Corporate report

Department for Transport annual report and accounts 2022 to 2023

Published 20 July 2023

This was published under the 2022 to 2024 Sunak Conservative government

For the period 1 April 2022 to 31 March 2023:

• accounts presented to the House of Commons pursuant to section 6(4) of the Government Resources and Accounts Act 2000
• annual report presented to the House of Commons by Command of His Majesty
• ordered by the House of Commons to be printed on 20 July 2023

Secretary of State foreword

Nine months in as Transport Secretary and I am proud of what the department has achieved over the past year. Transport not only connects people and place but underpins our nation’s prosperity and resilience. That makes our work crucial to achieving the Prime Minister’s priorities of halving inflation, growing the economy, and reducing debt.

Unsurprisingly, the year has been dominated by Russia’s barbaric and illegal war in Ukraine. I am pleased the department responded quickly, closing all UK airspace and ports to Russian aircraft and ships, whilst establishing the UK-Ukraine transport partnership. Our rail industry has provided aid to Ukraine, including a £10 million package of essential tools and materials to repair rail infrastructure and help facilitate increased grain exports. This support is part of a wider package of measures being delivered across the UK government, demonstrating our unwavering solidarity with the Ukrainian people as they defend their freedom and, in doing so, ours.

The entire government, indeed, the whole country, has been forced to confront the economic shocks created by the war in Ukraine. High inflation has hit the public purse, testing, but not stopping our ability to deliver capital programmes. We have made tough but necessary decisions to reprioritise projects, ensuring we manage costs and deliver value for the taxpayer. Having worked hard to secure a positive capital budget of over £40 billion for the next 2 years, we can now focus on getting on with delivering the department’s aims to grow the economy, improve the transport system for all users, and reduce our environmental impact.

We have taken action to support people with the rising cost of living, including keeping regulated rail fare increases significantly below the rate of inflation. But we’re also acting to increase usage of the nation’s most popular form of public transport, having already rolled out our £2 bus fare cap. And I’m delighted we have made a commitment to extend the £2 cap until November 2023, followed by a longer-term £2.50 cap until December 2024.

As the country deals with inflation, the department continues to invest in the transport sector, however, these capital programmes are costing significantly more due to the high rate of inflation. This is causing challenges for the department to invest in major projects; however, we continue to provide the best value for money for the travelling public.

We have cancelled plans for new smart motorways recognising the lack of confidence felt by some drivers and cost pressures. We will continue to invest in the safety of existing smart motorways through £900 million of improvements, including progressing the construction of 150 extra emergency areas across the smart motorway network.

On rail reform, we’re building momentum. After setting out my vision for the railways in my George Bradshaw address in February, I announced, the following month, that Derby will be the HQ of a new industry body, Great British Railways. We have also made progress on resolving some of the industrial disputes across the network, having worked hard to improve the tone of the debate and facilitate discussions between unions and rail employers.

And we are showing leadership on the decarbonisation agenda too. Transport is the UK’s biggest source of carbon emissions, which is why we’ve made nearly £400 million available to roll out tens of thousands of EV chargers across the country. It’s why we’re also setting minimum annual targets for the sale of zero emission cars from next year, via our ZEV Mandate. And it’s why we’re accelerating the transition to sustainable aviation fuels, ensuring the reality of green flight is closer than ever.

Finally, following the passing of Her Late Majesty Queen Elizabeth II and the subsequent Coronation of Their Majesties King Charles III and Queen Camilla, colleagues across the department and the transport sector demonstrated their professionalism and dedication to ensure the events were delivered safely and successfully. In both cases we should be proud of how we helped bring the nation together.

This report covers the department’s work over the last 12 months in much greater detail. And I would like to thank all staff at DfT, in our public bodies, and across the transport system for their hard work and commitment this past year. I look forward to working with all of them as we continue to deliver the Prime Minister’s priorities and build the transport network our economy needs and that the British people deserve.

The Rt Hon Mark Harper MP

Permanent Secretary foreword

The last year has been eventful for the Department for Transport (DfT). As the Secretary of State for Transport notes, the war in Ukraine has had global consequences, whilst the summer and autumn of 2022 was a period of political uncertainty at home. Inflation has had a significant impact on the cost of delivering transport investment and services.

We have also seen an increase in industrial action on the railway as well as within the wider DfT group, and managing and mitigating disruption across the transport network has been a key focus.

Against this backdrop, we have continued to focus on working with our ALBs and partners to deliver key programmes and projects. The Elizabeth line was opened by Her Late Majesty on 23 May 2022. It has exceeded expectations with 125 million passenger journeys since opening. HS2 Phase 1 is now in full delivery mode, creating around 29,000 jobs across the country. The government has committed to delivering the Trans-Pennine Route Upgrade as the first phase of Northern Powerhouse Rail, with £1.1 billion spent so far, including works to deliver electric services between Manchester Victoria and Stalybridge.

The East West Rail Alliance has also made good progress, delivering earthworks to prepare the ground for the 80km of new track that will carry services between Oxford to Bletchley and Milton Keynes, around half of which has now been installed. In November 2022, the A1 Scotswood to North Brunton improvement scheme was opened for traffic, whilst across the Strategic Road Network (SRN), National Highways has resurfaced 1,000 lane miles of road surface and renewed or installed 240 miles of safety barriers.

As well as investing in infrastructure, the department continues to focus on maintaining and improving transport services. Over £1 billion has been invested, through local transport authorities, in delivering more reliable, better co-ordinated, and cheaper bus services. City Region Sustainable Transport Settlements funding of £5.7 billion over 5 years is supporting 8 combined authorities as they develop integrated plans for improving transport in their regions. Active Travel England (ATE), a new executive agency, will help deliver funding for active travel and raise the quality of walking and cycling routes. The decision on 11 May to take TransPennine Express into the operator of last resort (OLR) presents an opportunity to reset performance which has been unacceptably poor for passengers.

Our executive agencies continue to deliver vital services to the public and sector. After a difficult time during COVID-19, DVLA services are now back to normal and DVSA now offers a 3 week wait for vocational tests which has helped the road haulage industry recover from the driver shortage. The Maritime Coastguard Agency responded to 36,504 incidents, dealing with distress and emergency 999 calls.

Freight plays a critical part in the wider resilience of our economy. This year, we published the future of freight plan setting our long-term cross-modal priorities for the freight sector and implemented several commitments in the plan including: providing £345,000 to support year one of the Generation Logistics campaign to promote the sector to a new audience and attract new talent; awarded year one of the £7 million Freight Innovation Fund to 9 SMEs, and appointed an industry co-chair of the Freight Council to drive further action and ambition on issues.

Work continues to drive transport decarbonisation across all modes, nationally and internationally. At COP27 the UK pledged alongside the US, Norway, and the Netherlands to promote ‘green shipping corridors’, maritime routes decarbonised from end to end. The International Civil Aviation Globalization Assembly also agreed a long-term goal for international aviation of net zero carbon emissions by 2050.

DfT has also supported a range of smaller but important initiatives to tackle wider social challenges including investing £5 million in tackling loneliness, £7 million in supporting mobility centres across England, and £20 million on Bikeability training. Corporately, we have continued to diversify our workforce across the country, with 442 DfTc roles now recruited or relocated to Birmingham or Leeds. We have launched a new Senior Civil Service development programme to build the leadership capability of our staff and invested in better digital support.

We continue to work with the sector to raise skills and attract people into transport. We have launched Generation Aviation and Generation Logistics, aimed at increasing the number of people applying for jobs in these sectors.

Looking ahead, the challenges and opportunities of new technology for transport are immense and we need to ensure we in the department are working effectively to drive positive outcomes for the economy, environment, and society. This will require a strong focus on digital and data capability.

As I look back on another year, I continue to be proud of and grateful for the dedication of DfT people across the group who continue to work with commitment and professionalism to deliver for ministers, the government, and the travelling public.

Dame Bernadette Kelly DCB

Performance report

This performance report notes the department’s key successes and challenges against the workstreams it worked on within our outcome delivery plan. Whilst delivering the department’s priority outcomes, we also had to respond to several challenges across the transport system, which are included in this report.

Overview: how we have performed

The purpose of this report

This performance report is based on the priority outcomes set out in section A of the department’s outcome delivery plan. These priority outcomes were developed using the principle of the public value framework, published by HM Treasury in 2019, which is a tool for maximising the value delivered from public spending and improving outcomes for citizens. The priority outcomes were confirmed as part of the department’s Spending Review settlement (SR20) and they remain in place as part of the SR21 settlement. The Performance report also includes the effects of COVID-19 on policy, delivery, and the subsequent programme for recovery.

How we are organised

The Department for Transport (DfT) consists of the central department (DfTc) and several public bodies. These are classified according to the level of ministerial control required for them to best perform their functions. Many of these organisations have their own governance structures and publish annual reports, with their accounts consolidated into the department’s annual report and accounts.

Executive agencies act as an arm of DfTc and typically carry out services or functions with a focus on delivering specific outputs, with policy set by ministers.

Non-departmental public bodies (NDPBs) and non-ministerial departments (NMDs) are separate legal entities from DfTc. The department usually sets their strategic framework, appoints the chair of their boards, approves all non-executive board member appointments, and appoints their accounting officer.

The wider departmental family includes other public bodies helping to achieve our objectives but have more autonomy over their own policies and are not consolidated into the group’s financial statements.

Our governance

The department’s governance arrangements reflect best practice and the importance of giving Parliament confidence that we use our resources cost-effectively when delivering our priority outcomes. The full governance statement can be found in the accountability report.

Wider departmental family

Consolidated departmental groups

Six directors general-led groups:
Rail Strategy and Services Group, Rail Infrastructure Group, Corporate Delivery Group, High Speed Rail Group, Roads and Local Group, Aviation, Maritime and Security Group, Decarbonisation, Technology and Strategy Group (report direct to the Second Permanent Secretary) and Non-Group comprising of legal

Other entities accounted for within DfTc:
Office for Zero Emission Vehicles, Centre for Connected and Autonomous Vehicles, Disabled Persons’ Transport Advisory Committee, Advisory Group on Education in Transport, Air Insolvency Review, Rail Strategy Advisory Board, DfT Science Advisory Council and Independent Commission on Civil Aviation Noise

Executive agencies:
Driver and Vehicle Licencing Agency, Vehicle Certification Agency, Maritime and Coastguard Agency, Driver and Vehicle Standards Agency and Active Travel England

Other Government owned companies:
LCR Finance plc, CTRL Section 1 Finance plc, Train Fleet (2019) Ltd and Air Safety Support International Ltd

Executive non-departmental public bodies:
Transport Focus (including its subsidiaries Transport Focus Scotland Ltd and Transport Focus Wales Ltd), British Transport Police Authority, Trinity House Lighthouse Service, Northern Lighthouse Board, Commissioners for Irish Lights, High Speed 2 Ltd, National Highways, Network Rail and East West Railway Company Ltd

Other consolidated entities:
Air Travel Trust Fund

Non-ministerial departments and regulators:
Office of Rail and Road

Other public corporations:
Trust Ports as listed in Note 26 to the financial statements

Public corporations and regulators:
Civil Aviation Authority

Public corporation and government owned companies: London and Continental Railways Ltd, Crossrail International Ltd, LNER Ltd, Northern Trains Ltd DfT OLR Holding Ltd and SE Trains Ltd

Our governance

Parliament

• checks and challenges the work of the department through questioning ministers, debating and committee work
• checks and approves departmental spending

Secretary of State for Transport

• appointed by the Prime Minister
• has overall responsibility for the department and its delivery bodies
• makes policy decisions based on advice from officials, presents and accounts for policy publically and in Parliament

Permanent Secretaries and Principal Accounting Officer

• the permanent secretaries are responsible for the effectiveness and efficiency of the department’s work to support ministerial polices and objectives. They are also responsible for the department’s leadership, management and staffing
• the Principal Accounting Officer is responsible for the propriety and regularity of the departmental group’s expenditure

DfTc’s board

• advisory body that supports and challenges both the department’s ministers and the Principal Accounting Officer
• provides strategic focus by advising on the operational implications and effectiveness of policy proposals

DfTc’s executive team

• consists of the permanent secretaries, directors general, director of human resources, director of group communications, director of strategy, and chief scientific adviser – director of legal, and non-executive board members are invited to items as required
• the department’s business in-line with ministerial priorities

Internal and external audit

• reviews our processes and procedures to help us improve our risk management, control and governance
• Internal audit: provides independent assurance to the Permanent Secretary and Departmental Board
• External audit: undertakes a statutory audit of DfT’s consolidated annual report and accounts

Our risks

Risk management is an integral part of the department’s work, from how we manage our programmes and our money, to how we develop our policies and work with the departmental family. These risks represent the department’s view of its overall risk profile, considering the risk carried and managed by our public bodies. The governance statement contains a full report on our internal controls and risk management approach and sets out the principal risks faced by the department in 2022 to 2023. The report includes the actions the department took or are taking to mitigate these risks.

Performance overview

This performance report notes the department’s key successes and challenges against the delivery of our priority outcomes, which are set out in detail below.

By shaping projects around our priority outcomes, the department is ensuring that it delivers on its long-term missions whilst addressing immediate challenges. Key highlights from the last 12 months include the commitment to invest £20 billion in the transport network over the next 12 months, supporting the long term growth of the UK economy.

Transport is currently the largest emitting sector of greenhouse gases (GHG) in the UK. We are addressing the challenge of decarbonising transport (which still produced 26% of the total UK carbon emissions in 2021) through:

• investing in sustainable transport solutions, from electric vehicle infrastructure to launching the UK Shipping Office for Reducing Emissions (UK SHORE), a programme for green investment in maritime
• improving the customer travel experience by both providing support to users and improving infrastructure, including the programme for rail reform
• the £2 bus fare cap and other cost of living support

As set out in the Secretary of State’s foreword, there have also been several immediate challenges which we have addressed. Most significant this year has been the war in Ukraine and high levels of inflation, which have come alongside ongoing changes in demand for transport services following the COVID-19 pandemic.

These challenges have required significant government support and intervention, working hand in hand with industry and local government to make sure that UK transport system provides the infrastructure and services our citizens and businesses need at a price taxpayers and service users can afford.

Within the transport system, and particularly on our railways we have also seen significant industrial action. The department has been playing its part in the negotiations by facilitating discussions between trade unions and employers. The government remains focused on resolving this dispute so that critically needed workforce reforms can take place, supported by a fair pay deal, to deliver a better railway for passengers.

The department’s priority outcomes:

Growing and levelling up the economy

Increasing growth and prosperity across the country by; investing in the transport network; improving connectivity; and completing work on time and on budget we are working towards:

• having more productive cities and towns
• supporting local growth and regeneration
• supporting jobs and skills
• improving networks between major economic centres, and with international gateways
• strengthening the union

Improving transport for the user

Ensuring that the transport system is safe, reliable, joined-up and inclusive, building passenger and supply chain confidence following COVID-19, and reflects evolving travel patterns and demand. We aim to:

• build confidence and improve the public transport experience
• improve the experience for road users
• build a transport network that works for everyone
• continue to improve the safety, security, and resilience of the transport system

Reducing our environmental impact

Continuing to lead on decarbonising transport and cutting pollution, as we work across government to achieve our Net Zero commitments. The department aims to achieve this through:

• decarbonisation of road, rail, aviation, maritime vehicles
• accelerating modal shift to public and active transport
• decarbonising how we get our goods
• place-based solutions and environmental impacts
• positioning the UK as a hub for green transport, technology, and innovation

Increasing our global impact

Boosting our influence as a leading trading nation, and seizing the opportunities presented by Brexit to strengthen ties with countries around the world. The department is working towards:

• a new international strategic framework to coordinate the department’s activity under the Global Britain agenda
• international leadership through our response to COVID-19
• maritime and aviation remaining fundamental to UK global impact and trade
• maximising exports and inwards investment
• enhancing our global leadership in tackling transport’s contribution to climate change by reducing carbon emissions and helping to deliver a successful COP26
• making the UK a science superpower by 2030, with transport acting as an anchor for the globally exportable development of science skills, research, and knowledge

Being an excellent department

Being a well-run department that looks to improve how it operates and where people feel well supported and enjoy working, focusing on:

• great people: workforce, skills, and location
• new ideas: innovation, technology and data
• sustainability
• better outcomes: delivery, evaluation and collaboration in project delivery, commercial and with our public bodies

Priority outcomes are interlinked and mutually support each other: delivery of one will often contribute to the delivery of the others, as in many cases workstreams offer benefits across more than one priority. The reporting framework lends itself to a matrix style of reporting across the priority outcomes.

Priority outcome indicators

As part of the delivery of this framework, the department has a suite of metrics that are used to monitor progress towards delivering the priority outcomes. These metrics set out the latest published position.

While a range of data is available to monitor progress, both within the department and across the transport sector, these metrics are typically drawn from official and national statistics sources. We strive to ensure outcomes are measured using data of the highest quality.

It is however important to note that these metrics are non-exhaustive and are:

• to be considered as part of a suite of wider evidence
• designed to measure progress towards overall outcomes rather than individual DfTc programmes
• subject to reporting lags and are not necessarily published to a consistent schedule

Our performance at a glance: growing and levelling up the economy

This year the department:

• completed the £94 million retained Tyne and Wear Metroflow project, to time and within budget
• successfully installed the world’s longest box slide in North Warwickshire, the Marston Box Rail Bridge
• opened the A1 Scotswood to North Brunton improvement scheme for traffic In November 2022
• announced with the Welsh Government, £2.7 million in funding to Transport for Wales, for a development study on the South Wales Main Line
• announced £8.8 billion at the Spring Budget 2023 for a second round of City Region Sustainable Transport Settlements from April 2027
• continued to beat industry averages for female and BAME employees, achieving 28% and 23% respectively for the HS2 supply chain
• published the Connected and Automated Mobility 2025 paper
• opened the Elizabeth line for Bond Street station in October 2022, which marked the completion of all central section stations
• continued to deliver on, A Future of Transport Rural Strategy, setting out how rural areas in the UK should benefit from new innovations in transport in support
• and East West Rail Alliance delivered 1 million M3 earthworks to prepare the ground for the 80km of new track that will carry CS1 services, around half of which has now been installed

Our performance at a glance: improve transport for the user

This year the department:

• awarded £5 million for the Tackling Loneliness with Transport Fund to 12 public sector delivery partners in 2022
• confirmed the extension of pay-as-you-go ticketing: with 53 stations across the south-east set to be completed this year including on Chiltern, London Northwestern, and c2c train services
• launched a review of the Civil Aviation Authority to make sure it has the resources and capabilities needed to support the sector and to regulate effectively and proportionately in the future
• awarded over £1 billion of indicative funding allocations to 34 local transport authorities to deliver more frequent, more reliable, better coordinated, and cheaper bus services as set out in their bus service improvement plans
• continued to support the mobility centres of England with annual grant funding of £7 million. Hubs advisory services, which help people unable to drive find other ways to be mobile and independent, are operational across all centres
• established a freight energy forum to address the long-term challenges and provide solutions for the provision of zerocarbon energy infrastructure within the freight sector
• through National Highways resurfaced 1,000 lane miles of existing asphalt road surface and 48 lane miles of existing concrete road surface was reconstructed and replaced with asphalt
• confirmed the local highways funding allocations for 2022 to 2023 and provided indicative allocations for 2023 to 2024 and 2024 to 2025, achieving a 3 year plus highways maintenance funding settlement
• in June 2022 implemented the Motor Vehicles (Compulsory Insurance) Act 2022
• through Network Rail delivered over £1.9 billion of efficiency improvements across the first 3 years of CP6

Our performance at a glance: reducing environmental impacts

This year the department:

• published the third consultation on the final proposals for the zero emission vehicle mandate and future regulatory framework of CO2 emissions and consulted on phase out dates for other non-zero emission road vehicles
• published Cycling and Walking Investment Strategy 2 (CWIS2), which outlines the total investment into active travel across government through to 2025
• established Active Travel England, a new executive agency, which will help deliver £2 billion of funding for active travel over 5 years
• published the final proposals on zero emission vehicle mandate and future regulatory framework of CO2 emissions for cars and vans
• funded 4,200 zero emission buses across the UK, since February 2020. An estimated 2,400 have been ordered with 1,600 on the road
• introduced E10 petrol (petrol with up to 10% ethanol) in Northern Ireland in November 2022, aligning with the rest of UK
• played a leading role in the adoption of net zero by 2050 as a new global goal for reducing the CO2 emissions of international aviation
• published the Jet Zero strategy, setting out a clear framework for the aviation sector to achieve net zero 2050
• invested £20 million in our zero emission road freight trials and are now going ahead with the demonstrator programme that will see hundreds of zero emission HGVs and their refuelers on UK roads
• exceeded the December 2022 target of having 25% of our car fleet made up of ultra low emission vehicles, with 40% of the department’s car fleet being ULEV compliant
• provided funding to support the deployment of zero emission buses in 2022 to 2023, including taking forward the £280 million Zero Emission Bus Regional Areas scheme

Our performance at a glance: increasing our global impact

This year the department:

• published the refreshed National Strategy for Maritime Security in August 2022
• delivered high-profile ministerial visits and participation in key global transport events, including a successful UK Presidency of the International Transport Forum
• supported the UK to be re-elected to the Council of the International Civil Aviation Organisation and worked with allies to prevent Russia’s council reelection, gaining assembly condemnation of Russia’s aggression; and agreed a long-term aspirational goal for net-zero carbon emissions for international aviation by 2050
• successfully implemented transport sanctions against Russia. As of January 2023, 126 Russian transport entities have been sanctioned with £942 billion frozen, 3 aircraft and one superyacht have been detained in the UK. The department and the UK transport sector are providing direct support, including a £10 million rail aid package containing essential tools/materials to repair damaged rail infrastructure and facilitate grain exports

Our performance at a glance: being an excellent department

This year the department:

• increased the department’s workforce outside of London from 10% to 21%, and as of March 2023, there were 442 staff in Birmingham and Leeds
• grew the skills and capability required to futureproof and build on the resilience of the transport network through science and technology
• worked with the Cabinet Office and HM Treasury to shape emerging central guidance on good governance of public bodies and to deliver against the aims of the wider government public bodies reform programme
• established a staff driven innovation and continuous improvement platform called ‘Your ideas’ to harness the expertise and knowledge at grass roots level on ideas for how the department can continuously improve and innovate

Financial overview from the Director General for the Corporate Delivery Group

Introduction

The department’s work and its financial position have been affected by industrial action and inflation in 2022 to 2023 and the cost of living pressures have impacted transport users. With the support of HM Treasury, we responded to the challenges presented while ensuring a sustained focus on delivering the government’s transport ambitions. Our annual capital expenditure continued to rise to record levels, reflecting existing plans to ramp up investment in local and national infrastructure. The department continued the high level of support for passenger rail services: although passenger numbers have recovered, domestic demand has not yet returned to levels achieved pre COVID-19.

Looking forward inflation continues to cause cost pressures to the budgets set at Spending Review 2021 for 2023 to 2024 and 2024 to 2025. In the final months of the last financial year the department undertook a review of its capital spending to ensure it can live within the budgets set for these years. This means that some schemes will take longer to delivery than originally planned. Details were set out to Parliament in early March 2023.

Our initial spending plans for 2022 to 2023 were agreed with HM Treasury through Spending Review 2021, with statutory authority for final budgets granted by Parliament via the estimates process. Budgets are set in accordance with HM Treasury’s budgeting framework for central government bodies and our financial statements are prepared on an accruals basis in accordance with the government financial reporting manual (FReM).

This report provides a high-level overview of our financial performance, with figure 1 summarising spend against the final control totals voted by Parliament at the supplementary estimate and figure 1.1 showing a breakdown by mode.

The final budgets for the year were authorised through the supplementary estimate: this was agreed between the department and HM Treasury in December 2022, at which point the outlook for the final quarter of the financial year remained uncertain.

	2022-23 Budget £m	2022-23 Outturn £m	2022-23 Variance £m	2022-23 %
Resource DEL	18,087	16,886	1,201	7%
Of which: Administration	371	336	35	10%
Capital DEL	20,588	20,538	50	0%
Resource AME	6,076	3,726	2,350	63%
Capital AME	(77)	(112)	35	-31%
Net Cash Requirement	32,731	29,052	3,678	13%

Figure 1: outturn and control totals authorised by Parliament

This chart shows the total DEL and AME spending by estimate line, with estimate lines grouped by transport mode. Total DEL and AME spending includes both resource and capital cash spending in addition to non-cash resource costs such as depreciation. Significant variances between budget and outturn are explained in the statement of outturn against Parliamentary supply.

Figure 1.1: breakdown of spending by mode

Income and funding

Alongside the supply funding received from HM Treasury described in figure 1, the departmental group received £5.8 billion in income from other sources. These are summarised in figure 2, and more detail can be found in note 4 to the financial statements.

Figure 2: main sources of income received in the year

Figure 2.1 below shows the net movement in Income by revenue source in the year ended 31 March 2023. Key movements are discussed below:

Figure 2.1: movement in revenue streams, £m (source: financial statements note 4, cash items)

Franchised track access income has decreased due to the compensation Network Rail is required to pay train operators for delays, service changes or cancellations as the result of planned and unplanned disruption on the network, including the reduction of services as the result of rail industrial action. Rail revenues from business travel and commuting continue to be lower than levels pre-pandemic.

Regulated rail fare increases for the year were set significantly below the rate of inflation. The train operating companies are outside the department’s statutory accounting boundary and therefore, farebox revenues earned by rail operators are not consolidated into the department’s financial performance. Instead, the department’s financial performance reflects subsidies paid to rail operators, which reflect the net financial performance between the operators’ revenues and their costs.

Expenditure

The departmental group incurred £30 billion of expenditure in 2022 to 2023 compared to £32 billion in the previous year. Figure 3 shows the headline movements in expenditure during the year.

Figure 3: movements in expenditure in 2022 to 2023

Goods and services include the department’s contractual payments to train operating companies to sustain rail services. These costs reduced in 2022 to 2023 as passenger numbers and fare revenues recovered from the levels experienced in the previous year. Although passenger numbers have improved, demand and domestic travel is below levels achieved pre COVID-19.

Grants include support payments to Transport for London (TfL), bus and light rail operators. The decrease in subsidies for Transport for London reflects the payments made under the new, long-term funding deal, linked to TfL’s capital investment programme, which has replaced the short-term support payments during the pandemic. The new long-term funding deal secures funding for TfL to March 2024. Subsidies to the bus sector increased in 2022 to 2023 and we rolled out the £2 bus fare cap in response to cost pressures faced by the public. The £2 bus fare cap has now been extended until October 2023 and then £2.50 until November 2024. Support for light rail operators has reduced in 2022 to 2023 due to the ongoing recovery in passenger numbers and farebox revenues since the pandemic. In addition, grants include amounts issued to local authorities for investment in local transport and local roads improvement: these reduced in the year following the high level of grants to local authorities in 2021 to 2022. The Levelling Up Fund was launched during the year. Transport related grants of £81 million from the Levelling Up Fund were issued by the department in the year.

Depreciation is a non-cash cost reflecting operational usage of assets: this increased due to the higher valuation of assets, which has driven by the impact of inflation on asset values.

Finance costs primarily represent interest charges on legacy debt owed by the group to bondholders: these increased due to the impact of inflation on index-linked debt.

The decrease in Other costs primarily reflects the corporation tax credit in 2022 to 2023 arising from the loss before tax reported in Network Rail’s statutory accounts for the year and the one-off impact of the change in corporation tax rate, which was substantively enacted for accounting purposes in the previous year in addition to a corporation tax charge for that year. There has been no change in the corporation tax rate in the current year.

Capital investment

Capital investment included continued delivery of the road investment strategy by National Highways, the Network Rail enhancements programme and High Speed 2 construction by HS2 Ltd. These are our 3 main areas of capital spending.

Alongside these major infrastructure projects, we have continued to invest at a local level, including via grant funding to local authorities and mayoral combined authorities, in line with our strategic priority of growing and levelling up the economy. We have increased investment in projects to decarbonise the transport system – such as cycling and walking infrastructure, zero emission buses and electric vehicle infrastructure. Active Travel England commenced operations in August 2022 as an executive agency of the department with the objective of making walking and cycling the first choice for local trips.

Total managed expenditure

Total managed expenditure (TME) represents the total funds spent by the department against a series of different budget types, which are depicted in figure 4. A comparison of TME in 2022 to 2023 to recent years is shown in figure 5, with 2022 to 2023 values corresponding to the statement of outturn against Parliamentary supply. Net cash requirement (NCR) is a separate Parliamentary control total which limits the cash funding departments can draw from the Exchequer to finance their TME spending for the year.

Our budget framework

HM Treasury sets the budgetary framework for government spending.

Figure 4: our budgetary framework

The total amount the department spends is referred to as total managed expenditure; which splits into:

• annually managed expenditure (AME) and
• departmental expenditure limit (DEL)

AME expenditure is typically volatile or demand-led. AME budgets are agreed with HM Treasury on an annual basis. DEL expenditure reflects the cost of delivering front-line and back-office activities. Long-term DEL budgets are set through spending reviews which usually occur every 3 to 5 years. Budgets are also classified into resource and capital. Resource DEL includes a further split into:

• programme budgets for frontline services, and
• admin budgets such as back office functions

Figure 5: TME and NCR by year

Our resource DEL covers the expenditure associated with the day-to-day running of the group, including the costs our arm’s length bodies incur to support delivery of our major projects and to operate and maintain the elements of the transport network they are responsible for.

Our capital DEL covers the major capital programmes described above and other important investment that is intended to create future economic growth. Network Rail, National Highways and the core department received material levels of capital income: these relate to contributions from other bodies towards capital projects.

TME includes our non-cash budget requirements, such as: depreciation in resource DEL; deferred tax and interest accretion charges in resource AME; and capital provisions in capital AME. Rising inflation increased the costs associated with servicing Network Rail’s external debt. Most of the debt is index-linked and total accretion interest on the outstanding balance of Network Rail’s debt was £2.8 billion in 2022 to 2023. As RPI has increased, the cost related to the bonds has also increased.

Figure 5 includes our net cash requirement for the year, which represents the department’s total call on taxpayer funds from the Exchequer to finance its spending activities for the year.

Figure 5.1 shows how our biggest area of capital spend – HS2, Network Rail and National Highways – have evolved in recent years. Spending plans for 2023 to 2024 reflect amounts authorised by Parliament in the main estimate for the year and those for 2024 to 2025 reflect amounts agreed in Spending Review 21. The recent increase in spending on HS2 reflects the profile of Phase One (London to Birmingham) construction activity and the significant inflation experienced on the programme in recent years. Capital spending by Network Rail and National Highways is typically more stable between years, in line with the long-term investment programmes agreed through the ORR control period and the road investment strategy mechanisms respectively.

Figure 5.1: biggest areas of capital spend

Assets and liabilities

	2022-23 £m	2021-22 £m	Increase / (Decrease) £m
ASSETS
Property, plant and equipment, including leases and assets held for sale	600,764	534,891	65,873
Receivables	2,578	2,694	(116)
Loans	2,616	2,522	94
Investments in equities and associates	1,089	1,096	(7)
Cash	455	1,191	(736)
Inventories	1,151	1,077	74
Derivatives	94	13	81
Investment properties	231	211	20
Intangible assets	450	406	44
TOTAL ASSETS	609,428	544,101	65,327
LIABILITIES
Borrowings	33,195	30,325	2,870
Payables	8,454	8,601	(147)
Pensions	883	4,007	(3,124)
Deferred tax	6,450	5,120	1,330
Provisions	1,693	1,880	(187)
Derivatives	231	264	(33)
TOTAL LIABILITIES	50,906	50,197	709
NET ASSETS	558,522	493,904	64,618

Assets

The department had £609 billion of assets at 31 March 2023, an overall increase of £65 billion on the prior year. Notable changes are set out below.

As at 31 March 2023 £411 billion of assets related to the Railway Network in Great Britain and £159 billion related to the strategic road network in England, which are the responsibility of Network Rail and National Highways respectively. The value of the department’s asset base increased by £65 billion between 31 March 2022 and 31 March 2023. This was driven largely by £17 billion additions and £62 billion of revaluation increases to property, plant and equipment assets, offset by £8 billion of depreciation charges.

Additions to the rail network comprised £2 billion of enhancements and £4 billion of renewals. Major schemes included: TransPennine improvements, East West Rail, Midland main line improvements, East Coast Main Line improvements; and in Scotland, improvements relating to the Inverness to Aberdeen and Edinburgh to Glasgow lines. Additions to AUC include £6.9 billion relating to construction works undertaken to-date by HS2. Additions to the strategic road network included: £2 billion of capital enhancements including spending from the designated funds used to improve the surroundings of the network, supporting sustainability and protecting quality of life and the environment; and £1 billion of asset renewals. Significant additions included the A11 concrete roads reconstruction at Wymondham, Norwich and the A533 Expressway Bridge near Runcorn. These networked assets are valued using a depreciated replacement cost valuation approach as required under HM Treasury financial reporting rules, representing the newbuild cost of a modern equivalent asset which is then depreciated to its current condition. The revaluation gains primarily represent inflationary increases in the estimated cost of building a modern equivalent infrastructure asset. The department’s approach to revaluing these assets and the sources of uncertainty are explained in note 1.2.

Loans increased by £0.1 billion, primarily driven by £0.1 billion new loans for the Crossrail project made available to the Greater London Authority and Transport for London (TfL) (2021 to 2022: £0.5 billion).

Derivative assets increased by £0.1 billion due to interest rate swaps where Network Rail fixed its cash flows relating to interest ahead of its debt drawdowns.

Cash decreased by £0.7 billion: this represents a return to a normal level of cash balances across the group, following the more cautious approach to cash flow management adopted in recent years during pandemic response.

Further details can be found in notes 5 to 9 and 11 to 17 to the financial statements.

Liabilities

Our costs and liabilities have increased as a result of the impact of inflation, increasing our construction costs and spend across the transport network.

The department held £51 billion of liabilities at 31 March 2023 (2021 to 2022: £50 billion). These comprise:

• Network Rail has £28 billion (2021 to 2022: £25 billion) of debt payable to bondholders, reflecting third party borrowing entered into before the company joined the departmental group. The increase is due to an increase in accretion on the index linked bonds. In addition, £4 billion of debt (2021 to 2022: £4 billion) is payable to institutional investors holding bonds issued by the department’s finance companies, LCR Finance plc and CTRL Section 1 Finance plc. This stock of debt matures by 2052
• £8 billion of trade and other payables (2021 to 2022: £9 billion)
• Network Rail has a total deferred tax liability of £6 billion. This has increased by £1 billion since the prior year, reflecting temporary differences for depreciation on the railway network and actuarial movements in Network Rail’s pension scheme
• £1 billion of defined benefit pension liabilities relating to employees, which is £3 billon lower than last year due to net effect of changes in key financial assumptions on assets and liabilities. The pension schemes accounted for within this liability are described in note 24 to the accounts: this liability excludes civil servants in the PCSPS, for which accounting rules require that liabilities are recognised in year as the employer contributions fall due
• £2 billion of provisions, of which £1 billion is for land and property purchases along the HS2 route
• £1 billion of lease liabilities in respect of right-of-use assets (2021 to 2022: £1 billion)

Further details can be found in notes 13, 18 to 22 and 24 to the financial statements.

The department has £2 billion of contingent liabilities and £12 billion of remote contingent liabilities, many of which were designed to promote investment in transport assets by offering guarantees and indemnities to the supply chain in the event that assets do not produce the expected revenues. The value of contingent liabilities tends to decrease over time as many are based on the remaining value of underlying assets, such as rolling stock and depots. The department also has several contingent liabilities that cannot be quantified.

Figure 6: increase / (decrease) in liabilities during the year £m

Future outlook

HM Treasury’s Spending Review 2021 set future year budgets up to and including 2024 to 2025. Capital DEL investment will remain high as we continue to deliver through the lifecycle of our major programmes.

Figure 7: total net expenditure (exc. depreciation) split between capital and resource net expenditure

Alignment to The Taskforce on Climate Related Financial Disclosures (TCFD) recommendations became mandatory for large companies from April 2022. HM Treasury have proposed a road map towards implementation of TCFD in central government bodies by 2025-26. Climate change is likely to have a material impact on the department’s financial statements, most notably on the road and rail network assets and other transport infrastructure assets which are valued using a depreciated replacement cost method.

Key features of these valuations which may be impacted by climate change, include: useful lives of asset components; modern equivalent asset design standards as the department implements the government’s decarbonisation agenda; and risks to assets located at sites facing specific climate change risks, such as coastal locations. Recognising the department’s role in responding to decarbonisation and environmental challenges across the transport system, the department established a Second Permanent Secretary led group for decarbonisation, technology and strategy in 2021 to 2022 and in May 2023 a new Second Permanent Secretary at the department was appointed.

Despite the pandemic receding, inflation presented fresh challenges for public spending, the department and the supply chains we depend on to deliver. The 2022 Autumn Statement protected the departmental budgets but cost pressures to our projects and programmes created by inflation mean that the delivery of some schemes will take longer than originally intended in order to contain spending within the budgets set at SR21. The details were set out to Parliament in a written ministerial statement on the 9 March 2023.

Timelines for certain parts of the HS2 programme have been rephased, including revisiting plans for delivering the link in London between Old Oak Common and Euston. The Lower Thames Crossing road construction project will be rephased by 2 years, and some other major road schemes will also be deferred.

The performance report demonstrates the department’s progress in delivering against our long-term strategic priorities, while simultaneously responding to the unprecedented challenges brought on by the industrial action and inflation. Despite the likely challenges the future will bring, I am confident in our ability to continue delivering the government’s transport ambitions and creating value for money.

Nick Joyce

Director General, Corporate Delivery Group

Performance analysis

Response work on the transport sector during 2022 to 2023

In addition to the more routine workstreams within the priority outcomes, the department has responded to and delivered on additional and in some cases once in a generation, areas of work. Work on these is reported within the sections below.

The demise of Her Late Majesty Queen Elizabeth II (Operation London Bridge)

On 8 September 2022, the department’s Operation London Bridge response plan was activated following the demise of Her Late Majesty Queen Elizabeth II.

Owing to the professionalism, dedication and perseverance of colleagues working across the rail, road, aviation and maritime sectors, the transport industry’s response over the 11 days of ‘National Mourning’ was delivered well.

The planning for Operation London Bridge took many years and continued to be tested up to the time that the plan was activated. This meant that the transport sector had robust and assured plans in place that could be adapted as necessary to support all of those participating in the events surrounding Her Late Majesty’s funeral and the ascent of King Charles III.

During Operation London Bridge the department:

• supported industry partners with bolstering rail services and encouraging retailers in and around major transport hubs to stay open later to accommodate the needs of passengers attending national commemorative events, including the lying in state in London
• assisted partners on the approval of the temporary traffic regulation order by the Transport Secretary, to close roads in central London for over 72 hours
• supported the Foreign Commonwealth Development Office (FCDO) with the arrival and departure of approximately 500 VIPs for the State Funeral

The department’s contributions aided to the successful delivery of Operation London Bridge, an event that took place with both respect and dignity.

Coronation of Their Majesties King Charles III and The Queen Camilla (Operation Golden Orb)

Following Operation London Bridge, planning began to prepare for the Coronation of Their Majesties King Charles III and The Queen Camilla.

Teams from across the department worked with transport stakeholders and other government departments (OGDs). Planning catered for the multi day celebrations that would use the lessons learned from Operation London Bridge to ensure the transport sector enabled a successful, safe, and celebratory event.

During Operation Golden Orb the department:

• worked closely with London and industry planners to prepare for and deliver the largest military personnel movement since World War II
• engaged with Police Scotland and National Highways to ensure the smooth transportation of the Stone of Scone from Scotland to London
• worked with Windsor delivery partners, including the Royal Borough Council, as well as Rail Transport Operators and Department for Digital, Culture, Media and Sports (DCMS) to ensure additional services were provided late into the night after the Windsor Concert, with a focus on passenger welfare and the ability to transport people from Windsor to London

Cancellation of smart motorways

In April 2023, the government announced that all plans for news smart motorways have been cancelled, recognising the lack of confidence felt by drivers and cost pressures. This resulted in the 11 schemes paused in RIS2 and the 3 earmarked for construction during RIS3 being removed from the government’s road building plan.

We take the public’s concerns about smart motorways seriously. Whilst National Highways smart motorway progress report continues to show that overall, in terms of serious or fatal casualties, smart motorways are the safest roads on the strategic road network, we recognise that we need to do more to build public confidence.

We are continuing to invest £900 million in safety improvements on existing smart motorways. This includes adding an additional 150 emergency areas across the network and giving motorists clear advice when using smart motorways to boost public confidence. We are also continuing to deliver against other commitments as set out in January 2022 in the government’s response to the Transport Select Committee’s report on the rollout and safety of smart motorways.

Safety on our roads remains an absolute priority and we will continue to ensure that our roads remain among the safest in the world – helping drivers not just to be safe, but crucially, to feel safe and confident when driving.

Rail industrial action

Over the last year, the department has managed the impact of national industrial action on the railway system and worked with trade unions (TUs) and employers to support the resolution of disputes where possible.

These disputes are over the resistance to critical workforce reforms and originally spanned all 14 DfT-contracted train operating companies (TOCs) and Network Rail. Whilst Network Rail has settled its disputes with all its unions (RMT, TSSA and Unite) by agreeing a 2 year pay deal for significant reforms, the TOCs have not been able to settle with either the RMT or ASLEF. Both trade unions, continue to take industrial action and have refused to allow their members a referendum on the deal offered to them by the TOC representatives, which in RMT’s case, is almost the same as the Network Rail offer it accepted. The department’s position is clear: whilst is wants these disputes to end, without RMT and ASLEF agreeing to essential workforce reforms, funding a pay deal will not be possible.

At the onset of the strikes, the department mobilised a response to address the key impacts on transport, focusing on the optimal available service provision for passengers and freight given the significant disruption to services. Operational management was led by the industry; however, the department provided a bridge between industry and ministers, making sure risks were well understood, monitored, and mitigated for; supported cross-government contingency planning, and reported extensively on Network Rail TOCs plans for service delivery.

It is long standing practice for rail operators to use a degree of rest day working – overtime – to operate their timetables and permit the training of new drivers and introduction of new train fleets. This has been to the mutual benefit of both the companies and staff. On 30 July 2022, some TOC’s experienced an immediate and near total cessation of drivers volunteering to work passenger trains on rest days leaving them unable to resource their timetables and in the immediate term, resulted in significant short notice cancellations.

On average, each TOC endured 31 days of strikes in 2022 to 2023, with Network Rail experiencing 28. To maximise disruption, a third of strikes were held over 2 or more consecutive days, while 16% of strikes were held on days immediately before or after action taken by another trade union at the same as TOC/Network Rail. 25% of strikes called were subsequently suspended.

Different strikes had differing impacts on transport services and revenues. However, the total daily revenue at risk from a complete shutdown of the rail network was approximately £25 million (£15 million at weekends).

The strikes caused wider economic impacts, with a December report from the Centre for Economics and Business Research estimating that the June 2022-January 2023 strikes could result in a loss of around £500 million for the UK economy due to people outside of the rail sector not being able to work.

The department met the challenges that arose from the rail strikes by:

• working with the DCMS to help identify and control risks for planned major events, which included the Glastonbury music festival, the Commonwealth Games, Women’s Euros, the Rugby League World Cup and Eurovision
• gathering data at the onset of strikes to determine the impact subsequent strikes could have on passengers, freight, the wider economy, and other travel mode
• supporting Network Rail’s planning for Christmas engineering work, which was threatened by Action Short of Strike (any action which imposes pressure on the employer as a bargaining tool, but which does not amount to a full withdrawal of labour)
• working closely with the Department of Business and Trade to support the passage of the Strikes (Minimum Service Levels) Bill through Parliament, which, subject to Royal Assent, will give the government the power to ensure that a minimum level of service is delivered across important public services during strike action
• publishing the public consultation for implementing minimum service levels (MSLs) in passenger rail in February 2023

War in Ukraine

The department continues to support the UK government to pressure Russia to end its illegal and unprovoked invasion of Ukraine, while supporting the Ukrainian government and its people. The department boosted UK influence by being at the forefront of global transport measures against Russia, working across His Majesty’s government (HMG) to impose the most severe sanctions ever imposed on any major economy. The department continued to support Ukraine’s long-term reconstruction needs, working with the UK transport sector to provide support to repair damaged transport infrastructure and facilitate supply chains. This alongside keeping the UK transport network safe, reliable, and inclusive for Ukrainian arrivals.

Delivery actions

• closed all UK airspace and ports to Russian aircraft and ships, and in collaboration with HMG and G7 partners, developed an oil price cap and placed prohibitions on the import of Russian oil, cutting Russia’s critical revenue sources
• provided a £10 million rail aid package (procured by Network Rail and developed in conjunction with Ukrainian networks)
• provided essential tools/materials to repair rail infrastructure and facilitate increased grain exports
• established the UK-Ukraine transport partnership, linking the Ukrainian Ministry of Restoration with UK organisations specialising in rebuilding transport infrastructure
• provided over 2,900 Ukrainian arrivals with free access to the UK transport system
• extended the length of time Ukrainians on the 3 visa schemes (Homes for Ukraine, Family and Extension) can drive in Great Britain on their home country driving licence from one year to 3 years
• detained 3 aircrafts and one superyacht
• prohibited Russian airlines from selling an estimated value of £50 million of airport slots

Implications of inflation and higher cost-of-living crisis

The cost of living has increased significantly since mid-2021, with Russia’s invasion of Ukraine being the main contributor. In addition, production problems following COVID-19 pushed up the prices of goods. This has led to falls in ‘real’ disposable incomes for households (that is, adjusted for inflation and after taxes and benefits).

On average, households in the UK spend 14% of their total expenditure on transport, the joint highest category of spend, alongside housing and utilities. Consequently, transport is a significant component in the rising cost of living.

As well as impacting on transport users, inflation also has impacts on DfT’s capital programme. The latest construction prices index published by ONS on 12 May 2023 showed that 12-month infrastructure inflation to March 2023 was 14.1%, and has traditionally run higher than CPI. However, these figures are generalised; construction industry inflation depends on many factors.

The department has delivered several proposals in response to these cost pressures, including a £2 bus fare cap in England and interventions to manage rail fares, as well as looking into potential adjustments to MOT test timings.

