Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 40 - 59)



  40. You are indicating that there might be an internal departmental line of progress; is that confidential to the Department, or is it something that we should know about, or should be publicly available?
  (Mr Rickett) I think, once Ministers have taken a view on that, I can give you an answer, if I can put it that way.


  41. What you are actually doing, Mr Rickett, is booking yourself a permanent appearance at this Committee for the next 12 months.
  (Mr Rickett) Oh, I am confident of that.

Mr Stevenson

  42. Can I ask if Mr Rickett can give us some idea of when that is likely to be?
  (Mr Rickett) We are doing the review of the Plan, as we said we would, as part of the Spending Review; the focus is very much on delivering against what we promised, rather than changing direction, because we want a stable framework. We will be aiming, I think, to publish a document in the summer that tries to give more detail on what has actually been delivered and what has been decided since the Plan, and slightly more analysis about the sorts of issues that you are addressing, about how we monitor progress, and how you would be able to monitor progress, too, because that is important.

  43. I would like to put it to you, Mr Rickett, that, if there is a Plan, which there is, and if it is over ten years, which, of course, it is, and welcome, I may say, it is of significant public interest that progress towards the objectives in that Plan is available.
  (Mr Rickett) Yes. One point I might make is that we have been developing our model so that it gives us what we hope is better and more detailed forecasts; so one part of the work programme, essentially, is to redo all the forecasts that we made as part of the 10 Year Plan.


  44. So that Lord Birt can have more models to play with?
  (Mr Rickett) Your words; yes.

Mr Stevenson

  45. Congestion and workplace charges, Mr Rickett. You will be aware of the conclusion of the Committee in previous reports on the 10 Year Plan, that we thought that, if congestion charging and workplace charging were to be introduced and were to be workable and, most importantly, understood, if not necessarily fully accepted, by the public, there would have to be concomitant improvements in public transport. One of the points we made was that, in that situation, the Government should look to provide resources up front, so that, in local areas, improvements to public transport could take place at the same time and not some years afterwards, in terms of workplace charging and congestion charging. Is that a view you would support, and, if so, what representations are you making to the Treasury, accordingly?
  (Mr Rickett) I think it is what we have done, first of all. We have given a very large increase in allocations to local authorities for their Local Transport Plans, so they have resources to put in place a wide range of public transport, and indeed local transport, improvements, including walking and cycling and other important modes, so they have resources to put in place significant improvements. If you are asking a more complicated question about can they, in some sense, sort of draw down on the revenue from congestion charging, or something like that, that is a slightly different issue. The Government is intending to legislate, when time allows, to introduce prudential limits for local authority borrowing, rather than the current system of control, and under such an arrangement it would be perfectly open to a local authority to borrow against future charging streams, if it could convince lenders that such streams of income were to be forthcoming. No doubt they can also enter into private finance arrangements to achieve the same sort of end. But, as I said, we think we have given a large increase in local transport allocations, which should enable significant improvements in local transport.

  46. I see. I would like to ask my final question then, as a direct consequence of that response, and this concerns bus travel. The Plan target is for a 10 per cent increase, but we are looking at something like a 50 per cent increase within the London area. My basic mathematics suggest to me that, if the 50 per cent increase takes place in the London area, we are looking at decreases elsewhere in the country. If I can bring my questions together, rather than coming back; in spite of the Quality Assurance Agreements, or whatever they may be, with bus operators, I think the experience outside London, certainly in the area I represent, is, we are seeing cuts in services and the inability, due to resource problems, of local authorities actually to counter that. We are finding that tendered bus services are increasing by something like 21 per cent, in terms of costs. That is an example of the problems that are being faced. So how do you square this particular circle, Mr Rickett; do you agree that, if the target is 10 per cent and it is going to be 50 per cent increase in London, we are looking at cuts elsewhere? And, secondly, should we strengthen the arrangements with bus operators to make them Quality Agreements and Contracts, rather than arrangements? And, thirdly, what about the increase in tendered bus prices, and the effect that is having on bus services?
  (Mr Rickett) We will need to review the bus target; it was set about a year before the Mayor's Strategy set a target of a 40 per cent increase. And, as you say, that would imply a continuation of the sort of trends we have seen over the last ten years, where we have seen increases in London offset by reductions elsewhere, with the reductions elsewhere perhaps beginning to bottom out, but a strong regional variation, in that, I acknowledge. We are also developing our model to give us a bit more information about forecasting bus journeys, rather than the sort of very aggregated information it was giving before. So we will want to review the target, so that we are sure it is sufficiently ambitious.


  47. So what is a reasonable target?
  (Mr Rickett) I am not going to commit myself to that until we have done the analysis; and partly because, as you say, the bus industry is facing challenges.

  48. It is difficult, really, to produce a model that makes sense, if you have not got any possible idea of the targets, is it not?
  (Mr Rickett) The model tells us what might happen on certain assumptions, or, at least, it gives us an indication of the likely direction of change on certain assumptions.

