Transport Committee - Minutes of EvidenceHC 583

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Oral Evidence

Taken before the Transport Committee

on Monday 25 February 2013

Members present:

Mrs Louise Ellman (Chair)

Sarah Champion

Jim Dobbin

Kwasi Kwarteng

Karl McCartney

Adrian Sanders

Iain Stewart

Graham Stringer


Examination of Witnesses

Witnesses: Jay Parmar, Legal and Policy Director, British Vehicle Rental and Leasing Association, Jack Semple, Director of Policy, Road Haulage Association, James Firth, Head of Road Freight and Enforcement Policy, Freight Transport Association, and Steven Latham, Senior Operations Manager, National Franchised Dealers Association, gave evidence.

Q1 Chair: Good afternoon, gentlemen. Welcome to the Transport Select Committee. Could we have your names and organisations, please?

Jay Parmar: I am Jay Parmar representing the British Vehicle Rental and Leasing Association.

Jack Semple: I am Jack Semple representing the Road Haulage Association.

James Firth: I am James Firth from the Freight Transport Association.

Steven Latham: I am Steven Latham representing the RMI, which is a retail motor trade organisation.

Q2 Chair: Mr Semple, in the evidence that you have already sent to us you describe the relationship between VOSA operators and the authorised testing facilities- the ATFs-as "fundamentally flawed". Could you tell us what you mean by that?

Jack Semple: The current arrangement, which is part of the testing transformation programme that was introduced by the previous Government and carried on largely as was by the current Government, is an issue that is frequently discussed by members and is of considerable concern, as in fact are all of VOSA’s activities. If you are in the haulage industry, running trucks is your main business and, therefore, compliance and enforcement activities are very important.

In terms of testing, we had a system where VOSA was completely in control of the location, the booking and the carrying out of the test, apart from the development of designated premises towards the end of the previous system. That old system has been changed completely now with the introduction of authorised testing facilities, which are completely in the private sector.

We now have private sector premises that have a contract with VOSA, which is also their regulator-that is an uncomfortable relationship as well-whereby they may be maintaining the vehicles but they have to run a booking system where they have to block book a VOSA tester. In terms of the efficiency and flexibility that VOSA can provide to this new set-up, we do not consider that can ever achieve an acceptable level of efficiency. We have an opportunity to take the logical next step that we believe will increase and improve investment in safety and the safety culture within the industry. There is a real opportunity to open up the ability to test the vehicle at the statutory annual test to the private sector-to ATFs-within a system of high-quality regulation, which is very important. The obvious regulator, I would guess, would be VOSA-but where VOSA does not itself test the vehicles.

Q3 Chair: Before we consider what might be done to change things, I would like to get a full understanding of what problems there are now or, indeed, if there are any improvements on the old system. Does any other member of the panel want to add to what Mr Semple has said or disagree with anything?

Jay Parmar: I would not go so far as sharing Jack’s concerns about it being "fundamentally flawed", but certainly it is an uncomfortable situation where you have ATF owners who have to make, potentially, a £250,000 investment into a testing facility. They are wholly and totally reliant on VOSA for providing the testers. Again, that removes the potential flexibility and competitiveness for that particular ATF.

Looking at the current regime critically, the concern we have is the overdependency that an ATF owner will have on VOSA. Let’s not lose sight of what VOSA is really about. It is there to enforce road safety standards. It should not be an employer of testers. Alastair Peoples has already outlined in his statements that VOSA would like to see 75% of all testing carried out in an ATF by next year. If that is realistically to be achieved, then we have to look at the current model, particularly in the areas where they are having difficulties in getting ATF interest. These are particularly in the remote areas up and down the UK. We can start to look at making that business case more attractive for an ATF owner by allowing them that flexibility, where they have multi-skilled staff being able to be deployed for a couple of hours to do the testing and then they can do other work. That will give the ATF owner that flexibility.

Q4 Chair: What is the position about people being able to get tests when they require them? Is that happening now? VOSA does have targets, but it is not clear if they are being met.

James Firth: I am hearing anecdotal evidence all the time of operators having difficulty getting tests-of 150-mile-round trips in order to find a test. VOSA tells us that it is responding to pleas from the ATF providers when they feel they have a lack of resource.

Our real concern, as Mr Semple was describing earlier, is that where previously all bookings were made through VOSA and, therefore, failures of bookings are monitored by VOSA directly. They do not now have full sight of all the management information they need to be able to recognise if there may be a problem. I have asked our membership a number of times, "If you are encountering problems, you must let us know because we need to be able to let VOSA know." To be frank with the Committee, there has been very little real evidence coming in on that score, but we do still keep hearing the stories. My key concern is that, if there is a problem, or if there were to be a problem, I am not sure how well VOSA will be able to have oversight of that.

Q5 Chair: But the information you have is anecdotal rather than from a comprehensive account of what is actually happening.

James Firth: Yes, indeed.

Steven Latham: We have a situation where operators-I do not represent operators but they do feed back-often have to ring around to get a test. We now have 300 ATFs and 160 designated premises. Staff from 89 test stations have to go and facilitate the tests all round the country. Obviously, the allocation of the testers is probably quite difficult within the body of testers they have. This is where suddenly one ATF is allocated its 21-axles test on one day but somebody else wants to go to a different ATF. ATFs are growing. We have only been there since 2010, so we are either going to have a shortage of VOSA’s own testers or we need to do something else, which is probably what we are suggesting.

Q6 Chair: Will the expansion of the authorised testing facilities help the situation? I think VOSA has plans to do that.

Jack Semple: The expansion of ATFs will be held back so long as VOSA’s monopoly of testing is maintained. We won’t see the optimisation of what could be achieved. We have to be careful to differentiate the fundamental flaws that are identified in the submission with the day-to-day practical teething problems of the transfer, where we have clear winners and losers among operators, and we have a cost of change that was inevitably identified.

