Memorandum by the Royal Borough of Kensington
and Chelsea (LU 09)
The Royal Borough welcomes the opportunity to
submit this memorandum to the Committee for the inquiry by its
Transport Sub-Committee into London Underground. It is an officer
submission reflecting the views of the Council.
The terms of reference appear to be comprehensive
and the distinction between the conditions under which the Government
should sign the contracts and how to ensure that implementation
maximises the benefits and minimises the disadvantages of the
PPP is helpful. Our comments on the particular terms of reference
are as follows:
1. THE DESIRABILITY
Comment: Such an audit is considered essential
but does not go far enough. The Council has written to the National
Audit Office (NAO) asking that their proposed review of the outcome
of the PPP negotiations be brought forward to before the final
contracts with the "Infracos" are signed. It is understood
that the NAO will shortly make a decision on whether to bring
forward the part of this work that relates to the value for money
of the PPPessentially updating their December 2000 report
on the financial analysis of the PPP. This is welcome, given what
appears to be the rising level of Government financial support
needed for the scheme and the danger that this will drain national
resources from other parts of TfL spending, including that
on the Underground not related to the PPP contracts and resources
allocated to the London boroughs via TfL.
However, in their December 2000 report, the
NAO also stressed that London Underground should continue to assess
a range of factors in addition to the 'public sector comparator'
used to test value for money, namely:
The strategic risks and benefits
of the PPP
The proposed contractual framework
and incentive regime
How well a long term partnering relationship
between all the parties can be established
Which option will best ensure effective
The Council is concerned that when faced with
criticism of the value for money of the PPP, London Underground
(LU) tend to hide behind these other factors. It is, therefore,
essential that the NAO should bring forward these wider aspects
as part of their proposed review of the outcome of the PPP negotiations
is order that an independent audit is carried out into these aspects
prior to signing the contracts. This could possibly form part
of the Sub-Committee's inquiry, which could potentially cover
these matters fully within its terms of reference.
2. HOW MUCH
Comment: The Council would like to have a comprehensive
picture of the actual physical improvements to the system that
are written into the contracts. The open letter of 17 April 2001
from Keith Hill, which included two documents "What The PPP
Will Deliver" and "The Offer To Londoners", as
well as a subsequent DTLR Factsheet, dated 24 July, headed "Some
Common Misconceptions About The Future Of The London Underground"
are not at all comprehensive. It is understood that 'LU will set
the strategic priorities for investment' but the Council is uncertain
what exactly this meanshow much discretion is being given
to Infracos in deciding between improved maintenance regimes or
new investment in meeting defined "outputs"? The Council
has been concerned about the performance of the Circle and District
Lines for some time and it has long been accepted that the renewal
of its signalling is long overdue. Yet the document "What
The PPP Will Deliver" only refers to an increase in the capacity
of the District Line of 11.8 per cent by 2019 by the latest, with
no indication of how this is intended to be achieved.
3. THE ALLOCATION
Comment: The Council's main concern relates
to the risk taken on by the public sector and whether this might
lead to the problem referred to earlier, of additional costs on
the Government draining national resources from other parts of
TfL (and consequently borough) spending. This problem was
reflected in the Jubilee Line cost overruns, drawing resources
from other areas of LU spending.
4. THE OPPORTUNITIES
Comment: This would appear to be essential given
the worries that have been expressed about the scheme and the
fact that it is untested. It would give some comfort to those
concerned about these matters. The DTLR factsheet `Some Common
Misunderstandings About The Future Of The Underground' refers
to all the PPP deals being open to NAO scrutiny and to the Public
Accounts Committee. If neither of them scrutinise the outcome
of the negotiations before contracts are signed it is particularly
important that the contracts can be adjusted after they are signed,
given their long duration.
Comment: Following a meeting with London Underground
it would appear that the Council's concerns relating to safety
and the monitoring of performance may have been resolvedin
particular the proposed `fault attribution process' seems to have
merit. Other concerns about the working arrangements remain relating
to the split in responsibility between track and train.
6. SETTING AND
Comment: The Council is concerned that the performance
indicators that it receives from LU should be disaggregated by
line, including branches of the District Line. At present there
is very little useful information that is provided on separate
services such as the Circle and Hammersmith and City Lines.
The Council has also been unhappy at the way
information on the performance of the Underground has increasingly
been aggregated which has the effect of masking some of the serious
problems that exist on the system (eg the chronic state of the
District Line's signalling). Specific and separate information
on track, train and signalling performance is an essential part
of any performance monitoring package for the Boroughs.
Comment: The Council is concerned about congestion
at a number of stations in the Royal Boroughin particular
High Street Kensington, Sloane Square and South Kensingtonand
finds that very little information is available from the PPP papers
that have been published by the DTLR. There appears to be no programme
and a reference to `major enhancement agreements', only lists
five schemes referred to in "What The PPP Will Deliver"
as being already in the pipeline for the whole of London. The
only scheme in the Royal Borough is at the Harrods end of Knightsbridge
Station on the Piccadilly Line and this is nearly completed and
not being funded through the PPP process. In respect of increasing
the capacity of the network, the section "Train Service Capacity"
of the document "What The PPP Will Deliver" lists a
number of percentage increases in the capacity of each of the
Underground lines (with the exception of the Circle Line) without
saying what work this entailsthe Council is very concerned
that the increase in capacity of the District Line is achieved
so late (11.8 per cent increase by 2019 at the latest) and is
concerned at the implications of this for its re-signalling.
In respect of extending the network, it is understood
that this is outside the scope of the PPP contracts. As mentioned
already, the Council would be concerned if the cost of the PPP
contracts were to drain resources for such schemes.
Comment: No Comment.
Comment: The Council appreciates that the safety
case has received a lot of attention. It has continuing concerns
about the dangers posed by station and platform overcrowding.
Transportation and Road Safety Group
Transportation and Highways Department