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

Memorandum by Transport 2000 (Bus 49)


  Transport 2000 is an environmental campaign group that works to improve public transport and encourage walking and cycling so as to reduce car use and road building. Our members include bus operators, bus users and trade unions representing bus workers. We have recently prepared a policy paper on buses, which has been the subject of extensive internal and external consultation, and have drawn on this for this memorandum. We have also supported a joint submission to this inquiry from the Local Government Association and others.


  For environmental reasons; we need to reduce car use and increase the use of buses, along with walking, cycling and railways. There needs to be high quality local bus services as one element in a set of alternatives to car use. For social inclusion reasons; there needs to be a high quality bus service that can provide access to people, goods and services for those without access to a car. To meet social inclusion objectives, buses have to be accessible—and this means the bus stop has to be reachable too—and affordable. For economic reasons; buses can help to tackle congestion by reducing peak time car use and to get people without access to a car to jobs and training, giving employers a larger recruitment pool. Buses can also enable access to tourist and leisure areas while reducing car use and parking.


  Public funding for bus services is below that in many European countries, and much of it is either national and not specific to an area (fuel duty rebate) or ringfenced for certain groups (concessionary fares) or types of service (rural services and school travel). The fuel duty rebate scheme is currently being reviewed by the Treasury and by the Commission for Integrated Transport, but will almost certainly remain a national scheme. The funding actually available for local councils to spend in supporting and enhancing local bus service levels and quality is very small. Local transport plans give five year capital funding for bus priority/bus infrastructure improvements, but revenue funding for subsidising services has not increased, against a background (see below) of commercial deregistrations, pressures for these to be subsidised and cost increases. Bus revenue funding is also not ringfenced in revenue support grant, unlike highway maintenance, and has to fight for priority with other non-statutory services. Revenue funding is also decided annually—there is no long term revenue funding framework comparable to the LTP capital funding. Rural Bus Grant has helped, but until recently could not be used to support existing services.

  We believe therefore that improved bus services will require extra public funding, but through a reformed system. Extra funding is needed:

    —  To extend bus/public transport networks to serve more people and areas currently without any or many services.

    —  To make the cost of public transport affordable. Bus fares have increased substantially in real terms, while motoring costs have stayed constant, and while Transport 2000 supports increases in real motoring costs we also believe that in some cases fares reductions can and should be used to reduce car use and social exclusion. Extensions to concessionary fares may be appropriate, but there is also a case for pump-priming funding to bring down fares generally. As Joyce Dargay and Phil Goodwin have found (in the IPPR report, "Any More Fares?"), some fares reductions could in principle pay for themselves over time through extra patronage.

  As well as extra funding, real reform in the way local authorities are funded for bus services is needed, and should be undertaken as part of the current review of local government finance. This should involve five year revenue funding arrangements for bus support, linked to bus strategies (with appropriate checks to ensure that councils deliver the services promised). This would give greater certainty to councils and operators alike in planning services, and would supplement the five year capital funding arrangements through Local Transport Plans. This funding could incorporate all or most bus support, including school transport, rural transport and concessionary fares, so making council bus funding subject to a single agreement with central Government.

  There has been wide publicity for service withdrawals and increased tender prices for bus services. However, there are a number of pressures on bus industry costs:

    —  Fuel prices have increased, and although the industry gets significant rebate on its fuel duty, recent increases have only taken partial account of fuel price rises.

    —  Wage costs have risen and companies are having to pay more to recruit and retain staff, after years of reductions in wages and conditions. Recruitment and retention are also affected by rising numbers of attacks on staff.

    —  Increasing congestion increases bus-operating costs and deters staff recruitment: more buses are needed to run the same service but fewer people are available to run them.

  These cost increases can no longer be absorbed by cost cutting—if anything there are now too few staff rather than too many and there is no "fat" to cut.

