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

Memorandum of the Institute of Logistics and Transport (Bus 38)



  1.  By way of preamble it is worth noting the crucial role that the bus industry must play in order to achieve the objectives for reducing road congestion, improving air quality and reducing greenhouse gases that the Government has set in its integrated transport policies, most recently the 10-Year Plan. Put bluntly, unless the bus industry is able to attract substantial patronage from trips currently made by car, the targets set by the Government cannot be met, even if a renascent railway industry achieves or exceeds the targets set for it.

  2.  The Institute is concerned that some recent comments by Ministers, Bus Industry leaders and Local Government Members and Officials have indicated a confrontational stance, particularly in respect of the interpretation and use of provisions in the Transport Act 2000 for Quality Contracts. As the original proponents of the concept of Quality Partnerships ("Bus Routes to Success", Chartered Institute of Transport, 1991) we remain convinced that in the complex statutory environment created by successive governments, the only practical way forward is for all players to work together and reach consensus. That will undeniably require some vigorous debates, but time is not on the side of British transport and substantial changes to the legislative framework are not a short-term option.


  3.  UK governments have always tended to regard the provision of public transport as a commercial activity. Operating companies are expected to make profits. Subsidies are considered to be a sign of inefficient operation. However, cross-subsidies are an inherent factor in public passenger transport. Subsidies could not normally be paid from public funds to bus operators until the 1968 Transport Act which enabled them to be paid for the provision of economically or socially necessary services. The 1985 Transport Act arose from the then government's desire for transparency in the costs of operation of bus services. Services that could not be provided commercially were to be put out to competitive tender.

  4.  Today around 83 per cent of bus mileage is provided commercially, ie without subsidy, with the balance being provided through the tendering system. This, however, does not reveal the extent of other public funding made available to the bus industry through fuel duty rebate, and to its passengers through payments for concessionary travel. Local authorities also directly fund a variety of ancillary functions, including in many areas the publication of timetables and information and/or the provision of infrastructure (bus stations, stops and shelters). Overall it is estimated that some 25-30 per cent of expenditure by or for the bus industry is supported from public funds.

  5.  For the bus industry to play its full part in integrated transport policy it must be capable of offering services which will cater both for those with no realistic alternative way of travelling (including those without personal access to cars, young people etc)—the traditional (and dwindling) "captive" market—and for those who can be persuaded to choose bus travel for reasons which might include convenience, value for money or successful marketing. To serve these market segments adequately requires services which are comprehensive in terms of times of availability and hours of operation of an appropriate range of routes, operated by vehicles with high standards of amenity and comfort (including ease of access) at fares which are seen as reasonable, particularly for those opting to use bus in preference to other modes.

  6.  In much of the developed world, including most of Continental Europe and many North American cities, it has long been accepted that the costs of providing public transport services that meet these criteria will exceed fare income. Subventions from public funds are often in the range 30-50 per cent occasionally greater. It is important to recognise that in many other countries both public and political attitudes accept such levels of subsidy on the basis of maintaining the general quality of life in the urban environment. Public Transport is rarely subject to the dramatic swings that have characterised British transport policy. Correspondingly levels of investment have been more consistent than in the UK, although, at least in major urban areas, recent operator investment in new vehicles has been impressive.

  7.  It will be seen that public support levels to the UK bus industry overlap the lower end of the range of support observed in other developed countries. However, the common perception of travellers is that UK public transport is significantly worse than in many parts of Europe. All things being equal, this should not be so and this suggests that there is a strong case for examining how the support is applied.

  8.  A common European model is to pay support for networks of services rather than individual routes, and to expect that concessions for children, older people etc carried on regular services will be part of the general fares structure. In Great Britain, excepting Greater London, tendering is on a route-by-route basis and opportunities to plan jointly the commercial and publicly supported services do not arise. Therefore some network synergies are lost.

  9.  UK concessionary travel schemes are governed by a Byzantine set of regulations requiring that operators should be "neither better nor worse off" as a result of carrying concessionary passengers. The comparison is with passengers carried at the full standard fare, but as concessionary travellers account for around 40 per cent of total UK bus patronage, supported by public funding of almost £500 million, effectively the foundations of many commercial services are underpinned by public support payments.