James identified individual cases that we have raised with VOSA and have tried to resolve, but those are teething problems and day-to-day issues. The fundamental flaw is in the relationship-the fact that VOSA is putting itself between the ATF and the operator. It cannot possibly have the flexibility to respond. The gateway reviews envisaged between 500 and 1,500 ATFs. We are currently at about 300. How is VOSA going to get round 500 to 1,500 ATFs without a significant increase in resource? We have failed to see the half-day slots that were indicated by VOSA. We have failed to see the night-time working in some busy service that was highlighted as a potential from VOSA.

VOSA is making slow progress in terms of trying to adapt to what is-for it-a much more complicated and difficult position. Fundamentally, compared with what we could have, which is an encouragement of investment and safety culture within the industry, the current arrangement cannot be as satisfactory.

Q7 Sarah Champion: Forgive me; I am trying to get my head round this. You are all making lots of points and I am trying to unpick how they interrelate. Mr Semple, you talk about fundamental flaws. Are they flaws that you are anticipating in that VOSA will not have enough testers to go round, or are they flaws that you are seeing now? Mr Firth says that he is receiving anecdotal evidence of problems, but not actual problems. If it was a real problem now, wouldn’t you have floods of people complaining?

Jack Semple: We have a number of members who are ATFs already and many more members who are interested in becoming ATFs-that is haulage operators. They could test their vehicles at much less cost than they have with VOSA and with much greater flexibility. That would reduce the cost to the operator who is booking his vehicle in to test. We also think that there would be a significant increase in the number of ATFs. There would be a greater willingness by workshops to invest in upgrading their facilities so that they could carry out their own tests.

Q8 Sarah Champion: But, if there are more ATFs, that would mean there needed to be less premises owned by VOSA, saving them money. Is your fear that they will not invest in more testers, or are you arguing that you want the whole thing to be privatised?

Jay Parmar: That is a really important point. We have to make the distinction. Today, if you have an operator that wants to find a location to carry out the test, they have two choices. They either use the ATF that is available locally or they travel to a VOSA test site. Those are the two choices they have today.

If you do not get your vehicle maintained by a particular ATF owner, one of the concerns that our members are picking up is the difficulty in getting that vehicle tested. There is no contractual relationship. One of the arguments would be to say that they then have to travel to the VOSA test site. That is going to be much further away. You are quite right to identify that the VOSA strategy is to start to close its own testing sites. The choice an operator will have is going to start to reduce increasingly as VOSA starts to move towards that strategy of closing their sites.

Our members operate one in four trucks in the UK. They are already reporting to us that they have to travel further. It is contrary to VOSA’s own strategy of shorter distances. The cost of that is going to increase as well.

Q9 Sarah Champion: But Mr Semple said that they are looking to have between 500 and 1,500 within the next few years. Wouldn’t that address that?

Jay Parmar: I do not think that is going to address the issue, largely because, going back to the earlier question, you need to look at UK competitiveness. Those trucks need to be tested and maintained when the operator is not going to need them. That particularly looks at the flexibility and the time of day that these vehicles can be tested. Night-shift work, for example, is one area that we are looking at; weekend work is another area. With VOSA’s testers, there will be restrictions as to what flexibility they can offer. We are trying to create those sorts of efficiencies and productivity. The current model is not going to achieve and deliver that, no matter how many ATF sites are open up and down the country. You have to look fundamentally at the relationship of the testing being carried out by the ATF owners’ own staff and not be reliant on VOSA’s staff.

If you look up and down the country, whilst there are some trials going on by VOSA to look at home working, for example, again you are reliant on that service being sufficiently flexible to meet the peaks and demands that the industry needs. We do not think that is going to be achieved in the current model.

Q10 Chair: Mr Parmar, you have referred to some problems. Is that based on anecdotal evidence?

Jay Parmar: No; that is our members ringing us up and telling us that they are having difficulties. They have to wait two to three months for a test date for a particular vehicle and they have to travel much further than currently because the local VOSA test site has been closed. They have to travel much further for that flexibility. It is already costing industry a great deal of money without that difficulty. If you were to put some figures on that, you could be running into millions of pounds that it is costing industry now.

James Firth: On that point we are also hearing those sorts of tales. If you were an operator located next door to a VOSA test site and it closed down, you are then losing out. Of course, if-which is more likely with there being more ATFs than VOSA stations-an ATF opened next door to you, I do not think operators would be ringing us up and saying, "Oh, this is fantastic." It would just be the way it is operating.

I would make one point. I do not want to delve into ancient history, but I reflect on the fact that seven or eight years ago the industry was looking at year on year double-digit percentage fee increases from VOSA. The purpose of those increases was to refurbish the ageing testing estate. That was a model that was fundamentally flawed, if you like. It is important to recognise that on this issue VOSA listened to industry; it saw that it had to change and this is a transformation programme. We are moving through it at the moment, and there is a consultation open from the Department for Transport on the motoring services agencies. It clearly indicates a willingness now to investigate new mechanisms for delivering the tests. Certainly, the flexibilities that ATFs have brought-and we have to recognise that they have brought flexibilities-are constrained by the fact that the test examination has to be delivered by Government-employed staff; I agree with Mr Semple on that. It is now time to move on from that position and realise the flexibilities that could be brought.

Q11 Karl McCartney: I want to pick up the point that Mr Firth mentioned about Government employees and also examine what Mr Semple said. As a Conservative I obviously welcome privatisation. However, a Government employee is independent. With regard to safety benchmarking, if all testers were employed by ATF operators-i.e. hauliers-how can you guarantee there would not be the temptation maybe to cut corners or do things that an independent assessor would not do?

Jack Semple: I am very pleased that you have asked the question.

Karl McCartney: I was pleased to ask it.

Jack Semple: There are still people who have perhaps spent 30 or 40 years within the industry and have grown up with VOSA and the system as it has been. They find it difficult to conceive of a system that is different, but we are already moving in that direction. At the moment, the good operator-the well-run workshop, whether it be a franchise dealer, a third-party workshop or a haulier’s own workshop, and we are very keen that they are able to test as well-is already the subject of a regulatory regime. They are already assessing and inspecting the vehicle to the same safety standards at least four times and in some cases six times a year. They are also maintaining the paperwork.

