LIST OF CONCLUSIONS AND RECOMMENDATIONS
(a) It is inconceivable that the Treasury
did not take a meaningful and material role in such a significant
financing commitment that will have ramifications for public finances
over a 30 year period. Consequently, we are appalled that neither
Treasury Ministers nor officials would appear before the Sub-Committee.
That refusal threatens to undermine the Departmental Select Committee
system. Those Ministers who make decisions must be accountable
to Parliament for them (paragraph 64).
(b) We conclude that it is inevitable
that the PPP will lead to significant and expensive disputes over
the contracts and between staff and employers (paragraph 74).
(c) The Government must provide the funds
to meet the target of a 15 per cent increase in capacity by Year
20 of the 30-year programme. The potentially vast cost to London
and the nation's economy of failing to meet that target justifies
a considerable increase in Government subsidy (paragraph 75).
(d) Our considerations show that the shortage
of funds has already constrained capacity improvements and it
is likely, therefore, that risk transfer has also been limited.
If little risk can be transferred to the private sector then the
rationale for the PPP is seriously undermined (paragraph 76).
(e) A number of key factors in the assessment
of value for money are subjective and difficult or impossible
to quantify. There are clear differences in opinion between experts
in the engineering, management and finance fields involved in
the process about these factors. There is also considerable risk
that the cost of the project will be inflated after the first
review period where prices are not fixed. This risk has been amplified
by decisions to delay significant amounts of capital spending
to these later periods when they will be more 'affordable'. We
note that the Secretary of State accepted that it will not be
possible to provide a definitive answer regarding the value for
money of the bids and we therefore recommend that the Government
does not approve the PPP deal (paragraph 77).
(f) We recommend that the Government should
develop alternatives to the PPP in conjunction with the Mayor
and Transport for London (paragraph 78).
(g) Investment decisions to upgrade the
network should be undertaken in parallel with the handover of
the Underground to the Mayor (paragraph 79).
(h) We recommend that, whatever scheme
is chosen, the Government provides the same type of long-term
funding commitment to the Underground as was envisaged under the
PPP (paragraph 80).
(i) It is essential that the Government
and the Mayor of London revise their estimates of the contribution
of fares to the investment programme. The Government must commit
to funding any resultant financial shortfall and by doing so ensure
that it neither compromises the investment plan nor creates pressure
for above inflationary fare increases (paragraph 81).
(j) We welcome the Strategic Rail Authority's
decision to fund completion of the East London Line extension
by 2006. We recommend that the Government continues to support
Cross Rail and the Hackney-SouthWest Line as part of the Mayor's
transport strategy (paragraph 82).
(k) We therefore recommend that the Health
and Safety Executive give themselves more time to establish whether
Version 3.0 of the Safety Case produces safe working practices,
to allow operational difficulties to be more clearly identified,
before considering approval of Version 3.1. We find it disgraceful
that the Health and Safety Executive has only been given one month
to reach such important conclusions (paragraph 83).
(l) We recommend that the Government fund
the increased monitoring costs to ensure that the public sector
has sufficient control over safety and performance monitoring
of the Infraco operations (paragraph 83).
(m) The establishment and maintenance
of a complete register of all assets is a priority for the Underground
network and should have preceded the PPP contract negotiations
(n) We recommend that the arbiter's office
be established early in the PPP contract and well resourced
to ensure that the dispute resolution mechanism is genuinely independent
of the parties involved (paragraph 83).
(o) We recommend that London Underground
and the Infracos enter into an agreement to develop combined training
programmes to minimise the potential divergence of working practices
and standards (paragraph 83).
(p) We recommend that London Underground
and the Infracos work closely with the Trade Unions and Professional
Institutions and the Strategic Rail Authority to develop a National
Rail Academy (paragraph 83).
(q) We recommend that Transport for
London be given lead responsibility for the co-ordination of major
upgrades on the Underground to reduce disruption to the travelling
public (paragraph 83).
(r) We recommend that the Government should
not pursue a mixture of public and private Infraco operations
if one of the bids fails. The benefits of retaining all of the
three Infrastructure companies in the public sector as a single
integrated operation must be re-examined (paragraph 84).
(s) The initial forecasts that the PPP
would provide a saving of £4.5 billion over public sector
management were inadequate and flawed (paragraph 85).
(t) The Government should follow the National
Audit Office's advice to address the affordability and funding
provision for infrastructure projects before deciding on the financing
mechanism (paragraph 85).
(u) Greater effort must be made to divulge
those elements of such contracts that do not directly affect the
Government's negotiating position to the public at an earlier
stage (paragraph 85).
(v) A principal cause of the atrocious
state of the London Underground has been the failure of the Treasury
to provide adequate long-term funding over a number of decades.
The Treasury is also, according to the evidence which we received,
one of the principal instigators of the PPP scheme. We were therefore
appalled that despite its leading role it refused to make itself
accountable to Parliament by giving evidence to the Sub-Committee
during the inquiry. This refusal threatens to undermine the Departmental
Select Committee system. Those Ministers who make decisions must
be accountable to Parliament for them (paragraph 86).