Delivery actions

• the department introduced a £2 fare cap from 1 January through to 31 October 2023 on single fares covering thousands of routes in England outside London, to be replaced by a longer-term cap of £2.50 from 1 November 2023 to 30 November 2024. The £2 cap has showed signs of increased bus use, with an independent survey of more than 1,000 people from Transport Focus showing that 11% of people say they are using the bus with increased frequency
• the department aligned the regulated rail fares increase to July 2022 average earnings growth (5.9%) This was in place of aligning the increase with July RPI (12.3%). This alignment has more than halved the increase that was due to be faced by passengers
• a consultation on changing the timing of the first MOT test from 3 to 4 years was launched in January and closed on 22 March. The department also ran a call for evidence exploring options for developing the test content to reflect new technologies and developments in the automotive field

The department has also developed options to generate internal savings, reviewing the potential impact of inflation on our medium-term financial position. We continue to monitor escalating costs that impact the delivery of capital projects e.g., fuel price increase, and the impacts of increased maintenance of bus services.

Our programme teams reviewed schemes and engaged regularly with our key stakeholders and HM Treasury to understand impacts of inflation and how we might re-scope or re-prioritise schemes if required.

Reverting to a new, post pandemic normal

Following the publication of the government’s living with COVID-19 strategy, the department’s Domestic COVID-19 Response Directorate was wound down in March 2022, and ongoing work is now integrated into teams to:

• embed HMG’s ‘living with COVID-19’ strategy within the department
• develop robust departmental contingency plans for any major resurgence of COVID-19
• capture lessons learned from the COVID-19 pandemic and begin preparing for future pandemics beyond COVID-19 and capture lessons learned from the COVID-19 pandemic and begin preparing for future pandemics beyond COVID-19

Spaceflight

Space is a vital part of the UK’s economy, as we rely on satellite and space activities to deliver navigation, weather forecasting, power grid monitoring, financial transactions, better public services such as, television services and other digital communication.

The National Space Strategy (September 2021) sets out the UK’s vision, to build one of the most innovative and attractive space economies of the world, growing the UK as a space nation. This includes an ambition for the UK to be the leading provider of commercial small satellite launches in Europe by 2030.

The government, through the UK Space Agency, has awarded targeted grants to build a UK launch manufacturing capability, catalyse private sector investment (including from US launch providers) and enable the supporting infrastructure (space ports and ground support equipment). These interventions enabled the UK’s first launch by Virgin Orbit from Spaceport Cornwall on 9 January 2023. With further spaceports and launches planned from Scotland with other operators, it has also stimulated significant private sector investment in launchers and launch infrastructure.

Whilst the Virgin Orbit launch outcome was disappointing (a system anomaly occurred during the firing of the rocket’s second stage engine) the project has demonstrated the UK’s commitment to our ambitious space programme.

Despite this short-term setback, this is an exciting time for the pioneering UK space sector. The department, working with the UK Space Agency and Civil Aviation Authority are thoroughly capturing lessons learned from the first launch, to make the legislation and licensing process as efficient and effective as possible.

In parallel to the Virgin Orbit operation, the department has been working with a number of other spaceports that are currently going through the licensing process. If successful, SaxaVord Spaceport in the Shetland Isles and Sutherland in Northern Scotland will be the first vertical spaceports in UK, In the case of Saxavord they are already in discussion with a number of foreign launch companies, including ABL, HyImpulse, Skyrora and Rocket Factory Augsbeurg, all of which have plans to launch within the next 18 months.

Delivery highlights

• UK’s first spaceport is now up and running in Cornwall, with further spaceports and launches planned from Scotland in the coming year
• the government has awarded £40 million of grant funding to help establish vertical launch services from 2 spaceports in Scotland and horizontal launch by Virgin Orbit from Spaceport Cornwall

Growing and levelling up the economy

Improve connectivity across the United Kingdom and grow the economy by enhancing the transport network on time and on budget.

Growing and levelling up the economy is at the heart of the government’s agenda to spread opportunity across the UK, and transport has a vital role to play in this work.

In the short-term, local transport enhancements are vital for improving access to local services, jobs, education, and housing in order to support local growth and regeneration. Our Transforming Cities Fund projects, funding for active travel and bus service improvement plans, Restoring Your Railways Fund, and Levelling Up Fund, are all examples of how transport can improve access to social and economic opportunity and improve pride in place.

In the longer term, our infrastructure portfolio can play a vital role in creating more productive cities and towns by bringing businesses closer together to reduce costs, fostering competition and innovation; widening labour markets to improve skills matching; and changing our economic geography by attracting investment towards key economic centres outside of London and the south east. The department progressed a range of activity to help drive these longer-term productivity benefits, from improving intra-city connectivity through our City Region Sustainable Transport Settlements, to better connecting our key economic centres and improving access to international gateways through major projects like HS2, Northern Powerhouse Rail and strategic roads enhancements. The department also continued to ensure that the benefits of better connectivity are felt across all 4 nations of the UK and is seeking to publish our response to the union connectivity review shortly as part of this.

The department also drives growth through pro-innovation regulation to unlock significant growth and productivity benefits from emerging transport markets. Through our Future of Transport programme, we are seeking to stimulate innovation in the transport sector, create new transport markets, secure a safe and inclusive 21st-century transport system, and secure the UK’s position as a world-leading innovator.

Highlights over the last year include the official opening of the Elizabeth Line (Paddington-Abbey Wood) to passengers on 24 May 2022, and delivery of 2 subsequent milestones in November with the opening of Bond Street station, and start of through-running (connecting Reading, Heathrow and Shenfield to the central section tunnel).

The Restoring Your Railway programme also announced further development funding for 9 schemes in June 2022, which will reconnect communities through improved access to jobs, homes, and education, and help catalyse local regeneration.

Good progress was also made on local infrastructure improvements across the country. City Region Sustainable Transport Settlement allocations were confirmed for mayoral combined authorities in July 2022 and several key Transforming Cities Fund schemes were delivered over the course of the year, such as the Tyne and Wear Metroflow project.

In March 2023, the Secretary of State provided an update on the government plans to reform the railways and announced Derby as the location chosen to be the national headquarters of Great British Railways (GBR), providing further detail on GBR’s regionalised approach including how GBR will benefit the whole of Great Britain, as well as offering more detail on the role of GBR.

Since its inception Network Rail has spent £52.6 million on GBR. This includes £10.3 million on fares, ticketing and rail reform.

Progress made in this priority outcome in 2022 to 2023, is summarised below.

Future of Transport

The objective of this workstream is to stimulate innovation in the transport sector, create new transport markets, secure a safe and inclusive 21st century transport system, and secure the UK’s position as a world-leading innovator, so we can encourage changes in behaviours and more sustainable travel to increase the pace of decarbonisation.

The workstream fosters the development and deployment of technology in line with guiding principles that the department has set. These principles include that new mobility services must lead the transition to zero emissions, support mass transit and active travel and make more efficient use of existing road space and infrastructure capacity through increased occupancy and sharing.

This workstream will support delivery of the department’s 2030 nationally determined contribution, the Sixth Carbon Budget in 2035 and net zero transport emissions by 2050, by delivering modal shift to more sustainable forms of travel and increases in car occupancy.

This workstream can also directly help to tackle congestion, by supporting fewer overall car and other vehicle trips, improving air quality, and supporting better journeys for all road users.

The Future of Transport programme remains vital to keep the UK as a global leader in transport innovation, leveraging private investment, skilled jobs, decarbonising transport, and both unlocking and delivering on the potential of an independent Global Britain.

Delivery highlights

• published the Connected and Automated Mobility 2025 paper
• conducted the Great Self Driving Exploration, an award-winning study to allow people from all levels of society to engage with self-driving vehicles and understand how they might affect their lives

This workstream continues to:

• deliver a code of practice to support the emerging Mobility as a Service (MaaS) market, providing clarity to industry about how new services can be designed to align with government goals and legal frameworks
• deliver on, a future of transport rural strategy, setting out how rural areas in the UK should benefit from new innovations in transport in support
• outline how future transport solutions and interventions can tackle rural mobility issues, improve connectivity and accessibility, increase low and zero-carbon travel options, and deliver more integrated transport services
• deliver the Commute Zero programme which supports employers and employees to embrace opportunities for more sustainable commuting
• deliver a better understanding of people’s different needs, preferences and barriers to using new technology in transport
• consider how we can best ensure our transport networks and regulatory systems provide a robust framework in which new technologies can be safely developed and deployed

Passengers have been boarding the world’s first fully sized, self-driving bus service in Edinburgh since spring 2023 (CAVForth), after it was awarded a share of £84 million in joint UK government and industry support for self-driving transport technology. The project is one of 7 successful projects from around the UK, and forms the most advanced set of commercial, self-driving passenger and freight operations anywhere in the world.

Integrated Rail Plan (IRP) future network planning

The objective of this workstream is to set out a core pipeline of £96.4 billion investment in rail up to 2050, which acts as a framework for the integration of the HS2 Phase 2b Western Leg, and other major projects including Northern Powerhouse Rail, the TransPennine route upgrade, Midland Main Line electrification, and a major upgrade of East Coast Main Line.

The IRP is committed to look at the most effective way to run HS2 trains to Leeds, and has started work on the new West Yorkshire mass transit system; progressing options to complete Midlands Rail Hub with an outline business case.

These interventions would support the growth of rail freight, with the full electrification of the TransPennine route and gauge clearance work on the network to improved services.

Preparatory work has progressed on both the HS2 to Leeds study and the Toton study with working level stakeholder engagement established with local authorities, Network Rail and HS2 Ltd.

In partnership with Network Rail, work was underway to identify potential improvements to cross-border rail connectivity between Scotland and England linked to Lord Peter Hendy’s review of union connectivity.

Delivery highlights

• Network Rail and Midlands Connect submitted an outline business case for the Midlands Rail Hub West and Central scope at the end of 2022 and this is currently under consideration

High Speed Two (HS2) programme

HS2 is the most significant single investment in the UK’s public transport system – a new railway that will provide high-speed services between Birmingham, Manchester, London and the East Midlands.

HS2 will change the economic geography of our country, bringing our biggest cities and economic regions closer together with reliable, fast and high-capacity travel. It is also a long-term investment that will offer a greener alternative to long-distance road travel and domestic flights, helping meet the government’s ambition to bring all greenhouse gas emissions to net zero by 2050. With over 28,500 workers and 3,000 businesses currently supported, HS2 is enabling the UK to develop world-class skills, innovation, and greener technology, building a skilled workforce that will benefit the country for years to come.

HS2’s opening stage will be delivered to schedule, with the first high-speed services running between Old Oak Common in west London and Birmingham Curzon Street by 2033. However, like other construction projects, the programme has faced significant inflation. In March 2023, the Secretary of State announced that construction for elements of HS2 would be rephased to help balance the nation’s books. We will not proceed to full construction of the Euston station in the next 2 years due to affordability and profiling issues, instead using this time to ensure an affordable and deliverable design. On Phase 2a, between the West Midlands and Crewe, we will rephase construction by 2 years.

Delivery highlights

• delivery of Phase One continues with around 350 active construction sites between the West Midlands and London. Two of the 12 tunnel boring machine journeys on Phase One are now complete and HS2 Ltd is making good progress with significant earthworks programme
• in North Warwickshire, the Marston Box rail bridge – the world’s longest box slide – was successfully installed
• the High Speed Rail (Crewe - Manchester) Bill passed Second Reading in the House of Commons in June 2022. An additional provision laid in July 2022 made changes to the scheme in response to Parliament’s instructions, and progress continues with petitions now being heard by the specially appointed select committee
• HS2 Ltd launched its diesel-free plan, setting out how diesel will be phased out on all construction sites by 2029. There are now 19 diesel-free construction sites across HS2, with more planned in the future
• HS2 has planted more than 845,000 trees on the programme since construction began, with an aim to plant 7 million new trees and shrubs along Phase One
• the HS2 supply chain continues to beat industry averages for female and BAME employees, achieving 28% and 23% respectively
• HS2 has recruited over 1,200 apprentices since 2017, more than halfway to its target of creating 2,000 apprenticeships over the course of the programme

Restoring Your Railway (RYR)

The objective of this workstream is to reopen railway lines and stations across England and Wales that reconnect communities, contributing to local economic regeneration and improving access to jobs, homes, and education.

In January 2020, the government pledged £500 million for the RYR programme to deliver its manifesto commitment and start reopening lines and stations in England and Wales. This investment is being used to level up and reconnect smaller communities, regenerate local economies and improve access to jobs, homes, and education. RYR’s first success was the Dartmoor Line , which reopened nearly 50 years following its closure and ahead of schedule.

Delivery highlights

• on the Northumberland line a Transport and Works Act Order was granted in June 2022, and construction is now underway
• the project to restore the Bristol to Portishead line received an additional funding contribution of £15.65 million in summer 2022
• the granting of a development consent order in November 2022 has enabled early work to be undertaken on site, and a full business case is expected to be submitted in early 2024
• the New Stations Fund, for the Marsh Barton and Thanet Parkway stations have completed construction and will be open to passengers over the summer. There has been continued progress with 4 other ‘New Stations Fund 3’ schemes with White Rose station being expected to open by the end of 2023. In June 2022, further funding was announced to support 9 schemes’ business cases, and the department has since received all outstanding business cases through the Ideas Fund

Crossrail project (the Elizabeth Line)

The objective of this workstream was to deliver a new high-frequency rail service, increasing rail capacity in central London and in doing so will improve journey times, ease congestion, and offer better connections from Reading and Heathrow in the west to the City, Canary Wharf and the east and south-east of London.

The Elizabeth line opened in May 2022, with services starting in the central section between Paddington and Abbey Wood. The opening of Bond Street station in October 2022 marked the completion of all central section stations.

6 November brought the start of through-running services connecting Reading and Heathrow in the west and Shenfield in the east to the central tunnel. This stage of the project also introduced Sunday services and increased service frequency through central London from 12 to 22 trains per hour (tph) in the peak (16 tph off peak).

The Elizabeth line has exceeded expectations with over 150 million passenger journeys during the first year of operation since May 2022 and ridership is now at around 600,000 journeys a day on weekdays.

Stage 5c (Full Crossrail Service Reading / Heathrow to Shenfield / Abbey Wood), was delivered in May 2023, which was the final Crossrail milestone, and has introduced full end-to-end services, including direct services between Shenfield and Heathrow, and the end state frequency level of 24 tph in the peak (although remaining at 16 tph off-peak).

Some risk remains around performance following the introduction of stage 5c due to reliability issues in the western section but Network Rail and TfL have improvement plans in place.

Northern Powerhouse Rail (NPR)

The objective of this workstream is to improve passenger experience and service reliability, reduce levels of crowding across the northern rail network and contribute to the achievement of Net Zero 2050. This to be achieved through the electrification of the north’s rail infrastructure and driving modal shift from the region’s congested roads.

The government has committed to delivering the TransPennine route upgrade (TRU) the first phase of NPR, which, combined with sections of new line and the HS2 Phase 2b Western Leg to Manchester Piccadilly will transform connectivity between Liverpool, Warrington, Manchester Airport, Manchester Piccadilly, Huddersfield, Leeds, and York / Newcastle.

The department continues to develop formal NPR co-sponsorship arrangements with Transport for the North, and the NPR strategic outline business case is being revised to align to the IRP. In line with the Green Book (2022) requirements, this will update the analysis on a range of different network options, including the potential levelling up impact on communities. This will allow the core NPR network committed to in the IRP to be compared with strategic alternatives.

The department continues to work closely with Network Rail in the development of infrastructure options along the proposed route for NPR and work has begun to initiate aspects of NPR new line development with HS2 Ltd.

To date, £3.0 billion has been committed to TRU, with £1.1 billion spent so far. Infrastructure delivery has continued to be delivered on time with several successful blockades having been recently completed, including a 26-day blockade in April 2023 as part of works to deliver electric services between Manchester Victoria and Stalybridge by the middle of the decade. Works continue on the route near York and Manchester with planning and design for the rest of the upgrade advancing rapidly, with much of the programme moving into design and delivery as part of the next stage of funding approvals anticipated in summer 2023.

On 11 May 2023, the Secretary of State announced that the TransPennine Express (TPE) contract will not be extended at the end of the month. This brought the company into operator of last resort (OLR) from 28 May 2023.

This follows months of significant disruption and regular cancellations across TransPennine Express’s network, which has resulted in a considerable decline in confidence for passengers who rely on the trains to get to work, visit family and friends and go about their daily lives.

The decision to bring TransPennine Express into the control of the operator of last resort is temporary and it is the government’s full intention that it will return to the private sector. The decision will not instantaneously resolve the challenges being faced on the lines but will provide an opportunity to reset relationships between the operator, staff, trade unions and passengers.

East West Rail (EWR)

The objective of this workstream is to improve connectivity, support wider economic growth, and help unlock current and future housing ambitions in the area.

EWR is a multi-year rail project that will provide a direct rail link between Oxford and Cambridge and will join up key towns and cities across the Oxford to Cambridge Arc. The scheme will not only improve connectivity but support wider economic growth in the area.

The project is split into several stages, structured around the phased introduction of passenger services:

• connection stage 1 – in delivery: The government has provided £1.3 billion to deliver connection stage 1 (CS1). When completed it is set to create a direct, twice-hourly rail service from Oxford to Bletchley and Milton Keynes and enable the delivery of future connection stages to Bedford (CS2) and Cambridge (CS3). CS1 is in construction phase and due to complete by 2025
• connection stages 2 and 3 – in development: Connection Stages 2 and 3 of EWR will connect Milton Keynes and Bletchley with Cambridge, via Bedford, completing the line of route between Oxford and Cambridge. The government’s 2023 Spring Budget reconfirmed commitment to the delivery of connection stages 2 and 3 of East West Rail. Since then, a public route update announcement has been made on the future of the scheme, confirming further details, and setting out next steps towards the submission of the development consent order application which would provide the planning powers needed to deliver the new railway between Bedford and Cambridge

Delivery highlights

• the EWR Alliance has delivered 1 million m3 of earthworks to prepare the ground for the 80km of new track that will carry CS1 services, around half of which has now been installed. Track works are due to complete in 2023 and signal the beginning of the testing and commissioning phase for the railway
• all 5 of the new railway overbridges are now open and 10 of the 12 footbridges have been installed
• works at Bletchley High level station and Winslow station are at an advanced stage and are set to complete later in 2023

Intra-city Connectivity: City Region Sustainable Transport Settlements and Transforming Cities Fund

The objective of this workstream is to improve intra-city transport connectivity through the Transforming Cities Fund (TCF) and the City Region Sustainable Transport Settlements (CRSTS). The department is committed to supporting cities to develop and promote local growth through the £2.45 billion TCF and the £5.7 billion CRSTS.

The TCF is aimed at driving up sustainable transport, productivity, and access to jobs through investments in public and sustainable transport infrastructure in cities across England. During 2022 to 2023 £21 million was allocated to one mayoral combined authority and £367 million was allocated to the 11 competitively bid city regions, including West Yorkshire Combined Authority, who are leading the residual schemes in City of York and North Yorkshire that could not be subsumed in to CRSTS.

Due to delays across the entire TCF programme there has been an impact on grant payments. A total of £135 million in 2022 to 2023 has been paid to TCF cities. Due to these wider challenges the department commissioned a review into the TCF delivery to understand next steps.

The independent assurance review was commissioned to consider the deliverability of all TCF cities delivery plans beyond March 2023 and advise on delivery priorities whilst considering a range of probable future funding scenarios.

Cost escalation due to impact of inflation could result in cities re-prioritising, re-scoping projects back to an affordable funding envelope, or seeking additional funding. The review concluded in March 2023 and helped to inform the ministerial decision for funding to be rolled forward into financial year 2023 to 2024 and a limited indicative funding allocation for 2024 to 2025. The review also recommended areas for strengthening programme controls and governance. These are now being introduced.

The City Region Sustainable Transport Settlements are a £5.7 billion fund to invest in the local transport networks of 8 mayoral combined authorities over a 5 year period. CRSTS consolidates existing funding including local roads funding and final year Transforming Cities Fund (TCF).

City regions benefiting from confirmation of the multi-billion-pound transport investment are Greater Manchester (£1.07 billion), West Yorkshire (£830 million), South Yorkshire (£570 million), West Midlands (£1.05 billion), Tees Valley (£310 million), West of England (£540 million) and Liverpool City Region (£710 million). Delivery plans have been agreed with these 7 city regions and published in July 2022. The north east is eligible for up to £563 million following a successful devolution deal in December 2022.

Delivery highlights

TCF:

• completion of the £94 million retained Tyne and Wear Metroflow project, to time and within budget
• completion of the local transport hub at Gosport Interchange in Portsmouth
• the roll out of 18 electric buses in Leicester

CRSTS:

• final settlements and delivery plans agreed and published online
• schemes in delivery including station redevelopments in West Yorkshire and the order of 100 zero emission buses in Greater Manchester
• agreement of a monitoring framework to hold places to account on delivery progress
• a further £8.8 billion was announced at Spring Budget 2023 for a second round of CRSTS from April 2027

Local transport planning and enhancements (including the Levelling Up Fund (LUF)

The objective of this workstream is to improve the planning and targeted local transport enhancements which better connect, and contribute to the growth and regeneration of, local communities and areas, this being consistent with our environmental objectives and the scale of local transport challenges.

The LUF invests in local infrastructure in areas which have been targeted for economic growth by improving connectivity, reducing congestion, and making places healthier and more attractive to live and work. Upcoming new local transport plan guidance for England, supported by capacity funding and regional centres of excellence, will provide long-term support to local transport authorities (LTAs) in the effective planning and delivery of local transport enhancements.

Delivery highlights

• LUF round 1 memorandums of understanding, including delivery plans, were signed with almost all LAs, and in January 2023 a round 2 provisionally allocated nearly £670 million to 29 transport projects across the UK
• the department has engaged extensively with local authorities to inform forthcoming local transport plan guidance and make sure it will support sensible trade-offs between transport priorities in line with budgets; including quantifying carbon reduction guidance to support building the evidence base to progress towards net zero
• 75% of Levelling Up round 1 schemes had begun construction by March 2023
• the Chancellor of the Exchequer announced there will be a round 3 of LUF as part of the Spring Budget in March 2023

Strategic road enhancements

The objective of this workstream is to address performance issues on the strategic road network (SRN) by, for example, adding capacity on congested stretches of road or junctions, or removing strategic road traffic from town centres. The SRN, covering England’s motorways and major A-roads, is the backbone of the country connecting people, building communities, and creating opportunities to help the nation thrive. It is essential in helping the nation recover from the pandemic and realising significant social and economic benefits right across the country.

The government has committed a £24 billion investment in the SRN through the second road investment strategy (RIS2 2020 to 2025). Around half of that investment is on a portfolio of enhancements. These are the most significant and complex improvements, intended to reduce journey times and the environmental impact of roads, and improving reliability, connectivity, capacity, and safety.

Delivery highlights

To date, 19 schemes have been open for traffic in RIS2, including 9 schemes in FY22/23 these include:

• A1 Scotswood to North Brunton
• M6 Junction 13 to15
• M4 Junction 3 to 12
• M25 Junction 25
• A31 Ringwood
• A2 Bean and Ebbsfleet
• M27 Junction 4 to 11
• A27 East of Lewes
• M1 Junction 13 to 19

A further 18 schemes are currently in construction, 4 having started works this financial year.

In November 2022, the A1 Scotswood to North Brunton improvement scheme was opened for traffic. This stretch of the A1 suffered from congestion and major delays, especially at peak times. National Highways increased road capacity at junctions 74-79, improved links to nearby important areas and supported local and regional communities to protect the nearby environment and reduce negative impacts of construction. The scheme has improved the economic and social performance of the region as well as people’s access to jobs, education, retail, and leisure.

Major road network (MRN) and large local major (LLM) schemes

This objective of this workstream is the enhancement of the most important local roads, to improve regional and local connectivity, economic growth, and rebalancing of the economy.

The MRN / LLM programme introduces schemes prioritised by sub-national transport bodies. Schemes are promoted by LAs and are on the busiest and most strategically important local roads and link key locations of economic importance. Schemes support economic growth, unlock land for housing, support active travel and public transport and support wider networks.

The MRN/LLM scheme provided funding for local roads by the department to local authorities to:

• reduce congestion
• support economic growth and rebalancing
• support housing delivery
• support all road users
• support the SRN

Delivery highlights

• progression of 6 schemes through full business case stage, allowing construction to start, including St Austell to A30 Link Road (Cornwall), A284 Ly minister Bypass (West Sussex), A59 Kex Gill (North Yorkshire), and Melton Mowbray Eastern Distributor Road (Leicestershire)
• a review of the current MRN / LLM programme was undertaken to identify any schemes which were no longer needed
• working with subnational transport bodies (STBs) and local authorities a small number of schemes were withdrawn from the programme due to costs, changes in road use since the pandemic and smaller scale interventions now being considered
• 31 MRN / LLM local authorities major schemes have been progressed to the next stage of development through the business case process

The impact of inflation and rising material costs in construction, including labour, plant, and materials, could further impact tight local authorities budgets and result in schemes being re-prioritised or re-scoped to meet the funding available.

The department works closely with local authorities and sub-national transport bodies to provide guidance and support to help relieve blockers in the timely delivery of the schemes.

Strengthening the union

The objective of this workstream is to implement the recommendations of the independent union connectivity review (UCR). This includes the publication of the UK government response to the UCR.

In 2020, the UK government asked Lord Peter Hendy to undertake an independent review on improving strategic connectivity to support economic growth across the UK. His union connectivity review was published in November 2021 and made 19 recommendations for new transport studies, policies, and investment.

Lord Peter Hendy has highlighted that in most cases his report does not contain new detailed infrastructure proposals. Instead, he points the way to further work which should better identify where, when and what to invest in for the best results. In line with all transport projects and investment decisions, a business case will be required for each project before it is progressed to the next stage.

The response will set out how the government intends to take forward the UCR’s recommendations over the short, medium, and long term and establish a framework of engagement with the devolved administrations (DAs). As part of this, thorough engagement is being undertaken, externally with DAs as well as internally within the department and across UK government departments.

Delivery highlights

• in February 2023, the department announced with the Welsh Government, £2.7 million funding to Transport for Wales for a development study on the South Wales Main Line, including design options for 5 new stations to reduce congestion on the M4
• in 2022 to 2023, SWNI hosted 11 ‘4 Nations’ transport forums, bringing together colleagues from the devolved administrations and territorial offices to discuss a range of issues, further enhancing relationships

Retaining European Union laws (REUL)

The Retained EU Law and Brexit Opportunities directorate was formed at the end of 2022 to coordinate the department’s work relating to the Retained EU Law (Revocation and Reform) Bill. Since its formation, the department has worked closely with the Brexit Opportunities Unit and across government to identify and develop a plan for all transport-related retained EU laws.

At the time of publication, 66 REUL have been include in the bill’s schedule for items to be revoked after December 2023. The Secretary of State is also considering further opportunities to reform EU laws that remain on our statute books progressing opportunities to reform transport regulations, with the goal of ensuring that the transport sector continues to be at the forefront of our ambitions for growth and innovation.

Grow and level up the economy: priority outcome indicator

Performance narrative

The Infrastructure and Project Authority’s assessment of GMPP projects is due to be published shortly and the department will review and assess findings upon publication. However, we are starting to see positive signs of benefits realisation at a workstream level. For example, HS2 is currently supporting over 28,500 jobs and has created 1,200 apprenticeships since 2017.

More generally, the department continues to develop methods to better assess progress against this strategic priority, which is difficult due to the long-term nature of impacts and challenge in directly attributing such impacts solely to transport interventions.

The below indicators were agreed as part of the SR21 settlement to show performance against the priority outcome. Unless otherwise stated, metrics have been drawn from the sources referred to in the department’s outcome delivery plan. Historical data may not match previous publications due to minor amendments through data revisions. Historical versions are available by request.

The percentage of transport infrastructure projects in the (GMPP) that the department assesses as on track to delivery, based on Infrastructure and Project Authority assessments.

Annually	Percentage
2021-2022	91%
2020-2021	96%
2019-2020	82%

Source: major projects data, Infrastructure and Projects Authority (IPA)

Release schedule: annually

This statistical release presents estimates of travel times from where people live to the nearest large employment centre, defined as a destination comprised of 5000 or more jobs. The ongoing publication of this statistical series is currently under review.

Measure of connectivity

The department’s outcome delivery plan has previously contained metrics on journey times^{[footnote 1]} derived from Official Statistics. This measure presents estimates of travel times from where people live to the nearest large employment centre, defined as a destination comprised of 5000 or more jobs. Note that the ongoing publication of this statistical series is currently under review, with 2019 being the latest year for which data is available.

Recognising the limitations of existing data and methods, the department is working to develop a ‘model of connectivity’ which aims to calculate a connectivity score for each area based on the purpose of travel (for business, including employment, visiting friends in their homes, education, shopping, leisure, and recreation), time of day of travel and mode of travel (walking, cycling, driving and public transport). The connectivity score is from 0 to 100 where 100 represents the most connected area. Within the model, ‘connectivity’ is defined as ‘someone’s ability to get to where they want to go.’ The model will be used for both monitoring and appraisal purposes to understand the impact of policy interventions and will supersede existing measures.

Improving transport for the user

Ensuring that the transport system is safe, reliable, joined up and inclusive; whilst also building passenger and supplier confidence.

Improving transport for the user is critical to making sure the department delivers and maintains a transport system that meets the needs of the public and addresses what they care about most.

As transport users have changed their travel habits post COVID-19 i.e. reduced use of certain transport modes e.g. rail, the department puts the needs and expectations of current and potential users (both passengers and freight) at the heart of the operation of the transport system and thinks about end-to-end journeys, not just individual transport modes.

The department’s focus is on what public transport users need, whether on buses, trains, trams, ferries, or planes. Users of these transport modes want more frequent services, which are reliable and run on time, and services where they feel safe, and which are clean and comfortable and not crowded. They also want shorter journey times, with good quality and easy to access information.

The same factors also drive the needs of motorists and the supply chain from the freight and logistics sector. They require, shorter journey times, reliability, and predictability and a comfortable road surface and good quality of information around road works and incidents.

A well maintained and reliable transport network makes it safer and more comfortable for pedestrians and cyclists to travel, as nearly every public transport journey starts and ends with walking and cycling.

In May 2022, the government published Flightpath to the future, a strategic framework for the future of aviation, focusing on the next 10 years. This strategic framework includes ‘delivering for users’ as one of its 4 key themes and seeks to consider ways to improve air travel inclusivity and accessibility.

The Future of freight plan was published in June 2022 and includes freight users as a key part of the ‘national freight network’ priority. This has a goal to take a system-level approach to the freight network supporting end-to-end freight journeys that are more efficient, reliable, and resilient. Our investment in facilities for HGV drivers on the roads and ports infrastructure demonstrates our commitment to amplify the centrality of freight within the transport system and as an economic enabler.

Transport Equality Centre of Excellence (TECOE) launched in September 2022 to improve equality and inclusion considerations within the department’s decision making and processes delivering better user outcomes. A key area of focus will be embedding in public bodies delivery.

This section highlights where the department have been continuing to improve transport for the user on local and strategic roads, through bus and rail reform, by working to improve the passenger experience, accessibility and road safety as well as maintain a secure network during these unique times.

Progress made in this priority outcome in 2022 to 2023, is summarised below.

Bus reform

The objective of this workstream is to make buses more frequent, more reliable, easier to obtain understandable information, better co-ordinated and cheaper for the public.

Delivery highlights

• in April 2022, the department awarded over £1 billion of indicative funding allocations to 34 local transport authorities (LTAs) to deliver more frequent, more reliable, better co-ordinated, and cheaper bus services as set out in their bus service improvement plans (BSIPs)
• by the end of March 2023, the department had paid the first year of funding to all 34 areas. The first major BSIP initiative launched on 4 September 2022 with the start of flat fares in Manchester (£2 for adults, £1 for children and a £5 daily cap), followed by Liverpool City region on 18 September 2022
• in May 2023, we announced a long-term approach to supporting bus services with an additional £300 million from July 2023 to July 2025, building on the more than £2 billion the government has provided since March 2020 to mitigate the impacts of the pandemic and prevent reductions to services. This funding will ensure services continue to run and passengers can continue to travel as we emerge from the pandemic
• introduced a £2 cap on single bus tickets from 1 January to 31 October 2023, covering thousands of routes in England outside London, to be replaced by a longer-term cap of £2.50 from 1 November 2023 to 30 November 2024

Rail reform (rail transformation programme)

The objective of this workstream is to deliver significant organisational, cultural, business, operational and commercial change across the rail sector. Improving customer experience and service by addressing fragmentation across the rail industry. It involves a clear and single point of accountability to provide a more reliable railway meeting the customers’ requirements; ensuring efficiency savings that reduce cost, attract investment, making the network financially sustainable, and working in the national interest as a public service.

The railway has continued to face major challenges. It is not delivering the service that customers deserve and requires an unsustainable level of taxpayer subsidy. Travel and commuting patterns have changed since the pandemic, and industrial action has exacerbated a system which already faced longer-term systemic issues, as set out in the Plan for Rail white paper.

The rail transformation programme has been established to take forward reform, tackling the fundamental inefficiency and fragmentation of the railway, restoring customer confidence, increasing rail usage, and creating the environment for the private sector to drive innovation and growth.

The establishment of Great British Railways, as a guiding mind for the railways, will improve the customer experience on the railway, including modernising fares and ticketing, tackling the fundamental inefficiency caused by the fragmentation of the railway system. The retail experience is being modernised to improve the experience for the customer and workforce, fares and ticketing reform is tackling outdated working practices. This focuses on reliability, performance, and efficiency, creating an environment that re-energises the private sector encouraging them to play a bigger and better role in delivering innovation and efficiency.

Primary and secondary legislations are required to create an integrated rail body, to transfer government franchising authority and to make changes to enable the new industry structure for Great British Railways. Decisions regarding legislation are made collectively across government and will be confirmed during the King’s Speech this autumn.

Many reforms and tangible benefits for rail users can be delivered ahead of legislation, such as workforce reform, simplifying fares and continuing the rollout of pay-as-you-go ticketing, building local partnerships, simplifying industry practices and the publication of the first draft of the long-term strategy for rail.

Delivery highlights

• the Great British Railways transition team was established as an organisation. It has continued to develop and embed a design and new culture for GBR. It has delivered a range of initiatives for the government, including the development of a long-term strategy for rail, network revenue incentives, with a whole industry view of finances, as well as leading national revenue efforts
• the Secretary of State also confirmed the extension of pay-as-you-go ticketing: with 53 stations across the south-east set to be completed this year including on Chiltern, London Northwestern and C2C train services
• improvement of the passenger offer. The department trialled single leg pricing on London North Eastern Railway (LNER) and committed to extending to other parts of the LNER network from the spring; continued to sell new flexible season tickets. As of April 2023, over 600,000 new flexible season tickets have been sold, offering commuters travelling 2 to 3 days a week significant savings as they return to the railway
• Derby winning the public vote for the GBR headquarters, and the consultation on the legislation for rail transformation

Rail concession contracts

The objective of this workstream is to focus on evolving National Rail Contracts (NRCs) to include greater revenue incentives and developing, with appropriate market engagement, a future commercial model. The ongoing industrial action and the uncertainty on revenue recovery has impacted on the return to competition.

NRCs will continue to be used to provide the necessary stability to customers and operators as the impact of the pandemic continues to be felt and provide the department with the necessary flexibility to direct change and accommodate reform measures.

Delivery highlights

• commenced the NRC direct award on Thameslink in April 2022, and the Southern and Great Northern contract, which will run until April 2025
• delivered NRC direct award on Great Western, with the contract commencing in June 2022 and running until June 2025
• delivered NRC direct award on East Midlands, with the contract commencing in October 2022 and running until June 2025
• on the West Coast Partnership, an extension has been issued until October 2023, at which point a decision on the long-term operator on West Coast is expected

Rail renewals

The objective of this workstream is to achieve the Network Rail operations, maintenance and renewals funding settlement which is agreed across 5 year control periods via a periodic review, as set out in the Railways Act 2005.

Ensuring the rail network remains safe and reliable whilst supporting strategic priorities such as levelling up and decarbonisation. A safe and reliable network enables passengers to make use of the railway across the country for work and leisure; supports connectivity both for individuals and businesses; enables the country to maximise the opportunities offered through rail freight; and allows greater value for money for the taxpayer through enabling medium/long-term planning in the supply chain to unlock efficiencies.

In December 2022, the department set the overall objectives and funding for operational railway infrastructure through the High-Level Output Specification (HLOS) and Statement of Funds Available (SoFA) for the next Network Rail Control Period (CP7, 2024 to 2029). This is part of the periodic review process mandated by the Railways Act 2005 and overseen by the independent regulator, the Office of Rail and Road (ORR), and includes the funding of renewals for control period 7.

Renewal projects delivered by Network Rail make sure the rail network remains safe and reliable whilst supporting strategic priorities such as levelling-up and decarbonisation.

During the current control period (CP6, running from 2019 to 2024) the department continues to work closely with Network Rail and ORR on monitoring the delivery of the renewal’s outputs.

The 2022 SoFA contains a considerable commitment to the railway, with Network Rail expected to spend £44.1 billion on the day-to-day running of railway infrastructure over CP7. The HLOS reinforces our expectations for NR to make sure a strong focus on safety and reliability, with ORR providing a strong challenge on efficiency and deliverability.

In March 2023, Network Rail submitted its strategic business plans to the department for approval. These set out, at a high level, how Network Rail will deliver the objectives set out in the HLOS and SoFA railway over control period 7. Within the plans to deliver these objectives, Network Rail set out its plans for delivering improved resilience to the effects of climate change and extreme weather events. Network Rail also set out early indications of how it will, working closely with train operators, help deliver a move across the rail industry towards greater financial sustainability.

Delivery highlights

• the 2022 SoFA settlement represents a 4% real-terms like-for-like increase compared to the settlement for CP6, highlighting the government’s commitment to a safe and reliable railway
• Network Rail delivered over £1.9 billion of efficiency improvements across the first 3 years of CP6 and is aiming to deliver £4 billion of efficiency improvements by the end CP6

Rail performance

This objective of this workstream is to keep a strong focus on performance so we can get trains running on time. The NRCs will include a range of enhanced performance incentives compared to the contracts they replace, including operational performance and customer experience.

Rail performance has seen a decline in the last year and performance has been consistently worsening since early 2020 when COVID-19 restrictions were originally introduced, although performance is higher than pre-COVID-19 levels. Over the last year there have been notable increases in the number of delays caused by faults with the tracks and the overhead line equipment, and from rolling stock and unavailability of traincrew. The impact of severe weather has also caused greater delays than the previous year and industrial action has had a significant impact on train performance, including through a significantly reduced train service on strike days and deferring infrastructure maintenance.

The department has been clear that current performance is unacceptable; over the past year, it has held regular high-level meetings with both Network Rail and representatives from the TOCs to monitor operational performance closely. The department continues to hold industry to account to ensure they make the necessary improvements to deliver the punctual, reliable services that passengers and taxpayers deserve.

On rolling stock, the programme for delivering new rolling has also faced challenges with significant delays experienced. The delivery of new trains on Greater Anglia and the introduction of Class 196 units on West Midlands, with consequent improvement of passenger experience, form the positive highlights in this area of work.

The following graphs illustrate the current performance picture and its fluctuation against contractual targets: National ‘on time’ moving annual average (MAA) peaked at 79.8% at the end of 2020 to 2021 and stands at 68.0% at the beginning of March 2023. The MAA for national ‘cancellations’ is 3.8% at the start of March 2023, up from 2.1% at the end of 2020 to 2021.

National performance – on time

On time measures the percentage of recorded station stops arrived at early or less than one minute after the scheduled time (as per timetable). A higher on time score indicates better punctuality.

National performance – on time: two year view

National performance – cancellations

Cancellations measures the number of trains that are cancelled as a percentage of trains planned to run. This would include trains missing stations and/or not operating all their planned journey, which would count as 0.5 cancellations.

National performance – cancellations: two year view

Local highways maintenance and renewals

The objective of this workstream is to improve the safety and quality of journeys by supporting local highway authorities (LHAs) (outside London) to maintain the local road network in as good a quality as possible by providing them with the multi-year certainty needed to drive efficiency, plan, integrate maintenance with wider transport interventions and by funding, promoting and incentivising innovation.

Ensuring that all road users’ experience of the local road network – including motorists, logistics companies, pedestrians, and cyclists, is as good as it can be with the funding available by:

• limiting the deterioration of the network, including the numbers of potholes, the number of structures with weight restrictions, or closures and poor-quality pavements and street lighting
• ensuring the maintenance of critical pieces of highway infrastructure, thus improving the resilience of the network (including heavy freight and high volumes of passenger vehicles, and inclement weather)
• working with the Highway Sector Council, the ADEPT Live Labs programme, and others to drive effective innovation in new, stronger materials, processes, and technologies with lower environmental impact across the sector and throughout the respective local networks, enabling local authorities to become more effective ‘service providers’ for their local road users

LHAs have a statutory responsibility to help maintain their respective local highway network and are provided with capital grant funding each year using a sector-agreed needs-based formula. The department remains committed to ensuring that LAs have the resources available to carry out safe and effective maintenance of their highways network and associated assets (such as bridges, culverts and street lighting). This investment benefits all road users, not just motorists, and is critical for the successful delivery of both national transport strategies such as the national bus strategy and Gear Change16, and local transport plans.

The department engages with the highways maintenance sector to develop and disseminate best practice through UK Roads Leadership Group. Following the success of the initial incentivisation programme which realised tangible improvement in LHAs delivery, the department is reviewing the role incentivisation can play in driving better performance on key departmental outcomes. This includes strengthening the audit function, thereby making the incentivisation more effective. However, there are significant funding challenges in the highways sector.

The challenges are that there is a significant highways maintenance backlog, exacerbated recently by the challenging weather conditions seen in the winter of 2022 to 2023 when the combination of very wet weather followed by very cold weather caused road surfaces to deteriorate rapidly. The department estimates that at least £375 million a year of additional highways maintenance funding is needed to prevent a further decline in network condition and up to £12 billion over 10 years would be needed to eliminate the maintenance backlog. Inflationary cost pressures will mean that backlog gets longer, with vital works having to be delayed.

Delivery highlights

• successful Live Labs 2 pilot projects to decarbonise local roads, bringing together local authorities and academia, were announced in January 2023, with funding totalling £30 million over 3 years
• in April 2022, the department confirmed the local highways funding allocations for 2022 to 2023 and provided indicative allocations for 2023 to 2024 and 2024 to 2025, achieving a 3 year plus highways maintenance funding settlement
• local authorities in receipt of CRSTS secured an additional 2 years of funding. This will help provide certainty to the sector and wider supply chain

Strategic roads: renewals and maintenance

National Highways delivers a significant maintenance and renewals programme on the strategic road network (SRN). It is committed to considering the diverse needs of all road users and is particularly focused on improving its approach to delays, congestion hotspots and roadworks on the network, to improve the road user’s experience and ensure all journeys are safe and reliable. National Highways teams work hard to ensure that its assets, including everything from bridges to roadside signs, are well maintained, and the surrounding environment is protected.

National Highways also utilise its ring-fenced designated funds programme to provide wider benefits to users and those who interact with the SRN, including consideration of integration with other transport modes such as active travel.

Delivery highlights

• in FY22/23 National Highways has increased its investment in renewals activity particularly across concrete roads, its largest structures and safety barriers
• National Highways has resurfaced 1,000 lane miles of existing asphalt road surface and 48 lane miles of existing concrete road surface has been reconstructed and replaced with asphalt. It has renewed or installed 240 miles of safety barriers, and achieved its ambition of 95% technology assets availability across the network. This ensures that the strategic road network remains fit for purpose for all road users, today and into the future

Future of freight

The objective of this workstream is to develop a future of fright plan jointly with industry setting out long-term government and industry ambitions and actions to ensure a freight and logistics sector that is cost efficient, reliable, resilient, environmentally sustainable and valued by society.

A long-term plan was published in June 2022, which is an excellent example of the department collaborating across government and with industry to develop a shared vision. This vision is for a UK freight and logistics sector that is cost-effective, reliable, resilient, environmentally sustainable and valued by society. In pursuit of this vision the plan set out agreed actions to address infrastructure, decarbonisation, innovation, planning, and people and skills.

In its first 6 months over 267,000 people visited the campaign website, its social media channels recorded over one million engagements, and 170 volunteers joined its ambassador network.

In January 2023, the department launched the 3 year £7 million Freight Innovation Fund. Year one of the Freight Innovation Fund will support ideas and tech that address data, cross-modal journeys, disaggregation of consignments, and port-centric distribution models.

Delivery highlights

• published a call for evidence to improve the planning system for freight infrastructure
• established a Freight Energy Forum to address the long-term challenges and provide solutions for the provision of zero-carbon energy infrastructure within the freight sector
• appointed an industry co-chair of the Freight Council

Transport for London (TfL) funding and support

The objective of this workstream is a key part in ensuring transport services for users are maintained at the levels needed, as well as supporting the operation of essential services and the wider economy within London.

The government continued to work with TfL this year to identify funding pressures resulting from the pandemic. The focus was particularly on TfL’s capital programme (including renewals) to make sure that the transport network continued to be maintained and renewed where necessary to maintain services at sufficient levels. After detailed negotiations, a funding settlement was agreed between the department and the Mayor of London in August 2022, which secured funding for TfL until March 2024.

The settlement expects TfL to carry out a specified level of renewals and enhancements to the network as well as progressing with their modernisation programme and driving efficiency through the organisation. The settlement was structured in a way that enables TfL to become financially sustainable in the future.

Aviation strategic framework

The objective of this workstream is to make sure the UK and its citizens have a strong aviation sector to provide human, business and trade connections domestically and internationally.

Flightpath to the future, a strategic framework for the aviation sector was published in May 2022. The framework sets out a 10-point plan for the next 10 years, focusing on establishing a modern, innovative, and efficient UK aviation sector for the future.

Delivery highlights

Since the publication of the framework, the department has:

• launched an aviation council which brings together representatives from across government and the sector to support the delivery and implementation of commitments set out in the 10-point plan
• published an Aviation Passenger Charter as a single information point for passengers on their rights and responsibilities at each stage of their journey, when travelling by air
• launched a review of the Civil Aviation Authority to make sure it has the resources and capabilities needed to support the sector and to regulate effectively and proportionately in the future

Equality and inclusion

This objective of this workstream is to provide advice and guidance across the department on putting users at the forefront of policy and project development, in particular through due consideration of the Public Sector Equality Duty (PSED), to support the department in building a transport network that works for everyone and improve the user experience. Our specific projects to tackle loneliness with transport, improve the safety of women and girls while travelling, and support the ongoing operation of the 13 Mobility Centres across England, will also contribute to improving transport for all users.

