Theory test fiasco continues to hit taxpayer's pocket

Thursday, April 14, 2016


Mainstream media outlets are claiming that the calamatious handling of the Theory Test contract will result in taxpayers footing a multimillion pound bill. But this is not the first time there has been outcry at the mismanagement of this process and the impact that has on the public purse.


Sky News led with the headline earlier this week that 'Taxpayer Pays Out Over Driving Test Fiasco' with a special report by Sky's City Editor, Mark Kleinman stating that taxpayers have been 'left nursing a substantial bill after Whitehall officials slammed the brakes on a contract to move the management of Britain's driving theory tests.'


Sky News has learnt that the Government agreed a multimillion pound settlement this month with Learndirect, the privately owned company which was due to begin supplying the tests later this year. 


The decision to annul Learndirect's involvement was taken by the Driver and Vehicle Standards Agency (DVSA) with input from the Cabinet Office and the Department for Transport.


Officials refused to disclose the size of the payout to Learndirect, but it is said to have run to millions of pounds.


According to Sky, Whitehall sources conceded that taxpayers would also suffer financially because of the cost of running the next procurement process and the fact that Pearson's deal is significantly more expensive than the one proposed by Learndirect.


As Sky was quick to point out this is the latest 'botched procurement exercise involving Whitehall officials, and another undistinguished chapter in the administration of tests for learner drivers.' 


Issues over the handling of the Theory Test contract first hit the papers over two years ago when DVSA was originally forced to pull back on a decision to hand the contract to Learndirect (from 2014) because they had failed to carry out proper checks on the company.


Pearson issued a formal challenge at the time and were rewarded with a two-year extension to their deal, meaning Learndirect could not take over until at least 2016.


The contract with Learndirect was estimated, at the time, to be worth £20m-£25m per year leading to accusations that the botched process could have cost the taxpayer up to £20m over two years (source: The Telegraph, 16 January 2014).


In response to the latest furore over the settlement paid to Learn Direct, an official statement was has been released, stating that:


"The DVSA and Learndirect have concluded an exit from the contract for the provision of the UK Driving Theory Test, which was due to transfer to Learndirect in September 2016. 


Since the award of the original contract in 2013, demand for the test has increased by over 50 per cent to 2.4m (2015/16), and is now forecast to reach 2.8m in 2017/18. Against that background, and because continuity of service is of primary importance, it has been decided that now is not the right time to transfer. Pearson VUE will therefore continue to provide the service for some time." 


The DVSA, Learndirect, LDC, Pearson and the Cabinet Office declined to comment beyond the official statement. Driving Instructors Association did contact the regulator directly earlier this week (on the publication of Sky's story) to request further comment on the issue - particularly given the huge concern and interest the driver training industry would have about this latest news and in the wider context of ongoing issues with the provision of driving test services in the UK. DVSA were, however, were unable to comment beyond the official statement. 


DIA Chief Executive Carly Brookfield commented:
"Clearly we will be raising this issue (amongst other concerns over the current provision of test services) in our meeting with DVSA next week and pushing for further explanation as to why this issue occurred at all, as well as asking what steps are being taken to manage this process and overall service better in the future.


With the added burden to the taxpayer this settlement incurs, there obviously needs to be more serious consideration of how these services can be delivered more effectively, efficiently and economically in the future. With respect to DfT, the recent Motor Services Consultation directly asked for stakeholder views and suggestions on ways in which the government could deliver such services more effectively and DIA made a number of suggestions of how services,  such as the Theory Test, could be better delivered.


It is our view that a considerable amount of money could conceivably be saved by capitalising on the digital nature of the test. A large amount of resources (and what accounts for a large element of the delivery costs in such contracts) is expended on delivering the test from dedicated Theory Test centres, physical premises which are costly to resource and which in addition require other costly resources dedicating to them, such as staffing. The test is digital, and therefore theoretically, can be delivered anywhere. The reality is, increasingly, many formal educational assessments and tests are delivered online and so can be delivered at very low cost in more accessible locations such as schools, further education colleges and libraries (who in particular, facing severe funding cuts, would probably welcome the additional footfall and usage of their buildings, ICT resources and staff). 


There were clear areas where costs could be saved on the delivery of the Theory Test before they were further ramped up by this settlement and overall mishandling of the contract process - clearly we should expect that both the government, and indeed Pearson, will now seriously consider how this services are better managed moving forward". 

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