Committee
Audit Committee, 10 Dec 2008
10 Dec 2008 · S3 · Audit Committee
Item of business
Section 23 Reports
“The First ScotRail passenger rail franchise”
Could you leave that for the moment because other members wish to come in?Mr Black, it is astonishing that you say that Transport Scotland did all the work, and got all the evidence, but did not bother to produce a business case. That is not for you to answer, but it seems astonishing that information was there that could have led to the production of a business case, which might well have satisfied objective observers.
In the same item of business
The Convener:
Lab
Item 2 is a briefing from the Auditor General for Scotland on the report "The First ScotRail passenger rail franchise".
Mr Robert Black (Auditor General for Scotland):
Good morning, convener. My report on the First ScotRail passenger rail franchise was published on 28 November. It looks at Transport Scotland's management of...
The Convener:
Lab
Thank you very much. I want to clarify one of your comments before I go into some of the wider issues that you have identified. Transport Scotland felt that ...
Mr Black:
Yes.
The Convener:
Lab
We will perhaps return to that at some point.On governance, what would be your view of a Government body or agency failing to ask for a business case in such...
Mr Black:
This is the largest contract that is let by the Scottish Government. Good practice would require a formal business case to be prepared. Transport Scotland de...
The Convener:
Lab
We can certainly do that. However, from an audit perspective, whether in relation to this contract or any other contract or set of accounts that you are look...
Mr Black:
I certainly think that for any significant contract such as this it is preferable to have a business plan in place, because that plan can be used to independ...
George Foulkes (Lothians) (Lab):
Lab
You are choosing your words carefully and diplomatically. You said that it would be preferable to have a business plan in place. Can you tell us of any other...
Mr Black:
Unfortunately, I cannot give you information on that, because we have not audited comprehensively across the whole public sector. However, it is certainly di...
George Foulkes:
Lab
Neither you nor your colleagues can recall any instance of a major contract being let or extended without a business plan or a business case.
Mr Black:
I will try to be as helpful as I can in answering that question. I remind the committee that we produced a report on major capital projects recently. There w...
George Foulkes:
Lab
It is a fairly unusual situation. As you say, the ScotRail franchise is the largest contract to be let by the Scottish Executive.
Mr Black:
Yes, it is the largest contract of its type to be let.
George Foulkes:
Lab
There is one more thing that I do not understand. Would it not be normal for other operators to be given some chance to bid for such a huge contract? I am th...
Mr Black:
When the original contract was formed, before responsibility was devolved to Scotland, there was an opportunity for all interested parties to bid for the con...
George Foulkes:
Lab
There is no way that you, or we, could tell whether or not we might have saved more money for the public purse if the franchise had gone out to a new contrac...
Mr Black:
I cannot give you that opinion.
Sandra White (Glasgow) (SNP):
SNP
I will start with the passenger situation before coming on to the contract. I travel back and forth between Glasgow and Edinburgh, and I agree with your asse...
Mr Black:
I will take the second point, and I will then turn to colleagues to amplify what I say, and to pick up the point about Passenger Focus.Transport Scotland was...
Tanya Drury (Audit Scotland):
I can comment a bit more on Passenger Focus's work in Scotland and its continuing effort to work with Transport Scotland in a specifically Scottish context. ...
Sandra White:
SNP
I am sorry to interrupt you. You said that Passenger Focus will do more work in a specifically Scottish context. How many surveys have been done in Scotland?
Tanya Drury:
The surveys all began at the same time across Britain, and they go back five and a half years.
Sandra White:
SNP
Fine. Mr Black was saying that Transport Scotland took more of a carrot than a stick approach with the franchise extension. I am concerned that Transport Sco...
Mr Black:
It is important to distinguish the Audit Scotland comment about the rigour of the process from the absence of a business plan. The Audit Scotland team has as...
Sandra White:
SNP
Are you concerned about the contract as it was issued? You mentioned that Transport Scotland said that First ScotRail might not make enough profit above the ...
Mr Black:
It is for Transport Scotland to satisfy the committee on the question whether it is satisfied or not. It has indicated to Audit Scotland that it is satisfied...
Sandra White:
SNP
Convener, I do not want to hold the committee up. I want to go on to talk about finance.
The Convener:
Lab
Could you leave that for the moment because other members wish to come in?Mr Black, it is astonishing that you say that Transport Scotland did all the work, ...
Mr Black:
I understand your concerns about that matter.