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

Memorandum by National Express Group plc—Travel West Midlands (Bus 05)


  National Express (NX) is pleased to submit its memorandum in response to the Transport Sub-Committee Inquiry on the bus industry announced on 11 March 2002. We would like the Committee to reflect on the following points in reading our submission:

    —  NX are supportive of the regulatory policy framework established by the Transport Act 2000 and believe that further implementation is required before legislative changes are considered;

    —  The acceleration of the delivery of local transport plans would achieve quick wins;

    —  We believe that Quality Partnerships are the best way of delivering improved, customer-focused bus services. These should be jointly funded by Local Authorities/PTEs and operators;

    —  The implementation of the planned bus priority schemes, the enforcement of existing priorities and the reinvestment of fines in further bus priority schemes will further improve traffic flow whilst encouraging greater use of public transport;

    —  Improved co-ordination of bus priority and traffic enforcement schemes would deliver service improvements;

    —  Concessionary fares are a subsidy to the passenger and not the operator. The schemes keep fares low and are therefore an aid to social inclusion. They are good news for passengers;

    —  Quality Partnerships and Quality Contracts are not substitutes for each other. Quality Partnerships require the implementation of improvements in bus priority measures and other infrastructure. Quality Contracts are essentially a tendering mechanism;

    —  Restoration of 100 per cent fuel duty rebate would bring further investment into the industry, help keep commercial fares low and enable buses to help meet the social inclusion agenda;

    —  Traffic congestion remains the main obstacle to improving bus services.


  The UK bus division of the NX Group, Travel West Midlands ("TWM") primarily provides bus services in the West Midlands with further services at Travel Dundee, in Scotland. We are committed to:

    —  Observing high standards of safety;

    —  Meeting the needs of local communities;

    —  Providing reliable, comfortable and secure services;

    —  Recruiting and retaining quality staff;

    —  Providing value for money and quality products;

    —  Investing in public transport.

  TWM carries over 330 million passengers a year on an intense network of nearly 600 routes, with an average fare of 54p per passenger journey. Over two thirds of mileage operated is on high frequency routes of 10 minutes or better. The West Midlands has the second highest level of bus journeys per head of all the passenger transport executive ("PTE") areas, 134 per year with other PTEs averaging just over 100 journeys per head.

  We aim to continually improve service quality for our passengers through investment and innovation. We are committed to working in partnership with local authorities and the West Midlands Passenger Transport Executive (Centro) to deliver the five year local and 10 year national transport plans.

  Since NX acquired TWM in 1995 there have been a number of significant achievements:

    —  Providing and developing an intense network of services across the whole of the conurbation;

    —  Making public transport accessible for all, including the disabled. All 800 buses purchased by TWM since 1997 are low floor fully accessible;

    —  Developing active and productive partnerships with the West Midlands local authorities and Centro. We are playing an integral role in the delivery of the local transport plan and accompanying bus, ticketing and information strategies;

    —  Playing a major role in all the West Midlands Showcase routes, each of which have delivered double digit patronage growth;

    —  Improving integration:

      (a)  transportation—Improved multi-modal interchanges for bus, rail, light rail and airport services have been developed. Specifically we have been involved in the design and implementation of the Birmingham City centre Bus Mall that will improve interchange between buses, trains and ultimately trams. We are also a partner in the Wolverhampton Interchange Project.

      (b)  ticketing and marketing—The West Midlands has the most extensive range of integrated tickets in the UK, including bus/rail/metro tickets that can be bought on TWM buses. A programmed introduction of Smartcards is underway with Smartcards scheduled to be introduced on our Coventry area buses in late 2002.

      (c)  information—TWM provides comprehensive printed information on all its routes and fares distributed through a network of over 1,000 local agents. NX is also a major funder and supporter of the national Traveline public transport information service.

    —  Making buses more environmentally friendly. During 2001 140 new low floor easy access double deck buses were introduced, all powered by Euro III engines and fitted with particulate traps ensuring they are the greenest buses in the UK. A further 140 will be delivered during 2002;

    —  Investing in driver training and recruitment to tackle the tight local labour market. Over a third of our staff have achieved an NVQ qualification with a further 20 per cent undertaking the programme currently;

    —  Developing a positive industrial relations climate. The agreement of a unique five year pay deal for staff has given employment security and guaranteed wage rate progression;

    —  Forming partnerships with local police to deter crime and improve security on our buses through "Operation Safer Travel". The latest digital CCTV technology has been installed on all new vehicles.

  TWM has also committed to invest £30 million in infrastructure and bus priority measures. We are disappointed that slow progress with the implementation of agreed schemes by Local Authorities has resulted in only £1 million being spent so far, four years after the initial commitment was made.

  We make the following comments in relation to the Committee's terms of reference.


