Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence


Memorandum by Capital Transport Campaign (LU 04)

  1.  We strongly advocate that there should be an independent audit prior to signing the contracts to ensure value for money, and also that the results of this audit be made public, at least in part, to all the key stakeholders in London Underground before the contracts are signed. Recent developments corroborate this position.

  In August the Deloitte Touche report was published, with deletions of items said to be commercially sensitive. This report compared the cost of the PPP with other ways of modernising the Underground and argued that the claims made by PriceWaterhouseCoopers for the efficiency of the PPP were based on topping up the public sector comparator in favour of the PPP through a number of adjustments which totalled £2.5 billion, Non-accountants may well think that this approach to the public sector comparator stacks the books in favour of the PPP. If reputable firms of accountants disagree so dramatically on whether the PPP is value for money, then a third independent audit needs to be made, prior to signing the contracts.

  We note, however, that earlier this summer, Mr. David Jamieson answered a parliamentary question about "the full value for money analysis" with respect to the PPP (Hansard, 16 July 2001, 9-10W), stating that the Government's response is:

    "that the results of the full value for money analysis will be made publicly available once contracts have been signed. To publish the results any earlier would undermine London Underground's commercial position and damage its ability to achieve best value for the taxpayer."

  We advocate that the Government reconsider the position stated here for several reasons. The publication of a value for money analysis only after contracts have been signed will yield a foregone conclusion—that the contracts signed were best value for money—and this will not carry conviction; as Mandy Rice-Davis once said: "they would say that, wouldn't they." Since it was possible to publish the Deloitte Touche report with commercially sensitive material deleted, this provides a precedent for publishing the results of a genuinely independent audit on a similar basis.

  As Will Hutton of the Industrial Society has argued(Observer, 26 August 2001), commercial confidentiality is the figleaf which the Government and London Underground have used to keep negotiations over the PPP behind closed doors. We think that an independent audit prior to signing the contracts might well work to enhance London Underground's bargaining position by identifying areas where value for money could be improved. As things stand at present, London Underground's many stakeholders are being asked to accept as an article of faith that its senior management will achieve best value for the passenger and the taxpayer in negotiating with consortia involving a number of big companies with extensive negotiating experience and skills which they deploy on behalf of their shareholders.

  The Deloitte Touche report has also argued that because of the arrangements for periodic review it is only possible to conduct a value for money analysis for the first 71/2 years of the PPP, which is planned to run for 30 years, stating that "these periodic reviews allow LUL's payments to the Infracos to take account of changed circumstances and cost increases which an `economic and efficient' Infraco would experience." (p5) This may be the formal principle for these periodic reviews, but it is hard to see how it can be guaranteed that they will operate in accordance with this principle. It is not at all clear that either LUL or Transport for London could enforce this condition and restrict changes in payments accordingly.

  2.  Underground passengers and taxpayers have been kept in the dark about the precise nature of the PPP contracts; they will foot the bill one way or another if there are subsequent problems such as costs being higher than originally anticipated. The prevailing secrecy means that they are effectively being asked to sign a blank cheque while blindfolded. It has been observed that only advisors on the Government's payroll recommend the PPP, and that independent commentators across a wide range of political views do not think that the PPP will accomplish its stated aim of modernising the Underground in a safe and efficient way. Under these circumstances the concerns and fears of the travelling public will only continue unless further information about the nature of PPP contracts is made public before they are signed

  Recent developments in connection with Railtrack being taken into administration reinforce our concern that passengers and taxpayers should know what the Government and London Underground are signing up to. It has been argued that Railtrack was fundamentally unworkable, because it did not have and could not raise the resources required to maintain and modernise the rail network. The Industrial Society's review (p129) was concerned that the bidding consortia were too small to do the job. This is a matter which should be settled before contracts are signed.

  3.  In the past decade, measures of 'customer satisfaction' and performance targets have all too often been a flexible friend for London Underground. London Underground has repeated their untenable claim that customer satisfaction increased between 1990 and 1995, using measures of customer satisfaction that have been changed annually; this would not be acceptable in advertising, and it should not be acceptable from the provider of a public service.

  Other performance measures have been withdrawn from public view. We have traced the withdrawal of Passenger Charter figures in Capital Transport Bulletin 98 (May-June, 1999). We are particularly concerned that figures for the incidence of attributable delays of 15 minutes or more, on a line by line basis, are now no longer available. London Underground was only willing to provide annual figures for the average number of such delays in a four week period, in response to a parliamentary question(Hansard, 363-364W, 19 July 2001). We think that this is an important measure, because passengers can claim compensation in the form of vouchers for such delays. We are not persuaded that London Underground's concocted statistic for weighted journey time provides an adequate alternative to this measure: it deals with an average journey time, whereas what matters to passengers are those tube journeys on which they are significantly delayed, eg for 15 minutes or more. We think that this information should be published, as it was until 1996. We would also like to see a survey to establish the extent to which passengers are aware of their entitlement to claim for such delays. If it should emerge that significant numbers of passengers are not aware of this entitlement, we recommend that appropriate publicity be given to this right.

