PAC unconvinced by DfT grip on project costs

Meg Hillier taking no prisoners at Monday's Public Accounts Committee hearing into TramTrain…

Chair: I have to say that whatever you take from Mr Carne’s comments about the regulator—we as a Committee have been critical about the role of the regulator in the past—it is staggering that the Department did not challenge the costs more. We cannot quite believe that that happened.

Bernadette Kelly: Without question, we would provide much greater challenge and seek far greater assurance on these project costs now than we may have done back in 2012.

Chair: Can I make you an offer, Ms Kelly? The next time you are looking at a project, this Committee would love to look at it prior to the point at which it is agreed, just to have a good rummage through the numbers. I would be very happy to do that.

Bernadette Kelly: I hope that what you would see now is that there is a really rigorous process. If it would be helpful to the Committee to provide some further information on exactly the process that Mr Carne and I have outlined, we would be delighted to do so.

Chair: We would be interested to see that. As I said, the offer stands: if you have a future project that you would like us to look through in detail before it spends taxpayers’ money, we would be very happy to do that. Thank you very much.

Ouch!

PAC - Thameslink offers bright future for Pacers

This from The Man by the Photocopier...

Eye readers might be intrigued to learn that the new Thameslink rolling stock will be unrefurbished Pacers!

And all the time we thought it was going to be some wizzo-super new version of the electric Desiros from our chums at Siemens.

But the Public Accounts Committee knows better, judging by this highly appropriate picture on its website which accompanies the Committee's latest Thameslink moan (shurely "carefully researched and insightful report"? Ed).



An additional exclusive is an ERTMS semaphore. Another British first?

And where was this charming picture taken? Must be Radlett. There are certainly no overhead wires to spoil the view!

Chair of PAC on HS1

This from the Public Accounts Committee...

NATIONAL AUDIT OFFICE: The completion and sale of High Speed 1

A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:

I am yet to be convinced that HS1 will prove to be value for money. Yet again we hear that value for money will depend on uncertain benefits which have not been quantified. We will want the department to do all it can to realise the benefits and turn this sorry story round.

Compared to the staggering mismanagement of the West Coast Mainline upgrade, the department did relatively well with the construction of HS1. But that is damning with very faint praise indeed. It’s a sad state of affairs when it comes as no surprise that HS1 was based on dodgy assumptions and bad planning.

Don't be so coy Margaret, tell us what you really think!

NR public or private - PAC weighs in

This from today's Public Accounts Committee report into Reducing costs in the Department for Transport...

It is unacceptable that Network Rail is not directly accountable to Parliament and not subject to National Audit Office scrutiny.

Network Rail spends billions of pounds of public money each year, , its debt of over £25 billion is underwritten by the taxpayer and international accounting conventions show that it should be considered as part of the public sector.

Yet the Department continues to hide behind the Office for National Statistics classification of Network Rail as a private company which keeps Network Rail's debt off the public balance sheet and its spending from direct NAO scrutiny. We also note that an additional £950 million borrowing through Network Rail formed part of the Government's plans in the Autumn Statement, further undermining the Department's argument that it is an "essentially private sector" company.

As we have previously recommended the Department should provide the Comptroller and Auditor General with full access to Network Rail so that Parliament can scrutinise Network Rail's value for money.

No doubt last month's decision by the Captain of Netball to over-rule NR's Management Incentive Plan will allow the ONS to resolve this particular anomaly...

UPDATE: This from Captain Deltic...

Given that DfT can't or won't provide me with a simple spread sheet of current franchise/premium profiles in existing franchise agreements I think the PAC is barking up the wrong tree.

A quick call to ORR should provide more financial data than the geekiest of NAO wonks can handle.

A busy week for the Public Accounts Committee...

This from the PAC page on Parliament.uk...



Watchable live and on-line at www.parliament.uk

And all, unbelievably, without the benefit of the Alternative Vote!

More on the PAC report

This just in from Mutley...

Scrolling through the Letting of Rail Franchises report and paragraph 7 in chapter 1 caught my eye and may help explain a few things:

"The Department has operated with fewer staff than the Strategic Rail Authority, bringing the cost of managing franchises down from £7.3 million in 2004–05 to £5.7 million in 2007–08. Some 30% of staff had departed within two years of the change in responsibility.
The Department expects people to move on every two or three years and many Strategic Rail Authority staff had been in post for some time. The Department’s rail service delivery team does not normally recruit from the wider civil service. It recruits largely from the railway industry itself instead, and has difficulty in attracting and retaining staff because it pays salaries towards the bottom quartile of that industry."

The department expects resource to 'move on' every two to three years and has difficulty attracting and retaining staff because it pays 'bottom quartile' industry salaries.

As a result, 30% of staff have gone and operating costs reduced to £5.7m in 2007-2008.

In other words DafT franchise management costs have come down but the result is that the department is now populated by a revolving door of demotivated staff on burger-flipper wages!

But hang on a minute, is this the same department that spends £15m on consultancy fees to procure the frankenstein train which may or may not actually happen?

UPDATE: This just in from Robert Wright over at the Pink 'Un...

The section on how the DfT's franchising people weren't up to much because the organisation didn't pay enough was fascinating.

Perhaps a sign of how Network Rail may end up if the bonus-hackers get their way in future years...

UPDATE: This just in from J Alfred Prufrock...

So let's get this right.

If Coucher doesn't have the prospect of doubling his basic half a million plus a year he will either

A) Be demotivated and only go through the motions for his £250 per hour,

or

B) Say 'blow this for a game for soldiers and go and do something better paid and/or providing greater job satisfaction.

Must be hell being trapped in a job because you need the money.

I blame the ORR.

It's the system that's wrong.

They didn't need whips to get the rowers going flat out in the Greek triremes at the battle of Salamis.

But ORR assumes that the only way to get railwaymen to do a proper job is to make them dependent on bonuses for a half decent standard of living.

Prescient questioning

The House of Commons Public Accounts Committee took evidence on the 4th June into the National Audit Office's report "Reducing passenger rail delays by better management of incidents."

Rail industry witnesses included Dr Mike Mitchell (Director General, Rail and National Networks Group, DfT), Iain Coucher (Chief Executive, NR) and David Franks (MD, National Express East Coast and an ATOC Board member).

Coucher-Tiger and Franksy made a good fist of the affair showing themselves to be on top of their brief.

One small gem crept through the rather dry proceedings.

With a delicious sense of irony Ian Davidson MP (Glasgow South) asked David Franks how delays influenced the number of assaults on rail staff.

How Franksy, who was sat next to Mike Mitchell at the time, managed to keep a straight face is unclear.

Younger readers may be unaware that in 2005 Dr Mike Mitchell was accused of of verbally abusive and threatening conduct towards a member of GNER staff.

He was found not guilty.