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The Work of The Department for Transport's Executive Agencies - Driver and Vehicle Operator Group and The Highways Agency (HC 907-i)

Transport Committee 8 Feb 2006

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Evidence given by Mr Stephen Hickey, Director General, Driver and Vehicle Operator Group, Department for Transport; Miss Rosemary Thew, Chief Executive, Driving Standards Agency (DSA); Mr Clive Bennett, Chief Executive, Driver and Vehicle Licensing Agency (DVLA); Mr Paul Markwick, Chief Executive, Vehicle Certification Agency (VCA); and Mr Stephen Tetlow, Chief Executive, Vehicle & Operator Services Agency (VOSA).

Q38 Mrs Ellman: Concerns have been expressed to us that you do not have enough staff to deal with enforcement particularly as enforcement is becoming increasingly important. Is that a concern to you?

Mr Hickey: I, like anyone, would always happily have more staff. It would be foolish not to say that and we are of course under pressure on our head count and all sorts of different things, so the efficiency drive is quite an important one for us. What we are trying to do is to use efficiency savings not only to achieve absolute savings, because that is right and proper, but also to free up resources for high priority things, and that does include enforcement and, as I say, Stephen could talk about in VOSA in particular how that is being done.

Q39 Mr. David Clelland: Does that mean you are under-staffed? You gave us a long answer but what is the answer to the question?

Mr Hickey: The answer is that we, like anyone coming in front of you would say, could always use more staff.

Q40 Mr Martlew: No, they do not actually.

Mr Hickey: Well, we could use any number of staff.

Q41 Chairman: I think the point is the enforcement bit. If you are going to create 109 new posts for enforcement officers, are you going to create those at the cost of losing other posts?

Mr Tetlow: We are intending to create those particular 109 posts by rediverting staff from back office jobs onto the front-line so they will be cost neutral.

Q42 Chairman: That is fine of course until somebody wants some information that relies on back office staff, is it not?

Mr Tetlow: In this case the way we are doing it is by centralising a lot of our operations from around the country, for example our licensing operation, into one place, which will be in Leeds.


Q85 Mr. David Clelland: I have got a question specifically to Miss Thew on the Driving Standards Agency. According to information supplied in the Committee, 17 to 24-year-olds hold only 11 per cent of licences but they are involved in 25 per cent of accidents annually in which someone is killed or seriously injured, and drivers aged 16 to 19 have 16 accidents per 1,000 licence holders, compared to just six per 1,000 licences for drivers aged over 25 years, and male drivers aged 17 to 20 are ten times more likely to die in a collision than for men aged 35 to 54. What is your Agency doing about this?

Miss Thew: This is essentially a problem with the novice driver and we do recognise that this is the case and we are very concerned about it. We are working very hard to try to improve the attitude of people in learning to drive because we do believe that if you can influence people's attitudes even before they start to learn, you can make sure that they are better protected and it will provide better protection as far as the public is concerned once they have passed their test.

Q86 Mr. David Clelland: If you can influence their attitudes. How are you going to do that?

Miss Thew: We are working with people in schools, for example. We have a programme which we called Arrive Alive which is targeted at the age group below 17 in order to make sure that people understand their responsibilities once they have passed the test. We are increasingly trying to make progress in ensuring that people understand that passing the test is only the first part of safe driving for life. This is going to be our future agenda. We also have a programme called Pass Plus. Pass Plus is designed to ensure that people who have passed the test are exposed to things that they may not have experienced during the course of their learning. For example, driving on motorways, driving in the dark and driving in adverse weather conditions. The problem of novice drivers, you are absolutely right, is a really big one and it is certainly something we want to get engaged in.

Q87 Mr. David Clelland: Are you able to measure what progress, if any, you are making or is it too early to say?

Miss Thew: I think it is too early to say. Certainly what I would like to do - and I have been with the Agency for four months now and it is an area of work ---

Q88 Mr. David Clelland: So you have not done enough in that time, have you!

Miss Thew: That is right and it is an area of work I really do think that we need to pick up on and I will be pleased to report back to the Committee at a later stage.


Q130 Mr. David Clelland: Could I continue my questions on the DSA. I was asking Miss Thew some questions about the Driving Standards Agency. We talked about problems with younger drivers. Are there any specific problems with older drivers now we have got so many people living to a grand old age?

Miss Thew: I think this is a very interesting one because in some cases people could have taken the test at 17 and still be driving 50 or 60 years later. I think that is an area that I would like to look at to see whether or not there is anything that we ought to do.

Q131 Mr. David Clelland: Is that based on specific problems that you have come across?

Miss Thew: The research suggests that accident rates do increase towards the late 60s and early 70s and then can increase quite significantly beyond that.

Q132 Mr. David Clelland: Right. You say you have been at the Agency for four months now.

Miss Thew: Indeed.

Q133 Mr. David Clelland: What are the other main areas of work apart from the two we have discussed which you feel need to be done in the Agency?

Miss Thew: May I just set a little bit of context. We spoke earlier about the Agency's targets and one of the Agency's targets for this year was a six-week waiting time for practical car driving tests. We started to run into difficulties with that around about 18 months/a year ago and a great deal of the preoccupation within the Agency has been recovering that target. I am very pleased to be able to tell you that at the moment we are running at five weeks. There are variations between some sites but that is the average waiting time now. What that has meant is that we have deployed resources to the recovery of that target and some other areas of work, I am afraid, have not been taken forward quite as much as we would like to see. So we are falling short on the delivery and achievement of some of our other target areas. I would also like to start thinking much more radically about the way in which we make a reality of our responsibilities for safe driving and ensuring road safety for all levels of road users. That is the novice driver, as you have already mentioned, right the way through and including remedial driving. That would be my agenda over the course of the next year or so.

