2.2 Before the spending review, the Department had recognised the need to rethink how it could deliver its objectives more cost-effectively in the longer term in a number of key areas:
• In December 2009, the Department and the Office of Rail Regulation commissioned Sir Roy McNulty to examine the cost structure of the railway industry and identify options for improving value for money.
• In early 2010, the Department carried out a series of 'discovery projects', designed to identify 'radical options to look at how [they] could do things fundamentally differently in certain areas' with a significantly lower budget. These projects examined nine areas, ranging from changing franchise specifications to new revenue-raising opportunities. Several specific recommendations were incorporated in the Department's spending review bid.
2.3 As Figure 5 shows, strands of work such as the strategic review of rail were operating to a timescale beyond the spending review decisions and thinking on how programmes interact, or how the Department as a whole might work differently was at an early stage. They were not, nor were they intended to be, a holistic examination of the whole department and how it delivered its objectives. The Department, therefore, did not have in place a target operating model at the time of the spending review, such as to guide judgements on the balance between different modes of transport, or between taxpayer and passenger financing, within the context of the Department's objectives.
2.4 The Department is currently developing a longer-term planning cycle, consistent with the long-term nature of transport investment decisions. This is intended to be a more comprehensive approach to allocating resources, considering, among other issues, the speed and direction of travel of programmes and activities; driving a stronger efficiency culture through a bottom-up review of activities, and giving a cross-cutting look at processes and resourcing.
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Figure 5 Strategic reviews by the Department for Transport
Date
| December 2009 | The Department and the Regulator commissioned a study on 'Improving value for |
| January 2010 | Internal 'discovery' projects were announced to consider cost reduction or revenue |
| February 2010 | Internal 'alternative planning assumptions framework' exercise to examine options for |
| October 2010 | The outcome of the 2010 spending review was specified, and includes an |
| January 2011 | The Government's response to the Reforming Rail Franchising policy consultation |
| May 2011 | The McNulty rail value for money study was published. |
| July 2011 | The Department The Department announced its intention to reform rail franchising policy. |
| November 2011 | 'A fresh start for the Strategic Road Network', a review of the Highways Agency by |
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Source: National Audit Office summary of the Department's strategic reviews
2.5 The spending review process itself, was primarily a case-by-case appraisal of options from each spending area to identify savings up to 2014-15. This process helped the Department to identify areas where it needed to consider further reforms. As part of the spending review settlement, the Department committed to an independent review of the Highways Agency. The review considered the Government's approach to operating, maintaining and enhancing the strategic road network to deliver services more efficiently and was published in November 2011.