Session 2010-11
Publications on the internet

To be published as HC 750-i

House of COMMONS



transport Committee

Bus services after the Spending Review

Tuesday 25 January 2011

Nick Richardson, Steve Warburton and Professor Peter White

David Sidebottom, Stephen Morris, Stephen Joseph and Greg Lewis

Evidence heard in Public Questions 1 - 105



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Oral Evidence

Taken before the Transport Committee

on Tuesday 25 January 2011

Members present:

Louise Ellman (Chair)

Steve Baker

Julie Hilling

Kwasi Kwarteng

Mr John Leech

Paul Maynard

Gavin Shuker

Julian Sturdy


Examination of Witnesses

Witnesses: Nick Richardson, CILT Bus and Coach Forum Committee Member, Chartered Institute of Logistics and Transport, Steve Warburton, Operations Manager, TAS Partnership Ltd, and Professor Peter White, University of Westminster, gave evidence.

Q1 Chair: Good morning, gentlemen, and welcome to the Transport Select Committee. Could I ask you, please, to give your name and the organisation you represent? This is for our records. We will start at the end here, Mr Richardson.

Nick Richardson: Nick Richardson, Chartered Institute of Logistics and Transport.

Steve Warburton: Steve Warburton from the TAS Partnership.

Professor White: Peter White, Professor of Public Transport Systems at the University of Westminster, but speaking in a personal capacity.

Q2 Chair: Thank you. Buses are the most popular form of public transport in relation to numbers of people using them and journeys made, yet buses are relatively low profile and don’t seem to get the same attention as other modes of transport. Why do you think that is? Who would like to give me their opinion on that?

Steve Warburton: My opinion is that it’s because the market is so diverse and it’s also made up of a series of short journeys for low value. Bad service for something that costs £1.40 has a lower priority than something that costs £264 or whatever the current fare is that you might be railing at paying for a railway fare. The bus market also tends to be seen, although there seem to be some changes, as the province of the less welloff, who are not so articulate in complaining and perhaps don’t know who to complain to.

Q3 Chair: Are there any other views on why this should be?

Nick Richardson: I think the bus industry suffers very much from an image problem. You only have to think of people in their 30s and 40s; their last recollection of a bus was going to school on one. It is the car-only generation and it actually has very little relevance for a lot of people, which is a situation that needs to be turned around.

Professor White: The social status of many bus users is lower than that, say, of rail users and they are less articulate perhaps in expressing their views and interests.

Q4 Mr Leech: Clearly, there is a distinction between London and the rest of the country on that image issue, though. Why is it different in London to the rest of the country? Is it simply that some people have no choice other than to use the bus in London and, therefore, all sorts of people from all sorts of backgrounds do, or is it something different in London?

Professor White: I have looked at the rapid growth in the bus market in London in recent years and it is certainly true that the level of bus use is much higher and probably a slightly higher socio-economic group is attracted, although none the less bus users in London tend to be of lower income than users of the underground, for example. Central London is a rather different case to the rest of London, where clearly you have a higher income group using buses, for example, in connection with rail commuting into the central area and then travelling to their final destination within zone 1.

Q5 Chair: How does the provision of bus services here compare with that in comparable countries?

Steve Warburton: There are some major areas where the provision of service compares very well. Some of the major operators such as in South Manchester and Newcastle provide almost as good a level of service as is provided in London.

Q6 Chair: But what about other countries?

Steve Warburton: In other countries it is better, I think.

Q7 Chair: Better elsewhere?

Steve Warburton: No. I think London has a very good bus system.

Q8 Chair: Professor White, how would you assess this?

Professor White: If we compare with other European countries, the bus system, as such, sometimes does compare quite well. We have a fairly good level of service in small towns and rural areas, compared with France, for example. A lot of the differences in public transport use, if we put bus and rail together, are in the large conurbations, not in London. But if we compare Greater Manchester, the West Midlands and so on with equivalent conurbations elsewhere in Europe, the public transport trip rate per head is relatively low when we put together the bus and rail trips as one indicator.

Q9 Chair: Are the benefits of bus travel different in urban and rural areas?

Nick Richardson: Very much so. The level of service available varies enormously and with urban bus services you get a much more intensive service and often a much better quality of service. It is more reliable, for example, and, indeed, more affordable. There is a gradation from urban, through suburban to rural, in terms of the offer that is there and the number of people that are willing to use it.

Professor White: Another difference between urban and rural is that there are relatively few adult journeys to work commuting on buses in rural areas. The peak is very much dominated by school travel, but, on the other hand, they do serve a very important role for journey purposes like shopping, personal business, medical appointments and so on.

Q10 Chair: Is there any hard evidence that buses support economic recovery?

Steve Warburton: We did some work for CPT recently where we were assessing the value of spend by bus passengers and the value of the industry for the economy generally. The consensus was that bus passengers may spend less per trip but they make more shopping trips than people who arrive by car, so their value is probably the same. Our estimate was that the value to the economy was over £4 billion.

Q11 Chair: Do you have any other views on buses and economic recovery?

Professor White: I was involved in an earlier study of a similar form, which likewise confirmed that buses represent a substantial amount of shopping activity. It is perhaps not so immediately evident because one sees the cars parked in the shopping centre but not the bus as it moves on.

Q12 Chair: Bus usage has been falling over recent decades, apart from in London, and there has been a slight increase recently. What do you think is the reason for that? Is it to do with the deregulated system outside London or is there some other factor working?

Nick Richardson: There was already some decline before deregulation, which has been exacerbated since, I think it’s fair to say. A lot of it derives from increase in car ownership amongst many people, many groups in society, but also a lot of land use decisions. I am sure you can all imagine the business parks and shopping centres that are relatively poorly served by bus but have large car parks. Is it any wonder that people opt to use cars in those situations?

Q13 Chair: Can we encourage more people to leave their cars and get on the bus? Is that the same market or is it a different market?

Professor White: That will depend on the destinations to which people are travelling. Obviously that is most likely to occur where people are travelling into congested town centres where there may be limits on the amount of parking and environmental constraints on the amounts of cars one can accept. In cities like Oxford and Brighton, for example, one sees high levels of bus use, with a combination of some indirect restraint on car use and a positive approach by the operators in marketing their services, improving quality of course. Park and Ride would be a clear example of that.

Q14 Chair: How important is the marketing?

Professor White: It’s difficult to quantify exactly but we do know it is a major factor. For example, even in an area where the population and jobs don’t change, individuals come and go all the time, so it is necessary for buses operators to remind people of the product they are offering. Companies like Trent Barton, for example, do this quite successfully by using liveries and the image of the service to increase public awareness of the services that they offer.

Q15 Paul Maynard: This is addressed to the TAS Partnership mainly but I would welcome other views. I was struck in particular by paragraphs 12.3 and 12.4 of your evidence where you contrasted the decline in post-war demand and post-war service levels and said that demand has dropped very sharply but service levels less so. Clearly, those factors have declined and the cost per passenger has increased. What moral or lesson, shall we say, do you draw from those figures in terms of what you expect to see happening in the future and whether it is predictable and acceptable or not?

Steve Warburton: I would say, in general, that that trend would level out, because there is some evidence that the drop in demand is levelling out already. The cost pressures on the industry are the one thing that really drives the increase in fares now, largely driven by wages, because they are such a big proportion of the industry costs. Until you can get a level of cost controlling, I don’t think we are going to get away from the above inflation fare increase.

Q16 Paul Maynard: You mentioned specifically that Western Greyhound in Cornwall and Konectbus in Norfolk have been able to drive up passenger levels. Can you explain how they were able to do that? What steps did they take that improved levels of ridership?

Steve Warburton: I think the Chair’s earlier remark about marketing has a lot to do with it. In the case of Western Greyhound, certainly, they have brought themselves up as the good local bus company with feelers in all fields. To take another example, Norfolk Green in north Norfolk have what should be a very unpromising bus territory but they have made a really good success of that company.

Q17 Paul Maynard: It is a sort of cultural sense almost of soft power rather than hard-

Steve Warburton: There is a feeling that it is part of their own service. With regard to their marketing, if you go to any tourist place in north Norfolk, there will be something from Norfolk Green in the rack somewhere.

Professor White: I also referred to Western Greyhound and Norfolk Green in my memorandum in very much the same terms.

Q18 Mr Leech: Has the concessionary bus pass-the free bus pass for pensioners-masked a further decline in bus patronage by increasing the number of free concessionary journeys, and has that been responsible for that slight increase in passenger numbers in the last two or three years?

Nick Richardson: In many cases that is exactly what has happened. The concessionary scheme, you could argue, aims to increase accessibility for many people, or is it in reality increasing mobility for the minority who would be using it anyway? They may make more trips rather than new entrants making new trips.

Q19 Chair: Has any detailed research been done to distinguish those two users?

Professor White: I could comment on that point. I have referred in my memorandum to some work that was done in conjunction with one of my students in a case study, where we found that one feature of introducing the free concessionary travel was not only that the people travelling on half fare now travel more often, as one would expect, but quite a lot of people in the eligible age group took up a pass for the first time. It seems to have increased awareness of the availability of bus services in a group who may not have used them very much before.

Q20 Mr Leech: Given that the bus operators are not supposed to make any money-it is supposed to be cost neutral to the bus operators-that therefore means that the cost to other passengers who are paying other fares is significantly increasing as a direct result of the free bus travel. Am I right to make that assumption?

Steve Warburton: It can be, but that’s indirect. There was one case of Rossendale Transport in Lancashire who expressly put in a 10p surcharge on their normal passengers when Lancashire reduced the rate of reimbursement, so there is a correlation. But, generally, in terms of adult passengers, some of the larger companies specifically make reference to recording nonconcessionary passengers so that they can report increases on that front as well, and there have been some.

Q21 Mr Leech: I think, politically, all parties agree that the free bus pass is generally a good thing, but from your perspective would you say that it provides value for money?

