UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 750-i i i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

transport Committee

bus services after the spending review

Tuesday 3 May 2011

Ray Wilkes, Victoria Harvey, Terry Kirby and David Redgewell

Norman Baker MP and Anthony Ferguson

Evidence heard in Public Questions 219 - 285

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the transport Committee

on Tuesday 3 May 2011

Members present:

Mrs Louise Ellman (Chair)

Kwasi Kwarteng

Iain Stewart

________________

Examination of Witnesses

Witnesses: Ray Wilkes, North Yorkshire, Victoria Harvey, Milton Keynes/Leighton Buzzard, Terry Kirby, Leicester, and David Redgewell, Somerset, gave evidence.

Q219 Chair: Good afternoon and welcome to the Transport Select Committee. Could I ask you, please, if you would just give your names for our records? I will start at the end.

Ray Wilkes: Ray Wilkes.

David Redgewell: David Redgewell.

Victoria Harvey: Victoria Harvey.

Terry Kirby: Terry Kirby.

Q220 Chair: Thank you very much. Not all of our members are here this afternoon. Some are on other parliamentary business, on Bill Committees, and others are on constituency business, but they will all be studying the results of this afternoon’s evidence session. I thank all of you very much for coming to the Transport Committee today.

All of you use buses. Could you tell us how important you think local buses are and perhaps indicate where you think changes to those bus services might be coming-things that have either happened or you know have been planned? Who would like to start us off?

Terry Kirby: Shall I start? I am Terry Kirby from Leicestershire. You asked how important local buses are. They are absolutely crucial. They are crucial not just to many local people-to the people who use them-but they are also crucial to local society. They are also crucial to local businesses, the local tourist economy and the whole of society in general. Bus journeys comprise 70% of the entire public transport usage, basically. 70% of public transport usage is on the bus. At present we have a network which is reasonably intensive and which covers most areas of the UK, but of course it is now under threat as never before.

People use buses in my experience-and I know a lot of people who use buses in urban and rural areas-not just to get to work but to get to school, to the doctors, to visit their elderly parents, to do shopping and so on and so forth. Some of these proposals will undermine their ability to do any-and in some cases all-of those things.

It will not just be the local community that suffers but the local business community will suffer. Several years ago my local bus company did a survey in Hinckley town centre and they found that their bus passengers spent £5 per average in Hinckley town centre when they brought the passengers in. By doing that, they managed to work out that it brought 2,000 passengers into that town centre every day, and a simple equation indicated that their buses brought in £10,000 to that local economy every working day, on average. That local economy was already beginning to struggle. So the bus company could quite successfully say that, if there were any traffic proposals which would undermine bus services, the local economy would risk losing up to £10,000 per day. That was actually accepted.

Q221 Chair: Thank you. Would anybody else like to add to that?

Victoria Harvey: Yes. I suffer from ME-chronic fatigue syndrome-so frequently I cannot walk very far. Without the bus, I would probably have to look for some form of assisted living or I would not be able to survive by myself when I am ill. I see a lot of very elderly people and, literally, the only thing they can manage to do is to walk from the front door to the bus. When you are ill and living on a small budget, you become aware of the vulnerability of so many people who depend on the bus to get back and forth from hospital. They don’t know other people who can give them lifts and the bus is crucial. It is also crucial for beating congestion, from which Dunstable suffers hugely. On the LSP, the cost to business was moaned about the whole time. You see it in Leighton Buzzard. We have one developer bus service that is beating congestion; it has created a 20% modal shift. But the tragedy is that there is no funding for that to be repeated anywhere else.

David Redgewell: Can I give you a south-west of England perspective? We have just started to see the effects of the cuts in Somerset. The effects of Somerset County Council’s cuts have been widespread because they affect the counties of Dorset, Bath & North East Somerset, North Somerset and into the Greater Bristol area. Somerset has basically withdrawn most of its evening services.

I will give you some examples of college students who are studying in Bristol, who reside in the Mendip region, near the city of Wells and Shepton Mallet. Shepton Mallet is a town of about 10,000. It used to have a bus service via Wells to Bristol and Bath until 11 o’clock at night. The last bus from Wells to Shepton Mallet is now at 5 minutes to 6 in the evening. If you are working in Bristol or Bath, there is no access to jobs and employment. We have lost the evening services between Wells and Bristol and Bath, and Cheddar does not have an evening service at all now. So you have a major tourist attraction in the UK without access by bus service after 6 o’clock at night.