  The publicly quoted big groups are also under pressure to grow profits through passenger growth. Because they take the view that more growth is possible on core routes, there has been a tendency to cut out marginal or loss-making services away from these routes. We recommend that any move towards increased subsidy to bus services should be accompanied by a national partnership agreement between the Government, local government and the operators, with agreement from operators on their investment and service commitments and some commitments from local government on bus priority (see below).

  We have strongly supported the Government's Rural Bus Services Grant and rural and urban bus challenge initiatives. We carried out research on the first year of RBSG; this concluded that its application had been patchy, with some areas having improved services while others had not. The research did however show that tender prices did not seem to be influenced by the number of tenders—there was no correlation in nearly 1,000 tenders between number of bidders and outturn prices. If the Sub-Committee would like to see this research, we would be happy to submit it.

  Several rural bus challenge schemes have also provided improved services and have in particular shown the benefits of demand responsive services in some areas. There is however a concern that without increased mainstream support challenge schemes face serious problems, since they are supposed to become self-supporting. It is however clear that valuable challenge schemes such as the Wiltshire Wigglybus are unlikely to be able to achieve this and the services thus provided may therefore disappear. The Government should therefore conduct a proper evaluation of the experiments run under the challenge schemes, so as to reach firm conclusions on approaches which appear to work well, and then ensure that these enter the mainstream through the five year funding arrangements for local authorities suggested above.


  At present councils cannot, except through taking on quality contract powers, influence timetables or fares of commercial services, and amendments that would have enabled quality partnership agreements to extend to cover these were rejected during the passage of the Transport Act 2000. The bus industry is strongly opposed to local authority powers to intervene on timetables, routes and fares.

  The current situation seems to offer "all or nothing" controls to local authorities—either no say on commercial services, or complete powers to specify every detail of all services, on the London franchising model. There are two big problems with this position:

  First, in many areas, especially rural areas, operators do not in practice use their commercial freedom very much. In some areas—eg Dumfries/Galloway—almost all services are tendered, and in these places a move to quality contracts would lose operators very little freedom and might help them by allowing for longer term planning.

  Second, there can and should be options between London-style full specification of services and fares, and no involvement at all. There are examples of tendering arrangements in other European countries where operators retain significant freedom to plan networks. In the Netherlands, operators have been invited to suggest better networks for the same subsidy. In Helsingborg, Sweden (population of around 110,000), the agreement between the operator and the local authority gave the operator responsibility for service and fare planning subject to minimum levels of frequency and network density. In this case, costs and subsidy have been reduced, services have increased and patronage has remained stable. The operator can lose the contract if patronage falls by more than 3 per cent or if customer ratings of quality fall below certain standards, and can get extra payments if quality targets are met or exceeded. In Sodertalje, part of the Stockholm region, the authority defines minimum frequencies and maximum walk distances but otherwise gives planning responsibility to the operator (all of this is from John Preston's international comparison of bus service regulation in "Any More Fares?" Tony Grayling [ed], Institute for Public Policy Research, 2001).

  These are admittedly cases where regulation has moved to tendering from full public ownership/operation, but they show that there are other options between full commercial freedom to define networks and fares and the London model of complete specification by public bodies. The Swedish examples seem to aim to give operators incentives to grow bus use while reducing costs, within very broad specifications.

  There certainly would be big problems with any general reregulation on the London model, giving general powers to all councils to define and plan bus networks. We know already that councils vary enormously on transport, in terms of vision, capacity and competence, and in their attitude to buses; some are very good, others do little or nothing to give buses priority or even make things worse (by excluding buses from shopping areas, for example). There is no doubt that some areas would get worse rather than better bus services if councils were determining service patterns. There is also a danger of councils focusing on detail—trying to plan timetables for instance—rather than strategy (frequencies, start/finish times, interchange, priority etc). On the other hand, some councils would improve things. But it would be extremely variable.