Nick Richardson: One of the major difficulties is that the proportion of eligible people will be increasing into the future, so if it is regarded as affordable now, that may be very different in a few years’ time.

Q22 Mr Leech: Given the level of funding that goes into that scheme, could that money being spent in bus services in a different way be spent better and more efficiently in creating a better bus service?

Steve Warburton: You could argue that, if there is a chance that there is a large reduction in service provision but you still have a free pass, it is better not to have a free pass but have a service, which is definitely the scenario we could be facing in the near future. One of the things we concluded is that in its current form the scheme isn’t sustainable without some additional finance or contribution by the users.

Q23 Mr Leech: Have you done any work on the additional cost to the scheme in coming years?

Steve Warburton: We have done some. We have measured that the cost of the scheme is lower than the value to the passengers in terms of benefit, so we contend it is a good thing to have socially.

Q24 Steve Baker: What could the Government do to reduce bus operators’ costs?

Nick Richardson: One of the big items for a bus operator is fuel, and that is always going to be the case. Changes to the amount that the operators pay makes a significant impact, which is often only recoverable through the fare box.

Professor White: The other point one might add is that most of the costs of running a bus service vary with time. You pay your staff by the hour and you have annual depreciation of leasing charges for vehicles, for example. The most effective way of reducing bus operating costs, assuming wage levels don’t change, is to make them go faster. Even a very modest increase in speed, from, say, 18 to 20 km an hour in an urban area, could give quite substantial financial savings to an operator and that could be achieved, for example, by bus priority measures and also by ticketing systems which speed up boarding time at stops.

Q25 Steve Baker: You mentioned bus priority measures. Is there any research on the commercial value of that legally privileged access to road space that is priority access through bus lanes and so on? What is the value of that privileged access to bus operators?

Professor White: There are wellestablished rules for evaluating bus priority that have been followed for many years. We evaluate both the financial gain in terms of reduced operating costs but also, more importantly, the time savings to the bus users in the vehicle and any offsetting time losses to other road users. The main element, in fact, is the economic gains and losses in terms of time savings to users. The operating costs saving is important, but it is a relatively small part of the economic evaluation of a bus priority system.

Q26 Steve Baker: The key thing here is to try and assess the indirectly known costs-the costs which you can’t measure through the price mechanism.

Professor White: Yes, but there are wellestablished values of time used in economic evaluation of transport schemes, which can be applied in this case.

Q27 Kwasi Kwarteng: How likely is it, do you think, that people will stop using cars and move on to buses?

Nick Richardson: This is always the crunch issue because the growth in the bus market is dependent on a transfer from car use. You used the word earlier, Chair, of "encouraging" people away from car use, and over the years policies at all levels have very much talked about encouraging a shift to bus. What would be helpful is if, instead of encouraging, we were facilitating that shift to bus. That does mean addressing some of the issues that make people drive. I have mentioned land use decisions, but there is also parking availability and pricing. There are fundamental issues in terms of how people make their travel choices.

Q28 Kwasi Kwarteng: I would like to hear from the rest of the panel on what their view is on that.

Professor White: I think there are two factors. One is that there is some underlying growth in car ownership. For example, it may be that some of the recent growth in concessionary travel by those aged 60 upwards is reversed as further people coming into that age group have a higher car ownership than traditionally people did in that sector. On the other hand, it is very interesting to note in London that car ownership per head has increased very little for the last 15 years. What you can also see in London is quite a substantial growth of car clubs; that is to say people are happy to use public transport most of the time but hire a car for the occasional journey for which it would not be convenient. If we maybe move away from this idea of some intrinsic benefit of car ownership to seeing the car as more of a utility, people might be more selective and perhaps willing to hire cars when required rather than necessarily thinking in terms of, say, having a second car in the household.

Steve Warburton: We have seen some development of the principle which park and ride schemes use as well, in that using your car to get to a bus to go into a city centre has switched, to a degree, to using the bus for the whole journey, which is no bad thing. The number of car owners who make bus journeys is now higher than it was.

Q29 Julian Sturdy: You touched on concessionary travel and the impact it’s having on operators through the growth that has been developed through the free bus pass. Mr Leech has already touched on the fact that it has support from all political parties, but, having regard to what is happening with concessionary travel and the impact it is having, do you think rural areas are suffering more than urban areas because of the knockon consequences?

Steve Warburton: There are two ways I think that’s true. The main way is because of the proportion of the fare that is refunded to the bus operator. A proportion of the high fare for a long rural journey means there is a bigger gap between a normal fare and the fare that they would actually get as a result of this. I am sure Professor White will agree that, compared to the early 1980s, for example, there are many rural areas that have better bus services than they have had in years. They are very dependent on public funding, and if that drains away then the impacts on the rural areas are bound to be higher, but we must not overlook the impact on the smaller urban places as well because they often get overlooked.

Professor White: I think it is true to say that the free travel probably had a bigger impact on growth in bus use in rural areas, partly because fares initially are somewhat higher. The problem is that, if local authorities have constrained budgets and you have a mandatory responsibility to fund free concessionary travel, you may squeeze even further the budget for tendered services. So, as Mr. Warburton said, in fact we’ve had a marked improvement in rural bus service levels in recent years, which the National Travel Survey confirms. There is a danger of that being reversed with some fairly drastic cuts in support for tendered services.

Nick Richardson: That has some quite deep consequences as well in terms of which sectors of the community are trying to travel and for what purpose. The concessionary scheme at the moment obviously targets people who are eligible by age or disability, but there is also very much a need for people of younger age groups, who are perhaps job seeking who need that accessibility, and it is quite possible that either they can’t access bus services because they don’t exist or because they are unaffordable. That has lots of implications in terms of where people live and work and the structure of some of these rural communities.

Q30 Chair: What is the evidence on the impact on people seeking work?

Nick Richardson: At the moment I think it is fair to say it is a bit difficult to tell because we haven’t had the fundamental changes that might well be round the corner. But I know of instances, for example, in South Dorset, where people in rural communities, younger age groups, tend to move towards the larger urban centres because that’s where their work is and they have no means of getting there other than a car, and if they don’t have a car they inevitably move.

Q31 Julie Hilling: Mine is a little bit of a chicken and egg question. You talked about some services that are very successful. London is an example of this-I certainly park my car here if I drive down, and then I don’t use it again until I go home-but you also talked about South Manchester and a couple of other places. What is it that is fundamental about people using a bus and having a very regular good service and people not using a bus and perhaps having a poor service?

Steve Warburton: In a way, success breeds success. We have found that those who have taken the plunge and simplified their services on higher frequencies tend to have built on those initial frequencies. What was a mishmash of hourly buses going different ways became a 15-minute doing the same thing, growing to a 10-minute doing the same thing. If you look at the Manchester-Stockport corridor, it’s every three or four minutes now on the 192, and that’s a London frequency.

Nick Richardson: There is also some market segmentation, particularly in South Manchester, where you have the cheap and cheerful bus offering running against others of generally higher quality. In that particular instance, it’s one operator operating under two brands for different markets, which is a most peculiar situation. In one sense it’s competing against itself, but on the other hand it’s also generating a culture of bus use.

Professor White: As the other witnesses have indicated, there are benefits in concentrating high-quality, high-frequency services on trunk corridors, which also makes it much easier for the passenger to understand the network that is being provided. We also find that, once you run a headway better than about every 10 minutes, people no longer need to consult a timetable; they just turn up and get the next bus. That, again, makes the service easier to understand and use.

Q32 Julie Hilling: What then needs to be done to encourage people to run a more frequent service?

Nick Richardson: A key issue for most of the users is reliability. Is it going to turn up when they expect it to turn up? One of the key causes of unreliability is traffic congestion. So we come back to the issue of whether you can reallocate road space or put in other measures that make the bus turn up when it should. It is this idea of facilitating bus improvements rather than encouraging them. Coupled with that is punctuality, and a key element of that is information. Are people getting the information about the services they need? Do they understand it? Is it in the right format and is it available when they are making their travel choices?

Q33 Chair: Are aspects such as reliability more important than fares?

Nick Richardson: I think it’s fair to say that it depends. People will pay for the product if it does what they think it’s going to do because they value it as providing the service they need. The thing about buses, certainly in my experience, is that it takes a combination of a whole range of things to make it work. There is no one particular thing. Yes, it is marketing, information and reliability, and a host of other things as well. All those in combination produce the quality product that generates the growth, and too often that is thwarted by unreliability.

Q34 Mr Leech: Going back briefly to fuel prices, you said that was obviously impacting the industry. My understanding is that a lot of operators bulk buy in advance so they get different prices. They may get it at a good level or they may get it at a bad level, depending on when they bought it. But where is the balance between that and the cost to motorists, persuading motorists out of their cars and on to the buses?

Professor White: If motorists look directly at petrol costs as their main perceived cost of travel, that can be quite significant in modal choice, whereas it is a comparatively smaller share of the bus fare, around 10%. So an increase in pure prices should relatively assist buses if it achieves the modal transfer from car, even if bus operating costs as such are increased.

Q35 Mr Leech: Would you argue then that higher fuel prices are good for the bus industry as opposed to bad for the bus industry?

Professor White: That depends on the cross-elasticity of demand with respect to car fuel price, but yes, that could be a significant effect.

Steve Warburton: Could I just add to that? If you were a bus company that has been used to getting 20% of your fuel duty rebated but the level of rebate is frozen, you end up with very significant fuel price increases for bus operators above what motorists experience, because the proportion of fuel that you are paying for has increased by over 50% in about the last seven or eight years.

Q36 Paul Maynard: Continuing on the issue of fuel and in particular BSOG, there were some interesting parts of your evidence where there was a suggestion that BSOG favoured larger operators over smaller operators who had a more fragile economic base. In its complexity, BSOG, focusing on things like fuel efficiency, having smart card machines, information and so on, was almost distorting the market. How can BSOG be improved, and are there any ways in which it could be locally assigned, i.e. there will be parts of the country where some things matter more than others perhaps? How could BSOG be made more local in what it can incentivise?