This is a point that is not always appreciated. For the companies that are doing that well, it is surely but a short step for them to do the statutory annual test as well within approved facilities. In terms of safeguards, a haulier who is already maintaining and testing his vehicle to a standard has an immense amount to lose were he to abuse the system. For a start, he loses his ability to test his own vehicle in his own workshop and would have to take it somewhere else. In addition, were VOSA or somebody else to be the regulator, his good repute as a haulier is under threat, so whatever benefit there might be in abusing the system-and the well-run operators would not do that anyway-the risk to his core business is very considerable. I do not think the issue would arise. It might arise on occasion, but in the main what a good haulier-and we are talking about regulation of a high-quality system-has to lose would far outweigh what he might gain. He is already maintaining and assessing his vehicle 364 days a year and doing it well within a regulated system. What we are talking about is the 365th day-testing the vehicle and maintaining the paperwork.

Q12 Karl McCartney: You have just answered on behalf of the well-run hauliers. I am not picking on road hauliers at all, but in any industry I hope you will admit that there will be some road hauliers who perhaps are not as good as others. What safeguards would you see whereby they would not be able to buck the system and do something that your good hauliers would never do?

Jack Semple: No regulator worth his salt would give them permission to do the annual statutory test. It is a very important point.

Steven Latham: I would point out that, as well as hauliers, there is a plethora of people involved in ATFs, including a lot of truck dealers and independent workshops. All of those have a very commercial interest in it. These trucks and hauliers are regulated to a standard. If they start producing substandard vehicles, they will be pulled over at a rate of knots and will lose their customer business. They have to have a very high standard.

We know with the franchised dealers that they have a standard of first-time pass from preparation of over 90%. We know that they are dealing with newer trucks, and I take on board that newer trucks run by big professional operators always have a better test standard. Outside the industry they will be regulated by VOSA.

You only have to look at the MOT system. You have a 40% fail rate on car and light vans and a 50% fail rate on heavy vans, which is Class 7-3 tonnes to 3.5 tonnes. This shows to me that the private sector is quite happy to fail vehicles and demand a high standard of roadworthiness.

Q13 Chair: But don’t you think you would need some kind of regulation if you moved into this new system? Mr Parmar, do you have any ideas on that? What would you need to make sure that standards were right and public safety was observed?

Jay Parmar: We must not lose sight of the road safety outcomes that we are trying to deliver here. The earlier question about what controls and measures will be in place is a valid one. The MOT scheme is delivering good safety outcomes. The comment about cars and vans is a valid one. VOSA already oversees the independence of those testers and they are subject to audit. We do not see that changing in any way. We see that as VOSA extending its reach from cars to vans to heavy goods vehicles. Those independent testers will be subject to scrutiny by VOSA. If they do not meet those very high standards, then they would lose their ability to carry out those tests.

Q14 Karl McCartney: Chair, this is a subject close to my heart. At ATFs how much time do you think will be given over to VIC checks for private vehicles as opposed to road hauliers’ vehicles, if at all?

Jay Parmar: The question about vehicle identity checks is a very interesting one. I know it was the subject of consultation. We think that needs to be completely reviewed to see if it is valid in its current structure and format. There is no reason why an ATF owner, if it was prescribed, could not carry out those tests if and when they are needed. I think the VIC checks could be carried out.

Q15 Karl McCartney: You will understand that testing a large lorry, whether it is your own or somebody else’s, is probably going to be more economically beneficial than testing somebody’s private car that is maybe a Cat C vehicle.

Jay Parmar: You are absolutely right. One of the concerns we have is about the open access to a third party being able to book and validly carry it out. That needs to be subject to audit. The earlier point made by James Firth about the booking system was a valid one. We need to have a very open and accessible system for anybody. You do not necessarily have to have your vehicle maintained by that particular ATF owner to be able to take and get fair access.

Q16 Karl McCartney: Private individuals are having much the same experience as your anecdotal evidence for road hauliers. If you try and get a private vehicle VIC checked, you will find it is six to eight weeks and you will have to travel a long way to get that check done.

Jay Parmar: That should be the subject of review as well. We should have that access, whether it is an ATF or a VIC check. That needs to be looked at. Our concern around the third-party access is a particularly valid one. If you do not get your vehicle maintained there, can you simply turn up to get your vehicle tested by that ATF owner? A large number of the ATF owners are existing designated premises, who are maybe testing their own vehicles. It is a valid point that you make with regard to accessibility and fairness without having to wait. It would erode your own competitiveness in getting your vehicle tested if that was not available.

Q17 Chair: Wouldn’t there be a possible problem of hauliers testing their own vehicles?

James Firth: I have to say that FTA members have expressed caution-I think that is the appropriate word-about operators potentially testing their own vehicles. There was also the issue raised of testing a vehicle that they have maintained-to use the colloquialism, "marking their own work". I am a little bit nervous about making comparisons too closely to the MOT scheme. I would prefer to look further afield than our industry. There are examples out there of how this can be made to work better. We would look perhaps to the aviation industry. I have to say I do not know the airworthiness testing system in detail, but, as far as I can tell, you do not have to fly your plane to a plane test station and have a Government employee check it over. There are lessons we can learn. The cautions that Mr McCartney highlights are very serious, but we go into this with our eyes open and not just gung-ho, saying, "We need this because it is cheaper and it is better." We recognise that it has to be done properly, with appropriate safeguards in place.

Chair: Public safety has to be paramount.

James Firth: Absolutely.

Q18 Iain Stewart: I would like to raise the related topic of the roadworthiness of foreign HGVs on our roads. Is there cause for concern? If so, what should VOSA be doing about it?

