Memorandum submitted by West Midlands
Passenger Transport Authority and Centro (West Midlands Passenger
Transport Executive)
BACKGROUND
1. West Midlands Passenger Transport Authority
(WMPTA) coordinates public transport in the West Midlands Metropolitan
Area, setting budgets and policies. Centro is the trading name
of the West Midlands Passenger Transport Executive, which implements
WMPTA's policies, and promotes and develops public transport across
the West Midlands.
2. The current policy of the PTA, established
in 2003, is to continue to work in partnership with all bus operators,
and in consultation with all districts, on the understanding that
if this does not prove fruitful, then the Authority would consider
applying to the Secretary of State for a Quality Contract.
3. The West Midlands Bus Strategy, part
of the Local Transport Plan Two, outlines the actions necessary
by three partners—Centro, bus operators and highway authorities—to
increase bus patronage from 325 million passenger trips in 2003-04
to 355 million in 2010-11. Substantial parts of it are now being
delivered including improvements to bus stops, information, integrated
ticketing, new and refurbished bus stations, and better passenger
waiting facilities.
4. In order for the Bus Strategy to realise
its full potential, higher quality bus services will need to be
delivered, which will require more action by WMPTA/Centro, metropolitan
district councils and bus operators. WMPTA/Centro now consider
that the only practicable way of improving bus services to deliver
the benefits outlined in paragraph 36 may be through a Quality
Contract scheme (or schemes) and is therefore developing proposals
that may lead to the submission of a scheme's to the Secretary
of State for Transport. However, in view of the timescales for
the introduction of Quality Contracts, we are continuing to implement
those parts of the Bus Strategy for which we are responsible.
Has deregulation worked in the West Midlands?
5. There are over 50 operators of registered
local bus services. The largest operator in the area is Travel
West Midlands (TWM), part of the National Express Group, operating
over 80% of all bus mileage. Other operators include Diamond Bus,
part of the Go Ahead Group (7.5%); Arriva Midlands (0.7%); Stagecoach
in Warwickshire (0.8%); De Courcey (0.8%); and Chase Bus Services
(0.9%).
6. Over 90% of public transport journeys
in the Centro area are made by bus. In 1980 this equated to over
500 million passenger journeys. However, bus patronage has been
in long-term decline. Despite a wide range of initiatives being
implemented by WMPTA/Centro, local authorities and bus operators,
this declining trend is continuing. In 2004-05 only 314.5 million
bus passenger journeys were made. If current conditions prevail
the revised Bus Strategy and LTP2 target to increase patronage
to 355 million by 2010-11 will not be met.
7. Network stability is a key user requirement.
To increase levels of passenger awareness and confidence, service
changes need to be kept to minimum. Ideally, changes should take
place no more than two to three times a year. In working towards
this goal WMPTA/Centro has requested that bus operators in the
Metropolitan Area adhere to a voluntary Code of Conduct to limit
service alterations 12 times a year. Nevertheless, there are still
those that make changes at other times. Service deregistrations
are also a cause for concern. Recent cases have led to confusion
on which services are operating.
8. Operators in the Centro area lack attention
to detail resulting in poor quality. TWM, unlike some other operators,
is good at maintaining its fleet to legal standards but the external
presentation and internal cleanliness of even the newer vehicles
is often very poor. Where buses have route branding they are not
always allocated to the right services. Destination displays are
often missing on some operator's services which can be misleading
to passengers. There is evidence from recent interventions by
the Traffic Commissioner that some operators are not maintaining
their buses to legal standards. In Birmingham, Britain's second
city, there are still buses operating along trunk routes that
are over 20 years old.
9. Over the last 10 years, there has been
a lack of innovation in bus operations in the PTE area, a key
exception being investment in low floor buses by TWM and some
other operators. Initiatives by operators have been limited and
their focus has been to maintain profit levels rather than grow
the market.
10. Faced with this lack of innovation and
a concern that the bus industry is not meeting the needs of existing
and potential bus users, WMPTA/Centro has commissioned an independent
review of the Metropolitan area bus network. One of the initial
findings is that in certain areas there may be over-bussing, where
operators could be protecting their market share at the expense
of providing services elsewhere.
11. Reliability of services is crucial to
user confidence and yet a survey undertaken by Centro of 50,000
bus services in 2004 found that 40% of buses were running a minute
or more early, or more than five minutes late, which is well below
the standard set by the Traffic Commissioner.
12. Information at bus stops has been historically
poor, with operators providing little or no information on services.
To address this Centro/WMPTA are leading the introduction of a
completely new suite of information, which will feature all modes
of public transport, and present them as part of an integrated
"Network West Midlands" identity. This information will
appear at all bus, rail and metro interchanges and at over 13,000
bus stops.
13. Bus, Midland Metro and rail services
are not well integrated even though many are operated by the same
group, National Express.
