Select Committee on Transport Written Evidence

Memorandum from the Association of Greater Manchester Authorities (AGMA), the Greater Manchester Passenger Transport Authority (GMPTA) and Executive (GMPTE) DLTB 36

  Greater Manchester's economy is growing, with the best per capita GVA growth record outside London and the South East, and 45,000 new jobs created in the last five years alone. In the absence of transport or other constraints, we have every prospect of continuing to grow at these (or better) rates, with the City Region Development Plan identifying potential growth sufficient to deliver a net increase of more than 210,000 jobs over the next 15 years. Delivering these new jobs over the next 10-15 years will significantly change the demand for transport, not only to and from the regional centre, but throughout the Greater Manchester area and beyond. Transport capacity will need to be massively enhanced to absorb these demands, and hence we must have an increased level of influence in order to deliver greater transport connectivity and reliability. This relates primarily to the operation of bus services, but extends also to local rail services and major highways.

  Therefore AGMA and GMPTA/E welcome the timely publication of the draft Local Transport Bill. We are currently developing a bid for Transport Innovation Fund (TIF) resources, and the draft Bill provides some of the essential reforms and additional powers that will be vital in ensuring that this broad package of public transport and road charging measures can meet the transport challenges that face the Manchester city-region over the next 20 years. This means developing a high quality, fully integrated transport system that can promote sustainable and enhanced economic growth and productivity, improve the quality of the local environment and enhance access for all to jobs, opportunities and services.

  GMPTA/E's comments, as informed by our TIF bid, cover the six headings referred to in the draft Bill:

    1.  Quality Partnership Schemes and Quality Partnership Agreements

    2.  Quality Contract Schemes

    3.  Extension of the maximum length of subsidised services agreements

    4.  Governance arrangements relating to Passenger Transport Authorities

    5.  Integrated Transport Strategies and Implementation Plans

    6.  Power of PTAs to make a Local Charging Scheme


  1.1  We are currently investigating the most appropriate method of delivering our TIF Bus Strategy outcomes. Our approach is to investigate which mechanism can best secure those outcomes that are vital in supporting the step change in bus service provision, which is an essential component of our proposed radically improved public transport offer under TIF. One route currently being discussed with the Greater Manchester Bus Operators" Association is through some form of partnership such as legally binding bilateral or unilateral Quality Partnership Agreements (QPAs) and/or Quality Partnership Schemes (QPS). However, we are also fully exploring the viability of Quality Contracts (QC) in the event that the partnership route cannot deliver all the necessary outcomes. We are then keen to ensure that the Bill sufficiently amends existing legislation such that both QPS and QC become realistic and practicable options that can provide the stable framework essential for the delivery of improved bus services. We welcome the approach adopted in the draft Bill whereby it is for local transport authorities to select the most appropriate measure from a menu of options to meet local transport demands.

  1.2  We also welcome the widening of the scope of QPS to allow for the inclusion of agreements on frequency or timing of services, fares and the phasing-in of facilities and service standards.

  1.3  However, based on our experience to date we do have concerns about whether partnerships, even amended as proposed, will be able to deliver all the outcomes that we believe will be essential to ensure the success of our TIF bid. These concerns, plus the appropriate remedies that may be necessary to incorporate into the draft Bill to further strengthen partnership arrangements, are outlined below:

Protecting parties in a QPS from predatory competition

  Where we have entered into an agreement with one or more operators on standards along a particular corridor or route (for example on frequencies, timings, quality standards and fares), there is nothing to prevent another operator (who may still meet the minimum quality standards set in a QPS) from operating along that route and undermining the Agreement. It should not be assumed that this additional "on-the-road" competition is always in the interests of the passenger, particularly if it creates the circumstances recently witnessed in central Manchester where the city centre was brought to a standstill following a large increase in unmanaged bus movements. We believe that where operators have entered into an Agreement on frequencies, timings or fares, a mechanism should exist which prevents other operators from registering similar services along that route for the period of the Agreement, and we are keen to see such a mechanism considered and incorporated into the draft Bill.

Revenue sharing agreements

  The public sector will be making a significant level of investment in public transport infrastructure and services if our TIF bid is successful. Introducing a local charging scheme will also contribute to significant mode shift from car to public transport. There is a legitimate role for the public sector to be able to guard against bus operators raising their fares to take advantage of their monopoly position and further, we will require a fair share of the increased revenues from passenger growth that our policies have brought about. We believe this is best undertaken at the city-region level, not least because as part of the TIF funding model these revenues will be required to support the less commercial parts of the public transport network. Again, we are keen that the DfT consider how the draft Bill could be amended to permit such a revenue sharing arrangement within a QPS.