  TWM receives negligible subsidy from public funds. The TWM strategy is to operate in integrated network covering the whole of the West Midlands conurbation. Over 97 per cent of mileage operated is commercially registered and the company receives less than 1 per cent of its income from tendered service payments. The comprehensive TWM network reduces the need for high levels of subsidised services. The cost per mile of subsidised services, paid for by Centro, has fallen by 49 per cent since industry de-regulation in 1986.

1.1  Concessionary Fare Reimbursement

  We believe that there is a role for concessionary fares in the provision of bus services. Such fares enable groups of passengers to travel on a reduced or no cost basis. These concessions are subsidies to the passenger and not the operator.

  The West Midlands Senior Citizen Concessionary Fare Scheme allows free travel for senior citizens after 0930 Monday to Friday and all day Saturday, Sunday and Bank Holidays. This is one of the UK's most passenger-friendly concession schemes and is more generous to the passenger than the statutory minimum. However, the reimbursement arrangements mean that we do not receive full fare payment for all these passengers. For example, for every 100 senior citizens carried we receive full fare reimbursement for only 61.

1.2  Fuel Duty Rebate

  TWM, in line with the rest of the bus industry, currently receives 80 per cent rebate of the full fuel duty, leaving it to pay 20 per cent of the duty at a cost of £5m per annum. Raising the FDR to 100 per cent, in line with other transportation, would restore the industry to the position pre 1994 and enable further investment. FDR helps to keep fares low and assists buses to meet the social inclusion agenda.

  We believe there is merit in reforming the payment mechanism for FDR into, at least in part, a per passenger payment. This would give an additional incentive for operators to carry more passengers. However, the potential impact on lesser used routes, even in the conurbations, needs to be assessed as this may reduce services in some "socially excluded" areas.

  TWM currently has no experience of either urban or rural bus challenge initiatives. Within the West Midlands the focus for these initiatives has been largely towards demand responsive transport.


  Quality Partnerships and Quality Contracts are not substitutes for each other. Quality Partnerships require the implementation of improvements in bus priority measures and other infrastructure. Quality Contracts are essentially a tendering mechanism.

  We believe that the key to improving bus services is to:

    —  Reduce the ever worsening effects of traffic congestion on bus punctuality;

    —  Improve road allocation schemes for public transport including more bus priorities;

    —  Better enforcement of bus lanes;

    —  Reinvest funds from bus priority enforcement fines in local transport;

    —  Jointly funded investment in infrastructure.

  Experience confirms that improved reliability of public transport encourages more people to choose public transport as their first choice mode of travel, assisting the Government's environmental objectives.

  In line with the Transport Act 2000, we believe that Quality Partnerships are the best delivery mechanism for improving bus services and improved customer information.

  Quality Partnerships will result in:

    —  Improvements in bus reliability/punctuality;

    —  Network plans being based on customer needs—there is evidence that current subsidised services do not improve social inclusion;

    —  An incentive for operators to carry more passengers and improve quality;

    —  Minimised administrative costs for PTEs;

    —  Greater certainty for the industry, resulting in higher investment levels.

  We believe Quality Partnerships need a chance to succeed and any change in the existing balance of control would be detrimental to the industry. TWM has been successful in developing a number of high profile Quality Partnership routes over the past five years. Double digit passenger growth has been achieved on those routes.

  We believe strongly that Quality Contracts would be detrimental to the growth of bus travel and should not be introduced on urban bus travel. They would simply provide a compulsory competitive tendering mechanism which would effectually re-regulate the industry. Quality Contracts do not contain any requirement on the Local Authorities to provide bus priority measures and their implementation will merely further delay delivery of the local transport plan bus priority targets.

  Through Quality Partnerships local authorities, PTEs and operators can each commit to improve the quality of the service provided through investment in bus priority measures, infrastructure, new vehicles and customer care. This would tackle traffic congestion—the primary reason why bus services are delayed.

  To date no statutory Quality Partnerships have been signed anywhere in England. Within the West Midlands little progress has been made in incorporating the existing "Showcase" schemes into the statutory framework. Centro has yet to provide its draft template for statutory Bus Quality Partnerships. In general it does appear that the existing powers in the Transport Act 2000 are not fully appreciated by the PTEs/LAs.

  Quality Contracts are irrelevant to the real issue of providing a reliable service to the passenger in worsening congestion.


  Congestion is the biggest challenge faced by bus operators, restricting patronage and industry growth. Improving reliability and punctuality is the top priority for existing and potential bus users. These problems can be overcome by more bus priority schemes, such as bus lanes, bus priority at traffic junctions and better management of the highway; including control of road works and illegal parking.