14. Despite these shortcomings bus usage
in the area is amongst the highest in the UK with 126 journeys
per head of population per annum. This is assisted by the WMPTA's
concessionary travel scheme, which provides free travel for elderly
and disabled people.
15. The speed of bus boarding is good although
this is at the expense of not giving customers change on TWM buses.
Two thirds of users have pre-paid tickets and this helps to ensure
that the remaining cash fare transactions only take up a small
amount of time.
16. On the majority of main radial corridors,
a turn-up-and-go frequency is provided during the daytime, which
means that users do not necessarily have to consult timetables.
Network penetration is generally good.
17. For deregulation to deliver the objectives
of the Bus Strategy and LTP2 there needs to be far greater financial
and/or legal penalties/incentives to incentivise operators to
deliver a high quality service.
Is statutory regulation compromising the provision
of high quality bus services?
18. The joint National Audit Office and
Audit Commission report, Delivery Chain Analysis for Bus Services
in England, published in December 2005, shows that the delivery
chains for achieving growth in bus passenger numbers are being
hampered by organisations such as the Office of Fair Trading,
due primarily to the prevention of discussions between operators,
especially relating to ticketing and service frequencies.
19. Bus and rail operators have mentioned
the OFT limits their opportunities to integrate their services.
The main issue is not competition between public transport operators
but competition between public transport and the car.
Are priority measures having a beneficial effect?
20. Bus priorities are essential. Action
on this key area will determine the ability of the bus product
to compete effectively with car use. Bus priorities can take many
forms from small, but valuable, junction improvements through
to bus lanes with traffic light priority for buses and the associated
enforcement measures. Cities such as London and Brighton are good
examples in the UK but many more exist in the major cities of
Western Europe. However, the installation of bus priority measures
relies crucially on the willingness of the local highway authorities
because the PTA has no highway powers.
21. Where priority measures are introduced,
infrastructure improved, and better quality buses introduced—as
has been achieved with Bus Showcase projects in the West Midlands—then
patronage increases can be achieved, for instance of around 16%
on Line 33.
COMMUNITY SERVICES
22. 93% of bus mileage is operated commercially
and 7% with subsidy of £5.80 million in 2005 from Centro
in respect of socially necessary services. Even though there are
higher than industry standard profit levels in the Metropolitan
area, operators have been reluctant to provide these services
commercially. The PTA access standards are currently under review
as part of the Government's accessibility agenda. This may lead
to the requirement for more socially necessary services.
CONCESSIONARY FARES
23. WMPTA/Centro believe that it is essential
that statutory concessionary travel schemes should provide access
to all modes of local transport, including Ring & Ride, demand
responsive and community transport services, to allow the development
an integrated network.
24. If the proposed national scheme for
2008 is not made multi-modal, then individual Transport Authorities
will need to retain the ability to enhance the statutory concession
locally, in order to maintain the concessions currently available
in areas such as the West Midlands. This may have implications
on the administration system proposed for the new scheme.
25. The funding arrangement for the current
free scheme is a concern. In PTE areas, government funding is
channeled through District Councils via RSG and not specifically
ring fenced for concessions. Whilst the proposal to introduce
national free travel will be welcomed by many elderly and disabled
people, many questions remain unanswered, such as proposed reimbursement
and administration arrangements. It is essential that local authorities
are properly funded to introduce this proposal. It would be useful
to know if Smartcard is being proposed as part of any reimbursement
system, as WMPTA/Centro is currently developing proposals for
Smartcards.
Why are there no Quality Contracts?
26. The recent reduction in the notice period
from 21 to six months between approval of a quality contract scheme
and its commencement is likely to increase the likelihood of applications
for Quality Contacts but lead times are still too long.
27. The guidance issued by the DfT is welcome
but the process involved is still complex, time consuming and
tortuous. We have endeavoured to engage with the DfT to discuss
the development of individual Quality Contract schemes but they
are anxious not to prejudice the Secretary of State's legal position
in approving an application. One useful and simplifying legislative
amendment would be to allow local transport authorities to introduce
Quality Contracts without the need for the Secretary of State's
approval.
28. Quality Contracts can only be approved
for a maximum of five years which appears to be at variance with
EU proposals for the length of public transport contracts.
TRAFFIC COMMISSIONERS
29. The Traffic Commissioner for the West
Midlands has sufficient powers to regulate bus services, which
he has exercised on a number of occasions. However, his ability
to do so is undermined by lack of resource with just one member
of VOSA staff to monitor bus operations throughout the West Midlands
region. Quite clearly, a significant increase in resource is needed
to ensure a rise in bus operating standards to the levels outlined
in the Bus Strategy.
30. The role of the Traffic Commissioner
is not readily understood by many bus users who would normally
complain to the bus operator about reliability or quality issues
such as driver attitudes, cleanliness or poor driving. Therefore,
complaints do not often come to the attention of the Traffic Commissioner
to enable him to take action.
