e The Department's monitoring of cost reduction measures does not provide a strategic overview of whether transport spending is becoming more cost-effective. As the Department develops its vision of a lower-cost operating model, it should put in place performance measures which give:
• a quantified assessment of progress on individual and overall budget reductions;
• a clear link between all spending lines and objectives; and
• joined-up reporting of budget reductions and their impact on long-term value.
f We welcome the Department's investment in working with local authorities to identify and share how efficiencies can be made in maintenance. This good practice needs to be applied to other areas of spending with third parties, so that the Department knows how cost reductions are being achieved, the impact on quality and whether its objectives are being met.
g The Department has identified that there are risks to the delivery of cost reduction from higher inflation and fluctuations in subsidies to train operators. The Department should continue to develop this work to:
• quantify the potential impact on different budgets and objectives, across its whole business and for a range of scenarios of both higher costs and fluctuations in income;
• understand the relationship between cost and value in areas of potential further reduction or additional spend; and
• develop plans to minimise any impact on budgets.