  One of the key limitations of partnership arrangements is their revocable nature. However, the Authority clearly requires long term guarantees regarding bus service frequencies, fares, network coverage, quality and so forth; and this will be particularly important in a TIF environment. However, as the draft Bill stands we are not convinced that QPS can provide these essential guarantees of stability and we would be keen for the DfT to consider further amendments to QPS arrangements to secure this key objective.

Traffic Commissioners

  The draft Bill proposes to expand the remit of Traffic Commissioners to oversee a strengthened bus performance regime and places an obligation on bus companies to provide punctuality data. Whilst we welcome these proposals, we are keen to ensure that Traffic Commissioners will be sufficiently resourced to properly undertake these and any additional responsibilities, for example, oversight over any putative QPA/QPS. To further enhance this regime, we would suggest widening the sanctions available to the Commissioners to punish operators that consistently fail to run punctual, reliable services by providing them with the flexibility to impose penalties that do not negatively impact on the passenger. Regulations governing the use of Traffic Regulation Conditions (TRC) should be clarified and amended such that local authorities can ask Traffic Commissioners to impose them pre-emptively in order to prevent predictable problems, such as congestion. At the moment, the guidance governing TRCs suggests that they can be imposed only after problems have arisen. Finally, it may be appropriate for an independent adjudication process to be established to administer local revenue sharing arrangements and consider issues of predatory competition et al, and the Office of the Traffic Commissioner may be best placed to adopt this role, provided they are adequately resourced.


  2.1  We welcome the intention to make QC a more realistic option and the removal of the "only practicable way" test, but are very concerned that this intention will not be satisfied by the proposals in the draft Bill. Should the partnership approach with operators prove unable to deliver our desired TIF Bus Strategy outcomes, it will be essential to have in place a mechanism and regime for QCs that can deliver the integrated network, together with the frequencies, stability, quality and capacity that we believe will be an essential pre-cursor to any local charging scheme.

  2.2  However, we are concerned at both the nature of the proposed public interest test and its narrow definition of "public interest'. Whilst we understand the wish of the Secretary of State to remove himself from the decision-making process, the proposals in the draft Bill will mean that both the approval and appeals processes will now be in the hands of non-elected bodies (the new Approvals Board and the Transport Tribunal). It seems anomalous to us that on the one hand, the draft Bill devolves to local authorities the responsibility to make decisions about Local Charging Schemes, yet does not provide them with a similar responsibility to determine the most appropriate framework for delivering local bus services, despite the fact that the ability to deliver significant bus improvements and capacity is critical to the success of our overall TIF bid. Whilst we have no objection to reasonable scrutiny of our proposals, perhaps in the form of a public inquiry under the auspices of an independent panel, we believe that the final decision should rest with the promoting authority after having regard to the panel's recommendation.

  2.3  At the very least, we require the DfT to provide an estimate of the time required for the proposed approval process and access to the detailed guidance they presumably intend to provide to the Approvals Board and Transport Tribunal (in order for them to determine whether the public interest test has been met), before we can properly determine the viability of the proposed public interest test. It is imperative to ensure that the proposed public interest criteria are an appropriate framework for setting out how a QC will deliver the authorities" overall objectives and be affordable without being so onerous as to make them impractical. Specifically, we would expect the remit of any public interest test to be drawn much more widely, such that an Approval Board would be able to consider the wider economic, social and environmental benefits of QC arrangements.

  2.4  There is a need for the timings of decisions on local charging schemes and the delivery mechanism for the public transport strategy to be closely linked. The AGMA tests for our TIF bid require that "enhanced capacity (on public transport) must be in place where congestion charging is proposed prior to the introduction of the charging scheme". We believe that where a QC is integral to the delivery of a local charging scheme, it will be essential for a simplified and accelerated approval process to ensure that the quality and capacity public transport enhancements are in place before charging is introduced. We are concerned that the draft Bill contains no such provisions.

  2.5  We welcome the proposals (clauses 16-17) to give increased flexibility by allowing the extension of the maximum period of quality contracts and the confirmation of a scheme for a further period beyond the initial 10 year period. This is likely to be invaluable for us to be able to deliver improvements over the longer term.

  2.6  We have noted the DfT's intention to review the fact that the Bill does not include any transitional arrangements to cater for the circumstances where the incumbent operator is unsuccessful in a bid for a QC in the area of their current operation. We are convinced however, that the potential risk is so great (transfer of vehicles, running down of services, disposal of depots, etc) that transitional arrangements will need to be put in place.


  3.1  We welcome the increased flexibility afforded by extending the maximum contract length from 5 to 8 years. We would question, however, why 8 years has been chosen as part of the proposed amendments to Clause 36.

  3.2  As part of the proposed amendments to Clause 16 (extending the maximum period of quality contracts to 10 years), the Explanatory Notes state, "Ten years is also the maximum duration for public service contracts for coach and bus services proposed by virtue of article 4.3 of a draft Regulation of the European Parliament and of the Council on public passenger transport services by road and rail..."

