Written statement to Parliament

DSA procurement

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

New contract arrangements are set to reduce the costs of the driving theory test from September 2014.

I am pleased to announce that, in accordance with the commitment previously given to reduce the costs of learning to drive, new contract arrangements will see a reduction in the cost of the driving theory test from September this year and savings in excess of £100 million over the next 9 years.

The Government Procurement Service (GPS, an executive agency of the Cabinet Office) and the Driving Standards Agency (DSA, an executive agency of the Department for Transport and now merged with VOSA into the new Driver and Vehicle Standards Agency) jointly ran a competition to appoint a supplier for a framework contract to provide computer-based testing for the government. The competition was concluded in early 2013. A call-off contract for the driving theory test - an essential part of arrangements to ensure road safety – has now been awarded under this framework.

The decision to award the framework agreement was subject to a formal challenge which prevented award of the agreement during the course of the challenge. To ensure continued supply of the driving theory test and a reduction in test fees, and in accordance with government policy to manage disputes by the most effective and appropriate means possible, this dispute was resolved by agreement. This resolution enabled the award of a government framework agreement to learndirect Ltd on 18 October 2013. Further, DSA and the Driver and Vehicle Agency Northern Ireland agreed that the driving theory test will be provided by learndirect Ltd from September 2016 and that the current provider, Pearson Driving Assessments Ltd, should continue to provide the test until that date.

The result of these contract arrangements has been to secure a very good, value for money deal. The reduction in net cost per test, allied to the Driver and Vehicle Standards Agency’s forecast of increased test volumes as a result of the economic recovery, means that more than £100 million will be saved over the next 9 years. In addition, national coverage will be improved with tests becoming available at more locations.

As a consequence of the formal challenge and as a matter of good practice, the Permanent Secretary of the Department for Transport commissioned an independent review of the handling of the competition by officials in the Driving Standards Agency and other parts of the department. This has now concluded. A separate report on the lessons that can be learned to inform future procurements will be published shortly. The National Audit Office has been apprised of these matters.