In March 2022, the independent Violence Against Women and Girls (VAWG) Transport Champions, Laura Shoaf (Chief Executive, West Midland Combined Authority) and Anne Shaw (Executive Director for Transport for West Midlands), published 13 recommendations on how to improve the safety of women and girls on the transport network. We are working with transport partners to deliver the ambitions set out in the recommendations. This includes, for example, updating the local transport plan guidance to include a number of considerations that local authorities should make regarding personal safety as part of planning and scheme design.

As of January 2023, there has been a 5% and 74% increase in reporting of sexual offences and sexual harassment respectively to British Transport Police (BTP). This reflects an increase in confidence in reporting as opposed to increased offending. BTP are increasingly encouraging passengers to use its 61016 text reporting service to also flag any incidents or things of concern relating to VAWG/sexual harassment, as well as through the Railway Guardian app.

In July 2022, the Railway Guardian app was launched and made available to download on Apple and Android devices and aims to increase reporting of incidents of unwanted sexual harassment/behaviours and unsafe features at stations. The app enables users to share their journeys with trusted contacts via geo-location, and access news, guides and support to help them feel safe and empowered whilst travelling on the rail network.

The Transport Equalities Centre of Excellence (TECOE) was launched in September 2022. It is currently reviewing departmental processes to consider how early equality consideration can be built in where required. TECOE is also responsible for upskilling staff through the provision of PSED workshops and providing support to colleagues to make sure they pay due regard to the needs of people who share protected characteristics.

Delivery highlights

• awarded £5 million for the Tackling Loneliness with Transport Fund to 12 public sector delivery partners in 2022. These partners have started delivery of pilot schemes that aim to build the evidence base on how transport can intervene to help tackle loneliness. The department expects to publish the final evaluation report in September 2023
• the department is working on incorporating questions in the new rail customer experience survey (which is currently in development and is due in winter 2023) and in the National Travel Attitudes Survey (due summer 2023). This will improve the department’s ability to track perceptions of safety on transport and relates to recommendation 2 of the Violence Against Women and Girls Transport Champions’ report: improvements in the collection of gender disaggregated data
• the department continues to support the Mobility Centres of England with annual grant funding of £7 million. Hubs advisory services, which help people unable to drive find other ways to be mobile and independent, are operational across all centres. The department started an external evaluation of the centres in March 2023
• National Highways continues to work with the Hidden Disabilities Sunflower to make the vehicle sticker and magnet available to disabled customers. These indicate to traffic officers and recovery services that the occupants have a disability and may need support and understanding during a breakdown on the motorway. Over 15,000 have so far been distributed and NH has identified resources to continue this initiative until at least 2026

Accessibility policy and strategy

The objective of this workstream is to deliver the department’s commitments in the inclusive transport strategy (ITS), with the overarching ambition that the transport system should be fully accessible to disabled people by 2030, with assistance if physical infrastructure remains a barrier.

The 2018 Inclusive transport strategy remains integral to the department’s ambition of a fully accessible and inclusive transport system by 2030, with assistance if physical infrastructure remains a barrier. The department continues to make progress on the ITS and many of the original commitments have now been delivered. The department committed to delivering the remaining ITS commitments alongside other departmental work to make travel more accessible and inclusive.

In 2022, the department consulted on updated guidance for taxi and private hire vehicle licensing authorities. The proposed new version includes stronger recommendations on accessibility, aimed at helping authorities to support services which work for everyone.

We also worked with the aviation sector, consumer, and disability groups to develop and publish the Aviation passenger charter in July 2022, providing a single point of information for consumers on their rights and responsibilities when travelling by air.

In December 2022, we also worked with the Maritime and Coastguard Agency to hold the first conference dedicated to maritime passenger accessibility. The Maritime Minister, Baroness Vere, called for industry to improve accessibility for disabled passengers and promoted the Inclusive Transport Leaders Scheme accreditation, a framework for operators to make their services more accessible.

In March 2023, we laid the Public Service Vehicles (Accessible Information) Regulations in Parliament. Subject to Parliamentary approval these regulations will require operators of local bus and coach services across Great Britain to provide audio-visual announcements on board their vehicles. This will help provide disabled passengers across the country the necessary information they need to be able to travel with confidence, knowing that they will be provided with clear and consistent information about their journey. We have also provided £4.65 million grant funding for small operators to help them comply with these new measures.

The ‘It’s everyone’s journey’ media campaign aims to build disabled people’s confidence to travel by creating a more considerate and supportive environment. The department’s latest campaign ran from September 2022 to March 2023 through paid media and working with partner organisations in the transport and disability sectors. This activity coincided with people returning to travel after the summer and new year periods and helped to raise awareness of disabled passengers’ needs amongst non-disabled passengers.

Road safety strategic framework

The objective of this workstream is for the department to lead a cross government approach to developing a road safety strategic framework (RSSF) to create an integrated road safety strategy to reduce road deaths across the UK.

In June 2022, the department announced its intention to publish an RSSF which will enable a cross government approach to developing an integrated safe system approach to reduce road deaths across the country. The RSSF will be published later this year with subsequent implementation plans to affirm what actions the department will deliver with its stakeholders.

In June 2023, we published the results of the driving licensing call for evidence and in most instances there was support for some form of restored entitlements in the driving licence categories under consideration. However, as the evidence presented to fully understand any associated road safety risks was not comprehensive, it is essential that further consideration is undertaken. We will therefore confirm the next steps in due course.

Delivery highlights

• Vnuk: The Motor Vehicles (Compulsory Insurance) Act 2022 came into force 29 June 2022. This ended the effect of the Court of Justice of the European Union Vnuk decision in retained EU law, and of related retained case law. This ended any associated liability for insurance claims against the Motor Insurers’ Bureau in respect of accidents on private land and for vehicles not constructed for road use; this could have resulted in motor insurance premiums increasing around £50 per year
• drug driving: In April 2022, the department launched a call for evidence on protecting the public from repeat drug driving offenders. The department has supported a Parliamentary Advisory Council for Transport Safety (PACTS) led competition to incentivise industry to produce the next generation of evidential breath testing instruments to replace the aging stock. The Home Office is hoping to be able to type approve a device this year
• roads policing calls for evidence: The government’s response will be published together with a motoring offences call for evidence. Project RADAR: This is a 3 year research project looking to:
  • create an improved database tying in the Police’s national automatic number plate recognition (ANPR) system with the Motor Insurance Database (MIB) uninsured vehicle, DVSA’s no MOT, and DVLA’s no current keeper and no road tax databases
  • commission concept technology demonstrators for a mobile evidential drug testing instrument

Improve transport for the user: priority outcome indicators

Performance narrative

The effects of the pandemic and subsequent travel restrictions have impacted figures in 2020 and 2021 – for example the temporary general reduction in road transport vehicle miles travelled was seen alongside an associated reduction in reported road traffic collisions. Taking such things into consideration, generally performance across most metrics has been broadly consistent, although this is not the case for all measures. General travel and commuting patterns have changed since the pandemic, and effects of cost inflation and rail industrial action have delayed planned maintenance and substantially disrupted network operations, impacting users’ satisfaction and perception of the transport network.

Despite this, the department continues to deliver programmes of work that may positively impact user satisfaction, network quality, and safety. £1.1 billion bus service improvement plan (BSIP) funding was allocated to 34 counties, city regions and unitary authorities to deliver improved bus services for passengers. Furthermore, we announced a further £300 million to support services from July 2023 to April 2025, and a £2 fare cap on single bus tickets went live in January 2023 and will run until 31 October, to be replaced by a longer-term cap of £2.50 from 1 November 2023 to 30 November 2024. In April 2022, the department confirmed the local highways funding allocations for 2022 to 2023 and provided indicative allocations for 2023 to 2024 and 2024 to 2025, achieving a 3+ year highways maintenance funding settlement.

In April 2022, the department confirmed the local highways funding allocations for 2022 to 2023 and provided indicative allocations for 2023 to 2024 and 2024 to 2025, achieving a 3+ year highways maintenance funding settlement.

Additionally, the 2018 inclusive transport strategy (ITS) remains integral to the department’s ambition of a fully accessible and inclusive transport system by 2030, with assistance if physical infrastructure remains a barrier. The department continues to make progress on the ITS and many of the original commitments have now been delivered.

The below indicators indicators were agreed as part of the SR21 settlement to show performance against the priority outcome. Unless otherwise stated, metrics have been drawn from the sources referred to in the department’s outcome delivery plan.

Historical data may not match previous publications due to minor amendments through data revisions. Historical versions are available by request.

Percentage of users satisfied with their most recent journey, England (strategic road network)

	Q2 2022	Q3 2022	Q4 2022
Strategic road network	74%	73%	73%

Due to a methodology change, results before March 2020 and result since April 2021 are not directly comparable. Between March 2020 and April 2021, the survey was paused, and moved from face-to-face interviews to an online survey

Source: Transport Focus

Release schedule: annually

Data from the Bus Passenger Survey is no longer available, and has been replaced by the Bus user survey, which is run fortnightly. Overall satisfaction with bus journey stood at 87% in the last bus user survey report, covering the period 6 January to 11 June.

Percentage of non-frequent bus services running on time, England

2019-2020	2020-2021	2021-2022
84.1%	89/1	83.9%

Bus users name punctuality as one of the most important factors they would like improved with their services. A frequent service is one that has 6 or more buses per hour. Several areas have no frequent services. ‘On time’ is defined as being between 60 seconds early and 5 minutes, 59 seconds late. Considered for maintenance suggests treatment may or may not be required but the road should be investigated fully.

Source: bus reliability and punctuality (BUS09), DfT

Release schedule: annually

Percentage of users very or fairly satisfied with their local roads

2019-2020	2020-2021	2021-2022
42%	43%	48%

Local roads are unclassified (i.e., not A, B or C roads) roads. The vast majority (60%) of roads in the UK fall within this category.

Source: NTS0802, National Travel Survey, DfT

Release schedule: annually

Percentage of users very or fairly satisfied with provision in their local area, England (cycling, walking)

	2019	2020	2021
Cycling	29%	26%	42%
Walking	68%	78%	78%

Source: NTS0802, National Travel Survey, DfT

Release schedule: annually. 2022 data due to be published in summer 2023.

Average (mean) delay on strategic roads (seconds per vehicle mile), England

Year ending Dec 2020	Year ending Dec 2021	Year ending Dec 2022
7.30	8.50	9.30

Average delay is in seconds per vehicle per mile and is the difference between speed limit and recorded average journey times.

Source: Department for Transport, and Office for National Statistics

Average (mean) delay on local A roads (seconds per vehicle mile), England

2019	2020	2021	2022
46.1	39.3	44.4	45.5

Average delay is measured in seconds per vehicle per mile and is the difference between speed limit and recorded average journey times. ‘A’ roads are trunk or principal roads, typically with heavy traffic flows.

Source: road congestion and reliability statistics

Release schedule: annually

Percentage of rail journeys rated satisfactory, Great Britain

This survey has not been run since the onset of the pandemic. However, weekly user experience surveys have been run by Transport Focus since September 2021, with overall satisfaction in the 83 to 90% range.

Source: National Rail Passenger Survey (NRPS), Autumn 16, Autumn 17, Autumn 18, Autumn 19, Transport Focus

Release schedule: twice annually

Percentage of trains running on time, Great Britain

April – June 2022	July – Sep 2022	Oct – Dec 2022	Jan – March 2023
73%	68%	62%	68%

On time’ services are those that arrive at the station early or within 59 seconds of the scheduled time. In the latest year (1 April 2022 to 31 March 2023), 67.8% of recorded station stops in Great Britain (49.0 million out of 72.3 million) arrived within a minute of the scheduled arrival time (on time).

Source: passenger rail performance, Office of Rail and Road (ORR)

Release schedule: quarterly

Number of people killed or seriously injured in reported road traffic collisions, by road user, Great Britain

	2019	2020	2021
Pedestrians	6,998	4,722	5,393
Pedal cyclists	4,347	4,476	4,464
Motorcycle users	6,101	4,798	5,574
Car occupants	12,093	8,992	10,384
Bus and coach occupants	345	164	198
Goods vehicle occupants	785	654	804
Other vehicles	307	360	634
All road users	30,976	24,166	27,450
All road users	30,976	24,166	27,450

This metric includes data from strategic roads, local roads and devolved administrations.

Source: KSI (adjusted), RAS0201, reported road casualties by road user type and severity, Great Britain (2012 to 2021), DfT

Release schedule: annually

Percentage of local authority roads considered for maintenance, England

	2019-20	2020-21	2021-22
‘A’ roads and motorways	4%	4%	4%
‘B’ and ‘C’ roads	6%	6%	6%

The condition of local roads has been broadly stable over time, with the proportion of roads that should be considered for maintenance for the year ending March 2022 being largely unchanged from the previous 12 months. Considered for maintenance suggests treatment may or may not be required but the road should be investigated fully.

Source: RDC0121, road condition statistics, DfT

Release schedule: annually

Number of trips per person per year, by main mode and disability status

	2019	2020	2021
Aged 16-59, with a disability	850	621	672
Aged 16-59 without a disability	1027	809	816
Aged 60+, with a disability	680	544	526
Aged 60+, without a disability	984	787	837

The basic unit of travel in the National Travel Survey (NTS) is a trip, which is defined as a one-way course of travel with a single main purpose. Trips consist of one or more stages. A new stage is defined when there is a change in the mode of transport.

Source: DIS0402 , Department for Transport

Release schedule: annually

Reducing environmental impacts

Tackle climate change and improve air quality by decarbonising transport and meeting air quality targets.

This priority is about recognising that there is an environmental aspect to all transport, and by extension to the work of almost everyone in the department.

Transport is currently the largest emitting sector of greenhouse gases (GHG) in the UK. The transport system must change to deliver the government’s Net Zero target and the department will drive forward that change through our longer-term green transport agenda.

Our Transport decarbonisation plan (TDP) which was published in July 2021 sets out the steps we are taking to deliver the necessary carbon reductions across every form of transport. The TDP contains the bold ambition needed to achieve the UK‘s carbon targets and remains credible and deliverable.

Sustainability is at the heart of levelling-up. People everywhere need to feel the benefits in villages, towns, cities, and the countryside. The priority outcome focuses on making the UK, cleaner, greener, healthier, and more prosperous, with pleasant environments in which we are all able to live and work.

Much of the work undertaken by the department supports the 2030 Agenda for Sustainable Development which aims to eradicate extreme poverty, fight inequality and injustice, and leave no one behind. The UK is committed to the delivery of the sustainable development goals (SDGs) and the department is working towards directly contributing to the achievement of 6 of those goals. Much of the work undertaken within this priority outcome supports the delivery of the SDGs and further details can be found in the sustainability report.

Progress made in this priority outcome in 2022 to 2023, is summarised below.

Cycling and walking

The objective of this workstream is to enable modal shift to active transport, increasing cycling and walking and making our roads safer for all vulnerable road users, therefore delivering health benefits, reducing congestion on roads, and improving air quality.

Mode shift to active transport is one of the best value for money ways of reducing transport emissions, given additional benefits such as improving health and air quality. Journeys below 5 miles represented 61% of all private car journeys in 2021 and provide the biggest opportunity for switching short car journeys to cycling and walking offering the potential to reduce the 68MtCO2e of current annual car emissions.

In August 2022, the department established a Active Travel England (ATE), a new executive agency, which will help deliver £2 billion of funding for active travel over 5 years. ATE has already started to deliver important Gear Change commitments to get more people walking, wheeling, and cycling.

The department created ATE to deliver the new improved high standards for active travel infrastructure, and lead on new development designs, engagement, training, and behaviour change.

In February 2023, the department announced £200 million of funding for hundreds of upgraded routes and paths across the country to help reduce emissions, boost local growth, and create jobs. This builds on the £32.9 million Capability Fund, announced in January 2023, which will help LAs to deliver high quality walking and cycling schemes and to support behaviour change.

Delivery highlights

• in July 2022, the department published the Cycling and Walking Investment Strategy 2 (CWIS2), which outlines the total investment into active travel across government through to 2025

Cars, vans, and scooters decarbonisation

The objective of this workstream is to transition UK internal combustion engine road vehicles to zero emission vehicles, with the aim of reducing emissions from road vehicles and improving air quality.

The department is delivering the policy, funding and regulatory framework needed to transition to zero emission road vehicles. A new regulatory framework, including a zero emission vehicle (ZEV) mandate for new cars and vans from 2024, is helping deliver the department’s commitments to phase out the sale of all new non-ZEVs by 2040 at the latest. The ZEV mandate is the largest carbon saving measure in the Net Zero strategy and will provide market certainty to attract new investments in infrastructure and supply chains.

The Office for Zero Emission Vehicles (OZEV) is delivering key measures to support the roll-out of local and rapid electric vehicle charging infrastructure, improve the consumer charging experience and increase the uptake of zero emission vehicles (ZEVs).

Delivery highlights

• launched the Local Electric Vehicle Infrastructure (LEVI) Fund in March 2023 to support local authorities to work with industry and transform the availability of charging for drivers without off-street parking; along with the LEVI capability Fund, in February 2023, for English LAs to hire electric vehicle (EV) officers who can plan and deliver EV infrastructure. This followed the launch of the LEVI Fund pilot in August 2022
• published the third consultation on the department’s final proposals on the ZEV mandate and future regulatory framework of CO2 emissions for cars and vans and consulted on phase out dates for non-zero emission L-category vehicles

Bus and coach decarbonisation

The objective of this workstream is to support the green transformation of the bus and coach sectors, whilst maintaining a high standard of public service, to reduce our transport greenhouse gas emissions, encourage more people to use public transport and reduce the congestion on our roads.

The National bus strategy committed to supporting the introduction of 2,500 zero emission buses (ZEBs) and achieving an all-ZEB fleet. The department provided funding to support the deployment of ZEBs in 2022 to 2023, including taking forward the £295 million Zero Emission Bus Regional Areas scheme, which will support the purchase of almost 1,400 ZEBs. Since February 2020, funding support has been provided for approximately 3,400 ZEBs across the UK. Furthermore, in spring 2022, the department consulted on the end sales date for non-ZEBs. This included calls for evidence about the decarbonisation of coaches and minibuses.

Delivery highlights

• 130 double decker buses have been ordered with 50 of these already in service, and an aim to increase this to 275 ZEB to support the all-electric bus city scheme, which will see Coventry’s entire bus fleet switch to zero-emission
• from April 2022, a new Bus Service Operators Grant (BSOG) payment for ZEBs was introduced at 22p/km – this was calculated to bring BSOG payments for ZEBs into line with diesel bus support. BSOG certified claims are paid yearly in arrears, and the department is working to process a number of the first ZEB claims for operators now BSOG is a discretionary grant paid to eligible English bus operators outside of London. The amount each operator receives is based on the litres of fuel (e.g. diesel, biofuels or petrol) used. Whilst ZEBs cannot claim this core grant, they were eligible to claim the low carbon emission bus incentive at a rate of 6p/km

Rail decarbonisation

The objective of this workstream is to deliver a net zero rail network by 2050, with sustained carbon reductions in rail along the way, and an ambition to remove all diesel-only trains by 2040 by: delivering a programme of electrification; building extra capacity on our rail networks to meet growing passenger and freight demand; and working with industry to modernise fares ticketing and retail to encourage modal shift.

The £96 billion Integrated Rail Plan (IRP) includes the electrification of the TransPennine Route between Manchester, Leeds and York and completing the electrification on the Midland Main Line to Sheffield and Derby. The department has also committed £78 million funding for electrification of the line between Wigan North Western and Bolton.

Delivery highlights

• the department helped to bridge the gap between technological innovation and operational application by supporting trials, including approximately £2.15 million of Rail Network Enhancement Pipeline funding into the UKs first fast charging battery-only train. The department expects this trial to commence on the Greenford line during 2023 to 2024 through the department’s First of a Kind innovation funding programme, around £2 million has been awarded to projects that will help to decarbonise the railway or reduce harmful emissions. This includes second round funding for 2 projects, 25kV Battery Train Charging Station Demonstration led by Siemens Mobility Ltd and ‘Self Powered Bogie’ – economic retrofit for DMU’s to enable zero emissions in stations led by WATBEC UK Limited
• HS2 Ltd has planted over 845,000 trees on the programme since construction began, with an aim to plant 7 million new trees and shrubs on phase offsetting 170,000 tonnes of carbon

Freight decarbonisation

The objective of this workstream is to support the transition to net zero UK freight, through: removing barriers to the uptake of zero emission medium, and heavy-goods vehicles (HGVs) and by continuing to offer incentives, and regulation to increase their uptake; removing HGV loads off the road by incentivising modal shift to rail and use of inland waterways; and reforming last mile deliveries with the aim of reducing carbon emissions and improving air quality.

The department is working with industry to meet end of sale dates for new non-zero emission HGVs by 2040 (new non-zero emission HGVs under 26 tonnes by 2035), by funding at-scale demonstrations of zero emission HGVs and supporting infrastructure. This will provide an evidence base for future infrastructure decisions, giving the sector the confidence needed to invest.

Operators are supported with guidance on how to reduce emissions from their fleet through the freight portal and with purchase incentives. The department is designing a new regulatory framework to ensure the end of sales dates are met and support uptake in the interim period. This will cut carbon emissions, improve air quality, and create new UK jobs.

Delivery highlights

• as part of the zero emission road freight demonstrator programme, competitions for the battery electric and hydrogen fuel cell vehicles and infrastructure closed in October 2022, with successful projects expected to begin in October 2023
• consulted with industry to identify suitable exemptions for HGVs below 26 tonnes that may take longer to transition. A response will be published in 2023

Maritime decarbonisation

The objective of this workstream is to support decarbonisation and innovation in the domestic maritime sector, through the development and deployment of zero emission technology and infrastructure solutions, to enable significant fleet-wide emissions reduction in the 2030s and net zero shipping by 2050.

The £206 million UK Shipping Office for Reducing Emissions (UKSHORE) launched in March 2022. The programme works in partnership with industry to tackle supply and demand side barriers to maritime decarbonisation, as well as developing the infrastructure and consumer confidence to support zero emission technologies. It is funding a series of competitions over 2022 to 2025, investing in developing green technology solutions for maritime.

Delivery highlights

• competitions for low technological readiness maritime solutions: the £3.7 million Clean Maritime Research Hub (February 2023) and £0.4 million of Transport Research and Innovation Grants (October 2022)
• two rounds of competitions for medium technological readiness solutions including product demonstrations: Clean Maritime Demonstration Competition 2 and 3 May 2022 (£14.9 million) and September 2022 (£60 million) respectively
• a high technological readiness competition for port and vessel technologies close to market readiness and the £77 million Zero Emission Vessels and Infrastructure Competition (February 2023)
• in July 2022, the department published the Course to zero consultation, seeking views and evidence on the optimal pathway to net zero emissions in 2050 for the domestic maritime sector, including where there is scope to accelerate decarbonisation across sub-sectors
• in July 2022, the department published a summary of responses to the shore power call for evidence and are considering next steps
• as host of COP26 and the International Maritime Organization (IMO), the UK launched the Clydebank Declaration at COP26, under which 24 states from around the world committed to support green shipping corridors, zero emission routes between 2 ports. At COP27 in Sharm el Sheikh, Egypt, Baroness Vere, and the Second Permanent Secretary hosted a Clydebank Declaration anniversary event. The event included the launch of the Global Maritime Forum’s green corridors progress report, providing an opportunity for the department, international partners, and industry to reflect on active efforts towards green shipping corridors and discuss next steps for tackling barriers and delivery

Aviation decarbonisation

The objective of this workstream is to decarbonise the UK aviation sector by 2050, by increasing the efficiency of our existing aviation system, developing a UK sustainable aviation fuel (SAF) industry, accelerating the development of zero emission aircraft and flight, developing and utilising carbon markets and greenhouse gas removal methods, and helping consumers to make sustainable travel choices.

Delivery highlights

• in July 2022, the department published the Jet Zero strategy, setting out a clear framework for the aviation sector to achieve net zero 2050 or Jet Zero for UK aviation
• in December 2022 5 projects were awarded funding from the £165 million Advanced Fuels Fund to develop sustainable aviation fuel (SAF) plants in the UK, with a second window for applications opened in March 2023
• a second SAF mandate consultation was also launched in March 2023
• the department has provided an additional £1.2 million funding for the Zero Emission Flight Infrastructure project to help develop airport infrastructure for new types of aircraft
• the department commissioned external research on the department’s target for UK domestic flights to reach net zero by 2040
• published a call for evidence on the department’s target for airport operations in England to be zero emission by 2040
• played a leading role in the International Civil Aviation Organization’s October 2022 adoption of net zero by 2050 as a new global goal for reducing the CO2 emissions of international aviation
• negotiated to protect and strengthen the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) which is expected to introduce offsetting of aviation emissions on flights between at least 118 countries from 2024

Natural environment and air quality

The objective of this workstream is to ensure the transport sector plays its role in the development and delivery of the legislation, deliver plans and policies necessary to reverse the decline of nature in the UK and clean up our polluted air.

Air quality

The general trend in NO2 concentrations continues to show an improving picture as average concentrations have decreased since 2017. However, the department recognises there is more to do and has ring fenced over £880 million to help local authorities act on NO2.

Work is taking place within National Highways on improving air quality and further details can be found in National Highways annual report and accounts.

Delivery highlights

The department, in partnership with Defra continued to support local authorities to develop and implement measures to address their NO2 exceedances in the shortest possible time. This included introducing 4 new clean air zones in:

• Bradford (September 2022)
• Bristol (November 2022)
• Tyneside (January 2023)
• Sheffield (February 2023)

Other local authorities are implementing a range of schemes to improve air quality.

Biodiversity

The department has worked closely with Defra to support the implementation of the Environment Act 2021. As part of this, the government published new long-term environmental targets, which will require ambitious action on reducing air pollution, from particulate matter, improving water quality, reducing waste (by ensuring zero to landfill and more recycling), and protecting and enhancing nature.

Delivery highlights

• in January 2023, the Environmental improvement plan was published, focusing on improving environmental quality
• in January 2023, the environmental principles policy statement was published by Defra, outlining all ministers in government will need to give due regard to this when making policy
• the review of the national networks national policy statement (NNNPS) progressed well, and a draft of the revised statement was published for consultation in March 2023. The revised statement reflects wider changes to environmental policy and legislation, including on air quality and biodiversity net gain within the Environment Act 2021

International vehicle standards

International vehicle standards (IVS) oversees the development and enforcement of vehicle regulation, to support the delivery of the department’s environmental and safety objectives. This year, IVS has funded research into better understanding and measuring non-exhaust emissions from vehicles. These are currently unregulated and make up an increasing proportion of a vehicle’s total emissions. This research will inform the development of new non-exhaust emissions standards in the future.

Delivery highlights

• IVS has funded research to support the uptake of electric vehicles and the safe introduction of automated vehicles, both of which will become increasingly important to the transport system
• IVS has continued to fund the Market Surveillance Unit, run by the DVSA
• IVS has also funded trials into the use of noise cameras to improve enforcement against excessively noisy vehicles, supporting the work of police and local authorities in this area

DfT infrastructure and property

The objective of this workstream is to manage and reduce the carbon emissions generated by the department’s infrastructure projects and portfolio and its estate by embedding comprehensive assessment of whole life carbon (WLC). It is also to inform investment and project decision making by better integrating carbon in business cases and to drive a culture change around carbon through the ‘carbon literacy training’.

The department has made significant progress over the past year in embedding whole life carbon assessment requirements for infrastructure projects through its carbon management programme. Business case guidance and the transport appraisal guidance have been updated to ensure national transport infrastructure projects assess their whole-life carbon impacts in line with industry standards at critical stages in the project lifecycle and those impacts are considered as part of the decision-making process.

In addition, carbon management plans are also required, which set reduction target against baselines established in the whole life carbon assessment (WLCA). The department also continued to build its carbon management capabilities. Good progress has been made in training, with 8% of staff having attended the carbon literacy training already.

The department’s car fleet are now made up of 40% Ultra Low Emission cars, exceeding the December 2022 targets of 25%. The department has also installed additional EV charging points to support the fleet changes.

The department continues to identify opportunities to decarbonise its offices and operational estate, which includes:

• air source heat pumps to replace fossil fuel boiler systems
• solar arrays to provide renewable energy
• upgrading building management systems to manage the department’s working environment more efficiently and effectively
• insulation to improve energy efficiency of the department’s buildings; and
• improving lighting controls to reduce energy waste

Road decarbonisation and environment

The objective of this workstream is to reduce the carbon intensity of the road network, in terms of its construction, maintenance and operations, including traffic management. To improve air quality at areas of the SRN where limits are currently exceeded and to ensure that new road projects deliver appropriate mitigations for environmental impacts, such as biodiversity net gain.

A revised NNNPS was developed and is currently subject to a public consultation which closes on 6 June 2023. The revised NNNPS reflects wider changes to environmental policy and legislative commitments, including the commitments on air quality and biodiversity net gain within the Environment Act. The NNNPS review is supported by an independent Appraisal of Sustainability (AoS) to make sure it contributes to the achievement of sustainable development, and a habitats regulation assessment to consider any potential effects on nature conservation sites.

Development of the third road investment strategy (RIS3) is continuing. In May, National Highways set out its proposals for the future of the SRN and its priorities for the third road period (2025 to 2030) in its SRN initial report. This includes how it will contribute to the long-term net zero commitment through reducing carbon emissions from the construction, maintenance, and operation of the network, and support wider measure to reduce road user carbon; and measures it will take to improve air quality and improve the natural environment. The department will respond to this and to responses to the consultation on the SRN initial report, in its autumn 2023 draft RIS. In the meantime, the department is looking at improved metrics for carbon reduction and measuring environmental impacts as part of work to develop the RIS3 performance specification.

Delivery highlights

• National Highways have deployed further new air quality monitoring sites across 56 sections of the strategic network. The new monitoring data will be available and published in November 2023, providing an updated picture of the overall air quality position. The department continues to review further options and new technologies that could be implemented on the remaining road sections
• invested £30 million into Live Labs 2, a 3 year programme, which includes funding for a green carbon laboratory, examining the role that the highways green asset can play in decarbonising highway operations
• produced the highways maintenance decarbonisation toolkit, issuing advice to local authorities on actions they can take to reduce transport carbon emissions including around managing grassland road verges

Science, research and development

The objective of this workstream is to provide a joined-up and coordinated Government Research and Development (R&D) portfolio delivering and testing innovative solutions for the system, as well as the evidence needed to inform decisions to deliver significant carbon reductions year on year and our wider environmental objectives.

The department’s R&D portfolio; delivers and tests innovative solutions and provides the evidence needed to inform decisions to deliver significant carbon reductions and the wider environmental objectives. Global innovation and R&D are key to unlocking new green technologies, delivering system level efficiencies, and helping the department deliver the levels of social and behavioural transformation needed.

Delivery highlights

• the department implemented robust oversight and governance across the R&D portfolio; supporting policy leads in scoping and development of large-scale R&D programmes designed to reduce environment impact (such as UKSHORE and Zero emission road freight trials funding), providing assurance on the quality of the work
• the department has aligned transport research funding on areas such as climate change adaptation and Digital Twins
• the department is working on development of innovative early-stage technologies on maritime decarbonisation through the 2021 Transport Research Innovation Grants programme, helping innovators take sensible risks and ensuring a healthy pipeline of new solutions
• the department built stronger links with academia and industry, developing 5 priority research questions on reducing environmental impacts to clearly communicate and signal our interests to the market

Low carbon fuels

The objective of this workstream is to deploy low carbon fuels across the transport sector in a way that achieves maximum greenhouse gas savings and become a leader in low carbon fuel production.

This decade will see low carbon fuels increasingly used to decarbonise harder-to-abate transport modes such as aviation and maritime. To help build a vision for the transition in the period to 2050, the department issued a call for ideas on a low carbon fuels strategy, followed by stakeholder workshops. This informed the development of a strategy that the department intends to publish later this year.

The department made the Renewable Transport Fuel Obligation more flexible to enhance support for renewable fuels of non-biological origin such as hydrogen and consulted on supporting recycled carbon fuels.

The £15 million Green Fuels, Green Skies competition supported projects developing UK SAF production plants. Fulcrum Bioenergy Ltd. received funding for development of their Northpointe plant at Ellesmere Port, which will produce ~100 million litres of SAF per year and is expected to complete in 2027. Fulcrum have since won £16.7 million through the Advanced Fuels Fund to continue development. The 5 projects funded through the Advanced Fuels Fund will produce over 300,000 tonnes of SAF and save an average of 200,000 tonnes of CO2 each year when operational.

Delivery highlights

• introduction of a new RTFO (Renewable Transport Fuel Obligation) IT Operating System (ROS) to streamline the submission of information to the RTFO Administrator, reducing the effort required and enabling fuel suppliers to receive renewable transport fuel certificates (RTFCs) sooner
• E10 petrol (petrol with up to 10% ethanol) was introduced in Northern Ireland in November 2022, aligning with the rest of UK

Hydrogen

The objective of this workstream is to maximise the opportunities of low carbon (green) hydrogen for use within the transport sector in modes/use cases where it presents the best zero emission option.

The department co-ordinates hydrogen policy across transport modes and works with departments across government, industry, and international counterparts to explore the potential for as well as the challenges with this technology, including identifying barriers to hydrogen uptake (e.g., regulatory barriers). This has led to the Tees Valley Hydrogen Transport Hub, which is supporting vehicles, refuelling infrastructure, and developing skills in the region to show how hydrogen can work within a decarbonised transport system. The hub is supporting jobs, cutting carbon emissions, improving local air quality, and providing lessons for other areas in the UK looking to realise hydrogen transport ambitions.

Delivery highlights

• in October 2022, the department launched a £20 million R&D competition to identify projects to demonstrate transport applications in the Hub
• the department allocated £300,000 to Tees Valley Combined Authority, which will be used by local colleges to upskill the local workforce in hydrogen technology and foster a pipeline of UK-based talent

Reduce environmental impacts: priority outcome indicators

Performance narrative

The 2021 transport decarbonisation plan and the Net Zero strategy put the sector on an ambitious path to net zero by 2050, and we are making good progress against the Climate Change Committee and Independent Review of Net Zero recommendations.

Domestic transport emissions in 2021 were impacted by COVID-19 and the resultant restrictions on movement; they were 11% lower than 2019 and 15% lower than 1990. Road transport constitutes many of these emissions.

The government is going further and faster to decarbonise transport by phasing out the sale of new non-zero emission road vehicles. The latest statistics show that in 2022 the number of new registrations for battery electric cars was up 40% compared to 2021 with just over 16% of all new cars zero emission. To support this transition, we have supported increased availability of public charging devices, more than tripling their number in 4 years, from 2019 to February 2023, with over £6 billion private sector investment now committed out to 2030.

On active travel, levels of walking and cycling have fallen back since 2020, following the impacts of the pandemic and subsequent changes to working patterns. The department has established Active Travel England to oversee quality active travel infrastructure and ensure people have a real choice on whether to use active travel for their day-to-day journeys.

These indicators were agreed as part of the SR21 settlement to show performance against the priority outcome. Unless otherwise stated, metrics have been drawn from the sources referred to in the department’s outcome delivery plan

Historical data may not match previous publications due to minor amendments through data revisions. Historical versions are available by request.

Greenhouse gas emissions from domestic transport, including HGVs (million tonnes of CO2 equivalent), UK

Dec 2019	Dec 2020	Dec 2021
123.10	99.27	109.45

Source: table 1, UK greenhouse gas emissions, BEIS

Release schedule: annually

Percentage of new registrations of cars and vans that are (i) Zero Emission Vehicles (ii) Ultra Low Emission Vehicles in the United Kingdom

	Oct – Dec 2021	Jan – Mar 2021	Apr – Jun 2022	Jul – Sep 2022	Oct – Dec 2022
Zero Emission Vehicles (ZEV)	11%	16%	14%	12%	13%
Ultra Low Emission Vehicles (ULEV)	17%	23%	19%	16%	18%

Source: VEH0150, vehicle licensing statistics, DfT

Release schedule: quarterly

Percentage of cars and vans that are (i) Zero Emission Vehicles (ii) Ultra Low Emission Vehicles in the United Kingdom

	2021 Q3	2021 Q4	2022 Q1	2022 Q2	2022 Q3
Zero Emission Vehicles (ZEV)	0.9%	1.1%	1.3%	1.4%	1.6%
Ultra Low Emission Vehicles (ULEV)	1.7%	1.9%	2.2%	2.4%	2.6%

Source: VEH0150, vehicle licensing statistics, DfT

Release schedule: quarterly

Average (mean) number of cycling trips as proportion of total trips, England (per cent)

2019	2020	2021
2%	3%	2%

Source: NTS0303, National Travel Survey: 2021, DfT

Release schedule: annually

Total number of cycling stages, England (millions)

2019	2020	2021
964	1196	875

Source: CW0403, walking and cycling statistics, DfT

Release schedule: annually

Average (mean) number of walking trips as proportion of total trips, England (per cent)

2019	2020	2021
26%	32%	31%

Source: NTS0303, National Travel Survey, DfT

Release schedule: annually

Average (mean) annual number of walking stages per person, England

2019	2020	2021
332	281	279

Source: CW0402, walking and cycling statistics, DfT

Release schedule: annually

Estimates of normalised passenger and freight carbon dioxide equivalent (CO2e) (emissions g/CO2e per passenger km and g/CO2e per net freight tonne km)

	2019-2020	2020-2021
Passenger CO2e per km	35.2	146.5
Freight CO2e per km	27.5	26.5

Source: rail emissions 2020 to 2021, Office of Rail and Road (ORR)

Release schedule: annually

Percentage of local buses by emissions standards to which they adhere, England

Emissions standard	2021/22
Battery electric	3%
Compressed natural gas (CNG)/biomethane	1%
Diesel-hybrid – Euro VI standards	16%
Diesel-hybrid – other	1%
Euro III standards	6%
Euro IV standards	8%
Euro V standards	19%
Euro VI standards – as manufactured	21%
Euro VI standards - CVRAS approved retrofit	21%
Hydrogen fuel cell	0%
Other	2%
Unknown	2%

Source: BUS06e, DfT

Release schedule: annually

Number of publicly accessible charge points per 100,000 population, by region

	Jun 2022	Sep 2022	Dec 2022
All – England	48.6	52.7	55.7
Rapid – England	8.8	9.4	10
Non-rapid – England	39.8	43.3	45.7
All – North East	43.1	42.6	47.3
Rapid – North East	10.5	9.70	10.7
Non-rapid – North East	32.6	32.9	36.6
All – North West	27.2	29.7	31.2
Rapid – North West	6.7	7.5	8.3
Non-rapid – North West	20.5	22.2	22.9
All – Yorkshire and the Humber	29.2	33.3	35.5
Rapid – Yorkshire and the Humber	8.9	9.6	10.2
Non-rapid – Yorkshire and the Humber	20.3	23.7	25.3
All – East Midlands	35.3	37.9	39.0
Rapid – East Midlands	9.1	10.1	10.5
Non-rapid – East Midlands	26.2	27.8	28.5
All – West Midlands	36.2	42.2	47.4
Rapid – West Midlands	9.8	10.6	11.1
Non-rapid – West Midlands	26.4	31.6	36.3
All – East of England	33.2	36.2	37.4
Rapid – East of England	8.3	8.6	8.9
Non-rapid – East of England	24.9	27.6	28.5
All – London	116.4	122.5	131
Rapid – London	8.4	9.1	9.7
Non-rapid – London	108.0	113.4	121.3
All – South East	44.0	49.5	51.7
Rapid – South East	9.5	10.3	10.5
Non-rapid – South East	34.5	39.2	41.2
All – South West	39.5	42.2	44.1
Rapid – South West	9.0	9.8	10.6
Non-rapid – South West	30.5	32.4	33.5

Source: electric vehicle charging device statistics, DfT

Release schedule: quarterly

Number of grant-funded charge points per 100,000, by region

	Jun 2022	Sep 2022	Dec 2022
North East	544	559	566
North West	525	546	554
Yorkshire and the Humber	543	562	570
East Midlands	610	636	648
West Midlands	552	575	584
East of England	641	663	675
London	387	333	340
South East	716	736	749
South west	562	577	587

Source: electric vehicle charging device statistics, Department for Transport

Release schedule: quarterly

Increasing our global impact

Boost our influence and maximise trade by having an innovative, outward-facing approach.

Increasing our global impact recognises the UK’s opportunities in the world as a fully sovereign and the importance of the department contributing effectively toward the government’s vision of a Global Britain.

The Declaration on Government Reform highlights the need for all government departments to embrace the links between our domestic agenda and our work on the international stage and to ensure that we design and implement domestic policies that consider the department’s Global Britain objectives.

The global impact programme aims to make sure that the department’s international work is targeted to achieve maximum benefits and impact across the full range of departmental priorities.

Given the geopolitical shifts which are likely to result following the Russian invasion of Ukraine, the global impact priority outcome is more important than ever.

The department maintains and extends its influence with international partners by making sure high standards of transport safety, security and environmental protection help to boost UK trade, exports, and inward investment.

Increasing our global impact is connected to the delivery of some of the other strategic priorities. If the government succeeds in negotiating the best trade deals and in promoting transport-related exports and inward investment, then this will help grow and level up the economy and improve transport for the user.

The department is also directly responsible for building and maintaining the UK’s portfolio of air services agreements, which secure the vital international air connectivity that enables trade, investment, and travel.

The UK remains a global leader in aviation security, with one of the most robust and effective aviation security systems in the world. We share our knowledge and expertise with other countries, bilaterally and through international fora such as the International Civil Aviation Organization (ICAO) and the European Civil Aviation Conference (ECAC).

We deliver improvements to global aviation security by promoting existing international tools, directly supporting specific countries by addressing any identified vulnerabilities through agreed capability development activities and encouraging innovation and integration of new technologies into the global aviation system. The UK aviation security strategy was refreshed in August 2022 and sets out the government’s strategic response to current threats to aviation, ensuring everything that we do is informed and driven by the risks we face.

A safe and secure maritime domain is vital for the growth and prosperity of the UK. Maritime security is essential to realising our potential and to projecting UK influence overseas. Working across government, we published the refreshed national strategy for maritime security in August 2022; it sets out the government’s priorities across the breadth of maritime security work, and our approach to new and emerging threats facing the sector.

With respect to our responsibilities for the security of ports and shipping, we published revised port facility security Instructions; supported the development of the UK-France Maritime CT Treaty; delivered the ports of reception project to ensure that partner organisations have the information required to develop effective contingency plans for maritime security incident response; and published new guidance to advise the sector on their response to stowaway incidents, in cooperation with the Maritime and Coastguard Agency.

As described elsewhere, we became the first country in the world to ban Russian ships from our ports, following the invasion of Ukraine, and have also contributed to a range of sanctions measures against the Russian shipping sector. We continue to provide advice to British shipping, ensuring that it is able to navigate freely across the globe; and to sponsor the Joint Maritime Security Centre.

Persuading international transport bodies to develop effective safety and security standards will improve transport for the user, both passengers and freight. Our influencing and negotiation within the international community, to progressively take stronger action to limit climate change, will reduce environmental impacts. Demonstrating our international capability will greatly enhance our reputation across other government departments and beyond as an excellent department to work for and work with.

Key milestones were delivered as part of the UK’s Presidency of the International Transport Forum (ITF). The ITF work programme for 2023 was agreed, including a high-level ministerial dialogue, attended by the Secretary of State, held on the Poland-Ukraine border in spring 2023 which focussed on how the ITF and international partners can support Ukrainian reconstruction. A joint session of the ITF boards was opened by the Secretary of State followed by presentations on and discussion of the UK’s transport priorities and on road transport decarbonisation. The UK-hosted ITF meetings also included a trip to visit a DfT-funded future transport zone in Portsmouth and a networking dinner held at the London Transport Museum.

The UK hosted an ITF Women’s Safety Event: ‘Accelerating action on gender equality: How can streets and public spaces enable safer travel for women?’ in November. This was part of the UK’s ITF Presidency campaign on inclusive transport. It explored how the perception of safety of transport services and infrastructure can prevent women and girls from walking, cycling, and using public transport. It included a panel discussion with international experts including the department’s Non-Executive Director and British Paralympian Dame Sarah Storey and Anne Shaw, one of the UK government’s Violence Against Women and Girls Transport Champions

The department has enhanced its global impact through our work on developing leading edge transport research and innovation, particularly in tackling transport’s contribution to climate change. The government stated its commitment to make the UK a science superpower by 2030 and the department has continued this work in areas such as hydrogen transport technology and infrastructure, and reduced emissions technology.

Progress made in this priority outcome in 2022 to 2023 is summarised below.

Policy and diplomacy

The objective of this workstream is to address global challenges and support our domestic transportation priorities by partnering with others. This workstream will aid policymakers in increasing the UK’s global impact and leadership in the international system.

Following Russia’s invasion of Ukraine, the UK banned all Russian aircraft from overflying or landing in the UK and banned Russian ships from UK ports. Since then, at least 28 ships have been prevented from entering the UK by the sanctions and no scheduled passenger flights now operate between the UK and Russia. As of January 2023, 126 Russian transport entities have been sanctioned with £942 billion frozen, 3 aircraft and one superyacht have been detained in the UK. The department and the UK transport sector are providing direct support, including a £10 million rail aid package containing essential tools/materials to repair damaged rail infrastructure and facilitate grain exports.

Delivery highlights

• the UK assumed the year-long presidency of the ITF at the ITF Annual Summit in Leipzig, in May 2022, leading a call to action condemning the Russian invasion of Ukraine. The department hosted the ITF Autumn Meetings in the UK in October 2022, including a transport day taking delegates to Portsmouth to experience one of the future transport zones
• the International Civil Aviation Organisation (ICAO) Assembly was one example of UK global leadership in action, demonstrated by success in: securing the UK’s re-election preventing Russia’s re-election to the ICAO Council, gaining assembly condemnation of Russia’s aggression; and agreeing a long-term aspirational goal (LTAG) for net-zero carbon emissions for international aviation by 2050

Prosperity

The objective of this workstream focuses on contributing to the UK’s trade policy goals, simplifying market access for UK transportation enterprises, and promoting UK trade and exports, this workstream aims to make the most of the UK’s status as an independent trading nation. The department has increased spending on R&D, demonstrating the government’s commitment to maintaining the advantages that make the UK an attractive investment environment, while maintaining the strengths of UK global supply chains.

