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

Memorandum by The Public Transport Consortium (Bus 45)




  1.1  The Public Transport Consortium is an all party grouping of local authorities outside the metropolitan areas with a responsibility for, and a particular interest in, public transport. It is a Special Interest Group of the Local Government Association and its members are County Councils and Unitary Authorities in England and Wales with direct experience of bus operations.

  1.2  It is fair to say that generally Consortium members are becoming increasingly concerned at the ability of the industry to meet the Government's targets set out in the 10 Year Plan, of which members are in general in full support. This paper discusses the situation outside metropolitan areas and suggests some ways in which changes to the current approach could help towards those objectives.


  2.1  The total bus network is made up of commercial (profitable) and supported services. The supported network is typically 20-30 per cent of the total, with the emphasis on evening, weekend, school and rural services.

  2.2  The worst performing supported services require the highest subsidy per passenger. An effective co-ordinating authority will monitor this area closely seeking good housekeeping savings and more cost-effective solutions, or non-conventional bus alternatives.

  2.3  The commercial network is typically 70-80 per cent of the total and are mainly daytime Mondays-Fridays/Saturdays urban and interurban services.

  2.4  The interface between the networks is unstable. Supported networks must respond to operators' actions on the poorest performing commercial services. As this interface is related to commercial financial performance, it is not clearly defined and the reality is that commercial and supported services are to a large extent intertwined.

  2.5  The Transport Co-ordinating Authorities are in an inevitable reactive role with respect to commercial changes at the interface, and because marginal commercial services compare with the best performing support services, the deregistration of commercial services prompts the co-ordinating authority to replace them with supported services. Without consequent action to achieve saving in the area of poorest performing services the support bill will increase.

  2.6  In many cases up to about 40 per cent of the shire authority supported network is concerned with the carriage of children to and from school—partly for statutory free transport and partly for fare paying students. The supported network is therefore closely related to the overall provision of free school transport by the LEA.

  2.7  The operators that tender for contracts to the co-ordinating authority to operate the services in the supported network are, by and large, the operators who provide the services in the commercial network. By far the majority of all services are provided by large national (and now multinational) companies like Arriva, First and Stagecoach. In the UK context, the most profitable areas in which these companies operate are the larger urban areas where passenger volumes are already high and there is potential to generate sufficient increases in patronage (and therefore revenue) to justify large scale investment in new vehicles and equipment.

  2.8  This serves to disadvantage the shire authority areas where there is, for sound commercial reasons, less incentive for investment in predominantly small and medium sized towns and rural services. Quality Partnerships (QPs) are therefore orientated to the better performing commercial routes where operators can expect to get best returns from investment in new vehicles. Hence a large proportion of the network is unlikely to benefit from Quality Partnership development in the short/medium term.

  2.9  The commercial services that do exist in the more rural shire authority areas are lower priority and poorer performers than elsewhere. Investment in new vehicles is therefore less likely and many services are operated by buses cascaded in from conurbations following delivery of new vehicles to replace them in these areas. Even where new vehicles have appeared on quality partnerships, the message from operators in shire areas is that future QPs may be provided with refurbished cascaded buses rather than new ones.

  2.10  The conflict between conurbation and small town/rural services comes into stark relief in places like Cheshire where the shire county has three neighbouring conurbations, two of which have PTEs. There is a great contrast between QP activity in, for example, Manchester and in Cheshire towns.

  2.11  Notwithstanding the greater opportunities in the conurbations, the shire areas still have significant social exclusion issues to tackle in which transport plays a major role, especially in rural areas and enclaves of multiple deprivation in many small and medium sized towns.


3.1  Introduction

  3.1.1  Having recognised that QPs are likely to be limited to the best performing commercial services it is necessary to address the mechanisms available to improve the broad band of only moderately performing services in the commercial sector. Some mechanisms are already available, though with differing levels of practicality.

3.2  Rural Bus Service Grant (RBSG) and Challenge (RBC)

  3.2.1  These are welcome as they allow for new initiatives to be developed. RBSG provides the opportunity to support and experiment with more marginal services than conventional bus support permits. Quality can be addressed by specifying or purchasing new accessible vehicles.

  3.2.2  There remains concern about the long term continuity of these services if RBSG is eventually withdrawn. RBC allows experimentation away from the traditional method of providing bus services with opportunity for more of a community focus for using other vehicles besides conventional buses. Concerns remain about exit strategies and continuity after, say, three years. From recent discussions with the Minister it seems that it be will necessary to continue support for these operations from ordinary revenue support funds, at the expense of some conventional services, thus adding to the problem referred to earlier.