  Furthermore, the "quality partnerships vs quality contracts" issue does not really focus on whether bus services work properly or whether they get people out of cars. Without a framework of "pro-bus" policies, bus services, whether run within quality partnerships or on quality contracts, will be unreliable and will be unlikely to attract people from cars. Such pro-bus policies should include:

    —  A framework of objectives, targets and measures to reduce traffic and social exclusion and promote a modal shift to public transport, walking and cycling.

    —  Planning policies which require travel plans for new developments, reduce parking standards, promote high density development and locate development where it can easily be served by public transport, including buses (as well as on foot and bicycle).

    —  Traffic management policies which manage and price car use properly and give priority to buses (as well as to trams, cyclists, pedestrians and taxis). This means realistic on and off street parking charges and controls, speed management, car-free or bus-only areas, priority networks and lanes and at junctions to allow buses (and other key groups) to take precedence over other traffic. New tracking technology that links buses to traffic control systems, now operating in cities such as Cardiff and Brighton, makes this easier (and also aids management of bus services and real time information).

    —  Traffic law enforcement, to reduce illegal parking, especially in bus stops and on bus lanes, and other traffic offences (speeding, jumping red lights etc) that impede buses.

  These general policies are key to growing bus use—but by the same token, as we have already noted, high quality public transport services and networks are necessary to make such policies publicly acceptable and workable.

  This has a number of implications. First, bus policy and planning cannot be considered in isolation. A town that does not have charges for car parking or has developments with very large car parks attached cannot expect to have very attractive, or very commercial bus services, and can generally expect significant and growing congestion, in which buses will be caught up. Council bus strategies cannot therefore be judged on their own. They will have to be looked at within the context of local transport and development plans.

  Second, operators must be sensitive to wider policy. A council—or in some cases a major employer or other traffic generator—that does embark on policies that can be considered "pro-bus" should expect a positive response from bus operators. From our experience, there are too many cases where this does not happen.

  Third, there are funding implications. As we have already noted, a high quality bus network will require extra public funding. But, in urban areas at least, the need for this could be lessened by "pro-bus" policies that increase bus patronage and reduce costs. By increasing usage and revenue, this will create a growing industry, with (potentially) surpluses that can and should be reinvested in further bus services or improvements to existing ones.

  So far the discussion on quality contracts has been somewhat theoretical. It is not enough to simply invite bids for the use of these powers. The Government should actively promote and conduct a series of experiments with the application of both quality partnership and quality contract powers, where authorities can make a case for them. These should cover a number of different areas (big city to rural), and should encompass a very broad spread of options, including different types of quality partnerships, area wide agreements and authorities setting broad parameters as in the Swedish examples (such as minimum frequencies and maximum walking distances), as well as detailed specifications on the London model. Crucially, this programme of experiments must include proper monitoring so that the performance of different types of quality contracts and quality partnerships in meeting environmental, economic and social exclusion objectives (and value for money tests) can be properly assessed and compared. The "pathfinder" proposals developed by six local authorities for the Local Government Association are examples of the experiments that Government should support and actively monitor.

  Beyond these experiments, councils should not be given extra bus powers in isolation. Councils should be given further powers to plan and specify service levels and fares on networks or particular routes, but only if they present to the Government a strategy, with specific commitments, for supporting bus services and increasing their use and quality. This should include appropriate targets for mode shift, social inclusion/access, traffic reduction and growth in usage (for example, rural authorities would have to contribute to the 10-Year Plan target of increasing the proportion of households with an hourly or better bus service within 10 minutes walk). It should also specify planning and traffic management policies and measures that will promote bus use and reliability, and a strategy, with costed proposals and schedules, for investing in and improving the key aspects of bus service quality outlined above—accessibility, information, connections, high quality staff etc. This strategy, which should be a strengthened version of the bus strategies required in the Transport Act 2000, should of course flow out of and support the local transport plan. Councils would have to demonstrate that they had the capability to implement this strategy, and should have access to extra funds (revenue and capital) to pay for it. They should also have to explain how they will involve users in planning services, and how they will integrate mainstream bus services with community transport or specialist transport such as schools and social services. Within this process, there should be opportunities for operators to show that the desired outcomes can be achieved without the extra powers.


