The performance of the Department for Transport - Fleet News

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Processed: 26-02-2010 19:10:26 Page Layout: COENEW [E] PPSysB Job: 442441 Unit: PAG2Ev 24Transport Committee: Evidenceprescribing the information which a TraYc Commissioner could require operators of registered local servicesto keep and provide (these are set out in sections 6(9) (i) and (j) of the Transport Act 1985) and therefore itwas not necessary to take any further primary powers in the 2008 Act.I will write again in early 2010 with a full response to the questions on which I promised you furtherinformation.December 2009Supplementary memorandum from the Department for Transport (POD 01b)Thank you for your letter of 15 December 2009 regarding my exchange of views with Mr Clelland MPabout the future of the East Coast Main Line franchise.As you are aware, following the termination of the NXEC Trains Franchise Agreement, DirectlyOperated Railways and its subsidiary, East Coast have been established as “arms length” companies to fulfilmy duties as the operator of last resort, as required under Section 30 of the Railways Act (the “Act”).In accordance with the provisions of Section 23 of the Act, those services previously operated by NXECand which are currently being operated by East Coast, are designated as services that are to be providedunder a franchise agreement.Section 25 of the Act precludes public sector operators, including any Minister of the Crown, GovernmentDepartment or other emanation of the Crown from being a franchisee and operating services designatedunder Section 23. The utilisation by the Secretary of State of his powers under Section 30 where he is obligedto secure the provision of services in the absence of a franchise agreement is an exception to this provision.In order to dis-apply the provisions of Section 23, it would be necessary to change the law by making anOrder, under Section 24, exempting such services for the carriage of passengers by railway from theprovisions of that Section. This would also require the processes set out in Paragraphs 3 and 4 of Section24 to be observed.The process for re-letting the East Coast Franchise has already commenced and it is expected that thesuccessor operator will be announced in late summer of 2010 with a view of commencing in November 2010.My overriding aim is to secure value for money for both the fare payer and the tax payer. I am very keenthat the state operator does a good job and provides a good service. I would expect any bids from potentialfranchisees to build on the high standards I hope East Coast will achieve, and any bids for the new franchisewill have to demonstrate better value for money than the state operator. If they do not, then the newfranchise will not be awarded and the franchise will continue to be run by East Coast.I hope this clarifies the position.January 2010This is an embargoed advance copy.Not to be published in any form until00:01 on Thursday 4 MarchFurther supplementary memorandum from the Department for Transport (POD 01c)Business Expenses of Department for Transport Senior OfficialsIn June 2009, the Cabinet Secretary announced that business expenses incurred by the most senior CivilServants would be published. The move reflected the Civil Service’s commitment to maximum transparency.All departments are publishing, on a quarterly basis, details of expenses incurred by their most senioroYcials (Directors General and above) and non-executive directors of the management board.As a result, the Department has today published on its website details of business costs, together with ahospitality register, of Department for Transport senior oYcials. The initial return covers the periods from1 April to 30 June 2009 and 1 July to 30 September 2009, and the Department will in future be publishingbusiness expenses on a quarterly basis.The return is available on the Department for Transport website (http://www.dft.gov.uk).January 2010
Processed: 26-02-2010 19:10:26 Page Layout: COENEW [O] PPSysB Job: 442441 Unit: PAG2Transport Committee: Evidence Ev 25Further supplementary memorandum from the Department for Transport (POD 01d)DfT Autumn Performance Report 2009 and Winter Supplementary EstimateThank you for your letter of 18 January with queries arising from the Transport Committee’s review ofthe Department’s Autumn Performance Report and Winter Supplementary Estimate.Our response to the points raised is as follows:Questions Arising from the Winter Supplementary Estimate1. Some £23 million is being made available to Transport for London to make the Oyster machines compatiblewith the National Rail ITSO smart card standard (RFR1, section X3). Could this problem not have beenforeseen and these costs avoided? Will any further money be required in due course? Is any funding beingprovided by the Mayor’s oYce?Response:ITSO and Oyster are separate schemes that began at diVerent times, as Transport for London assessedtheir own favoured approach to smartcard ticketing independently of Government. Time has revealed thefirm benefits and great popularity of smartcard ticketing, and there is now clearly a benefit in the twoschemes being interoperable. As it is a national open specification, the scope of ITSO is significantly morecomplex than Oyster (which serves London only), so the integration of the two schemes would always havegenerated some additional incremental costs. The DfT will be funding this project up to £60 million whichis bringing additional benefits over the original specification principally in the standard of the hardware.Operational costs will be funded by TfL. We do not anticipate any further cost but future changes in scopeor upgrades would be considered on their merits.2. There is a large increase of £50 million, in support for London and Continental Railways “restructuring”(Non voted) (page 7, explanatory memorandum). Why is this additional funding required and what benefit willthe expenditure bring?Response:The £50 million increase in support for London and Continental railways was a payment to HS1 in respectof the “domestic share” of track access charges between the introduction of the new track access chargingregime (in August) and the actual introduction of domestic services in December. This payment, to acompany wholly owned by DfT, enabled an earlier completion of the financial restructuring of HS1, with acorrespondingly earlier cancellation of the associated Government loans and guarantees.3. There are also large “non budget” sums of grant in aid being payable to new NDPBs in relation to Londonand Continental Railways (RFR1, Section AC). Why are these large cash payments required and do they resultin any additional public expenditure (DEL or AME) either now or in the future?Response:This is an embargoed advance copy.Not to be published in any form until00:01 on Thursday 4 MarchThe increase in non budget represents grant in aid for a) the £50 million track access charge referred toabove and b) a £177 million prepayment of the finance leases for seven Eurostar trainsets, entered into byEUKL in 1993 and 1994. This crystallises the state guarantees already given by the Government andapproved by the EC in 1994 and removes the liability from EUKL. These payments do not result in anyadditional public expenditure (DEL or AME) either now or in the future4. Why is an increase of £19 million in grants to bus service operators (RFR1, Section G) required? Areincreased levels of services being supported?Response:The £19 million increase in grants reflects changes in the rate of Bus Service Operators Grant (BSOG)which were introduced because of changes to the rate of fuel duty. These funds provide support to busservices.5. What extra funding is to be made available to support the rebuilding or repair of Cumbria’s bridges, in thewake of recent floods, and if so where will the funding come from?Response:Local Authority funding to support the rebuilding or repair of Cumbria’s bridges will be met from theDepartment’s existing programme resources for this year and next year as the repairs are carried out. TheDepartment will not be seeking additional resource cover to meet these costs.
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