  3.3  In these circumstances we see no reason why the proposals under Clause 36 should not also extend to a maximum of 10 years. We would find this particularly helpful in the context of our Yellow School Bus programme, another key component of our TIF bid proposals. When we have previously sought tenders from the bus companies to supply and operate new yellow school buses, the prices have proved too high because of the operators" need to write off the cost of new vehicles over the maximum period of the contract (5 years). Whilst an extension of the maximum to 8 years would assist, a further extension to 10 years would make such contracts more affordable to the authority and allow more rapid expansion of the programme.


  4.1  We welcome the proposals in the draft Bill to address the governance issues relating to the provision and management of transport services at the city-region level. In particular, we welcome the approach adopted whereby each city-region will be charged to determine their own most appropriate transport governance arrangements, via a review of current arrangements and subsequently to publish a scheme that sets out the results of the review and any proposals for change.

  4.2  Briefly, we believe that it will be essential to the delivery of our TIF Strategy for us to be able to manage or at the very least have much greater leverage over the wider transport network in the city-region, including significant influence over the specification of local rail services and the Highway Agency's strategic road network.

  4.3  We note the DfT's invitation, as part of the consultation on the draft Bill, to comment on funding arrangements and we will be preparing a full response. Briefly however, we envisage that a new GM-wide transport body will require significant, additional funding responsibilities, along the lines of those enjoyed by Transport for London, and we are keen to ensure the draft Bill contains the necessary powers to institutionalise any new funding arrangements. We will also be responding to the invitation to comment on the future of the Bus Service Operators" Grant.

  4.4  We also welcome the proposals to extend the power to promote well-being to PTAs as we believe that this will allow greater flexibility in meeting, in particular, our social, economic and environmental objectives as part of the TIF Strategy.

  4.5  We would however, wish to press government to consider the re-introduction of powers for PTA/Es to own buses and lease them to operators that were taken away as part of the 1985 Act. The GMPTA/E has no wish whatsoever to operate buses as part of the general network, but such powers would help us meet many of our social, economic and environmental objectives (for example the ability to purchase and lease to operators yellow school buses, low-carbon buses, and "people-carriers"). In the context of the tendered services network, the ability to own and lease buses could potentially widen the pool of operators willing to tender for contracts, thus enhancing our ability to guarantee Best Value.


  5.1  We welcome the proposals to replace Local Transport Plans (LTP) and Bus Strategies with Integrated Transport Strategies (ITS) and an Integrated Transport Implementation Plan (ITIP), primarily because they would enable us to formally define transport within the wider public policy context and adopt a long term view.

  5.2  Indeed, the context for our TIF bid was laid out in our own Greater Manchester Integrated Transport Strategy (April 2005); an innovative, integrated package of measures to tackle congestion and encourage modal shift in response to the government's Transport White Paper, the Future of Transport (2004). We had expected to prepare a revised LTP2 (Bus Strategy) subsequent to our TIF bid but may now need to explore with DfT the practicality of preparing a new-style ITS and ITIP prior to the expiration of LTP2.


  6.1  We welcome the proposals in the draft Bill to devolve greater control of road charging scheme to a local level. GMPTA/E has worked closely with AGMA districts on the preparation of the TIF bid. The ability to prepare a joint Charging Scheme to include GMPTA, including provision for revenues from a scheme to be apportioned to the PTA, would be a sensible extension of this partnership.

  6.2  We do feel, however, that greater clarity is needed over the period during which all the net proceeds of a local charging scheme can be used for local transport purposes. The draft Bill states (Clause 82 and Schedule 5) that a detailed programme for the application of the net proceeds of a charging scheme must be produced every 5 years from the date on which the scheme comes into force. However, it does not indicate over what period this would apply.

  6.3  Our public transport investment package of £2.9 billion (from TIF and from borrowings) is predicated upon the revenues being available (and re-invested) over a 30 year period and we are seeking reassurance from government that charging revenues will be available at least over the same period. Further clarity on this key point would be welcomed.

  6.4  As part of the removal of the current role of the Secretary of State to approve a local charging scheme, the government propose to introduce "an appropriate framework of accountability", which would comprise a combination of statutory guidance and regulation. Whilst we understand the need for such accountability, we would wish to ensure that any such guidance and regulation still allows for a scheme to strike a balance between the need for nationally applied standards (for example to allow for inter-operability) but retaining enough flexibility to allow for a scheme to take account of local needs. We would not wish to see over-prescriptive regulation that might, for example, reduce the ability at a local level to determine exceptions and exemptions from a charging scheme.

  In conclusion, the devolutionary approach of the draft Bill is encouraging, but should be further extended to the process for securing a QC, and we approve of the draft Bill's guiding principle that authorities are provided with a range of practicable transport options that they are free to select in accordance with local circumstances and requirements.

June 2007

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