The Network Rail - Scotland Route Utilisation Strategy: Draft Consultation

The responses below are those of members of The Chartered Institute of Logistics and Transport(UK) Scottish Policy Group who have contributed to the discussion on the Audit Scotland Report - Scottish Executive: An overview of the performance of Transport in Scotland.

The Institute is the professional body for the full range of people who are engaged in logistics and transport. This includes freight and passenger transport operators, government and local government employees, consultants and academics.

We welcome the report and the request for our views. It is pleasing that transport is recognised as having sufficient significance to be selected as the first area of Executive policy to be considered in the round by Audit Scotland. We note that this first overview and the lessons learnt from it will be reviewed to determine how similar exercises on other policy areas may be developed in the future. Before responding to the three aspects on which views are requested in the covering letter we have some general comments.

The report is very helpful in providing an overview of the Executive's transport responsibilities, its organisation, objectives, progress towards targets and the contribution being made to wider policy areas such as the economy, social inclusion, the environment and health and safety. The appendices are particularly beneficial in providing concise summaries of the Executive's Partnership Agreement, Transport Appraisal Methods and Major Projects costs and timescales.

The expenditure monitoring provides valuable information and together with progress made towards meeting targets, permits easy assessment of the Executive's performance in the different areas of activity. This is assisted by the helpful tables and graphics which also enable the various trends to be readily assimilated and problem areas to be identified. Responding to these aspects does however only partially meet Audit Scotland's remit to hold to account the Scottish Executive and public sector bodies for the proper and efficient and effective use of public funds.

The report is largely confined to statements of fact, progress made and costs incurred against the Executive's objectives, targets and budget heads. This is perhaps understandable in a first report of this nature but to be of greater benefit there should be wider consideration. This could include more comment on the merits of the approaches being followed, the extent to which exploring wider sources of finance and adopting different payment regimes might be beneficial and action which might be taken when costs incurred, and/or action now being taken do not result in predicted outcomes.

The recent report by the National Audit Office in England on Road Traffic Congestion goes further on these aspects. For example in commenting on the work of the Highways Agency the conclusions include -

1 - too much risk aversion in introducing measures used abroad
2 - poor management of some trials
3 - not using appropriate technology
4 - need for better preparation for events causing congestion.

There are several areas in the Audit Scotland report with an apparent need for deeper or broader appraisal.

For example "Concessionary Travel" (4.7-4.12) and the "higher than expected usage of free travel". We expressed the view during prior consultation that the reimbursement rate of 73.6%, representing generation of 37% appeared high. This has proved correct but contrary to the statement in the report capping overall payments will not prejudice the requirement that operators should be no better or worse off because the generated travel does not represent any loss of income. The only 'lost' payments would be in respect of any additional capacity or administrative costs which would be relatively small.

If the current levels of payment represent significant financial gain to bus operators there would be in effect a general subsidy provided by the Executive. This would be contrary to European Union requirements and it would be desirable to resolve the situation by undertaking elasticity analysis coupled with studies of experience with similar schemes and market responses elsewhere. Bearing in mind the substantial cost involved it would be helpful for Audit Scotland to comment on the way forward.

Another area of activity is "Freight Facilities Grants" (5.7-5.9 exhibit 24). For the last five years lorry miles transferred from road have consistently been little more than half the predicted figures on which grant was based. An Audit Scotland view on how this difference might be reduced in future and on partial recompense of grant by promoters when transfers do not meet their expectations would be helpful. Bearing in mind 'mileage removed amounts to less than two per cent of total heavy goods vehicle traffic' (para.14, page 4) a view from Audit Scotland on whether the grants represent good value for money would also be beneficial.

If Audit Scotland wishes to discuss the points we have raised or other areas where more extensive investigation would appear to be fruitful we would be pleased to respond. With regard to the three aspects on which views were requested in the covering letter.

1. Have the main issues facing transport in Scotland been captured or are there any other areas which should have been captured?

The main issues have generally been identified when considering transport as a separate entity but more attention should be given to the extent that capital and revenue budgets and expenditure therein relate to stated policies and objectives, i.e. monitoring should not just be against the Executive's parameters.

A particular aspect with capital projects is assessment of priorities and expenditure allocations against the findings from STAG evaluations. There is also a need to identify if best value for money is being obtained i.e. when major cost increases arise, as for Aberdeen Western Peripheral Road to ensure the revised project is fully justified rather than simply relying on subjective comment as in Appendix 3. A comparison of current decision making in such circumstances with the requirements formerly imposed by the Treasury would be beneficial.

A wider issue is whether use of PFI, PPP or other private finance initiatives represent best value to the taxpayer over the life of projects. It is recognised this topic extends over several other Executive policy areas but the longer term financial implications can be particularly significant for transport investment. An Audit Scotland view on whether presentational benefits arising from off balance sheet accounting and meeting Treasury targets compensate for the often higher longer term expenditure when compared with conventional public sector borrowing, would be of value.

The interaction of transport activity with other areas of Executive activity should also be addressed. It is hoped this will apply when overviews are undertaken of other areas of Executive policy e.g. when rationalisation and/or relocation of health facilities take place are the impacts and costs for transport taken fully into account. Similarly, do changes in priorities and budgets for transport, properly take into account the impact in other areas of activity such as policing and crime?

There is a need for a broader overall policy audit embracing the transport and economy linkage and the interaction with social need, sustainability and the environment.

2. Is focusing on the Executive's performance against its objectives and performance measures a useful approach to developing overview reporting?

This is a useful approach as a beginning but more extensive analysis in terms of both breadth and depth is required if Audit Scotland is to properly fulfil its remit. The report highlights deficiencies in the Executive's current monitoring (e.g. para.7, page 4; para.18, page 5). It would be desirable for Audit Scotland to be more pro-active in giving advice on how monitoring should be undertaken to overcome those deficiencies.

A fundamental aim should be to assess the appropriateness of the Executive's objectives against its stated policies in the context of its defined strategies. It would be sensible for this to be done as the strategy is refined; in particular with the revised strategy which is anticipated shortly. Targets should then be considered to ensure they represent a sensible measure of movement towards and achievement of objectives. Both objectives and targets should also be examined to ensure they relate to and are consistent with those used in other spheres of Executive activity.

There should also be consideration of the extent to which movement towards targets is a result of stated policy initiatives or of related actions e.g. increased bus patronage has arisen largely from introduction of more attractive concessionary travel rather than principally from improved bus services.

The legitimacy of payment regimes and grant awards should also command attention as referred to earlier with the examples related to concessionary travel and Freight Facilities Grants.

3. To what extent should Audit Scotland review the activities and performance of other organisations, such as local authorities in contributing to the Executive's objectives?

In principle it is desirable that Audit Scotland should undertake wider reviews for all public bodies. In practice this would be very demanding and would require extensive resources. On balance we feel that the more extensive work we have suggested should take precedence.

For non Executive activity the recently established Regional Transport Partnerships probably deserve priority attention if resources permit. This might be in respect of particular initiatives or issues where a need for attention has been highlighted.

For local authorities it may be possible for COSLA to be utilised in collecting and collating information. Attention might be directed to areas of activity where unexpected trends are identified and/or to particular authorities. Where Executive monitoring highlights particular issues this might stimulate consideration of related local authority activity.

It is hoped that the views expressed above are of assistance.