3.3  Quality Contracts (QCs)

  3.3.1  QCs are seen in the Transport Act (2000) as the means of addressing improvement where QPs cannot be provided. Effectively the QC gives the co-ordinating authority the means to establish a London-style franchise operation, eliminating on the road competition. However, there are a number of difficult aspects which are making co-ordinating authorities reluctant to pursue the QC approach:

    —  The co-ordinating authority is likely to want to improve frequencies and quality of vehicles, so there could be significant funding issues. If more vehicles are needed to operate a QC, new premises may be needed and cost increases could be substantial.

    —  If an operator were to lose its network, must it be compensated for the assets no longer needed?

    —  If a QC is implemented to improve the network within a given area and 50 per cent of the local service is provided by through running interurban routes, must these be incorporated within the contract?

3.4  Alternatives to the Bus

  3.4.1  Alternatives are inhibited inter alia by the licensing regime, the vested interests of commercial operators and the resource commitment falling primarily to the co-ordinating authorities in setting up and supporting innovative solutions.

  3.4.2  Nevertheless it is arguable that the bus, outside the larger towns, is no longer a product which has the power to persuade car users to switch to public transport. The low frequency, fixed route large vehicle with problems of unreliability and low service levels in the evening and at weekends does not meet many of today's requirements.

  3.4.3  There is scope for smaller, higher quality vehicles providing door to door services to replace large tracts of the conventional bus network. Many people today are happy to choose taxis as an alternative to the car whilst they would not consider the bus. Nevertheless the conventional taxi with associated high charges is not the appropriate replacement for the bus. The characteristic of the two modes must be melded into an attractive alternative to both. Up to now developments in this direction have been largely confined to the thinner areas of demand in the rural areas as an alternative to the supported bus. Commercial inertia and legislative restrictions have discouraged innovation in commercial bus areas, where current ridership levels are sufficient to provide a base load upon which attractive innovative services can be developed. Here lies an opportunity to address radically the middle ground of commercial bus and taxi operation in the shire areas to provide an attractive alternative to the declining bus.


4.1  Commercial Interests

  4.1.1  The statutory separation of the supported and commercial networks is an underlying barrier to integration. The 1985 Transport Act effectively prevents co-ordinating authorities from intervention in the commercial area.

  4.1.2  Fundamentally commercial competition clouds the opportunities that operators may have to provide integrated facilities. A significant proportion of corridors served commercially are served by more than one operator. They inevitably see themselves in a competitive position and the impact of this competition tends away from the provision of an integrated approach to the customers, as is evident in unco-ordinated timetables, incomplete publicity and separate ticket system without inter-availability.

4.2  Competition Law

  4.2.1  Commercial operators who may recognise the overall advantages of co-operation to produce an integrated and co-ordinated network are inhibited by competition legislation. Agreement on operation is generally deemed to be anti-competitive, so that on joint corridors spreading operation so that a regular headway is created and acceptance of each other's return or season tickets become difficult. The average member of the public is generally only interested in catching the first available bus, rather than the exercise of consumer choice. Insistence on a competitive interface between operators overlooks the main competitor which is the private car.

4.3  Information

  4.3.1  Publicity on bus services is generally poor: it can often be incomplete, difficult to understand or out of date. If potential passengers find it difficult to obtain information or receive wrong information on bus services, it is likely that they will be resistant to switching to public transport. Similarly, if at the bus stop no information is available, the customer is left in an uncertain situation at an often exposed and isolated location. Good publicity and information is therefore paramount in encouraging greater bus use and it is generally held that the cost of effective publicity can be recovered in the revenue from resulting increased ridership.

  4.3.2  In some areas publicity is still largely left to the operators. However, many local authorities have endeavoured, over the last 15 years in the deregulated market, to provide a comprehensive and up to date service. Without this, in a competitive situation an enquiry to a bus operator information point might have produced misleading information with an unwillingness to give details of the next bus or the full timetable on routes where commercial competition is occurring.

  4.3.3  The Transport Act 2000 makes provision for co-ordinating authorities to take on the publicity role (and charge operators), if they consider that operators are failing to provide the required service. It is important that authorities take up this responsibility and are not inhibited by resistance from operators to making financial contributions.

April 2002

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