niteflite01
24th Dec 2000, 02:58
Just received!
Very interesting reading - NOT!
Dear Sir,
Thank you for your email of xx December to the Deputy Prime Minister, regarding the public private partnership for National Air traffic Services Ltd (NATS). I have been asked to reply.
As you will be aware, the Transport Bill has now completed its Parliamentary Stages and received Royal Assent on the 30th of November 2000. I would like to re-iterate that safety is, and always will be, the overriding priority of the policy.
The Government are committed to maintaining - and improving wherever necessary - some of the most stringent aviation safety standards in the world.
NATS will remain, FOR THE TIME BEING (emphasis added), subject to regulation by the Civil Aviation Authority's (CAA) Safety Regulation Group (SRG), which is highly-regarded, world-wide, as an effective and professional regulator. As I am sure you know, they have wide-ranging powers to regulate aviation safety and have ample experience of regulating private sector bodies. Our willingness to enhance the safety regulator's powers if necessary, was explicitly stated in the consultation paper published in October 1998 and still stands, although the Group Director of SRG feels that his existing powers are adequate to regulate a private sector NATS.
Ministers do not accept that private sector status is, in itself, detrimental to safety. If that were the case, UK airlines would have gone out of business years ago. They are private sector companies regulated by an effective public sector regulator who has the powers, experience and expertise to do the job properly. The Government will be looking for interested partners who are seeking the competitive position a stake in NATS will secure - with unique opportunities to expand into new markets - rather than the opportunity to make quick profits.
During consultation no one has argued that the status quo for NATS is satisfactory. It is perfectly clear that NATS needs - at the very least - guaranteed access to funds for investment and a wider base of skills to enable them to manage that investment better. The level of future investment is not insignificant at £1.3 billion over the next ten years. NATS also has considerable potential to develop, operationally it is one of the best air traffic service providers in the world. With the freedom to invest and the skills to support that investment, it could take the lead in an expanding global market for air traffic services.
In considering the options it became apparent that public sector status does not offer NATS the commercial freedom it needs to develop the business and could not guarantee the availability of funds for investment. With any public sector solution the Government would remain behind NATS financially and with it the risk of having its commercial freedom severely curtailed in order to reduce the risk to the taxpayer or of its borrowing remaining on the public sector balance sheet, thereby keeping NATS under Government financial constraints. The public private partnership will provide both commercial freedom and access to funds for investment, and will provide other benefits such as transparency in charges and separating safety regulation from service provision.
The Government did carefully evaluate a number of options for NATS, including possible public sector models, and that of a Trust, in both deciding on its preferred option in the first place and in considering the responses to the consultation. Each was thoroughly assessed against our objectives for NATS; the PPP was the only solution to offer all the benefits of the various options considered. This Government does not believe in a "one size fits all" approach. The New Partnership Company secures access to private capital; separates regulation from operations; introduces economic regulation; involves all stakeholders in the company's future; provides for Government to appoint Partnership Directors; gives Government - and the taxpayer - annual dividends; and provides on-going assurance that the company is operating properly in the national interest.
The Government has carefully thought about the fundamental point of whether it is right and/or necessary to transfer control of NATS to the private sector. The significant advantage this secures is a guarantee of the necessary investment, without having to find it from public resources - which we believe would be better invested in education and health, where no alternative funding sources are available. The Ministers have therefore concluded, having considered safety issues in some detail that a new Partnership Company is the right way forward. This is very different indeed from the privatisation proposed by the last government. The Government is not selling our air, but mobilising private finance and management expertise to deliver safer skies without delaying passengers or depriving other Government priorities of much needed investment.
Thank you for your comments, which have been noted and I hope that the above offers you some assurance on these important points.
Yours,
xxxxxxx xxxxxxxxxxx
Civil Aviation Divison
------------------
"Go around..I say again...go around"
Very interesting reading - NOT!
Dear Sir,
Thank you for your email of xx December to the Deputy Prime Minister, regarding the public private partnership for National Air traffic Services Ltd (NATS). I have been asked to reply.
As you will be aware, the Transport Bill has now completed its Parliamentary Stages and received Royal Assent on the 30th of November 2000. I would like to re-iterate that safety is, and always will be, the overriding priority of the policy.
The Government are committed to maintaining - and improving wherever necessary - some of the most stringent aviation safety standards in the world.
NATS will remain, FOR THE TIME BEING (emphasis added), subject to regulation by the Civil Aviation Authority's (CAA) Safety Regulation Group (SRG), which is highly-regarded, world-wide, as an effective and professional regulator. As I am sure you know, they have wide-ranging powers to regulate aviation safety and have ample experience of regulating private sector bodies. Our willingness to enhance the safety regulator's powers if necessary, was explicitly stated in the consultation paper published in October 1998 and still stands, although the Group Director of SRG feels that his existing powers are adequate to regulate a private sector NATS.
Ministers do not accept that private sector status is, in itself, detrimental to safety. If that were the case, UK airlines would have gone out of business years ago. They are private sector companies regulated by an effective public sector regulator who has the powers, experience and expertise to do the job properly. The Government will be looking for interested partners who are seeking the competitive position a stake in NATS will secure - with unique opportunities to expand into new markets - rather than the opportunity to make quick profits.
During consultation no one has argued that the status quo for NATS is satisfactory. It is perfectly clear that NATS needs - at the very least - guaranteed access to funds for investment and a wider base of skills to enable them to manage that investment better. The level of future investment is not insignificant at £1.3 billion over the next ten years. NATS also has considerable potential to develop, operationally it is one of the best air traffic service providers in the world. With the freedom to invest and the skills to support that investment, it could take the lead in an expanding global market for air traffic services.
In considering the options it became apparent that public sector status does not offer NATS the commercial freedom it needs to develop the business and could not guarantee the availability of funds for investment. With any public sector solution the Government would remain behind NATS financially and with it the risk of having its commercial freedom severely curtailed in order to reduce the risk to the taxpayer or of its borrowing remaining on the public sector balance sheet, thereby keeping NATS under Government financial constraints. The public private partnership will provide both commercial freedom and access to funds for investment, and will provide other benefits such as transparency in charges and separating safety regulation from service provision.
The Government did carefully evaluate a number of options for NATS, including possible public sector models, and that of a Trust, in both deciding on its preferred option in the first place and in considering the responses to the consultation. Each was thoroughly assessed against our objectives for NATS; the PPP was the only solution to offer all the benefits of the various options considered. This Government does not believe in a "one size fits all" approach. The New Partnership Company secures access to private capital; separates regulation from operations; introduces economic regulation; involves all stakeholders in the company's future; provides for Government to appoint Partnership Directors; gives Government - and the taxpayer - annual dividends; and provides on-going assurance that the company is operating properly in the national interest.
The Government has carefully thought about the fundamental point of whether it is right and/or necessary to transfer control of NATS to the private sector. The significant advantage this secures is a guarantee of the necessary investment, without having to find it from public resources - which we believe would be better invested in education and health, where no alternative funding sources are available. The Ministers have therefore concluded, having considered safety issues in some detail that a new Partnership Company is the right way forward. This is very different indeed from the privatisation proposed by the last government. The Government is not selling our air, but mobilising private finance and management expertise to deliver safer skies without delaying passengers or depriving other Government priorities of much needed investment.
Thank you for your comments, which have been noted and I hope that the above offers you some assurance on these important points.
Yours,
xxxxxxx xxxxxxxxxxx
Civil Aviation Divison
------------------
"Go around..I say again...go around"