  10.  Concessionary travel is expensive to administer: authorities and operators devote much effort and survey resource to calculating concessionary travel reimbursement. There is cope for simplification by revising the regulations to allow the costs of concessionary travel schemes to be a matter for commercial negotiation between authorities and operators in their areas reflecting the fact that these are contractual payments to carry specific groups of passengers at reduced fares.

  11.  A more radical approach would be to move to a more open system of network support, whereby in each authority area a "conference" of the authority and all the operators within its area would jointly determine the overall requirement for bus services, following which operators would each assess the level of support necessary, including concessionary travel to maintain the parts of the overall network provided by them. Negotiation between the authority and the operators would finalise service and support levels.

  12.  Bus strategies required under the Local Transport Plan system offer an ideal vehicle for developing this approach. Ideally an additional sum equivalent to the current level of fuel duty rebate payments in the area would be available through the authorities so that a single support payment could be made for each operator's part of the network.

  13.  This "Network Development Conference" approach should more effectively bring together the commercial skills of the operators with the economic and social objectives of the authorities to achieve the best possible networks and service levels. Essentially it would maximise the effectiveness of the combined resources of the commercial network and public support payments. Such an approach is not too dissimilar to those in a number of European countries. In the UK, changes may be required not only to tendering and concessionary travel regulations but also to the role of the Competition Act within the UK bus industry.

  14.  This discussion of subsidy was opened by the comment that the British have usually regarded the provision of bus services as a commercial ie profit making activity. Subsidies have been seen as a sign of inefficiency. Integration has been seen as a political objective, not an essential feature of public transport networks that can provide reasonable alternatives to the private car. This lack of clarity or vacillation by successive governments has led to Britain having some of the poorest public transport in Europe. The Government needs to decide what role it sees for public transport and then draw up the appropriate financial rules and structures. Five basic options might be suggested:

RoleObjective Subsidy
Augmented CommercialProfit with quantified subsidy to meet identified non-commercial needs. Limited
TransportationTo provide an effective alternative to the private car with subsidies to keep fares competitive with perceived car costs and thus "control" modal split. Focused
RegenerationTo complement economic, industrial and development policies through adequate provision of public transport in network and frequency terms. Focused
SocialPublic transport provided as a social service offering mobility for all. Subsidies enable higher frequencies over a wider network to be provided at fares all can afford. General

  15.  The 1998 White Paper and subsequent actions: The Transport Act 2000, Local Transport Plans and the 10-Year Plan, all identify a "transportation" or "regeneration" role for public transport. Thus subsidies will have to be paid wherever the cost of public transport networks cannot be fully recovered from the fare box. This does not mean that bus operators should not use all their skills both to contain cost and effectively market their services. Nor does it mean that securing authorities should be over-prescriptive. The density of networks and frequency of services will vary according to the nature of the area.

  16.  In the time available to compile this memorandum the Institute has not had time to investigate potential solutions to some of the issues raised. However, a number of broad conclusion on subsidies can be drawn:

    (i)  public transport needs to be treated as a network, not a loose collection of free-standing routes, if it is to achieve its maximum potential;

    (ii)  with 25-30 per cent of the bus industry's turnover coming from public funds, comparison with European cities and regions with only slightly higher levels of support suggests that better results might be expected;

    (iii)  the various streams of public support and the regulations governing them are Byzantine and unnecessarily complex. Consideration should be given to providing all mainstream support for buses (service subsidies, concessionary fares, fuel duty rebate) through a single ring-fenced comprehensive "pot" allocated through the Local Transport Plan process with the fuel duty related support from central government included;

    (iv)  in determining the single support payments for each operator, there should be negotiation and agreement between authorities and operators to finalise the network and service levels.


  17.  As noted in the Introduction, one of the Institute's predecessors—the Chartered Institute of Transport—developed the concept of Bus Quality Partnerships. These have been supported and reinforced by the provisions in the Transport Act 2000 to give such partnerships statutory protection.

