NAO in its
report. The Red rating relates solely to the NAO's recommendation
that rail baselines, which were estimated and agreed with HM Treasury
three years ago as part of the 2007 Spending Review, should be
revised downwards to reflect actual spend data which were not
available at the time they were agreed.
The Department has set in hand a programme of work
to address the NAO's recommendations and welcomes the opportunity
to revisit the very real savings that have been made in the rail
industry, reflecting the significant changes that have taken place
since the 2007 Spending Review. All savings are already carefully
reviewed before publication and the Department will endeavour
to continue and strengthen this process.
Recommendation 17. We
call on the Department to publish details of the costs to date,
including those relating to the additional systems, staff and
contractors, and to update its estimates of the eventual costs
or savings of its shared services programme. The Department should
also publish a clear statement on the quality of the service that
is being provided. If costs and service quality are unsatisfactory,
the Department must review the entire programme. (Paragraph 61)
DfT Response. The
costs of the Department's Shared Service operators, including
set-up and migration, are as follows:
£15.6 million in 2005-06 and prior years;
£48 million in 2006-07
£45.4 million in 2007-08
£30.2 million in 2008-09
£20.1 million in 2009-10
The Department is reviewing with other Departments
how best to deliver shared services across Government, looking
at a range of governance and ownership models, including the possible
involvement of the private sector. Future costs and savings will
be updated once this work is complete.
The Shared Service Centre continues to demonstrate
strong performance improvement, regularly achieving all high-level
key performance indicators.
Recommendation 18. We
recommend that the Department provides a risk assessment of its
contingent liabilities and attempts to give an estimate, or at
least a range of possible costs, of its presently un-quantified
contingent liabilities. (Paragraph 64)
DfT Response. The Department
maintains, and regularly updates, a database of all its contingent
liabilities. The data include a risk assessment and an approximate
quantification of DfT's possible exposure. This database is populated
from a survey of managers across the Department, three times a
year, to identify and quantify all contingent liabilities - including
those liabilities too low in value or remote in risk to be disclosed
in the Resource Accounts. As a result, for internal management
purposes, the Department currently holds detailed information
on approximately 100 contingent liabilities, including:
A risk assessment which places each contingent liability
in one of the following bands: below 1% (remote/low); between
1%-10% (medium); between 10%-50% (high); over 50% (provision);
An approximate valuation of each contingent liability.
Many are valued to a single figure or within a relatively narrow
range; others are classified into the following bands: below £30m;
between £30m-£500m; over £500m. We encourage those
who manage contingent liabilities to provide as narrow a range
as possible; however, at any given time, a small number (currently
five) may not be quantified at all, either because of their inherent
unpredictability or because they are of very recent origin and
the managers have as yet insufficient information to perform a
valuation.
This work is provided to the National Audit Office
as part of its routine audit work. However, this level of detail
is not presented in the Resource Accounts because some items are
too low in value or remote in risk to require disclosure, and
because some items are too sensitive (on commercial or security
grounds) to be disclosed individually. Good accounting practice
permits the limitation of disclosure in such cases.
Conclusion
Recommendation 19. The
Department needs to ensure that it focuses on what matters most
to achieving its strategic objectives, while serving the needs
of the public and business. These issues cannot always be adequately
captured in a simple target. It is important, therefore, that
the Department reports progress realistically. (Paragraph 65)
DfT Response. As
noted in our Response to Recommendation 13, we continually aim
to improve our performance monitoring and reporting and we will
take the Committee's observations into consideration as we revise
our processes to reflect the new Government's priorities.
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