Memorandum by the Go-Ahead Group plc (Bus
19)
INTRODUCTION
1. The Go-Ahead Group is one of the leading
providers of passenger transport services in the UK, covering
bus, rail and aviation ground handling services. We operate a
range of bus services throughout the country including the North
East (Go North East), Oxford (the Oxford Bus Company), Brighton
& Hove, as well as central London and south London (London
Central and London General) and Surrey, in and around Crawley
and Gatwick (Metrobus).
2. We have been operating some of these
bus services as Go-Ahead for almost fifteen years, and in the
main from the early 1990s. We are committed to providing a first-class,
affordable and comprehensive service to all our passengers. Many
of our managers have wide experience not just in Go-Ahead, but
in the precursor public sector operations.
3. We are the only bus company to produce
an annual environmental report detailing our commitment to the
environment. We regularly renew and up-date our fleet with the
most environmentally-friendly and accessible buses. All our buses
run on ultra low sulphur diesel fuel, 45 per cent are fitted with
regenerative traps and 55 per cent have a Euro II engine. In the
last year alone (2000-01) we spent £37 million on 390 new
buses, and our average fleet age (excluding Routemasters in London)
is 5.83 years, well below the Industry-Government target.
4. Go-Ahead also works closely with its
employees. In Oxford we have set up a pioneering stakeholder board
to increase employee, trade union, passengers and local business
involvement in all aspects of the business.
SUBSIDIES IN
THE UNITED
KINGDOM BUS
INDUSTRY, AND
THE RESULT
OF "BUS
CHALLENGE" INITIATIVES
IN RURAL
AND URBAN
COMMUNITIES
5. There is an on-going debate about the
effectiveness of the partial fuel duty rebate received by bus
companies and its possible replacement, perhaps by a subsidy per
person carried. The fact remains that bus services, of all transport
systems, benefit least from fuel duty rebates or exemptions. Both
aviation and rail services benefit to a far greater extent. We
see no reason in principle why bus services should not benefit
from a full rebate, which is the only general subsidy to bus operators.
6. To introduce a subsidy per passenger
carried would be counter to the Government's overall policy objectives.
By definition, bus companies that continue to operate rural and
low density bus routes would lose out, placing a greater burden
on local authorities. In addition, companies that are introducing
low-floor buses and buses with air conditioning, which use more
fuel, would also suffer. The fuel duty rebate remains the best
way to ensure that companies can continue to maintain routes that
serve outlying communities or those at times of lower demand.
This is not an argument put simply to favour Go-Ahead's commercial
interests. Indeed, as a Group, a move to passenger subsidy would
be broadly favourable, with at least two of our subsidiaries benefiting
substantially, although our ability to maintain certain rural
routes would be compromised.
7. Concessionary fares, particularly for
old age pensioners, should not be regarded as a subsidy for the
industry. They are a subsidy to the passenger. The scheme is designed
to ensure that operators are no better or worse off as a result
of participating in such a programme. Go-Ahead recognises the
importance of, and supports, such schemes as they are very effective
in combating social exclusion.
8. Other payments to operators, for local
authority secured services or education transport, should not
be regarded as subsidy. They are more properly described as contractual
payment for specific performance of local authority defined services.
9. Some subsidies are, in our view, mis-directed.
For example, the rural bus grant was only available for new bus
services when the emphasis should have been on maintaining and
improving existing quality bus routes.
THE RELATIVE
MERITS OF
BUS QUALITY
PARTNERSHIPS AND
BUS QUALITY
CONTRACTS
10. In our experience, Quality Partnerships
where we operate our bus services have been a great success. They
are far less prescriptive and much more flexible than a Quality
Contract as envisaged would be. Quality Partnerships in our view
encourage much greater co-operation between local authorities
and bus companies.
11. We have seen their success in terms
of the number of passengers carried. In Oxford the partnership
has resulted in a 55 per cent passenger increase since 1991. In
Brighton & Hove we are currently seeing an 8 per cent year-on-year
increase building on a record of continual growth since 1994.
Overall, Quality Partnerships have seen passenger growth in the
region of 3-6 per cent throughout England.
12. Examples where co-operation is working
include:
— Brighton & Hove City Council/West
Sussex County Council investment in bus priority and real time
information is accompanied by Go-Ahead investment in new vehicles,
on-bus real time information equipment and improved frequencies.
— The Oxford Transport Strategy is
supported by Go-Ahead with significant fleet renewal and improved
frequencies.
— Continued fleet investment to increase
the proportion of low-floor vehicles, improve frequencies, reduce
average fleet age and improve security (CCTV etc).
— Investment (in partnership with local
councils/authorities) in "real time information" and
"automatic vehicle location" technologies.