  18.  The major weaknesses of Bus Quality Partnerships as presently operated are:

    —  they are not binding on participants. Instances of authorities and operators defaulting on their initial commitments have been reported;

    —  they are not able to include hours of operation of services or fares levels. In some cases, informal concordats have been reached on these issues.

  19.  The advocates of Bus Quality Contracts see them as an opportunity to extend a quasi-franchising system, similar to that introduced with some success in London, to other parts of the UK. However, a number of problems can be identified with this approach, including:

    —  few councils and PTEs now have staff skilled in the detailed processes of bus service planning necessary to formulate the service specifications that will be the basis of the contracts. In London the division of London Transport Buses ensured that appropriate skills were available in each successor body;

    —  a major criticism of the London arrangements is that the operators have the close relationships with the passengers that should ensure that service provision and performance are well matched to customer needs, not Transport for London who plan the services in great detail and control the contracts. When operators are cast in the role of contractors operating someone else's service specification with no opportunity for change in response to customer needs, tensions arise and job satisfaction suffers for managers who can then take no substantial role in market development;

    —  the tortuous approval procedures laid down in the Transport Act 2000, which introduce further bureaucratic burdens for both authorities and operators.

  20.  Clear examples of the need for more effective partnership can be seen especially in many small to medium sized towns and their rural hinterlands, where the mismatch between commercial and subsidised service requirements leads to networks that do not make best use of the available resources.

  21.  The Institute still believes that partnerships to jointly determine the total bus network in each authority area offer the way forward, using conferences of authorities and operators on the lines suggested in the discussion of subsidies above. By combing the skills of authorities in identifying the social and economic needs for services to meet their policies with those of operators in planning, marketing and operating bus services it should be possible to maximise both the effective use of resources and passenger satisfaction.


  22.  At the current time, the Institute is aware of mixed results from projects undertaken under the various Bus Challenge initiatives, but the sample available is small. However, it is appropriate to make a number of observations on the principles of such funding and the types of scheme being supported.

  23.  Provided that they are additional to and not replacing mainstream funding, "challenges" are a useful device for encouraging innovation. However, it is important to recognise the downstream consequences of success. For example, if a rural bus service proves successful to the extent that it would comfortably meet the relevant local authority's criteria for subsidy, yet that authority has no headroom in its subsidy budget when challenge funding expires, what happens? Expectations have been raised and on normal criteria the new service should continue. Should another subsidised service be sacrificed to allow this? The Government should place more emphasis on exist strategies both in its calls for bids and in assessing them.

  24.  For both and rural and urban challenges a number of common service characteristics emerge:

    —  interchange between services and modes

    —  joint sponsorship, for example with community health practices and the Countryside Agency

    —  demand responsive operation (eg dial-a-bus, "Wigglybus" etc)

    —  need for strong promotion and marketing

    —  emphasis on personal travel needs as compared to more traditional bus service planning

  25.  Some key issues arising from this are:

    (i)  recognition of the traveller as an individual and adapting services to his/her needs;

    (ii)  convergence (particularly in rural areas) of transport, health and parcel carriage requirements;

    (iii)  the availability in some instances of regeneration, other specific funds or funds from other agencies with complementary functions to supplement transport funding;

    (iv)  use of new technology, particularly vehicle tracking and communications, which will also facilitate better fleet management, real time passenger information and other worthwhile developments capable of wide application;

    (v)  the advent of travel plans or some types of higher quality service introduced with challenge funding can create problems of abstraction of passengers from commercial service, for example when "direct" works buses are introduced.

  26.  Care must be taken that disproportionate effort is not applied to small-scale schemes that are not capable of replication on a larger scale. Similarly, several authorities have decided not to bid for later rounds of Challenges because of "bidding fatigue" and the consequences of diverting scarce resources from mainstream task to projects with uncertain outcomes, either in attracting new support or in practical results.

  27.  All of these features suggest that there will be value from the Challenge initiatives in:

    —  increasing focus on individual needs in bus service planning;

    —  exposing opportunities to combine transport with other functions and initiatives (eg with health service requirements or tourist development);

    —  accelerating the use of appropriate new technology.

