DRIVER AND VEHICLE LICENSING (Hansard, 18 December 1975)

§ Mr. Robert Taylor (Croydon, North-West)

As this is the last debate on these Supplementary Estimates, I shall endeavour to be as brief as possible, but it is perhaps appropriate for me to express the thanks of the House to you, Mr. Deputy Speaker, for the patience you have shown tonight and to thank the Minister for his presence. I apologise if I am the sole reason for his having to stay on, but it is right that we should examine the extra expenditure which is being asked for the economic and financial administration of the driver and vehicle licensing service.

This is a very large amount of extra money and its provision has already been criticised by the Comptroller and Auditor General in the Appropriation Accounts 1973–74 and in the recent Fourth Report of the Public Accounts Committee, of which I had the privilege of being a member.

Despite criticism from these two sources, we are asked to approve £10,978,000, which represents a 30 per cent. increase on the original estimate. In 1973–74, total expenditure on these services was £22,280,679. In 1974–75 it had risen to £32,621,000 and the estimate for 1975–76 is now £46,913,000. Expenditure has more than doubled in two years.

1912 At the meeting of the Public Accounts Committee on 23rd April, the Second Permanent Secretary at the Department said: … we reckon that the running costs of the new system at 1974 prices, from 1978, will be between £28 million and £30 million a year. I know that a slight decrease in the number of staff is anticipated from 1980 onwards—the Second Secretary said it would be about 10 per cent.—but even allowing for the fact that there may be some reduction in costs, the figures in front of us tonight do not suggest that the expenditure will be contained to anything like the figures suggested by the Second Secretary. At the present rate of progress next year's expenditure is likely to be between £55 million and £60 million.

That is an unhappy story. All the estimates for this service have been wildly inaccurate and widely under-costed. If a private enterprise spent in excess of estimates in this manner it would go bust.

There is a lack of control over the scheme. According to the Comptroller and Auditor General's Report for 1973–74, when the scheme was originally envisaged the estimate was for 20 million vehicle licences a year and 3,950 personnel at an annual cost of £9,270. That figure was later revised to 5,431 personnel at a cost of £12 million, but the latest estimate is 7,961 personnel, the number of licences having decreased to 17 million. These figures demand an explanation. In an earlier debate on the Adjournment today attention was drawn to the increase in the number of civil servants throughout the country. In this service the growth is alarming. We cannot go on nodding through extra sums—within a hair's breadth of £11 million tonight—without an explanation why the money is necessary.

I shall be grateful to the Minister if he will answer one or two specific questions. Will he tell us when the scheme will be fully operative and when the duplication of offices will be eliminated. We should be given a definite date.

What is the latest estimate of the number of personnel required when the duplication is eliminated? Will the Minister give an estimate of the annual costs and tell us whether they have changed since the estimate given in evidence to the Public Accounts Committee? 1913 How many people are now employed in this department? Is the progression continuing as rapidly as it has done over recent years?

Why were the original estimates 30 per cent. under-costed? It is not long since they were produced, and they were wildly inaccurate. After such a short time the Minister comes back and asks for a further 30 per cent. over and above the large figure already approved.

Are the Department still relying on the advisers who originally estimated that a staff of 3,950 would be required and that the annual cost would be £9,270? If he is, it is time they were changed.

Does the Minister believe that the computerised system to which we have moved has diminished the number of untaxed vehicles on the road? We all know that there is a considerable number of vehicles at the kerbside not displaying tax discs.

Does the Chancellor of the Exchequer's famous ceiling on expenditure, to which he referred in his Budget Statement, relate to this project? It does not appear to do so. We have been told that there is a ceiling on expenditure in the Departments, but we are faced with an uplift of 30 per cent. for a small project in terms of the Department's overall responsibility.

Finally, I ask the Minister—I shall attach a great deal of importance to his reply—whether he has personally visited Swansea where all this money is being spent and whether he has been down there during this financial year in order to satisfy himself that this total expenditure of £46,913,000 is justified?

§ The Under-Secretary of State for the Environment (Mr. Gordon Oakes)

By leave of the House, I should like to reply. May I say how grateful I am to the hon. Member for Croydon, North-West (Mr. Taylor) for raising the question of the economic and financial administration of the driver and vehicle licensing centre?

The hon. Gentleman is not responsible for keeping me up. Another of his hon. Friends has the Adjournment debate. Consequently I am answering this debate, which is a little outside my normal scope. As a Minister in the Department of the Environment I do not normally stray into transport matters, but I hope 1914 to be able to answer some of the questions posed by the hon. Gentleman.

Dealing with his final question first, I point out that I have not visited the centre. My hon. Friend, who has recently been appointed Under-Secretary, will no doubt take an interest in the centre and may well visit it.

I know of the hon. Gentleman's interest as a member of the Committee on Public Accounts which considered this subject in April this year. I have read with interest the proceedings of the Committee and its Report. I am sure that the hon. Gentleman, as his speech clearly revealed, has also seen the Treasury minute replying to it last month.