  Congestion holds up buses and makes them unreliable. Parking in bus stops prevents buses from reaching the kerb and hence cancels out the benefits of low-floor buses. We consider that providing priority for buses and enforcing this, and bus stop clearways, effectively is critical to whether bus services work and are reliable and attractive. Brighton is an example of an authority that has invested in bus priority, the town's main bus operator has similarly invested in high quality vehicles and marketed the core network as a high frequency metro service with a flat fare. Passenger growth has been spectacular—20 per cent over the last three years and 9 per cent in the last year alone, comparable to London.

  Bus priority sometimes faces a reaction locally, especially from retailers, who tend to overstate the extent of their trade that arrives by car and under-estimate the extent to which people come to shops by other modes. Research in five towns for the Confederation of Passenger Transport found that between 30-60 per cent of shoppers arrived by bus. Bus priority measures can be better justified and made more publicly acceptable if carried out as part of upgrades of whole routes, like the London BusPlus programme now being carried out by Transport for London. In addition, as noted already, new technology allows "intelligent" bus priority.

  The Government should actively promote bus priority, and the "pro-bus" policies mentioned above. Specifically, we would like to see:

    —  Guidance to councils on buses, including indicative targets for bus services and for minimum bus access to key facilities and services, as outlined above. The guidance should also emphasise the need for priority where appropriate and the need for wider "pro-bus" policies. Guidance and briefing should also be given specifically to councillors on the powers they have and on good practice in bus services.

    —  Government scrutiny and comment on the new bus strategies, rewarding good ones with praise and high settlements, and criticising and giving low settlements to authorities with poor strategies, until they improve.

    —  An audit of local authority delivery of their part of current quality partnerships, in particular high quality bus infrastructure and bus priority.

    —  Enabling proper enforcement of traffic law, through including enforcement of bus priority and bus stops in decriminalised parking regimes and/or core police objectives.


  Currently, bus services outside London are subject to three main sorts of regulation:

    —  The Traffic Commissioners, who register services. The Commissioners have been getting tough on badly performing bus operators, but their scope and powers are limited. They do not take account of traffic congestion in poor performance and have no jurisdiction over local authorities, so operators are blamed for highway authority failures to give buses priority, or even for delays when roads are closed for maintenance. They also have a limited range of penalties: they can deregister or fine operators or sometimes stop them running services. In many cases this means that passengers lose out.

    —  The Office of Fair Trading which applies the Competition Acts to the bus industry (the rail industry has its own Regulator so the OFT has less of a remit there). The OFT also interprets its remit narrowly, looking at competition within the bus industry rather than competition between buses and other modes of transport. It has stopped operators from making agreements to accept each other's tickets or run regular interval joint services because it believes that this means anti-competitive cartels. A recent directive giving block exemption from Competition Acts for joint ticketing schemes is still very narrowly drawn and operators' legal advisers are still chary of any scheme which might fall foul of the OFT.

    —  Local authorities have "highway" powers, with "Traffic Regulation Orders" and conditions used to regulate bus priority, bus stops etc. They also have a direct public transport role, with duties under the Transport Act 2000 to draw up bus strategies and to promote public transport information.

  Operators are also regulated by the Vehicle Inspectorate on vehicle standards and maintenance, and by the Health and Safety Executive.

  We note that (unlike all other regulated utilities or privatised services) there is no statutory user representation or input into any of these regulatory frameworks (apart from a requirement in the Transport Act 2000 for councils to consult users when compiling bus strategies). Bus users in England and Wales have only a non-statutory appeals body run by the National Federation of Bus Users and the Confederation of Passenger Transport. In Scotland, a Bus Users Complaints Tribunal has been established with powers to hear complaints and award compensation to users, but it is not related to other regulatory bodies.