With regard to Taunton, the main county town, there is no evening service between Taunton, Wellington and Bridgwater. These are sizeable places. Taunton has nearly 60,000 people, Wellington has about 20,000, and Bridgwater, again, has getting on for about 20,000. The only link between Taunton and Bristol now is the railway line and the very overcrowded Great Western trains, with a lack of train seats. A lot of the county has no bus network.

There have been big protests in Bath. There has been the 67 Campaign around the suburbs of Larkhall and some of the socially excluded parts of the city around Snowhill where they lost their Circle bus. That was restored by Moir Lockhead, the then Chief Executive of FirstGroup, but they wanted to buy additional frequency every 30 minutes. The money that was going to be used for the 67 Campaign for the local bus services in Bath-and Bath is a pretty proactive council when it comes to buses-has been used because Bath and North East Somerset has basically spent money propping up the Somerset services down to Wells and effectively from Bristol. Bristol City Council is paying for buses into Somerset 21 miles from its boundary, so things are not very good.

Yeovil, which is a big military town with a naval air station, had a night bus service. That finished last night. It has two buses on a Sunday now, one paid by Dorset from Bridport into Yeovil. There are no links to the railway station. So you get to a major city railway station three miles out of town between Exeter and Waterloo, which no longer has a feeder service.

Across the south-west it has become extremely difficult to maintain buses. Dorset have said they certainly would not follow Somerset’s views. The Greater Bristol authorities, who spent huge amounts of money on buses, spent £70 million of Government grants on the Greater Bristol Bus Network, which is fantastic, with 120 brand new vehicles with First, stationed at depots like Wells, upgrading the network, providing realtime information, bus lanes and priority measures. That is a programme which is rolling under the coalition Government now but is stopping at the Somerset border, which is absolutely crazy. There is Wells, Glastonbury and Street. The 60,000 population of Shepton Mallet is no longer going to have the benefit of that network because Somerset have basically decided they are not going to continue to support public bus services other than they do now. Unfortunately, there has been no consultation with users of services, and it is not just about the lame, the poor and the sick. Mrs Thatcher had an idea that you were a failure in society if you were over 24 and used the bus. I think Sir George Young then came along and had a totally different idea of society.

In Devon, Cornwall and Somerset, over the last weekends, with no public holiday services running in many parts of the region, First Great Western have had to arrange taxiing people to places like Glastonbury and Street from rail heads. We no longer have a late night bus on a Friday or Saturday for the tourists up to Bude from Exeter St Davids. I can say, however, that FirstGroup Management Services, both bus and rail, have rallied round to move people, but I think there is a huge issue about the county council’s role. Devon-

Q222 Chair: Could I perhaps stop you for a minute? We will be coming back to these points. Mr Wilkes, what can you tell us about the importance of bus services and losses that there may be?

Ray Wilkes: I live in West Yorkshire and travel a lot in North Yorkshire because my hobby is hiking. In West Yorkshire, we have very severe congestion. About half the people on the buses have cars. They have switched back to cars as the bus service has got worse, and it is getting worse because of congestion. But, of course, as they switch back, it makes the congestion worse and the congestion is hitting the whole of the West Yorkshire economy.

In North Yorkshire, there have been cuts to rural services which carry a lot of people from West Yorkshire to go walking and do other touristy things. We spend a lot of money when we are out doing leisure things in North Yorkshire. So there are thousands of people going into North Yorkshire by bus. They are not going to be able to because of cuts, and this is going to hit rural businesses quite hard. They are aware of that fact and they are supporting the various campaigns to get more buses. We are getting commercial services, which are quite good in West Yorkshire, being destroyed by congestion and official indifference.

Q223 Chair: Mr Redgewell told us that there has not been any consultation on this. Have any of you had any consultation on this?

Terry Kirby: Leicestershire is promising consultation later this year.

Q224 Chair: But there has not been any up to now.

Terry Kirby: No, not yet. I also represent East Midlands and Northamptonshire. Northamptonshire have chopped all their support for bus services with effect from today, in effect, and there has been virtually no consultation at all.

Q225 Chair: Ms Harvey, are you aware of any consultation?