Jay Parmar: If you look at VOSA’s own statistics, the roadworthiness figures are converging. Foreign hauliers are certainly looking perhaps at stringent controls in other member states, which are being applied. If you look at VOSA’s own statistics, non-GB prohibition of roadworthiness is now at 14.2% compared with GB vehicles at 10.3%. When you then compare and contrast that with the drivers’ hours and you start to look at the 12.9% of GB vehicles versus non-GB at 11.5%, you can start to see there is convergence taking place. That is because over the last four to five years VOSA has targeted foreign operators and a strong signal has been sent. You are now perhaps even seeing a behavioural change by foreign operators who are coming and using it; they are not relying on smaller operators using international companies to carry out their work.

Again, it relates to the type of countries that they are travelling through. In Germany, the federal roads are charged at Euro 5. They are using more modern and newer vehicles when coming to the UK as part of their long journey.

Q19 Iain Stewart: Is that a unanimous view in the industry?

Jack Semple: I would put a slightly different slant on it. In our written evidence, we recognise the gains that VOSA has made from 2008 with the additional funding that it has had. However, anecdotally from within VOSA, our indications are not only that the targeting is much more effective in targeting UK vehicles, but also the severity of the infringements tends to be significantly worse with foreign vehicles.

We have a broad concern-we would not restrict this only to foreign vehicles, but it is particularly the case with foreign vehicles-that, for example, devices aimed at falsifying the drivers’ hours record are not sufficiently prosecuted by VOSA. There is a real problem there and to some extent a hidden problem. We have evidence from colleagues in Europe that the use of magnets and similar devices is becoming more common rather than less common. It is a good two years now that the Central Motorway Police Group found that one in three trucks stopped in a three-month period were using magnets to falsify the drivers’ hours record. That is a hugely serious offence. It basically means that it is almost impossible for the enforcers to know how many hours you have been driving.

Q20 Iain Stewart: Is the solution to that that VOSA needs more resources? Could it be an issue of penalties or their strategy? What is the solution?

Jack Semple: VOSA, working perhaps with the police, has to be more consistent and effective in taking these drivers to court. The court needs to be a bit more consistent in imposing adequate penalties. At the moment, as I understand it, because of the lack of co-ordination, somebody who uses a magnet very often gets a £200 fixed penalty for not having a functioning tachograph.

In terms of VOSA’s funding, our concern is to ensure that the funding is maintained going forward. We would like to engage more closely with VOSA in future as to how the money is allocated.

James Firth: When we are talking about non-GB operators-we can all throw statistics back and forth when we are speaking-VOSA has a plethora of statistics. The thing that I draw out of it when talking about these statistics is that, for the domestic GB operators, they work against the background of having some quite sophisticated targeting tools available to use. The main one is OCRS. They are getting better at developing targeting tools for non-GB operators, but it is nothing like what they have for domestic operators. We have to remember when comparing statistics that there is a mechanical prohibition rate of 28% for HGV motor vehicles for the last year for domestic and 31% for non-GB. While they sound like similar amounts, of course for GB that is for those whom VOSA would expect to be the worst, and for the non-GB it is more like the average of the foreign operator.

The thing that could potentially make a big difference to this-we are coming on to the Road User Levy Bill later-is that the potential for the data that that generates in terms of understanding which operators are in the country could be a tremendously powerful tool for VOSA to use in improving enforcement for non-GB operators.

Q21 Chair: Before we go on to the Road User Levy Bill, does anybody else have further comments to make about differential treatment between domestic and foreign HGVs in relation to infringements? I just want to give you all the opportunity to tell us. We are told that VOSA’s budget in relation to compliance has been reduced and that that has caused some of these problems. Is that your impression?

Jack Semple: The Committee is very well aware that there was a big increase in 2008. That principle of increased funding from the Government for enforcement has pretty much been maintained. We do not know what the plan is for the coming financial year, but we fear a cut. Going forward, with proposals for increased liberalisation of cabotage rules, this is going to become more and not less of an issue.

The key point is that we have foreign operators operating in the UK who would not get a UK operating licence because the traffic commissioners do not think they operate a sufficiently compliant business. As long as that remains the case, we have to ensure that we have adequate resources to enforce against foreign vehicles.

Q22 Chair: I would like to ask you about the Road User Levy Bill. On a number of previous occasions some of you have given evidence to this Committee and the previous Select Committee about the importance of securing a level playing field. Do you think that this new Bill will secure that?

James Firth: It will help get to a more level playing field, but, against the key issue of fuel duty differentials between GB and the average across Europe, it is not going to have as significant an impact as action against fuel duty might. None the less it will help and we fully support the Road User Levy Bill’s enactment.

Q23 Chair: You sound a bit reticent. You have all been asking for this Bill for a long time. It has now come. Where are the problems?

Jack Semple: I would agree with James. Basically, we are very supportive. It will not level the playing field. We have by far the highest duty level in Europe. On an annualised basis, that can easily amount to £12,000 a year cost advantage in terms of fuel duty for a foreign operator. None the less, in terms of the principle of doing what we can in this area within EU rules and getting additional information for enforcement, our members are strongly behind it.

Q24 Chair: The Government have made an assessment about the net cost to British hauliers. They estimate that there will be very little, if any, additional cost. Is that something that you agree with from your own work?

Jay Parmar: I would certainly go back to the original principle behind the Bill, which is to create a level playing field. That is something we would certainly agree with, together with our colleagues on the panel. But we have to be careful what we ask for. The estimates by the Treasury’s own figures are that they are expecting a gross revenue of around £40 million, with a net revenue of around £18 million to £23 million. We then need to look at the actual cost of running that scheme-the enforcement costs-which I am sure we will come on to.

Our concerns are largely around the reduced pollution certificate benefits that currently UK owners enjoy. We believe that we have to get that model right. Again, we have yet to see the details of this, though we believe that some additional announcements will be made in the budget. We have to make sure that we are protecting UK owners from losing the potential RPC for greener trucks that they operate. We also have to look at the actual mechanism of claiming refunds on the unused portion of the VED or Levy paid. We have raised that again through various discussions, both in the Public Bill Committee and also within the House. We question the Minister’s intentions of reducing the amount an operator can reclaim on VDs that they have paid over the year.