  But they should not be overused and have clear exist strategies.


  28.  Bus priorities are essential if reliable and punctual bus services are to be provided. The biggest disadvantage of the bus is that it shares its "track" with general road traffic. Whilst this enables it to provide accessible services it causes buses to be caught up in traffic congestion, unless bus priorities are provided. Although it is preferable that buses should have exclusive use of such priorities to maximise their benefits, in some instances the admission of carefully selected additional classes of vehicle may be accepted. Thus, it is common for cycles and taxis to be admitted to bus priority lanes, less frequently motorcycles and Heavy Goods Vehicles are also admitted. Where bus frequencies are low and road space permits, High Occupancy Vehicle (HOV) Lanes may be adopted. In the UK, this has been done only in Leeds where the lane is reserved for buses and other vehicles carrying two or more people, leading to the lane being christened a "two +" lane!

  29.  The provision of bus priorities requires political will from the local highway authorities. This is frequently not forthcoming since bus priority measures are generally seen as being "anti-car" rather than as better use of road space. Similarly, in respect of enforcement, all too often the police see buses only as another commercial road user and not as an effective instrument to reduce congestion.

  30.  Another factor in the success of bus priorities is visibility to the motorist. The most obvious cases of this are guided busways and contra-flow bus priority lanes, but there are also substantial arguments in favour of long continuous stretches of bus priority as may be found, for example, in the Red Routes in London, the Greenways in Edinburgh, the guided busway corridor schemes in Leeds and the Quality Bus Corridors in Dublin. Such schemes are however the exception rather than the rule.

  31.  Many bus priority schemes are installed in a piecemeal fashion and do not reflect any joined up thinking. Thus there are instances where park and ride sites have been set up but there are no bus lanes of any length to help the bus (and thus the park and rider) to reach the city/town centre quickly without being trapped in traffic queues. Similarly bus priority lanes and other measures are often insufficiently lengthy or too infrequent to make much difference. They consequently fail to entice the potential traveller to prefer the bus over the car. If the bus is to be promoted as a main mode of urban travel then users must be able to see and experience the difference in using the bus rather than a car.

  32.  Only guided busways are self-policing: all other bus priorities require supervision to ensure that prohibited vehicles do not use them. A mile-long bus-only lane can be rendered useless if one lorry parks in it to make a delivery, or if a car park, whilst the driver pops into a newsagents. The abuse of bus-only lanes in Britain tends to be high because of insufficient enforcement by the police. A very different situation exists in Dublin where the Quality Bus Corridors are respected and well-policed by the Garda.

  33.  The main impact of bus-only lanes is to improve service reliability, unless they are part of a comprehensive route traffic management exercise, such as the Red Routes in London, where cost savings may be made because vehicle and staff productivity can be improved. However, in non-comprehensive or insufficiently enforced schemes it is frequently the case that benefits observed in the short-term are eroded, often because of abuse of the facilities by other road users.

  34.  Once bus-only lanes have reached a degree of maturity, five particular problems arise:

    (i)  Inconsistent periods of operation cause confusion to car drivers and lead to lane abuse, ie ignoring the restriction when they should be observing it and ignoring the lane when they can use it!

    (ii)  Inconsistent surface treatment, in that separate colours—green, red, black—are now commonly used but there is no standardisation—eg red for all day bus lanes, green for daytime only etc. Note the different conventions in London and Edinburgh for example!

    (iii)  Lack of enforcement—the police do not consider bus-lane enforcement worthy of any priority, which leads to widespread abuse at all times. Limited waiting/loading times are frequently ignored by frontages onto bus-only lanes. It is of course recognised that the police work to priorities and plans set by the Home Office and suffer their own lack of resources.

    (iv)  Maintenance—where bus-only lanes are coloured, eg Greenways in Edinburgh, the coloured top layer wears off and this, combined with the works of the public utilities, means that the viable message is reduced.

