Examination of Witnesses (Questions 260-279)
7 JUNE 2006
DR STEPHEN
LADYMAN MP AND
MR BOB
LINNARD
Q260 Graham Stringer: That is just
at odds with the facts, is it not? It is unreasonable surely to
set targets for bus passengers, when passenger transport authorities
and local authorities have virtually no control over the bus service.
Dr Ladyman: They do not have control
now, but influence they do have. You might argue that maybe we
should have completely excluded that patronage from the calculations,
but I should argue that they are capable of influencing bus patronage.
Having said that, we have already very clearly recognised that
this is an area that we have to look at and the previous secretary
of state made it very clear that the way buses are regulated and
the influence that local authorities and metropolitan districts
have over bus patronage is something that we have to have a fresh
look at.
Q261 Graham Stringer: That is a very
general view, is it not? You used the word "influence".
Perhaps you could tell us how a shire county or a passenger transport
authority should go about hitting the bus passenger targets. What
should they do?
Dr Ladyman: They can look at the
provision of bus lanes, they can look at the provision of priority
routes, they can try to build up effective partnerships with the
local bus companies and try to influence the behaviour of bus
companies and they can be involved in the various challenge programmes
to which the Government make money available. I accept entirely
all these things fall short of being able to control bus patronage,
but they are ways in which it can be influenced. I do not know
whether Mr Linnard would like to add anything?
Mr Linnard: That is exactly right.
Outside London where bus patronage is growing the common feature
is a strong partnership between the local authority and the local
bus company and that does happen in some shire counties. In Devon
it happens to very good effect between the county council and
Stagecoach in particular in the south of Devon; there is very
big growth in bus patronage on some of the routes into Exeter.
It is partnership and it is giving buses priority on the road
and in terms of local funding decisions.
Dr Ladyman: I entirely accept
your premise that that falls short of being able to control bus
patronage.
Q262 Graham Stringer: It falls short
in two ways, does it not? I should be interested in your comments.
One, if you put bus priority measures in urban areas, you may
well get more passengers going down those radial routes which
is where they usually are at peak times. However, the evidence
which I know from Greater Manchester is that then the bus routes
contract, so you get more passengers on that route and fewer bus
routes. That is not sensible, is it, and I should be interested
in your comments on that? The second question is to Mr Linnard.
I have read the Department's evidence on these matters and it
seems to assume that you can apply the experience of Devon and
York and Oxford and Cambridge to huge conurbations like the West
Midlands and I do not believe that is the case. I should be interested
in your comments on that as well.
Dr Ladyman: I shall comment on
that as well as Mr Linnard because the previous secretary of state
has already acknowledged that we have to have a fresh look at
the way bus patronage is influenced in the metropolitan districts.
There are good examples, one was just mentioned, of where a good
partnership has been formed but clearly there have been efforts
to form those partnerships in other parts of the country that
have completely failed. That is one of the reasons why we have
said that we need to look at exactly how those partnerships are
formed and how we can influence that in the future and whether
we need to change the arrangements that we have. Two broad areas
are influencing that: the contradiction between what is happening
in London, where you have a very different system of bus regulation
from that outside London and where we are seeing significant increases
in bus patronage, so we have to ask ourselves what lessons can
be learned from that in the future. Secondly, and maybe we shall
talk about this later, a very big part of the Government's strategy
for dealing with congestion in the long term is demand management.
We do not believe demand management and local road pricing schemes
will work unless authorities like the authorities in Manchester
are in a position to provide alternatives and to influence bus
patronage. If people are going to stop using the roads, they are
going to have to find other means of travel. It is necessary for
us all to look at how we influence bus patronage in the longer
term. That was the reason why we created the quality contract
scheme, but of course nobody has taken that up yet. We understand
one authority is preparing a bid to go down that route, but nobody
has actually done it yet. If that is proving to be unworkable,
we need to look as well and find out how we can adapt that.
Q263 Chairman: Mr Linnard on the
difference between Devon and Greater Manchester?
Mr Linnard: One very obvious difference
is that Greater Manchester as a PTE does not have highway powers;
it does not have control over the local road network. That is
with the district councils. So it is that much harder for a PTE
having to work with 10 district councils in the case of Greater
Manchester to put together and implement a plan for partnership
working across the whole network and that goes back to what the
Minister was saying at the beginning about looking at city-regions.