Nick Richardson: One of the difficulties with BSOG in its various forms has always been ease of administration with what is a very fragmented business in many ways. I think it might be quite difficult to have more local inputs there. But, as you rightly say, changes to encourage people to adopt smart card ticketing, for example, incur quite a considerable expense for an operator and there is a danger that those with the bulk buying power become more distant from those who, generally, are relatively small.

Steve Warburton: It is the recent addons to BSOG that have added the complications. The basic principle of BSOG that you get a rebate per mile operated was a system that was very fair and easy to administer. The one downside was that perhaps it rewarded poor fuel consumption, because that was taken into account, but a simple move to a rebate per mile operated would be quite fair, because you would get more miles in a rural area and more rebate.

Professor White: You should also bear in mind that, compared with bidding for a tendered service, the BSOG claim procedure may be relatively simple for a small operator. One effect of BSOG, by lowering costs, is to make some services commercially viable that would otherwise go through the tendering process.

Q37 Steve Baker: I am just thinking about road charging, which I know the Government has ruled out. To be absolutely clear, we know it has ruled out road charging. We have talked about fuel and the cost of fuel to bus operators, and it is obvious it would be a major cost. If one were to have substantially lower fuel taxes but introduced road pricing, how do you think that would impact on bus operators? If I may, I will give you a steer while you think about it. It just strikes me that a full bus is highly likely to outbid a single occupancy car for scarce road space during rush hour. It seems to me that perhaps road pricing is good for bus operators or potentially good for bus operators. Is that something the industry has considered?

Steve Warburton: I would totally agree. One of the main things that sways the balance of car versus bus is cost. If you add that significant cost to the car journey, the balance is tipped a little. The same principle could apply to city centre parking. If there is a high premium on city centre parking, such as there is in somewhere like Nottingham, and with the workplace parking levy coming in there, that is likely to have the same balancing effect.

Professor White: If revenue from fuel tax effectively were replaced by income from road user charging, that would make the charging system far more selective, with higher charges where congestion occurs. That would clearly be to the benefit of buses in congested urban areas. On the other hand, in rural areas, of course, buses might be in a less favourable position as the direct perceived costs of running cars would be lower if some of the fuel tax revenue from cars had been replaced by income from road user charging.

Q38 Chair: This is not an inquiry into road pricing, I emphasise, but quick comments may be helpful to us.

Nick Richardson: I would certainly concur with the views expressed so far. It may well be in the dim and distant future.

Q39 Chair: What is the overall impact of the spending review going to be in relation to transport? Is it going to have a drastic effect on services, and who is going to suffer the most? Is it possible to make predictions at this stage?

Nick Richardson: It is difficult to make predictions, quite clearly. But, yes, if you have less money to distribute, particularly for what are basically more marginal services, it is quite possible that many of those will disappear, because there is no alternative funding stream for them. That is a real danger, because it undermines not only those services at the margin but commercial services also. You can imagine a situation, for example, where you want to use the bus to go to work and come back in the evening after six o’clock, but there is no bus after six, and the net result of that is you don’t use the bus at all. There could be some quite severe ramifications.

Q40 Chair: Is that view generally shared? The Department for Transport says that a reduction in BSOG will result in an overall 1% change in fare levels and services and a 2% change in rural areas. It’s not just BSOG, is it? It is a combined effect.

Steve Warburton: The BSOG thing is fair enough. If it was only the change in BSOG, the world could probably live with it by means of some adjustment to service and some increase in fare. I would not query the 1% to 2% for that. The really dangerous one is the change in the way concessionary fares are paid for, which is going to lead to some significant reductions in payments to operators. The thing about the concessionary fare payments is that they are across the board, it’s a commercial network, tendered network, everything. We are working from one large shire county in East Anglia which is reducing its payment level by 33%, and that’s not a level of reduction of payment that operators can tolerate.

Q41 Chair: Can increased bus fares compensate for a lack of income or a reduction of income?

Nick Richardson: In many cases they can, but to the detriment of attracting new users, and indeed putting off some current users. There is no standard fare across the country, and some places are just prohibitively expensive.

Professor White: As I mentioned in my evidence, the typical price elasticity is minus 0.4%, which means that an operator normally will get a net gain in revenue if they increase prices, albeit at the loss of some ridership.

Q42 Chair: Should entitlement to concessionary travel be extended to community transport?

Professor White: Yes, it would be logical if one argues that the purpose is to benefit the types of user who require such services.

Steve Warburton: Many local authorities do extend the scheme to cover community transport schemes, but it’s not part of the mandatory scheme.

Q43 Paul Maynard: On that point, clearly there is a national set of guidelines for the concessionary fares scheme. Some councils choose to go over and above what is mandated nationally, either by extending it to community transport or adjusting the hours. How can the national scheme be improved to make it more locally responsive? I am thinking of my own constituency, Blackpool, where we have high numbers of tourists coming in who aren’t local and there are always concerns that we are not getting the proper rebate that we should for the amount of mileage. Is there any way that the concessionary scheme can be tweaked so that it is more locally responsive and then councils can make better decisions, as it were, over how they spend that money, or does it need to be nationally mandated or else it will just fritter away?

Professor White: One thing that would help is more comprehensive use of smart card technology, because at the moment we have a national entitlement within England but relatively poor data in some cases on the use by nonresidents in places such as Blackpool, even though many of the passes have been issued as smart cards. If that technology comes into wider use, we should at least improve the statistics to establish how many trips have been made by residents local to the area and how many by visitors. But if you then attempt to introduce a lot more local variation, that would be very difficult for operators who already have problems where they cross boundaries of different authorities. One or two may give the concession in the morning peak and the other does not. So there are some operational feasibility issues as to the degree of complexity you could have.

Q44 Paul Maynard: On both concessionary fares and BSOG, you appear to be arguing that the virtues lie in simplicity and that that is a price we therefore have to pay for the local kinks in the system, as it were. Would that be a fair assessment?

Nick Richardson: That is generally the case, yes.

Q45 Chair: You are all nodding. Does that mean yes, because we can’t write nods down?

Witnesses: Yes.

Q46 Paul Maynard: Finally, where we have a socially necessary route-define that how you want-which is uneconomic, what in your view is the best way to try to sustain that route? Who should be paying and how?

Professor White: Under the present system it comes out of the budget of the local authority, and it probably would be sensible to continue making that decision at a local level. One underlying problem, which also arises in the case of transport investment, is a very high dependence of local government on central government grants. We don’t have, for example, some of the local sources of tax revenue one sees in other European countries, like the Versement Transport in France, which enable local financial objectives to be set and money to be raised to provide, for example, a better public transport system.

Q47 Julian Sturdy: Just going back to community transport, what do you see as the role of community transport and its role in delivering greater accessibility to areas where the bus services are quite poor at the moment? Then, following on from that, do you think that existing operators see community transport as a threat to them going forward as well?

Nick Richardson: On your last point, no, I don’t think they do see it as a threat. They see it as a complementary service. But it’s worth remembering with community transport that they too require quite a substantial subsidy. In most situations that’s always going to be the case. They provide a very valuable service. Various schemes have attempted to attract a very broad audience rather than just elderly or disabled people, with mixed results, I think it is fair to say. It is a different type of service but a very valuable one none the less.

Professor White: You need to distinguish between community transport in the sense of services provided by volunteers, where you are dependent on a pool of local volunteers which may need to be replenished continuously over time to sustain that service, and other services which may involve use of paid staff, such as demand responsive minibus services which can incur rather high costs per trip, albeit providing very useful benefits to the local community.

Steve Warburton: I think community transport and bus services are very much different beasts, and there isn’t a lot of crossover between the organisations that do one or the other. There are a handful, probably, in the entire country who dabble in proper bus operations, if you could call it that. I don’t think there is an army of willing community transport people wanting to take on bus services out there.

Q48 Paul Maynard: Looking forward, given what you have just said, do you think it would be helpful to try to redefine bus provision and incorporate all other forms of publicly funded transport by local councils, i.e. not just community transport but post buses perhaps or the work done by hospitals transporting people around the local area? There is clearly an awful lot of publicly funded transport going on, moving people around an area. Do you think that, if we are going to see the impacts you have suggested in terms of levels of bus services in the future, we need a more radical reappraisal of what transport is being provided at a local level out of the public purse?

Steve Warburton: I would fully agree. One of my colleagues specialises in doing precisely this-working with local authorities to pull together all the different strands of social services transport, nonemergency patient transport by the ambulance service, volunteer-run things, the whole gamut. Some of the local authorities are very good at doing them and others all operate in little, isolated spheres.

Q49 Paul Maynard: Would you say there is an awful lot of duplication going on?

Steve Warburton: There can be.

Nick Richardson: There is a certain amount of an awful lot of people all running services for their own requirements. One of the remits of local authorities is to try and coordinate transport at that sort of level, and, as Mr Warburton says, with quite a lot of success and savings. But you also have to remember that, for example, those services provided by the NHS have specific requirements in terms of the times of journeys and so on and so forth. It is very circumstantial, but yes, I think there is significant room for improvement.

Q50 Julie Hilling: I want to push more on what needs to be done because buses are a public service as well as being public transport. Hopefully, all of us will reach a point in our lives where we need to use buses, and certainly at the start of our lives we need to use buses. There is an issue about interconnectivity and you have said before that some bus companies have been more successful. What is it that the Government, local authorities and operators should be doing to ensure that we are not going to lose services during this period of time now and that we have better bus services rather than worse ones?

Chair: What can the various participants do to make things better?

Professor White: An element of stability in funding, particularly for changing services in rural areas, is important. Another, which the Local Transport Act 2008 has helped with, is removing some of the barriers which competition policy has created to sensible cooperation between operators. Particularly in the early phase of deregulation, it was quite difficult to have joint ticketing and timetabling. That has now eased, but there is scope for encouraging more interoperator cooperation in some cases so that we can promote a single network more effectively to the user. You can now see this occurring in some respects in Oxford under the quality partnership there, for example.