Victoria Harvey: Our consultation has been on two weekdays. One of them was inaccessible unless you could get a lift and the invites only went out to people from community groups. The problem is there had been consultations in the past, but what do you tell people when they say, "We want better bus services," and the response has to be, "There is even less money than there was before"?

Q226 Chair: Mr Wilkes, has there been any consultation of which you are aware?

Ray Wilkes: North Yorkshire did a very good consultation in terms of open input. We were invited to put our views and lots of people did. There was a consistent message coming from the consultees which was totally ignored. West Yorkshire, in consultation with Metro, tend to be steered by the question so they get the answer they want.

Q227 Chair: So you do not feel it was very meaningful.

Ray Wilkes: No.

Q228 Iain Stewart: I am aware that the Competition Commission are currently conducting an inquiry into the regulation of bus services, and I understand parts of that has been a consultation process on whether they wish to introduce network changes. As individual users or the passenger groups you represent, have you had any input into that?

Terry Kirby: Yes. We are beginning to, partly because of my own personal experience. On my own local route from Leicester to Hinckley and Nuneaton, there are two companies that do not exactly compete with each other but do not exactly cooperate either: Arriva and Stagecoach. Arriva run half hourly in the daytime; Stagecoach run every 20 minutes. You frequently get two buses running together, which is 40 miles there and back, and there is no cooperation between them.

It has taken 18 months to go through the Competition Commission to get them to agree to a joint weekly ticket which would be valid on the other company’s buses, but you cannot use it on any of Arriva or Stagecoach’s other buses. Then there is a 28-day equivalent which Stagecoach do, apparently, but Arriva will not accept. So you have all these different things coming about, and there is no cooperation or coordination between them.

Our Leicestershire group-Campaign For Better Transport-is trying to get Leicestershire County Council to look at promoting bus corridors which will cover the Hinckley Road area and the Hinckley area of Leicestershire, which would be able to get properly coordinated services which would deal with this type of thing at source. Most of the people I speak to, and I speak to a lot of people, are not particularly bothered if, for example, Stagecoach reduce their service to every half hour so that they get a bus every 15 minutes. They do not mind losing a journey.

Q229 Iain Stewart: You are happy that you have had the opportunity to feed all these points in. Is that the same for the other members?

Terry Kirby: It has been very higgledypiggledy. There has been a form of opportunity, but it has been very higgledypiggledy. There is no proper coordination about it and it certainly needs to be looked at in more detail.

David Redgewell: In South West England, in Somerset, there is no competition to speak of. In Bristol, there is no "on road" competition. Obviously the West Midlands Partnership and the City of Bristol are doing quite a major consultation on their bus, rail and ferry services across the four unitary authorities. But, as far as competition is concerned, there is a little bit of competition around Barnstaple and Ilfracombe in North Devon in the daytime and a tiny bit around Plymouth and Torquay. Where there was competition between First and GoAhead in Plymouth, that evaporated after six weeks, and, effectively, Plymouth has no evening or Sunday services. There are just two commercial operators that run. If there is no subsidy in there and no tender, we do not get the services. I am not sure what the Competition Commission can do, apart from saying they regulate the industry. We have a whole area from Cheltenham to Penzance where, apart from very tiny amounts of corridors, no bus runs against another. What we are trying to hang on to in South West England is a bus network, not the luxury of having two operators on the same route, because we have not got it.

Q230 Iain Stewart: If I can just follow up on that, this is an additional question I would like to ask everyone. Where you have services that need to run across different local government areas-Ms Harvey, you are Leighton Buzzard, which obviously has close links to Milton Keynes and to Aylesbury Vale-in your view, is there sufficient cooperation between different authorities in the routes that are supported?

Victoria Harvey: Not at all, in an answer. One of the main problems now is that, due to council cuts, you are getting massive cuts in officers. Officer time is at a massive premium as well as Arriva’s time. Arriva’s shortage of managers is so great that, if you run out of bus timetables on a bus, it nearly causes a whole crisis trying to get the bus timetables delivered to that bus. They are so shortstaffed at a high level it is unbelievable and it is the same in local authorities.

