Examination of Witnesses (Questions 120-139)
MR ROY
WICKS, MR
GEOFF INSKIP,
MR DOUGLAS
FERGUSON, MR
ROBERT SMITH,
MR MIKE
PARKER AND
MR MARK
DOWD
21 JUNE 2006
Q120 Graham Stringer: Mr Rowlands
in that report brought up the Human Rights Act as a hurdle. Do
you believe that was an act of sabotage on your attempts to get
quality contracts or is there a consensus in the industry that
human rights are different in London from the rest of the country?
Mr Wicks: I think the latter point
is probably true. On the specifics, in our own quality contract
discussions we have also started to take legal advice and there
is a real issue there in terms of whether or not the operators
would have a case for compensation if their operating rights were
withdrawn.
Q121 Graham Stringer: Had the Department
helped you and advised you on this matter before?
Mr Wicks: The Department's position
is that they cannot help us on this matter as they have to remain
separate from the process. One of the complexities in making a
quality contract application is as the Department for Transport
will be taking a view on that application they are struggling
to work through a way they can advise potential applicants as
to how to make that application without compromising their own
position particularly, and it goes back to my colleague's point,
as were there to be an appeal or a judicial review against the
decision it would obviously be the Secretary of State's decision
that would be taken to appeal. That is not unusual, the Transport
& Works Act is a good example of that and the Department for
Transport have promised to set up appropriate Chinese walls within
the Department in order to advise us. That process has been quite
elongated because we have been working on quality contracts for
over a year and, as yet, we have not had detailed advice on the
case we will have to make. We will be putting that in as a "surprise"
to the Department and I am not aware of any legal advice on the
human rights issues which was presumably taken when the legislation
was first made and subsequently being made available to any of
us.
Q122 Graham Stringer: This is a general
question: you are putting more and more money in as passenger
transport executives and you are getting a worse service out.
Are you completely incompetent or are you victims of cartels?
Mr Wicks: I would hope we were
not incompetent. We are certainly victims of limited competition.
That is why we are paying for it, it is quite a simple equation
in South Yorkshire's case and I think Councillor Dowd made exactly
the same point.
Q123 Graham Stringer: Do you believe
that it is limited competition by accident or do you believe that
bus companies are organising themselves in an anti-competitive
way?
Mr Dowd: Can I say this: we are
in the position now where, say, for instance a bus contract, a
subsidised one, is for two or three years, when they come back
for 30 or 40% over and in many instances we only get one or two
applications for sometimes huge contracts, as far as I am concerned
I find that strange.
Q124 Graham Stringer: So do I. The
argument you are putting is I guess that you do not have the evidence
but you believe there is anti-competitive behaviour out there.
I did a debate with Mr Souter not long ago, and some of you were
present, and his view, and I would like a response to this, is
that you are all dinosaurs based in the late 1960s and that the
real model that you should be operating to is the Brighton, Cambridge,
Oxford model, that is the way forward. It is Cambridge, Oxford
and York as the model, not London. Can you respond to Mr Souter's
point?
Mr Dowd: Brighton, York, I should
imagine that what we speak of are two bus companies, in Manchester
there are 48, in Liverpool there are 37, so it is an entirely
different ballgame when you have only got one or two bus companies
to basically deal with, other than, say, for instance, me, I deal
with 37, that is a major difference.
Q125 Graham Stringer: Anybody else?
Mr Smith: Madam Chairman, if the
Committee is looking for a model there are many models not far
from here in Western Europe which operate very successfully. There
are many different models but they all have one thing in common
and that is some form of bus franchising, so whether it is a quality
contract or enhanced quality partnership or whatever, the bus
franchising model is the one which does deliver results whether
it is government objectives, local objectives or, indeed, objectives
commercially for bus companies.
Mr Inskip: Certainly the Brighton,
York model, is great for those cities, I am sure, but try bringing
something like that into Greater Manchester. At one level I have
had the same conversation with Brian Souter, "So, okay, Brian,
what is stopping you doing it in Manchester as well? Why are you
not increasing growth? Why are you not increasing patronage? I
am not stopping you, I will help you in every way I can, putting
in bus corridors, putting in bus priorities to help you".