  49. Precisely; so we have to have some idea of the assumptions you are making before we can (work it out ?)?
  (Mr Rickett) Yes; the input assumptions that we can make, which tend to be about levels of resourcing, and so on. But, just to answer the other questions, I am not quite sure where to start, but, I suppose, first, to start with withdrawals; yes, we have seen increased withdrawals, the withdrawal of services, partly because costs have been rising, particularly labour costs, and, indeed, there have been labour shortages. It is not quite as bleak as it was portrayed in the newspapers yesterday, which referred to services accounting for two million passenger journeys being withdrawn; that is about one in 1,500 of the journeys that are made on buses in a year, because there are 2,950 million bus journeys in Great Britain outside London, so that is a relatively small number. But, yes, costs are going up; yes, local authorities are having to spend more, after years in which they were able to get the same level of bus services for less, as costs came down after deregulation. We have given local authorities more resources to provide bus priority measures, which are important because congestion is a difficult problem for buses, it reduces the reliability of services, and that is something that passengers worry about. We have given them enough to put in 4,500 kilometres of bus priority routes. We have given targeted resources for rural bus services and deprived urban areas. I believe the Rural Bus Subsidy accounts for an additional 17 million passenger journeys a year, to compare with the two million of withdrawals. We have given what we consider to be generous local authority revenue settlements, and local authorities, as I say, have been giving more priority to buses, as costs rise: and we have given the local authorities new powers. I am not sure the answer lies in immediately, only very shortly after introducing the Transport Act, moving from an emphasis on statutory Quality Partnerships to statutory Quality Contracts, which imply taking commercial services back into local authority control, but we will want to keep under review how the Transport Act regime is working.

  Chairman: Mr Rickett, you have been very helpful, but I think we are going to need shorter answers, and certainly we are going to need shorter questions.

Mrs Ellman

  50. What actual mechanisms are you going to use to restrict fare increases in public transport, in both road and rail; what is the mechanism?
  (Mr Rickett) Fares on buses, which we have just been discussing, are set largely by commercial bus operators, because over 80 per cent of bus services are commercially operated, and we rely on competition and contestability to keep fare levels down. In terms of rail, as I said, we are assuming that the regulated fares continue to fall, in real terms, and that the unregulated fares, again, partly through competition with domestic air services and other alternatives, are kept in line with prices. That was the assumption made in the Plan.

  51. What is the basis for that assumption holding true?
  (Mr Rickett) The regulation is a requirement; the other assumptions are based on an assessment of trends.

  52. Have you taken into account the trend of Virgin, on the West Coast Main Line, Liverpool to London fares, increases of over 100 per cent, over a relatively short time, and the rail regulator refusing to conduct an investigation, and taking 18 months to say he refuses to have an investigation? Is there anything you have got in this Plan that would make a situation like that unable to happen again?
  (Mr Rickett) I think it is quite difficult just to say that rail fares have risen by 100 per cent, because of the fairly complicated structure of rail fares.

  53. Yes, but you made a statement, Mr Rickett, that you had an assumption based on trends. Now I am asking you, what is the basis for your assumption that you do not need any additional powers, or any additional regulations, to keep the increases down, in the way you suggested?
  (Mr Rickett) I do not think I accept your assertion of the level of increase on rail services, when you look at the fares that are provided for those who book in advance, which is the policy that those operators have been moving towards. I am sure you have heard all this before.

  54. No. I am talking about fares that commuters are called upon to pay. Now are you saying, do I take it, from the comment you have just made, that, when you are talking about the increases that you think will happen in the future, that is actually related to very limited areas of travel and it is not going to apply to all journeys; so does it have any meaning?
  (Mr Rickett) London commuting fares are capped, and, indeed, will have fallen by 1.4 per cent in the last year.

  55. No, I am not talking about London. I do not wish to get into more detail.
  (Mr Rickett) That is where most of the rail journeys are.

  56. So you do not have a concern outside London; is that the Department's view?
  (Mr Rickett) No; as I said, the SRA are reviewing fares in the rail industry, and I think we should wait perhaps till they have finished their review.

  57. But you have the 10 Year Plan here, there are assumptions here about public transport, congestion, private transport, all those things are interrelated; is it good enough just to assume somebody else will solve the problem that has been highlighted, and one you do not seem to want to recognise?
  (Mr Rickett) I am not saying I do not recognise the issue. As I said at the beginning, we have a Plan that is based on a significant fall in road user prices, and a continuing increase, in line with prices, of public transport fares, and that is one of the underlying assumptions in the Plan.

  58. But if public transport fares continue to rise, and rise in a way that you had not predicted in drawing up this Plan, will not that have an impact on private driving and on congestion?
  (Mr Rickett) If fares rose faster than our assumptions then it would have an effect on our predictions, and we would need to take that into account in our Plan, yes. I think that, ten months into the Plan, it is a bit early to assume that the assumption over ten years is going to be wrong.

  59. But what mechanisms do you have to assess what is actually happening, and outside of London, unless the Department really believe that London is the only place that matters?
  (Mr Rickett) No, I did not say that the Department believe that at all. Well, fares are a matter of public record, one can do surveys of what levels there are.

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