The performance of the Department for Transport - Fleet News

More documents

Recommendations

Info

2055. The NAO is satisfied that, in many cases, the Department for Transport is achievinglong term savings. The main reasons for the NAO's concerns are that 80% of theDepartment for Transport’s reported savings relate to support for the rail industry, and theNAO considers the baselines against which these savings were measured should have beenrevised in the light of the most recent information, which would have reduced the savingsreported in 2008–09. There is also the risk that large elements of the savings are notsustainable across the spending review years owing to the impact of the economicdownturn on passenger revenues.56. The Committee, like the NAO, is concerned that such a high proportion of claimedsavings could possibly be overstated. We support the NAO’s view that the baselinesagainst which savings have been reported should be recalculated, and that all claimedsavings should, in future, be carefully reviewed before publication to ensure that theyare defensible and real.Shared services57. The Department has transferred various corporate functions, such as human resources,payroll, and finance support to its agencies, to a Shared Services Centre, operated bycontractors. For several years, we have been critical of the Department for allowing the costof the shared services programme to over-run. 88 We have also had concerns about thesuitability of the Department for Transport to be in the vanguard of the project. 8958. In 2008, the NAO investigated the establishment of the Shared Services Centre. Itreported that, by March 2008, the project was forecast to cost £81 million to 2015, ratherthan save £57 million as originally forecast by the Department in April 2005. 9059. The NAO once again draws attention to Shared Services in its briefing note ofDecember 2009. 91 The Department describes a number of measures that it has taken toimprove the reliability and performance of the Shared Services Centre. It concludes that“At year end [31 March 2009], a position had been reached where the internal controlsover transactions had reached acceptable levels. This level of control has beenmaintained.” 92 This is hardly a statement of resounding success.This is an embargoed advance copy.Not to be published in any form until00:01 on Thursday 4 March60. Our concerns are about both value for money and the impact on the Department’seffectiveness, including on its agencies. For example, during 2008–09 DVLA and DSA hadto employ “extra-systems controls” in order to maintain effective control of their financialservices. 93 The Department brought in experienced civil servants and contractors to88 Transport Committee Fourth Report of Session 2006–07, Departmental Annual Report 2006, HC 95, p 489 It is the policy of the Cabinet Office that in order for Shared Services to be desirable for an organisation, it needs tohave between 20,000 and 50,000 staff. When the project was approved, the Department for Transport group hadjust 19,000 staff, plus 3,000 volunteers in the Coast Guard Rescue Service.90 National Audit Office, Shared Services in the Department for Transport and its Agencies, HC 481, Session 2007–08,23 May 2008, Fig 191 National Audit Office, Performance of the Department for Transport 2008–09, Briefing for the House of CommonsTransport Select Committee, November 2009, p 1292 Department for Transport, Annual Report and Resource Accounts 2008–09, HC 454, July 2009 pp 324–5 and Ev 1993 These are not explained in the Accounts. Presumably they are additional manual procedures and ad hoc systems tosupplement and validate the financial information provided by the Shared Services Centre.
21transfer the Maritime and Coastguard Agency (MCA) and the central Department toshared services. Despite this, the MCA transfer to the Shared Services Centre was delayed,causing problems and additional costs for the MCA. The Capability Review of 2009, whichranked the Department joint sixth out of the 14 government departments assessed, foundthatManagement information is hampered by the current state of shared services, andsome of those interviewed expressed the view that management information wasworse now than it was previously. 9461. We remain deeply concerned about the Department for Transport’s shared servicesprogramme. It appears that it will cost the Department more money and yet provide alower level of service than the previous arrangements. Judging from the evidence availablethus far, this is not a model other government departments should seek to emulate. We callon the Department to publish details of the costs to date, including those relating to theadditional systems, staff and contractors, and to update its estimates of the eventualcosts or savings of its shared services programme. The Department should also publisha clear statement on the quality of the service that is being provided. If costs and servicequality are unsatisfactory, the Department must review the entire programme.Contingent liabilities62. Contingent liabilities are possible future liabilities that the Department underwrites, orpresent liabilities which are not measurable reliably. As a result they do not appear in theDepartment’s balance sheet. Some of the Department’s measurable contingent liabilitiesare for very large sums. In other cases, these contingent liabilities are totally unquantifiedand may not become quantifiable until they become probable or unavoidable, when theywould need to be recognised and could prove to be very large. Indeed, the collapse ofMetronet is one such example. The Department’s contingent liabilities increased by 19% in2008–09 to £27 billion. According to the NAO, “the main reason for the 19% increase is anincrease of £3.6 billion in support for the Network Rail debt programme, nowunderwritten up to a maximum of £26.3 billion, and new indemnities issued in respect ofCrossrail funding (£730 million)”. 95This is an embargoed advance copy.Not to be published in any form until00:01 on Thursday 4 March63. Compared with many other government departments, the Department for Transporthas an unusually high level of exposure to contingent liabilities. 96 The level is also high inrelation to the size of the Department’s resource budget (£10.9 billion) and capital budget(£7.9 billion). 97 In essence, if things went wrong, the Department would be dependent onthe Treasury to bale it out. 9894 Cabinet Office Capability Review 2009, p 11 http://www.civilservice.gov.uk/Assets/296680_Capability_Department forTransport_web_tcm6-8286.pdf95 National Audit Office, Performance of the Department for Transport 2008–09, Briefing for the House of CommonsTransport Select Committee, November 2009, p 696 Central Government Supply Estimates 2009–10: Main Supply Estimates (HC 514), Notes to Main Estimate: contingentliabilities97 Central Government Supply Estimates 2009–10: Winter Supplementary Estimates (HC24), (Department for Transport,Reconciliation of resource expenditure between Estimates, Accounts and Budgets and Reconciliation of capitalexpenditure between Estimates and Budgets, p 10398 Q 15
Page 3: House of CommonsTransport Committee
Page 9 and 10: 59. Governments should give careful
Page 11 and 12: 7(DVLA), working with the police, t
Page 14: 10policies on education, health and
Page 20 and 21: 16the Department should be saying t
Page 22 and 23: 18Department should regularly repor
Page 26 and 27: 2264. Contingent liabilities are a
Page 28 and 29: 24passengers and concessionary bus
Page 30 and 31: 26Formal MinutesWednesday 24 Februa
Page 32 and 33: 28List of Reports from the Committe
Page 34 and 35: 30Fifth Special ReportSixth Special
Page 36 and 37: Processed: 26-02-2010 19:09:54 Page
Page 66 and 67: This is an embargoed advance copy.N
Page 68: Distribution by TSO (The Stationery

The performance of the Department for Transport - Fleet News

Create successful ePaper yourself

Delete template?

Save as template?