Inevitably the overall shape of the market in Manchester is still
in decline and, therefore, we have to make some changes and the
changes are systemic. It is a systemic decline in this industry
in the metropolitan areas unless something is done about it and
the Brighton and York models simply will not work. Brian Souter,
Moira Lockhead, and the rest of them, if they thought it could
work, we could invite them to Manchester and throw the challenge
down. Quite honestly, unless we take positive control over the
networks and over the quality standards that people want, I do
not think people are going to come back to the buses.
Mr Parker: Chairman, I think there
is also another point about the nature of places like York, Oxford
and Cambridge. They are very historical cities with very limited
access. They have managed to get political support for very, very
significant car restraint and, therefore, the local authorities
are delivering very good park and ride systems. If you like, the
culture is there for people to cycle and to use buses, that culture
is less in the big conurbations where the propensity to drive
a car is much greater.
Mr Ferguson: Chairman, one other
point: in the west of Scotland we have a very extensive rail network
and I can see nothing in the current legislation that would encourage
Mr Souter to integrate with that rail network and provide services
that feed that rail network, quite the opposite, it seems that
the current rules encourage them to compete with the rail network.
Q126 Graham Stringer: Mr Ferguson,
I have trying to get out of the Government the figures for public
subsidy per capita in all the regions of England. I have managed
to get it for England, including London, and Northern Ireland
but because transport is a devolved matter I cannot get those
figures for Scotland. Would you be able to provide those figures?
Mr Ferguson: I could certainly
try and provide those, Madam Chairman, I do not have anything
just now.
Chairman: That would help us, Mr Ferguson,
thank you.
Q127 Graham Stringer: Two more questions,
if I may. First, to Mr Inskip, I know Manchester very well, I
have stood on platforms arguing for the re-regulation of these
services. Do I take it from the submission from yourself and the
chair of the PTE that the policy has not changed, that the Greater
Manchester Passenger Transport Authority is still in favour of
re-regulation?
Mr Inskip: I think the issue for
us is quite clear. We have been knocking on Government's door,
we have been asking for a form of re-regulation and have been
told that we have got to work within the existing confines of
the marketplace.
Q128 Graham Stringer: You feel you
are being bullied into this position?
Mr Inskip: I think that as far
as we are concerned, we need to find a way through this with Government.
To find a way which will bring us the control over the market
that we want. I am not sure that there is a huge amount of difference
between whether you want to call it a quality contract, whether
you want to call it franchising or whether you want to call it
an enhanced quality partnership. Certainly from our point of view
an enhanced quality partnership gives us control over frequencies
and fares and, therefore, there is not too much difference. I
think where we come at it is saying that rather than wait three
or four years to be able to put something in, if we can put something
in much quicker on our terms through a binding partnership, albeit
that that does require some change in legislation. We want services
to change quickly and in order to do that we are proposing that
this may be a way forward.
Q129 Graham Stringer: Finally, I
would be interested in all your views on the operation of a concessionary
fare system. Do you think it is value for money? Do you think
the money is properly accounted for and do you think the basis
of the scheme, whereby there is an assumed subsidy to a full fare
passenger who is eligible, is a scheme fit-for-purpose?
Mr Parker: No, I do not, Chairman.
In Tyne & Wear we are being hit most by the recent changes
in the concessionary travel scheme because we have ended up with
a £5.4 million deficit on funding. I think there are a number
of issues. You asked earlier about powers and one of the things
local authorities have is wellbeing powers which would allow them
to give concessions to other groups that in some way are deprived
financially. At the moment Passenger Transport Authorities only
have the powers to give concessionary travel to pensioners and
to children, yet if one of the key objectives, which certainly
is in our PTA, is to use transport to reduce social exclusion
then you need powers to be able to provide concessions to students,
single parents on income support, et cetera, jobseekers and so
on. At the moment we do not have those powers. I think if your
objective is to reduce social exclusion then you need to say,
"Well, how much money am I going to put that way?" Should
you put all the money, if you like, in the pensioners' basket?
