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Management of Road Passenger Transport Regulation State Library of New South Wales Cataloguing-In Publication Data

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Management of Road Passenger Transport Regulation State Library of New South Wales Cataloguing-In Publication Data Performance Audit Report NSW Department of Transport Management of Road Passenger Transport Regulation State Library of New South Wales cataloguing-in publication data New South Wales. The Audit Office. Performance audit report : NSW Department of Transport : management of road passenger transport regulation / [the Audit Office of New South Wales] 0734721129 1. Transport and state - New South Wales - Auditing. 2. Transportation - New South Wales - Passenger traffic. 3. New South Wales. Passenger Transport Act 1990. 4. Transportation - Law and legislation - New South Wales. 5. New South Wales. Dept. of Transport - Auditing. I. Title: NSW Department of Transport : management of road passenger transport regulation. II. Title: Management of road passenger transport regulation in NSW. 354.77328409944 388.409944 © Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. Contents Executive Summary.................................................................................................... 1 Summary of Recommendations 5 Response from the Department of Transport 7 1. Introduction.......................................................................................................... 9 1.1 Introduction 10 1.2 Policy Directions 11 1.3 Road Passenger Transport Legislation and Regulation 12 1.4 Managing Regulatory Compliance 13 1.5 On-going Regulatory Activities of the Department 15 1.6 Acknowledgement 18 1.7 Cost of the Audit 18 2. Assuring Compliance with Regulatory Standards............................................ 19 2.1 Enforcement of Driver Standards 21 2.2 Enforcement of Operator Standards 23 2.3 Support and Enforcement Issues 26 3. Certification/Licence Processing Issues............................................................. 29 3.1 Cost Recovery from the Industry 30 3.2 Risk Based Certification Periods for Operators/Drivers 31 3.3 Processing of Driver Authorities 31 3.4 Licensing Outcomes 34 4. Contract Issues in the Bus Industry .................................................................. 35 5. Probity Issues...................................................................................................... 39 6. Appendices.......................................................................................................... 43 Performance Audits by the Audit Office of New South Wales 47 Performance Auditing 48 Executive Summary Management of Road Passenger Transport Regulation 1 Executive Summary Executive Summary The Role and Regulatory activities of governments are typically not large in Impact of dollar terms, but they exist to ensure that services provided to Regulation the community do not fall below set standards. Good regulation may largely be invisible, even though its impact on the community’s quality of life may be substantial. Road passenger transport regulation is a prime example. Road Passenger Road passenger transport covers buses, taxis, hire-cars and Transport tourist vehicles. The regulatory goals to be achieved are set out Regulation in the Passenger Transport Act 1990. In pursuit of these objectives, the Department of Transport (the Department) carries out a substantial amount of activity. How well that regulation is managed impacts directly on citizens. Communities expect their regulators to behave efficiently, effectively and ethically. The Performance This audit examines the effectiveness and efficiency of the Audit current approach to managing the task of regulation, so as to achieve the road passenger transport policies determined by the Government. The Audit Office is not entitled to question the merits of any regulatory policy of a government: that is an issue for the Parliament and the community. The Audit Opinion The Audit Office is of the opinion that the Department’s levels of regulatory activity in respect of road passenger transport regulation may have exceeded optimum levels. The Department’s current focus on processing activity limits the Department in achieving all of its desired outcomes. The Audit Office considers that a change in the approach to undertaking and managing road passenger transport regulatory activities would achieve better outcomes for the community and a better use of resources within the Department. The Audit Office believes that while there is scope to make some improvements from procedural changes, such changes would not be sufficient to generate significant improvements. 2 Management of Road Passenger Transport Regulation Executive Summary In respect of its regulatory assurance activities for road passenger transport, the Audit Office considers that the Department should move to an altered regulatory regime, whereby periodic (maybe yearly) certification of regulatory compliance would be the responsibility of the service providers, using accredited independent agents. This would enable the Department to change its role in road passenger transport to a more strategic approach, where it would licence and monitor the inspections of service providers, undertake in-depth audits where problems are indicated and educate the industry. The Audit Office believes that this altered approach can increase the effectiveness of regulation for road passenger transport, and can release valuable resources that the Department could put to more effective use. The report also considers other functions of the Department in the road passenger transport area apart from its regulatory assurance activities and a range of other recommendations are provided which the Audit Office believes can lead to significant improvements in the Department’s use of its resources. The audit opinion is based on the following findings. Too Busy to be At present, the Department needs to contract, license, inspect, Efficient and audit, consult and educate on a wide range of activities. There Effective? is a sense that the Department is overrun with detail and finds it difficult to keep on top of things. In many respects, the assurance obtained by the Department is limited. Despite extensive efforts by the Department, there are delays and backlogs that inevitably lead to frustration both within and outside the Department. Finding New Ways There is a growing trend, both in Australia and overseas, to Achieve Better towards recognising that an alternative approach is to make Results with licensing conditional on providing adequate evidence of Regulatory compliance with licensing conditions. Service providers are Compliance by required to obtain from an accredited independent third party a Operators and certificate of compliance. The Department's responsibility is to Drivers license and inspect the system of those who provide such assurance services. Management of Road Passenger Transport Regulation 3 Executive Summary It is considered that by moving towards such an approach, the Department would be freed from many of the routine regulatory activities that presently consume much of its resources but provide limited value. The Department could focus on regulatory activities that add maximum value and provide substantial impact. For example, audits could be in more depth, but selective, based on identification of common operator and driver performance problems. Penalties for failing to comply with requirements could be set at appropriate levels to deter poor operators/drivers and encourage all parties to treat their responsibilities with due care and attention. The Department could enhance its education and advisory functions to assist operators to fully appreciate and address their responsibilities. The Audit Office considers that overall such a regime would make the system more effective and better use limited Department resources. Making Processing There is also scope for a considerable amount of regulatory More Efficient and processing activity to be contracted out to an appropriate body Customer Focused whose structure and systems are set up for delivering such services to a widely distributed customer base. The Roads and Traffic Authority is one example of such a potential contractor that could be considered. The shifts in approach that this report raises for consideration A Significant are not cosmetic or simple. The development of outsourced and Reform Challenge co-regulatory arrangements needs to be developed so as to ensure that responsibility and accountability are not clouded, and that the Department’s ability to assure outcomes is not impeded. Care would be required in the crafting of new arrangements and legislation, and transition provisions would need attention. However, these are short-term impediments to any change of scale. This report seeks to contribute to the reform process by Directions For outlining some broad directions for change only. As always, the Change detail will present many challenges and this report does not seek to present a detailed blueprint. That is the next step, which is a challenge and a choice for the Department, the government and the industry to work together to achieve better outcomes for the community. 4 Management of Road Passenger Transport Regulation Executive Summary Summary of Recommendations Assuring 1. Legislative reform be considered to: Regulatory · Place requirements and costs upon operators for Compliance by obtaining periodic (perhaps yearly) independent Operators and certification of regulatory compliance as part of Drivers licensing conditions · accredit independent third party bodies to undertake regulatory
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