— Innovative ticketing schemes—"flat
fare" (Brighton), "Smartcard" (Oxford), "integrated
ticketing" (Go North East).
— Innovative/largely unique consultation
process in the North East for service changes.
— Expansion of Park & Ride facilities/services
in Oxford.
— The introduction of low floor buses
was an example of early partnership. Go North East was the first
company to introduce them outside London in partnership with North
Tyneside Council in 1994.
13. The nearest equivalent to a Quality
Contract is the system operating in London, with detailed obligations
on reliability and mileage. London, however, is a unique case.
There is severe road congestion, wide-spread commuting and near
saturation on the Tube and the Heavy Rail networks. The combination
of these elements—where the transport system is well-defined
and there is little room for flexibility and innovation—is
not present in any other UK city. Elsewhere, it is vital that
councils and bus companies can have the flexibility to meet rapidly
changing needs.
THE IMPORTANCE
OF BUS
PRIORITY MEASURES
AND THEIR
ENFORCEMENT
14. All customer research leads to the conclusion
that service reliability is paramount. Dedicated—and enforced—bus
lanes, priority junction control and parking restrictions are
essential to provide an efficient bus service for passengers.
These measures demand the commitment of local authorities to ensure
that we can play our part. In Brighton & Hove for example,
the council has invested over £6.5 million in priority measures,
alongside the £15 million we have invested in our fleet,
and has taken over parking enforcement and recruited additional
wardens. Brighton & Hove bus company has helped to highlight
the need for stricter enforcement by mounting a public campaign
including a successful petition which attracted 2000 signatures
and enabled the company to raise the matter as a priority with
the Police.
15. Bus priority measures help to ease traffic
congestion, help us to provide better and more reliable bus services
for our passengers and make better use of travelling time for
our vehicles. Without a doubt, bus priority measures are essential
to ensure a smooth running bus service for the travelling public.
16. In addition, if bus services are to
get anywhere near the reliability figures imposed by Traffic Commissioners
then much greater enforcement measures need to be undertaken.
This would include the enforcement and increase of parking restrictions
and more monitoring and enforcement of bus lanes. Perhaps the
Commissioners should also monitor police and local authority activities
in these areas.
REGULATION OF
THE BUS
INDUSTRY
17. In our view, the bus industry is already
adequately regulated. At present, we are allowed to set fares,
routes and timetables, in accord with passenger demand, wherever
we are able to do so commercially. Any increase in regulation
would have a harmful effect on the quantity and quality of the
bus services we operate.
18. Although we are free to set our own
timetables, the majority of our services are still influenced
by the local authority, for example to coincide with school timetables,
as well as by the demands of our passengers.
19. Extensive and increased regulation would,
we believe, impact significantly on the service we could offer
our passengers. It would increase bureaucracy and costs. It would
reduce flexibility making it more difficult to respond to passenger
needs and would break the link between the market and the network
planner. It should not be forgotten that the Transport Act 1985,
which defined the current form of regulation, was a direct response
to the excessive cost incurred in a number of authorities, particularly
in Metropolitan areas where direct control of bus services was
exercised.
20. One aspect of regulation that is no
longer working is that of Traffic Commissioners. They now seek
to impose far more unrealistic targets than are imposed elsewhere
in the transport industry. The ability of a bus to keep to a timetable
is far more outside of our control than in any other comparable
industry. Delays are caused by events such as accidents or illegal
parking, which we can neither predict nor remedy.
THE CONTRIBUTION
OF BUS
SERVICES TO
REDUCING SOCIAL
EXCLUSION
21. We are able to offer routes across a
wide range of areas. Because of our network approach, we are able
to maintain less profitable routes by subsidising them internally.
Service reductions are ultimately as a result of Councils facing
cash crisis on revenue expenditure for supported services, NOT
due to Go-Ahead companies cutting back or increasing profit levels
demanded.
— In Crawley Metrobus stepped-in to
maintain the commercial bus network abandoned by a previous operator.
— Go-Ahead companies invest enhancing
the frequency of commercial networks.
— All subsidiaries operate a "social
network". In other words, they cross subsidise to maintain
a mix of profitable/not so profitable/not independently profitable
services.
22. There is no clear evidence of mass deregistrations
taking place. The recently published ATCO report is based purely
on local authority opinion of new registrations/cancellations,
not on actual figures. It should also be remembered that many
registration changes are limited to one or two journeys, or are
made to meet a specific local authority requirement.
23. Go-Ahead is mindful of the need to reduce
social exclusion. We fully support concessionary fare schemes,
and we have a commitment to introduce fully accessible low floor
vehicles throughout our operations.
Chris Moyes
Deputy Chief Executive
April 2002
| 