Crossrail International

Crossrail International (CI) is a department-owned public corporation, set up in 2017 to deliver specialist advisory services globally to client organisations developing and delivering complex rail schemes.

One of CI’s priority markets is Indonesia, driven by the country’s focus on broadening its international supply chain and expansion of its rail infrastructure portfolio. The department signed 2 cooperation agreements with the Indonesian Ministry of Transport, which aim at sharing UK good practice and garnering UK supply chain interest in Indonesia’s infrastructure plans such as the East-West Jakarta metro line, with CI as a key delivery partner for the department’s commitments.

Longer term, the cooperation could lead to commercial opportunities for UK businesses in light rail and high-speed projects. The department and CI will continue to build relationships and strengthen HMG’s position as a potential long-term partner.

Delivery highlights

• the UK launched negotiations for free trade agreements with India, the Gulf Cooperation Council, Canada, and Mexico and to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). The department is playing a full part in all of these. CPTPP accession could create new opportunities for the aviation sector by stimulating increased trade in goods and services between the UK and CPTPP members. The Department for International Trade (DIT) estimates that accession could see total trade between the UK and CPTPP increase by £3.3 billion a year
• the UK concluded air services negotiations to reopen direct passenger services between the UK and China, following a long suspension as a result of the COVID-19 pandemic. The department also concluded negotiations with India, Saudi Arabia, and Thailand in the last year. These agreements with emerging economies, coupled with our comprehensive arrangements with the United States and the European Union, provide critical market access for UK airlines and continue to ensure that UK consumers and businesses have access to travel, export and investment opportunities

Capability

The objective for this workstream is to deliver on the department’s mission of being an engaged, capable, and influential international organisation, which requires a focus on increasing capability. The department is strengthening the ability to deliver those areas of its business that require international collaboration or global awareness. The department is developing its policy teams to enhance the department’s international reputation and achieve the department’s international and domestic priorities by making sure that staff have the necessary skills and knowledge to work effectively internationally.

To raise awareness of the importance of the department’s international work and help develop staff’ capability, the department delivered a month of targeted internal communications and events, in July 2022, spotlighting international work. The programme of events raised awareness of the important links between the department’s international work and domestic policy priorities and the impact of global events on the delivery of all of DfT’s strategic priorities.

Delivery highlights

• the department improved understanding of the priority through a complete refresh of global impact resources available to staff via the intranet and the launch of a Global Impact Staff Network
• the department has also promoted use of the International Learning and Development prospectus and its cross-departmental International Capability Fund
• the department also targeted specific skills and knowledge gaps by organising specialist learning events, which were attended by over 800 staff
• the department launched the Trade in Transport Statistics Dashboard for the department’s staff. Using a wide range of data sources, it enables the department’s policy makers and analysts to visualise and analyse a wide range of statistics relating to trade and all modes of transport

Being an excellent department

To deliver the priority outcomes, the department will continue to be a well-run department that focuses on delivery, drives value for money and embodies the department’s values in all that it does.

Being an excellent department continues to be a key area of focus, enabling the department to continuously improve and work together more effectively. During 2022 to 2023 there has been positive progress made against the deliverables. The vision and outcomes for the priority have been further defined. The priority is being delivered for and by staff across the department, and as such a new staff suggestion campaign, Your Ideas was launched to capture ideas for further improvements.

As part of the strategic plan, the department has launched initiatives over the last year that seek to enhance key stages of the employee lifecycle. These have included improvements to the induction experience for people joining the department, to support them in getting up to speed more quickly whilst ensuring a positive joining experience, and the launch of a skills and capability plan that provides all staff with access to the learning they need to build their professional skills and progress their career and development journeys.

This comprehensive package covers learning interventions that have a focus on professions and specialist skills development; transport sector specific development options; mandatory learning and Civil Service core skills. In addition, the department has rolled out a leadership development programme for its senior civil servants (SCS) as well as a foundation development programme for line managers. A new online career hub complements the skills and capability plan through a range of resources that support individuals and their managers with having regular, productive career conversations.

The department’s ambition is for a highly professional, skilled, diverse, and motivated workforce and a culture which reflects the department’s values of confidence, excellence and teamwork.

To support the priority outcome, the department agreed 3 themes for the 2022 to 2025 people strategy:

• strengthening our ability to deliver across the UK
• confident leaders supporting change and driving delivery
• a diverse and empowered workforce which reflects the communities the department serves
• people have opportunities to thrive, grow and reach their potential

Strengthening our ability to deliver across the UK

DfT has committed to significantly grow its presence in Birmingham, Leeds, and Edinburgh to at least 688 roles, including 41 SCS roles by 2025. This complements our existing footprint in London, Swansea, and Hastings. We are prioritising the growth of our presence outside London, to become a more national organisation which draws on the talent across the country so that we better represent the communities we serve This year we have increased the proportion of our workforce outside of London from 10% to 21%, with over 442 staff at the end of March 2023, now based in our places for growth locations, Birmingham, and Leeds.

Increasing our numbers outside of London aims to better represent the people we serve, drawing talent from a wider pool and ultimately helping to improve our policy making.

To support the delivery of our ambition, all new vacancies, bar a very small number of roles requiring proximity to London), have been advertised including the Birmingham and Leeds locations. We have continued to promote our relocation offer which we improved, for example, by increasing the commute radius. As a result, we have achieved 41 relocations during the year.

We remain confident that we can keep on track with the 2025 targets but have recognised the challenge in terms of our SCS. We have focussed our efforts on identifying and trialling new approaches to strengthen progress, including attraction strategies and recruitment controls. The department is creating an action plan to increase recruitment and relocation in places for growth locations for senior civil servants.

We have also taken the lead on the development of the West Midlands Local delivery plan, bringing together other departments with a presence in the West Midlands to identify opportunities for joint working and collaboration with local stakeholders.

The department’s capital portfolio has grown, and workforce capacity pressures have been a constant across DfTc over this period. Changes have been implemented in the last 12 months that have enabled the department to reduce the severity of its capacity and capability risk and these include:

• implementation of a crisis response cohort to provide immediate response for any future crisis
• development of robust workforce planning
• a strengthened apprenticeship pipeline
• a renewed focus on career development with supporting tools
• development of a skills and capability plan for the department
• development of an employee value proposition and employer brand to position DfTc prominently in our key markets of Birmingham, Leeds, and London

We have continued to invest in our workspaces, digital tools, and cultural conditions to ensure all staff are enabled to deliver efficiently and effectively in their roles, wherever they are based.

Confident leaders supporting change and driving delivery

The department’s developmental offers for its SCS is underpinned by a new departmental leadership statement. The purpose of this statement is to outline the department’s expectations of its leaders and is aligned to the department’s values. The corresponding development offer is made up of 4 elements:

• elevate: an upcoming SCS leadership development offer which has been shaped in recognition of the current challenges being faced in the department. This is due to be rolled out across all SCS from May 2023
• SCS masterclasses: These sessions focus on reflecting on major events and achievements in the department and learning from them. Each session is an opportunity to reflect and consider how the department can learn from these experiences to ensure excellence in the department’s delivery
• DG engagement sessions: Open discussion sessions with a range of deputy directors, each are chaired by a DG with the aim of discussing the big leadership challenges the department facing as a community, a space for reflection as a senior leadership team and discussion on what next steps to take collectively
• professional learning for all: including data, digital and finance

The statement and development offer will continue to be enhanced and rolled out across 2023, supporting leaders to manage change and drive delivery as well as creating a collective leadership community who can deliver across boundaries.

As well as the SCS offer, the department encourages the SCS leaders to use the Leadership College for Government. The Leadership College for Government offers training for Civil Service and public sector leaders at different stages of their career.

In addition to work to build the capability of SCS leaders, the department has also delivered a significant programme of work this year to build line management capability, focusing on the delivery of core modules to support managers through a range of people processes including managing hybrid teams, performance, and attendance.

A diverse and empowered workforce which reflects the communities the department serves

The department aims to put diversity, inclusion, and wellbeing at the heart and central of its culture and values.

The department is seeking to provide a welcoming, healthy, and supportive workplace enabling attracting, developing and retaining a diverse workforce that reflects the communities the department serves. Providing an inclusive environment where everyone can feel a sense of belonging, feel valued, be themselves and is recognised for their individual talents and contribution to the delivery of the department’s objectives.

In 2022 to 2023, the department implemented a DfTc diversity, inclusion and wellbeing action plan. This is focused on delivering outcomes linked to 4 strategic priorities in the DfTc diversity, inclusion and wellbeing strategy 2022 to:

• represent the communities the department serves
• be confidently inclusive
• maximise potential for all
• build a transport network that works for everyone

The actions in this diversity, inclusion and wellbeing action plan were developed in collaboration across HR and in consultation with staff networks and business areas. It provides the department with a clear set of actions which are focussed on the areas where the biggest difference to the staff and to the customers and communities the department serves.

The action plan consolidates previous departmental action plans related to individual protected characteristics and other priority areas, such as social mobility and bullying harassment and discrimination.

Within the department, there are senior champions (at director general / director level) who take personal responsibility for leading and supporting their area.

In 2022 to 2023 the champions were:

• social mobility (Conrad Bailey)
• gender (Rannia Leontaridi)
• age and carers (David Hughes)
• LGBT+ (Nick Joyce)
• disability and wellbeing (Clive Maxwell)^{[footnote 2]}
• race (Emma Ward)
• faith and belief (Nick Bisson)

The senior champions are responsible for reinforcing and role modelling the department’s commitment to representing the communities the department serves and to being an inclusive employer.

The department is prioritising the growth of its presence outside London, to become a more national organisation which draws on the talent across the country so that the department better represent the communities it serves.

People have opportunities to thrive, grow and reach their potential

The department has an ongoing commitment to ‘being an excellent department’. A key focus is on ensuring that staff feel trusted and empowered to deliver and have the skills, knowledge, and capability to do so effectively in their roles as well as the opportunities to reach their potential, wherever they are based.

A skills and capability plan was launched in January 2023 and sets out how the department is committing to doing this and the delivery priorities over the next 3 years. In particular it focuses on:

• setting a clear vision for skills and capability building within the department, and what success will look like for the department
• outlining improvements that will be made to how learning is delivered to ensure that it accessible at the point of need
• identifying the department’s key skills priorities for the next 3 years and how learning opportunities will evolve to meet these
• setting out the roles and responsibilities that everyone in the department has in driving up the capability of the department, including the role of line managers and individuals

Building capability in the following professions is a critical part of the skills and capability plan and actions for the delivery of the plan include:

• project delivery: rolling out skills assessment and accreditation for project delivery professionals by December 2023; developing leadership capability through the Major Projects and Leadership Academy and Cranfield Project Leadership programme; re-launch of a robust internal talent scheme to build capability and specialist skills
• policy: masterclasses delivered by the department’s staff and experts from government, industry, and academia; development of a policy school, addressing live policy issues; launch of a policy orientation course to develop understanding of the wider policy environment
• analysis: conducted workforce capability review in 2022 and developed plans to increase capability; developing tailored departmental offer to support the ‘One Big Thing’ initiative; reviewed data masterclass programme targeted at SCS and senior leaders ready for re-launch

As well as setting out a clear vision for skills development, the department, has also continued to focus on ensuing that learning opportunities are as accessible as possible to all staff. Attendance rates remain high at 87% across all learning opportunities in 2022 to 2023.

In 2022 to 2023, the department’s ambition was supported by governance and oversight to monitor performance against 3 themes:

• workforce, skills, and location
• innovation, technology and data
• delivery, evaluation and collaboration

Workforce, skills and location

The objective of this workstream is to ensure that the department is focused on making sure the workforce is diverse and inclusive, representing the communities the department serves. The department’s staff will feel trusted and empowered to deliver, have the skills, knowledge, and capability to do so effectively in their roles and the opportunities to reach their potential.

The relocation offer continues to improve iteratively, such as increasing the commute radius. The department is creating an action plan to increase recruitment and relocation in places for growth locations for senior civil servants.

There has also been further development of new line manager programme as well as the design and introduction of Elevate, the department’s senior leadership programme.

The department’s capital portfolio has grown, and workforce capacity pressures have been a constant across DfTc over this period. Changes have been implemented in the last 12 months that have enabled the department to reduce the severity of its capacity and capability risk and these include:

• implementation of a crisis response cohort to provide immediate response for any future crisis
• development of robust workforce planning
• a strengthened apprenticeship pipeline
• a renewed focus on career development with supporting tools
• development of a skills and capability plan for the department
• development of an employee value proposition and employer brand to position DfTc prominently in key markets of Birmingham, Leeds, and London

Delivery highlights

• there has been a review of all the department’s workplace adjustment procedures and created an action plan to improve the service, including resources and communication routes
• the department continues to work across HMG to complete local delivery plans for Birmingham and Leeds. The department spearheaded a pilot programme of outreach events for schools and universities, working with other government departments and the local government to deliver a successful school outreach session in Leeds and planned delivery of university sessions as well as more school sessions in Birmingham and Leeds. The department’s careers website was reviewed, and the talent and careers hub was launched. The department’s skills and capability plan was delivered, and the department’s diversity, inclusion and wellbeing strategy was published in July 2022 and commenced development of inclusion and wellbeing action plan
• increased the proportion of the department’s workforce outside of London from 10% to 21%, and as of March 2023, there are 442 staff in Birmingham and Leeds supported by the voluntary relocation offer and recruitment

Innovation, technology and data

The objective of this workstream is to own and deliver strategies that will maximise the department’s investments now and into the future. This includes the development and ownership of the department’s future ways of working strategy, and innovation culture strategy.

It coordinates projects that make sure the department’s estate (and how it is managed) is future facing, sustainable and brings staff together to deliver world leading transport services.

The workstream is also placing itself at the heart of government interoperability in both the digital and estates programmes to ensure a simple, single cross-civil service model that will be ‘business as usual’.

Following the successful refurbishment of the department’s London office, Great Minster House, relocation to One Priory Square in Hastings and to the government hub in Wellington Place, Leeds in 2021, in March 2023, the department moved into the new site in Birmingham, the Colmore Building. The new office, officially opened by the Secretary of State on 11 April 2023, was designed with over 7,000 pieces of user feedback and hosts a variety of workspaces.

Delivery highlights

• the department successfully achieved a mature marking in the PAS3000 smarter working accreditation against the BSI standard. Achieving the standard is the culmination and recognition of nearly a decade’s worth of strategically planned significant investment into the offices, technology offer and organisational development programme. This was aimed at providing the staff the best physical, digital tools, and cultural conditions to deliver more efficiently and effectively. Investment has seen the department maintain exceptional performance during and after the COVID-19
• the planned shift in working practices enabled a full and smooth return to the office, in line with the department’s hybrid working model. An organisational-wide programme of capability support and tailored local interventions made sure that colleagues were able to maximise the benefits of hybrid working
• the department’s workspace design has continued to evolve and innovate. Two new projects started to relocate the Birmingham Hub and Swansea office
  • in Birmingham, the new site went live on 20 March 2023. It was an end-to-end the department influenced workspace design that incorporated significant user-needs from staff into the design and implemented new workspace concepts as pilots that, if successful, will be incorporated into the rest of the estate in due course
  • in Swansea, the department confirmed in March 2023 that it will permanently share space with the DVSA. This represents a no-lose investment for the department. The decision brings together the departmental family organisations into the same space, under a single, cost-effective lease. It enables the organisations to complete a full, staff-led redesign of the workspace designed with the department’s needs in mind and represents an opportunity to lead the way in cross-organisation interoperability
• the department also successfully identified and opened an office in York for Active Travel England
• the department remains focused on ensuring the staff have the right tools and skills to deliver more innovatively, effectively, and efficiently for the traveling public:
  • following a successful pilot, the department has commenced a full refresh of the end user devices – offering staff the best, more reliable, and secure hardware, supported by a continuously improving application suite that will drive innovation
  • a full smartphone refresh programme – over 900 new iOS and Android devices delivered to staff to ensure continued business continuity and anywhere working
  • the Confident Collaboration project has delivered an incremental and continued digital evolution on the department’s existing Microsoft stack, making sure that the department maximises the benefits of its baseline application suite whilst enabling other supporting platforms to be rolled out quickly and easily to users on a business need basis
  • significant improvements have been delivered in streamlining the backend digital processes. The successful launch of the digital self service platform has also shifted digital support away from a tradition helpdesk environment to a more self-serve approach that will see significant benefits delivered long term via an increase in user capability and reduction in support costs
  • the implementation of an External Security Operations Centre providing 24/7 monitoring in response to the huge increase in activity in this area
• the Science, Technology and Innovation teams helped to make sure the department continues to grow the skills and capability required to futureproof and build the resilience of the transport network
• a staff driven innovation and continuous improvement platform, ‘Your Ideas’ was established to harness the expertise and knowledge at grass roots level on ideas for how the department can continuously improve and innovate

Delivery, evaluation and collaboration

The objective of this workstream is to achieve excellence in project and public service delivery. Making it easy to collaborate and provide a seamless experience for the public.

To improve the ability of the projects to deliver to time and cost and to deliver their intended benefits, delivering (often via its public bodies) an enormous and complex capital portfolio. Developing and maintaining the skills, standards, and capabilities to do this is a core attribute of ‘being an excellent department’.

To carry out proportionate evaluation of the department’s activities to enable systematic learning from them, greater accountability and a stronger evidence base for future decision making.

To enable delivery of excellent outcomes by the department’s public bodies, through effective shareholding and corporate sponsorship that has clear objectives for public bodies to both agree with, and be accountable for, the delivery of them.

This workstream will deliver further value for public money across the department, focussing on processes, being user-friendly and ensuring effective delivery. The department will drive continuous improvements across the department, joining up across the DfT group where possible and driving better outcomes for the department’s customers.

There has been a continued focus on improving project delivery capability including the launch of the new project delivery portal.

As part of this the department’s Public Bodies Review Programme commenced, with the Civil Aviation Authority review is due to report in summer 2023. DVLA and DVSA reviews will follow in 2023 to 2024, and National Highways and Maritime and Coastguard Agency reviews in 2024 to 2025.

Delivery highlights

• a rapid review of the department’s corporate services across DfTc and its executive agencies has now been completed, which has delivered a range of potential opportunities for implementation. These options are in the process of being developed into a programme of work, following which the implementation of opportunities will be prioritised
• the department has also worked with the Cabinet Office and HM Treasury to shape emerging central guidance on good governance of public bodies and to deliver against the aims of the wider Government Public Bodies Reform Programme

Gender pay gap reporting

The department’s gender pay gap (GPG) report is published annually as part of the legal requirement for public authorities to publish their gender pay gap. Over the last 6 years, we have significantly reduced our gender pay gap. Disappointingly, however, we have seen a slight increase in the DfT group mean and median gender pay gap in 2021 to 2022, as well as increases in the mean GPG of DVLA and DfTc. The gender bonus gap (GBG) has also shifted in favour of men in most agencies compared with the previous year.

Structural factors continue to impact our GPG. In particular the DVLA, our largest agency, employs thousands of people in Swansea, predominantly in more junior grades, the majority of whom are women. Due to temporary changes in the workforce profile and working arrangements (and remuneration as a result) during the peak of the pandemic, the 2020 to 2021 data saw a larger than expected decrease to the DVLA GPG. As we come out of this period and return to more normal ways of working, we have subsequently seen an increase in the GPG this year.

Across the DfT group as a whole, roles which attract additional pay allowances, such as commercial contract management, engineering, and digital, are more likely to be occupied by men. Addressing the gender balance in these roles will require action to widen the talent pool and ensure women are attracted into these professions.

To continue to ensure the department is an employer of choice for women, our 2022 inclusion and wellbeing action plan includes a number of actions to address the GPG. These include: reviewing our senior civil servant talent pipeline to ensure talented women are identified and supported in their careers; refreshing our women’s health strategy which incorporates new menopause guidance; and continuing to design inclusive recruitment campaigns that mean we are attracting the best talent in the market.

What is driving the gender pay gap?

• women are proportionally more represented at lower grades (AA to EO), and men at higher grades (SEO and above), especially in the executive agencies
• there are higher proportions of men in the top 3 pay quartiles, and a higher proportion of women in the bottom pay quartile
• there are higher proportions of men in most specialist roles, many of these roles in the department offer additional pay and allowances due to market skill shortages, unsociable working hours or travel involved in the role

What the department is doing to address the gender pay gap?

The department is committed to ensuring that women working at the department are given equal opportunities. As part of the diversity, inclusion, and wellbeing strategy the department is taking action to close the GPG under these priorities which reflect the employee life cycle:

• representing the communities the department serves – recruiting from a more diverse pool of candidates that reflects the various communities the department serves and providing opportunities to progress locally, including in the department’s growing hubs in Leeds and Birmingham
• being confidently inclusive – fostering a healthy and supportive culture where colleagues feel confident bringing the full range of their background, experiences, and skills to work
• maximising potential for all – creating an empowering environment where everyone feels a sense of connection with the department and sees opportunities to thrive and develop their careers

Apprenticeships

The department continues to remain fully committed to supporting the government’s pledge to increase the quantity and quality of apprenticeships to drive the development of a diverse, inclusive, and productive workforce that meets the capacity and capability needs of a modern Civil Service.

The department has developed a departmental apprenticeship strategy and action plan to align with the vision and priorities set out in the Civil Service apprenticeship strategy which is an overall 5% target by 2025, which includes devolved nations and is not an annual target.

The total number of apprentices starting between 2022 to 2023 was 145, with 302 currently enrolled on existing programmes. This is 3.7% of the department and its executive agencies workforce in 2022 to 2023.

To further support the apprenticeship strategy, the department has run volume campaigns targeted to particular professions and supporting individuals as part of the Life Chances programme on securing nationally recognised qualifications alongside valuable work experience through the apprenticeship levy.

The department takes part in a Peer Mentoring Programme with KPMG. This is our fifth year partnering with KPMG to organise a programme for apprentices across both organisations.

Over a 7 month period apprentices can:

• network with peers and seniors from both organisations – with organised events throughout the year to give the chance to build internal and external network
• develop organisational skills – with support from senior leaders from both KPMG and the department, to organise and host a virtual presentation on a theme assigned to the cohort
• take part in peer mentoring meetings – meet with peer mentors from the department throughout the year to discuss topics

Employee engagement

The annual Civil Service People Survey looks at civil servants’ attitudes to, and experience of working in government departments. Every year, a Civil Service benchmark report is published along with a summary of main department scores.

The Civil Service People Survey engagement score for the department and its executive agencies overall remained the same in 2022 in comparison to 2021 at 58%.

There was a mixed picture this year across the department and its executive agencies. Both Driving and Vehicle Licencing Agency (DVLA) and DVSA increased by 1pp, while there were reductions in the engagement index at DfTc (4pp lower), Vehicle Certification Agency (VCA) (3pp lower) and Maritime and Coastguard Agency (MCA) (1pp lower).

The department has used the data through the survey to inform actions as both a local and departmental level to address key themes.

Civil Service and DfT Group’s People Survey engagement scores 2018 to 2022

Engagement index (%)	2022	2021	2020	2019	2018
Civil Service	65	66	66	63	62
DfTc and executive agencies	58	58	64	61	59
DfTc	64	68	67	64	64
DVLA	54	53	63	63	61
DVSA	54	53	62	57	52
MCA	65	66	68	65	65
VCA	62	65	68	63	64

People centred systems and policies

The department is committed to providing people centred systems and policies for our people.

The future of shared services (FoSS) programme aimed to produce a ‘tell Us once’ suite of systems covering HR, finance and commercial services. During 2022 to 2023, the programme successfully built and tested a core solution. In line with the shared services for government strategy, this work transitioned into the Unity cluster at the end of February 2023. The strategy sets out 5 ‘cluster programmes’ who will come together on a unified platform and DfT are in the Unity cluster with HMRC and DLUHC, utilising the SAP product.

The FoSS programme’s work to date is now being used as an accelerator to deliver the Unity programme and work continues on the transfer of assets from DfT to the Unity cluster. The Unity programme will deliver the Cabinet Office aims to drive greater efficiency and effectiveness in the delivery of corporate services by taking a cross-government approach, allowing for greater interoperability across the Civil Service, thereby delivering better outcomes.

People centred policies

Our policies and guidance were updated throughout the year to support both employees and the business. This includes:

• updating our policies and processes to align with the government guidance on living with COVID-19. This helped support our employees as we returned to our workplaces
• reviewing our raising a concern policy to ensure that all our employees are clear on how to raise concerns including those who may have concerns that involve the Official Secrets Act. The routes for employees to raise concerns were also publicised as part of the cross Civil Service ‘speak up week’ campaign in September
• providing guidance to help support employees who have experienced pregnancy loss or the loss of a baby. This was developed with the help of the department’s Gender Network and signposts the policies and support in place within the department to help employees at a difficult time. A separate manager’s guide offers practical guidance on how to support team members who experience pregnancy loss
• new menopause guidance was published in October to support employees experiencing the menopause and to enable line managers to feel confident in providing support and workplace adjustments where they are needed
• the department’s policy and process on declaring outside interests were updated to align with the latest Cabinet Office guidance. This included a new strengthening the existing process for declaring outside interests including any secondary employment that may conflict with an employee’s role as a civil servant. The updated process includes oversight by senior managers of all declarations, provides greater transparency and enables us to ensure that our employees actions are always aligned with the Civil Service Code which requires us to act with integrity and honesty and all times
• our travel and subsistence (T&S) policy for UK travel was updated to ensure that indicative rates for hotel accommodation and meal allowances to recognise the impact of inflation and to enable more choice for our employees within the recommended ranges
• the drug and alcohol policy was also reviewed and updated to clarify expectations and conduct

Sustainability report

UN sustainable development goals

The 2030 Agenda for Sustainable Development is a historic global agreement which aims to eradicate extreme poverty, fight inequality and injustice, and leave no one behind. It was agreed by world leaders at the UN in 2015. The UK is committed to the delivery of the sustainable development goals (SDGs) and the department is working towards directly contributing to the achievement of the following goals:

• SDG 3 – good health and well-being
• SDG 4 – quality education
• SDG 8 – decent work and economic growth
• SDG 9 – industry, innovation, and infrastructure
• SDG 11 – sustainable cities and communities
• SDG 13 – climate action

SDG 3 – good health and well-being

Ensure healthy lives and promote wellbeing for all ages.

In 2021, the department published the Transport decarbonisation plan (TDP), world leading in terms of its scope and ambition. The UK is ahead of most other countries in setting out such a detailed plan for decarbonising transport by 2050. The commitments made will also help to reduce emissions that impact the quality of the air, leading to cleaner air and making lives healthier. Since publishing the TDP:

• the department has and will continue to regulate the tailpipe CO2 emissions of new non-zero emission cars and vans to limit their emissions until 100% of new sales are zero emission
• outside of cars and vans, the department is continuing work to phase out other non-ZE road vehicles, including buses, coaches, and HGVs, to help improve air quality in our towns and cities:
  • between March and May 2022, the department ran a consultation to help determine the exact date for ending the sale of new, non-ZEBs. Alongside the consultation, the department also launched calls for evidence on coaches and minibus decarbonisation
  • since the initial consultation on HGV phase out dates, the department has published a further call for evidence to identify possible exemptions to the 2035 phase out date for vehicles below 26 tonnes that may take longer to transition
  • in July 2022, the department published the second statutory Cycling and Walking Investment Strategy (CWIS 2), covering the period 2021 to 2025, to help enable people to use public transport, or to walk and cycle, which is one of the TDP’s 6 strategic priorities. The strategy includes new and updated objectives including increasing levels of walking and walking to school, doubling cycling, and increasing the proportion of journeys in towns and cities that are walked of short cycled
• the department is tackling high pollution levels which is a serious challenge for communities across the UK which is why the government has put in place a plan to improve air quality and reduce harmful emissions. Fourteen local authorities have completed implementation of their air quality measures to reduce NO2 and the department has supported the delivery of 6 clean air zones (CAZs), including Bradford and Bristol in September and November 2022 respectively; and Tyneside in January 2023. This is a huge achievement in terms of both digital delivery by government and promoting behavioural change to improve air quality and public health

SDG 4 – quality education

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.

A more specific infrastructure carbon eLearning training package has been developed as part of the shared digital carbon architecture programme and is now available to all staff in the department.

The department continues to be in corporate partnership with the Institute of Environmental Management and Assessment, which provides opportunities to further our sustainability knowledge, capability, and expertise across the department.

SDG 8 – decent work and economic growth

Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all

The future low-carbon transport economy offers significant potential for economic growth, job creation and the opportunities for the UK to become a global leader. Chris Skidmore MP led the Net Zero review in September 2022 to understand how HMG could deliver its legally binding commitments in a way that is pro-business and pro-growth. The review consistently makes an economic case for decarbonisation and outlines opportunities for growth, green jobs, levelling up, health and wellbeing, and international leadership. To take advantage of the opportunity, the department has been supporting the development of emerging green industries such as:

• sustainable aviation fuel where on top of existing programmes and support, the department will provide £180 million to support industry to accelerate the commercialisation of sustainable aviation fuel (SAF) plants and fuel testing in the UK
• the UK SHORE programme , which focuses on decarbonising the domestic maritime sector. UK SHORE investment will bring jobs and opportunities, as well as direct economic benefit to our coastal communities, building back better. Interventions include the second round of the Clean Maritime Demonstration Competition (CMDC) allocated over £12 million to 31 feasibility studies and pre-deployment trials in clean maritime solutions across the UK. These projects are delivering between January and August 2023

SDG 9 – industry, innovation, and infrastructure

Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation.

It is the responsibility of the department to set the regulations, to support the early R&D, work with the private sector to ensure that infrastructure is rolled out fairly and no region gets left behind, and make sure that this transition is delivering jobs here in the UK.

The LEVI Fund aims to deliver a step-change in the deployment of local, primarily low power on-street charging infrastructure across England. This will particularly support residents without access to off-street parking to have better access to EV chargers, as well as growing the charging network across the country. The LEVI Pilot awarded almost £32 million government funding to 25 local authorities across England and is expected to deliver close to 3,400 chargepoints and 1,000 gullies. Following the success of the LEVI Pilot, the department launched the full LEVI Fund in March 2023, with a further £381 million (£343 million capital and £37.8 million resource) available over the next 2 financial years. The existing On-Street Residential ChargePoint Scheme (ORCS) will continue in 2023 to 2024 and will be available to all local authorities in the UK. Since the scheme began in 2017, it has already provided funding which will see more than 14,000 public chargepoints installed.

Alongside setting the end of sale dates for non-complaint HGVs, which will drive innovation and create a market for zero emission vehicles. The government has announced in the last financial year to take forward the Zero Emission Road Freight Demonstrator (ZERFD) programme. The programme will kick-start at-scale deployment of long haul zero emission HGVs (typically 40-44 tonne) and their supporting infrastructure across the UK. The programme will create an evidence base on which technology (or technology mix) will be best suited to decarbonise the heaviest road freight vehicles in the UK, which will provide confidence to the sector and enable longer term investment.

In maritime, UK SHORE manages the implementation of a suite of interventions such as the Clean Maritime Demonstration Competition (CMDC) and the Zero Emission Vessels and Infrastructure (ZEVI) competition. These grant funding schemes focus on different technology readiness levels (TRLs), supporting zero emission technology solutions from early-stage research through to feasibility studies, small scale demonstrations and whole system technology demonstrations which include both port-side infrastructure and vessels. The first 2 rounds of the CMDC allocated over £35 million to 86 projects across the UK. The third round of the CMDC will allocate £60 million for technology and system demonstrations in clean maritime solutions and successful projects are expected to deliver between April 2023 and March 2025. CMDC3 will build on the feasibility studies and initial trials funded through CMDC1. The ZEVI competition will allocate £77 million to match fund project builds between October 2023 and March 2025, with whole system demonstrations acting for a further 3 years.

It is critical that the aviation sector plays its part in delivering the UK’s net zero commitment and the government is already supporting a variety of technology, fuel, and market-based measures to address aviation emissions. Following publication of the Jet Zero strategy in July 2022 the department is implementing a range of measures to decarbonise aviation.

Our target is to deliver at least 10% SAF by 2030. The department has made £165 million of capital grant funding available, through the Advanced Fuels Fund, to support the development of commercial scale SAF plants in the UK. In 2022, the department announced that 5 projects will receive a share of the £165 million Advanced Fuels Fund, which aims to take as many as possible through to commercial scale production.

In addition, the department is undertaking a call for evidence on the 2040 zero emission airport operations target, supporting airports prepare for new forms of aircrafts through £4.2 million of funding towards the zero emission flight infrastructure project and in January 2023 published a refreshed airspace modernisation strategy.

The government’s Future of transport programme aims to keep the UK at the global forefront of transport innovation, leveraging £50 billion of investment in skilled jobs, and decarbonising transport. Through this programme, the department is supporting real-world trials of new transport technologies and business models. The department has invested £92 million in 4 future transport zones and accelerated trials of rental e-scooters to support local leaders to work with industry and trial new approaches.

The department is taking action to reduce the carbon impacts of infrastructure projects, ensuring alignment with Net Zero and carbon budgets. This includes embedding standardised carbon assessment across transport modes and methods of managing and reporting carbon across the asset lifecycle. In May 2022, guidance and templates were updated to enhance the role of carbon in all 5 elements of the business case, including work with our environmental analysis to update economic case guidance (TAG) and ensuring whole life carbon assessment is well reflected in appraisals. The department is also enabling the rapid adoption of carbon reduction mechanisms that are emerging from industry, such as the electrification of plant and less carbon intensive materials, including steel and concrete/cement.

The Transport Research and Innovation Grant programme (TRIG) is a programme of competitive grants funding research and innovation to enhance the UK’s transport system across all modes. It funds early-stage innovation and prototyping and is designed to maximise SME involvement through grants of £30,000 as part of an ‘open’ competition where all ideas are welcomed, and targeted competitions on the department’s strategic priorities. The most recent TRIG competition funded 51 innovators on maritime decarbonisation, future of freight, COVID-19 recovery and transport system resilience.

SDG 11 – sustainable cities and communities

Make cities and human settlements inclusive, safe, resilient, and sustainable

The department is supporting and empowering local authorities to decarbonise, utilise their knowledge and expertise, and maximise the sharing of best practice already happening across the UK:

• in April 2022, the department published the local authority toolkit, which contains guidance to support local authorities to develop and implement transport decarbonisation policy measures, adopt best practice, learn from case studies of successful schemes already delivering local benefits, as well as signposting to other published guidance and methodologies
• in August 2022, the department formally established ATE as an executive agency based in York. The objectives of ATE are:
  • to raise design standards and work with local authorities to ensure that the infrastructure they design, build, and maintain enables active travel
  • to be a repository of expert advice on how walking and cycling provision can be improved, including through the planning system
  • to increase skills and capacity in local authorities, promoting best practice and enabling authorities to learn from each other
  • in January 2023, ATE announced the Capability Fund, which is investing £32.9 million in local and combined authorities across England (outside London). The fund will build active travel capability in local authorities, including training officers and councillors, supporting network design and planning and public engagement and consultation. The fund will also enable more people to walk, wheel and cycle local journeys

SDG 13 – climate action

Take urgent action to combat climate change and its impact

We are already experiencing the effects of climate change, with extreme weather events, such as the July 2022 heatwave, causing widespread travel disruption across the country. Decarbonising the economy will not be enough to prevent extreme weather events from having an impact on all forms of transport and the infrastructure that it relies upon. Understanding these effects and seeking ways of lessening their impacts on the transport network can help improve transport’s resilience at such times. The department has plans in place to adapt to the risks of climate change, including:

• contributing to the development of the third national adaptation programme due in 2023. This is part of the department’s legal obligation to address the transport-related risks identified in the third climate change risk assessment
• the road investment strategy , which includes a commitment to enhance all-weather resilience of the SRN, to minimise the risk of incidents and their impact for road users
• the plan for rail which includes a priority for long-term investment in climate resilience supported by smarter forecasting, planning and technology
• Network Rail’s announcement on its extreme weather resilience task force following July 2022’s heatwave, to tackle the effects of hot weather on the railway

Rural proofing

The department understands that the transport needs of communities in rural areas differ from those in urban environments for a variety of reasons, which include demographics, lower population density and travel distances.

The department’s appraisal system is consistent with Defra’s National rural proofing guidelines, ensuring that policy makers address the needs of rural areas throughout the policy cycle.

Delivery highlights

• the rollout of Demand responsive transport trials supported by the department’s £20 million Rural Mobility Fund continued, with Gloucestershire, Leicestershire, and Warwickshire among the latest to have launched
• Defra are working with the department to plan a new co-chaired rural road working group on road safety. This will also include highways authorities with the aim to reduce road traffic collisions on rural roads
• the department has awarded £100 million to LAs between 2017 to 2018 and 2021 to 2022 as part of the Safer Roads Fund, to improve high risk rural roads
• following a funding award of £23.5 million, Cornwall Council officially launched their 4-year bus fares pilot scheme on 10 April 2022, introducing a suite of cheaper fares, which reduced prices by around a third for everyone across the county
• the department provided Sustrans with £25 million in 2022 to 2023 for the National Cycle Network to deliver a variety of improvements which will support a number of rural communities
• the department’s Tackling Loneliness with Transport Fund awarded nearly £5 million to 12 public sector delivery partners in 2022. These partners have commenced pilot schemes that aim to build the evidence base on how transport can intervene to tackle loneliness. Around a third of the pilots funded are operating in rural areas of England, and an evaluation report is expected in autumn 2023
• the Local Electric Vehicle Pilot was expanded in February 2023 to deliver more chargepoints across local areas in England. This included providing funding to LAs with large rural areas, such as North Yorkshire, Norfolk, and Cumbria

Climate change adaptation

The department continues to drive progress on climate change adaptation, working to make sure the transport system is responsive to the impacts of climate change. In 2022 the UK saw the first ever red weather warning for heat causing widespread disruption as large parts of the country was advised not to travel.

This year the department worked closely with partners and across government to fulfil the legal obligation to address the transport related risks identified in the climate change risk assessment and set out mitigating actions in the third national adaptation programme. Parts of the transport sector are making strong progress in understanding the impacts of climate change. However, there are gaps in knowledge, evidence base and action, along with strategic challenges such as aging infrastructure. The department will address these issues through a transport adaptation strategy.

Actions in response to climate change risks are primarily taken by transport infrastructure operators, many of whom continue to build adaptation into their strategic planning. For example, following July’s heatwave Network Rail announced the launch of the extreme weather resilience task force, to tackle the effects of hot weather on the railway. In the high-level output specification (HLOS) 2022, the Transport Secretary was clear that railway infrastructure must be as resilient as reasonably possible to the effects of climate change.

Information and communications technology

The department has taken steps to reduce its greenhouse gas emissions associated with digital services by transforming its data estate and moving its operations fully to the cloud. This has allowed the department to benefit from the significant improvements in energy efficiency being achieved by the large cloud providers.

The department has a hybrid working policy that blends the benefits of office-working with the efficiencies of homeworking, which is supported by equipping users and offices with the technology required to work effectively from any location.

The department has worked to improve the management of its information and communications technology (ICT) resources and waste to ensure that no ICT waste goes to landfill.

All digital contracts the department signed in 2022 to 2023 meet the minimum mandatory government buying standards (GBS) and comply with the Waste Electrical and Electronic Equipment Regulations . At end of life, all ICT devices are sent back to suppliers for reuse, refurbishment, or to be recycled.

Work is ongoing to ensure proportionate and relevant sustainability social value criteria are contained within ICT tenders and tracked through the duration of contracts with the use of key performance indicators.

Sustainable development

Alongside the work to deliver a more sustainable transport system, the department also recognises the environmental impact that our own estate and business operations can have, and work to ensure these are managed in an equally sustainable way.

The department is part of the government greening commitments (GGCs), under which Defra provides the structure and standard of sustainability performance for all government departments to achieve. In 2021 Defra published a new phase of GGC targets covering 2021 to 2025. The department reports its performance against the GGC targets quarterly to Defra, who produce a cross-government annual report. The data provided to Defra and outlined below covers the operations of the department, and 12 of its public bodies. More detail on the activities of individual organisations to improve their own sustainable performance can be found in their individual annual report and accounts.

The department continues to work towards delivering the actions in its operational sustainability strategy 2021 to 2025, published in 2021, to meet the GGCs by 2025 and further refining our pathway to Net Zero by 2050.

Summary of performance

A full breakdown of the department’s sustainability metrics is provided in tables 1 to 4.

2022 to 2023 performance shows the department is on track to meet 8 of our 9 quantitative GGC targets (Table 1).

Theme	Measure	2017-18 baseline	2024-25 target	2022-23 target trajectory	2022-23 actual performance
Mitigating climate change	Total emissions (tCO2e)	412,459	156,734 (-62%)	230,977 (-44%)	218,072 (-46%)
Mitigating climate change	Direct emissions (tCO2e)	37,948	30,738 (-19%)	33,015 (-13%)	20,707 (-45%)
Mitigating climate change	ULEV cars (% car fleet)	Not available	25% (Dec 2022)	25%	38%
Mitigating climate change	Domestic flights (tCO2e)	867	607 (-30%)	685 (-21%)	392 (-55%)
Minimising waste	Total waste (tonnes)	795,249	675,962 (-15%)	707,772 (-11%)	1,245,680 (+57%)
Minimising waste	Waste to landfill (%)	7%	<5%	5%	(0.2%)
Minimising waste	Waste recycled (%)	91%	>70%	70%	(92%)
Minimising waste	Paper use (reams)	255,431	127,716 (-50%)	163,476 (-36%)	59,552 (-77%)
Reducing water use	Water use (m3)	2,219,366	2,041,817 (-8%)	2,086,204 (-6%)	1,239,450 (-44%)

Table 1

The organisations in scope of sustainability reporting are in line with the latest phase of GGCs. Those included are DfTc, DVSA, DVLA, British Transport Police, Vehicle Certification Agency, High Speed 2 Ltd, Maritime and Coastguard Agency, National Highways, Network Rail, East West Rail, Northern Lighthouse Board, Trinity House, and Office of Rail and Road. As a result, the figures provided in the tables below will differ to those included in annual reports and accounts, before 2021 to 2022. Further information can be found in the public bodies own annual reports and accounts.

The department’s 2022 to 2023 performance in comparison to 2021 to 2022 has seen some impact by the continued return to office of more staff, particularly in terms of business travel, although not at pre-pandemic levels. The increased use of digital solutions for meetings is a significant contributing factor to business travel level being below 2019 to 2020 figures. The department continues to see significant reductions in paper use, water use and domestic flights, and exceeding the target trajectory in all 3 areas. The department anticipates maintaining these lower levels to 2024 to 2025 through sustained behaviour changes and staff awareness campaigns.

The department’s overall and direct emissions have seen smaller reductions as sites/buildings have a baseline emissions level to operate in a safe and usable way, regardless of the number of staff attending. With the lifting of coronavirus restrictions, the department has also seen decreases in fleet travel as car sharing once again begins to become usual practice. The increasing decarbonisation of the department’s fleet and the achievement of the 2022 green fleet commitment of 25% of car and van fleet being ultra low emission vehicles, has assisted in lowering emissions from business travel.

The department has already eradicated single use plastic cutlery, stirrers, straws, takeaway boxes, plates, and cups. These have either been removed completely or replaced by compostable/recyclable alternatives. We continue to work with our facilities management suppliers to eradicate single use plastics in this area, replacing historic single use plastics with refillable/reusable alternatives. We are also working with our wider supply chain to minimise/eradicate packaging and where that is not possible ensuring that it is both non-plastic and reusable.

Network Rail continues to produce large volumes of industrial waste from maintenance of the railway. These volumes fluctuate depending on the scale of works required each year, and as such is not within the department’s direct control. This has increased from its baseline. Network Rail do however ensure waste is recycled and diverted from landfill wherever possible. The department is exceeding targets in both these areas.

Greenhouse gas emissions		2019-20	2020-21	2021-22	2022-23
Gross emissions (tonnes CO2e)	Scope 1: direct emissions	103,720	110,046	98,791	77,991
Gross emissions (tonnes CO2e)	Scope 2: energy indirect emissions	183,186	168,476	146,225	122,221
Gross emissions (tonnes CO2e)	Scope 3: business travel emissions	29,994	18,256	20,116	17,859
Gross emissions (tonnes CO2e)	Total emissions	316,900	296,778	265,132	218,072
Related energy consumption (kWh)	Office grid electricity	69,970,643	65,570,660	69,984,658	61,342,972
Related energy consumption (kWh)	Non-office grid electricity	646,721,001	657,066,891	651,079,042	570,683,988
Related energy consumption (kWh)	Renewable electricity	30,867	28,226	30,103	103,982
Related energy consumption (kWh)	Gas	109,880,602	94,342,680	133,619,370 (increases were due to more staff returning to offices and more face-to-face activities being undertaken)	73,888,134
Related energy consumption (kWh)	Other heating	36,260,045	36,984,860	27,157,129	27,137,691
Related business travel	Fleet road travel (litres of fuel)	6,049,015	6,193,811	20,711,353 (fluctuations as Network Rail moved to reporting fuel use, rather than kilometres travelled)	16,752,864
Related business travel	Fleet road travel (km)	247,770,528	297,826,976	39,709,470 (fluctuations as Network Rail moved to reporting fuel use, rather than kilometres travelled)	34,581,542
Related business travel	Non-fleet road travel (km)	47,090,685	19,303,054	35,016,912	28,900,470
Related business travel	Public transport (km)	117,161,164	884,943	13,384,912	29,453,887
Related business travel	Domestic flights (km)	6,101,606	252,321	1,867,071	3,017,634
Financial indicators	Energy expenditure	£543,237,838	£494,666,555	£558,404,402	£643,674,472
Financial indicators	Business travel expenditure	£44,777,322	£7,090,490	£19,278,238	£21,591,627

Table 2: greenhouse gas emissions

Waste		2019-20	2020-21	2021-22	2022-23
Non-financial indicators	Total waste generated	1,072,035	1,025,083	1,007,326	1,245,680
Non-financial indicators	Waste sent to landfill	8,043	3,330	103 (waste to landfill reduction was a result of Network Rail having undertaken a waste audit and diverted waste to other waste streams.)	3,006
Non-financial indicators	Waste recycled	1,053,494	1,008,080	996,396	1,148,175
Non-financial indicators	Waste incinerated	10,498	13,672	10,827	94,498
Financial indicators	Expenditure on waste	This is not available as waste services are provided as part of a total facilities management contract, so specific spend on waste only is not able to be separated out.	This is not available as waste services are provided as part of a total facilities management contract, so specific spend on waste only is not able to be separated out.	This is not available as waste services are provided as part of a total facilities management contract, so specific spend on waste only is not able to be separated out.	This is not available as waste services are provided as part of a total facilities management contract, so specific spend on waste only is not able to be separated out.

