I am writing to update you on the Government's position in relation to the repeated call by the Commission for Member States to sign the Memorandum of Understanding (MoU) on eCall[31], and to inform you of the results of the Government's research and consultation.

As you may recall from Explanatory Memorandum (EM12383/05), the Government view was that we should not sign the MoU until we had undertaken our own review of the business case and the implications that any subsequent deployment might have within the UK. As a result this EM was not cleared by your Committee, and sight of the outcome of the intended research was requested.

  Sub-Committee B also considered Explanatory Memorandum 15932/06 on the above proposal on 22 January 2007 and responded that it would like an update on the independent analysis that DfT had commissioned to identify whether the positive cost/benefits cited in the EC communication was transferable to the UK.

  Unfortunately, the length of the research period and the detailed consultation with Govermment Departments and other key stakeholders who share a common interest in eCall, has delayed the provision of this udpate to your Committee until now.

  I am pleased to now be able to enclose a copy of the report "eCall—The Case for Deployment in the UK" (not printed)[32] which is being published by my Department. The study found that the pan-European business case for eCall is not transferable to the UK. Given the UK's already well established emergency call systems (e.g. 999/112), the total costs of implementing eCall outweigh the likely benefits. Total predicted benefits from 2010-2020 ranged from £389 million to £1,681 million, with total costs ranging from £2,282 million to £9,053 million, giving a benefit-cost ratio of between 0.1 and 0.7:1. In addition, mobile telecoms operators would need to upgrade their infrastructures to enable the efficient operation of the new system, and further discussion is required between central government, local government and the network operators to agree who would bear the cost of each connected eCall. The existing 999 service is already provided free to users, the call costs being supported by the Fixed and Mobile Network Operators.

  As you know, the Commission issued a further communication in September 2007 (EM 13922/07, COM (2007) 541 Final), calling for Member States to sign the MoU and to prepare for a roll-out of pan-European eCall by 2010. However, in addition to concerns over the benefit-cost ratio in the UK, the functional specification and technical details of eCall have not yet been finalised. There are uncertainties over whether the system in its current form can deliver the full potential benefits and whether it would be acceptable to UK Mobile Network Operators. This makes the implementation date of 2010 an unrealistic target.

  In addition, the eCall Driving Group that negotiated and drafted the MoU has been disbanded, so there is no longer a platform to co-ordinate ongoing eCall activity which would enable us to engage more closely in the development process, and to address our concerns. We intend to press the Commission to create such a forum. This may also help to understand the concerns of other Member States, given that only 13 have signed the MoU to date.

  After exhaustive consideration and consultation with other Government Departments and devolved administrations, it has been agreed that the UK will not sign the MoU at the current time as we remain unconvinced, following our independent review, that the cost of implementing eCall justifies the benefits. This decision will enable us to apply pressure on the Commission to address our concerns, and to assess the case for signing based on further investigation and evidence, whilst reserving our position on a financial commitment. We will also avoid any implication that we agree with current eCall timescales and specifications.

  Signing would indicate a commitment to implement eCall in the UK by 2010 which we do not believe can be delivered. While we fully support the objective of road casualty reduction, the evidence does not show eCall would bring a significant benefit to the UK in this area. The negative benefit-cost ratio and the potential demands which would be placed on both industry and government mean that there is not currently a business case for implementation. By signing with caveats we would run the risk that our concerns would be underestimated and not fully addressed, as the Commission turned its attention to other Member States who have not yet signed.

  Due to a lack of clarity over the technical and functional specifications of the proposed eCall system, I am afraid that it has not been possible to complete a full Impact Assessment. However, the proposal would have a significant impact on Mobile Network Operators and other industry stakeholders (e.g. vehicle manufacturers) as the benefit-cost ratio is poor. By not signing the MoU, we will allow these stakeholders to avoid a potentially high financial commitment. These stakeholders are expected to support this decision, which will give them more time to develop their own positions. We intend to maintain a close dialogue with all stakeholders, and to seek further analysis in order to monitor and review the case of eCall in the UK.

  I will be writing to Commissioner Reding this week to outline the UK position and provide a copy of our report.

27 November 2007

  Thank you for your letter dated 27 November. Sub-Committee B considered it at its meeting on 3 December.

Although the Committee agreed to clear both documents (12383/05 and 15932/06) it noted that there has been no indication of how this matter will be progressed following the UK's decision not to sign the MoU. Therefore, the Committee has decided to clear these documents with the expectation that it will be informed of any future developments on the eCall project.

4 December 2007

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