  We would like to see the Government reform bus regulation in the following ways:

    —  Reforming competition law. As noted in the joint submission from the LGA, the Office of Fair Trading's "block exemption" of ticketing schemes should be revised. It should generally support integrated ticketing schemes and give clear guidance on where operators are allowed to co-operate on ticketing without infringing competition law. Beyond this, the application of competition law to the bus industry should be reformed more generally, with a new public interest test that would allow most agreements between operators provided that these did not actively exclude or work against other operators. This on its own would tend to reduce real bus fares in many areas.

    —  Reforming the Traffic Commissioners, giving them a brief to consider the full range of problems affecting operators, including traffic congestion, and to raise entry standards into the industry so that operators have to meet certain quality criteria before being allowed to run services. They and the Vehicle Inspectorate should have increased resources to fulfil their role effectively.

    —  Giving users a proper voice, through proper funding for the bus user forums pioneered by the National Federation of Bus Users and through trials of other methods of user involvement, such as panels or hearings arranged by the Traffic Commissioners. The Scottish Bus Users Complaints Tribunal, mentioned above, is another model to be considered, but should ideally be linked with the other regulatory arrangements.

  There also needs to be Government action to remove fiscal and regulatory barriers to flexible services, for example VAT on small vehicles.

  In the longer term, we would like the Government to introduce a single regulatory body for the bus industry, which might initially do two things:

    —  It could take over the Traffic Commissioner role in registering bus services. In this role it could be given duties and powers to ensure that quality services are provided, and to take account of wider environmental, social and economic objectives.

    —  It could also take over some of the Office of Fair Trading powers in respect of the bus industry, and again could apply them taking account of wider objectives, as the Rail Regulator does to the railways.

  In exercising both these sets of powers, it could be given a duty to take account of users' views and to establish user forums or bodies to advise it.

  We have noted that good bus services depend on a framework of "pro-bus" policies from local authorities. A new regulatory body could therefore be given a third set of powers: to inspect local authorities and the exercise of their duties and powers over public passenger transport. This can encompass community transport, taxis, school and social services transport as well as ordinary bus services, and would give some regulatory backdrop to bus strategies. The authority could:

    —  Provide guidance on good practice to operators and councils.

    —  Develop industry wide initiatives (eg smartcards, rail-bus link ups).

    —  Vet and make recommendations on bus strategies by local councils.

    —  Investigate complaints by bus users and others about operators (with the Traffic Commissioner powers) and councils, eg the failure to provide priority measures or to improve bus services.

    —  Have powers, if councils were really failing to do anything on buses, to impose bus strategies itself based on best practice and subject to Secretary of State approval.

    —  Identify areas with particularly poor transport services and declare "transport improvement zones" with special funding.

    —  Take over funding for rural bus grant/challenge and urban bus challenge.

  Such an authority could help bring councils up to the standard where they can develop and implement effective bus strategies and could realistically bid for and support extra powers to plan bus services.

  We have talked about this regulatory body as free-standing one. But it could be regionally-based, or a series of regional authorities, tied to devolved administrations and directly elected regional assemblies or strengthened regional bodies. The bus industry has always fought any reregulation because it has been aimed at operators. This regulation would give oversight of local councils too. It is only in this context that further powers over bus services should be given to councils, and as already noted a range of models for this could be used. In general, council powers should be focused on broad planning of networks rather than detailed timetables (a bit like rail franchising).


  As already noted, those without access to a car need a high quality, accessible and affordable bus service so that they can get access to people, goods and services. There is a tendency among transport planners and bus operators to differentiate between bus services that provide for "modal shift"—getting people out of cars and on to buses—and those designed to serve people without cars. While there may be different responses in some cases, there are real dangers in splitting "social inclusion" and "modal shift" objectives, or environment and social concerns:

    —  It can lead to using buses as a sticking plaster response to land use and other changes that have increased social exclusion and car dependence—for example closures of local schools, hospitals, banks and shops, especially in rural areas. Providing bus services for those without cars who are forced to travel further will always be very much second-best, compared with retaining local services in the first place.