Q134 Mr. David Clelland: Some research has been undertaken into the way people learn to drive and you touched on it earlier where you talked about attitudes, behaviour, involvement in crashes and the various DSA programmes. How is all this proceeding and what ---

Miss Thew: I am sorry?

Q135 Mr. David Clelland: The research into how people learn to drive and their attitudes and behaviour.

Miss Thew: We have a cohort study going on at the present time. That has been running for round about a couple of years and we expect to see the findings starting to emerge during the course of this year, and certainly I will be very anxious indeed to look at that and to see what we need to take on board there.

Q136 Mr. David Clelland: What about road safety across Europe? What role do we play there? Are we ahead of the game?

Miss Thew: We are members of what is called CIECA, which is a European organisation. We do contribute quite a bit and we are actively involved with them.

Q137 Chairman: Forgive me Miss Thew, but we are taking a record. Is that the Commission Internationale des Examens de Conduite Automobile?

Miss Thew: That is absolutely right, Chairman.


Q189 Mr. David Clelland: I have noticed that Mr Markwick has not spoken at all during the whole of this discussion. I am sure that is not because he is a shy person. I assume it is because nothing that has been said up to now is particularly relevant to his department. Therefore I wonder why the Vehicle Certification Agency is part of the DVO Group or is it just that the Department has nowhere else to put it?

Mr Markwick: The VCA covers type approvals before they are registered on the road. Part of that process relates to taking things like CO2 figures. DVLA does not register vehicles unless they are approved for use on the roads. The DVLA needs VCA information for registration. It also needs the information in terms of the vehicle excise duty as well. The VCA works very closely VOSA on approvals, particular for trucks and things like that. There is very good contact.

Q190 Mr. David Clelland: What about the operating deficit which your agency has been running for the last three years? The reasons given for this were apparently: predicted income from DfT being lower than expected and MSC; and higher debtor write-offs. Could you explain that?

Mr Markwick: I would love to be able to share that with my agency as well. VCA is a relatively small agency. Therefore, any slight hiccup in revenues can have quite a big effect. On the DfT funding, there is an enforcement budget that DfT administers, which VCA delivers on or operates to. Quite late in the year 2004-05, the Department decided not to spend all of that budget. We had already incurred costs which are costs on labour. They held back a bit of the VCA enforcement budget. There were some write-off costs or liability costs with the demise of MG-Rover. You will know as well as anybody that happened right at the back end of the financial year. We had £50,000 worth of liability, a mixture of type approval work and managing system work. We could not legislate for those.

Q191 Mr. David Clelland: Your forecasting then gets much brighter and you think VCA will return to its surplus situation within three years. How can you be so confident that that will happen?

Mr Markwick: We work on a commercial basis. Of course I cannot sit here and say I am one hundred per cent confident that in year X I am going to deliver Y amount of surplus. I can tell you that our income, our revenue, is 14 per cent up this year on last year and our costs are up between 11 and 12 per cent. As long as our revenue is rising faster than our costs, then we should be on the glide path towards a surplus.

Q192 Mr. David Clelland: Presumably you have identified what risks there might be to prevent you reaching that happy position. Can you share with the committee what they might be?

Mr Markwick: The risks are similar to any commercial type operation, an engineering surplus type organisation. You may remember back to when my predecessor gave evidence to this very committee; he talked about potential slippages in manufacturers' product launches. VCA, in terms of the activity it generates, fees from manufacturers, happens right at the end of the vehicle engineering process. If there is a hiccup in that engineering process, which is nothing to do with us (it is down to the engineering process), then that will delay the certification and final approval side. That is a risk. To mitigate that we are trying to spread our net so that we have a larger customer base. We have been working hard to increase our globalisation, particularly over the last couple of years, and that is working. If we are less dependent on fewer companies, then we are trying to mitigate that risk.

Q193 Mr. David Clelland: You say that the Agency expects to double its expenditure by 2007-08 against a 44 per cent predicted increase in income.

Mr Markwick: I do not remember that.

Q194 Mr. David Clelland: This is in your evidence, is it not? You have a pattern of falling expenditure for the last three years and expenditure is expected to rise again in 2005-06 onwards. In particular, a significant rise is expected in 2007-08, a 25 per cent increase in payroll and 141 per cent increase in other expenditure.

Mr Markwick: I am sorry, but I am not familiar with those figures. I would need to come back to you on that.

Q195 Mr. David Clelland: You can come back on that. What level of foreign exchange loss did the Agency have in 2004/05?

Mr Markwick: It has changed a lot. It was in the order of £50,000.

Q196 Mr. David Clelland: How do you manage overseas bank accounts in order to minimise that?

Mr Markwick: It is very difficult. We are not like, say, a big bank where we can buy forward on the exchange and mitigate those losses. We try not to shift money around. Where we have that loss in principle, we try not to take that loss. We manage very carefully when we bring money back, if we need to. If the exchange rate is adverse for us, we will not shift the money; we will leave it in the local account funding the operation in that local area. Where you have our headline figures, we do not necessarily take the actual cash loss; that is a provision.

Q197 Mr. David Clelland: We are told that you are looking at other methods to mitigate risks, such as invoicing in sterling.

Mr Markwick: We do, where we can, invoice in sterling. If our customers are not prepared to pay in sterling, then there is little we can do. I repeat that we operate in a commercial environment. If we do not give our customers what they need to buy, then they will go and buy somewhere else.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

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