The Department for Transport's complete lack of common sense in the way it ran the West Coast franchise competition has landed the taxpayer with a bill of £50 million at the very least. If you factor in the cost of delays to investment on the line, and the potential knock-on effect on other franchise competitions, then the final cost to the taxpayer will be very much larger. The Department made fundamental errors in calculating the level of risk capital it would require bidders to put on the table and it did not demand appropriate levels of capital from both bidders. Faced with the possibility of legal challenge, it cancelled the competition. The Department failed to learn from mistakes made in previous projects. Recommendations made in the Committee's report 'The failure of Metronet' (HC 390, session 2009-10, ISBN 9780215544216) to prevent a lack of oversight and information were clearly not applied in this competition. Cuts in staffing and in consultancy budgets contributed to a lack of key skills. There was no single person responsible from beginning to end and, therefore, no one who had to live with the consequences of bad policy decisions. For three months, there was no single person in charge at all. Not only that, there was no senior civil servant in the team responsible for the work, despite the critical importance of this multi-billion pound franchise. Given that the Department got it so wrong over this competition, there is concern over how properly it will handle future projects, including HS2 and Thameslink

In this report the Transport Committee calls on the Government to implement the vision for transport - including improved traffic flows on motorways, rail electrification and high speed rail, reducing greenhouse gas emissions from transport - that has been established under the current Secretary of State, Lord Adonis. The Department has made progress in a number of important areas, both recently and over the past decade, and has also established a new sense of direction, despite a too-frequent change of ministers. The Committee reviews progress against the Government's integrated transport plan, 'Transport 2010', which was adopted in 2000. Whilst much has been achieved, the ambition to build up to 25 light rail lines has not. It calls on the Government to publish a comprehensive progress report against the targets that it set itself. It also calls for strong action on local bus services which, outside London, are still not integrated with other local transport services. Bus use outside London continues to decline, apart from a slight increase after the introduction of free bus travel for older and disabled people. The Committee calls for full implementation of the Local Transport Act which gives local authorities powers to introduce bus quality partnerships and quality contracts; and for the Traffic Commissioners to be given adequate resources to carry out punctuality monitoring.

The Driver and Vehicle Operator (DVO) Group is part of the Department for Transport and is made up of four agencies: the Driving Standards Agency, the Driver and Vehicle Licensing Agency (DVLA), the Vehicle Certification Agency (VCA) and the Vehicle and Operator Services Agency (VOSA). It was established in 2003 to promote closer collaboration between the agencies and to develop modernised co-ordinated services in order to deliver improved customer services and value for money. The Highways Agency is an executive agency of the Department for Transport and is responsible for operating, maintaining and improving the strategic road network in England. Issues considered in the Committee's report include how the agencies contribute to departmental objectives and policy, issues of accountability and transparency, agency funding and accounts, shared systems and co-ordination.

The NAO report on this topic published as HCP 481, session 2007-08 (ISBN 9780102954159)

Dated May 2007

This report details a new approach to scrutinising the financial performance of the Department for Transport during the life of this parliament. The strategy rests on innovations agreed with the Department designed to make it easier for the Committee to compare information in the departmental annual review with that provided in the estimate of expenditure. These changes are to be welcomed as they will make it easier to hold the Government to account about the delivery of its transport policy pledges including those made in the recent comprehensive spending review. However, it is essential that in moving to a simplified structure for the annual estimate of expenditure, important detail about departmental spending is not hidden from public view. The Committee will be carefully monitoring the new arrangements to ensure that this is not the case

As part of the 2010 Spending Review the government announced a significant reduction in the budget of the Department for Transport, with spending due to be 15% lower by 2014-15, in real terms, than the Department's £12.8 billion budget in 2010-11. The Department prepared early, identifying areas for budget reductions based on good analysis. But for road users, railway passengers and taxpayers, there are many questions which remain unanswered. The Department doesn't fully understand the impact of its cuts to road maintenance. There is concern that short-term budget cutting could prove counter-productive, costing more in the long-term as a result of increased vehicle damage and the higher cost of repairing the more severe road damage. Another area of concern is rail spending. The Department spends two-thirds of its budget through third party organisations such as Network Rail and Transport for London. While information and assurance have improved over some third party spending, there is still a lack of proper accountability and transparency for Network Rail. Rail budgets aren't being reduced as much as other areas, yet passengers still face high fares. The Department hands Network Rail over £3 billion each year, underwrites debt of over £25 billion and continues to treat it as a private sector company. The National Audit Office must be allowed full audit access as quickly as possible.. Better contingency plans for dealing with threats to its planned budget reductions also need to be developed - for example if some of its planned efficiency savings do not deliver or if inflation is higher than forecast

Ministers have challenged all Departments to reduce their 2004 sickness rates by 30% by 2010. This report looks at the sickness levels in the Department of Transport and its seven executive agencies, which average 10.4 days sickness for each full-time employee (compared to a Civil Service average of 9.8 days). However the performance is varied. The central Department and four agencies have sickness levels at or below comparable organisations but three agencies have higher levels and the Driving Standards Agency and the Driver and Vehicle Licensing Agency have absence rates of 13.1 and 14 day respectively. If there is going to be a significant change there needs to be action at the corporate and individual business level. Corporately there needs to be: targets for each part of the Department, tailored to circumstances; quality standards for recording sickness with the provision of management information; a consistent framework for evaluating initiatives and sharing good practice. At a business level more could be done to ensure that line managers were aware of their responsibilities and improve intervention in long-term cases.

The 2010 spending review set a transport budget that is 15 per cent lower in 2014-15 compared with 2010-11. All areas of spending are affected by reductions, but the Highways Agency sees the biggest reduction, with a budget falling from £3.2 billion in 2010-11 to £2.1 billion in 2014-15. The Department felt constrained in altering some areas of spending, most significantly excluding from consideration the current grant to Network Rail. In a sample of 73 per cent of the Department's budget, over half of the reductions, compared to planned spending, are the result of cuts, delays to new investment or higher fares rather than new approaches to delivering the same services for less. The Department had a good understanding of the relationship between costs and benefits regarding specific transport projects such as Crossrail and national road schemes. Information was less good in other areas, the weakest being in rail. The Department commissioned work to improve its information on the costs and benefits from grants to Transport for London and local authorities. There is a risk now that a proportion of the budget reductions in road maintenance and rail budgets may not be financially sustainable. Budget reductions of £1.23 billion will be made to national and local road maintenance; however, this includes £223 million of unspecified efficiencies, risking deterioration in road quality and higher long term costs to the Department or local authorities. One year after the spending review, it is too early to assess with confidence progress on the major cost reduction measures, as most of the critical milestones against which progress can be judged lie ahead

The Department of Transport and its seven executive agencies average 10.4 days of sickness for each full-time employee (compared to a Civil Service average of 9.8 days). However the performance is varied. The central Department and four agencies have sickness levels at or below comparable organisations but the Driving Standards Agency and the Driver and Vehicle Licensing Agency have absence rates of 13.1 and 14 day respectively. On the basis of a Comptroller and Auditor General's report the Committee have examined current sickness levels in the Department and actions being taken to meet their 2010 targets. They conclude that the Agencies need a better understanding of why some staff take so much sick leave. Although there appears to be a correlation with low paid repetitive administrative jobs there are also concerns about leadership within the Department. Measures have therefore been taken to strengthen management in areas involving repetitive work.