Table 3: waste minimisation and management

Finite resources		2019-20	2020-21	2021-22	2022-23
Non-financial indicators	Total water consumption (m3)	2,207,335	1,360,739	1,349,664	1,239,450
Non-financial indicators	Office-only water consumption (m3)	275,675	190,709	234,496	185,918
Non-financial indicators	Office water use per head	9.73	6.73	8.11	6.52
Non-financial indicators	Paper use (reams A4 equivalent)	239,229	158,720	68,759	59,552
Financial indicators	Expenditure on water	£5,863,594	£4,052,419	£4,608,006	£4,654,886
Financial Indicators	Expenditure on paper	This is not available as paper is provided as part of a wider office supplies contract, so specific spend on paper only is not able to be separated out.	This is not available as paper is provided as part of a wider office supplies contract, so specific spend on paper only is not able to be separated out.	This is not available as paper is provided as part of a wider office supplies contract, so specific spend on paper only is not able to be separated out.	This is not available as paper is provided as part of a wider office supplies contract, so specific spend on paper only is not able to be separated out.

Table 4: finite resource consumption

Sustainable procurement

The department’s procurement function is managed through a collaborative operating model, which includes DfTc, the executive agencies, government owned companies and non-departmental public bodies, also known as the DfT group. DfT group organisations are predominantly responsible for conducting their own procurements but can draw on central support from DfTc and assurance for most projects is carried out by a central function within DfTc. Each organisation has their own delegated authority, but as a rule their major spend will go through the DfTc assurance function. They also must comply with central policy either produced by DfTc, or OGDs such as the Cabinet Office.

As a group, the department recognises the significant impact procurement decisions can have on sustainability outcomes, therefore the department is committed to ensuring the supply chain supports sustainable development goals.

The department is committed to embedding sustainability into procurement processes and has developed several tools to support this.

Guidance is available to all procurement and contract management staff on the intranet and is regularly checked and updated when policy changes. The department has a corporate environment policy which can be included in tenders where appropriate, setting out the minimum environmental and sustainability standards that potential suppliers to the department must meet to win contracts. This document is reviewed regularly.

Training is given to all staff involved in procurement and they have access to the sustainable development eLearning on Civil Service Learning and are actively encouraged to undertake it. Some executive agencies include sustainable procurement in their annual performance targets for procurement officers, and contract managers, while others provide general sustainable procurement training to all commercial staff. Staff with more responsibility for sustainable procurement have undertaken advanced training. The department has the CIPS kite mark, a statement of our commitment to ethical sourcing and supplier management, and as part of the department’s CIPS accreditation, commercial staff must complete an ethical sourcing assessment, which includes a module on environmentally sustainable procurement.

The Commercial Lifecycle Assurance function team provide assurance of all major procurement processes in the department, to provide confidence to the investment boards that they are being managed effectively, efficiently, and compliantly. This includes consideration of the inclusion of relevant sustainability targets, by ensuring consultation with appropriate sustainability experts at appropriate points in the procurement phase.

The department complies with Procurement policy note 06/21, which requires all suppliers bidding for contracts with a value of £5 million per annum to submit carbon reduction plans, or face being excluded from the procurement. Carbon reduction plans are challenging suppliers to change their behaviour and detail their own carbon reduction policies within their organisation, as well as providing their current and baseline emissions. This is a major initiative to reduce the carbon footprint of our supply chain. Where this policy poses challenges for small-to-medium enterprises, the department has run training sessions to assist such businesses and support them in complying with the policy.

The department’s major procurements (above public procurement thresholds) must now attribute a minimum 10% weighting to a social value outcome as part of the tender evaluation criteria, potentially including outcomes which focus on environmental concerns and decarbonisation. With a significant factor in winning government work linked to such an outcome, the aim is to drive supplier behaviour to support strong decarbonisation initiatives. Initiatives which may be assessed include supplier’s ability to work towards net zero emissions, increased biodiversity, improved air quality, creation of green spaces, and a reduction in waste throughout the contract and down the supply chain.

To support this further, the department has produced a social value strategy, which maps out links between the social value criteria outlined in Procurement policy note 06/20, and the department’s strategic objectives such as reduce environmental impact.

The department has fully implemented the Construction playbook, a best-practice principles framework published in 2020 which is aimed at getting construction projects right from the start as green as possible, through requirements for Net Zero 2050 strategies, whole life carbon cost assessments such as PAS 2080, and an emphasis on modern methods of construction (MMC) and off-site construction where possible, which is much less carbon intensive than traditional construction. From January 2023, infrastructure projects delivered by our ALBs are required to assess all carbon impacts in line with recognised industry standards (PAS 2080). Furthermore, the department is looking to produce a commercial construction strategy to help achieve the decarbonisation benefits linked to MMC.

The department’s commercial directorate has both category management and supply chain management functions which are concerned with identifying supply chain risks that include the environmental impact of the department’s supply chain. These teams work closely with the department’s public bodies to facilitate collaboration on treatment strategies across the DfT group and other government departments. Current work includes leading strategic engagement with Industry and supply chain partners to test market capability and capacity to deliver the department’s future construction materials demand and net zero targets.

As well as these established policies, the department is developing a sustainable procurement strategy. The department is investigating the further use of:

• carbon focused KPIs for our contracts
• setting science-based targets for the organisation and our suppliers, as has been championed by Network Rail, with HS2 Ltd and National Highways also looking to implement similar targets
• model contract clauses with carbon considerations
• carbon baselining and carbon incentivisation systems
• incentivisation versus mandating low carbon materials, primarily steel and concrete
• disclosure and reporting systems able to track whole-life carbon through the contract lifecycle, as part of the department’s commitment to the industrial deep decarbonisation initiative, an international cross-government agreement announced at COP26 in 2021

Dame Bernadette Kelly DCB

18 July 2023

Permanent Secretary and Principal Accounting Officer
Department for Transport
Great Minister House
33 Horseferry Road
London SW1P 4DH

The accountability report

Report from the Lead Non-Executive Board Member 2022 to 2023

Over the course of 2022 to 2023, the Department for Transport has continued to drive the effective delivery of its broad capital programme. Inflationary cost pressures in particular increased construction cost and higher prices has posed particular challenges to the department’s public bodies.

The Spring Statement provided an opportunity to address some of these challenges, and to ensure that the department’s spending plans continued to reflect that of the government’s overall priorities. Key decisions had to be made to re-phase and reset some programme investment within the department’s capital portfolio, and in particular within the delivery bodies. IPDC is reviewing the consequences of this on a regular basis.

The department continued to deliver on its priority outcomes. Each non-executive board member (NEBM) has been allocated a specific priority that aligns with their areas of knowledge and expertise. We provide advice within these to support the department in the delivery of their objectives.

The NEBMs also have a role in engaging across the department to provide support, and challenge by sharing our experience and expertise. As such, we offer an independent voice across governance and assurance, business improvement, policy development and project delivery.

We continue to be actively involved in the department’s key committees such as the; DfT Board; Investment, Portfolio, Delivery Committee; Group Audit, Risk and Assurance Committee; Nominations Committee and the Executive Non-Executive Meetings.

Some of the key specific areas that have been considered in the committees which NEBMs sit on include:

• challenges and opportunities for the department
• fiscal events planning
• rail transformation programme
• major projects contingency review
• cyber and information security

A fuller list of items we have been engaged in can be found further on in this report.

We have also supported on a wide range of activities both within the department and across government. Within DfT, this has involved providing advice on ensuring tight control of programme expenditure and in monitoring performance and managing risks across the department’s portfolio.

Other activities include:

• the review Richard Keys conducted on the department’s statutory instrument programme
• advice provided by Tony Poulter on the Civil Aviation Authority review
• Dame Sarah Storey’s involvement with the road safety aspects of transport, in particular engaging with the Highway Code updates
• Tracy Westall’s work as the Public Appointment Diversity Champion, which includes chairing the DfT Public Appointment Diversity Engagement Group
• my involvement on the recruitment panels for the Second Permanent Secretary and DG High Speed Rail Group

We also engage with the department’s public bodies, for example I serve as a Special Director for HS2 and also sit on Network Rail’s Investment and Delivery Advisory Board providing useful links between the department and its public bodies.

On the cross-government level, we are engaged in a number of fora such as the Cabinet Office Lead Non-Executive Board Member Forum and the Cross Government Union Forum. Ranjit Baxi, for instance, sits on the Cross Whitehall ‘Climate Non-Executive Board Member Liaison Forum,’ sharing his extensive experience of environmental issues.

The composition of the NEBMs have not changed since last year, helping to provide continuity and a level of consistent support to the department when welcoming new Ministers.

This year, the department carried out a light-touch board effectiveness evaluation. This review yielded an overall positive response to the department’s governance structure and working practices. Further work will be undertaken on the outcomes of this evaluation to drive the continuous improvement of the department’s governance. For 2023, actions will include a review of the ongoing training offer for board members and working with the department’s public bodies on shared areas of interest.

The department remains committed to delivering a challenging programme of work improving the experiences of those using the transport network, making journeys cleaner, and supporting productivity and economic growth. My NEBM team and I look forward to working with the Secretary of State, his ministerial team, the Permanent Secretaries and ExCo as well as DfT more broadly over the next year to support the department on the delivery of its ambitious programme of work.

Ian King, Lead NEBM

The corporate governance report

The corporate governance report explains the composition and organisation of the department’s governance structures and shows how they support the work to achieve the department’s objectives. The report comprises of:

• statement of Principal Accounting Officer responsibility
• directors’ report
• governance statement

Statement of Principal Accounting Officer’s responsibilities

Under the Government Resources and Accounts Act 2000 (the GRAA), HM Treasury has directed me, Dame Bernadette Kelly DCB, to prepare for each financial year, consolidated resource accounts detailing the resources acquired, used or disposed of, during the year by my department, including its public bodies and other public bodies designated by order made under the GRAA by Statutory Instrument 2022 no 1319 (together known as the ‘departmental group’, consisting of the department and designated bodies listed in Note 25 to the accounts).

The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Department for Transport and the departmental group and of the net resource outturn, application of resources, statement of financial position, changes in taxpayers’ equity and cash flows for the financial year.

In preparing the accounts, I am required to comply with the requirements of the government financial reporting manual and in particular to:

• observe the accounts direction issued by HM Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
• ensure that the department has in place appropriate and reliable systems and procedures to carry out the consolidation process
• make judgements and estimates on a reasonable basis, including those judgements involved in consolidating the accounting information provided by non-departmental and other delivery bodies
• state whether applicable accounting standards as set out in the government financial reporting manual have been followed, and disclose and explain any material departures in the accounts
• prepare the accounts on a going concern basis
• confirm that the annual report and accounts as a whole is fair, balanced and understandable and take personal responsibility for the annual report and accounts and the judgements for determining that it is fair, balanced and understandable

HM Treasury has appointed me as the Permanent Secretary and Principal Accounting Officer for DfT.

I have appointed the chief executive of each sponsored delivery body as the accounting officer for their delivery body.

As the department’s Principal Accounting Officer, I am responsible for ensuring that appropriate systems and controls are in place to ensure that any grants that the department makes to its sponsored bodies are applied for the purposes intended and that such expenditure and the other income and expenditure of the sponsored bodies are properly accounted for, for the purposes of consolidation within the resource accounts. Under their terms of appointment, the accounting officers of the sponsored bodies are accountable for the use, including the regularity and propriety, of the grants received and the other income and expenditure of the sponsored bodies.

The general responsibilities of an accounting officer, which includes responsibility for the propriety and regularity of the public finances for which the accounting officer is answerable; for keeping proper records; and for safeguarding the assets of the DfTc or non-departmental and other delivery bodies for which the Principal Accounting Officer is responsible, are set out in full in section 3.3.3 of Managing Public Money published by HM Treasury.

As the Principal Accounting Officer, I have taken all necessary steps to make myself aware of any relevant audit information, and to establish that the National Audit Office has been made aware of all relevant information connected with its audit. Insofar as I know, there is no audit information of which the National Audit Office is not aware.

I confirm that the annual report and accounts as a whole are fair, balanced and understandable. I take personal responsibility for the annual report and account and the judgements required for determining that they are fair, balanced and understandable.

Directors’ report

The Secretary of State for Transport, appointed by the Prime Minister, has overall responsibility for the department and its public bodies. The Permanent Secretaries are responsible for the effectiveness and efficiency of the department’s work to support ministerial policies and objectives. In 2022 to 2023 the first Permanent Secretary Dame Bernadette Kelly DCB is the Principal Accounting Officer, responsible for the propriety and regularity of the department’s group expenditure. The Permanent Secretaries are also responsible for the department’s leadership, management, and staffing.

Further information about the Principal Accounting Officer’s responsibilities is set out further on in this report. The department’s funding sits in several categories, and HM Treasury holds the department accountable to agreed funding limits for each category. Detail of outturn against these funding limits is shown in the statement of outturn against Parliamentary supply.

Governance statement

The governance statement describes how the DfT Board and its supporting governance structures work and how they have performed. It provides an assessment of how the department is managed, including the effectiveness of the systems of internal control, risk management and accountability. The Secretary of State is supported by the permanent secretaries, ministers, non-executive board members (NEBM), and directors general. The structure of these and the composition of the board is set out in this report.

Departmental board members as at 31 March 2023

• Rt Hon Mark Harper MP, Secretary of State for Transport
• Huw Merriman MP, Minister of State (Rail and HS2)
• Rt Hon Jesse Norman MP, Minister of State (Decarbonisation and Technology)
• Richard Holden MP, Parliamentary Under Secretary of State (Roads and Local Transport)
• Baroness Vere of Norbiton, Parliamentary Under Secretary of State (Aviation, Maritime and Security)
• Dame Bernadette Kelly DCB, Permanent Secretary
• Gareth Davies, Second Permanent Secretary^{[footnote 3]}
• Jo Shanmugalingam, Second Permanent Secretary^{[footnote 4]}
• Conrad Bailey, Director General Rail Strategy and Services Group
• David Hughes, Director General Rail Infrastructure Group
• Emma Ward, Director General for Roads, Places and Environment Group
• Dr Rannia Leontaridi OBE FRSA, Director General Aviation, Maritime and Security
• Nick Joyce, Director General Corporate Delivery
• Clive Maxwell, Director General, High Speed Rail Group^{[footnote 5]}
• Ian King, Non-Executive Director and Lead non-executive director and non-executive board member with responsibility for the union
• Ranjit Baxi, Non-executive board member
• Richard Keys, Non-executive board member
• Dame Sarah Storey, Non-executive board member
• Tony Poulter, Non-executive board member
• Tracy Westall, Non-executive board member

The department’s previous ministers during 2022 to 2023

Minister	Date joined	Date left
Rt Hon Grant Shapps	July 2019	September 2022
Andrew Stephenson MP	February 2020	July 2020
Robert Courts MP	September 2020	September 2022
Trudy Harrison MP	July 2021	September 2022
Wendy Morton MP	December 2021	September 2022
Rt Hon Anne Marie Trevelyan	September 2022	October 2022
Kevin Foster MP	September 2022	October 2022
Rt Hon Lucy Frazer KC MP	September 2022	October 2022
Katherine Fletcher MP	September 2022	October 2022

Overview of DfTc groups, as of 31 March 2023

The department is organised into 7 groups. The Decarbonisation, Technology and Strategy Group is led by the Second Permanent Secretary and the 6 other groups are each led by a directors general.

In January 2023, the department announced changes to Aviation, Maritime, and Security (AMS) to streamline the operational activities and in November 2022 Roads and Local Group (RLG) restructured from Roads, Places and Environment (RPE).

The main responsibilities for these 7 groups are set out below.

Decarbonisation, Technology and Strategy Group

Leads on:

• transport decarbonisation
• future transports systems and environment
• science, technology, and innovation (incorporating the Chief Scientific Advisers Office)
• international
• analysis
• strategy, ministers and permanent secretaries offices and governance
• economy, union and levelling up

Rail Infrastructure Group

Leads on:

• rail infrastructure central
• rail infrastructure south
• rail infrastructure north
• rail infrastructure Midlands and Integrated rail plan
• strategy and portfolio
• assurance

High Speed Rail Group

Leads on:

• Euston project
• delivery
• development
• programme integration

Rail Strategy and Services Group

Leads on:

• rail workforce transformation
• rail strategy and rail analysis
• Integration and security
• sector design and legislation
• rail transportation programme – programme directors
• passenger services

Corporate Delivery Group

Leads on:

• portfolio and project delivery
• shareholding and corporate sponsorship and policy on National Highways, Network Rail, HS2 and COVID-19 Inquiry
• corporate finance and property
• group finance
• group commercial
• group human resources, including change and operational design
• digital information and security
• group communications
• acceleration unit

Aviation, Maritime and Security Group

Leads on:

• transport security, resilience and response
• airports, infrastructure and commercial intervention
• aviation
• maritime
• Ukraine Response Cell
• accident investigation branches
• Maritime and Coastguard Agency

Roads and Local Group

Leads on:

• road strategy
• logistic and borders
• motoring and freight
• local transport
• regions, cities and devolution
• shareholding and corporate sponsorship and policy on Active Travel England, Driving and Vehicle Standards Agency, Driving and Vehicle Licensing Agency, and Vehicle Certificate Agency and the Roads and Projects Infrastructure Delivery

Non DfT entity:

Leads on:

• legal

The system of corporate governance, management, and internal control

The department is governed by:

• the Secretary of State who has overall responsibility for the department
• the Permanent Secretary’s responsibilities, both to the Secretary of State and directly to Parliament, as the Principal Accounting Officer for the department’s expenditure and management
• the departmental board’s collective responsibility for overseeing the work of the department

The system of control includes the DfT Board sub-committees, the Executive Committee and its sub- committees, and the department’s public bodies. These are governed by the control framework, which is supported by internal and external assurance processes. The chapter in this report about DfT’s governance structure provides an illustration of the board and the sub-committee structure in the department and the chair of each committee.

DfT governance structure

Full minutes of any of the governance meetings below are available on request.

DfT Board

Chair: Secretary of State
Frequency: at least quarterly
The DfT Board is an advisory body that supports and challenges both the department's ministers and the Principle Accounting Officer.

Group Audit and Risk Assurance Committee (GARAC)

Chair: Non-Executive Board Member (Richard Keys)
Frequency: approximately 8 times per year
GARAC supports the Board and Accounting Officer and provides oversight of the DfT programme, reviewing the comprehensiveness and reliability of assurances on governance, risk management the control environment and the integrity of financial statements and the annual report.

Executive Committee (ExCo)

Chair: Permanent Secretary
Frequency: weekly
Steers the department's strategic vision; maintains a strategic oversight of and provides scrutiny of the department's policies and delivery commitments, and takes key management decisions across the department.
Legislation Board
Strategic Priority Committee – (formally known as Strategic Committee)
People Committee
Group People Committee
Risk Committee
National Security Board

Investment Portfolio and Delivery Committee (IPDC)

Chair: Permanent Secretary
Frequency: every 2 weeks
IPDC considers advice to ministers on economic, financial and commercial decisions across the Tier 1 portfolio of programmes and projects, at all stages of the project lifecycle.
Commercial Assurance Board
Tier 2 Investment Committee
Rail Investment Board
Rail Board
Combined Tier 2 Board
Local Transport Investment Committee

Nominations Committee

Chair: Lead Non-Executive Board Member (Ian King)
Frequency: approximately 3 times per year
The Nominations Committee has an advisory role focusing primarily on ensuring the department has the capability to deliver and plan the current and future needs for talented people in both the department and its arms-length bodies. It provides scrutiny of both DfT executive appointments, as well as, DfT and arms-length bodies non-executive appointments by ensuring appropriate succession planning is in place to meet the needs of the department and ministers.

Executives and Non-Executives Meeting (ENEM)

Chair: Permanent Secretary
Frequency: at least quarterly
ENEM provides a supportive and challenging working environment for the executive and non-executive members.
It monitors and oversees the department's delivery and financial performance; its management of risks, organisational capability and resourcing; and policy development.

Departmental Board and its responsibility

The Secretary of State chairs the Departmental Board. The board has oversight of 5 main areas, as outlined in table 5.

It advises and challenges the department on its strategic direction, and on the operational implications and effectiveness of its portfolio. The board operates by delegating several of its responsibilities to sub-committees, and retains accountability for the department’s public bodies, from which it can request periodic updates. The Board achieves all of the above by drawing on the commercial, operational, and political expertise of its members, which comprises of ministers, civil service leaders and NEBMs.

The corporate governance in central government department’s code of good practice requires the Departmental Board to meet on at least a quarterly basis. During 2022 to 2023, the board met 3 times, which was primarily due to the impact of political changes in year. A summary of the discussions during 2022 to 2023 is provided in table 5.

Responsibilities of the board		Topics discussed 2022-23
Performance	scrutinising the performance of the department and its public bodies setting standards and values	milestones and delivery were discussed at each meeting as part of the management information report
Strategy	setting the priority outcomes and ensuring activities contribute towards them advising on major policies, projects, and programmes	the department’s response to summer disruption transport and a new government: opportunities and challenges
Resources	ensuring sound financial management considering the appropriate allocation of departmental resources	the board discussed resourcing and its allocation across the department as part of the standing management information report presented to the board
Capability	ensuring the department has the capability to deliver ensuring the department plans to meet current and future needs	the management information report provides an overview of the department’s resources and capabilities
Risk	setting the risk appetite reviewing key department risks ensuring controls are in place to manage risk	certain aspects of risk were delegated to ExCo (including the Executive Risk Sub-Committee) and GARAC, who conducted a series of deep dives on key risks on behalf of the board

Table 5

Compliance with HM Treasury’s corporate governance code

The department has assessed its compliance with the corporate governance code for central government departments and has remained compliant with the spirit and principles of the code.

Board effectiveness evaluation

The department is required under HM Treasury’s corporate governance code to carry out a board effectiveness evaluation annually, with independent input at least once every 3 years.

In March 2022, Richard Pennycook, the lead NEBM for the Department for Education was commissioned by the department to conduct an independent evaluation. The report was broadly positive and where there were recommendations the department has worked to improve its corporate governance arrangements using the recommendations made. During 2022 to 2023, the department has undertaken a light-touch board effectiveness evaluation the results of which will help continue the department’s commitment to continuous improvement of its corporate arrangements.

To address the results of the 2022 to 2023 board effectiveness evaluation, the department will seek to further develop its induction and learning and development processes for board members in the coming year. The department will also look to strengthen the process for information flows and relationship between the board and the DfT’s public bodies.

Overview of the board’s subcommittee discussions

Executive Committee (ExCo)

The committee met 48 times between April 2022 and March 2023 and held regular discussions around key areas including:

• strategic priorities
• management information – including the department’s principal risks
• security and resilience
• local authority capacity and capability
• annual report and accounts
• workforce review
• Budget 2022 to 2023
• Ukraine response
• land use planning and consenting
• People Survey 2022
• winter resilience
• train operating companies business plan
• internal outcome delivery plan 2022 to 2025
• places for growth commitments
• statutory instruments
• inflation and cost of living
• Acceleration Unit update
• COVID–19 inquiry
• legal risks
• public body review
• shareholding and agency updates including Active Travel England, DVSA, MCA and DVLA
• joint session with BEIS

Executive and non-executive meeting (ENEM)

The committee met 4 times between April 2022 and March 2023 and held discussions around key areas including:

• challenges and opportunities for DfT
• management information
• summer disruption
• board effectiveness evaluation
• DfT complaints process
• fiscal event
• honours
• risk appetite

As well as this, there were informal briefing updates relating to changes in the ministerial team and the financial settlement.

Nominations Committee

The committee met 3 times between April 2022 and March 2023 and discussions around key areas including:

• key public appointment activity, processes and succession planning across the department and public bodies
• public appointment diversity strategy
• increased non-executive ALB engagement and the implementation of a new shareholder/sponsorship directorate to deliver this
• directors general and director talent and succession planning
• DfT Board effectiveness evaluation results

Group Audit and Risk Assurance Committee (GARAC)

The committee met 5 times between April 2022 and March 2023 and held regular discussions around key areas including:

• annual report and accounts
• Executive Risk Committee update
• decarbonising transport/Net Zero
• cyber and information security risks
• raising a concern (incorporating whistleblowing) learning and development system
• management assurance
• renewable transport fuel obligations
• Great British Railway transformation programme
• internal audit strategy and internal audit plan
• future of shared services
• external audit planning report
• business appointments
• declarations of interest

Additionally, there were 3 GARAC deep dives on: cyber security, decarbonisation and renewable transport fuel obligations.

Investment Portfolio and Delivery Committee (IPDC)

The committee met 26 times between April 2022 and March 2023. Meeting on a regular basis enabled the assurance and controls to be maintained on decisions for investments and other financial interventions. This also ensured that business cases were considered in a timely manner and that the review of procurement activity across several different areas was maintained regularly throughout the year. The committee oversaw the department’s project portfolio and scrutinised projects during their business cases and delivery phases as well as considered lessons learnt.

Projects considered and programmes considered by IPDC during 2022 to 2023 included:

• portfolio reports including National Highways and Network Rail
• rail projects including Crossrail, TransPennine Route Upgrade, Coventry Very Light Rail, Northern Powerhouse Rail and East West Rail Route Alignment, Midlands Rail Hub
• national rail contracts including Great Western, East Midlands, West Coast Partnership, TransPennine Express and Cross Country
• roads projects including A120 Braintree to A12 Scheme, A12 Chelmsford, A428 Black Cat to Caxton Gibbet, A417, A358 Taunton to Southfields, zero emission road, freight trials and Local Electric Vehicle Infrastructure Fund, New Tees crossing, smart motorways emergency areas retrofit, A417 Air Balloon, A66 Northern Trans-Pennine, M4 Junctions 3 to 12 smart motorway, Rapid Charging Fund, cycling and walking programme, Lower Thames Crossing
• the High-Speed Rail Two portfolio – including HS2 quarterly updates, Phase 2b Western Leg, Phase 2a, performance report, Euston, and Phase One automated people mover, HS2 Phase 2b Western Leg - design changes to M56, HS2 Phase 2b Western Leg route wide ground investigations, HS2 Phase 2a main civil works

Overview of Board and sub-committee attendance up to 31 March 2023

Board member	DfT Board	Executive and Non-Executive Meeting (ENEM)	Executive Committee (ExCo)	Group Audit and Risk Assurance Committee (GARAC)	Investment Portfolio Delivery Committee (IPDC) (includes 5 additional IPDC)	Nominations and Governance Committee (NGC)
Rt Hon Mark Harper	1/1	n/a	n/a	n/a	n/a	n/a
Rt Hon Jesse Norman	1/1	n/a	n/a	n/a	n/a	n/a
Huw Merriman MP	1/1	n/a	n/a	n/a	n/a	n/a
Richard Holden MP	1/1	n/a	n/a	n/a	n/a	n/a
Baroness Vere	3/3	n/a	n/a	n/a	n/a	n/a
Rt Hon Anne Marie Trevelyan	1/1	n/a	n/a	n/a	n/a	n/a
Kevin Foster MP	1/1	n/a	n/a	n/a	n/a	n/a
Rt Hon Lucy Frazer KC	1/1	n/a	n/a	n/a	n/a	n/a
Katherine Fletcher	1/1	n/a	n/a	n/a	n/a	n/a
Rt Hon Grant Shapps	1/1	n/a	n/a	n/a	n/a	n/a
Andrew Stephenson MP	1/1	n/a	n/a	n/a	n/a	n/a
Wendy Morton MP	1/1	n/a	n/a	n/a	n/a	n/a
Robert Courts MP	1/1	n/a	n/a	n/a	n/a	n/a
Trudy Harrison MP	1/1	n/a	n/a	n/a	n/a	n/a
Ian King	3/3	3/4	n/a	n/a	23/26	3/3
Tony Poulter	3/3	4/4	n/a	n/a	24/26	n/a
Richard Keys	3/3	1/4	n/a	5/5	n/a	n/a
Tracy Westall	1/3	4/4	n/a	n/a	n/a	3/3
Ranjit Baxi	3/3	4/4	n/a	5/5	n/a	n/a
Dame Sarah Storey	3/3	2/4	n/a	n/a	n/a	n/a
Amarjit Atkar	n/a	n/a	n/a	3/5	n/a	n/a
Kathryn Cearns	n/a	n/a	n/a	4/5	n/a	n/a
Mark Bayley	n/a	n/a	n/a	4/5	n/a	n/a
Dame Bernadette Kelly DCB	3/3	3/4	38/48	4/5	20/26	2/3
Gareth Davies	2/2	2/3	28/37	n/a	13/19	½
Nick Joyce	1/3	4/4	44/48	4/5	22/26	3/3
Clive Maxwell	2/2	2/2	28/37	n/a	14/18	n/a
Emma Ward	2/3	3.4	38/48	n/a	19/26	n/a
David Hughes	3/3	2/4	33/48	n/a	21/26	n/a
Conrad Bailey	2/3	3/4	27/48	n/a	16/26	n/a
Rannia Leontaridi	2/3	2/4	34/48	n/a	18/26	n/a
Alan Over interim (Interim DG of HSG from November 2022 and was appointed permanent DG in April 2023)	n/a	2/2	13/18	n/a	10/10	n/a
John Parkinson interim (took on a co-ordination role for DTS Group including representation at senior fora in January 2023)	n/a	1/1	10/11	n/a	2/2	n/a
Dan Moore (interim DG from November 2022 to March 2023)	n/a	n/a	12/12	n/a	n/a	n/a

• There were also deep dive sessions scheduled for select members for particular topics of interest

Table 6

Governance of public bodies

Much of the department’s business is conducted with and through its public bodies. Within the department a sponsor team – or separate client and shareholder teams in the case of government-owned companies – manages the relationship with a public body at working level by following the principles set out in a framework document.

Framework documents

There is a framework document in place between the department and each of its public bodies, in line with HM Treasury and Cabinet Office guidance.

Framework documents are developed in collaboration with each public body to set out respective responsibilities, accountabilities, governance arrangements and financial management, and include expectations for the relationship between each public body and the department. Relevant controls set out by the department, HM Treasury, and Cabinet Office that define the parameters within which the organisation must operate are also detailed, including reporting requirements.

In addition, the sponsor and shareholder teams are supported by the department’s Public Bodies Centre of Expertise (PBCE) team in ensuring best practice is followed and lessons learnt.

Public body review

In line with the Cabinet Office’s public bodies review programme, the department is undertaking a series of public body reviews, commencing with the Civil Aviation Authority, due to report the middle of 2023. The reviews programme work will be staggered. DVLA and DVSA will follow in the course of 2023 to 2024 with National Highways and Maritime and Coastguard Agency following in 2024 to 2025.

DfT's public bodies landscape

*Commissioner of Irish Lights is the General Lighthouse Authority for the island of Ireland and is therefore identified by ONS to be sponsored both by the Irish Government and by DfT

Non-executive board appointments

Ministers appoint around 150 non-executive board members (NEBMs) or equivalent roles, including chairs to the department’s public bodies each year. One of the functions of these roles is to provide a link between the department and its public bodies as well as providing their boards with the required expertise and experience to enable delivery of government objectives. NEBM also provide constructive challenge to the public bodies Boards, to ensure good governance is in place. Many of the department’s public appointments are regulated by the Office of the Commissioner for Public Appointments, in compliance with the government’s governance code for public appointments.

Diversity in public appointments

In 2021 to 2022 the department developed a strategy for diversity in public appointments aiming to improve data, attract more diverse talent, develop a more inclusive application processes, and provide more ongoing candidate support. This diversity strategy is being refreshed aiming to build on our successes and make further improvements from 2023 to 2025, using more comprehensive data collection.

In March 2022, 33% of NEBMs at department’s public bodies were female and 8% were from ethnic minority backgrounds. In line with government aspirations, the department has been working on improving diversity in public appointments and now collect more comprehensive diversity data on current appointees, including regional and socio-economic data, to build a fuller picture of the diversity of our public appointments. As of March 2023:

• 32% of the department’s public appointees are female
• 12% are from an ethnic minority background (4% Indian, 4% Irish, 1% Pakistani, 1% White/Black African, 1% African and 1% Other Mixed/Multiple ethnic background)
• 14% have declared a disability
• 44% are located outside London and the south-east
• 5% are aged 35-44, 15% aged 45-54, 16% aged 65-74 and 50% aged 55-64
• 32% attended a state-run/funded non-selective school, and 8% attended school outside the UK

As part of the 2021 to 2022 strategy aims, the department has continued to build a diverse list of Independent Panel Members (IPMs) for public appointment panels, and a talent pool of credible and diverse candidates with a range of skills and experience. Public Appointment roles have also been promoted among a wide variety of networks, we have made improvements to our advertisements and candidate packs to ensure they are more inclusive, and we have organised regional events aimed at attracting diverse candidates and raising awareness of public appointments.

The department has also set up a Public Appointments Diversity Engagement Group which meets every quarter and is chaired by a DfT NEBM in their capacity as DfT Public Appointment Diversity Champion. Attendees included chairs, non-executives or executives from a number of DfT’s public bodies, and each quarter the group discuss and contribute improvement suggestions to help DfT’s Public Appointments team take action in various areas to improve diversity in public appointments.

Ministerial direction

There were no ministerial directions during 2022 to 2023.

Declaration of interest

To ensure alignment with the latest Cabinet Office guidance, in January 2023 the department introduced changes to the way that it manages declarations of outside interests. All employees must declare any relevant outside interests upon joining the department, when moving roles and if their circumstances change. This enables the department to assess whether there are any potential conflicts of interest arising and take action to resolve or mitigate them. All employees must also seek permission to undertake any secondary employment or appointment.

The department’s declaration of outside interest policy refresh included:

• strengthened guidance for all staff on how declarations should be made and considered
• approval of recommendations by an appropriate senior manager (deputy director for declarations from staff at AA to G6 and director general for all SCS declarations) as well as a route of escalation to the Cabinet Office for advice
• the launch in February 2023 of an annual exercise for all DfT SCS (including SCS in the executive agencies) to confirm that their relevant outside interests are up to date and mitigations (if required) are in place
• central oversight of all DfT group SCS declarations by HR
• a review of the robustness of the department’s policy and process and compliance with Cabinet Office guidance and the Civil Service Management Code (CSMC) by the DfT Group Audit and Risk Committee (GARAC)
• oversight of SCS declarations with secondary paid employment by the department’s Permanent Secretary
• publication of SCS details with outside employment, work, or appointment (paid or otherwise remunerated) that has been agreed through the process, separately on GOV.UK

Name	Name of company or organisation	Position held in DfT	Type of Interest (e.g. pay, fees, shareholding)	Other relevant information
Richard Keys	NATS Holdings	DfT NEBM and GARAC Chair	Director of NATS Holdings	Registered interest in 2018 and recuses from any discussion relating NATS Holdings and all NATS Group matters. Richard retired from the role as a Director of NATS Holdings in September 2022.
Tony Poulter	London and Continental Railways Ltd	DfT NEBM	Special Director	Registered interest in April 2021 and recuses from any discussion on London Continental Railways Ltd.
Ian King	HS2 Ltd	HS2 Ltd	DfT NEBM	Registered role in August 2021 as interim Special Director.
Kathryn Cearns	Crossrail, Elizabeth Line	DfT GARAC committee member	Special Representative	Registered interest in October 2020. This role ended July 2022.

Table 8: declaration of interest by NEBMs

Name	Interest
Neil Tweedie	Mr Tweedie held a paid role as a Company Director of Edwin Street Media. While in his role as a special adviser with the department, Mr Tweedie had not been active in this capacity and has not undertaken any work on behalf of Edwin Street Media. Mr Tweedie left the department in September 2022.

Table 9: declaration of interest by special advisors

The department’s approach to risk

The department’s risk management policy promotes a no surprises, no blame culture, where well managed risk taking is encouraged and managers are asked to lead by example. Risk management behaviours should be embedded into all departmental activities. The department’s leadership understands that considered and well-managed risk taking is necessary to deliver business objectives.

As a result, there is regular monthly reporting of the group’s top risks to ExCo, and additional reporting to ENEM and the DfT Board. The Executive Risk Committee to include a deep dive of a specific principal risk and also of a group’s top risks each month.

During the year, the department reviewed and further developed the principal risks and the reporting of the same to senior management. The purpose is to update, clarify and clearly identify the department’s top risks. These risks were managed and mitigated throughout the year and will continue to be updated role.

The department also reviewed and updated its risk policy which included much clearer guidance around the definition and use of risk appetite and tolerance. The department now has 16 risk themes which align with the Orange Book risk categories and also align with the department’s principal risks.

There is no principal risk around legal, however the department is mindful that we work in an environment and deliver projects and programmes that can attract legal challenge, and it is important that we operate within the law. Legal risks are assessed, monitored, and mitigated project by project and programme by programme and we take appropriate measures to meet legal or regulatory requirements or to protect our assets.

The department is fully engaged on cross government improvement work to strengthen risk management – the department’s principal risks align closely to the Civil Service principal risks and are used to provide updates to the Civil Service Board.

The department recognises that many risks are carried by the public bodies and works with them to ensure that risks are widely understood, and opportunities are taken to collectively manage them. The risk escalation protocol promulgated in 2018 continues to give direction to the public bodies on what they need to escalate to the department and when. The department recognises that many risks are carried by the public bodies and works with them to ensure that risks are widely understood, and opportunities are taken to collectively manage them. The risk escalation protocol promulgated in 2018 continues to give direction to the public bodies on what they need to escalate to the department and when.

The reporting year has again brought many challenges and as a result, the department took forward a risk action plan to further address and strengthen risk management. This plan was agreed and supported by the Executive Risk Committee (incorporating departmental risk champions) as well as by ExCo and GARAC. Key elements of the plan included more consistency with how risks are managed by the top boards, strengthening the feedback loops across the whole department, and renewing the commitment to build staff capability. Increased, dedicated, risk management training for all staff is to be taken forward during the coming year.

Principal risks

The table below sets out the principal risks that the department managed during the year. These risk themes represent the department’s view on the overall risk profile, considering the risks carried and managed by the public bodies.

Note: The direction of the risk trend indicates whether the probability of the aggregate likelihood and impact of the risk materialising increased, decreased or remained the same over the period of this report.

Principal risk	Mitigating activities taken during 2022 to 2023	Direction of risk trend at year end
DfT is not able to afford to deliver all of its priorities in the medium to long-term, in particular due to inflationary pressures or cost of living crisis.	The department: following the Spring Budget, undertook a business planning review to allocate funds across the department's priorities, this allowed us to better understand residual pressures we may be facing during the Spending Review period made continued use of sound finance clearance processes to advise ministers, ExCo and wider the department on future affordability risks until the SR is completed reviewed the potential impact of inflation on our medium-term financial position and is working with HM Treasury, to collectively determine appropriate mitigations across government	Current exposure score has increased slightly
DfT is not able to deliver its major projects to time or cost or deliver the expected benefits.	The department: used quarterly IPDC Portfolio meetings to monitor, analyse and report on progress of Tier 1 projects, in particular project delivery capability via delivery confidence assessments and performance such as cost, schedule, benefits, resourcing and underpinning metrics established an enduring learning culture in our projects and support continuous improvement and knowledge-based decision making throughout the project lifecycle engaged with SROs and portfolio risk owners to improve analysis and reporting, using their expertise to scrutinise project data and provide better assessment of project risk exposure and mitigations has put in place new systems to manage delivery risks which have enabled early warning of critical supply chain issues and ensured robust mitigation plans are in place challenged and improved mitigation actions by risk owners acting to drive awareness and co-ordination of actions across the department	Current exposure score remains unchanged
There is a catastrophic event which may lead to the forced closure of some or all of the transport network, a significant number of casualties or results in being unable to restart services efficiently post incident.	The department: worked with industry stakeholders to assess vulnerabilities to accidents and incidents occurring, and mitigating measures through policy, including legislated and non-legislated measures; informed by legal, science, technology, and analyst functions assessed the risks of those threats and hazards to the transport network against likelihood, impacts, vulnerabilities and considered actions to mitigate these developed contingency plans for mitigating and responding to catastrophic risks, through participation in cross-government planning and national exercising programmes maintained, developed, and tested the crisis response mechanism across the department which enables effective identification and response to emerging events	Current exposure score remains unchanged
DfT does not deliver sufficient action in the transport sector to provide carbon savings, meet air quality and biodiversity targets, and adapt to climate change, as required by law.	The department: worked across government to maximise the efficiency of other available funds e.g., Transforming Cities Fund, Office for Zero Emission Vehicles (OZEV), Highways England Air Quality Designated Fund and Ministry of Housing, Communities and Local Government (MHCLG) funds, including exploring potential budget swaps to align the funding available to local authority delivery plans began work across the department to embed environment principles into our policymaking and to understand and manage legal risk to our investment programmes worked with public bodies to ensure consistency in how it measured and reported carbon across the DfT Portfolio and integrated carbon into the 5 case assessment model for project decision making launched the £20 million Tees Valley Hydrogen Transport Hub R&D competition for industry to harness the power of hydrogen in transport projects worked with the International Civil Aviation Organisation Assembly who agreed a long-term emissions goal for international aviation of Net Zero carbon emissions by 2050 launched the Bradford Clean Air Zone (CAZ) in September 2022	Current exposure score remains unchanged
Freight, passenger transport and key transport corridors disrupted due to border delays and/or workforce shortage	The department: published the future of freight plan setting our long-term cross-modal priorities for the freight sector in June 2022 and implemented several commitments in the plan including: providing £345,000 to support year one of the Generation Logistics campaign to promote the sector to a new audience and attract new talent; awarding year one of the £7 million Freight Innovation Fund to 9 SMEs, and appointed an industry co-chair of the Freight Council to drive further action and ambition on issues including decarbonisation and skills implemented an international supply chain strategy to identify and track risks to UK transport supply chains introduced 33 short, medium and long-term interventions to address shortage of HGV drivers. These include 2 new funded apprenticeship routes and 11,000 boot-camp places. increased HGV driver testing capacity which is now at record levels with supply exceeding demand, eliminating the backlog in processing provisional licenses and renewals, and training 66 more HGV examiners to continue to meet ongoing demand to improve the long-term attractiveness of the sector, we launched a £32.5 million matched funding grant scheme to assist operator of roadside services improve facilities HGV drivers. An additional £20 million from National Highways’ Users and Communities Fund is also available to support operators to improve security, lighting, and shower rooms for HGV drivers along the strategic road network played an ongoing active role in supporting the Kent Resilience Forum in developing and implementing their traffic management plans and short-term tactical interventions when disruption occurs including extended DVSA enforcement powers, provided additional coach and lorry holding facilities, ensuring both driver and passenger welfare is provided. With a view to the future of Kent resilience. Initiated a policy review jointly led with Kent County Council to consider alternatives to use of Operation Brock to manage freight traffic delayed on its way to the portals in Kent led by a steering group which includes government departments, Eurotunnel, Port of Dover and Kent Police ensured relevant government departments are engaging with transport stakeholders on key border initiatives following EU Exit, including the draft target operating model and roll out of Electronic Passenger Authorisation for passengers continued to engage with industry across transport sectors to ensure short and long-term resilience, including looking at seasonal events and peaks such as winter weather, energy resilience and Christmas travel, as well as industrial action specifically on aviation, we worked with industry to put processes in place to speed up recruitment within the industry, and amended the slot rules and passenger cap restrictions at Heathrow which ensured schedules were manageable	Current exposure score has increased slightly
DfT does not have the capacity and/or capability to deliver its priorities and objectives, with additional effect on the wellbeing of DfT staff.	The department: continued the quarterly ExCo workforce reviews established during 2021 to 2022 to place focus on workforce risks and issues and to enable timely prioritisation and re-alignment of our workforce against our highest priorities across the department established robust, good quality toolkits and approaches that can be repeatedly used to improve efficiencies every time we go to market and the risk of sub-optimal outcomes. These included attraction strategies and recruitment toolkits and further development of our candidate support hub launched a skills and capability plan for the next 3 years is currently under development and is anticipated to launch in the autumn. This plan will set the vision for skills and capability building within the organisation over the SR period, ensuring that DfT has a clear view of priority skills and that career development opportunities are clearly articulated especially in the context of CS2025 in line with the commitments set out in the inclusion & wellbeing and race action plans, undertook significant activity to strengthen and diversify the pipeline into more senior leadership roles within the department launched an SCS leadership development programme with a particular focus on change management launched a skills and capability plan for the next 3 years is currently under development and is anticipated to launch in the autumn alongside the 2022 to 2025 people strategy (also under development). This plan will set the vision for skills and capability building within the organisation	Current exposure score remains unchanged
Transport systems are unable to function due to a critical market, supplier or supply failure in key network and delivery tools.	The department: continued regular financial monitoring, business continuity and risk assessment of DfT group strategic and critical suppliers including the production of weekly intelligence across strategic suppliers and key markets continued strategic supplier engagement through a strategic partnering initiative, and industry body engagement through a supply chain working group to ensure strategic alignment and identification of risks and opportunities participated in Network Rail industry quarterly risk review in support of sharing information to and from ail industry forums/ groups to better understand cross-cutting themes produced a bi-annual (twice a year) UK construction market health dashboard and presentation to IPDC. This presentation keeps IPDC sighted on UK construction market health and identifies any changes in condition. An example would be the impact of the Spring Budget, and inflationary pressures as requested by the SoS we arranged strategic supplier engagements with SoS to discuss the growth plan and list of accelerated roads projects. Discussion centred on achieving continuity (of work and workforce), consistency (of approach and standards) and collaboration (e.g. alliancing) worked with all ALBs to understand their pipelines and pinch points, analysing pipeline data to identify pinch points by category, commodity, or skill. Modelled worst case scenarios, e.g. if everyone ordered everything at the same time, could the market/ current suppliers satisfy demand, if not how do we work with the market / suppliers to increase overall supply set up a working group to work closely with ALBs to investigate commodities such as steel and aggregates and take a much wider view of overall demand for key/essential commodities	Current exposure score remains unchanged.
DfT and transport digital systems become compromised due to a hostile cyber environment and increase in cyber-attacks	The department: created a security improvement project to ensure awareness of and fixing of vulnerabilities, implementing improved monitoring and review how we conduct our monitoring/fixing capability enhanced our Security Operations Centre to increase levels of protection enhanced our Security Operations Centre to increase levels of protection issued extra communications to DfT staff reminding them to be ultra-cautious in a period of heightened threat	Current exposure score remains unchanged.
DfT does not adequately forecast/ horizon scan for future changes in the transport system, resulting in ineffective decision making (e.g. demand forecasting, scenarios, or future projects).	The department: established the virtual (cross departmental) futures team to mitigate this principal risk. The team supports DfT analysts and policy officials to develop, deliver and appraise policy, regulation and investments with the ultimate aim of making decisions more resilient to future uncertainty acquired an automated horizon scanning platform that the Futures team will work on integrating into the wider DfT organisation. This scans for emerging technologies that may offer opportunities to achieving policy aims developed the uncertainty toolkit, including a set of common analytical scenarios (CAS), with the data that feeds into these and the national road traffic projections developed extensive engagement programmes, internally and externally, on: the futures procurement framework: the futures call-off contract through which specific futures risks can be explored the CAS, the proportionality framework and practical advice on how schemes can incorporate these	Current exposure score remains unchanged.
DfT is ineffective in its response in advance and during an international crisis, in particular one that causes economic instability, movement of people and supply chain issues thus affecting national/major transport network(s).	The department: engaged with stakeholders to identify threats to critical resources, examining alternative sources and routes of supply in order to inform intervention and mitigating opportunities engaged with OGDs on geopolitical situation at a strategic level to ensure that our and their solutions are not dependent upon the same suppliers / supply chain worked across the department to increase capacity resilience through having more people security cleared and equipped to access higher levels of classified documents	Current exposure score remains unchanged.