Is London a sound model for the rest of the UK?
31. Centro has carried out an extensive
review of UK and international frameworks for the provision of
bus services. The London model includes many areas of best practice
taken, in particular, from models in other European countries.
Whilst the regulatory model in London is a key factor in the provision
of high quality bus services, there are other factors which play
an important role including strong political leadership, significant
funding, highway powers placed with TfL, the existence of the
congestion charge and extensive bus priorities.
32. Parts of the London model, including
the contractual and operational arrangements between TfL and bus
operators, are suitable for use in other parts of the UK. The
strengths of the London model include its strong brand, integrated
ticketing, and quality incentives. There is also competition for
the market, rather than in the market. WMPTA/Centro consider that
improvements in bus service quality could be obtained in the West
Midlands Metropolitan area by the introduction of an operating
framework similar to that in London without the level of public
sector funding support that they enjoy.
What is the future for the bus in the West Midlands?
33. Bus companies need to improve significantly
the delivery of bus services and help in the funding of better
passenger information. In our area this will be essential if road
demand management is to be introduced. The bus network needs to
become attractive to motorists.
34. In the Centro area, the current situation
is failing to deliver the required improvements to attract new
users and hold onto existing users, which is illustrated by the
continued decline in bus patronage.
35. We need to ensure that the public sector
can better harness the strengths of the private sector to provide
a quality bus network. We need the appropriate tools to do this.
Whilst partnership working can deliver some benefits there is
a case for local authorities outside London to develop their own
form of regulated competition to improve bus quality and therefore
bus patronage.
36. The following list details areas in
our Bus Strategy where WMPTA/Centro want to see operators improve
delivery. WMPTA/Centro are considering whether the only practicable
way to achieve this is through the introduction of Quality Contracts:
— More reliable bus services.
— Performance payments and penalties under
a QC will incentivise on time running whilst not penalising operators
for occurrences outside their control.
— Genuine customer care from drivers.
— Incentive payments and penalties in a
QC based on customer satisfaction surveys will ensure better driving
standards and other soft quality and people related issues. A
Passenger Charter that includes publishing operational performance
by bus route would be a condition of a quality contract.
— Incentive payments and penalties based
on customer satisfaction surveys will ensure better cleaning standards.
— Develop bus service networks to meet
modern passenger travel requirements more effectively than the
current mixture of commercial and contracted services.
— Such a network could be aimed at reducing
traffic congestion by attracting journeys from the car and/or
tackling social inclusion by serving new areas or running for
longer periods of the day. A more adventurous and innovative approach
to bus service development is required than has recently been
provided by bus operators.
— Improved security measures on bus.
— Coordinated CCTV and other security programmes
are more successful where common standards can be specified in
a QC.
— Improved integration with other bus,
rail and Metro services.
— Services could be more effectively planned
under a QC, with operators input at an appropriate stage, to maximise
integration.
— Public sector control over bus fares
to make the product more affordable.
— Introduction of competition between
bus companies which would result in a more innovative approach
and use of best practice—would also ensure proper level
of profits is achieved.
— Better presentation of vehicles.
— Vehicle presentation and image, even
with the larger operators is poor, and would be specified and
monitored to a consistent standard in a QC.
— Phase out non low floor and older
buses.
— The condition of many buses in the area
is very poor. A QC would specify minimum standards.
— QCs would eliminate the commercial and
competition issues that make integrated multi operator and multi
modal ticketing so difficult to introduce at an attractive price.
— Two to three dates a year for service
changes instead of the current 12 dates.
— Service stability is a key customer requirement
and would be specified under a QC.
— Better marketing and promotion of
bus services, including branding of the bus network.
— Bus companies pay insufficient attention
to this important area which could be a specified requirement
under a QC.
— Profit sharing with public sector
as patronage grows.
— Patronage incentive payments in a QC
could be used to incentivise operators to grow the market.
37. Buses currently carry around 90% of
the local public transport market. The bus certainly has a future
in the West Midlands Metropolitan Area and is vital if we are
to achieve our Bus Strategy patronage and LTP2 targets. A step-change
in the quality of bus services is essential if they are to be
attractive to motorists. This will be even more important that
they should be able to accommodate the expected modal shift in
the event of the introduction of road demand management in our
area.
CONCLUSION
38. We consider that the bus industry needs
to change and that it needs help in doing so. We believe we have
identified real opportunities to deliver a more effective product
to meet the needs of the metropolitan area—and ones that
will help deliver Government targets. We appreciate the need to
work together as part of an industry team but need a regulatory
framework to encourage more effective team working whilst recognising
the commercial requirements of bus operators.
39. We would welcome the opportunity to
attend a meeting if the committee would find this helpful.
23 May 2006
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