  We are concerned that information about other performance measures is only made public as a result of parliamentary questioning. One such example is the information about the availability of escalators on a line by line basis. (Hansard, 20 July 2001, 529W). On occasion, information has been provided in an incomplete form, making comparison on a year by year basis difficult, to say the least: the figures for train, track and signal and points failures were originally given to Parliament only for three-quarters of the financial year 2000-01 (Hansard, written answer to question no. 159435, 8 May 2001), and further inquiries were needed to obtain figures comparable to those given for previous years. We think that London Underground should be more forthcoming about its performance, and also that it should substantiate claims such as those made in its most recent Annual Report, where it was stated that the Central Line and the Northern Line were "the best performing lines in 2000-01."

  We recommend that there should be a set of key performance measures which are used for a period such as a decade, to enable comparisons to be made; we would like to see these reported on a line by line basis as well as for the system as a whole—passengers are entitled to know how the line or lines they most commonly use are performing. This set should include attributable delays of 15 minutes or more; the percentage of trains in service at peak times and outside peak times; the percentage of escalators and lifts in service; waiting time at ticket offices in the morning and evening peaks; train, track, and signalling and points failures. We should also like to see appropriate measures of the extent of passenger crowding at peak times on a line by line basis, with respect to actual performance: the figures published in Hansard (22 March, 2001, 283 W) gave peak time passenger loadings on the assumption that the system is operating as scheduled, without breakdowns; because of the higher frequency of scheduled peak time services, infrastructure failures have a greater impact on these services.

  At present, performance targets for London Underground appear to be aspirational rather than enforceable. London Underground's latest Annual Report stated that "customer satisfaction surveys...did not attain the demanding targets set by the Government," but omitted to mention that its performance on four of the five targets had deteriorated in the past year.

  4.  Capacity on the existing network can best be increased by systematically planning the necessary modernisation of the infrastructure. This requires an inventory of what needs to be done and developing an overall plan on the basis of the inventory. It is hard to see how this approach can be adopted under the PPP, where there will be infrastructure companies charged with modernising part of the Underground's infrastructure. Increasing capacity within the existing network is a matter of great urgency, because of the serious safety problem of present levels of overcrowding, particularly at peak times. We think that it requires unified management control, which is not on offer under the Government's proposals. This is a serious limitation from the point of view of value for money as well as for safety.

  With regard to extending the network, we welcome the planning consent for a southern extension to the East London Line, and we would like to see priority given to the proposed northern extension to this line, as well as to other possible southern extensions. Developing the East London Line is a relatively inexpensive way to extend the capacity of the existing network; it can be achieved in a fairly short time frame, and it will benefit areas of London which have poor transport links and where there is recognised social deprivation.

  5.  Our greatest concern for passenger safety is to do with the extent of overcrowding on tube trains, particularly at peak times but also outside peak times. Existing levels of overcrowding, when there is a rapidly increasing number of infrastructure breakdowns is a volatile combination for safety. It requires constant vigilance from front-line staff and rapid response to any kind of disruption to services. This is a very heavy responsibility for station staff, particularly at heavily used stations such as King's Cross, Oxford Circus and Liverpool. Street.

  Passenger safety for commuter journeys to and from work, and also for late night journeys home from central London, should require that there are sufficient staff present on stations to ensure that passenger congestion does not become a safety risk. We have received reports from commuters of being part of an almost immovable mass of passengers, with no staff in sight. Some of the video evidence compiled by a member of the Greater London Authority for the GLA's Safer Journeys Home Scrutiny Committee gave an alarming picture of late night passenger crush at Leicester Square station, with no staff in sight.

  Overcrowding was recognised in the Fennell Report into the King's Cross Fire as one of the three principal dangers to passengers at stations. (p154). Dr. Tony Ridley, then chairman and managing director of London Underground said that:

    "I have tried to stress that nothing is more important that the problems arising from the very high congestion that currently exists on the system."

  One recommendation in this report (no. 62) was that "reports of the most serious incidents of congestion must be made to the Board of London Underground and to the Railway Inspectorate." There should be evidence of the extent to which London Underground has reported such instances to the Railway Inspectorate.

  We are also concerned that insufficient attention has been given to stakeholder concerns about safety in connection with the PPP. The Industrial Society's review of the PPP recommended that "the HSE invite all interested parties to submit their specific concerns about the PPP's safety regime." (p17) This may not have been practicable in the light of the resources available to the HSE.

  The procedure adopted by the HSE was to require London Underground to organise a stakeholder meeting, with the HSE as an observer at this meeting. The aim of this meeting was "to identify the significant findings (both strengths and weaknesses) of relevant stakeholders to LU and the PPP" (Work Element 15, An HSE Review of London Underground and its preparations for the Public-Private Partnership, 5 December 2000). This meeting was originally scheduled to take place before the end of February 2001, and was finally arranged, with relatively little notice given, for 19 September 2001. The meeting was by invitation only, and at least one established passenger group with a safety concern did not receive an invitation: the Campaign for Safer Underground Platforms. The number of stakeholders present was not large: we estimate that there were between 100 and 150 to represent the 3.25 million passengers who use the Underground daily. The time available for stakeholders to express their concerns about safety was extremely limited: less than an hour in a two-hour meeting. It is the view of Capital Transport Campaign that the atmosphere generated by London Underground at this meeting was inhospitable to the expression of genuine concerns about safety and in some respects intimidating; this approach is hard to reconcile with London Underground's frequently repeated mantra that safety is their top priority. This should include respect for the concerns of passengers and stakeholders about safety on the Underground now and under the PPP.

September 2001


 
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