Appendix 2  Methodology

1  The National Audit Office examined the Comparators and their application to inform the decision to select a preferred bidder for the proposed London Underground Public Private Partnership.

2  We used an issue analysis approach to designing the scope and nature of evidence required to complete the examination. That is, we set a series of high-level audit questions that we considered it would be necessary to answer in order to assess the Comparators and their use, and collected evidence accordingly. For each of the top level questions, we set a subsidiary group of questions, linked logically to the main question, in order to direct our detailed work and analysis.

3  The top level questions we set were:

■  whether the relevant guidance had been followed;

■  whether the Comparators were sound;

■  whether the evaluation of the bidders' prices was being conducted soundly; and

■  whether the comparison between the bid prices and the Comparators were likely to be sound.

Figure  5 summarises these primary issues and the more detailed areas considered under each.

4  Our main evidence came from detailed examination of the Comparator models, and information provided by the Department and London Underground's files. We also undertook interviews with key staff, and discussions with London Underground's financial advisers, PricewaterhouseCoopers. Finally we discussed issues of concern with major stakeholders in the project, such as the Mayor of London, the Transport Commissioner for London and bidders.

5  In addition, we appointed a Review Panel, which contained experts from outside the National Audit Office. This panel provided advice on issues and aspects of the report.

6  External members of the Review Panel were:

Professor Vic Barnett, Nottingham Trent University

Kingsley Manning, Managing Director, Newchurch Limited

Professor Tony M. Ridley CBE, FREng, Emeritus Professor of Transport

Engineering, Imperial College

Michael C. Spackman, National Economic Research Associates

George Steel, Managing Director INDECO (International Management Consultants) Limited

Bruce O. B. Williams