Q51 Chair: Are quality partnerships important in improving the situation?

Nick Richardson: Very much so. Partnership works. It is a complex business, but what you need is commitment from all parties and that is local authorities acting as the highway authority and, clearly, operators and other players as well. The way to take partnership forward is to have a coordinated programme of improvements because everyone has the same objective. They want more people on the buses and they want better services. They have a common goal, but negotiating all the hurdles to achieve that is quite an intricate process.

Q52 Chair: Mr Warburton, do you have any thoughts about that?

Steve Warburton: Probably, if you asked a lot of bus operators, they would like to be left alone more. We have had innumerable OFT investigations in the industry, the OFT investigation into the whole industry and now the Competition Commission investigation into the whole industry.

Q53 Chair: Ms Hilling’s question isn’t, "What would any individual party in provision of transport like?" It is what should be done to make the best of reduced funding, in the interests of the public.

Steve Warburton: Partly, that goes along the same avenue that there is this sort of sword hanging over bus operators about doing things which would benefit the passengers but would be seen as anti-competitive. We have worked with local authorities that want to do that as well, but they have run scared of the competition authorities.

Q54 Chair: Yes, but what should be done? We are not asking you how each individual participant sees things. The question is: what can be done by the various parties providing public transport to make the best use of reduced resources?

Steve Warburton: I think partnership working is very important. There are some very successful ones which, above the ones that are usually quoted which are the Brightons and Oxfords of this world, have done some useful things.

Q55 Chair: So partnership working?

Steve Warburton: Yes.

Q56 Julie Hilling: When you talk about the sword of Damocles, what do you mean?

Steve Warburton: Because the penalties for infringing competition law can be so severe, it acts as a stifling aspect on a lot of things, such as sharing frequencies or perhaps acquiring a smaller operator that may not be worthwhile in the end because you have this investigation that costs a fortune and you may have to divest and that sort of thing.

Professor White: It may inhibit some aspects of smart card ticketing technology, not the period travel card but pay as you go systems, equivalent to the Oyster pay as you go in London, where you need some harmonisation perhaps of fare structures between operators in the same area for a card to be easily interavailable. Sometimes competition policy makes that rather complicated for the operators to do.

Q57 Julie Hilling: You are saying that operators should not be competing. They should be working together to plan a bus service across an area.

Nick Richardson: Indeed. That is very much the case. In the context in which operators work there are an awful lot of challenges and they need to pool resources to achieve improvements. Ticketing is one. Apart from the actual fares charged, you have incompatible systems, and that is gradually working through to a more positive outcome. There is joint information and that sort of thing. Some of them are easier than others but they all need to happen.

Q58 Julie Hilling: Therefore, what is the barrier then to quality contracts and to having that as competition? We have a device now to say, "Okay, you can have quality contracts". Why are we not doing them?

Nick Richardson: Operators tend to think in the very short term and recent events have bumped them into a longer-term view. They realise that, as you say, they are not competing against each other; they are competing against car users by and large. That is the share of the market that they need to tap into. But with that realisation comes a whole host of practical difficulties, partly to do with the regulation and competition issues. Cooperation doesn’t come easy to some of them and there is very much a role there for local authorities to try and guide them through the process. Everyone is in the same boat, as I say. They all have the same objective, but it often takes many years to work through the system and that ought to be accelerated and encouraged.

Q59 Kwasi Kwarteng: On the issue of cars and buses, do you think there is any way in which the bus companies can aggressively market themselves in order to attract car users? My colleague asked you about coordination, and you said that you felt the bus companies should be more coordinated in terms of planning routes. At what level do you think this planning should take place? Is that a Government thing or a local government thing, or is it something that they should be planning within themselves?

Nick Richardson: On your latter point, yes, it is very much a local authority scale of planning, although having said that, of course, you often end up involving more than one local authority, particularly with buses that go from smaller towns to a larger urban area, for example. Hence, you end up with a dose of politics in there which can be very difficult.

Q60 Chair: What does that mean?

Nick Richardson: For example, in the West Midlands you have one authority that has been busy taking out bus lanes while others have been putting them in.

Q61 Chair: You mean different decisions are made by different authorities?

Nick Richardson: Yes.

Chair: That is a clearer way of expressing what you meant.

Nick Richardson: Yes, and a different political complexion with a different view towards how you operate buses.

Q62 Chair: And independent integrated transport authorities?

Nick Richardson: They tend to be more successful in trying to coordinate things. Again, there are no guarantees and, of course, they only apply in six areas. There are plenty of large conurbations where that framework simply isn’t in place.

Coming back to your first question, on what we can do to facilitate a shift from car use, marketing works. It tends to be relatively short-term in impact, though, and you have to keep renewing it and coming up with new ideas. But there may well be other opportunities for operators, for example, running their own park and ride site rather than a local authority and that sort of thing. It is teasing out what car users want out of a bus operation. I think, historically, many bus operators simply haven’t asked the question.

Q63 Kwasi Kwarteng: Can I ask a followup? It seems to me from your answers that you envisage a big role for local authorities in this area, and I just want you to expand a bit more on that. What do you see as the function of the local authority?

Nick Richardson: A lot of it boils down to local authorities in the fact that they are the highway authority. We have spoken about bus priority measures; they are the people who implement them. You have to work handinhand with them to promote that. They take that overall view on coordination so that they can stand back and see the slightly bigger picture and also act as a useful role for consultation, because channelling the views of the users and the various other sectors of the communities and enabling change is important.

Q64 Steve Baker: Following up from an earlier remark, heaven forbid that politicians should be considered unhelpful in any way to transport policy. But, given the experience of the last 100 years, the remarks you made earlier about the sword of Damocles and the levels of intervention in bus operation today, what reasons are there to believe that it’s possible to come up with a rational transport plan at any level?

Nick Richardson: We all share an impending problem. We all know about traffic congestion, yet we blame it on everyone else. We all know about air quality issues; we all know about peak oil. What are we going to do there? There are some very significant things just around the corner, and one way of addressing that and a whole host of social and environmental issues is promoting public transport in a positive and forthright way.

Q65 Chair: Are there any other views on rational transport policy?

Professor White: The local transport plan framework also provides the means by which local authorities can address these issues in a comprehensive way, including bus priorities, parking policy, highway construction and so on.

Q66 Steve Baker: If I may, I think the imperative is absolutely clear. I think the question is: should we, based on our experience and current circumstances, increase the levels of intervention in bus operation and transport generally, or should we have a much more open and dynamic system for enabling people to make rational choices about how they travel?

Nick Richardson: Certainly my view is that there ought to be more intervention. Of course, the difficulty is that you upset an awful lot of people through doing that and there is a balance to be struck, quite clearly. The lessons of history over the past 20 or 30 years have suggested that maybe we are not quite heading in the right direction.

Q67 Steve Baker: If they won’t make the right choices, just force them.

Nick Richardson: No. One of the things about transport is that you can’t force anyone to do anything. What you want to do, basically, is to facilitate the means through which they can make rational choices. If people are volunteering to do it, they will be an awful lot happier.

Chair: Are there any different views to that? No. Mr Maynard?

Q68 Paul Maynard: Part of our inquiry is looking at the adequacy or otherwise of the consultation processes. Do you think local areas are consulting adequately or not with a view to the current set of changes that is going on?

Steve Warburton: I think there are as many areas of consulting or not as you could possibly come up with.

Q69 Chair: But what is actually happening?

Steve Warburton: We are aware of examples of local authorities just deciding at committee level that services are not going to be supported in the evening or Sundays, without any public consultation. We have others that consult the public on what the options are for certain patterns of service or replacing them. The same equally applies to operators. Some are very good at consulting their passengers if they want to change something and some just go ahead and do it.

Q70 Chair: So it is a mixed bag?

Steve Warburton: Very much so.

Q71 Paul Maynard: Is Passenger Focus playing the role that you might like them to play or do you think they are the people to play it in managing this period of change?

Chair: Does anybody have any views on Passenger Focus’s role?

Professor White: Yes. I think they play a useful role, particularly in identifying the relative priorities which bus users attach to differing aspects of service quality, reliability, price and so on. It is also worth bearing in mind in terms of consultation that the other effective thing to do when you change a bus network is to monitor the changes in the levels of demand and usage which follow. After all, one feature of bus networks is that they are relatively flexible. It is not like consulting on some piece of infrastructure that is going to be unchanged for 50 or 60 years. As you change networks, by monitoring the impact of that change on users, you can then be responsive where problems arise, for example.

Q72 Chair: Does Passenger Focus have sufficient powers to be a bus watchdog for the public?

Professor White: It certainly provides a welcome balance to the previous emphasis, which was very strongly on the interests of rail users, who in any case are more vocal and articulate. But, also, at the local level you do need bus users to stand up for themselves a little more perhaps.

Q73 Paul Maynard: In Blackpool, we have had regular focus on whether individual routes should be retained or not in periodic consultations. Do you not think it would be better at a particular time of change if we have wider consultations that focus on the networks that people want to see rather than this gradual erosion of services and an argument every few months over, "Why has this number bus disappeared?" Would that not be a more sensible approach at this stage?

Nick Richardson: I think that would be the case. One of the difficulties with consultations of the sort you mentioned is that it is very difficult to change the outcomes. It is all about taking things away and reshaping, rather than looking at the bigger picture. One of the features often in transport consultation is that it is an information exercise rather than an engagement exercise, which is generally far more effective.

Chair: Thank you, gentlemen, for coming and answering our questions.

Witnesses: David Sidebottom, Bus Passenger Director, Passenger Focus, Stephen Morris, General Manager, Bus Users UK, Stephen Joseph, Chief Executive, Campaign for Better Transport, and Greg Lewis, Programme Director, Age UK, gave evidence.

Q74 Chair: Good morning, gentlemen, and welcome to the Transport Select Committee. Could you give your name and the organisation you represent, please, for our records? I will start at the end here.