On the centralisation of driver and vehicle licensing, the main point made by the Committee—and very fairly made—is that lessons derived should be applied to future computer projects. In particular, the Committee asks that more attention be given to preliminary studies, planning and the preparation of reliable estimates of cost. This will certainly be the case. Indeed, as long ago as 1970, in the light, among other matters, of experience of the Swansea project, the Central Computer Agency introduced a manual which is now used in all such cases and emphasises very much these points.

The Committee and the hon. Gentleman also referred to the large increase in the estimated cost of the project since its first conception in the early 1960s. The Press reports showed some misconceptions of what was entailed in these increases and I should like to deal with one or two apparent misapprehensions which were not put forward by the hon. Gentleman but which did appear in some Press reports.

Let me make it clear to the House and the hon. Gentleman that I in no way seek to excuse the poor quality of the original estimates. However, there have been suggestions—although not by the Committee itself—that there has been waste of public money. I hope to convince the House that that is certainly not the case.

My first point is that the very large money figures quoted in paragraph 35 of the Report do not represent an additional cost that has fallen upon Government funds through introduction of the 1915 new system. They represent for the most part the total staff costs of dealing with driver and vehicle licensing over the 12 to 14 years from 1968, when the firm decision to go ahead was taken, to completion of the change in the early 1980s. It is that period of time to which the figures relate.

So the figures in that paragraph do not represent a cost that would have been avoided by persisting with the old system. The old system itself required large and increasing numbers of staff, and if it had been retained its cost, totalled over 14 years, would have been similarly large. And of course the cost, in that case also, would have risen steeply over the years as wage rates increased.

My second point is that fundamental reorganisation was in any event totally unavoidable. The old system, with its records dispersed among 200 local authorities all over the country, would clearly not be able to cope with the constantly growing load upon it. It could not provide the comprehensive and up-to-date records needed to deal with evasion of Vehicle Excise Duty, which the hon. Gentleman mentioned, or with crimes associated with the use of vehicles. Those concerned looked for a system that would be more effective and, if possible, cheaper. The second objective has not been achieved, but the first objective of a more effective system is well on the way to realisation.

The main increase in estimated costs has arisen because the need for supporting staff to process and correct information going into the computers and to deal with inquiries, and so on, was badly underestimated at the early stages. Like many others who have put into service large computer projects over the past decade, both in this country and abroad, the Government have had to learn from experience not to minimise the problems of clerical support for massive centralised systems. However, the licensing operation based at Swansea is already beginning to offer the public a standard of service which compares well with the old local system and to give far better assistance to the police in the prevention of crime. It is doing this at a cost which, although the figures may seem large, is by no means exorbitant.

1916 I know that the hon. Member is also interested in the Supplementary Estimates for 1975–76, particularly the additional £11 million in Class XIII going to the driver and vehicle licensing system. Perhaps it would be useful if I first sketched the general background before dealing with the detail of that £11 million.

Hon. Members on both sides of the House, and people in the country as a whole, are all too well aware that we are living in a time of unprecedented inflation which the Government are taking very strong action to bring under control. This is not the occasion for a discussion of that action, but one inevitable consequence is increases in wages.

The Driver and Vehicle Licensing Centre is a very large-scale clerical operation, staffed by civil servants who, in common with most other workers, have been given salary increases recently. Much of the Supplementary Estimate is required to pay these increases.

Thus, sub-head A1 provides for an increase of £4.5 million, from £16 million to £20.5 million. Of this, £2.7 million is acounted for by salary increases as a consequence of the Civil Service pay awards granted on 1st January and 1st April this year. These salary increases also had consequences for national insurance contributions. A further £1.4 million went on general expenses, the bulk of it paying for the increases in postal charges in March and October.

Sub-head A2 is payments for agency services on driver and vehicle licensing. Of this, £4.4 million went to local authorities, whose staff also had a pay award in July and whose general expenses suffer like the rest from inflation; £1.9 million went to the Post Office as a consequence of a renegotiated agreement this year, approved by the Treasury, for the services at 1,800 post offices up and down the country; and £200,000 went to Northern Ireland Departments. The hon. Member will know that from 1st January 1974 the responsibility for collection of excise duty upon which registration depends, which was formerly a responsibility of the Northern Ireland Administration, was transferred to my right hon. Friend the Secretary of State for the Northern Ireland Constitution Act. We are still using the Northern Ireland staff for this function on an agency basis. They had a pay award in July this year and 1917 we have also got to pay increased general expenses and the special costs of security.

Sub-head A3 is increased costs of medical and legal services. Largely this is a consequence of the additional medical activity resulting from the "Till 70" licences to be introduced next year, and under which there will be a responsibility on drivers to inform the Secretary of State of any possible disabilities. This arrangement will mean additional medical activity and additional staff to cope with it.

The hon. Member asked, for example, about the exact date on which the full scheme would come into operation, the total staff and the annual costs. I undertake to ensure that my hon. Friend will supply that information as soon as possible to the hon. Gentleman by letter. He asked about the position on advisers, and here, too, I shall see that he is supplied with the necessary information.

It is right that there should be rigorous and keen examination of the estimates covered by the Bill in the way followed by the hon. Member for Croydon, North-West, and the whole House should be grateful to him.