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It's all in the detail
Page 3
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11 Any accountant worth his calculator wi LI tell you that if you want to find out what's really happening, you must 'drill down into the detail". That's especially true when it comes to Looking at the figures in the latest Business Plan from VOSA.
During 2009/2010, the agency expects the total number of 0-licences in circulation to fall by almost 6% (or 5,700 in real termsJ, while the total number of vehicles held on
those licences will drop by a similar percentage or 21,700. Even more depressing is the fact that VOSA expects 1,175 fewer new 0-licence .applications in 2009/2010a drop of more than 18%. This industry is still shrinking, and fewer people want to get into it. Can you blame them?
But there's something more worrying. During 2009/2010, VOSA plans to conduct 24,100 and 17,800 fewer annual truck tests and retests respectively, while the number of trailer annual tests and retests is expected to fall by 13,100 and 3,750. Worrying, because the cash VOSA gets from 0-licence fees and truck and trailer testing pays for its enforcement and compliance activities, as well as running its test stations.
If volumes drop, presumably revenue would follow, too unless VOSA hikes up its fees. If revenues fell, what would that do to enforcement and service Levels? The projected reduction in test volumes could also explain why VOSA is so determined to controversially switch 85% of its testing activity to the private sector by 2012.
Meanwhile, any decline in VOSA's revenue would be worrying enough normally, but in the middle of the worst recession on record, it's a major concern. Few doubt that public spending is going to have to drop. And when politicians talk of cutting investment in sacred cows such as the Health Service, we don't hold out much hope for VOSA escaping the Treasury's knife... do you?
Brian Weatherley