Stephen Morris: I am Stephen Morris from Bus Users UK.

Stephen Joseph: Stephen Joseph, Chief Executive, Campaign for Better Transport.

David Sidebottom: David Sidebottom, Passenger Focus.

Greg Lewis: Greg Lewis, Age UK.

Q75 Chair: Thank you very much. Where would you say that passengers and the public rank bus services in relation to other public services? Are they seen as something important? Would anyone like to comment?

David Sidebottom: I think so. We undertook some research ourselves in terms of passenger satisfaction, and levels of passenger satisfaction with bus services are extremely high and I think pleasantly surprising compared to some of the previous ones we had done on rail. Also, there has been some research undertaken for rural communities and it is placing passenger transport as a very high priority, particularly amongst rural communities. 28% of respondents felt that, in terms of things improving, public transport was one of the key priorities for improvement at a rural level.

Greg Lewis: The survey that Passenger Focus undertook also revealed that 39% of older bus pass holders made a greater number of local journeys by bus than before they obtained their passes. It was a very useful piece of research from our perspective as well and reiterated the fact that free local bus travel is a lifeline for many older people and is very highly valued by them.

Stephen Joseph: In the local consultations that some local authorities have been doing about the kinds of cuts people want to make and what choices they want to make, buses have come out as one of the top things people want to protect. There is some good evidence emerging that that is one of the things that people are really worried about and we are starting to see a lot of campaigning and so on going on around the maintenance of bus services in some areas.

Stephen Morris: There is a substantial sector of society that don’t have access to cars for reasons of age, disability, etcetera. For those people, the bus service is just as vital as any other public service. If you live in a particular place you expect to have a postal delivery, mains electricity, gas, water, etcetera, and the bus service is just as vital as those services to enable you to access all sorts of opportunities, such as retail, work and education opportunities. The big difference, of course, is that the bus service does tend to be expendable and can be removed almost without any notice, unlike other similar services.

Q76 Chair: The spending review is likely to have a significant impact on bus services. Is there any particular aspect of the spending review that you think will be more harmful than others and who is going to be most affected by the likely cuts?

Stephen Joseph: Shall I start on that? In common with some of the comments made by the previous witnesses in the previous session, it is no one cut that is causing the problem. It is the combination of cuts. So we have seen a focus and the Committee rightly focuses on the Bus Service Operators Grant. But we are also seeing general cuts in revenue support for local authorities which are feeding through to tendered bus services and, also, the impact of concessionary fares changes. There is the change of going to transport authorities rather than district councils and the way that’s changing. Also, there is the formula being used to reimburse local authorities and, in turn, the guidance on reimbursing bus operators. All of those are having an impact on bus operations and the combination is leading to some significant reductions in various areas.

David Sidebottom: It is also worth saying that the immediate threat, I think, is the 28% reduction in local authority grants and mentioning the work we are doing to write to all local authorities across the country to gather the information about what is happening in terms of cuts and how that is going to affect services being put in doubt, reduced or removed. But, also, we are finding in recent times as well that authorities are looking at saving some money on the provision of information, particularly at bus stops and where there are larger bus stations, the sort of ticket office facility. That, again, goes against the flow of trying to encourage people who don’t use buses to find the kind of easily accessible information to make an informed choice about, "I will catch this bus to this destination at this time." That is the kind of consequence of a longer-term decision.

Greg Lewis: I would agree with that and say it is a combination of various cuts in the grants that affect bus provision. Our particular concern is the disproportionate effect that we anticipate it will have on bus travel for older people in rural areas, not least because of the fact that a large percentage of pensioner households in rural areas don’t tend to have access to a car and therefore there is the impact that it will have on them. We would very much like to see a rural premium being taken into account when the provision of bus services in rural areas is considered.

Q77 Mr Leech: I think you were all sitting in the audience when we had our previous panel and I accepted that all political parties were in support of the free bus passes for pensioners and disabled people. But I asked a question, and I didn’t really get an answer, as to whether that £1 billion could be spent better than on a free bus pass. Do any of the panel think that there is a way in which that £1 billion could be spent better to improve bus services without losing the sort of services from which a lot of elderly and disabled people have clearly benefited?

Chair: Mr Lewis, do you have any thoughts on this?

Greg Lewis: I think it is a very difficult question. I think the problem with the current system is its complexity. The funding arrangements are extremely complex; I struggle myself to understand them. The way bus companies are compensated currently by the Act provides a service whereby they shouldn’t make any money out of the scheme, which obviously would be correct. The concern for us, I suppose, is that, if bus companies feel they are not being remunerated in a way that makes providing those services cost-effective for them, they will simply withdraw them. Therefore, a balance has to be struck between ensuring that bus operators can make a profit and run these services and provision of these services, particularly, as I said, in rural areas, but also in some of the smaller urban areas where these services are relied on particularly by older and disabled people. So I do think it is a balancing act. I think it is very difficult to encapsulate simply where those administrative changes should be made, although we support the Government’s aims in trying to simplify the administrative arrangements as they currently stand.

David Sidebottom: The work we did talking to concessionary fare passengers was published in 2009. Clearly, it was a very popular scheme and people have made an informed choice by leaving their car behind. There is some evidence in modal shift, so there is some benefit in the scheme. If additional money was to be put back into the bus industry, whether it came from concessionary fares or elsewhere, there is the issue now of those very marginally profitable routes that may exist on the edge of town or rural services, if run commercially, which may be tipped into being unviable and there may not be the local authority spending there to pick up those tendered services. So, if money was to be redirected in, it would be better for a passenger to have a service than have a bus pass. The challenge here is that many passengers in the immediate term will have a bus pass but no service, so maybe some funding allocation might be something to look at.

Stephen Morris: Certainly, quite a lot of the people we talked to at our bus users surgeries suggest that they would be quite happy to pay a flat fare to travel on the bus, say, 50p, to ensure that they still have a bus service, rather than to see the bus service disappear because of the cost of the concessionary fares system.

Q78 Chair: How extensive is your research on that?

Stephen Morris: We do about 20 surgeries a year in England in different locations around the country. They are typically attended by about 150 people. Out of those, we probably get that comment 10 or 15 times at each surgery. It is not hugely comprehensive, but we do meet ordinary people in the street rather than people who have specifically come out to go to a meeting.

Q79 Chair: Mr Lewis, in your evidence, though, you talk about the value that people attach to the free pass. From some of the evidence, and certainly many of the comments submitted, it seems that funding free concessionary fares is emerging as a problem rather than something beneficial. Is that something that would be a concern to you?

Greg Lewis: It would be a concern to us if there was any move to alter the universal nature of the bus concession. We have always opposed the idea of the concession, for example, being means-tested. Because of the amount of people we think potentially would be taken out of the system as a result of that, and the administrative cost of means testing, we don’t think it is a viable option. You won’t be surprised to hear me say that. We think that the bus concession has been a great success. We think it is very, very popular with older people.

I would agree that there is an opportunity here to do more research, and Age UK is about to try and embark on some research to find out exactly how much use is made of the bus pass by individual older people and disabled people, because I think there is some suggestion that it is a small number of older people making a large number of trips. I think that information would be very helpful.

Q80 Mr Leech: Is there much evidence that the free pass has given access to people who were not accessing bus services before, though?

Greg Lewis: There is evidence that there has been a high takeup of the bus pass. That may not necessarily be the same thing and it comes back to getting the data. Some of the discussion prior to this session was on the use of the smart cards, and, undoubtedly, where smart cards have been introduced, the data that has been obtained from that and the use of the bus pass amongst older people has been very useful. So we are looking at that quite closely now because, clearly, we want to be able to demonstrate value for money of the bus pass and we clearly think the social benefits and the services that it provides to older people and access for them to local services is absolutely vital. I think it’s early days. I would not want to be in a position to suggest that the bus concessions should be changed now or the universal nature of them should be changed until that research has been done and we can get the data to examine more closely how these bus passes are being used.

Q81 Mr Leech: Can I just come back to Mr Joseph, because he did not get an opportunity to offer an alternative way of spending £1 billion?

Stephen Joseph: The only point I was going to make is that, in theory, of course, you could put £1 billion into the bus industry and possibly get better returns in terms of numbers of services available in the way that David talked about. In practice, what I have noticed is that money removed from transport tends to go elsewhere, so I am not sure this is a real choice. If £1 billion was going to go, in ringfenced terms, into local authorities for bus services, I guess it might be able, in many cases, to be better used if you had the kind of flat fare arrangement that Mr Morris was talking about, charging people and so on. In practice, what we have noticed-and some of the cuts that we have seen coming forward from local authorities suggest this-is that transport, and bus services in particular, tend to be in the firing line when cuts are considered.

Q82 Mr Leech: That leads on to my last question. Out of the comprehensive spending review, railways did, relatively speaking, quite well. Have the buses always been the poorer relation in public transport terms and what needs to be done to turn that around? Given that most people using public transport use buses, why is it that we have this attitude that buses tend to be the first victim of any cuts?

Stephen Joseph: It is really a version of the previous answer I gave, which is that bus funding is atomised. It comes in lots of different packages. I am not saying that Government sat down and said, "We are going to do this for buses and this for rail," because they couldn’t. You had different Government Departments making decisions about different funding for buses, the Department for Transport in the case of the Bus Service Operators Grant, and the Department for Communities and Local Government in relation to local authority revenue support and the allocations within that. You have had changes in fuel duty and so on being made by the Treasury. All of these have had an impact on bus services.

If you had single funding for bus services from central Government in the way that rail has a single pot of money handled by the Department for Transport, you would be able to make rather better choices in this kind of thing, but that’s not the way it has worked. In addition, there is a problem that has particularly emerged for this Government’s emphasis on localism, which in principle we support, which is that, on the one hand, a lot of these decisions are being left to local authorities and ringfencing has been removed. On the other hand, it is quite clear that some of the bus cuts that are being considered will have big impacts on other Government Departments and other major Government objectives. For example, the Secretary of State for Work and Pensions made some comments to people in Merthyr in south Wales about people getting on buses to Cardiff to find access to jobs.