    —  It could lead to a two tier system of high quality new buses on main urban routes aimed at car drivers and low quality (older, less accessible) vehicles running less frequently in poorer and rural areas ("let them have converted bread vans"), thereby widening social exclusion.

    —  It limits horizons: ideally, public transport, and other non-car modes, should be good enough for people to choose not to have a car and separating "sustainable" and "social" policies is therefore artificial.

  This is not to argue that improved bus services will not help reduce social exclusion, only that there are dangers in separating this objective from the others. An approach that brings the objectives together is access to key facilities and services. People with and without cars travel because they want to get somewhere—to work, education, shops, friends, cinemas etc. The 10-Year Plan already includes a target to increase from 36-48 per cent the proportion of households in rural areas with an hourly or better bus service within 10 minutes walk. Such an approach could be broadened. Local authority bus strategies could set access targets, which might be expressed as—for example—ensuring that all cinemas in the area are served by bus services running at least every 30 minutes up to the last showing within a 10 minute walk of 80 per cent of those within a four mile radius of the cinema. It should not in principle be difficult to set such targets—the report for CPRE and Transport 2000 on Rural Bus Services Grant, referred to above, was able, by analysing bus tender documents, to assess whether bus services broadly enabled rural people to undertake work, education, shopping and leisure journeys. The value of such an approach is that it focuses on the ultimate desired outcome—access—rather than outputs such as bus miles. It also makes it easy to involve travel generators in meeting such targets, through travel plans, developer contributions etc.

  There are particular issues in rural areas, where experience with buses is extremely mixed. The debate on rural transport tends to split rural and urban areas up, yet in fact they are extremely interdependent. Many of the journeys that rural people want to make are in fact to the nearest town, and most rural bus services end up in market towns or cities, so the issues about town centre car parking and other "pro-bus" policies are relevant to rural areas too.

  However, the lower densities of rural areas make public transport more difficult to provide. It is sometimes said that traditional full sized buses cannot meet rural needs at all—but there are examples of good rural services. Norfolk Green, a small bus company in West Norfolk, runs a mainly commercial network of scheduled ordinary buses in a very sparsely populated area. The Wensleydale Railway Company has run commercial and tendered services in the Wensleydale area. The Truronian company in Cornwall runs high quality commercial and tendered services. These are all smaller local companies who know their markets well and have low overheads.

  Having said this, there is plainly a general case for considering demand-responsive services. Several of these have been set up with Rural Bus Challenge and seem to be successful. Combinations of fixed route and demand responsive services, such as Lincolnshire Inter-Connect, also seem to work well. However, rather than create whole new networks, it would be sensible to integrate taxis into public transport networks, so that taxi operators could be licensed or franchised to run a network of services where conventional bus services would not be appropriate. Already many taxi operators, backed by local authorities, are bringing in people carriers to cater for group travel. However, any more formal or widespread approach will require legislative and fiscal changes. Taxi licensing is separate from other transport powers; it is exercised by district rather than county councils, is subject to widely variable rules and approaches (and quality control) and is not linked to wider transport policy or networks. Attempts to integrate taxis into rural public transport networks have faced a number of legal and other obstacles; for example, vehicles less than 12 seats pay VAT. In other countries, taxi services are run as part of public transport networks, so that bus drivers can call ahead for a taxi to meet the bus, especially at night, and this should be possible here too.

  This is in fact not just a rural issue. Many of the bids for urban bus challenge funding are proposing demand responsive services in urban or near-urban areas, and Greater Manchester PTE, for example, is looking at ways of supplementing fixed routes services with demand responsive services to estates and suburbs.

  In summary then, we would like to see targets for bus services expressed in terms of enabling access to key facilities. We would also like to see more effort and support for demand-responsive transport, in urban as well as rural areas, and serious consideration given to reforming bus and taxi licensing and fiscal regimes so as to enable more flexible services to be fully integrated into local public transport networks.

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