There is a concern that we must get that model right. Currently, an operator or owner is able to reclaim the full outstanding months due on a VED. When the Bill becomes law, they will be restricted to reclaiming the amount by the one-tenth methodology put in. If you put that into figures for our members, who dispose of around 20,000 trucks every year, we believe we are going to lose out by £2.7 million. While the Minister has given us assurances through the debates in the House, we have yet to see the details of those assurances and how they will be addressed. We have to be careful that the bill does not start to impose unintended costs on UK owners.

Q25 Chair: That is something we should all look at because the Ministers gave a very clear intention that the practicality needs to be looked at. What about the relationships and roles of VOSA, the traffic commissioners and the Department for Transport? Do you have any views on how those three organisations are connected?

Jack Semple: There was a very important document last summer-the framework agreement between the traffic commissioners, the DFT and VOSA-which is helpful and which goes a significant way to recognising the importance of all three parties and their relative roles. It also highlights the importance of fair competition in the role of the traffic commissioner. We would like to see that restored specifically in the role of VOSA.

It is important that the industry has confidence that the regulator, VOSA and the DFT are all working together. I think we are making progress in that direction.

Q26 Chair: Does it have confidence on making progress towards that?

Jack Semple: Reasonable confidence.

Q27 Chair: Do you all agree? Does the industry have confidence that VOSA, the traffic commissioners and the Department are working together?

James Firth: Yes; I believe that the industry does have confidence in that. The framework document was very important. For the trade associations that work closely with both bodies, we can see how that relationship is working. There is a difficulty for operators outside in the industry understanding the relationship between the two bodies, particularly on the issue where you have VOSA staff working for the traffic commissioners and understanding the important difference there.

As I mentioned, there is currently a consultation out on the motoring services agencies from the Department for Transport. While it does talk about redrawing the boundaries of responsibility for the various agencies, I notice that it did not touch on issues of the staff that support the traffic commissioners and I wonder if that is partly because the DFT got its fingers burnt a little bit last year when it tried talking about the independence of the traffic commissioners in a VOSA fees consultation. Certainly, the trade responded strongly to that. I do not know if it is perhaps time to investigate whether the traffic commissioners should have staff that can be identified as being separate from VOSA.

Jack Semple: A very positive development has been the establishment of the commercial vehicle road safety compliance forum. That is chaired by the Department for Transport and brings back to the Department the responsibility and the active leadership in terms of what compliance is all about. I think that has perhaps been unclear between itself and VOSA. That is a useful forum for moving forward in this area as well.

In terms of the traffic commissioners, we have made a lot of progress both on the statutory transparency of what they do and the requirement to discuss with the industry. In practice, we are seeing that as well. We are keen to see a bit more of that from VOSA going forward.

Chair: Thank you very much, gentlemen, for coming and answering our questions.

<?oasys [pg6,cwe1] ?>Examination of Witnesses

Witnesses: Kevin Warden, VOSA TUS Secretary, and Gary Washer, VOSA TUS Assistant Secretary, gave evidence.

Q28 Chair: Good afternoon, gentlemen. Welcome to the Transport Select Committee. Can we have your name and organisation, please?

Kevin Warden: My name is Kevin Warden. I am a member of Prospect Union and I am also the VOSA Trade Union Side Secretary.

Gary Washer: Good afternoon, Chair. My name is Gary Washer from the Public and Commercial Services Union. I am the VOSA Assistant Trade Union Side Secretary.

Q29 Chair: What are your views about VOSA’s strategy for improving arrangements for annual inspections? How do you think it is all working?

Kevin Warden: When we gave evidence in 2008 we had concerns about the plans as they were developing. Those concerns remain, I must admit, while the increase in ATFs has come along. We are deeply concerned about the threat and the consequence of privatisation, and I heard what Mr McCartney said in the previous session. While you will hear bits of anecdotal evidence from us, we have some factual evidence as well.

When you compare the vehicle testing of the light schemes-cars and light goods vehicles-VOSA strongly regulates that. It audits the systems and trains and ensures that the testers doing that testing work do so to the right standards. Yet still, year on year, when VOSA examiners go out and do random checks on recently tested car/light vehicles, around 15% of those vehicles year on year are found to have been tested incorrectly by the private sector. They are random. If you begin to go down the road where VOSA targets garages where it suspects that the standards are not being applied, then that increases to around 25% of vehicles tested by the private sector being given the wrong test result.

We have to be absolutely honest here. That does not mean all of those vehicles are dangerous. It could mean that some of those vehicles were passed by the private sector when they should have failed, and some were failed by the private sector when they should have passed, but they were given the wrong result at annual test. To convert that over to heavy goods vehicles or to PSV vehicles, there is little to convince us that putting that sort of privatised system in place would not perhaps result in the same sort of abuse by those doing the test.

As well as being a union representative, I was a vehicle examiner working for VOSA many years ago. This is an actual factual event: I visited a motorcycle garage one year and watched a tester do a perfect demonstration test on a motorcycle; unbeknown to me, the following day one of my colleagues went in and did what we used to call an incognito test, which now they call a mystery shopper test. A perfect test was demonstrated to me, but the following day it transpired that that vehicle did not even make its way into the workshop. The person who had proved to me the day before that they were absolutely competent to do the test just got on the vehicle, drove it down the road, rode it back and said to one of my colleagues, "Yeah, that’s all right", and issued an MOT certificate. That is a real-life example of how the private sector sometimes reacts, particularly in the current MOT scheme, when you introduce profit into safety.

VOSA is trying and working its absolute hardest to keep those standards high, but we get perfect examples time and time again of competence one day and then abuse shortly afterwards.

Q30 Chair: Where is the information you refer to documented?

Kevin Warden: VOSA produces those figures. Certainly, the 15% failure rate is something that VOSA produces either through FOI or internally. It was always previously determined in reports that VOSA did, but VOSA should be able to confirm that those figures are accurate.