Financial governance and management control

The department’s business planning process allocates the budget voted by Parliament to all parts of the department. Financial plans are agreed between the department and HM Treasury through the Spending Review process.

At the commencement of each financial year, Parliament provides statutory authority for the department’s budget through the main estimate. In parallel, the Principal Accounting Officer formally delegates budgets to directors general and the department’s public bodies. The department, through ExCo, reviews actual and forecast outturn each month to ensure that spending is managed in-line with approved budgets and takes any required action to enable and control this. This monitoring is designed to ensure that the department does not breach any of the spending control limits approved by Parliament, while also providing advice on options to ensure the best use of available resources to ministers and the board in order to deliver the department’s priority outcomes.

Requests for budget changes are agreed with HM Treasury during the year alongside strategic decisions made by ministers and the board. The department seeks statutory authority from Parliament for changes to budgets in year through the supplementary estimate. In parallel, final budget delegations for the year are issued to directors general and public bodies. Actual spending for the year is compared with the final budgets approved by Parliament in the statement of outturn against Parliamentary supply.

Cabinet Office rejection of retrospective spending control approval

The department’s financial delegations from HM Treasury require compliance with Cabinet Office spending controls. The future of shared services (FoSS) programme developed a resource management solution suitable for the department, its agencies and other departments. Due to a change in government shared services strategy, the FoSS programme was closed in February 2023, with the solutions developed by the programme to be transitioned over to the Unity Cluster, led by HMRC.

The department had engaged Cabinet Office, including the commercial function, in assuring the programme throughout its life. In advance of the programme’s closure, the FoSS Programme team reviewed historic records of formal Cabinet Office commercial spend approvals and identified insufficient cover for the actual spend incurred to-date and the remaining forecast spend. Once this was discovered, formal approval through the spend control process was sought.

Cabinet Office approved the forecast expenditure to complete FoSS and provide BAU shared services, however rejected the request for £31.5 million retrospective spending approval. Although the expenditure was in-line with Cabinet Office shared services strategy, the request for retrospective approval was rejected on procedural grounds, in that the department had not formally sought Cabinet Office authority before committing funding.

In accordance with Managing Public Money, the department informed HM Treasury and NAO of the spending control breach. The department has reviewed its processes and controls over adherence to Cabinet Office approval limits, in addition to engaging GIAA to undertake an external review. The department has agreed and is implementing the recommendations from both the lessons learned exercise and the GIAA report.

Financial control, counter fraud, rising a concern

The department has a ‘zero-tolerance’ attitude towards fraud, bribery, and corruption. Any such acts are investigated and, where appropriate, disciplinary and/ or legal actions are taken, in line with the Public Sector Fraud Authority (PSFA) guidelines. The department continued to deliver against the new 3 year counter fraud, bribery and corruption strategy (launched in 2022 to 2023) in countering fraud, reducing risk, and raising awareness across the department. The department participated in the International Fraud Awareness Week by working with internal and external stakeholders to help raise awareness of counter fraud, bribery, and corruption.

The department continued to undertake detection activity and used Spotlight, a due diligence tool to support identification of risk areas that may require further investigation and detection of fraud and error.

Quarterly meetings were held comprising of senior fraud officers, Government Internal Audit Agency and other representatives from the department and its public bodies. It considered updates from group members on counter-fraud activity, advice and initiatives from the Cabinet Office information sharing, best practice and any areas of concern impacting on the group’s policies and procedures.

This collaborative approach allowed the department to raise awareness of counter fraud activity and better understand the risk landscape across the department. Significant progress has been made in meeting the requirements of the Government’s Counter Fraud Functional Standard.

All staff in the department are required to undertake annual online fraud awareness training.

The department continues to implement Cabinet Office’s cross-government internal fraud policy where employees dismissed for fraud, bribery or corruption are placed on to the Cabinet Office internal fraud database and are not able to gain re-employment across the civil service for a period of 5 years. During 2022 to 2023, no cases fell within scope.

Where appropriate, any cases of reported fraud during the same period within the department’s public bodies are noted in their own governance statements.

Raising a concern

The department remains committed to building a culture where people feel safe to speak up about perceived wrongdoing and inappropriate behaviour and to report any concern in the knowledge that these will be heard, and concerns taken seriously.

To improve awareness of reporting routes, in November 2022 the department participated in the civil service-wide ‘Speak Up – it’s better to say’ campaign.

A series of events were delivered with a particular focus on unfair treatment, including bullying, harassment, and discrimination, fraud awareness and reminding employees of the informal and formal reporting routes and support available to individuals. This was a joint campaign with the relevant HR and counter fraud teams working together. The events were championed by one of the non-executive board members and supported by the Secretary of State.

The People Survey also provides the department with useful information and insight on how employees feel about the organisation at a point in time. This data provides an opportunity to improve, develop and strengthen existing processes and practice going forward. Some of the key findings from the 2022 People Survey results included:

• 69% of the department respondents said they were aware of how to raise a concern under the Civil Service Code (1% above the civil service benchmark of 68%). This was an increase of 4% from 65% in 2021
• a reduction by 3% in levels of confidence that a concern raised would be properly investigated. This was also 1% below the civil service benchmark of 75%. The civil service benchmark had also reduced by 2% from 2021
• small reductions in respondents feeling safe to challenge the way things are done in the organisation (58%) or able to challenge inappropriate behaviour

The results indicate there is more to do to improve employee understanding and awareness of the Civil Service Code, routes to raise concerns and the protections available to them. Plans are in place to continue to improve employee understanding and awareness going forward.

Functional standard

Where relevant, DfT staff seek to work to the mandated government functional standards in a way that meets its business needs and priorities. GovS 001, Government functions sets expectations for the consistent management of all functions and functional standards across government. The remaining standards, GovS 002 onward, set expectations about specific types of functional work, such as project delivery or commercial. They provide a stable basis for assurance, risk management, capability improvement and support value for money for the taxpayer.

Management assurance

The department’s overall approach to management assurance is a 2-stage review, consisting of a first line of defence via director level assessments of the level of assurance they have over key control areas within their responsibility, and then a second line of defence is an independent view of assurance against those same control areas by policy members or subject matter experts (SMEs).

• the overall first line of defence opinion for the DfTc is on the borderline between the Substantial and Moderate ranges
• the second Line of defence opinion for the central department based upon initial SME assessments is within the moderate range
• the overall third line of defence opinion, via the Government Internal Audit Agency (GIAA) audit opinion for the central department based upon the 2022 to 2023 GIAA audit plan, is also moderate
• therefore, taking all 3 lines of defence into account, the overall 2022 to 2023 assurance opinion for the central department is moderate

The 2022 to 2023 management assurance first line of defence review of the central department identified an overall opinion at the border of the moderate and substantial ranges, with overall 20 of the 39 areas of internal control reported by business units as substantial (with the remainder being reported overall as moderate).

There were 2 individual unsatisfactory ratings identified in 2 different categories for 2 different business units of the central department in 2022 to 2023. Year-on-year, the process is bringing greater visibility to the importance of controls and requirements. Results are reported to ExCo and GARAC focusing on the lower scoring categories, with action plans identifying improvements with a number of actions already undertaken. Noting that while these are the lowest scoring categories, they are in the moderate range and therefore are not flagged as ‘urgent action required’:

• line manager development (lowest scoring)
• pandemic/disease resilience
• equality duties: dbligations
• cyber security of third-party suppliers
• impact assessments and post implementation reviews

Projects

Project delivery capability

Capable project delivery professionals are a critical component of successful project delivery. The department remains committed to supporting our people to ensure they have the project delivery capabilities they need to do their jobs to a high standard. Steered by the Head of Profession and supported by the Project Delivery Profession Board, the department has continued to make ongoing investment in individuals continued professional development.

The department has invested in its experienced project delivery professionals through funding for 5 staff on the Major Projects Leadership Academy, 26 staff on the Project Leadership Programme and 15 through the Project Delivery Development Programme during 2022 to 2023. This is to ensure it has the qualified and experienced resources it needs.

DfT investment approval structure

Investment approvals are required whenever there is a contract award or investment, and approval must be gained from the appropriate investment board. In 2022 to 2023 the department revised its internal investment approvals framework.

The department operates a tiering system for projects and provides assurance through governance boards who monitor and make investment decisions at set points in a project’s lifecycle. The scale or scope, level of strategic risk, nature (whether it is novel or contentious), and expected costs determine the level of governance oversight a project requires.

The department and its public bodies major projects portfolio (comprising 30 projects at the end of March 2023) includes the largest, riskiest, and most costly projects. This ‘Tier 1’ portfolio reports into the Investment, Portfolio and Delivery Committee (IPDC) – the department’s senior investment committee. A sub-set of this portfolio of projects (24 projects) forms part of the Government Major Projects Portfolio and reports quarterly to the IPA. Dedicated portfolio management sessions have been established for IPDC in 2022 to 2023, to further enhance oversight of portfolio performance and inform investment decisions and portfolio planning.

DfT's investment approvals structure

Independent project assurance reviews on DfT Tier 1 projects and programmes in 2022 to 2023

Project assurance

The department is a major contributor to the project delivery profession cross-government workstreams, and actively supports the professionalisation of project delivery. In 2022 to 2023 the department set out its own internal integrated assurance strategy and has worked closely with the Infrastructure and Projects Authority (IPA) to support the rollout of central initiatives such as the government project delivery framework and updating the government functional standard for project delivery. The department’s Project Delivery Centre of Excellence provides a central source of advice, guidance, and support to our project delivery community.

The Centre of Excellence also provides expert project assurance to support the monitoring of projects and inform the department’s investment decision making processes. This is supplemented by the department’s Lessons team and though its established community of practice, which shared project delivery lessons, themed best practice, and profession insights from across industry all through a series of events held over the year. All Tier 1 projects must undergo independent project assurance reviews at particular stages in their lifecycle aligned to these investment approvals, and those reviews carried out this year by IPA accredited reviewers are provided in this report.

Analytical assurance

Analytical quality assurance (AQA) involves the consideration and communication of the strengths, weaknesses, and limitations of analysis. This allows decision makers to better understand the quality of the evidence base they use. The department’s analytical assurance framework, ‘Strength in numbers’, aims to strengthen the standard of analytical quality assurance in the department. It is now well embedded within the department and the executive agencies.

As part of the framework, the department maintains and publishes a register of business-critical models, each of which has an appointed senior model owner responsible for ensuring appropriate governance and quality assurance of the model and its outputs throughout its lifecycle. Business critical omdels are used to drive essential decisions and have robust governance regimes in place to assure against errors which could cause serious financial, legal and/or reputational damage to the department.

There are currently 94 business critical models used across the department and the executive agencies, 43 of which are based in the department.

Where analysis is used to inform or underpin decision-making, papers must include an analytical assurance statement. These statements highlight the strengths, limitations, and uncertainties in the analysis, ensuring decision-makers are fully informed. When included in submissions to ministers and Tier 1 and Tier 2 investment boards, they must be reviewed by an independent assurer to make sure all relevant information has been communicated, and the extent to which the analysis is considered reasonable and robust is clear.

There is good governance and assurance of analysis produced by public bodies to inform decisions taken by the department, facilitated by strong working relationships between analysts across the organisations. Where responsibility for decision-making is delegated to public bodies, responsibility for AQA is also delegated. The department’s community of practice brings together colleagues responsible for AQA from the department and the executive agencies to share good practice and ensure continuous improvement.

This is a mixture of a qualitative assessment (based on experience via the DfT Model Board and challenge on QA practices of business-critical models) and also assessments from the management assurance exercise on analytical assurance. Where explored further, feedback from investment boards were positive, noting few if any instances of analytical assurance not having an independent review (i.e. via review of an analytical assurance statement from the Economic Centre of Excellence for any Tier 1 or Tier 2 investments based on analysis). This was also explored with ministers and permanent secretaries offices, where no instances of non-approved analysis were noted, however there is a need to explore this further to increase confidence over the coming year.

Independent assurance

The department’s internal audit service is provided by the Government Internal Audit Agency (GIAA), an executive agency of HM Treasury. GIAA operates to the public sector internal audit standards, confirmed through its last external quality assessment undertaken by the Institute of Internal Auditors between July and October 2020. The Group Head of Internal Audit (Group HIA) provides the department’s Accounting Officer with an independent opinion on the adequacy and effectiveness of the department’s systems of internal control and makes recommendations for improvement. The work of GIAA is based on its analysis of the department’s risks and its audit programme, which is approved by GARAC. Regular reports are provided by GIAA to the department’s management, GARAC and to the Executive Committee.

The Group HIA has provided the Permanent Secretary with an annual report on internal audit activity in the department and its ALBs over the course of 2022 to 2023. This report summarises each of the individual Head of Internal Audit annual opinions for the department and its ALBs; movement from 2021 to 2022 and provides the Group HIA’s independent opinion for 2022 to 2023 on the level (i.e. substantial, moderate, limited, unsatisfactory) of assurance that can be placed on the adequacy and effectiveness of the department and ALBs governance, risk management and internal control arrangements.

External review

The Comptroller and Auditor General (C&AG) is appointed in legislation as the statutory auditor of the department’s financial accounts. NAO’s financial audit work and their conclusions are described in the certificate and report of the Comptroller and Auditor General.

In addition, the C&AG is required to report to Parliament annually on the collection of vehicle excise duty, which is remitted to the Consolidated Fund. The C&AG’s annual report is included within the DVLA annual report and accounts.

The C&AG also has statutory audit access rights to report to Parliament at his own discretion on how the department has used its resources to discharge its functions. The Public Accounts Committee frequently draws on these reports to hold inquiries, and the Permanent Secretary and her leadership team regularly attend hearings to give evidence on transport topics.

The department was subject of 4 reports by the National Audit Office in 2022 to 2023. These reports covered the following topics:

• Transpennine Route upgrade programme, July 2022 – review of work undertaken to-date and the department and Network Rail’s readiness to deliver the programme
• Road Investment Strategy 2 progress update, November 2022 - review of how effectively National Highways and the department are securing value for money in RIS 2 road projects
• The management of backlogs in driving licence applications, November 2022 – an investigation of DVLA’s actions to manage and reduce delays and backlogs
• High Speed Two Euston station, March 2023 – review of whether HS2 Ltd and the department are now set up to effectively manage VFM risks at Euston station

The recommendations identified in these reviews are constructive in nature. The department accepted the recommendations identified through NAO’s performance audit work and is working with NAO to agree the implementation and closure of these recommendations.

Accounting Officer system statement

The department published its Accounting Officer system statement in March 2022.

Correspondence

The department aims to respond to correspondence from members of the public in 20 working days. In 2022 to 2023 12,974 cases were received (a 55% decrease on the previous financial year) and 92% of replies were sent on time. The department’s target response time for correspondence from MPs, Peers and key stakeholders is 7 working days. The department received 9,412 cases in 2022 to 2023 (a 49% decrease on the previous financial year) and 62% of replies were sent by the target deadline.

Information rights, including personal data related incidents

Information rights

The department and its executive agencies received 3094 requests for information under either the Freedom of Information (FOI) Act or the Environmental Information Regulations (EIR). The department met the 20-working day statutory response deadlines in 95% of these cases. The department publishes a list of FOIs and EIR responses where some or all the requested information has been disclosed.

The department also answered 19,580 valid requests from individuals exercising their rights under data protection legislation. These consisted mainly of subject access requests, 98% of which were answered within the statutory deadline.

Personal data related incidents

The department holds personal data on millions of drivers in Great Britain, vehicle keepers across the UK plus those taking driving tests, driving instructors, and seafarers. Every year we process millions of physical transactions involving personal data and billions of automated and digital interactions, so we take very seriously our responsibility to keep data secure. The department notified 11 breaches to the Information Commissioner’s Office and takes action to reduce the number of personal data related incidents.

Complaints 2022 to 2023

DfTc is committed to responding to complaints within 20 working days. The department’s public bodies, including executive agencies have their own complaints procedures and timelines within an overall departmental policy framework in accordance with the Parliamentary and Health Service Ombudsman Principles .

The number of complaints handled by the central department, executive agencies, and other public bodies (where data is available) during 2022 to 2023 and the previous 3 years is provided in the DfT Independent Complaints Assessors (ICA) annual report for 2022 to 2023 and includes lessons learnt and subsequent changes to complaint handling and/or service delivery.

DfTc

DfTc received several complaints from members of a Community Group around proposed road improvements in their area. These were sent to the policy team concerned but also individual non-executive members of the department’s board. This prompted the department’s board to agree a process for complaints received by non-executive directors. The process requires that where the complainant has also written to one or more non-executive board members at the department, the response from policy officials should advise complainants that the non-executive board members will not reply individually to complainants. The response will also advise that non-executives will have noted all comments and will ask officials to brief them on the issues raised and how they are being responded to, taking an active interest in major projects and representations about them including from complaints.

Complaints to the Parliamentary and Health Service Ombudsman

The Parliamentary and Health Service Ombudsman (PHSO) investigates complaints about the department and its delivery bodies when referred by an MP on behalf of a complainant. Generally, the PHSO will expect the ICAs to have reviewed the matter before they consider investigating. Where the PHSO believes there is evidence that there has been maladministration, unfair treatment, or poor service, it will investigate the issues, review the remedy provided, and may recommend further actions to resolve the matter. All recommendations made by the PHSO were implemented during the year by the department.

The data supplied in Tables 10 and 11 have been supplied by the PHSO and corroborated by the department, and its public bodies.

Organisation	Complaints accepted for detailed investigation 22/23	Complaints accepted for detailed investigation 21/22	Complaints accepted for detailed investigation 20/21	Investigations upheld or partly upheld^ 22/23	Investigations upheld or partly upheld^ 21/22	Investigations upheld or partly upheld^ 20/21	Investigations not upheld or discontinued 22/23	Investigations not upheld or discontinued 21/22	Investigations not upheld or discontinued 20/21
DfTc	0	0	0	1	0	0	0	0	0
DfT ICAs	0	2	0	0	1	0	0	0	0
CAA	0	1	0	1	1	0	0	0	0
DVLA	1	4	12	4	5	4	3	2	8
DVSA	0	0	0	0	0	0	0	0	0
National Highways	0	0	0	0	0	0	0	0	0
HS2 Ltd	0	2	0	0	2	0	0	0	0
MCA	0	0	0	0	0	0	0	0	0
VCA	0	0	0	0	0	0	0	0	0
Total	1	9	12	6	9	4	13	3	8

Completed investigations often occur from cases accepted for detailed investigation in previous years

Table 10: number of complaints investigated, upheld, and not upheld by PHSO

Investigations into complaints by PHSO

When PHSO concludes an investigation, it may do so in the year(s) following when it was accepted. In addition, there can be several recommendations made to the Department or its public bodies to resolve a complaint, and the time between the conclusion of an investigation, issue of a report with recommendations, and when those recommendations are complied with or not can fall into a subsequent year.

Table 11 includes the number of recommendations made by PHSO following an investigation of a complaint and whether those have been complied with over the last 3 years.

DfT centre or DfT public body	No. of cases with recommendations 2022-23	No. of cases with recommendations 2021-22	No. of cases with recommendations 2020-21	No. of recommendations 2022-23	No. of recommendations 2021-22	No. of recommendations 2020-21	Closed: complied with 2022-23	Closed: complied with 2021-22	Closed: complied with 2020-21 h	Open: in compliance 2022-23	Open: in compliance 2021-22	Open: in compliance 2020-21
DfT	1	1	0	5	1	0	3	1	0	2	0	0
DVLA	4	5	3	13	9	6	13	8	6	0	1	0
HS2	0	2	0	0	2	0	0	2	0	0	0	0
CAA	1	1	0	4	1	0	4	1	0	0	0	0

It was reported in 2019 to 2020 as 7 complied and 1 open, this open recommendation was subsequently complied with.

Table 11: recommendations made by PHSO and compliance.

Better regulation

The department has continued to ensure that regulation in the transport sector is proportionate and does not impose unwarranted burdens on business.

Between January 2022 and March 2023, the department produced 79 regulatory impact and de minimis assessments^{[footnote 6]} and 17 post-implementation reviews^{[footnote 7]}. Twelve of these were submitted to the Regulatory Policy Committee for Independent Scrutiny, all of which received green ratings at final stage.

This year has seen a number of key regulations made, including the Seafarers’ Wages Bill which seeks to make payment of the equivalent of UK national minimum wage for seafarers regularly calling in UK ports a condition of port access, following P&O Ferries’ dismissal of 786 seafarers without consultation or notice.

The department has taken steps to ensure that all regulatory interventions are informed by a proportionate level of evidence and fully adherent to the Small Business, Enterprise, and Employment Act 2015. For all regulatory policies, resources have focused on measures with the highest impact to ensure that burdens are minimised. Small and micro business assessments are carried out for all regulatory measures to seek regulatory solutions that avoid disproportionate impacts where possible.

The department will continue to assess the proportionality of its regulations on an ongoing basis and is actively engaging with the Better Regulation Executive on a proposed new framework for regulatory reform, expected to be implemented across government in time for the fourth parliamentary session. This is subject to the repeal of the business impact target provisions in the Small Business, Enterprise, and Employment Act 2015 through the Retained EU Law (Revocation and Reform) Bill.

Auditors

This section sets out the costs of auditing the DfT Group accounts along with the costs of auditing the organisations which form part of the DfT Group. Audit fees are not included in this section for other entities who are outside the department’s consolidation boundary. The Comptroller and Auditor General (C&AG) carries out the audit of the consolidated accounts of the DfT Group, as well as the audits of the following executive agencies:

• Maritime and Coastguard Agency
• Driver and Vehicle Licensing Agency
• Driver and Vehicle Standards Agency
• Vehicle Certification Agency
• Active Travel England

These audits are conducted under the Government Resources and Accounts Act 2000 (GRAA), at an annual notional cost of £1,025,000 (2021 to 2022: £916,500). Active Travel England is a new executive agency from 1 August 2022 and is included in the notional costs as above.

The audits of the following entities are completed by the Comptroller and Auditor General, but incur a cash or real charge of £1,531,800 (2021 to 2022: £1,412,750):

• Network Rail Ltd (and its substantial subsidiary bodies, Network Rail Infrastructure Ltd and Network Rail Infrastructure Finance plc)
• National Highways
• British Transport Police Authority
• HS2 Ltd
• Transport Focus
• CTRL Section 1 Finance PLC
• LCR Finance PLC
• East West Rail Ltd

Network Rail’s audit fee of £673,800 includes £34,000 for other audit-related services including the audit of the Network Rail Regulatory accounts.

In addition to these entities, the C&AG audits the accounts of the General Lighthouse Fund (GLF), which consolidates the General Lighthouse Authorities (GLAs). While the GLAs are consolidated into the DfT Group, the GLF is not consolidated. As such, the audit fee for the GLF is not included in this total. The audit fee for the GLF for 2022 to 2023 is £140,000 (2021 to 2022: £102,500).

PwC audits the following entities, providing audit assurance to the Comptroller and Auditor General as the group auditor. These audits incur a real cost charge of £276,185 (2021 to 2022: £220,014):

• Smaller Network Rail subsidiary bodies
• Train Fleet (2019) Ltd

Deloitte audits the following entity, providing audit assurance to the Comptroller and Auditor General as the group auditor. This audit incurs a real cost charge of £175,000 (2021 to 2022: £108,000):

• Air Travel Trust Fund

BDO LLP audits the following entity, providing audit assurance to the Comptroller and Auditor General as the group auditor. This audit incurred a real cost charge of £9,300 (2021 to 2022 £9,300):

• Air Safety Support International Ltd

The National Audit Office (NAO) in its work to scrutinise public spending for Parliament also performs other work under statute, including Value-for-Money and assurance work.

Health and Safety

Health and Safety remains a top priority for the department and its executive agencies. Health and Safety teams ensured that post COVID-19 arrangements at work were risk assessed and appropriate controls were put in place for staff and visitors’ safety. It also included the new hybrid working arrangements across the department and its agencies as staff returned to the offices.

Table 12 sets out the number of RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013) reportable incidents to the Health and Safety Executive (HSE) during 2022 to 2023. The numbers below represent staff and non-staff RIDDOR reportable incidents.

Organisation	2022-23	2021-22	2020-21	2019-20
DfTc	0	0	0	0
DVLA	3	1	4	8
DVSA (43 Non-staff includes those who have an injury on one of our sites, such as a visitor or contractor or a DVSA motorcycle test candidate. Under some circumstances, these become RIDDOR reportable)	10 staff 3 non-staff	8 staff 12 non-staff	2 staff 1 non-staff	2 staff 4 non staff
MCA (44 Non-staff figures also include MCA volunteers)	6 non staff	1 staff 4 non-staff	1 staff 7 non-staff	8
VCA	0	0	0	0
Total	13 staff	13 staff	7 staff	16 staff

Table 12: number of RIDDOR reportable incidents

Conclusion

As Principal Accounting Officer, I have responsibility for the effectiveness of the system of internal control. Management assurance is confirmed by executive managers within the department, who are responsible for upholding a robust internal control framework; and by our agencies and arm’s length bodies who are responsible for their internal controls and delegated spending. I am supported by the work of internal audit and by the comments made by the National Audit Office in their management letter and other reports. Based on these assurances, I am content that the department upheld a satisfactory level of internal control and corporate governance throughout the reporting period.

People and remuneration report

Trade unions

The trade union side in Department for Transport is made up of FDA, PCS, Prospect unions. In addition, drivers in the Government Car Service are represented by Unite.

2022 to 2023 proved a difficult year in industrial relations. Despite pay negotiations proceeding in a constructive spirit, 3 unions (FDA, PCS, and Prospect) rejected the annual pay offer in line with their national policy. Only Unite, representing a separate pay bargaining unit in the Government Car Service, accepted the offer.

PCS and Prospect held statutory ballots for strike action overpay, PCS completing theirs in November 2022 and Prospect in March 2023. Strike action by PCS commenced in December 2022 and the Prospect action began in March 2023, with the disputes continuing into 2023 to 2024. PCS action has taken place in DfTc, DVLA, DVSA, MCA and VCA; Prospect action has been restricted to DVSA and MCA. The dispute has also affected other departments, executive agencies, and public bodies.

The PCS campaign has focused on targeted, sustained action by members in DVLA and DVSA, with strike pay provided by the union. This type of action has been better supported than the one or 2 day strikes without pay that took place in previous campaigns.

The total number of strike days lost in 2022 to 2023 was recorded as 17,563. The majority of these days were lost in DVSA (6,522) and DVLA (10,160).

In spite of the dispute over pay, the trade unions have continued to engage with the department over other issues.

Number of employees who were relevant union officials during the relevant period	FTE employee number
136	131.6

Table 13: TU representatives – the total number of employees who were TU representatives during the relevant period.

Percentage of time	Number of employees
0%	28
1-50%	108
51%-99%	0
100%	0

Table 14: percentage of time spent on facility time – how many employees who were TU representatives’ officials employed during the relevant period spent a) 0%, b) 1%-50%, c) 51% to 99% or d) 100% of their working hours on facility time.

First column	Figures
Provide the total cost of facility time	£129,118.67
Provide the total pay bill	£778,752,145.53
Provide the percentage of the total pay bill spent on facility time, calculated as: (total cost of facility time ÷ total pay bill) x 100	0.02%

Table 15: percentage of pay bill spent on facility time

The figures requested in the first column of the table below will determine the percentage of the total pay bill spent on paying employees who were TU representatives for facility time during the relevant period.

Time spent on paid TU activities as a percentage of total paid facility time hours calculated as: (total hours spent on paid TU activities by TU representatives during the relevant period ÷ total paid facility time hours) x 100

0% No paid time is given for trade union activities

Table 16: paid TU activities (as a percentage of total paid facility time hours, how many hours were spent by employees who were TU representatives during the relevant period on paid TU activities)

Sickness absence

Overall average working days lost (AWDL) per staff year in DfTc and its executive agencies was 8.6 days in the year ending March 2023, this is a slight decrease on same period last year, where this value was 8.7. Of these average working days lost (AWDL) per staff year 4.80 days per staff year were lost to long term sickness, this is a slight decrease on the same period last year, where this value was 4.86 AWDL.

Mental ill health is the largest long term absence type. This is reflected at DfTc and its executive agencies with 2.4 days per staff year lost, consistent with last year.

All absence is reviewed to ensure that support is offered and occupational health reports, action plans and interventions are progressed as appropriate. The department is focused on improving wellbeing and supporting mental health including with focussed pilots and interventions such as the introduction of the Neurequity portal.

Our staff numbers (audited information)

Details on the average number of whole-time equivalent persons employed during the year, the staff costs and gender composition are set out in the tables below.

Average number of staff	Permanently employed staff	Others	Ministers	Special Advisers	Total 22-23	Total 21-22
DfTc	3,696	31	5	3	3,735	3,592
Agencies	11422	363	0	0	11,785	11,534
Other Delivering Bodies	54030	1,696	0	0	55,726	58,130
Total Average Number of Persons employed	69,148	2,090	5	3	71,246	73,256

Table 17: staff numbers (departmental group including delivery bodies), average number of staff, permanently employed staff, others, ministers, special advisers.

The special adviser numbers are taken on a snapshot date as of 31 March 2023.

	2022-23 Permanently employed staff	2022-23 other staff	2022-23 total	2021-22 total
Wages and salaries	3,421	56	3,477	3,498
Social security costs	390	1	391	380
Other pension costs	351	1	352	352
Sub Total	4,162	58	4,220	4,230
Less recoveries in respect of outward secondments	(2)	0	(2)	(2)
Less capitalised staff costs	(1,178)	(23)	(1,201)	(1,258)
Total net costs	2,982	35	3,017	2,970
Core department and agencies	755	24	779	737
Departmental group	2,982	35	3,017	2,970

Table 18: staff costs (audited information)

‘Other staff’ includes ministers and special advisers, who were paid £261,000 and £0k respectively (2021 to 2022: £272,000 and £0k).

Special advisers are temporary civil servants. In order to improve efficiency, the administration of staff costs for all special advisers across government is managed by the Cabinet Office, with corresponding budget cover transfers. Therefore, all special adviser costs are reported in the Cabinet Office annual report and accounts. Special advisers remain employed by the respective department of their appointing minister.

	Men at 31 March 2023	Women at 31 March 2023	Men at 31 March 2022	Women at 31 March 2022
Number of persons of each sex who were DfTc Permanent Secretary and Directors General	7	3	4	2
Number of persons of each sex who were senior managers of DfTc of the Senior Civil Service (excluding above)	116	109	113	104
Number of persons of each sex who were employees of DfTc	2113	1721	2036	1630
Number of persons of each sex who were employees of DfT agencies	6888	5849	6904	5887

Table 19: number of persons of each sex who were employees of the department and its executive agencies as at 31 March 2023

Staff movement

This data refers to DfTc

Annual staff turnover, i.e., staff leaving DfTc, was 15.8% over the financial year ending March 2023. Whilst this is lower than the previous year (ending March 2022), which was 18.6%, it still remains significantly higher than the 10 years prior to 2022. Mostly, this can be attributed to the buoyancy of the UK labour market with its record numbers of vacancies, alongside the cost of living crisis, resulting in staff seeking career progression and/or increased salaries outside of the department. The central department also sees around 10% of its staff promoted internally each year and, whilst this is a positive aspect of the department as a great place to work, it does equate to additional turnover and a need for more recruitment to backfill roles. To mitigate the impacts of high turnover, the department is putting in place a comprehensive retention plan. This is based on the key reasons for staff leaving the department, which has been gleaned through analysis of exit surveys completed by a majority of leavers over the last couple of years.

Staff Loaned in to DfT	Total loaned in	Loaned in short term (6 months or less)	Loaned in long term (more than 6 months)
EO	1	0	1
HEO	7	0	7
SEO	6	3	3
Grade 7	10	1	9
Grade 6	6	3	3
SCS	7	3	4
Total	37	10	27

The cost of staff on loan to the department in 2022 to 2023 is £961,000 (2021 to 2022: £714,000). There were 13 staff on loan to the department where we did not pay their salary costs which will have been paid for by their home department.

During 2022 to 2023, there was very slight decrease in the number of loans into the department, but the total number has remained broadly consistent with the previous year. Loans have been used largely as a short-term solution for resourcing priority areas. There are a number of longer-term loans in place to fill key roles and support the career development of these individuals, this can be seen in an increase in the average duration of loans.

Resourcing

The department and its executive agencies have control systems requiring recruitment to be approved by the most appropriate authority up to and including director general. Two thousand five hundred and thirty nine posts were recruited to DfT Group during 2022 to 2023. During the reporting year, there were 57 exceptions (exemption 1) to the Civil Service commission recruitment principles in relation to fair and open competition.

Service contracts

The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made on merit based on fair and open competition. The recruitment principles published by the Civil Service Commission specify the circumstances when appointments may be made otherwise.

Unless otherwise stated below, the officials covered by this report hold appointments which are open-ended. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service compensation scheme.

Remuneration

Remuneration policy – Senior Civil Service

Senior Civil Service (SCS) pay, and conditions are not delegated to individual departments. The SCS is a corporate resource, employed with a common framework of terms and conditions across government departments.

Recommendations on SCS remuneration are provided by the Senior Salaries Review Body (SSRB) in an annual report to the Prime Minister. Further information about its work and copies of its annual reports can be found on SSRB’s website.

The government’s response to the recommendations of the SSRB is communicated to departments by the Cabinet Office through annual SCS pay guidance, which set out the parameters for base pay and non-consolidated pay for the relevant financial year.

The department’s Pay and Performance Committee takes decisions on the remuneration of the department’s senior civil servants, in line with this central guidance.

Performance management – Senior Civil Service

Performance against Cabinet Office-determined core objectives, and relative to SCS peers, determines allocation to a performance group, to which non-consolidated variable pay is linked. There are 4 performance groups:

• exceeding
• high performing
• achieving
• partially met

To be allocated to the ‘exceeding’ performance group, an individual must have performed above and beyond all of their agreed stretching objectives, as well as evidenced exemplary behaviours throughout the performance year.

Number of Senior Civil Service staff by band (audited information)

The number of SCS employed by the department, including its executive agencies (DVLA, MCA, DVSA, VCA and ATE), as at 31 March 2023, is disaggregated in Table 20.

Salary Range	Staff numbers
£70,000-£74,999	30
£75,000-£79,999	88
£80,000-£84,999	36
£85,000-£89,999	18
£90,000-£94,999	9
£95,000-£99,999	38
£100,000-£104,999	6
£105,000-£109,999	6
£110,000-£114,999	8
£115,000-£119,999	9
£120,000-£124,999	6
£125,000-£129,999	5
£130,000-£134,999	4
£135,000-£139,999	0
£140,000-£144,999	1
£145,000-£149,999	2
£150,000-£154,999	1
£155,000-£159,999	0
£160,000-£164,999	0
£165,000-£169,999	0
£170,000-£174,999	0
£175,000-£179,999	1
£260,000-£264,999	1
Total SCS Staff Numbers	269

Table 20: number of SCS within the department and its agencies by salary range

Pay and Performance Committee

This committee comprises of the department’s Permanent Secretary (as Chair and Accounting Officer), all director generals, and the Group HR Director. For the 2022 to 2023 reporting year (to 31 March 2023), its members were:

• Dame Bernadette Kelly DCB – Permanent Secretary, Department for Transport
• Gareth Davies – Second Permanent Secretary, Department for Transport (from 01/01/2022) (membership until 31/12/22)
• Clive Maxwell – Director General, High Speed Rail (membership until 21/11/22)
• Alan Over – Interim Director General, High Speed Rail (membership from 22/11/22)
• Nick Joyce – Director General, Corporate Delivery
• Emma Ward – Director General for Roads and Local Group
• David Hughes – Director General, Rail Infrastructure
• Conrad Bailey – Director General Rail Strategy & Services
• Rannia Leontaridi – Director General Aviation, Maritime and Security
• James Norton – Group HR Director

The committee’s remit includes making pay and talent decisions for directors and deputy directors. The permanent secretaries, in consultation with the Group HR director, decide on pay and talent for directors general.

Remuneration (including salary) and pension entitlements

The following sections on executive board members’ remuneration and pension disclosures are subject to audit.

Executive members of the DfT Board

Salary

‘Salary’ includes gross salary; reserved rights to London weighting or London allowances; recruitment and retention allowances; minsters and permanent secretaries offices allowances and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by the department and thus recorded in these accounts.

Bonus and benefits in kind

Bonuses are based on performance levels attained and relate to the relevant performance year. Under SCS pay guidance we are permitted to pay in-year awards related to recognise in-year performance as well as end-year bonuses to those determined ‘exceeding’ through the SCS appraisal process which are paid in arrears in the next financial year. The bonuses reported in 2022 to 2023 relate to in–year performance during the 2022 to 2023 performance year and end-year performance for the 2021 to 2022 performance year.

The monetary value of benefits in kind covers any benefits provided by the department and treated by HM Revenue and Customs as a taxable emolument. There were no benefits in kind reported in 2022 to 2023 or 2021 to 2022 for executive board members.

Compensation payments

There were no compensation payments for executive members of the DfT Board in 2022 to 2023.

Officials	2022-23 Salary (£000)	2022-23 Full Year Equivalent Salary (£000)	2022-23 Bonus Payments (£000)	2022-23 Pension Benefits (£000)	2022-23 Total Benefits (£000)	2021-22 Salary (£000)	2021-22 Full Year Equivalent Salary (£000)	2021-22 Bonus Payments (£000)	2021-22 Pension Benefits (£000)	2021-22 Total Benefits (£000)
Bernadette Kelly (Permanent Secretary)	175-180	175-180	0	0	175-180	170-175	170-175	15-20	0	215-220
Gareth Davies (Permanent Secretary) to 9 January 2023	115-120	150-155	0	43	155-160	140-145	140-145	5-10	51	200-205
Nick Joyce (Director General)	145-150	145-150	10-15	25	180-185	140-145	140-145	5-10	42	190-195
Clive Maxwell (Director General) to 21 November 2022	100-105	155-160	15-20	-7	105-110	150-155	150-155	0-5	28	180-185
Emma Ward (Director General)	130-135	130-135	10-15	-2	140-145	125-130	125-130	10-15	34	175-180
David Hughes (Director General)	150-155	150-155	0	0	150-155	145-150	145-150	0	0	165-170
Conrad Bailey (Director General)	125-130	125-130	5-10	-23	110-115	120-125	120-125	10-15	186	320-325
Marianthi Leontaridi (Temporary Director General) from 10 January 2022 (Director General) From 13 June 2022	125-130	125-130	10-15	149	280-285	25-30	120-125	0	26	55-60
Alan Over (Temporary Director General) from 14 November 2022	45-50	125-130	5-10	47	n/a	100-105	n/a	n/a	n/a	n/a
Dan Moore (Temporary Director General) from 23 January 2023 to 31 March 2023	20-25	125-130	5-10	15	n/a	35-40	n/a	n/a	n/a	n/a

Table 21: officials’ remuneration (audited information)

Officials	Accrued pension at Pension age as at 31/3/2023 and related lump sum (£000)	Real increase in pension and related lump sum at pension age (£000)	CETV at 31/3/2023 (£000)	CETV at 31/3/2022 (£000)	Real increase in CETV (£000)	Employer contribution for those with a partnership pension account (nearest £100)
Dame Bernadette Kelly DCB (Permanent Secretary) (Dame Bernadette Kelly DCB is a member of the Partnership pension arrangement – 2022-23 pensions benefits are the employer contributions made this year)	0	0	0	0	0	26,800
Gareth Davies (Permanent Secretary) (Gareth Davies was made Second Permanent Secretary of the Department from 1 January 2022) to 9 January 2023	60-65	2.5-5	905	807	21	n/a
Nick Joyce (Director General)	50-55	0-2.5	789	707	4	n/a
Clive Maxwell (Director General) to 21 November 2022	70-75 plus a lump sum of 130-135	0 – 2.5 plus a lump sum of 0	1218	1139	-19	n/a
Emma Ward (Director General)	40-45 plus a lump sum of 65-70	0 – 2.5 plus a lump sum of 0	691	634	-18	n/a
David Hughes (Director General) (David Hughes is a member of the Partnership pension arrangement. 2022-23 Pensions Benefits are the employer contributions made this year.)	0	0	0	0	0	23,100
Conrad Bailey (Director General)	60-65	0	874	811	-34	n/a
Rannia Leontaridi (Temporary Director General) from 10 January 2022 (Director General) from 13 June 2022	45-50	7.5-10	796	603	120	n/a
Alan Over (Temporary Director General) from November 2022	30-35	2.5-5	394	349	25	n/a
Dan Moore (Temporary Director General) from January 2023	40-45	0-2.5	491	444	-4	n/a

Table 22: officials’ pension benefits

Pension data is provided by My CSP. The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights. From 17 January 2020 GMP adjustment factors are no longer applied in calculations for members who reach State Pension age on or after 06 April 2016.

For final salary member (classic/classic plus/premium) who has transitioned to alpha. The final salary pension of a person in employment is calculated by reference to their pay and length of service. The pension will increase from one year to the next by virtue of any pay rise during the year. Where there is no or a small pay rise, the increase in pension due to extra service may not be sufficient to offset the deduction made for inflation in arriving at the underlying real value – that is, in real terms, the CETV can reduce, hence the negative values.

Civil Service Pensions

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension Age (or 65 if higher). From that date all newly appointed civil servants and the majority of those already in service joined alpha. From 1 April 2022, all civil servants joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has 4 sections: 3 providing benefits on a final salary basis (classic, premium or classic plus) with a normal pension age of 60; and one providing benefits on a whole career basis (nuvos) with a normal pension age of 65.

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with pensions increase legislation. Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 switched into alpha sometime between 1 June 2015 and 1 February 2022. Because the government plans to remove discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members, it is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period (and this may affect the cash equivalent transfer values shown in this report – see below). All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a defined contribution (money purchase) pension with an employer contribution (partnership pension account).

Employee contributions are salary-related and range between 4.6% and 8.05% for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to 3 years initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on his pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with pensions increase legislation. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate in 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is an occupational defined contribution pension arrangement which is part of the Legal and General Mastertrust. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member). The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes but note that part of that pension may be payable from different ages).

Cash equivalent transfer value

A cash equivalent transfer value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost. CETVs are worked out in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

CETV figures are calculated using the guidance on discount rates for calculating unfunded public service pension contribution rates that was extant at 31 March 2023. HM Treasury published updated guidance on 27 April 2023; this guidance will be used in the calculation of 2023 to 2024 CETV figures.

Real increase in the value of the CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Pay multiples for DfT and its executive agencies (including agency staff and secondees)

The following section on pay multiples is audited information.

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the lower quartile, median and upper quartile remuneration of the organisation’s workforce.

	Salary and allowances	Bonus payments
Staff average	3.9%	36.3%
Highest paid director	2.9%	n/a*

Table 23: percentage change in salary and bonuses for the highest paid director and the staff average for 2022 to 2023 (audited information)

Although a £17,500 bonus was received in 2021 to 2022, no bonus was received in 2022 to 2023 so a percentage difference cannot be calculated.

	2022-23	2021-22
Band of highest paid board member’s total remuneration (£000)	175-180	185 – 190
Median remuneration (£)	28,872	26,963
Ratio	6.1	7.0
25th percentile remuneration (£)	23,946	22,326
Ratio	7.4	8.4
75th percentile remuneration (£)	41,228	38,061
Ratio	4.3	4.9

Table 24: ratio between the highest paid directors’ total remuneration and the lower quartile, median and upper quartile for staff pay (audited information)

	Lower quartile	Lower quartile	Median	Median	Upper quartile	Upper quartile
Financial year	2022-23	2021-22	2022-23	2021-22	2022-23	2021-22
Salary	22,497	21,841	27,448	26,778	39,823	37,338
Total pay and benefits	23,946	22,326	28,872	26,963	41,228	38,061

Table 25: lower quartile, median and upper quartile for staff pay for salaries and total pay and benefits (audited information)

The banded remuneration of the highest paid executive board member in the department in the financial year 2022 to 2023 was £175,000 to £180,000 (2021 to 2022 was £185,000 to £190,000). This decrease in remuneration was due to no award of a bonus in 2022 to 2023. However, the individual did receive an increase in annual salary due to the 2022 to 2023 pay award.

This was 6.1 times the median remuneration of the workforce, which was £28,872 (2021 to 2022: 7.0 times and £26,963); 7.4 times the lower quartile remuneration of the workforce, which was £23,946 ; and 4.3 times the upper quartile remuneration of the workforce, which was £41,228. This decrease in pay multiples was due to no bonus payment being awarded in 2022 to 2023 to the highest paid executive board member and higher increases in remuneration paid to other staff in the 2022 pay award.