Chairman: And? There must be other differences?
Q264 Graham Stringer: The point I
was making was that there are differences both in order of magnitude
and in the nature of the bus service between constrained market
historic towns and Birmingham. They are clearly different. May
I ask you to expand on that? Are you saying it is the Department's
policy that you should take highway authorities out of direct
democratic control in metropolitan areas? I should be interested
if the Minister could comment on the point I made previously about
contracting networks to increase profits on radial routes.
Dr Ladyman: We are on the verge
of violently agreeing with each other here. I am actually agreeing
with you that there are significant differences between the sort
of circumstance that you have experienced in Manchester and these
shire counties that have been able to form these successful partnerships.
That is the reason why we have acknowledged those differences,
we have acknowledged that we are not getting the increase in bus
patronage that we want to see in places like Manchester and the
West Midlands, and why we are looking again at how we should address
that situation. What Mr Linnard was simply pointing out when you
asked him to mention a difference between the circumstances in
Manchester and the circumstances in a shire county is that a shire
county is a highway authority, so it does have powers to put in
bus lanes and to do other things that a passenger transport executive
does not have. Therefore that is one of the issues that we are
going to have to look at when we try to move this issue forward.
You should not read into that, that I am intending to take highway
powers away from democratic control, but clearly you have identified,
or we have identified a difference which is affecting the ability
to deliver in Manchester and we have to address that one way or
another.
Q265 Graham Stringer: And the first
point about contracting bus routes?
Dr Ladyman: Could you repeat it?
Q266 Graham Stringer: The evidence
that I have seen is that when you encourage, persuade, force bus
routes, bus priority measures in urban areas, while you increase
bus patronage on those routes, you often get a contraction of
the network because the bus operators can make more profit on
those radial routes. Rather than making 5% on feeder routes, they
make 12% on the radial routes.
Dr Ladyman: I entirely acknowledge
the merit of what you are saying. I do not have to hand figures
which would support what you are saying, but my own experience
is similar to yours and I would entirely agree with you that that
is what happens and that is one of the reasons why it is important
that, under the current arrangements, you try to create partnerships
with the bus companies so that they do not contract from the more
difficult routes to travel over as you have suggested. That is
a factor which we are going to have to take into account when
we are looking at how these things are going to be changed in
the future.
Q267 Chairman: The trouble is they
do rather resemble those sorts of Victorian partnerships where
the senior partner takes all and the junior partner gets all the
work, do they not?
Dr Ladyman: I should not characterise
it quite like that, but I have acknowledged there are deficiencies
in the current arrangements and that is why we are looking at
them again.
Chairman: That is a very tactful way
of putting it.
Q268 Mrs Ellman: Are you considering
raising the £5 million threshold for major schemes?
Dr Ladyman: We can keep it under
review, but actually the £5 million threshold is widely misunderstood
and when we explain it to local authorities, they suddenly change
their minds about wanting to see it raised. The £5 million
is not the maximum that a local authority can spend: it is the
threshold under which we are unlikely to consider giving additional
grant. If we increased it to £6 million local authorities
would actually be worse off because it would mean that they would
have to have a £6 million scheme before we would consider
giving them additional grant. Local authorities would be better
pressuring us to bring the level down rather than to bring it
up.
Q269 Mrs Ellman: What is your thinking
on that at the moment then?
Dr Ladyman: I personally think
£5 million is about right, but I should be interested in
your views on that.
Q270 Mrs Ellman: Why have you imposed
national shared priorities when you are supposedly giving more
consideration to local factors?
Dr Ladyman: What is our rationale
for shared priorities? Exactly the reason that you pointed out
in your press statement when you announced this inquiry: we are
highly dependent on local authorities for delivering national
transport objectives and national transport policy and although
we believe that it is absolutely vital that we leverage in local
experience and local knowledge to the development of transport
networks, your Committee would be the first to remind us that
transport is the area of public policy where it is most important
to have joined-up thinking both literally and figuratively. We
have to think about our national transport priorities, we have
to think about our local priorities and we have to get them all
working together. I think it is appropriate that we have national
shared priorities. However, there are only the four national shared
priorities. Local authorities putting their LTPs together can
make a case to be excluded from two of them if they do not think
that they are applicable in their areas, so having four shared
priorities is not particularly onerous.