Q31 Chair: What do you think would happen if staff directly employed by the authorised testing facilities were able to carry out the tests rather than VOSA staff?

Kevin Warden: Hearing the previous panel as well and the assurances that they were giving, it is quite interesting. When you introduce commercial pressures into vehicle and safety testing, our fear would be that that commercial pressure, particularly when you are looking at commercial vehicles or PSV vehicles and the lost capacity in financial terms of those vehicles being off the road, has the likelihood of persuading people to cut corners and to turn a blind eye to some defects to ensure that that vehicle goes back on to the road with an MOT certificate, albeit it would be invalid.

It was interesting to hear again what the previous panel said and what the FTA have done. We include this in our written evidence. They sent something like 555 vehicles into franchised dealerships to be serviced. When those vehicles came out from service, they were inspected by the FTA’s own examiners and 27% of those vehicles were found not to meet the minimum MOT standard.

Again, we have to be really clear here. The MOT standard is not a once-a-year standard to be attained. It is the minimum safety standard that every vehicle should maintain on a day-by-day basis as it is being used on the roads. People tend to think of the MOT as this huge once-a-year mountain to climb. It is the minimum standard that we test vehicles to. As I say, certainly within those vehicles that have come to our test stations, around 20% of those vehicles prepared still fail. We are fearful in road safety terms. We emphasise that our members are here and our staff are dedicated to road safety. We are not here to try to make a lot of money. You would not join the civil service if you wanted to become a millionaire, I can assure you. I can show you my payslip and I am certainly not a millionaire. Our people join because of a dedication to road safety. The fears they have are that road safety will be diminished if it is passed out to the private sector to undertake.

Q32 Sarah Champion: Mr Warden, I completely share your fears. When Mr Semple was saying how wonderful all companies were and of course they would be great, I was thinking that that is great for the 10% at the very top, but what about the people lower down the food chain, who are being hit by a recession and who are trying to meet targets? I fear, like you, that corners will be cut.

We did a visit and were with the VOSA chief executive for most of the day. We all pressed quite hard on his views on privatisation for the testing staff. He rebuffed those. What is your gut feeling? Do you think that, in his mind, he is looking to secure the staff from this Government or do you think that the creep of privatisation is going to happen?

Kevin Warden: Up until quite recently I have been having one-to-ones with the chief executive as the Trade Union Side Secretary on a monthly basis. That is changing a little bit more recently, but we have been having those meetings. I believe, with his hand on his heart, Alastair-the chief executive-believes that road safety is best served by VOSA staff doing the testing, albeit done at non-VOSA test sites such as ATFs or DPs, if that is the best model to fit.

From the trade union side point of view, we have been warning from day one that by allowing greater and greater flexibility and access to sites-the arguments that trade associations were making, such as, "If they only have one or two vehicles to test, surely it would be better just to allow them to test the one or two vehicles." We have said this right from day one to the chief executive. He is not blind to it. In his heart, I think he is dedicated to road safety and to the public sector undertaking those road safety checks. In reality, he sees the political pressure that is being put on to move the physical element of testing out to the private sector.

I have just one more point and then I will let Gary in. I am taking up most of the talking here. We talk about testing and we talk about enforcement. Certainly from the point of view of a vehicle examiner and an engineer, and having worked for VOSA for nigh on a quarter of a century now, they are two sides of the same coin. Testing is the first element of enforcement. It is proving by operators that they can maintain or present their vehicles to the minimum standard at least once a year to show that they can present that vehicle in that way.

Those figures, as I understand it, also feed in to the operator compliance risk score. By moving that out to the private sector and asking an operator’s own fitter to do a test, that would go into the operator risk score to say that that operator was good, which would mean that on the roadside there was less chance of that vehicle being pulled in for a safety check. It is a self-fulfilling prophecy and a circular argument: the vehicles will always pass, because of that they will be less likely to be pulled on the roadside, and if they are pulled on the roadside, as a green operator it is less likely there will be a check on the vehicle.

Q33 Sarah Champion: Mr Parmar was talking about flexibility and weekends and evenings. It is extremely commendable how flexible the testing staff have been to this point. Does that need for flexibility have any concerns for you, or do you think that the staff would be open to a more flexible working approach as they seem to be embracing it?

Kevin Warden: In the discussions we have had with VOSA, and this goes back three years, our doors are open to talk about it. We spoke before about the shift workers-the high- risk transport initiative workers. When VOSA wanted to go down that route and introduce shifts, that was quite a change for the civil service from the way we had done it in the past. It had happened in other areas of the civil service, we understand, but we were open to discussion. We negotiated some terms. Staff have come in and have been working on those terms. We have recently been in discussion about changing the shift patterns. We are open to discussion on sorts of areas of greater flexibility. Yes, we are open to discussion.

The one thing that we are concerned about is allowing current staff the opportunity to opt in or opt out of the newer type of arrangements. I know that is causing some consternation back at the agency because they are looking at everybody moving on to this wholly flexible system. I heard one of the witnesses from the previous panel talking about working from home or being deployed from home, as VOSA says. I joined 25 years ago as a vehicle examiner and I was deployed from home pretty much every day of my working week. So this is nothing new, whether it is enforcement or going out testing.

As I say, they can come and talk to us. VOSA began tentative discussions two or three years ago about a new contract. They were not the easiest, I must be honest. We are waiting now because of changes within the governance between the Department for Transport and VOSA. We understand that any discussions about changes to contracts are going to be handled at DFT level. We are still waiting for the start of those discussions.

Gary Washer: I want to pick up on the point from the last Committee inquiry into VOSA back in 2009. At the end of that process, when the recommendation was made not to privatise the testing environment and the testing system, we made it perfectly clear to the Minister at that time that we were very receptive and provided evidence to him of the sorts of changes that we believed would go some way to providing industry with what it wanted. That was extended testing times and perhaps weekend and evening testing.