  35.  The key to successful bus priorities is enforcement. Many bus operators are now fitting CCTV cameras to their vehicles for internal security and external recording of traffic incidents. It is believed that images from these and static cameras can only be used for prosecution of bus lane offences in London, but they do enable serious or persistent offenders to be identified and referred to the enforcement authorities. The London arrangements should be extended elsewhere in the UK, possibly accompanied by decriminalisation to allow warden enforcement and reduce pressure on police resources.

  36.  Whilst detection of bus lane infringements by the operators themselves is obviously helpful, only the police can deal with moving traffic offences. As the benefits of bus lanes can be quickly eroded by infringement, there is a strong case for suggesting that the highways authorities and the police should build into the costing of proposed schemes provision to pay for police enforcement as part of the ongoing revenue costs. In some cases, operators have paid for a police presence, but usually only for short periods.

  37.  There should now be sufficient evidence from the large number of bus priority schemes for DTLR to develop guidance on the costs and benefits of enforcement, so as to improve the provision for enforcement both in the planning and the operation of such schemes. This is now urgently required so the yet to be implemented schemes in LTPs can be put in place with maximum effect—this demonstrates the importance of clear and technically robust monitoring programmes as part of these infrastructure projects.

  38.  The Sub-Committee's question directed attention to enforcement. Before leaving the topic of bus priorities however, the Institute consider attention must be drawn to a serious potential conflict between policy objectives and assessment of major LTP schemes using the NATA procedures. Because NATA, rightly, looks at costs and benefits in the round there have been cases (for example Leicester) where a comprehensive package of bus priorities and real traffic restraint has failed to be accepted because of the influence of high disbenefits to car traffic —in fact because the prime objective of the package is being shown to be achieved! Had the package been brought forward as a series of smaller schemes, each under the major scheme threshold and so within local authority discretion under Local Transport Plan procedures, there would have been loss of visibility and impact compared to the comprehensive approach but the package would eventually have been completed. Such cases demonstrate that the Government needs to review its approval procedures to ensure that its transport objectives and targets as set out in the 10-Year Plan are not frustrated by the perverse operation of standard assessment procedures and resource allocation rules.


  39.  As noted in the preamble, and in common with the Institute's views on the rail industry, now is not the time for another piece of radical primary legislation. Experience elsewhere in the world has shown that privatised and deregulated operations can provide high quality integrated public transport systems if there is a consistent approach to the application of subsidy and co-ordination of operators' services.

  40.  In the discussion of subsidy we have suggested that substantial revision of the regulations governing tendering and concessionary travel, to allow support to be applied at a network level rather than to a route or an individual passenger journey would be beneficial and that the mechanism to deliver this in practice can be developed through the Bus Strategies of Local Transport Plans.

  41.  One area of major concern which time and space does not permit us to explore adequately in this memorandum is the dead hand of the Competition Act as interpreted by the Director General of Fair Trading. Already the application of the provisions of the Act has led to the termination—to the bemusement of the public affected—of sensible voluntary integration such as joint timetables and inter-available ticketing schemes. There is now a strong case for treating the bus industry as a utility and creating a Bus Regulator to judge public interest and promote the achievement of the Government's integrated transport policies.


  42.  Social exclusion is commonly associated with urban problems, particularly in inner cities and on large peripheral estates. However, it is not only urban areas that have social exclusion problems, rural poverty is a less studied but nonetheless acute problem. Even in non-deprived areas, pockets of social exclusion exist. Crime tends to be prevalent in many deprived areas, with vandalism and attacks on vehicles, including buses, becoming more widespread. Choice is also limited where new housing areas require the provision of a bus service, but it is not present at the inception of the development, and introduced much later on.

  43.  It has long been recognised that the social groups most likely to suffer social exclusion are also those most likely to use bus services. They are also those least likely to be able to afford to run a reliable car (leading to the phenomenon of estate roads partially obstructed by immobile vehicles for most of the day). Therefore a key failure of most current transport policy as far as tackling social exclusion is concerned is that choice is unlikely to be available for the people most affected. Buses offer the best opportunities to use transport to tackle social exclusion.