The ratios are calculated by taking the mid-point of the banded remuneration of the highest paid executive board member and calculating the ratio between this and the lower quartile, median and upper quartile remuneration of the department’s staff. This ratio is based on the full-time equivalent staff of the department at the end of March on an annualised basis. This calculation includes the central department, DVLA, DVSA, MCA and VCA.

In 2022 to 2023 one employee (2021 to 2022: one employee) received remuneration more than the highest paid executive board member. Remuneration ranged from £19,000 to £266,000 (2021 to 2022: £17,273 to £264,000).

Total remuneration includes salary, non-consolidated performance-related pay and benefits in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

Pension arrangements across the departmental group

Employees of entities included in these accounts benefit from a range of pension scheme arrangements. Some are members of employee-specific defined benefit schemes, set out in note 24 to the financial statements. Others may be members of the Principal Civil Service Pension Scheme (PCSPS), or of defined contribution arrangements. The key schemes and associated costs for the departmental group are disclosed below.

The PCSPS is an unfunded multi-employer defined benefit scheme, but the Department for Transport is unable to identify its share of the underlying liabilities. A full actuarial valuation was carried out in 2016. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation.

For 2022 to 2023, employers’ contributions of £138.76 million were payable to the PCSPS (2021 to 2022: £130.94 million) at one of four rates in the range 26.6% to 30.3% (2021 to 2022: 26.6% to 30.3%) of pensionable pay, based on salary bands. The scheme’s actuary reviews employer contributions every 4 years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2022 to 2023 to be paid when the member retires and not the benefits paid during this period to existing pensioners.

Employees can opt to open a partnership pension account (a stakeholder pension with an employer contribution). For 2022 to 2023, employers’ contributions of £1.21 million (2021 to 2022: £1.22 million) were paid to Legal and General. Employer contributions are age-related and range from 8% to 14.75% of pensionable pay. Employers also match employee contributions up to 3% of pensionable pay.

In addition, employer contributions of £41,845 0.5% (2021 to 2022: £41,857, 0.5%) of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service and ill health retirement of these employees.

The core department and its executive agencies neither owed or had prepaid any contributions to partnership pension providers as of 31 March 2022 and 2023.

There were 8 early retirements as a result of ill-health (2021 to 2022: 5).

Network Rail has 2 defined pension schemes. The RPS and CARE schemes are both shared cost in nature, so the cost of benefits being earned and the cost of funding any shortfall in the schemes are normally split in the proportion 60:40 between the group and the members. In practice, the contributions are adjusted at each triennial valuation to reflect the funding position of the schemes at that time. For 2022 to 2023, the current service cost was £324 million (2021 to 2022: £378 million).

On 1 April 2004, a defined contribution pension scheme was introduced, the Network Rail Defined Contribution Pension Scheme (NRDCPS). This is an auto-enrolment scheme for all new employees of Network Rail, except those who have the legal right to join the Railway Pension Scheme (RPS), in compliance with regulations made under the Pensions Act 2008. Any employee who wishes to transfer from the Network Rail Section of the RPS to the NRDCPS is entitled to do so. For 2022 to 2023 employers’ contributions of £27 million were payable into this scheme (2021 to 2022: £23 million). National Highways offer employees access to; The Civil Service Pension Schemes, National Highways Personal Pension Scheme and the Mercer Defined Benefit Master Trust (previously known as the Federated Pension Scheme). These are described in more detail below including the eligibility criteria applied.

Employees who joined under a compulsory transfer from the Highways Agency on 30 September 2015 remain eligible to participate in either The Principle Civil Service Pension Scheme or the Public Service (Civil Service and Others) Pensions Scheme, also known as Alpha. The membership of these schemes is declining, with new employees only eligible if transferring from other government department.

Under the PCSPS, CSOPS, and the NHPP, pension liabilities do not rest with the company. For these schemes, employer pension contributions are recognised as they become payable following qualifying service by employees.

The Principal Civil Service Pension Scheme

This is an unfunded public sector pension scheme, operated under the cost control mechanism as outlined in Section 12 of the Public Service Pension Act 2013. A full actuarial valuation was carried out as at 31 March 2016.

The operation of the cost control mechanism in relation to the 2016 valuations was paused on 30 January 2019. Contribution rates for employers and members have, therefore, remained unchanged from the previous year. For the year to 31 March 2023, employers’ contributions of £21.5 million (2021 to 2022 £22.4 million) were payable to the Principal Civil Service Pension Scheme and Public Service (Civil Service and Others) Pensions Scheme at one of 4 rates in the range 26.6% to 30.3% of pensionable earnings, based on salary bands.

Our people can choose to switch to a Partnership Pension Account. This is a defined contribution scheme operated by Legal and General, the scheme manager (Cabinet Office) appointed single provider. Employer contributions are age-related and range from 8% to 14.75%. The company also matches employee contributions up to 3% of pensionable earnings. Contributions due to the partnership pension account as at 31 March 2023 were £8,586 (2021 to 2022 £14,625). In addition, employer contributions of £3,936 (2021 to 2022 £4,060). 0.5% of pensionable pay, were payable to the Principal Civil Service Pension Scheme to cover the cost of the future provision of lump sum benefits on death in service or ill health retirement of these employees.

The National Highways Pension Plan

Employees who joined the company with effect from 1 April 2015 are eligible to participate in the National Highways Personal Pension Scheme. The pension scheme came into effect on 1 April 2015 and is a defined contribution group personal pension plan provided by a Legal and General Ltd. The default contributions are 5% (employee) and 10% (employer). In addition, life insurance cover is provided for members of the plan at an average cost of 0.55% of gross salary.

As this is a defined contribution scheme, our company incurs no liability for future pension costs of members of the pension plan. For the year to 31 March 2023, employers’ contributions of £18.7 million (2021 to 2022 £14.2 million) were payable to the plan.

The Mercer Defined Benefit Master Trust

We are a participating employer within the multi-employer Mercer Defined Benefit Master Trust scheme. It is operated by Mercers, with the organisation holding responsibility for future member pension costs for the 2 sections to which we are registered as sponsoring employer: the National Highways Company Limited Section and the National Highways (Severn Bridges Section).

Mercers both manage and administrate the scheme, with trusteeship provided by professional trustees: PAN Trustees, Independent Trustee Services and PTL. We are required to meet each section’s liabilities and full actuarial valuations are completed by the scheme’s appointed trustees on a triennial basis.

The National Highways Company Limited Section

This section was established on 1 July 2016 to protect the defined benefit pension rights of individuals joining the company via a ‘Transfer of Undertakings Regulations’. The current membership is low, and instances of new joiners are limited.

The contribution rates are based on the last actuarial valuation of the scheme as at 5 April 2019, outlined in the statement of funding principle agreed with the trustees in July 2020. The employer is required to pay contribution at the annual rate of 56.8%, less the member contributions which are dependent on contractual employee contribution rates agreed at the time of transfer. Employer’s contributions of £0.3 million were paid to this section in the year to 31 March 2022 (2021 to 2022 £0.3 million).

The National Highways (Severn Bridges) Section

This section was established when the existing Severn River Crossing Pension Fund was wound up and transferred on the 31 December 2019, when we assumed responsibility for the Severn River Crossing from Severn River Crossing Plc. The current active membership of the scheme is limited; this section is made up of predominately deferred or pensioner members. The contribution rates are based on an actuarial valuation of the scheme as at 5 April 2020, outlined in the statement of funding principle and agreed with the trustees in August 2021. Employer contributions are 38.3% of pensionable earnings.

Employer’s contributions of £0.1 million were paid to this section in the period to 31 March 2023 (2021 to 2022 £0.1 million).

The actuarial valuation of this section as at 5 April 2020 revealed a funding shortfall (technical provisions minus value of assets of £5,221,000). To eliminate the funding shortfall, a recovery plan was agreed with the trustees with additional contribution to be paid of £1,100,000 per annum until 31 March 2024. British Transport Police has 2 defined benefit pension schemes; the British Transport Police Force Superannuation Fund (‘Police Officer scheme’) and the British Transport Police shared cost section of the Railways Pension Scheme (‘Staff scheme’). Both schemes registered pension schemes are intended to be a fully funded providing benefits on a ‘defined benefit’ basis. For 2022 to 2023, the current service cost for both schemes was £105.5 million (2021 to 2022: £110 million).

Ministers

The following sections on ministerial remuneration and pension disclosures are audited information.

Salary

Salary’ includes gross salary; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; ministers and permanent secretaries offices allowances and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by the department and thus recorded in these accounts.

In respect of ministers in the House of Commons, departments bear only the cost of the additional ministerial remuneration; the salary for their services as an MP £84,144(from 1 April 2022) and various allowances to which they are entitled are borne centrally.

However, the arrangement for ministers in the House of Lords is different in that they do not receive a salary but rather an additional remuneration, which cannot be quantified separately from their ministerial salaries. This total remuneration, as well as the allowances to which they are entitled, is paid by the department and is therefore shown in full in the figures below.

Benefits in kind

The monetary value of benefits in kind covers any benefits provided by the department and treated by HM Revenue and Customs as a taxable emolument. There were no benefits in kind reported in 2022 to 2023 for ministers.

Compensation for loss of office

Grant Shapps MP left government 6 September 2022. He received a compensation of £16,876.

Kevin Foster MP left government 25 October 2022. He received a compensation of £7,920.

Karl McCartney MP left government 7 September 2022. He received a compensation of £5,593.

Robert Courts MP left government 19 September 2022. He received a compensation of £5,593.

Katherine Fletcher MP left government 26 October 2022. She received a compensation of £5,593.

Ministers	2022-23 Salary (£)	2022-23 Full year equivalent salary (£)	2022-23 Pension benefits (to nearest £1000)	2022-23 Total benefits (to nearest £1000)	2022-23 Severance payments (to nearest £1000)	2021-22 Full year equivalent salary (£)	2021-22 Pension benefits (to nearest £1000)	2021-22 Total benefits (to nearest £1000)	2021-22 Severance payments (to nearest £1000)
Rt Hon Grant Shapps MP, Secretary of State from 25 July 2019 to 06 September 2022	29,252	67,505	7,000	36,000	16,876	67,505	67,505	17,00	85,000
Rt Hon Anne Marie Trevelyan MP, Secretary of State from 06 September 2022 to 24 October 2022	5,807	67,505	3,000	9,000	n/a	n/a	n/a	n/a	n/a
Rt Hon Mark Harper, Secretary of State from 25 October 2022	29,397	67,505	7,000	36,000	n/a	n/a	n/a	n/a	n/a
Andrew Stephenson MP, Minister of State from 13 February 2020 to 6 July 2022	10,560	31,680	2,000	13,000	n/a	31,608	31,680	8,000	40,000
Trudy Harrison, Parliamentary Under Secretary of State from 17 September 2021 to 6 July 2022 and Minister of State from 7 July 2022 to 5 September 2022	5,954, 5,209	22,375, 31,680	3,000	14,000	n/a	12,120	22,375	3,000	13,000
Wendy Morton, Minister of State from 8 February 2022 to 5 September 2022	15,840	31,680	3,000	19,000	n/a	3429, 5,087	22,375,31,680	2,000	10,00
Kevin Foster MP, Minister of State from 7 September 2022 to 25 October 2022	2,129	31,680	1,000	3,000	7,920	n/a	n/a	n/a	n/a
Rt Hon Lucy Frazer KC MP, Minister of State from 8 September 2022 to 25 October 2022	2,725	31,680	1,000	4,000	n/a	n/a	n/a	n/a	n/a
Huw Merriman MP, Minister of State from 27 October 2022	13,626	31,680	3,000	17,000	n/a	n/a	n/a	n/a	n/a
Rt Hon Jesse Norman MP, Minister of State from 26 October 2022	13,710	31,680	3,000	17,000	n/a	n/a	n/a	n/a	n/a
Karl McCartney, Parliamentary Under Secretary of State from 8 July 2022 to 7 September 2022	3,743	22,375	1,000	5,000	5,593	n/a	n/a	n/a	n/a
Robert Courts MP, Parliamentary Under Secretary of State, from 8 September 2020 to 19 September 2022	10,504	22,375	3,000	14,000	5,593	22,375	22,375	3,000	14,000
Katherine Fletcher MP, Parliamentary Under Secretary of State from 20 September 2022 to 26 October 2022	2,248	22,375	1,000	3,000	5,593	n/a	n/a	n/a	n/a
Richard Holden MP, Parliamentary Under Secretary of State from 28 October 2022	9,563	22,375	2,000	12,000	n/a	n/a	n/a	n/a	n/a
Baroness Vere, Parliamentary Under Secretary of State from 2 August 2019	70,969	70,969	20,000	91,000	n/a	74,729	74,729	17,000	92,000

Table 26: ministers’ remuneration (audited information)

Ministerial pensions

Pension benefits for ministers are provided by the Parliamentary Contributory Pension Fund (PCPF). The scheme is made under statute and the rules are set out in the Ministers’ etc. Pension Scheme 2015 (DOC, 200KB).

Those ministers who are MPs may also accrue an MP’s pension under the PCPF (details of which are not included in this report). A new MP’s pension scheme was introduced from May 2015, although members who were MPs and aged 55 or older on 1 April 2013 have transitional protection to remain in the previous MP’s final salary pension scheme.

Benefits for ministers are payable from State Pension age under the 2015 scheme. Pensions are re-valued annually in line with pensions increase legislation both before and after retirement. The contribution rate from May 2015 is 11.1% and the accrual rate is 1.775% of pensionable earnings.

The figure shown for pension value includes the total pension payable to the member under both the pre- and post-2015 ministerial pension schemes.

Ministers	Accrued pension at age 65 as at 31/3/2023 (£000)	Real increase in pension at age 65 (£000)	CETV at 31/03/2023 (£000)	CETV at 31/03/2022 (£000)	Real increase in CETV funded by taxpayer (£000)
Rt Hon Grant Shapps MP, Secretary of State from 25 July 2019 to 06 September 2022	5-10	0-2.5	101	90	4
Rt Hon Anne Marie Trevelyan MP, Secretary of State from 06 September 2022 to 24 October 2022	0-5	0-2.5	40	36	2
Rt Hon Mark Harper, Secretary of State from 25 October 2022	5-10	0-2.5	91	79	4
Andrew Stephenson MP, Minister of State from 13 February 2020 to 6 July 2022	0-5	0-2.5	26	24	1
Trudy Harrison, Parliamentary Under Secretary of State from 17 September 2021 to 6 July 2022 and Minister of State from 7 July 2022 to 5 September 2022	0-5	0-2.5	5	2	1
Wendy Morton, Minister of State from 8 February 2022 to 5 September 2022	0-5	0-2.5	25	20	2
Kevin Foster MP, Minister of State from 7 September 2022 to 25 October 2022	0-5	0-2.5	16	15	1
Rt Hon Lucy Frazer KC MP, Minister of State from 8 September 2022 to 25 October 2022	0-5	0-2.5	39	37	1
Huw Merriman MP, Minister of State from 27 October 2022	0-5	0-2.5	3	0	2
Rt Hon Jesse Norman MP, Minister of State from 26 October 2022	0-5	0-2.5	52	46	2
Karl McCartney, Parliamentary Under Secretary of State from 8 July 2022 to 7 September 2022	0-5	0-2.5	1	0	0
Robert Courts MP, Parliamentary Under Secretary of State from 8 September 2020 to 19 September 2022	0-5	0-2.5	9	7	1
Katherine Fletcher MP, Parliamentary Under Secretary of State from 20 September 2022 to 26 October 2022	0-5	0-2.5	0	0	0
Richard Holden MP, Parliamentary Under Secretary of State 28 October 2022	0-5	0-2.5	2	0	1
Baroness Vere, Parliamentary Under Secretary of State from 2 August 2019	5-10	0-2.5	114	84	11

Table 27: ministerial pensions (audited information)

‘Pensions benefit’ – the value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights

Cash equivalent transfer values

This is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the pension benefits they have accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total ministerial service, not just their current appointment as a minister. CETVs are calculated in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

CETV figures are calculated using the guidance on discount rates for calculating unfunded public service pension contribution rates that was extant at 31 March 2023. HM Treasury published updated guidance on 27 April 2023; this guidance will be used in the calculation of 2023 to 2024 CETV figures.

Real increase in the value of the CETV

This is the element of the increase in accrued pension funded by the Exchequer. It excludes increases due to inflation and contributions paid by the minister. It is worked out using common market valuation factors for the start and end of the period.

Non-executive board members

The following section on non-executive board members’ (NEBM) remuneration is subject to audit.

Each of the NEBMs, Ian King, Richard Keys, Tony Poulter, Tracy Westall, Ranjit Baxi and Dame Sarah Storey, is entitled to claim annual fees, currently £15,000 per annum, and reasonable expenses (including travel and subsistence in line with the department’s policy on such expenses).

Ian King, as the lead NEBM, receives an additional £5,000 in recognition of this role. Similarly, Richard Keys, as Chair of the department’s Group Audit and Risk Assurance Committee (GARAC), receives an additional £5,000 per annum in recognition of this role. Richard Keys also receives emoluments as a non-executive director of NATS Holdings Ltd, which is an organisation that DfT has a 48.9% investment stake in (see page 305 in the Department for Transport annual report and accounts 2022 to 2023 (web version) for further information) he however, stepped down from his role in September 2022.

NEBMs are appointed on fixed terms. Their fees for 2022 to 2023 are set out in the table below. In addition, the membership of the GARAC includes Amarjit Atkar, Kathryn Cearns and Mark Bayley, who receive a fee for attending and preparing for meetings. Ranjit Baxi also sits as a member of GARAC but receives no additional fee.

Non-executive board member fees	2022-23 (£000)	2021-22 (£000)
Ian King	20-25	20-25
Richard Keys	20-25	20-25
Tracy Westall	15-20	15-20
Anthony Poulter	15-20	15-20
Ranjit Baxi	15-20	15-20
Dame Sarah Storey	15-20	15-20
Group Audit and Risk Assurance Committee Member Fees	2022-23 (£000)	2021-22 (£000)
Kathryn Cearns (also remunerated by the department for her work as an Elizabeth Line Special Representative which ended in July 2022 – this disclosure relates to her role on GARAC)	0-5	0-5
Amarjit Atkar	0-5	0-5
Mark Bayley	0-5	0-5

Table 28: non-executive board members’ fees, 2022 to 2023 (audited information)

Off payroll engagements (audited information)

As part of the review of tax arrangements of public sector appointees published by the Chief Secretary to HM Treasury on 23 May 2012, departments and their public bodies were asked to report on their off-payroll engagements.

Data on these appointments is set out in the following tables.

	DfTc	BTPa	DVSA	DVLA	NH	HS2 Ltd	MCA	NR	VCA	ATE	EWRco	Total
No. of existing engagements as at 31 March 2023 (reflects the recent changes in HM Treasury guidance and scope of reporting)	21	8	30	71	17	234	10	879	7	1	19	1,297
Of which:
No. that have existed for less than one year at time of reporting	9	7	23	48	13	151	5	369	3	1	13	642
No. that have existed for between one and two years at time of reporting	10	0	7	19	1	49	1	299	2	0	4	392
No. that have existed for between 2 and 3 years at time of reporting	2	1	0	4	2	20	1	141	0	0	2	173
No. that have existed for between 3 and 4 years at time of reporting	0	0	0	0	1	7	3	46	0	0	0	57
No. that have existed for 4 or more years at time of reporting	0	0	0	0	0	7	0	24	2	0	0	33

Table 29: off-payroll engagements as at 31 March 2023, earning £245 per day or greater

Organisations with a nil return are not included in the above table

The department, its executive agencies, and public bodies have clearly defined governance and challenge processes in place to ensure they are compliant with the off-payroll (IR35) working rules. The Departmental Approvals Committee provides independent challenge and seeks assurance from the core department and the executive agencies that: every effort is being made to reduce its reliance on off-payroll resource; that a process is in place to transfer skills from off-payroll resource to permanent staff, and that alternative resourcing options have been considered. Similar governance arrangements exist within the arm’s length bodies.

The department undertakes a risk-based sampling exercise where a selection of engagements, which include those previously assessed as being out-of-scope, are reassessed for consistency to ensure that the status of the role has not changed, which would thus deem them to be in-scope of IR35 legislation. Table 30 shows the number of engagements that were reassessed for consistency purposes during the 2022 to 2023 financial year.

The department confirms that all the engagements reported in Table 29 and Table 30 have been considered using HMRC’s IR35 assessment tool, apart from those in HS2 Ltd, where the default is that all roles are assessed as being in scope of the off-payroll working rules. The assessment tool is then only used when a role is identified to be out of scope, to assess its compliance against the legislation.

	DfTc	BTPa	DVSA	DVLA	NH	HS2 Ltd	MCA	NR	VCA	ATE	EWRco	Total
No. of engagements between 1 April 2022 and 31 March 2023	48	18	49	152	27	373	18	1,422	16	1	51	2,175
Of which:
No. not subject to off-payroll legislation	42	14	42	145	27	1	2	1,205	1	1	51	1,531
No. assessed in scope of IR35	4	4	7	3	0	354	12	203	0	0	0	587
No. assessed as out of scope of IR35	2	0	7	4	0	18	4	14	15	0	0	57
No. of engagements reassessed for consistency / compliance purposes during the year *	14	0	0	6	0	8	2	11	7	1	0	49
No. of engagements whose IR35 status changed following reassessment	1	0	0	0	0	1	2	0	0	0	0	4

Table 30: all off-payroll engaged at any point between 1 April 2022 and 31 March 2023, earning £245 per day or greater

Organisations with a nil return are not included in the above table.

These figures represent the number of engagements which were reassessed during the period to ensure compliance with IR35 legislation.

Core department (DfTc): engagements deemed in-scope of the legislation are recruited through the public sector resourcing framework and placed on the payroll of the department’s chosen commercial framework supplier to ensure tax deductions are taken at source. Most off-payroll engagements were via umbrella companies and as a result, not subject to the IR35 legislation. Fourteen engagements were reassessed for consistency and compliance purposes, resulting in one change to the initial status.

British Transport Police Authority (BTPa): a robust governance process is in place to challenge and control the use of off-payroll engagements and ensure compliance. No engagements were deemed to be out of scope, as a result no sample tests were undertaken to reassess consistency and compliance.

Driver and Vehicle Standards Agency (DVSA): majority of engagements were not subject to the IR35 legislation, which is reflected accordingly in the table above, in line with recent changes to the HM Treasury guidance and scope of reporting. No sample tests were undertaken to reassess for consistency and compliance.

Driver and Vehicle Licensing Agency (DVLA): all engagements are assessed for compliance prior to recruitment. Quarterly reviews were undertaken to assess engagements both in scope and out of scope of the IR35 legislation for consistency. Six engagements were reassessed for consistency and assurance purposes, without resulting in a change to their initial status.

National Highways: a robust governance process is in place to challenge and control the use of off-payroll engagements and ensure compliance. All engagements were not subject to off-payroll legislation therefore, no sample tests were undertaken to reassess consistency and compliance.

High Speed 2 Ltd (HS2 Ltd): a central recruitment authorisation panel ensured governance and challenge for the recruitment off-payroll workers. A process is in place to provide independent assessment of engagements deemed out-of-scope of the IR35 legislation to ensure compliance. Eight engagements were reassessed for consistency and compliance, and one resulted with a change to their initial status.

Maritime and Coastguards Agency (MCA): all off-payroll engagements were subject to review, resulting in further changes being implemented to strengthen the process for assessing off-payroll engagements. Two engagements were reassessed for consistency and compliance purposes, resulting in changes to the initial determination status.

Network Rail (NR): robust processes and procedures are in place to determine the status of off-payroll engagements against the IR35 legislation. Random reviews of determinations are carried out during the year to ensure accuracy. This provides assurance that all workers engaged in the business are being correctly paid and fulfilling all income tax and national insurance obligations. Eleven engagements were reassessed for consistency and compliance, all were reflective of the working practices in place at the time of assessment.

Vehicle Certification Agency (VCA): a process is in place to assess compliance with the IR35 legislation. Majority of engagements were not subject to IR35 legislation. Seven engagements were reassessed for consistency and compliance, without resulting in a change to their initial status.

Active Travel England (ATE): a process is in place to assess compliance with the IR35 legislation. All engagements are reviewed internally by Corporate Services to ensure consistency and compliance.

East West Rail Company Limited (EWRco): a process is in place to manage compliance and recruitment of off-payroll engagements. All requests for, and extensions of, off-payroll engagements go through the Spend Approvals Committee, chaired by the Corporate Services Director, for authorisation. None of the engagements were subject to IR35 legislation.

	DfTc	BTPa	DOR	DVSA	DVLA	NH	HS2 Ltd Ltd Ltd	MCA	NLB	NR	TF	THLS	VCA	ATE	EWRco	Total
No. of off-payroll engagements of board members, and / or, senior officials with significant financial responsibility, during the financial year	0	0	0	0	0	0	2	0	0	0	0	0	0	0	0	2
Total no. of individuals that have been deemed ‘board members, and / or, senior officials with significant financial responsibility’, during the financial year. This figure includes both on payroll and off-payroll engagements	65	10	(Directly Operated Railways does not have any officials; all financial decision making is undertaken by DfT officials)	9	9	12	31	14	3	16	9	4	5	1	6	194

Table 31: off-payroll engagements of board members, and / or, senior officials with significant financial responsibility, between 1 April 2022 and 31 March 2023

Details of the exceptional circumstances that led to the above off-payroll engagements with significant financial responsibility, and the duration of the engagement is as follows:

High Speed 2 Ltd (HS2 Ltd): From 25 July 2022 to 30 April 2023 a chief financial officer was engaged temporarily whilst the permanent role was defined, and ministerial approval was obtained from Department for Transport to fill the role permanently. Accounting officer approval was obtained for the temporary engagement.

From 01 March 2023 to 31 August 2023, a delivery director was temporarily engaged whilst the permanent role was defined, and ministerial approval was obtained from Department for Transport prior to fill the role permanently. Accounting officer approval was obtained for the temporary engagement.

Consultancy and temporary staff costs (audited information)

During 2022 to 2023, the department and its delivery bodies employed a number of consultancy and temporary staff.

Consultancy is the provision of objective advice relating to strategy, structure, management or operations of an organisation in pursuit of its purposes and objectives. Such advice is provided outside the ‘business-as-usual’ environment when inhouse skills are not available and will be time-limited. Consultancy may include the identification of options with recommendations, or assistance with (but not the delivery of) the implementation of solutions.

Consultancy costs are incurred primarily on specialist transport-related activities across the group, notably in Network Rail, East West Rail, High Speed Two and the central department.

Temporary staff costs are incurred when staff are brought in to supplement the existing workforce, this could be due to a surge in demand, to address a short-term resourcing need or in a temporary capacity for specialist skills.

Temporary staff costs are incurred primarily in major infrastructure programme across the group, notably in Network Rail, High Speed 2 and East West Rail and continue to be the most significant driver of these costs.

	Consultancy	Temporary staff	Total
DfTC	74,332,218	5,036,361	79,368,579
Network Rail	108,226,519	117,694,039	225,920,558
High Speed 2	25,756,768	19,920,233	45,677,001
East West Rail	10,174,838	4,158,554	14,333,392
DVLA	934,806	5,015,989	5,950,795
DVSA	592,810	5,330,916	5,923,726
National Highways	2,400,000	5,600,000	8,000,000
BTP	1,156,866	1,459,769	2,616,635
MCA	1,432,396	2,119,157	3,551,553
VCA	6,273	97,824	104,097
Northern Lighthouse Board	0	460,595	460,595
Trinity House	0	433,719	433,719
Transport Focus	n/a	142,001	142,001
Commission for Irish Lights	4,524	80,427	84,951
Air Travel Trust Fund	0	0	0
Directly Operated Railways Ltd	0	0	0
LCR Finance Company	n/a	n/a	0
CTRL Finance Company	n/a	n/a	0
Air Safety Support International	96,520	39,244	135,764
Trainfleet	13,080	n/a	13,080
ATE	350,124	81,717	431,841
Department Total	225,477,742	167,670,545	393,148,287

Exit Packages (audited information)

Exit package cost band	2022-23 Compulsory redundancies	2021-22 Compulsory redundancies	2022-23 Other departures agreed	2021-22 Other departures agreed	2022-23 Total Exits	2021-22 Total Exits
<£10,000	0	0	9	8	9	8
£10,000–£25,000	0	0	4	7	4	7
£25,000–£50,000	0	0	1	7	1	7
£50,000–£100,000	0	0	6	2	6	2
£100,000–£150,000	0	0	0	0	0	0
£150,000–200,000	0	0	0	0	0	0
>£200,000	0	0	0	0	0	0
Total number of exit packages	0	0	20	24	20	24
Total Cost (£)	0	0	616,118	495,077	258,886	495,077

Exit package cost band	2022-23 Compulsory redundancies	2021-22 Compulsory redundancies	2022-23 Other departures agreed	2021-22 Other departures agreed	2022-23 Total Exits	2021-22Total Exits
<£10,000	53	46	45	31	98	77
£10,000–£25,000	106	81	105	299	211	378
£25,000–£50,000	211	160	191	347	402	508
£50,000–£100,000	22	41	240	226	262	268
£100,000–£150,000	1	11	83	33	84	44
£150,000–200,000		3	12	5	12	8
>£200,000		1	1	0	1	1
Total number of exit packages	393	343	677	941	1070	1284
Total Cost (£)	10,862,523	11,916,618	38,164,517	38,245,263	49,029,518	50,161,881

Table 32: whole departmental group (audited information)

Redundancy and other departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972 (with the exception of Network Rail, which is not governed by Cabinet Office controls and runs separate exit schemes). Exit costs are accounted for in full in the year of departure. Where the department has agreed early retirements, the additional costs are met by the department and not by the Civil Service pension scheme. Ill-health retirement costs are met by the pension scheme and are not included in the table.

In line with the Constitutional Reform and Governance Act 2010 and the model contract for special advisers, a special adviser’s appointment automatically ends when their appointing minister leaves office. Special advisers are not entitled to a notice period but receive contractual termination benefits to compensate for this. Termination benefits are based on length of service and capped at 6 months’ salary. If a special adviser returns to work for HM Government following the receipt of a severance payment, the payment is required to be repaid, less a deduction in lieu of wages for the period until their return. Termination costs for special advisers are reported in the Cabinet Office annual report and accounts.

Statement of outturn against Parliamentary supply

In addition to the primary statements prepared under IFRS, the government financial reporting manual (FReM) requires the department to prepare a statement of outturn against Parliamentary supply (SOPS) and supporting notes.

The SOPS and related notes are subject to audit, as detailed in the certificate and report of the Comptroller and Auditor General to the House of Commons.

The SOPS is a key accountability statement that shows, in detail, how an entity has spent against their supply estimate. Supply is the monetary provision (for resource and capital purposes) and cash (drawn primarily from the Consolidated Fund) that Parliament gives statutory authority for entities to utilise. The estimate details supply and is voted on by Parliament at the start of the financial year.

Should an entity exceed the limits set by their supply estimate, called control limits, their accounts will receive a qualified opinion.

The format of the SOPS mirrors the supply estimates, published on gov.uk, to enable comparability between what Parliament approves and the final outturn.

The SOPS contain a summary table, detailing performance against the control limits that Parliament have voted on, cash spent (budgets are compiled on an accruals basis and so outturn will not exactly agree to cash spent) and administration.

The supporting notes detail the following:

• outturn by estimate line, providing a more detailed breakdown (note 1);
• a reconciliation of outturn to net operating expenditure in the statement of comprehensive net expenditure, to tie the SOPS to the financial statements (note 2)
• a reconciliation of outturn to net cash requirement (note 3)
• an analysis of income payable to the Consolidated Fund (note 4)

The SOPS and estimates are compiled against the budgeting framework, which is similar to, but different from, IFRS. An understanding of the budgeting framework and an explanation of key terms is provided in the financial overview. Further information on the public spending framework and the reasons why budgeting rules are different from IFRS can also be found in chapter 1 of the consolidated budgeting guidance, available on gov.uk. A glossary of these financial terms can also be found in Annex A.

In SOPS 1, spending is split into departmental expenditure limits (DEL) and annually managed expenditure (AME), and within those categories spending is further split between resource and capital. These spending categories include: cash expenditure for transactions that require the transfer of money; and non-cash expenditure relating to changes in the valuation of assets (depreciation, pensions etc.).

AME includes areas of spending that HM Treasury deems unpredictable, difficult to control and of a size that departments would have difficulty managing within DEL budgets.

DEL is usually set for the term of the Spending Review, whereas AME is forecast on a yearly basis. Departments are set annual budgets split between resource/capital and DEL/AME.

As required by the 2022 to 2023 FReM, the SOPS is presented in £000s. The financial statements are presented in £m (million).

Summary of resource and capital outturn 2022 to 2023

Type of spend	SoPS note	2022-23 outturn voted £’000	2022-23 outturn non-voted £’000	2022-23 outturn total £’000	2022-23 outturn voted £’000	2022-23 outturn non-voted £’000	2022-23 estimate total £’000	2022-23 outturn vs. estimate saving/ (excess) voted £’000	2022-23 outturn vs. estimate saving/ (excess) total £’000	2021-22 prior year outturn total total £’000
Departmental Expenditure Limit (DEL)
Resource	1.1	16,876,780	9,656	16,886,436	18,071,520	15,908	18,087,428	1,194,740	1,200,992	18,584,065
Capital	1.2	20,537,039	1,231	20,538,270	20,588,203	74	20,588,277	51,164	50,007	19,151,091
Total	n/a	37,413,819	10,887	37,424,706	38,659,723	15,982	38,675,705	1,245,904	1,250,999	37,735,156
Annually Managed Expenditure (AME)
Resource	1.1	3,721,262	4,859	3,726,121	6,078,041	(1,853)	6,076,188	2,356,779	2,350,067	3,454,270
Capital	1.2	(112,306)	-	(112,306)	(76,989)	-	(76,989)	35,317	35,317	78,337
Total	-	3,608,956	4,859	3,613,815	6,001,052	(1,853)	5,999,199	2,392,096	2,385,384	3,532,607
Total budget
Resource	1.1	20,598,042	14,515	20,612,557	24,149,561	14,055	24,163,616	3,551,519	3,551,059	22,038,335
Capital	1.2	20,424,733	1,231	20,425,964	20,511,214	74	20,511,288	86,481	85,324	19,229,428
Total Budget Expenditure	n/a	41,022,775	15,746	41,038,521	44,660,775	14,129	44,674,904	3,638,000	3,636,383	41,267,763

Figures in the columns labelled ‘voted’ cover the control limits voted by Parliament. Further information about the supply process control limits voted by Parliament can be found in The estimates manual.

Detailed explanations of significant variances between estimate and net resource outturn and are shown after SOPS note 1.2.

Net cash requirement

The net cash requirement is the limit voted by Parliament reflecting the maximum amount of cash that can be released from the Consolidated Fund to the department in support of expenditure in its estimate.

	Note	2022-23 £’000	2021-22 £’000
Estimate	-	32,730,591	37,079,601
Outturn	SOPS 3	29,052,354	30,367,987
Under/(over) spend against estimate	-	3,678,237	6,711,614

Administration costs

The administration budget is a Treasury control on resources consumed by the department and forms part of the departmental expenditure limit (DEL). The administration budget is not a separate voted limit, but any breach of this limit will also result in an excess vote. Administration costs include items not directly associated with frontline service delivery.

	Note	2022-23 £’000	2021-22 £’000
Estimate	-	370,969	360,242
Outturn	SOPS 1.1	336,207	329,144
Under/(over) spend against estimate	-	34,762	31,098

The SOPS notes on form part of these financial statements.

The total estimate columns include virements. Virements are the reallocation of provision in the estimates that do not require Parliamentary authority (because Parliament does not vote to that level of detail and delegates this power to HM Treasury). In accordance with HM Treasury’s supply estimates manual para 2.67, virements apply to voted provision only; however, if a department wishes to increase spending on a non-voted section by making savings in another section of the same part of the budget, it can do so without the need for changes to the estimate. Further information on virements can be found in The estimates manual, available on gov.uk .

The ‘Outturn vs Estimate’ column is based on the total including virements. The estimate total before virements have been made is included so that users can tie the estimate back to the estimates laid before Parliament.

SOPS 1. Outturn detail, by estimate line

SOPS 1.1 Analysis of net resource outturn by estimate line

	2022-23 resource outturn administration gross £’000	2022-23 resource outturn administration income £’000	2022-23 resource outturn administration net £’000	2022-23 resource outturn programme gross £’000	2022-23 resource outturn programme Income £’000	2022-23 resource outturn programme net £’000	2022-23 resource outturn programme net total £’000	2022-23 total £’000	2022-23 estimate virements £’000	2022-23 estimate total inc. virements £’000	2022-23 outturn vs. estimate, saving / (excess)£’000	Prior year outturn total 2021-22 £’000
Voted:
A: tolled crossings	-	-	-	44,790	(147,426)	(102,636)	(102,636)	(109,572)	6,936	(102,636)	-	(106,774)
B: local authority transport	-	-	-	334,318	(61)	334,257	334,257	362,175	(27,918)	334,257	-	460,517
>C: National Highways (net)	44,948	-	44,948	2,517,853	-	2,517,853	2,562,801	2,803,431	-	2,803,431	240,630	2,393,290
D: funding of other ALBs (net)	1,221	-	1,221	(47,052)	-	(47,052)	(45,831)	(35,186)	141	(35,045)	10,786	(15,842)
E: other railways	-	-	-	451,354	(362,682)	88,672	88,672	255,592	(146,799)	108,793	20,121	139,994
F: sustainable travel	-	-	-	150,341	(5,641)	144,700	144,700	157,872	(12,933)	144,939	239	145,603
G: bus subsidies and concessionary fares	-	-	-	756,927	(5,087)	751,840	751,840	811,266	(14,838)	796,428	44,588	755,085
H: GLA transport grants	-	-	-	445,417	-	445,417	445,417	430,052	15,365	445,417	-	1,719,404
I: Crossrail	-	-	-	5,467	(42,228)	(36,761)	(36,761)	(27,743)	-	(27,743)	9,018	(27,838)
J: aviation, maritime, security and safety	-	-	-	158,923	(51,312)	107,611	107,611	101,236	6,375	107,611	-	217,365
K: Maritime and Coastguard Agency	8,291	(587)	7,704	420,229	(16,616)	403,613	411,317	416,168	37	416,205	4,888	369,299
L: motoring agencies	-	-	-	1,061,766	(1,025,907)	35,859	35,859	73,484	-	73,484	37,625	29,338
M: science, research and support functions	-	-	-	40,573	(747)	39,826	39,826	31,203	8,623	39,826	-	25,146
N: central administration	293,426	(12,660)	280,766	52,394	(21,624)	30,770	311,536	349,226	(178)	349,048	37,512	319,448
O: support for passenger rail services	-	-	-	2,958,646	-	2,958,646	2,958,646	2,793,457	165,189	2,958,646	-	4,509,724
P: high speed rail	-	-	-	49,807	(23,186)	26,621	26,621	101,641	-	101,641	75,020	(5,064)
Q: transport development fund	-	-	-	64,952	-	64,952	64,952	50,300	14,652	64,952	-	47,556
R: High Speed Two Limited (net)	1,366	-	1,366	43,396	-	43,396	44,762	50,811	-	50,811	6,049	219,246
S: East West Rail Company Limited (net)	168	-	168	65,511	-	65,511	65,679	70,604	-	70,604	4,925	74,358
T: Network Rail (net)	-	-	-	8,667,512	-	8,667,512	8,667,512	9,385,503	(14,652)	9,370,851	703,339	7,299,722
Total voted resource DEL	349,420	(13,247)	336,173	18,243,124	(1,702,517)	16,540,607	16,876,780	18,071,520	-	18,071,520	1,194,740	18,569,577
Non voted:
U: funding of ALBs (net)	34	-	34	9,622	-	9,622	9,656	15,908	-	15,908	6,252	14,488
Total resource DEL	349,454	(13,247)	336,207	18,252,746	(1,702,517)	16,550,229	16,886,436	18,087,428	-	18,087,428	1,200,992	18,584,065
Spending in annually managed expenditure (AME):
Voted:
V: National Highways (net)	-	-	-	11,201	–	11,201	11,201	10,000	1,201	11,201	-	9,380
W: Network Rail (net)	-	-	-	3,123,570	–	3,123,570	3,123,570	4,542,994	(1,201)	4,541,793	1,418,223	3,136,601
X: funding of other ALBs (net)	-	-	-	101,780	-	101,780	101,780	116,794	-	116,794	15,014	87,277
Y: other railways	-	-	-	746,821	(277,454)	469,367	469,367	1,302,780	-	1,302,780	833,413	199,658
Z: aviation, maritime, security and safety	-	-	-	–	(1,066)	(1,066)	(1,066)	(1,066)	-	(1,066)	-	(1,421)
AA: Maritime and Coastguard Agency	-	-	-	(772)	-	(772)	(772)	13,150	-	13,150	13,922	1,212
AB: motoring agencies	-	-	-	(4,070)	-	(4,070)	(4,070)	(2,140)	-	(2,140)	1,930	(5,476)
AC: central administration	-	-	-	22,588	-	22,588	22,588	96,000	(366)	95,634	73,046	17,888
AD: high speed rail	-	-	-	(105)	–	(105)	(105)	(471)	366	(105)	-	13
AE: High Speed Two Limited (net)	-	-	-	(1,231)	-	(1,231)	(1,231)	-	-	-	1,231	4,264
AF: East West Rail Company Limited (net)	-	-	-	-	-	-	-	-	-	-	-	-
Total voted resource AME	-	-	-	3,999,782	(278,520)	3,721,262	3,721,262	6,078,041	–	6,078,041	2,356,779	3,449,396
Non voted
AG: funding of ALBs (net)	-	-	-	4,859	-	4,859	4,859	(1,853)	–	(1,853)	(6,712)	4,874
Total resource AME	-	-	-	4,004,641	(278,520)	3,726,121	3,726,121	6,076,188	-	6,076,188	2,350,067	3,454,270
Total resource outturn	349,454	(13,247)	336,207	22,257,387	(1,981,037)	20,276,350	20,612,557	24,163,616	-	24,163,616	3,551,059	22,038,335

SOPS 1.2 Analysis of net capital outturn by estimate line

	2022-23 outturn gross £’000	2022-23 outturn income £’000	2022-23 outturn net total £’000	2022-23 estimate total £’000	2022-23 estimate virements £’000	2022-23 estimate total inc. virements £’000	2022-23 outturn vs. estimate, saving/(excess)£’000	2021-22 prior year outturn total £’000
Spending in departmental expenditure limit (DEL)
A: tolled crossings	121	-	121	1,260	-	1,260	1,139	459
B: local authority transport	1,,397,212	(44,006)	1,353,206	1,322,687	30,519	1,353,206	-	1,810,158
C: Highways England (net)	3,208,655	-	3,208,655	3,213,506	-	3,213,506	4,851	3,184,289
D: Funding of other ALBs (net)	29,321	-	29,321	25,400	3,921	29,321	-	36,397
E: other railways	143,913	-	143,913	126,434	17,479	143,913	-	122,955
F: sustainable travel	499,262	(1,025)	498,237	557,065	(57,950)	499,115	878	788,934
G: bus subsidies and concessionary fares	166,812	-	166,812	198,784	(30,240)	168,544	1,732	238,829
H: GLA transport grants	509,531	-	509,531	588,430	(45,600)	542,830	33,299	3,211
I: Crossrail	274,563	(151,890)	122,673	108,017	14,656	122,673	-	477,987
J: aviation, maritime, security and safety	106,866	-	106,866	106,753	113	106,866	-	303,068
K: Maritime and Coastguard Agency	31,514	-	31,514	38,401	(1,270)	37,131	5,617	31,848
L: motoring agencies	63,210	(6,689)	56,521	60,169	-	60,169	3,648	99,529
M: Science, research and support functions	18,113	-	18,113	16,588	1,525	18,113	-	26,978
N: central administration	48,730	(335)	48,395	48,395	-	48,395	-	47,183
O: support for passenger rail services	171,400	-	171,400	182,838	(11,438)	171,400	-	296,649
P: high speed rail	174,765	-	174,765	229,175	(54,410)	174,765	-	251,947
Q: Transport Development Fund	1,074,142	-	1,074,142	1,067,350	6,792	1,074,142	-	849,338
R: High Speed Two Limited (net)	6,883,199	-	6,883,199	6,818,548	64,651	6,883,199	-	5,001,680
S: East West Rail Company Limited (net)	121	-	121	121	-	121	-	315
T: Network Rail (net)	5,939,534	-	5,939,534	5,878,282	61,252	5,939,534	-	5,579,337
Total voted DEL	20,740,984	(203,945)	20,537,039	20,588,203	-	20,588,203	51,164	19,151,091
Non-voted:
U: funding of ALBs (net)	1,231	-	1,231	74	-	74	(1,157)	-
Total capital DEL	20,742,215	(203,945)	20,538,270	20,588,277	-	20,588,277	50,007	19,151,091
Spending in Annually Managed Expenditure (AME):
Voted:
V: National Highways (net)	109,691	-	109,691	50,000	59,691	109,691	-	(156,443)
W: Network Rail (net)	-	-	-	-	-	-	-	-
Y: other railways	-	(13)	(13)	-	-	-	13	(12)
Z: aviation, maritime, security and safety	-	(23,333)	(23,333)	(23,333)	-	(23,333)	-	(11,667)
AD: high speed rail	(232,832)	-	(232,832)	108,657)	(88,872)	197,529)	35,303	237,724
AE: High Speed Two Limited (net)	34,181	-	34,181	5,000	29,181	34,181	-	8,735
AF: East West Rail Company Llmited (net)	-	-	-	1	-	1	1	-
Total voted AME	(88,960)	(23,346)	(112,306)	(76,989)	-	(76,989)	35,317	78,337
Total capital AME	(88,960)	(23,346)	(112,306)	(76,989)	-	(76,989)	35,317	78,337
Total capital outturn	20,653,255	(227,291)	20,425,964	20,511,288	-	20,511,288	85,324	19,229,428

Variances

The department estimates the costs for each budget type and monitors these throughout the year. Final budgets for the year are authorised through the supplementary estimate. Significant variances between outturn and estimates before virements are set out in the table below.