As my colleague has said, at that time our door was open. All DFT and VOSA had to do was come and talk to us. We were assured that we would be able to negotiate on behalf of the staff in VOSA to enable them to provide the sorts of things that industry wanted. Unfortunately, what has happened is that we have continued down the same route that was being proposed previously, which is a fundamental step-by-step process, and we have genuine concerns that it will lead to the outsourcing and privatisation of the whole testing scheme.

Q34 Chair: What could be done within the system as it is now to improve flexibility and convenience for business in wanting to test vehicles?

Gary Washer: At the present moment-it was something highlighted by the previous witnesses-VOSA has a problem with regard to resources. At the last Committee hearing in 2009, even the chief executive at that time, Stephen Tetlow, admitted that to go forward in the way that they wanted would require an approximate 50% increase in testing staff. Since that time in 2009, we have had restrictions on public sector recruitment, which has made life very difficult. Even now, today, VOSA is finding it very difficult, mainly because of the financial issues and the fact that the staff we would want to come in to be able to do that sort of work are simply not prepared to come in for the sorts of salaries and conditions that we are offering at the present moment. They much prefer to work in main dealers and vehicle maintainers, where they can earn far more.

Q35 Chair: What suggestions would you have to improve the situation?

Gary Washer: We need to look at how we get a balance and a mix. What we would suggest, as we have done previously, is that we need a balance. We have had designated premises, and we were quite surprised at Mr Semple’s evidence when he said that DPs were new. They have been around for 30 years. We have been supporting designated premises and sending staff out for over 30 years.

We believe that there are financial arguments, where companies have looked at it and said, "It makes financial sense for us to do testing at our premises." They became designated premises over the last 30 years and VOSA has supported them by providing staff to them. What we now have is, effectively, VOSA forcing industry to become ATFs. We have had examples relayed to us where existing designated premises are being told-

Q36 Chair: I am looking for some ideas of how to improve the current system. We have heard suggestions of another fairly fundamental change. I was wondering if you have any suggestions as to how to improve the way the system works for business without a radical change.

Gary Washer: We believe that the existing framework of having VOSA sites, supplemented by ATFs, DPs, or whatever you wish to call them, is a model that works. It has worked for the last 30 years. It means that people who have a VOSA station close to them can get a test when they want it in a short period of time. That would be good. We have VOSA effectively closing off-

Q37 Chair: Would you then favour there being additional authorised sites to deal with the problem? Mr Warden, do you have any ideas on that? There clearly is some problem with how it is working at the moment.

Kevin Warden: Sure. The network of test stations that we have, and it was picked up earlier as well, is in need of refurbishment. It is 40 years old and has had very little investment. We included a letter in the written evidence that we wrote to the then Minister, Mike Penning, setting out perhaps a new picture of how VOSA could look to meet the gap with industry. There would be a backbone of VOSA’s own test stations supplemented by ATFs.

One of the witnesses on the last panel spoke about possible half-day testing. That, again, is something that VOSA would be happy to look at from the VOSA Trade Union Side point of view, but, of course, that will put up costs. If somebody has to travel out to one site to do half-a-day testing and then travels to another, you can only get two half-day testings in one day without the additional flexibilities that a revised contract may bring. Again, we are open to discuss all these opportunities, and particularly if it maintains road safety in the hands of independent and impartial examiners who have no axe to grind; there is no commercial pressure on them one way or the other. We are happy to look at how we can accommodate that in the terms and conditions, as long as it is done on a voluntary basis and people are not forced down that route. We will work whichever way we possibly can.

Q38 Chair: How do you view the current position on foreign HGVs? Is there still concern on safety standards?

Gary Washer: We would probably echo the previous panel’s evidence inasmuch as, over the past few years, there does appear to have been a considerable shift away from the roadworthiness aspects of foreign vehicles and more towards traffic enforcement, drivers’ hours, cabotage and the interference with tachographs. From that point of view we would agree with the previous evidence, and certainly it is evidence we find coming back from our own examiners themselves. From that perspective, we do think that the quality of vehicles from foreign hauliers that we are now seeing in this country is of a better standard, and it may well be for a number of the reasons previously given in evidence. But we are not finding the numbers or the real horror stories that we did four or five years ago. What we are finding is that there is more on the drivers’ hours, the cabotage and the licensing side of things, which is fairly consistent.

Q39 Chair: What do you think could be done to deal with that?

Gary Washer: We would look at the introduction of the HRTI-the High Risk Transport Initiative-and the shift-working staff that we had. We believe that was a good step forward. We are disappointed that the initial funding given by the Department for that has now been withdrawn. It has been subsumed within the single enforcement budget. That is on a downward trend in terms of funding. It means that we certainly have not been able to expand the number of shift-working teams in the way that we would have hoped to have done had the funding continued. That is having a real, detrimental effect in terms of the cuts in the funding. It means that we cannot continue in the way we had initially started for that brief few years.

Q40 Kwasi Kwarteng: With regard to the HGV Road User Levy Bill, you have mentioned foreign users. Do you think that the Bill equalises or levels the playing field, as people have suggested?

Gary Washer: I think it is still probably too early to tell at the present moment. It will depend on what the final result turns out to be. We can probably echo some of the concerns of the previous panel. Until we see the final details, it is going to be a bit difficult to know exactly. You may have the unexpected consequence element creep in relating to how you balance things out to make sure that that level playing field is maintained.

One of the things we put in our evidence is that we see an element whereby the revenue through that permit, or whatever it is going to be called, could be used, first, to administer the system and also to provide a route for funding enforcement of those vehicles coming into the country. By enabling VOSA to do that work, it would, first, enable us to make sure that we have accurate information very early on about the vehicles coming into this country that are buying the permits or paying the levy fees. That means we then have accurate information about those operators and those vehicles. If we have that data, then obviously that is immediately made available to our enforcement staff at the side of the road to be able to target them.

Kevin Warden: If I can add one little bit-

Kwasi Kwarteng: Can I ask a follow-on question after you have done that?