It is quite clear from the work we have done, and particularly some work we did with Citizens Advice, that in many cases people are not able to get off welfare and into work because of transport problems of various sorts. Either the fares are too high or the services don’t exist, or you can get a service there but not back and so on. There is a problem that the mix of funding and the differences between national and local objectives have not been clearly spelt out, and that makes it much more difficult to prioritise buses.

It has always been seen, as a former Prime Minister said, that people getting on buses are, in general, "losers"-I don’t think that’s quite the word she used-whereas trains are used more generally. It’s worth saying, in continuation of some of the previous conversation, that London is an exception. The percentage of people who don’t use buses in London is somewhere of the order of 20%, and that’s very different from elsewhere.

Q83 Mr Leech: Haven’t you made an argument there for means testing of free concessions, and possibly to include jobseekers?

Stephen Joseph: First, there is a general question with means testing of whether you end up absorbing all the savings you might make in the costs of the testing. That is a general problem. It is worth saying, by the way, that I notice from some Age UK polling of pensioners themselves that they value the bus pass above the winter fuel allowance, for example. So it is clearly valued. If you asked pensioners themselves what priority they would give among the benefits they get, that implies that bus passes would be at the top of the list. Even if economic theory would tell you that you might want to do things with bus passes, it implies that electorally and politically there might be some issues with that.

Secondly, however, the point you made about job seekers is very relevant. There is a real question for a number of other Government Departments than Transport. There is an assumption among the policy making they are doing at the moment that buses will be there and that local authorities or operators will provide those bus services. In the case of Welfare to Work or the freeing up of schools or access to hospitals and health services, where all the Government’s reforms are pushing people in the direction of having the freedom to choose and perhaps in some cases having to travel further, the bus services will not be there, and yet it implies that policy makers want them to be there. That requires-and we will be saying this across Government next week with a number of charities-that Government needs to take a coordinated view of this and look at other kinds of national funding for bus services but recognise the wider national value that they give.

Q84 Gavin Shuker: Assuming that constant change is here to stay in the bus industry as a result of the spending review, and we are expecting to see changes in services, how good is the industry at consulting about change with passengers?

David Sidebottom: It is very patchy. As somebody else said previously, we have done an extensive study, writing and talking to authorities about what they are doing, and we have seen two extremes, at both ends of the spectrum. One authority has made a decision and then has gone out with a form of consultation to the public and sought views, but the decision has fundamentally been made. But equally, Central Bedfordshire did a very thoughtful and considered consultation where they put options to passengers and residents about how to rank certain things. They have set aside a bit of money, £100,000-more than a bit of money-to look at community transport. So it can be done. In our letters to all authorities we suggested a best practice approach to consultation because it’s often that the passenger is not part of the partnership. We have heard previously about how important it is for an operator and an authority to work in partnership, but often the passenger is missed out of that, so it is patchy at best.

Greg Lewis: We personally think the needs and views of older people need to be taken into account in all transport planning. Our concern is that the Government’s own citizenship survey showed that older people were less likely than younger groups to feel that they could influence decisions locally. Bearing in mind the levels of social exclusion and isolation amongst older people and the importance they place on the provision of bus services, an integrated approach to ensuring their views are taken into account is very important.

Stephen Joseph: It is worth saying we have been doing a lot of work recently in finding out what is actually going on on the ground in relation to local authorities. One of the things we have found, as Mr Sidebottom said, is a huge variation in consultation that is going on but, also, in the ability of operators and local authorities to think broadly. Our local campaign group in Leicester did a lot of very, very detailed work with operators and local authorities when the local authorities then proposed cutting a number of services and were able to suggest creative ways of changing or adding to commercial routes, diverting them to serve areas which might have more passengers and so on. They were able to save about a third of the proposed cuts. Sometimes, that kind of detailed discussion, starting from looking at what the markets are that you are trying to serve and where the business is, isn’t done, because, particularly with tendered services, there has been a tendency by both authorities and operators to think that these are provided for a declining market rather than thinking creatively about how exactly you can provide them or even telling people about them.

One of the pieces of evidence in fact from other pieces of work by the Government-the sustainable travel towns work and personalised journey planning-is that when you tell people about the bus services available lots of people who use cars all the time start to use them. So it’s fair to say that authorities and operators have not always been very good at promotion, marketing and information.

Stephen Morris: I would agree that local authorities particularly are very variable in that respect. Consultation may just consist of, "This is what we propose to do. Take it or leave it," or, "Do you like that or do you not like it?" Surrey County Council recently have done a very good and openended consultation. The first phase of that has come out with some very beneficial results and quite substantial cost savings.

When bus operators are altering their commercial networks, there is very little history of any consultation when bus operators change their own networks outside the local authority structure. We feel that that is something that also needs addressing. The classic case recently was the one in Milton Keynes where the network was substantially revamped by the bus company with no consultation. There was a substantial backlash from the public and part of what was there before has had to be put back into place. But, typically, the commercial bus operator will not consult on changes on the commercial network.

Q85 Gavin Shuker: Mr Morris, you cited Somerset in your evidence. Is that correct?

Stephen Morris: Yes.

Q86 Gavin Shuker: What was the particular issue there? Why did it make it a decent case in point about consultation?

Stephen Morris: To the best of my knowledge, Somerset are not actually consulting on the changes that they are going to put into place for the service cuts. I certainly have not been able to find evidence of consultation anyway.

Q87 Gavin Shuker: I have one other question. Consultation is great, but if the money is not there, what is the point in consulting?

David Sidebottom: I think it is Stephen’s point particularly. Particularly it is about engagement. In the bus industry-and I say generally-there are operators and authorities that do it on a regular basis, and it is about informing passengers. One of the concerns that we have, whatever the decision and whatever we think about consultation or transparency, is that there is an impact here and passengers need to be informed. Our overriding concern is that those people who are elected to make the decision may not be armed with all the evidence in terms of impact assessments, patronage and the detail to make those decisions. It is knowing that a passenger has absolute faith in the process and then, when the decision is taken, how they then find out, because they don’t want to get to the bus stop on a Monday morning and find out the bus has gone. That is the crux of this.

Q88 Gavin Shuker: Mr Sidebottom, you said in your evidence: "In a time of cutbacks it is important that the industry does not marginalise the passenger. It is crucial that passengers’ views are sought and taken into account when determining priorities." What are passengers’ priorities generally when consultation goes out?

David Sidebottom: In terms of the actual journey itself, we have done some research into passenger priorities for improvement and the number one there is improving punctuality. I think we heard from the previous session that, if you can get buses to arrive on time and get to the destination on time, and where operators and authorities work in partnership to deliver that, it can be successful. We can all rattle off the same areas that win the awards every year for best operator of the year and so on, but that is the number one priority: passengers want buses to arrive on time, get them to their destination on time, and provide value for money.

Q89 Chair: Are fares important?

David Sidebottom: We tend to look at it more from a value for money perspective. With regard to individual fares, because of the nature of the low fare aspects, sticking another 20p on may not tip the journey for the passenger. It is the overall experience, and the work we have done through passenger satisfaction has focused on that.

Q90 Gavin Shuker: Just finally, Chair, at the moment there is no statutory requirement for bus companies to consult before a major change. Do you think there is a case to be made for that, considering the evidence that you have just given?

Stephen Morris: We would particularly like to see the bus operators adopting a voluntary code of consultation. The problem comes that, if you make it statutory, for a small operator it’s additional cost and red tape. Many of the smaller operators are poised on the edge at the moment. They are finding it difficult to run services profitably, and they are getting more and more bound up in legislation on this, that and the other. If you took another approach and said that service changes over a certain level would need consultation, I think we would end up with the worst of all worlds, with the larger operators making lots and lots of small cuts to try and get round that, with more and more uncertainty. In an ideal world we would like to see the bus operators doing it on a voluntary basis. But if that weren’t to work then, yes, we would support a statutory approach.

Gavin Shuker: I think many people would be surprised to hear there isn’t already a voluntary code.

Chair: Last one, Mr Shuker.

Q91 Gavin Shuker: My apologies, Chair. Would anyone else have any views on bringing in a statutory requirement?

David Sidebottom: I think a voluntary requirement might be something. It is small steps, yes.

Q92 Kwasi Kwarteng: Looking at these figures and hearing a lot of the evidence, I feel that there is not enough attention given to the regional variation. Clearly, in London, in the last six years, something has happened and people are using buses a lot more. In other areas, if you look at the figures for the English rural areas, it is much more of a mixed picture; it goes up and down. In the urban areas in England, as I see from these figures, the usage has actually gone down. This is over the last six years, from 2004, that we have this information. What are your thoughts accounting for this, because it seems to me there is quite a lot of regional variation going on? The danger for us is just to look at it all as one big picture of bus services, but when you break it down you are seeing lots of different pictures.

David Sidebottom: Outside of London-we have heard about Oxford, Nottingham and Brighton-there is great attention to a partnership working and a lot of attention to marketing. A lot of commercial operators do see themselves as almost on the high street and they think that way when attracting new customers and hanging on to customers. There is a lot of engagement through things like Facebook, and it is very modern and very alive. In other areas, it is more driven by the big operating groups in terms of core culture. I am talking about Stagecoach and First. It is driven that way. But equally, in London of course you work very much on a franchise level, where a lot of money goes into that and the rewards for operators are quite significant.

We talked earlier about the quality contracts framework, which has not been taken up as yet. Interestingly, in West Yorkshire we have just done some recent consultation with passengers there about some next steps, moving towards a quality contract. We don’t know whether that will deliver the kind of things that passengers want, but we are keen to see what the inputs are from passengers in terms of a franchise and what the outputs are from a passenger perspective. But the difference between London and outside is revenue and the surety of the fact that there is some stability in the market working to a franchise.