Expenditure line	Outturn £’000	Estimate £’000	Variance (over)/ under £’000	Explanation of variance
Resource DEL
National Highways	2,562,801	2,803,431	240,630	Depreciation of the strategic road network is based on year-end condition assessment under depreciated replacement cost valuation rules: this assessment produced a lower depreciation charge for the year than anticipated in the estimate.
Other railways	88,672	255,592	166,920	Rail costs for the year were dependent on a number of assumptions around revenues, industrial action and pay award. Final outturn resulted in an underspend compared with the supplementary estimate.
Support for passenger rail services	2,958,646	2,793,457	(165,189)	n/a
Bus subsidies and concessionary fares	751,840	811,266	59,426	Final support payment claims from bus operators were lower than the maximum authorised in the estimate.
High speed rail	26,621	101,641	75,020	The estimate included £70 million non-cash funding for potential downwards revaluation to market value of land and property assets accounted for as inventory. The final outturn is sensitive to actual market conditions at the end of the year, which indicated a minimal revaluation movement. The remaining variance is driven by underspends on HS2 Eastern leg.
Network Rail	8,667,512	9,385,503	717,991	Depreciation of the railway network is based on depreciated replacement cost valuation rules. Movements in key economic inputs in the valuation model between the estimate and year-end produced an underspend on the depreciation charge.
Resource AME
Network Rail	3,123,570	4,542,994	1,419,424	Derivative costs for the year were lower than forecast in the estimate.
Other railways	469,367	1,302,780	833,413	The supplementary estimate allowed £1,000 million non-cash costs for the potential impact of economic volatility on market value of assets. At year-end, the only material such movement arising was £268 million impairment of HS1 asset. The remaining variance is attributable to savings on interest costs in CTRL Section 1 plc and LCR Finance plc, together with reduction in rail-related provision expenses.
Central administration	22,588	96,000	73,412	The estimate allowed for £100 million non-cash pension costs under IAS 19 in the core department, reflecting the potential range of outcomes in key economic variables used in the actuarial calculations for defined benefit schemes. The final actuarial charge was £26 million.
Capital DEL
Sustainable travel	498,237	557,065	58,828	The department underspent on a number of grant schemes, including: electric charge points, clean air zones, plug in van grants and zero emission freight.
GLA transport grants	509,531	588,430	78,899	Capital support grants for Transport for London were lower than the maximum authorised under the estimate.
High speed rail	174,765	229,175	54,410	Utilisation of capital provisions for the HS2 land and property portfolio was slower than anticipated in the supplementary estimate.
High Speed Two Limited	6,883,199	6,818,548	(64,651)	HS2 experienced inflationary pressures on construction activity.
Network Rail	5,939,534	5,878,282	(61,252)	Reassessment of Network Rail’s leases in-scope of IFRS 16 at the end of the financial year produced a CDEL cost which was not anticipated in the estimate.
Capital AME
National Highways	109,691	50,000	(59,691)	National Highways incurred higher than forecast land and property provisions than forecast in the estimate.
High speed rail	(232,832)	(108,657)	124,175	The estimate allowed for greater uptake of new land and property provisions for the HS2 project than realised during the financial year.

SOPS 2. Reconciliation of outturn to net operating expenditure

As noted in the introduction to the SOPS above, outturn and the estimates are compiled against the budgeting framework, which is similar to, but different from, IFRS. Therefore, this reconciliation bridges the gap between the resource outturn and net operating expenditure, linking the SOPS to the financial statements.

Note			2022-23 £’000	2021-22 £’000
Total resource outturn in statement of Parliamentary supply		SOPS 1.1	20,612,557	22,038,335
Add:	Capital grants	3.3	3,789,243	3,933,944
Add:	Research and development	3.2	98,995	105,126
Add:	Research and development grants	3.3	17,143	18,546
Add:	EU Grants	3.3	987	1,427
Add:	Capital subsidies for rail operators	n/a	168,728	321,519
Add:	Share of (profit)/loss of investments measured using equity accounting	4	(91,336)	2,865
less:	Capital income	n/a	(470,350)	(481,862)
less:	Non-budget CFER income	n/a	(158,905)	(179,129)
Net Operating Expenditure in Statement of Comprehensive Net Expenditure		SOCNE	23,967,062	25,760,771

Capital grants, research and development and EU Capital Grants are budgeted for as Capital DEL but accounted for as expenditure in the SOCNE, and therefore function as a reconciling item between Resource and Net Operating Expenditure.

Capital Income is budgeted for as Capital DEL but accounted for as income in the SOCNE, and therefore functions as a reconciling item between resource and net operating expenditure. Network Rail and the core department received material levels of capital income: these relate to contributions from other bodies towards capital projects.

The non-budget CFER income of £159 million in 2022 to 2023 comprises £183 million of CFERs recognised in-year (as shown on the face of the SOCTE) less £23 million of General Lighthouse Fund loan repayments credited to the balance sheet (see Note 11) and £1 million of loan interest that is classified as RAME.

Share of profit and loss in associates is not included in budgets and has no impact on outturn.

SOPS 3. Reconciliation of net resource outturn to net cash requirement

As noted in the introduction to the SOPS above, outturn and the estimates are compiled against the budgeting framework, not on a cash basis. Therefore, this reconciliation bridges the gap between the resource and capital outturn and the net cash requirement.

	Note	Net outturn £’000	Estimate £’000	Net outturn vs estimate £’000
Resource outturn	SOPS 1.1	20,612,557	24,163,616	3,551,059
Capital outturn	SOPS 1.2	20,425,964	20,511,288	85,324
Total outturn	n/a	41,038,521	44,674,904	3,636,383
Accruals to cash adjustments for core department and agencies
Depreciation, amortisation and impairments	3.4	(507,688)	(316,498)	191,190
Provisions (non-cash movements)	22	(3,305)	(1,099,509)	(1,096,204)
Other non-cash items	3, 4	(30,240)	37,838	68,078
Adjustments to reflect movements in working capital balances in core department and agencies
Increase/(decrease) in receivables	16	(265,500)	n/a	265,500
(Increase)/decrease in payables	18, 19	(157,336)	832,798	990,134
Utilisation of provisions	22	188,185	251,535	63,350
Adjustments for arm’s length bodies:
Remove: voted resource and capital	n/a	(30,739,819)	(32,935,667)	(2,195,848)
Add: Grant-in-Aid, grants and loans to ALBs	3.3, 11	22,847,005	21,299,319	(1,547,686)
Less: repayments from ALBs to DfT	11	(3,326,122)	n/a	3,326,122
Removal of non-voted budget items
Remove non-voted spending	n/a	(15,746)	(14,129)	1,617
CFER income included in budgets	n/a	24,399	n/a	(24,399)
Net cash requirement	n/a	29,052,354	32,730,591	3,678,237

SOPS 4. Amounts of income to the Consolidated Fund

SOPS 4.1 Analysis of income payable to the Consolidated Fund

In addition to income retained by the department, the following income is payable to the Consolidated Fund (cash receipts being shown in italics):

	Outturn total 2022-23 Income accrued £’000	Outturn total 2022-23 Cash received £’000	Prior year 2021-22 Income accrued £’000	Prior year 2021-22 Cash received £’000
Operating income outside the ambit of the estimate – resource	159,788	174,566	180,549	419,028
Operating income outside the ambit of the estimate – capital	23,333	23,333	11,667	11,667
Total income payable to the Consolidated Fund	183,121	197,899	192,216	430,695

The income above includes:

• £150 million of fees relating to the sale and transfer of personalised registration marks by the Driver and Vehicle Licensing Agency (2021 to 2022: £150 million). Amounts earned by DVLA above £150 million are retained by the department and are to fund other transport activities
• £24 million in loan repayments and interest payments made to the department from the General Lighthouse Fund (2021 to 2022: £13 million)
• £9 million in proceeds of enforcement action relating to the Dartford charging scheme (2021 to 2022: £3 million)

The cash received above includes:

• £23.5 million of cash received relates to fines accrued in 2021 to 2022 and received in cash and paid to HMT in 2022 to 2023, in line with the accounting policies set out in note 1.24

SOPS 4.2 Consolidated Fund income

The Consolidated Fund income shown in SOPS 4.1 above does not include any amounts collected by the department where it was acting as agent for the Consolidated Fund rather than as principal. The amounts collected as agent for the Consolidated Fund (which are otherwise excluded from these financial statements) were:

	2022-23 £’000	2021-22 £’000
Licence fees, penalties and fines	266,525	214,400
Costs of collection – where deductible	(42,502)	(42,184)
Amounts payable to the Consolidated Fund	224,023	172,215
Balance held at the start of the year	6,737	6,618
Payments into the Consolidated Fund	(224,363)	(172,096)
Balance held on trust at the end of the year	6,397	6,737

The amount payable to the consolidated fund (net income) above includes:

• £164 million levied on fuel producers for a buy-out of their sustainable fuel certificates under the Renewable Transport Fuel Obligation (2021 to 2022 £120 million);
• £55 million of late licensing penalties and enforcement activities (net of cost of collection) relating to the Vehicle Excise Duty collected by the DVLA (2021 to 2022: £45 million)
• £4 million of graduated fixed penalties and deposits income in DVSA (2021 to 2022: £5 million)
• £0.4 million of COVID-19 related-fines levied on air passengers by the Civil Aviation Authority, which were surrendered to HM Treasury via the department (2021 to 2022: £3 million)

In addition to the values above, the DVLA collects Vehicle Excise Duty and pays it directly to the consolidated fund. Further details are given in the trust statement within the DVLA financial statements.

Parliamentary accountability disclosures

In addition to the statement of outturn against parliamentary supply, the following sections are subject to audit; losses and special payments, fees and charges, and remote contingent liabilities.

Use of government functional standards

Where relevant, DfT staff seek to work to the mandated government functional standards, in a way that meets its business needs and priorities. GovS 001, government functions sets expectations for the consistent management of all functions (and functional standards) across government. The remaining standards, GovS 002 onward, set expectations about specific types of functional work, such as project delivery or commercial. They provide a stable basis for assurance, risk management and capability improvement. They support value for money for the taxpayer, and continuity of implementation.

Losses and special payments

This section reports the total number of cases and value of losses and special payments, and details of any losses or special payments that exceed £300,000.

Losses statement

Losses may relate to cash and store losses, bookkeeping losses, losses arising from a failure to make adequate charge for the use of public property or services, fruitless payments, claims abandoned and frauds.

	2022-23 Core department and agencies	2022-23 departmental group	2021-22 core department and agencies	2021-22 departmental group
Total number of cases	9,978	52,877	8,934	44,442
Total amount £000	57,432	90,637	56,642	397,158

Dartford-Thurrock River Crossing Charging Scheme

The department suffers losses due to motorists’ failure to pay amounts due on the Dartford-Thurrock River Crossing Charging Scheme following the introduction of a free-flowing scheme from 1 December 2014 to reduce congestion. Until 30 November 2014, drivers using the Dartford-Thurrock River Crossing had to stop at barriers to pay the road-user charge, which resulted in significant levels of congestion. From 1 December 2014, a new scheme was introduced. The scheme introduced a barrier-less, free-flowing charging operation (Dart Charge) which requires drivers to pay for their crossing during chargeable hours, either in advance or by midnight the day after using the crossing. Road users have access to a variety of methods to pay the charge including payments online; via phone; at retail outlets, or by registered customer accounts. If a payment is not made in the allotted time, the scheme operator will issue a penalty charge notice (PCN). If required, penalty and recovery processes are employed to enforce the charging scheme and collection of charges.

After a period of time, when the scheme operator considers that it is no longer able to collect against the PCN, it then regards the charge as being irrecoverable and writes off the amount that was due.

The 2022 to 2023 losses include £40,300,000 in relation to 2021 to 2022 Dartford Crossing charges (2021 to 2022: £41,933,000 in relation to 2020 to 2021). Of this, £38,700,000 relates to the write-off of receivables for both road user charges and PCNs that became irrecoverable, and an estimated amount of up to £1,600,000 relates to PCNs that were not issued (2021 to 2022: £40,333,000 & £1,600,000 respectively in relation to 2020 to 2021). There are several circumstances in which PCNs are not issued, including: vehicle keeper details not being available; poor images; mis-read number plates; system errors and illegal activity/evasion (e.g. cloned vehicles).

HS1 domestic underpinnings

HS1 Ltd is the current concession holder for the Channel Tunnel Rail Link, which carries high speed domestic and international rail services between London and the Channel Tunnel. Under the domestic underpinning agreement between HS1 Ltd and the Secretary of State for Transport, HS1 Ltd receives income from DfT if the minimum number of domestic high speed rail paths is not met by rail operators in a timetable period. The domestic high speed operating timetable was below this threshold during financial year 2022 to 2023. As required through this arrangement, the department paid HS1 Ltd £16,383,000 (2021 to 2022 £8,955,000) during the year. Accordingly, this amount is recorded as a constructive loss in the table above.

Network Rail

£378,578 is the estimated cost of replacement of stores lost within a Network Rail property that caught fire during 2022 to 2023. The fire was not arson.

A £1.4 million fine was issued to Network Rail following an investigation by the Office of Rail and Road (ORR). The fine is for a health and safety breach.

HS2

HS2 Ltd has a loan receivable from National College for Advanced Travel and Infrastructure (NCATI) dating back to 27 March 2018 for a value of £2.8 million. The loan repayments were scheduled to start when NCATI reached a specified level of Operating Income (earnings before interest, taxes, depreciation, and amortization). On 4 April 2023, following a consultation, NCATI announced that direct delivery of its further and higher education programmes will be discontinued, and the college will be wound down by 31 July 2023. Based on an assessment of the financial forecasts and the available assets of the college HS2 Ltd has made the decision, with the approval of HM Treasury, to write off the loan and report it as a loss.

Special payments

Special payments include extra-contractual, special severance, ex gratia and compensation payments.

	2022-23 core department and agencies	2022-23 departmental group	2021-22 core department and agencies	2021-22 departmental group
Total number of cases	6,663	6,804	5,350	5,517
Total amount £000	11,535	19,559	8,204	23,851

Core department – industrial disease and injury claims

A total of £10,029,000 was paid to settle 136 industrial disease and injury claims from former British Rail employees (2021 to 2022: 148 cases totalling £7,566,000), of which 5 cases exceeded £300,000. Note 22 of the financial statements provides further information about these claims.

National Highways Ltd

There was one special payment with a value greater than £300,000 which relates to the building of a new roundabout on the A428 Black Cat to Caxton Gibbet project for £1,116.000.

HS2

A former landowner and its occupying tenant submitted a Judicial Review in the High Court against both the Department for Transport and HS2 alleging breach of Assurances previously given to the parties in relation to the amount of land required by HS2 and the design stages to be reached in assessing the quantum.

The claimants sought to have the general vesting declaration, which had been served at the expiry of the HS2 powers in February 2022, on their former land interests quashed and their former freehold land returned to them.

With approval from HM Treasury, HS2 entered into a negotiated settlement agreement in November 2022. These terms included the payment of £4.95 million to the claimants, granting of an easement and the ability to remain in occupation under licence until 2027 unless HS2 needs the land earlier, whereby the licence is terminated upon giving the requisite notice.

The general vesting declaration remained and the freehold interest in the land was vested by the Secretary of State for Transport in February 2023 with no further cost.

Fees and charges information

The majority of the departmental group’s income, described at note 4, arises either under contract or resulting from railway industry regulation. The table below describes the subset of the departmental group’s income relating to fees and charges made directly to public service users, which are within the scope of Managing Public Money, and describes both the income relating to those services, along with the full cost of providing them. It does not constitute an IFRS 8 (Operating Segment Reporting) disclosure.

	2022-23 income £m	2022-23 full cost £m	2022-23 surplus/(deficit) £m	2021-22 income £m	2021-22 full cost £m	2021-22 surplus/(deficit) £m
Maritime and Coastguard Agency
Fees and charges	9	8	1	7	8	(1)
Vehicle Certification Agency
Product certification	16	18	(2)	20	22	(2)
Driver and Vehicle Licensing Agency
Fees and charges	439	335	104	441	307	134
Driver and Vehicle Standards Agency
Fees and charges	402	407	(5)	380	365	15
Total	866	768	98	848	702	146

MCA and VCA fees and charges are set in line with a full cost recovery objective. DVLA is required to target full cost recovery of its fees and charges on a pooled basis for core service delivered. As described in note 2 of DVLA’s annual report and accounts, the surplus on DVLA’s fees and charges presented in the table above recovers the net costs of Vehicle Exercise Duty (VED) collection and enforcement: the corresponding VED revenues are accounted for in the DVLA trust statement and therefore are not included in the table above. The revenues received by DVLA for cherished transfers (personalised registrations) are generated on a commercial basis and are outside the scope of fees and charges.

Driver and Vehicle Standards Agency (DVSA) levies fees and charges in respect of driving tests and HGV testing.

Additional information regarding these fees and charges (including the financial objective and performance against this) can be found in the published financial statements for each of the agencies.

Remote contingent liabilities

Contingent liabilities are presented here where the likelihood of a transfer of economic benefit in settlement is judged remote. They do not meet the IAS 37 (Provisions, Contingent Liabilities and Contingent Assets) criteria for disclosure in the financial statements but are presented here for transparency purposes. These predominantly relate to situations where guarantees or indemnities have been entered into by the department, but where there are no significant indications that these will be drawn upon. Contingent liabilities for which the probability of crystallisation is rated as greater than remote are disclosed in note 23 in the financial statements.

Quantifiable remote contingent liabilities

This table summarises quantifiable remote contingent liabilities by their nature and purpose, with the amounts disclosed reflecting the highest reasonable estimate of the possible liability.

Subject	31 March 2023 £m	31 March 2022 £m
Inter City Express Rolling Stock: In 2012 the Secretary of State agreed to quantifiable (disclosed) and unquantifiable assurances, warranties, indemnities and potential losses under the Inter City Express Rolling Stock contracts with Agility Consortium and previously with Network Rail, covering the termination of the contract due to force majeure events and unavailability of commercial insurance. They expire in 2044.	5,900	5,900
HS1: The HS1 Concession Agreement between the Secretary of State and HS1 Ltd specifies that the Secretary of State would be liable to pay compensation if the contract were terminated due to legal changes, either in the UK or Europe ('change in circumstances') or a change directed by another part of the government ('government change'). The amount payable is formalised in the agreement, but depends on the cause of the termination, and includes capital expenditure, increases in operating costs and losses of revenue.	4,196	4,112
Passenger Rail Franchise Agreements – Rolling Stock: The Railways Act 1993 and Transport Act 2000 permit the Secretary of State to give guarantees to promote investments in railway assets, which include undertakings within passenger rail franchise agreements and guarantees to leasing companies. The value of this liability is based on the remaining value of rolling stock and depots covered by these guarantees.	393	488
Thameslink: To support the Thameslink programme, in 2013 the Secretary of State agreed to quantifiable (disclosed) and unquantifiable assurances, warranties, indemnities and potential losses with the major stakeholders: Siemens, Network Rail and Cross London Trains. This reflects assurances, warranties and indemnities covering ongoing contracts between the stakeholders.	704	702
Passenger Rail Franchise Agreements – Legacy: Guarantees were given by the Strategic Rail Authority (and previously by the Director of Passenger Rail Franchising), and novated to the department, in relation to new, replacement and extended passenger rail franchise agreements.	128	141
Channel Tunnel restoration: The department has a statutory liability under the Channel Tunnel Act 1987 that if, after termination of the Channel Tunnel concession, it appears to the Secretary of State that the operation of the tunnel will not be resumed in the near future, he shall take the necessary steps to ensure that the land is left in a suitable condition in accordance with the scheme.	100	100
Premises for the International Maritime Organization (IMO): Guarantees were given by the Strategic Rail Authority (and previously by the Director of Passenger Rail Franchising), and novated to the department, in relation to new, replacement and extended passenger rail franchise agreements.	137	90
Network Rail: Guarantees issued by Network Rail to its affiliate entities which are not consolidated in these accounts. These obligations primarily relate to banking facilities. Further information about the entities can be found in note 25. During the year, guarantees totalling £115 million were re-assessed to be remote risk, having previously been assessed as more than remote.	165	50
Business indemnities: Indemnities issued to businesses at rail privatisation by the British Rail Board (Residuary) Ltd, which were transferred to the department when the Board closed in 2013. This expired during the financial year.	0	10
Transport disaster indemnities: Letters of comfort have been issued, providing an indemnity in relation to legal action taken against the judge, counsel, solicitors and secretariat to the Thames Safety Inquiry and the Victim Identification Inquiry, which reported in 2000 and 2001 respectively, following major transport disasters.	10	6
Non-executive member indemnities: Indemnities have been issued to non-executive members of the departmental board, and to civil servants appointed to represent the Department on the boards of other organisations.	2	2
Other contingent liabilities, including legal claims	15	15
Total	11,750	11,616

Unquantifiable remote contingent liabilities

The department has obligations under agreements entered into by the Office of Passenger Rail Franchising (also known as the Director of Passenger Rail Franchising) prior to privatisation which indemnified rolling stock companies for the costs of industrial disease claims, personal injury claims and property damage claims. On abolition of the Office of Passenger Rail Franchising in 2001, the obligation novated to the Strategic Rail Authority. On abolition of the Strategic Rail Authority in 2006, the obligation novated to the department.

National Highways holds indemnities embedded within some procurement contracts. These indemnities are a promise by the company to compensate another for losses (such as asset damage, contamination or loss of income) suffered as a consequence of works undertaken on the strategic road network. The most significant indemnities relate to construction that occurs near to gas and electricity infrastructure or requires infrastructure to be moved. The approximate value of these indemnities is dependent upon the outcome of uncertain events and as such they cannot be accurately estimated. There have been no claims made against National Highways since its formation (as Highways England) in 2015.

The department is party to a NATO agreement relating to indemnification of civil aircraft in respect of their use on NATO tasks in times of crisis and war.

Marine and Aviation Insurance Act 1952, s1: government war risk reinsurance for British ship owners insuring their vessels with the British Mutual War Risks Associations (clubs). Under the current agreement with clubs, the government provides 95% reinsurance for King’s enemy risks (KER). A contingent liability arises from the continuous KER cover for the hull and machinery value of British flag vessels entered with the clubs.

The department has statutory responsibility for the maintenance of all railway structures. The contingent liability for this responsibility applies to legacy structures that have been sold to, and are controlled by, external parties. There have been no claims and there is no reasonable basis under which to quantify this risk.

The department has accepted obligations to indemnify operators under the Space Industry Act 2018 (the 2018 act) and Space Industry Regulations 2021 for losses occurring before the satellite reaches orbit. During the year, one launch took place: Cosmic Girl, on 9 January 2023. There was no cost to the taxpayer under the indemnity.

Annex D provides a reconciliation between contingent liabilities reported in the supply estimate and those reported in the Annual Report and Accounts – either as remote in the Parliamentary accountability disclosures above, or as greater than remote in note 23.

Dame Bernadette Kelly DCB 18 July 2023

Permanent Secretary and Principal Accounting Officer

Department for Transport
Great Minster House
33 Horseferry Road
London
SW1P 4DR

The certificate and report of the Comptroller and Auditor General to the House of Commons

Opinion on financial statements

I certify that I have audited the financial statements of the Department for Transport (the department) and of its departmental group for the year ended 31 March 2023 under the Government Resources and Accounts Act 2000. The department comprises the core department and its agencies. The departmental group consists of the department and the bodies designated for inclusion under the Government Resources and Accounts Act 2000 (Estimates and Accounts) Order 2022. The financial statements comprise the department’s and the departmental group’s:

• statements of financial position as at 31 March 2023
• statements of comprehensive net expenditure, statements of cash flows and statements of changes in taxpayers’ equity for the year then ended
• the related notes including the significant accounting policies

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and UK adopted international accounting standards.

In my opinion, the financial statements:

• give a true and fair view of the state of the department and the departmental group’s affairs as at 31 March 2023 and of their net expenditure for the year then ended
• have been properly prepared in accordance with the Government Resources and Accounts Act 2000 and HM Treasury directions issued thereunder

Opinion on regularity

In my opinion, in all material respects:

• the statement of outturn against Parliamentary Supply properly presents the outturn against voted Parliamentary control totals for the year ended 31 March 2023 and shows that those totals have not been exceeded
• the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them

Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs UK), applicable law and practice note 10 ‘Audit of financial statements and regularity of public sector bodies in the United Kingdom (2022)’. My responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of my certificate.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019. I am independent of the department and its group in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

The framework of authorities described in the table below has been considered in the context of my opinion on regularity.

Framework of authorities
Authorising legislation	Government Resources and Accounts Act 2000
Parliamentary authorities	Supply and Appropriation (Main Estimates) Act 2022
HM Treasury and related authorities	Managing Public Money

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the department and its group’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the department or its group’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the accounting officer with respect to going concern are described in the relevant sections of this certificate.

The going concern basis of accounting for the department and its group is adopted in consideration of the requirements set out in HM Treasury’s government financial reporting manual, which requires entities to adopt the going concern basis of accounting in the preparation of the financial statements where it is anticipated that the services which they provide will continue into the future.

Overview of my audit approach

Key audit matters

Key audit matters are those matters that, in my professional judgment, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditor, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of the audit of the financial statements as a whole, and in forming my opinion thereon. I do not provide a separate opinion on these matters.

This is not a complete list of all risks identified through the course of my audit but only those areas that had the greatest effect on my overall audit strategy, allocation of resources and direction of effort. I have not, for example, included information relating to the work I have performed around the mandatory audit risk on the potential for management override of controls, an area where identified any matters to report.

The key audit matters were discussed with the Group Audit and Risk Assurance Committee.

In this year’s report the following changes to the risks identified have been made compared to my prior year report:

• the valuation of HS2 compulsory purchase order (CPO) land and property provisions is no longer considered to be a key audit matter. This is because Phase 1 CPO powers ceased in February 2022, and CPO activity for Phase 2a acquisitions in 2022 to 2023 has been low. New provisioning and utilisation has therefore been significantly lower than in 2021 to 2022, reducing the risk of material misstatement
• the net pension deficit for the core department’s 1994 section of the Railways Pension Scheme is now included within scope of my key audit matter for pension valuations given the significance and complexity of the gross asset and liability balances, and to provide completeness of reporting for the material schemes that exist within the group

I further considered a significant risk of material misstatement under ISA 315 (revised) for expected credit losses on the Transport for London (‘TfL’) Crossrail loan but I did not consider this to be a key audit matter. Although the outstanding balance on the loan is material, TfL’s financial health has improved during 2022 to 2023 and as such management’s judgement to not recognise an expected credit loss was well supported.

1. Infrastructure asset valuations

Description of risk

The departmental group directly owns significant operational transport infrastructure, including the Strategic Road Network (England) and national Rail Network (Great Britain). These do not include infrastructure networks owned by other authorities (e.g. local authority roads, London Underground, the Core Valley Lines) or dealt with separately under infrastructure-inclusive concession arrangements (HS1). The strategic road network (SRN) includes in these accounts the Severn River Crossing and M6 Toll, as well as those assets reported on the same basis in the accounts of National Highways.

The infrastructure networks on the departmental group’s statement of financial position are – as described in notes 1.4.3 and 5 – valued in these financial statements using depreciated replacement cost (DRC). This provides a proxy for their fair value in the absence of income or market-based sources. At 31 March 2023, the Department valued the SRN at £159.4 billion and the rail network at £411.4 billion.

The valuations are significant estimates of the replacement cost of the current network functionality on a modern equivalent basis, adjusted using a measurement of their actual condition. Management discusses the nature and extent of estimation uncertainty, which is a continuing feature of these accounts, in notes 1.4.3 and 5. Uncertainty arises principally in respect of the appropriateness of costing rates and the condition adjustment, since the quantities of assets required in the replacement are based on the known configuration of the network.

A full revaluation of costing rates is performed every 5 years. For the rail network, the last such valuation was in 2018 to 2019. This exercise is performed for the strategic road network on a rolling basis for each category of asset, with 2022 to 2023 representing a full valuation year for structures assets. Recognising the effect of construction cost inflation on the costing rates suited to a year-end replacement cost, management use price indices to revalue the network assets between full revaluation years. The significant upward revaluation of the infrastructure assets is predominantly driven by the impact of relevant cost indices described in note 5.

How the scope of my audit responded to the risk

My procedures on both valuations are geared towards evaluating the reasonableness of management’s estimate of its value, to assess:

• the quality of source data in the underlying databases
• the reasonableness of costing rates and cost indexation factors applied in-year
• the adjustments made in respect of the network’s condition based on the available evidence from asset management activities, amongst other key assumptions
• whether there are any indications of management bias

Strategic road network – specific items

I engaged an expert to evaluate a sample of road and structure assets to confirm that the condition-based depreciation methodology has been consistently and correctly applied.

I also engaged my expert to evaluate the methodology used to revalue structure assets and the reasonableness of unit rates generated as part of the quinquennial review (QQR) exercise.

Alongside my expert, I evaluated management’s decision to move from using the Highways England costing index (HECI) to the construction implied output price index (IOPI) to index SRN assets between full revaluations.

Rail network – specific items

A full revaluation of costing rates for the rail network was last performed as at 31 March 2019, at which point I performed enhanced audit work supported by an auditor’s expert. My team continues to rely on this work and has evaluated the department’s assertions on the continued appropriateness of underlying assumptions – including on the nature of a modern equivalent.

I also evaluated the reasonableness of the asset condition assessment for key network components based on network rail’s own data drawn from operational systems.

Key observations

Strategic road network

During the year the SRN valuation increased by £13.4 billion. The main driver of this increase was the increase in the underlying IOPI index adopted for roads, structures and technology assets.

Through my expert’s challenge of management’s expert, alongside my own testing, I noted that management had used a limited range of costing data in order to perform the QQR of the structure assets. Whilst the underlying data came from a greenfield scheme using modern equivalent assets; the geographical range, structural type and quantity of the data used was limited.  While making suggestions for improvement, I am satisfied that the methodology used to revalue structures assets is reasonable and has been appropriately applied.

With the support of my expert, I confirmed that the IOPI index provides a reasonable basis for indexation of the asset in between full revaluations. Through my audit of indexation, I noted that the index applied by management was the Q3 (December 2022) index. The Q4 (March 2023) became available after the reporting period. I evaluated the impact of market volatility on the index between December 2022 and March 2023 and determined that the impact on the asset value was material. Management agreed with me that it was necessary to adjust the indexation to achieve a more relevant year-end estimate. This adjustment increased the value of the SRN by £1.8 billion.

In concluding my wider audit work on the SRN, with the support of my expert, I did not identify any material misstatements in the valuation of the road network recognised and disclosed in the financial statements.

Rail Network

On the rail network, I concluded that the underlying assumptions supporting continued indexation of the 2019 costing rates remain reasonable and noted improvement in underlying data quality supporting asset quantities.

I did not identify any material misstatements in the course of completing this work.

2. Defined benefit pension schemes – valuation of deficit

Description of risk

The departmental group has obligations under several defined benefit pension schemes described in note 24. These are funded schemes with significant assets under management. The pension schemes of the train operating companies, which are not consolidated in the department’s accounts, are not included here but the most recent published information on their financial position, including pension deficits, is provided at note 27. Based on risk and value, I focused my audit work principally on the Network Rail section of the Railway Pensions Scheme (RPS), the British Transport Police Force Superannuation Fund and the core department 1994 Section of the RPS.

The valuation of the defined benefit obligation (£10.1 billion as at 31 March 2023 for all group schemes) is highly sensitive to movements in financial assumptions.

Valuation risk in assets is most significant for Level 3 financial instruments, meaning those which cannot be valued based on transaction data from active markets. As well as directly held property, these include unquoted equity instruments for which there is a risk of unrecognised fair value differences where the valuations used are for a period before the year end (typically, the end of the previous quarter) because of the time taken for these to be prepared by fund managers. At 31 March 2023, Level 3 instruments represented £2.8 billion out of total group assets (excluding members’ share) of £9.2 billion.

How the scope of my audit responded to the risk

Scheme liabilities

I contacted relevant actuaries to obtain an up to date understanding of the methodology used to calculate the main actuarial assumptions. I performed my initial assessment of the independence and expertise of these actuaries and engaged an actuarially qualified auditor’s expert to examine the assumptions and methodology used to value the obligations, including both financial assumptions and the roll-forward procedures used to update membership data. I assessed financial assumptions against ranges for reasonableness. I note that changes in financial assumptions – particularly on discount rate – have been the primary cause of the significant in-year decrease for pension obligations.

I also tested the input data used by the scheme actuaries in the valuations, including cashflows arising from benefit payments and contributions.

Scheme assets

My work on scheme assets is informed by the results of the statutory audit of the RPS financial statements, which is independently performed by another firm based on a year end of 31 December 2022, but my primary assurance comes from substantive procedures I perform directly to evaluate asset values at 31 March 2023. These included sample testing on distinct asset classes within the funds in which group entities are invested.

• for quoted and actively traded assets, I independently agreed valuations to observable market prices
• for pooled investment assets, I agreed valuations to the investment manager valuation report and reviewed relevant observable active market data to evaluate its reliability, as well as considering potential indicators of impairment
• for directly held property investments, I have reviewed the independent third-party property valuations performed for the scheme asset manager and reviewed the valuation movements against those in similar property sectors to confirm that the movements are in line with the wider market

I completed additional procedures over private equity and non-exchange-traded pooled investment vehicles (unquoted equities). These included an evaluation of the reliability of the fund manager’s valuation through procedures including:

• a review of the most recent audited accounts
• work to understand the nature of the investment
• an informed consideration of impairment indicators

These additional procedures also included, in respect of the timing risk described above, a review (including sample test) of 31 March 2023 asset valuations received post year-end to judge the effect of time lags in the valuation presented for audit, both in respect of known movements, and projections of likely movement in the minority of funds which had not received March valuations.

Key observations

In the course of completing this work, I did not identify any material misstatements in the valuation of defined benefit obligations in the financial statements.

3. Subsides to train operating companies

Description of risk

The department contracts with train operating companies (TOCs) for the provision of passenger rail services. From March 2020, following the onset of the coronavirus pandemic, these contracts have placed all revenue risk, and substantially all cost risk, with the department. The department reported total expenditure in respect of TOCs of £3.2 billion in 2022 to 2023 (£4.8 billion in 2021 to 2022). The significant decrease is driven by large scale recovery of TOC revenue as passengers have continued to return to the network.

In 2022 to 2023, the vast majority of TOCs had completed transition from the emergency recovery measures agreements (ERMAs) that were in place during the pandemic to national rail contracts (NRCs). While the balance of risk remains similar to the ERMAs, I noted the risk that new terms in the contracts might impact the accounting treatment.

Given the significant expenditure by rail operators funded by the department on a pass-through basis, I also assessed a risk in respect of the regularity of the related expenditure recognised by the department, focused on whether disallowable costs would be properly identified.

How the scope of my audit responded to the risk

I considered the department’s accounting treatment for NRCs to be reasonable.

I reviewed the design and implementation of the department’s controls established to identify and monitor disallowable costs; the process for payment; and the wider governance in place under the contractual agreements. Having gained an understanding of the contracts and controls, I also:

• performed an analytical procedure which allowed me to compare my own prediction of expenditure, based on relevant contractual evidence, against the expenditure recognised in the accounts
• reviewed TOC outturns against agreed budget, considering the reasonableness of significant changes
• agreed a sample of expenditure and accrued expenditure recognised through the passthrough mechanism to the TOC’s request for funds and the department’s review and subsequent authorisation of payment
• considered the risk of irregular transactions, including within expenditure relating to passenger transport executives

Key observations

In the course of completing this work, I did not identify any material misstatements in subsidies to train operating companies, and I noted no instances of irregularity.

Application of materiality

Materiality

I applied the concept of materiality in both planning and performing my audit, and in evaluating the effect of misstatements on my audit and on the financial statements. This approach recognises that financial statements are rarely absolutely correct, and that an audit is designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatement or irregularity. A matter is material if its omission or misstatement would, in the judgement of the auditor, reasonably influence the decisions of users of the financial statements.

Based on my professional judgement, I determined overall materiality for the department and the departmental group’s financial statements as a whole as follows:

	Departmental Group	Additional Group threshold	Department (Parent) materiality
Materiality	£5,100 million	£383 million	£320 million
Basis for determining materiality	Approx. 1% of the net book value of prior year infrastructure assets (note 5)	Approx. 1% of group gross expenditure excluding depreciation and impairment, but including capital additions	Approx. 1% of parent gross expenditure
Rationale for the benchmark applied	The infrastructure assets are the largest item in the departmental group statement of financial position. Significant economic activity relies on the road and rail networks, and there is significant user interest in the extent and condition of those networks. I used the prior year amount for prudence, as in-year infrastructure assets increased substantially with inflation, which I did not deem indicative of reduced risk.	To reflect the sensitivity of financial statement users to transactions and balances reflecting taxpayer-backed financial activity. Capital additions are included since these reflect cash spending, and depreciation is excluded to avoid double-counting.	Aside from intra-departmental loan balances, expenditure is the most significant financial statements element for the parent and is a fair proxy for user sensitivity given DfT’s role as a spending department.This materiality relates to the transactions and balances reported in the core and agencies columns.

I determined that for non-infrastructure asset components of the financial statements, misstatements of a lesser amount to the overall departmental group materiality stated above could influence the decisions of users of the financial statements given the sensitivity of financial statement users to transactions and balances reflecting taxpayer-backed financial activity. The level of materiality to be applied to these components is described in the table above under the heading ‘additional group threshold’.

While my overall scheme of materiality thresholds is unchanged compared to 2021 to 2022, the 1% percentage I apply to the bases described for the additional group threshold and parent materiality are an increase from 0.90% in the prior year. This reflects the final unwinding of a decrease I put in place in previous years, to recognise that the effect of additional COVID-19 driven expenditure was likely to be temporary, taking a prudent view of user interest in respect of longer-term spending patterns as well as the department’s annual outturn. I have been content to use a higher percentage this year to represent the return to business-as-usual conditions, as the extent of temporary interventions has substantially lessened.

Performance materiality

I set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality of the financial statements as a whole. Group performance materiality was set at 75% of group materiality for the 2022 to 2023 audit (2021 to 2022: 75%). In determining performance materiality, I also considered the uncorrected misstatements identified in the previous period.

Other materiality considerations

As well as matters that are quantitatively material, there are certain matters that are material by their very nature and would influence the decisions of users if not corrected. Such an example is any errors reported in the related parties note in the financial statements. Assessment of such matters needs to have regard to the nature of the misstatement and the applicable legal and reporting framework, as well as the size of the misstatement.

I applied the same concept of materiality to my audit of regularity. In planning and performing my audit work to support my opinion on regularity and in evaluating the impact of any irregular transactions, I considered both quantitative and qualitative aspects that would reasonably influence the decisions of users of the financial statements.

Error reporting threshold

I agreed with the Group Audit and Risk Assurance Committee that I would report to it all uncorrected misstatements identified through my audit in excess of £300, 000, as well as differences below this threshold that in my view warranted reporting on qualitative grounds. I also report to the Group Audit and Risk Assurance Committee on disclosure matters that I identified when assessing the overall presentation of the financial statements.

Total unadjusted audit differences reported to the Group Audit and Risk Assurance Committee would have decreased net assets by £65 million.

Audit scope

The scope of my group audit was determined by obtaining an understanding of the group and its environment, including group-wide controls, and assessing the risks of material misstatement at the group level.

The Department for Transport Group has total assets of £609 billion. The group’s largest components are the Network Rail Limited group (excluding Network Rail Insurance Limited which in accordance with the FReM is not consolidated) and National Highways Limited. These components hold the 2 key infrastructure assets.

I have audited the full financial information of the core department, as well as the group consolidation. The audits of all significant components, which are overseen by the same engagement director, were complete at the time of my completion of the group audit. As group auditor, I have gained assurance from the auditors of the significant and material components and engaged regularly on the group significant risks such as valuation of the infrastructure assets and the pension schemes.

I covered 95.99% of the group’s gross expenditure and 95.83% of the group’s gross assets through audit work on significant components, with the remainder covered by analytical procedures performed on non-significant components. For most of these non-significant components, audit of the financial information was complete or well progressed at the point of my analytical procedures. Together with my audit work on consolidation adjustments, for example on the transformation of the rail network valuation from the separate basis used in Network Rail’s statutory accounts, this work gave me the evidence I needed for my opinion on the group financial statements as a whole.

Gross assets of individual components of the DfT Group

Other Information

The other information comprises the information included in the annual report but does not include the financial statements and my auditor’s certificate and report thereon. The accounting officer is responsible for the other information.

My opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in my certificate, I do not express any form of assurance conclusion thereon.

My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

I have nothing to report in this regard.

Opinion on other matters

In my opinion the part of the remuneration and staff report to be audited has been properly prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000.

In my opinion, based on the work undertaken in the course of the audit:

• the parts of the accountability report subject to audit have been properly prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000
• the information given in the performance and accountability reports for the financial year for which the financial statements are prepared is consistent with the financial statements and is in accordance with the applicable legal requirements

Matters on which I report by exception

In the light of the knowledge and understanding of the department and its group and its environment obtained in the course of the audit, I have not identified material misstatements in the performance and accountability reports.

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• adequate accounting records have not been kept by the department and its group or returns adequate for my audit have not been received from branches not visited by my staff; or
• I have not received all of the information and explanations I require for my audit; or
• the financial statements and the parts of the accountability report subject to audit are not in agreement with the accounting records and returns; or
• certain disclosures of remuneration specified by HM Treasury’s government financial reporting manual have not been made or parts of the remuneration and staff report to be audited is not in agreement with the accounting records and returns; or
• the governance statement does not reflect compliance with HM Treasury’s guidance

Responsibilities of the accounting officer for the financial statements

As explained more fully in the statement of Principal Accounting Officer’s responsibilities, the accounting officer is responsible for:

• maintaining proper accounting records
• providing the C&AG with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters
• providing the C&AG with additional information and explanations needed for his audit
• providing the C&AG with unrestricted access to persons within the department and its group from whom the auditor determines it necessary to obtain audit evidence
• ensuring such internal controls are in place as deemed necessary to enable the preparation of financial statements to be free from material misstatement, whether due to fraud or error
• ensuring that the financial statements give a true and fair view and are prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000
• ensuring that the annual report, which includes the remuneration and staff report, is prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000
• assessing the department and its group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the accounting officer anticipates that the services provided by the department and its group will not continue to be provided in the future

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Government Resources and Accounts Act 2000.

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting non-compliance with laws and regulations including fraud

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud. The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.

Identifying and assessing potential risks related to non-compliance with laws and regulations, including fraud

In identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, I:

• considered the nature of the sector, control environment and operational performance including the design of the department and its group’s accounting policies and strategic objective indicators
• inquired of management, the department’s Head of Internal Audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the department and its group’s policies and procedures on:
  • identifying, evaluating and complying with laws and regulations
  • detecting and responding to the risks of fraud
  • the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the department and its group’s controls relating to the department’s compliance with the Government Resources and Accounts Act 2000, Managing Public Money and the relevant Supply and Appropriation Acts
• inquired of management, the department’s head of internal audit and those charged with governance whether:
  • they were aware of any instances of non-compliance with laws and regulations
  • they had knowledge of any actual, suspected, or alleged fraud
• discussed with the engagement team including significant component audit teams and the relevant internal and external specialists, including actuaries, land valuation experts and financial modelling specialists, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud

As a result of these procedures, I considered the opportunities and incentives that may exist within the department and its group for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions, bias in management estimates and incentive to manipulate the accounts to avoid breach of control totals. In common with all audits under ISAs (UK), I am required to perform specific procedures to respond to the risk of management override.

I obtained an understanding of the department and its group’s framework of authority and other legal and regulatory frameworks in which the department and its group operates. I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the department and its group. The key laws and regulations I considered in this context included Government Resources and Accounts Act 2000, Managing Public Money, Supply and Appropriation (Main Estimates) Act 2022, transport legislation relevant to fees and charges, Health and Safety legislation and relevant employment and tax law.

In addition, I performed specific risk assessments in respect of significant risks relating to non-compliance with laws and regulations and fraud, including reviewing the department’s approach to material estimates presented within the accounts including the assumptions used in the pension scheme liability valuations and valuations of infrastructure assets.

Audit response to identified risk

To respond to the identified risks resulting from the above procedures:

• I reviewed the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements
• I enquired of management, the Group Audit and Risk Assurance Committee and in-house legal counsel concerning actual and potential litigation and claims
• I reviewed minutes of meetings of those charged with governance and the Board and internal audit reports
• in addressing the risk of fraud through management override of controls, I tested the appropriateness of journal entries and other adjustments; assessed whether the judgements on estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business
• I reviewed the processes, verified the data used and evaluated the appropriateness of the assumptions and judgements applied for material estimates presented within the accounts, including those described in my key audit matters above
• I confirmed that relevant approvals required under Managing Public Money have been obtained by management, and that the disclosures required by Managing Public Money are complete and have been appropriately included within the financial statements
• I confirmed that the Department for Transport Group has complied with the Parliamentary control totals set out in the Supply and Appropriations (Main Estimates) Act 2022 by confirming that the outturn is within the limits approved by Parliament, that the allocation of amounts to those control totals is appropriate and that management have not vired amounts inappropriately between control totals

I also communicated relevant identified laws and regulations and potential risks of fraud to all engagement team members including internal specialists and significant component audit teams and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website. This description forms part of my certificate.

Other auditor’s responsibilities

I am required to obtain appropriate evidence sufficient to give reasonable assurance that the statement of outturn against Parliamentary supply properly presents the outturn against voted Parliamentary control totals and that those totals have not been exceeded. The voted Parliamentary control totals are departmental expenditure limits (resource and capital), annually managed expenditure (resource and capital), non-budget (resource) and net cash requirement.

I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control I identify during my audit.

Report

I have no observations to make on these financial statements.

Gareth Davies Date: 18 July 2023
Comptroller and Auditor General

National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP

Financial statements

Download a spreadsheet of the annual report tables and financial statements (MS Excel Spreadsheet, 5.25MB).

1. Travel time (in mins) to reach nearest large employment centre, by region. Journey time statistics: 2019, Department for Transport. ↩

2. Left the department in November 2022 and the department is currently going through the approval process of appointing new champions. ↩

3. Left December 2022 ↩

4. Joined the department in May 2023 ↩

5. Left the department in November 2022 ↩

6. Regulatory Impact Assessments (IAs) and De Minimis Assessments (DMAs) are an important part of the government decision-making process. They set out the objectives of policy proposals and the costs, benefits, and risks of different ways (non-regulatory as well as regulatory) of achieving those objectives. ↩

7. Once the proposals have come into force, this stage offers the opportunity to review whether the regulation has met the intended objectives of the legislation. ↩