  As traffic congestion worsens operators have to use more buses to provide the same level of frequency with no increase in patronage. This limits the opportunities for network development and could be seen as concentration on the key corridors, as these are the routes that require extra vehicles simply to maintain the existing timetable. The situation is currently being exacerbated as operators build extra time and inefficiency into schedules to ensure that rigid and unrealistic national reliability standards can be met if unpredictable congestion does occur. We believe that targets for bus punctuality should be agreed locally by operators, Local Authorities and Traffic Commissioners. Increasing average bus speeds would allow improved frequencies and more services, with the same numbers of vehicles and drivers and thus generate patronage growth to allow further investment.

  The first West Midlands LTP Annual Progress Report states that the 2006 targets for improved bus speeds will not be met. TWM suggests a dedicated "task force" to speed up the design of programmed schemes. This "task force" could be a nationally provided resource, working on a project by project basis, funded directly through the DTLR, using the LTP funds. TWM would like to see the West Midlands "Outer Circle" Route project as the first "challenge" for the "task force". We are keen to play our part in the project and bring the benefits of the latest new low floor vehicles to the 15 million passengers who use the route every year.

  Vehicle congestion charging, with income "ring-fenced" for public transport improvements, may have a role to play in improving bus reliability and punctuality and we await with interest the impact of central London schemes.


  We support the regulatory policy framework established by the Transport Act 2000 and the Transport (Scotland) Act 2001. We believe that the current regulatory framework for the bus industry is appropriate, providing a stable environment in which to operate and having the potential to deliver benefits for both Government and the customer. Stability underpins investment with investment underpinning growth. However, we believe there needs to be an acceleration of deliverables from the five year plan and that the current framework has not been tested sufficiently.

  We believe formal working arrangements should be created linking the Traffic Commissioners and Highway Authorities thereby identifying sections of the highway where traffic management and bus priority measures are needed to allow bus operators to provide reliable services. Clear standards for achievable road speeds, which highway authorities could adopt as local transport plan targets, would greatly assist bus operation.


  Buses are the main form of local public transport, accounting for three quarters of all public transport journeys under 10 miles. Nationally, 87 per cent of people live within six minutes walk of a bus stop. In addition over 150,000 staff, including 116,000 as drivers and conductors, work for coach and bus operators. Bus usage is highest amongst the socially excluded with the poorest fifth of households using buses twice as much as the richer fifths. Households without cars use buses three times more than households with cars. However, whilst economic factors are important in determining bus usage, even in affluent areas there are significant numbers of elderly people and under 17s who may not have access to a car but are equally reliant on the bus for their day-to-day mobility needs.

  The current West Midlands Local Authority/PTE Bus Strategy sets a target that by 2006 92 per cent of the metropolitan area should be within 250m of a bus stop with weekday daytime service. By 2000-1 a figure of 89 per cent had already been achieved.

  TWM operates a comprehensive network of services on, where practicable, an 18 hour/7 day a week basis. Over 25 million passengers a year are carried on TWM buses after 7pm in the evening. The company has a large number of high frequency corridors passing through many of the most deprived areas in the country—eg Handsworth, Sparkhill, Small Heath. These routes also serve areas which could be defined as "socially excluded". Druids Heath (route 50), Castle Vale (route 67), Willenhall and Wood End in Coventry (route 21). Through experience TWM has learnt that to encourage users it is important to provide direct services along major routes rather than extended journeys through lower density areas. Such extended services can increase social exclusion by depriving people who have an absolute need for quick bus services eg people going to work.

  The TWM route strategy is supported by its approach to network ticketing. Within the West Midlands less than 40 per cent of passengers buy single journey tickets. The company's extensive and highly popular range of network day, week and monthly tickets allow passengers to make use of the whole TWM network without any "rebooking" fare penalty. TWM is also an active promoter of the Government's "New Deal" providing over 10,000 half fare Travelcards to New Deal clients a year.

  During the preparation of the West Midlands Bus Strategy TWM expressed concern about the proposed "Network West Midlands" as we believe that this strategy may result in less popular routes suffering from a lack of public investment. Whilst we understand the rationale for focused investment eg improved shelters, real time information etc on core "network" routes, we believe there is value in providing investment on non core routes where service frequencies are lower and investment is really needed and of benefit to the passenger.

  We also recognise that whilst scheduled bus services are the best way of serving busy corridors, in many lower populated areas Demand Responsive Transport (DRT) ie taxi/minibuses may be more cost effective. DRT and scheduled local bus services can complement each other in many cases, with DRT connecting people to the core bus network. TWM is keen to carry out a pilot exercise integrating its low floor buses with the Ring and Ride service.

  Finally, at the more strategic level it is generally recognised that planning policies and development patterns have significantly increased actual and perceived social exclusion. The growth of large out of town supermarkets designed for car users and the decline in local shops directly impacts on the non car owning/driving groups. Equally, motorway based business parks discriminate against potential employees from these groups. Such facilities are very difficult to serve both economically and practically irrespective of the legislative framework.

April 2002

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 12 September 2002