  44.  As has already been experienced with the introduction of low floor buses to benefit disabled people which have also brought significant benefit to others such as parents with buggies (which can use the wheelchair spaces) and those with temporary mobility impairment, measures to assist social inclusion will usually also be of benefit to a wider population. The following paragraphs demonstrate the issues for each aspect of bus services.

  45.  Networks: Support must be made available to ensure that all communities have adequate links to a range of employment, shopping and commercial centres, hospitals and clinics, social and recreational facilities. Although instances of public transport services being provided and supported financially as part of regeneration initiatives have occurred, there is little recognition of the need for long-term funding to sustain services as lifestyle changes take place. It is little use funding training for a group of unemployed people to take jobs in a relatively distant location if the pubic transport service used to access those jobs is withdrawn at eight weeks' notice (the period of notice required to vary a regulated local bus service) because the operator considers it is not viable or if there are no convenient services linking such clusters of people to appropriate locations where their skills can be employed.

  46.  Service Frequency and Periods of Operation: In the remoter deprived communities, the sense of isolation is often enhanced by the early termination of services. This cuts down the ability to socialise in the town or regional centre. In the mornings and at weekends, relatively late starting services can reduce the opportunity for shift-based and other employment requiring an early start.

  47.  Fare Levels: Public transport fares have risen considerably faster than the general cost of living index, at a time when motoring costs have continued to fall. The paradoxical situation is created that bus services, perceived as a low amenity form of transport, are more expensive than high amenity motoring. For those unable to purchase travelcards or season tickets the situation is exacerbated in that no discounts are available. Although concessionary fares alleviate the problem of travel costs for elderly, disabled and children in education, there is no such assistance available for low paid part-time workers, unemployed people, parents accompanying families or other deserving cases. Furthermore, the policies of some operators towards multi-operator travel schemes (for example in West Yorkshire the all operator Metro Card price is drastically undercut by single operator equivalents offered by the large groups) and the attitude of the Competition Authorities towards the creation of such schemes on a commercial basis, mean also that for some on the margins of social exclusion the availability of suitable tickets is becoming more restricted.

  48.  Patterns of Operation: Although not specifically a problem of social exclusion, bus operators have tended to rely on "mass transit" solutions to grow the market by concentrating services at higher frequency on key routes. This frequently creates the dichotomy that increasing bus use and modal transfer may be achieved, but at the expense of giving up service on sections of route which are valued most by those with limited mobility and no alternatives. It then falls to local authorities to cover the lost services through the tendering process. More flexible patterns of operation with timed interchange and free transfer between services or greater use of demand responsive options would help considerably with solving the problems of isolation and restricted travel opportunities that characterise social exclusion.

  49.  Support Policies: Whilst the remedies indicated, of providing more extensive networks, with longer periods of operation and cheaper travel, inevitably imply greater public support or lower returns for the operator, there should be a virtuous relationship in creating increased levels of bus travel, reduced need to own a car and, in the longer term, increased revenue from greater bus use. At subsidy levels measured in pence per passenger trip, such support compares well with public support for both car travel (which certainly does not cover its full costs in congested conditions) and for rail, where support is often measured in pounds per trip and the majority of passengers would not be regarded as socially excluded.


  50.  In this memorandum the Institute has discussed a number of issues in response to the questions raised by the Sub-Committee. Common threads emerge:

    —  Partnership rather than quality contracting is seen as a way forward, with the proposal of the Network Development Conference offering a model for debate;

    —  Primary legislation and radical changes are not required. Using the wide range of powers to make regulations it should be possible to use existing legislation to move towards the Conference proposal;

    —  The Conference approach would allow full incorporation of bus priority, social inclusion policies, joint ticketing, information and infrastructure within the overall negotiation of support levels for an area;

    —  Support to the bus industry should be rationalised so that a single "pot" replaces current separate arrangements for service subsidies, concessionary travel and fuel duty rebates;

    —  The Competition Act 1998 sits uneasily with the objectives of integrated transport policy. This could be resolved by the creation of a Bus Regulator, as is the case for other privatised utilities.

April 2002

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