Q271 Mrs Ellman: We have received
evidence that the Government are increasingly prescriptive on
their guidance on Local Transport Plans. How would you answer
that?
Dr Ladyman: When we moved from
the TPP to LTP1, there were 27 strategy areas and a case could
be made, with hindsight, that there were too many. That is why
we have moved away from that in LTP2.
Q272 Chairman: What is the difference
between a strategy area and a target?
Dr Ladyman: Good question. You
would have to address that to the Minister who decided they were
strategy areas rather than targets.
Q273 Chairman: "Not me guv"
is not good enough for a Transport Minister. Could you make a
wild guess at it?
Dr Ladyman: A target would be
quantified in some way. A strategy area would be an area of activity
where general objectives were set to improve. For example, in
air quality we might indicate that we want to improve the general
level of air quality and within that we might want to set targets
about exactly how we would do it.
Q274 Mrs Ellman: Some local authorities
told us they wanted to make economic regeneration a major factor
in looking at the Local Transport Plan but felt that your Department's
guidance precluded them from doing that. Are you aware of that?
Dr Ladyman: No. We have four shared
priorities; they are entitled to as many local priorities as they
like. If they want to make regeneration a strategy... I find that
a bit baffling. I know from my own constituency, which is in a
shire county, that my part of the shire county is in urgent need
of economic regeneration and it is very much part of our LTP that
transport should contribute to the regeneration of the area.
Q275 Mrs Ellman: So would you say
that a local authority who says that is mistaken or has misinterpreted
the guidance? Is that what you are saying?
Dr Ladyman: Yes, that is my feeling.
Q276 Mrs Ellman: So if that were
a big problem, would you state that, would you rewrite the guidance
if they have misunderstood?
Dr Ladyman: If we have inadvertently
in the guidance given that impression, certainly I should have
to have a look at it and we should have to consider clarifying
the position. Let me make it very clear. We have a set of what
we have called the shared priorities. We agreed those shared priorities
with the Local Government Association. The Local Government Association
entered into that negotiation with us about those four shared
priorities precisely because it wanted to ensure we did not have
too many national priorities and precisely because they wanted
to liberate local authorities to have their own priorities. That
is why we stuck with the four; that is why you can excuse yourself
from two of them, if you can make the case to excuse yourself
from them. If you have other priorities for your local area in
setting your Local Transport Plan, then knock yourself out, I
am happy for you.
Q277 Mrs Ellman: Why did the Department
decide to reject local light rail schemes when the local authorities
wanted them?
Dr Ladyman: For the same reason
that we reject any major scheme. We do a value for money calculation
on it. If it comes out to have a reasonable level of value for
money, a return for the public investment, then we are prepared
to look at funding that scheme. If it has a low value for money,
then we are not. I am not referring to any specific area, I do
not want to personalise this. However, if somebody comes and tells
us they have a light rail scheme they want to go ahead with at
£100 million and we say fine, that it is value for money
at £100 million and the next thing we know they are coming
back and saying it is £160 million, we do another value for
money calculation. If it is not value for money at the £160
million mark, we say "Sorry, you've gone over the limit".
What we normally tell them of course, which we have done in several
local authority areas, is that the money we said was originally
available is still there and if they come up with a £100
million scheme or if they can do the scheme they originally told
us they could do for £100 million, the £100 million
is still there for them. They can either do that by working within
the original funding envelope or agreeing to fund the increase
themselves, but they should not look at the Government as being
an ever-open chequebook.
Q278 Mrs Ellman: Are different criteria
used then by the local authorities and the Department in assessing
value for money?
Dr Ladyman: They should not be,
because we publish the New Approach to Transport Appraisal. We
publish the way that we carry out our value for money exercises.
Indeed, we want to encourage local authorities and their experts
to assess the value for money of potential schemes before they
start working them up in any detail. Sometimes, the political
leadership in certain local authority areas have reasons for thinking
a scheme might be offering value for money which are not included
in the way we appraise value for money.
Q279 Mrs Ellman: What do you mean
by that? You say "political leadership". Are you saying
then that different criteria are laid down or that somebody applies
a judgment locally to what they think is good locally?
Dr Ladyman: I am saying that there
might be private local judgments about what might be good for
a local area. For example, when I have conversations with councillors
about certain schemes, I sometimes get the impression that they
are putting a significant weight behind civic pride. They perceive
a particular type of major transport infrastructure—
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