Memorandum by Transport 2000 (Bus 49)
THE BUS INDUSTRY
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 accessibleand this means the bus stop
has to be reachable tooand 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
UK BUS INDUSTRY,
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 annuallythere
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 cuttingif 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 tendersthere
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.
2. THE RELATIVE
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
The current situation seems to offer "all
or nothing" controls to local authoritieseither 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 areaseg Dumfries/Gallowayalmost 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 detailtrying
to plan timetables for instancerather than strategy (frequencies,
start/finish times, interchange, priority etc). On the other hand,
some councils would improve things. But it would be extremely
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
These general policies are key to growing bus
usebut 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 councilor in some cases a major employer or other
traffic generatorthat 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 aboveaccessibility, 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
3. BUS PRIORITY
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 spectacular20 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"
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
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
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
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).
5. THE CONTRIBUTION
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 busesand 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 dependencefor 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 somewhereto 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 asfor exampleensuring
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 targetsthe
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
outcomeaccessrather 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 allbut 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
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
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.