Kevin Warden: Again, the early signs are good, I think. Within VOSA we have had one meeting of a project group to look at the project initiation document. That is a draft document and is still being worked through. It may not come as a surprise to you that one of the main questions in it that I asked was, "What funding is coming for this? Is it coming out of VOSA’s existing funding?" If my memory serves me correctly, we were told that there are three lumps of £500,000 being made available to VOSA to get the system’s capital costs up and running. Early day signals from our point of view are that it is going in the right direction, but it is very early days.

Kwasi Kwarteng: You have answered my follow-up.

Q41 Chair: You have commented in the written evidence you have given us that VOSA’s enforcement activity is now mainly focused on offences subject to a fixed penalty notice. Could you tell us what problems that creates?

Gary Washer: I would like to expand on that. While we welcome the introduction of the fixed penalties and we think they are a useful tool, what we have seen over the years since their introduction is that there is an emphasis now on being able to deal with matters at the side of the road by a fixed penalty very quickly and very easily. What we don’t then get is the follow-up that happens with those operators afterwards. This is where we have concerns in a number of areas as a result of that.

First, that means we don’t use that information to go and follow up with the operators. It seems to us to be imposing a shift in targeting from the non-compliant operators simply on to the drivers in the cab of the vehicles, and we are simply fining the drivers. Unfortunately, in this particular climate, we find that, if drivers are being targeted because they are non-compliant, they may be doing that because they are being put in a position of having to do so because of the pressures they are being put under by operators. The fact that we are then not going and visiting operators as frequently to do those follow-up inquiries means we are not looking at the systems the operator has. That means we are not getting the higher and in-depth information. It just seems unfair to us that we are placing the burden now on the lowest form of employee within the industry rather than on the unscrupulous operators behind them. Because we are not doing those investigations and going forward through prosecutions to magistrates courts, then obviously those are not following through the conduct proceedings to the traffic commissioners and public inquiries.

It also means that VOSA stands all of the costs of issuing those fixed penalties. Because it is a fixed penalty, that money goes directly to the Treasury. We stand all of the costs and have no ability to reclaim any costs, whereas, had we gone down the prosecution route through the magistrates courts or the Crown courts, then we have the ability to reclaim all of our costs involved with that. We find that that is a bit short-sighted and it is a self-fulfilling prophecy. It is a very costly way to do it. It is done very quickly but is not necessarily providing the best outcomes.

Q42 Chair: You refer to the graduated court deposit process and talk about limitations there. Could you tell us more about that?

Gary Washer: We have two systems. One is a fixed penalty, which we are all fairly familiar with. The other is a graduated deposit. This alludes also to the previous panel’s evidence about interruption devices. We have this strange situation within the legislation at the present moment, which is probably one of the failings of the legislation. At the present moment, if we issue a graduated deposit for the most serious offences of falsifying or interrupting with vehicles, we take a deposit off those drivers, specifically foreign nationals, so that they are then due to come back to court. Because of the requirements of our legal process, if we are unable to serve papers on those people because they live overseas, they never come back to court, and after a certain period of time they are then able to claim the deposit back with interest. So we end up paying them more than we have collected because they have offended and did not come to court. It is a little perverse from our perspective.

Q43 Chair: What can be done about that? It sounds a most incredible situation. It actually costs us more if we try and prosecute someone who we think has committed an offence.

Gary Washer: Obviously not every operator claims the money back, but that is a possibility. I think we need to look at the legislation again and what is in there to make sure that, if we are taking a graduated deposit, it is a deposit against something. We perhaps need to look at how matters can proceed if people fail to respond to court papers in these particular cases. Obviously, that is something for the lawyers to look at, but it is something that needs to be redressed.

Q44 Chair: Do we know how often this has happened and how much we have paid out?

Gary Washer: I do not know, but I am sure VOSA will be able to tell you how many deposits they have had to repay.

Chairman: We will ask them.

Gary Washer: It is a situation that is incredibly frustrating. In some way it goes to the previous evidence as to why examiners, because they know that happens, take it down to a lower level of offence whereby they can deal with it by fixed penalty, albeit the maximum. Obviously there is a financial penalty there, but we have to work within the systems we have at the moment.

Q45 Chair: You have also suggested that VOSA budget cuts have affected the work of the traffic commissioners. Can you tell us any more about that?

Gary Washer: It comes back to the previous point we were making about not being able to take the prosecution route for serious offences. What we have found since the introduction of fixed penalties is that more and more matters are being referred directly to the traffic commissioners. Again it comes back to the funding issue. VOSA has a limited amount of funds. At the present moment, its legal budget is somewhere in the region of £750,000 and that is capped.

What we are now finding is that we have to provide legal representatives at more and more inquiries that deal with impounding, immobilisation and public inquiries for conduct. Matters have not gone through a magistrates court or Crown court first. Previously we were just dealing with the matter of the traffic commissioners dealing with conduct on the basis of convictions. As those convictions have not happened, we now effectively have to prove those cases or the conduct of the operator in front of the commissioner. Unfortunately, because of the legal system for tribunals, we are not allowed to recover any of our costs. Again, we have to pay for a legal representative to present the cases to the traffic commissioners because they are now being challenged in front of the commissioners, whereas the operators would previously have done that in court. We now have to suffer the additional cost of providing a legal representative at those hearings and yet we cannot reclaim the cost of those representatives if the case is eventually proven.

Q46 Mr Sanders: What sort of costs are you talking about in a year? What is the figure?

Gary Washer: Do you mean in individual cases or overall?

Mr Sanders: What is the amount spent on external legal advice in a 12-month period?

Gary Washer: The information we have is that the VOSA legal budget is about £750,000, and it is exceeded every year. It is difficult to break it down into individual cases, but as that budget is broken every year then obviously the need is there. As we target more operators to try and get into more of the non-compliant, obviously the implications of those investigations become more serious for the operator and, therefore, they are defended more vigorously, so the legal costs rise.

Chair: Thank you very much.

Prepared 18th July 2013