Stephen Joseph: From observation, it is down to variations between both local authorities and operators in fact, and not just in relation to buses but wider policy. We have seen local authorities who have boasted about taking up bus lanes and freeing up space for motorists. In those circumstances, as previous comments have been made, as your previous session said, buses will struggle. On the other hand, where you have had wider supported policies, where buses have been given access to the centre of the town, where there have been some parking charges imposed to reflect the costs of providing car parking as opposed to subsidising parking, making it very cheap, then you have seen people using buses.

On the other hand, there are operators who have not been particularly responsive and some that are very good. In a way, there are smaller operators like Trent Barton. Western Greyhound was mentioned in the previous session. But also, one thing I have noticed is a variation between subsidiaries of some of the big groups. You find that some subsidiaries, depending on the local manager, are very good at building up local services and working with local authorities, and others who seem to have lost interest, where the focus is entirely on the bottom line this week and making very short-term changes. What you see is a bit of a patchwork across the country and, in a way, because buses are very local, you would expect that.

I come back to the point I made earlier, which is that, unfortunately, if you are trying to have a national programme for, say, getting people off welfare and into work, that gives you a problem, because in some places it will simply be very difficult for the bus services to be there.

Q93 Kwasi Kwarteng: Just following up on that, you were saying that clearly there are these two factors. There is the local authority, and there is a massive variation amongst those; and there are the operators, and there is a massive variation amongst those. If you times those two together, you are going to get an infinitely varied picture. That being the case, do you think there is anything that perhaps a Government could do to try and cull best practice and standardise that across the country, or do you think it is inevitable that the local differences will mean that we will always have a system with this patchwork, as you say-with different quality?

David Sidebottom: The local difference will always exist. The work we have done through our passenger satisfaction research has at least levelled out some. You can see from the bottom to the top of the league table that there is little variation. There is about 14% in general, if that. It is part of our work, particularly about best practice, trying to unearth from that research and find out what the nuggets are that make someone top of the pile, if you like, in terms of passengers, because I think everyone wants to work to have more and happier passengers on buses. That, I think, is a success story. It happens, and I don’t think the industry is particularly good at telling that story, but I think we will always have those local variations.

Stephen Joseph: There is a role for spreading good practice. I have heard the current Minister for Local Transport, Norman Baker, talk on radio about the need for the Local Government Association to do more in this area. Certainly, we have noticed that as local authority councillors-and I know a number of members here have been local authority councillors-it is quite difficult to find out what other authorities are doing in relation to bus services, providing the services and what good practice there is about.

There are a lot of myths around as well, on, for example, the Competition Act meaning that you can’t possibly have operators cooperating. We have done some work, as our evidence said, in St Albans in Hertfordshire, which is about disproving that and having four bus operators, two train operators, the city and county council working together to plan buses across a whole area as a voluntary partnership, because we wanted to show, particularly with the changes in the Local Transport Act 2008, that that cooperation is much easier. There are a lot of councils that don’t know that, and even Cabinet Members for Transport who don’t necessarily know what is possible and what is being used, and I think there is a role for good practice. Maybe this is for Government across the piece, working with the LGA and the local government family, to do a bit more in that area as well.

Stephen Morris: There are certainly best practice factors that go across all the best bus operations. But, essentially, there are few businesses that are more localised than local bus services. So a solution that will work in town A may not necessarily work in the same way in town B, but there are, obviously, certain common components. In particular, there is a real commitment to the locality. We very often see management being moved on from one location after a very short time and we end up with a poor bus service in that area. One of the things that is notable is that the places that have really good bus services are places where local management has stayed in place a long time and developed a good understanding of the locality and a real empathy with the local people and the local authority. That is very often a factor that makes things work well, along with a sort of local political will to make sure that the bus service works.

Q94 Paul Maynard: Mr Sidebottom, could I return to the issue of consultation? Irrespective of whether it is statutory or voluntary, would you not agree that the quality of the consultation is what matters?

David Sidebottom: Yes.

Q95 Paul Maynard: Would it be too crude to suggest that good consultation looks at the network overall and a poorer consultation focuses on retaining an individual route or not retaining it? Can you explain how Passenger Focus can facilitate good consultation with bus surgeries and the like? What do they amount to?

Chair: What’s good consultation?

David Sidebottom: Good consultation is about putting good information in the hands of the recipient in terms of what options are available, explaining it so that passengers or other residents will completely engage with the process, a commitment to go back with, "Here are the decisions we have taken and how we have arrived at them," and then something about measuring the impact of them down the line. The work that we have just started now in looking at what authorities are doing around England with the proposed cuts to tendered services is reinforcing the best practice. As Stephen said, now we need to get into resources allowing individual conversations with local authorities but also through the likes of the Association of Transport Coordinating Officers, who plan the services, the likes of LGA and other fora as well, to make sure that from what we learn from this exercise there will never be changes again in the future.

But I think you are right. It has to be at a network level because when you look at the number and the frequency of individual service changes they are probably far too often to have that level of consultation. But we do know from the research from passengers where there are service changes that the one way they want to find out is on the bus or at the bus stop. That is a worry for us in terms of where some of the cuts are made in terms of information provision.

Q96 Paul Maynard: Can I just ask Mr Joseph this on a wholly separate matter? I have listened very carefully to all you have said today, and you have fired my imagination, which might frighten you. Clearly, as a policy maker, I feel I have to start to consider more publicly funded transport as a concept, rather than public transport. To what extent, from your experience of your mini-campaigns around the country, do you think that voluntary providers and the third sector in the form of community interest companies are able to be the innovators in that gap in the publicly funded transport market between the commercially viable and the commercially unviable? I am sorry, but that is a complex question.

Chair: Can community, social enterprise, voluntary sector groups, fill the gap?

Stephen Joseph: I think they can fill some gaps. We have noticed that some of the better consultations that have been run by local authorities are actively engaging in the community transport sector, looking at what they can do and seeing whether it is possible to help them fill some of the gaps being left by mainstream fixed route services being withdrawn. I think that is valuable, but it does depend very much on the capacity of the local community transport providers. In some cases, that capacity will be there, and in other cases it won’t be and will be affected by other cuts made by local authorities or indeed by national Government in support of the voluntary sector. Age UK may want to come in on this, because they are a provider in some ways.

In relation to community interest companies, there are a number of community interest companies now running bus services in various places. There is one in Brighton and one in the Yorkshire Dales, and Hackney Community Transport is a large one. They would argue that, given a level playing field, they can fill some gaps, but this depends very much on the scale and pace of reductions in other services. What we are seeing in some areas is a very, very large speedy reduction in services.

We have been looking, as I said, at services around the country. Hartlepool Council, for instance, is talking about taking out all supported services after April, and that includes DialaRide and hospital buses. So they are not even supporting some community transport services. In those circumstances it will be very hard for community interests or any other kind of provider to step in.

Q97 Chair: You said, Mr Joseph, "some of the gap". How much of the gap could be filled by these enterprises and will it vary in different parts of the country?

Stephen Joseph: I think it will vary in different parts of the country. One of the operators we have been working with in the St Albans partnership is in fact the university of Hertfordshire, which has its own bus service. It runs an 80-vehicle bus operation, which they found more effective than contracting it, as some other universities have done. They’ve said that they have been able to build a large local network on the back of staff and student services. It is not a social enterprise as such, but it’s run as a subsidiary to the university. They have been able to take, as a local operator and as one rooted in the community, some decisions that a larger and more remote commercial operator might not have taken.

There is an opportunity where you have large journey generators, if you like, such as universities, hospitals, schools and colleges, to provide services there and then build networks on the back of those, and that hasn’t always been looked at. Community transport can do that, and Hackney Community Transport has been very successful in doing that.

Q98 Julian Sturdy: We have talked about sharing good practice, looking at the networks overall and better partnership workings, with all of which I agree. But isn’t the key thing connectivity? This is something that frustrates me at a local level when I see great park and rides around the city I represent but then the lack of connectivity into those park and rides. Where I live we have a bus service which provides poor connectivity into the local station, and if that was better publicised and better sold then I think the bus operator could build on that.

Also, across the region we see local authorities running different transport access schemes, and then the lack of joined-up thinking where you cross over one border and you are on to a different transport access scheme as well. Then it’s not about connectivity within the bus services, but it’s connectivity of buses to rail, airports, etcetera. How do you think we can build upon that? I know it’s a very broad thing but, to me, it’s quite frustrating that we are at this stage.

Stephen Joseph: In relation to stations specifically, we promoted, as an organisation, the concept of station travel plans, which has been taken up by the Government and the rail industry. The remarkable thing about the 30-odd pilot travel plans is the extent to which they have revealed, just by getting people to talk to each other, the lack of common-sense connections that have happened. For example, the Leighton Buzzard station travel plan found that all the buses arriving at the station arrived two minutes after all the peak hour trains to London. That kind of framework of travel planning for stations, and, indeed, in relation to my previous answer, to other big journey attractors like schools, colleges and hospitals and so on, is a way into this and can be used to help the people who are generating travel to think about how people are going to get there. I know from the experience we have had in Hertfordshire that Hertfordshire have a partnership, as a county council, with Lister Hospital where they help the hospital staff work out how patients are going to meet appointments. That is very rare and needs to be much more widely used as an example.

You are right to focus on connectivity. It is something that needs to be given much more emphasis. We are currently doing some work on doortodoor journeys, looking at how you can make some of the best practice more general. The Government’s stated ambition on smart cards will help in this area. But, as well as throughticketing and integrated fares, you also need proper doortodoor information, better interchanges and connections. All of those things are not provided routinely. In relation to stations, one of the things that should not be lost in reforming rail franchises and making them more light-touch is some of the integration, because that won’t always be provided by the market. It will need to be specified in franchises, and rail franchises are a way in which that can be done.