I think I could refer the Committee to the Commission for Integrated
Transport, which I used to be a member of, which produced a report
about three years ago on the value of bus subsidy and they very
clearly stated that once you went beyond half fare for pensioners
then the return—it does not mean to say you are not reducing
social exclusion—the actual return on your investment actually
gets less. The half fare is sort of maximising the return. Of
course, the basis on which we compensate the bus operators is
on the assumption that the bus operator would charge that pensioner
the full fare. There is a formula that relates to generation but
basically that is the principle. I believe in a competitive market.
If you have bus operator competing with bus operator and there
are no concessionary fare systems, those bus operators would charge
a lower fare for pensioners in order to attract pensioners on
their services rather than someone else's services.
Q130 Mr Martlew: On concessionary
fares, you have mentioned pensioners and many of us represent
rural areas where there are a great deal of problems with young
people who wish to come into the city, they are living in the
villages and get a bus but cannot afford that bus. Are you saying
we should be expanding the concessionary system to those groups?
Mr Parker: I am, Chairman. I think
we should be able to provide cheaper fares for students, anyone
in full-time education and jobseekers. If one of your objectives
on transport is social exclusion then a crucial thing is the price
of that transport journey. One of the frustrations that Passenger
Transport Executives and local councils have had over the years
is they have no control over that price. They used to, they have
that control in London, but we have no control over the price
and that is crucial. One answer might be to give those sorts of
powers to allow us to be able to give concessions to those disadvantaged
groups.
Q131 Chairman: Mr Inskip on this.
Mr Inskip: Madam Chairman, there
is just one point I want to make as well. It is great giving people
free travel but they have to have the buses and the services there
to use them. If there are no services it is no good having free
travel.
Q132 Mr Clelland: I accept that last
point, but on this question of giving concessions to young people,
it is possible to give concessions to students in full-time education
under 18.
Mr Parker: Under 18 it is but
not over 18. Over 18 has to be a commercial decision of the bus
operator, we are not allowed to put public subsidy in.
Q133 Mr Clelland: Even then, young
people under 18 in full-time education, some might be going to
further education colleges, not necessarily all going to sixth
form, may have to travel across the boundaries of the Passenger
Transport Authorities. Is there a case for having a wider than
PTE regional scheme?
Mr Parker: Absolutely, Chairman,
yes.
Q134 Mr Clelland: In order to finance
that, presumably you would need the co-operation of other partners
in the region. Is this something which Regional Development Agencies
might help out with?
Mr Wicks: If I could add to the
comments which have been made and respond to the question. There
are two or three things here which come together on what I would
call the city region agenda. I think there is a strong argument
and it is part of emerging government thinking to look at the
role in the city regions and to recognise that transport does
not necessarily neatly fit into the current administrative boundaries
but it should fit within the city region boundaries. I think all
the PTEs feel quite strongly about an alignment of powers which
gives them more local accountability and local flexibility about
how they organise those transport services, and it goes back to
the debate about quality contracts and the debate about concessionary
fares. It would seem to me they are local decisions at the city
region level, not necessarily national decisions, and I think
if you align those powers then you can address the cross-boundary
issue.
Q135 Chairman: Do you think the Department
gives you a strong enough lead?
Mr Wicks: In terms of what?
Q136 Chairman: Sir David seemed to
believe in the evidence that he was giving certainly to the Public
Accounts Committee, " . . . The complexity of the delivery
structure outside London is tied up with local authority structure".
That is a rather passive response to the needs of the bus industry,
is it not?
Mr Wicks: It is, very much so.
I think there is no difficulty with local leadership, local leadership
is very clear about where it wants to take its public transport
agenda. I think it is the ability of the local leadership to do
that.
Q137 Chairman: Should the Department
promote buses on a greater scale?
Mr Wicks: Yes.
Q138 Chairman: Why does it not collect
more data about buses and is that a problem?
Mr Wicks: I think all of us suffer
from a lack of data, most of that is not provided by the operators
because it is commercially restricted.
Q139 Chairman: Our Public Accounts
Committee looked at that and said that it was not convinced that
the Department monitored the operation of the market to the extent
to which monopolies may exist; is that your view?
Mr Wicks: Yes.
| 
