Supplementary memorandum submitted by
the Go-Ahead Group Plc
KEY PERFORMANCE
INDICATORS
1. In our 2004-05 financial year [our last
full year] we operated 98.87% of our scheduled mileage.
2. Over 68% of our fleet had disabled access
at 1 April 2006 and current investment plans will push this figure
beyond three quarters of the fleet.
3. Our latest published results [December
2005 Interim] show a 10.3% pre tax profit margin.
4. Although the new concessionary fare scheme
[from 1 April 2006] has increased overall passenger volumes our
trend on fare-paying passengers outside London remains marginally
negative [approximately -0.1%].
5. Punctuality [Traffic Commissioner standards]
is currently between 94% and 95% for North East operations.
CLARIFICATION ON
QUESTIONS RELATING
TO WHETHER
DEREGULATION "HAS
WORKED"
We understand that the Committee has received
evidence on the decline of bus use since deregulation in 1986.
We have not seen any reference in this to the greater levels of
decline that existing prior to 1986 under the preceding regulatory
regime. Taken in isolation the more recent data is misleading.
A long-term trend analysis from 1950 shows that
United Kingdom bus use has suffered an overall loss of 817 million
passengers since 1986 but suffered a loss of 10,804 million before
1986.[4]
Thus 86% of the reduction in bus passengers from 1950 occurred
before bus deregulation in 1986. Passenger loss was at it's highest
in the 1950s and 1960s [average 3.5% a year], which we believe
is significantly higher than the average rate since 1986.[5]
Whilst deregulation did not halt the trend of
passenger decline it has not increased it either.
COMPETITION LEGISLATION
We fully accept that the public interest needs
to be protected through competition legislation and that any operator
that seeks to conspire with other operators to take actions that
are against the public interest should be punished appropriately.
We do not believe that the Office of Fair Trading is best placed
to undertake the detailed evaluation of particular local circumstances
and are aware of numerous cases where the OFT position appears
to be in conflict with the wishes of local authorities and the
representatives of bus users.
We believe that either the Local Transport Authority
or the Traffic Commissioner should be empowered to issue a "Certificate
of Exemption" that would enable local service and ticketing
co-ordination initiatives to be pursued under a specific bus Block
Exemption power.
CONGESTION AND
TRAFFIC PRIORITY
We are grateful for the measures taken by highway
authorities to provide us with some relief from the increasing
effects of traffic congestion. Unfortunately, from our perspective,
this is usually "too little and too late". We understand
the difficulties faced by authorities, and are painfully aware
of the adverse public reaction to bus priority measures that is
sometimes encountered. Unfortunately we have frequently failed
to make well known the direct link between traffic congestion,
increased costs for bus operators and the consequent increases
in fares or reductions in services.
We believe that there is substantial merit in
the establishment of targets for bus operating speeds in Local
Transport Plans. An empirical approach, based on objective data
would help to demonstrate the links between the operating conditions
and what it is reasonable to ask an operator to deliver in terms
of service and fare.
IS LONDON
A SOUND
MODEL FOR
THE REST
OF THE
UK?
To clarify our position we should make it clear
that we are agnostic on the issue of regulatory control, provided
that the resources and commitment of the relevant public authority
is commensurate with the level of control sought. In our substantive
evidence we expressed the view that the public cost of bus provision
in London is unaffordable throughout the UK. This judgement is
based on the comments made to us by local authorities and PTEs
on their resources and budgets.
We would welcome Department for Transport proposals
for "partnerships with teeth" that would allow us to
make greater and earlier progress. At the same time we are fully
co-operating with Tyne & Wear and South Yorkshire PTEs on
"market consultation" on possible Quality Contract schemes.
Go Ahead is the largest provider of bus services
to Transport for London and is proud of our quality levels, which
regularly place us top of the London performance league. In Brighton
& Hove we operate in partnership with local authorities, in
a working relationship that is widely acknowledged to be effective
and probably the best of its type. In Tyne & Wear we have
recently made proposals to Nexus for a "Third Way" agreement
that would give the PTE unprecedented involvement in the planning
and supervision of our services in East Gateshead. We are open
to suggestions for improvements to the regulatory systems for
any of our businesses.
What is essential, however, is that we recognise
that each of these alternatives has implications for public authority
spending, resource allocation and traffic management functions.
We would be delighted to offer the "Rolls Royce" standards
of London in Tyne & Wear, but could only do this at Rolls
Royce costs. This implies a need for spending in Tyne & Wear
at around four times the current level. Equally we are happy to
work with authorities on less expensive models that we believe
could deliver the greater part of the London benefits, at a substantially
lower cost.
Transport for London has clearly indicated that
London quality levels cannot be achieved without the investment,
revenue support and traffic management measures implemented in
London.[6]
We accept that a more closely regulated environment is necessary
in London to achieve the benefits delivered. However the evidence
shows that it is these features, and not the regulatory system
itself, that delivers the service quality—the regulatory
controls are "necessary but not sufficient".
27 June 2006
4 Transport Statistics Great Britain: Department for
Transport. Back
5
Bus Industry Monitor: The TAS Partnership Ltd. Back
6
Peter Hendy, Director of Surface Transport, Transport for London. Back
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