David Sidebottom: On that particular point as well, commercially, bus operators will say there is not a great demand to take people from certain estates to the train station because there is not the demand there, so it is something like marketing, I guess. But, equally, with the opportunity for authorities to look at statutory quality partnerships and quality contracts, the specification might come in that in terms of, if that’s a model, it will force operators to bid for that particular kind of work. But, equally, the smart ticketing one is a good one because a passenger cannot get integrated inter-transport if he or she is carrying a ticket for a particular operator in a corridor where there are two or three bus operations. They can only use it on one operator and buses go sailing past. It is right at that level that passengers need to feel part of the integration.

Also, with regard to planning as well, we have seen the big redevelopment of Birmingham New Street going on at the moment and there is an issue there about how bus stops are being moved away from Birmingham New Street. It is the whole planning thing of making sure that everyone is involved in the planning of these big schemes.

Stephen Morris: There have been some very good examples of it in Cornwall and in Lincolnshire, on a rural basis, where, in Cornwall, Western Greyhound have developed a number of hubs and they have opened up all sorts of journey opportunities with just one simple change that wasn’t there before. In Lincolnshire, there is the Connect network, where a rural service just goes as far as the main road and there is a connection point there where it links into a trunk service. That has been very successful. I do understand the rural part of that network is under threat from the service cuts.

One very simple barrier to making connectivity work between bus services is the Traffic Commissioners’ window whereby the Traffic Commissioner will allow a service to be up to one minute early or five minutes late, and if an incoming service is running late there is pressure on the driver of the connecting service to leave on time or within five minutes rather than wait for that service. I believe the Traffic Commissioners are prepared to be a little bit more flexible in those circumstances, but the bus operators need to be aware of that and need to communicate that to their drivers.

Greg Lewis: I would agree with most of that. The key issue for older people is the accessibility or reliability of services, and connectivity is going to be a vital part of that. If they feel that they are going to be stranded in a town centre and not be able to travel on to their destination, if there is going to be a significant delay or even a significant amount of anxiety in making that journey, they won’t make that journey. That is the important point for them.

There is one point about hospitals, which is quite an important one, which is probably about hospital administration as much as provision of bus services. For people who need to travel long distances to make hospital appointments, there is not much point in making those early in the morning if there is no bus service for them to utilise to get there. But, as I say, that is probably the other side of the argument in looking at hospital administration to ensure that older people or people who rely on public transport can make those hospital appointments, for example.

Q99 Steve Baker: Is it in operators’ commercial interests to cooperate in respect of connectivity? I ask the question deliberately simply.

Chair: Who has a view on that? Is it in operators’ interests?

Stephen Morris: It depends very much on the circumstance. There are situations where diverting a bus service into a railway station will extend the journey time for the bulk of passengers who just want to get into the town centre. In that situation it is seen very much as a disincentive by the bus operator rather than serving the bulk of the market in a more appropriate way. On other hand, as in the situation I have already cited in Cornwall, the operator there has seen tremendous commercial opportunities in being able to link up services at interchanges, and that has certainly worked very favourably in the operator’s favour.

Stephen Joseph: I think the operator won’t always see it as in their interests to do this. In fact, competition law has, as was previously mentioned, in the past been applied in such a way as to give priority to the theoretical extra operator rather than cooperation between operators. From an operator perspective, you want people to travel on your own buses and so you do tickets that are only valid on your own buses. From a public perspective, what you want is to be able to go out by the first operator that comes to your stop and come back by the first operator that arrives. There is a conflict between the individual operator interests and network benefits. It is one of the areas, referring to an earlier question of yours about market failure, that pervades transport across the entire thing. Transport is an area that has massive market failure all the way through it and this is one area where network benefits just simply aren’t recognised enough, either in operators’ interests or, in some ways, in the way in which the operators are regulated.

Q100 Steve Baker: It is very interesting that you talk about that market failure because that is really the point I was, of course, driving at. If it is in an operator’s interests to maximise throughput, surely it is in their interests to serve the maximum number of people with the maximum interchange between different transport services. Actually, you have answered my second question inasmuch as I think we have all agreed that operators will sometimes not talk to each other where they otherwise might in order to better serve people’s interests precisely because they are so heavily regulated in that regard. Then, on top of all of that, we seem to be saying that that’s a market failure, when in fact it seems to me it’s a regulatory failure. Where does that leave us?

Chair: Who would like to try and give a short answer on that one?

Stephen Joseph: A short answer on that. First, when I said "market failures", I was talking in a very broad sense that transport across the piece, including road transport, has large market failures in relation to people causing congestion for other people in other cars and in buses and, also, wider environmental impacts of pollution and, indeed, climate change and so on. Those are all market failures which economists would argue are not fully priced in. You talked about road pricing earlier and that would be one way in which you could do that.

In relation to this, the problem has been not that they have been too heavily regulated but they have been regulated in the wrong way, with the wrong incentives. That was changed a bit with the 2008 Local Transport Act. The St Albans pilot I mentioned that we have been involved in was about proving that. Once you had got the changes in there, it essentially means that, where the local authority says it is in the public interest for operators to cooperate together, then it is deemed to be in the public interest, the Competition Act doesn’t apply and the penalties that were referred to earlier don’t apply. It seems to me that is the right direction. We have seen operators in places like Oxford, Nottingham and so on being prepared to join together to do partnerships that are in the wider public interest.

Q101 Steve Baker: A final yes or no question. Is it true or not that bus operation is characterised by subsidies, price controls, heavy intervention and lack of market in the scarcest resource, which is road space?

Chair: Who can offer, if they wish to, a short answer to that one?

Stephen Joseph: Yes, and so is other road transport. They all have subsidies and market failures in them.

Q102 Julie Hilling: If buses are the building block of public transport-and I think they, are in terms of that connectivity that we have talked about-can I ask first of all who you think is going to be hardest hit by the changes that are likely to happen? We have talked a little bit about older people, but are there other groups in society that are going to be hard hit by the reduction in services?

David Sidebottom: I think the immediate impact through the local subsidy will affect particularly the marginal services now which are supported by councils. What we are seeing very generally is weakened services and evening and mid-week services being cut. That is going to affect, disproportionately, those people that obviously use them, which will be shift workers, maybe, and people going into town, not just for the night out but who work in the places that serve the night out. I think there is something there about that and older passengers, I think, particularly as well. But the evidence coming through is that shift for edge-of-town rural inter-urban services, and people who rely on those. Yes, there may be higher car ownership in some of the areas we are talking about, but there is still a significant market there which will be disadvantaged by this.

Stephen Joseph: The surveys we have done have shown quite a wide variation in what local authorities are doing, but what you are seeing, apart from the cuts in keeping weekend services, is cuts in a lot of rural services in places like Cumbria and Lincolnshire, in services to schools and colleges. We are also seeing reductions or ending of concessionary fares for other groups, like Mr Leech’s comment earlier. For example, East Cheshire is removing services to colleges, and Darlington is moving concessionary fares to the statutory minimum of 9.30, away from a more generous scheme.

In fact, young people are going to be particularly hit because some authorities are reducing the concessions, so that they have to pay more, and reducing concessions to colleges at a time of the ending of the Education Maintenance Allowance, which has partly supported the transport cost to colleges. So that is a double whammy that hasn’t been fully appreciated yet.

Q103 Julie Hilling: Is it too easy for operators to stop services and put them in the hands of local authorities-I have forgotten the correct word-and, I guess, for the local authorities to stop services. Is it too easy?

David Sidebottom: I think, traditionally, that has been the case. We will see now, with the impact of cuts to BSOG and maybe concessionary fares reimbursement in the next year or two, tipping some of those services which traditionally would have been put into the hands of councils. But I just wonder as well how much councils have been supporting services for many years now without reviewing the network on a more regular basis. It has been continuing on, and we have reached a point now where the scale of the cuts and the impact is going to be quite severe, rather than being marginalised over a particular time.

Q104 Julie Hilling: What should all the partners be doing in terms of protecting the service and making it better going forward? What is the responsibility of everybody?

Stephen Joseph: In our evidence we talked about a range of things that we thought both local authorities and national Government need to look at. We talked about better commissioning of services across the piece, as I think has already been talked about, bringing ordinary tendered services together with schools and social services transport, looking across the piece and tendering them together so there would be better commissioning. The social enterprise point has already been mentioned and looking at options there. There are the kinds of quality partnerships we have talked about and options including creative use of the quality contract legislation so that, rather than tendering little bits of services, you might tender whole networks. Also, we talked in our evidence about looking at integrating taxis and buses, as happens in other European countries. That is something the Conservatives talked about in opposition and we have seen that happen in Government. Also, we need better marketing and promotion, as I have said.

But, for Government, there is an issue about other Government Departments recognising and perhaps bringing funding to the table for buses where it’s important for meeting their objectives. One example is the WorkWise Scheme that has been funded by the Department for Work and Pensions which has been about helping job seekers. That has not, I think, been continued and certainly the local authorities that have run passenger transport-the ITAs in particular-have found that it has been very valuable.

Long term, and this perhaps goes to Mr Baker’s point about being market orientated, we might want to look at what a number of other countries, including the US, do in relation to providing employerprovided vouchers for transport to work, which was done partly to recognise market failures, like the failure to charge for parking, of taxing parking at work as benefit in kind and that kind of thing, which has also been used in places like the Irish Republic and so on.

Finally, I think there is an issue about the planning system. The Government is deregulating the planning system at the moment; it is revising planning policy. I think there are some things in current planning policy on transport assessments for new major developments and parking standards that ought to be kept because they have been very helpful in providing a framework within which markets can organise themselves.

Q105 Chair: Mr Sidebottom, Passenger Focus is under review in terms of its remit and its budgeting. Can you tell us where those discussions are up to and are they likely to affect any of the work you have been discussing with us this morning?

David Sidebottom: Following the announcement from the Cabinet Office review of quangos, we are to be retained but substantially reformed. We are in the final throes of conversation with the Department over our final budget, and that will be announced, I believe, towards the end of this financial year.

Chair: Thank you very much, gentlemen, for coming and answering our questions.