It is an odd situation because Central Bedfordshire and Milton Keynes are two different worlds and they just do not get on. There is a huge amount of rivalry, Buckinghamshire and Milton Keynes hate each other. In between that, you occasionally get some poor wellmeaning officers speaking to each other, but I had to personally threaten direct action to get display cases up in Leighton Buzzard so that we could get the Buckinghamshire timetables put up there for the Buckinghamshire buses that brought people in from the villages to Leighton Buzzard, because, basically, there was not the revenue funding. This is the legacy from the last Government. There has been no money for revenue for putting up bus timetables.

The sustainable travel towns have shown that you need to have revenue money. When you don’t have it, it is a disaster. Milton Keynes has appalling public transport information because there is so little revenue funding. With regard to Central Bedfordshire, I am all for putting my own money in, and I am on benefits, to print out timetables to stick them up on bus displays. It is that bad on the ground. Then we have cuts on top of it.

Terry Kirby: It is no better in Leicester, let me assure you.

Ray Wilkes: Bus companies are really afraid to cooperate with each other to benefit the passenger because they live in fear of the Competition Commission. I think they are a completely unhelpful body for bus users. I would like to see them abolished as far as buses go because they do not understand the market at all. Every socalled monopoly area is a contestable market and there are also taxis, walking and cycling. The bus companies are under pressure from all those modes, but they are not allowed to compete for passengers.

I won’t say we have bullied them, but we have talked to various consumer organisations such as CBT and the DalesBus organisation, the Yorkshire Dales Public Transport Users Group. We managed to get some sort of consultation between West Yorkshire and North Yorkshire, but it took us years, partly because Metro thinks it knows best and all the other places have sat like colonies. The other thing is that they just have no staff partly to go very far.

David Redgewell: In the south-west, the jam in the sandwich was the South West Regional Development Agency. They held together a lot of the transport coordination, along with, obviously, the South West Leaders’ Board and South West Councils. They only exist now as very small bodies and the RDA is going.

In the Bristol area, we have the West of England Partnership, which is also part of the Local Enterprise Partnership. They are taking on the bigger role of coordinating bus and rail services and ferries with Wiltshire, Swindon, Gloucestershire and Somerset, but it is a new role for them and they are finding their feet. But, certainly with regard to the Somerset cuts, the Bristol and Bath authorities had a big say in preventing the cuts being as deep as they could have been.

I think there is a lack of guidance from central Government, from the coalition, on exactly how to go about cross-boundary cooperation, and maybe we need to reinvent some of the things the DfT did well in terms of guidance notes and issues like that. Certainly, we have problems with local authorities in that there is a shortage of staff to put up bus timetables. But FirstGroup, as a south-west Scottish company, do pride themselves, along with Stagecoach, in providing passenger information across the region, as does GoAhead and Western Greyhound operating down in Cornwall. So we do have information.

Q231 Iain Stewart: Can I just follow up on that? The Government have announced the Local Sustainable Transport Fund, which I understand is designed to address problems like this. Have you seen any evidence in the bids that local authorities have put forward under that scheme that this is a problem they are addressing, if not right now but in the future?

Victoria Harvey: It is a brilliant fund and we completely support it. It has taken up a huge amount of officer time to put in for, so that is a huge cost out of the local authority. The problem with it is that not every authority is concentrating on buses by any stretch of the imagination. Milton Keynes is concentrating on cycling.

The second thing is that it is not designed to make up for the cuts or to do the crucial thing, which is kickstart funding. To get a good bus service up and running and popular, you have to fund it to the tune of £100,000 a year. The new service to the south of Leighton Buzzard is incredibly popular and is now carrying 50,000 people a year, but we have to subsidise it to the tune of £100,000 per year for five years. That, in congestion benefits, is huge, but the problem is that there is this gap. The new fund is not filling the gap. If only there were simple, ringfenced funding, like kickstart funding, and marketing, because the problem is no one can afford marketing people. You have to be an anorak to deal with bus services; you have to be. But the person who uses the bus lives in the real world. You have to have somebody who can market it and sell it, and that is where Brighton and Aylesbury and Stagecoach in Fife have been brilliantly successful. I just pray for some simple, ringfenced funding that will be quick and easy to apply for, with a few hoops to jump through.

Q232 Chair: So one of the areas of your concern is the funding of people to look at the planning of services and to promote them.

Victoria Harvey: Yes, to market them.

Chair: Mr Wilkes, you had a very nice phrase in your written evidence. You said you saw "promoting bus services to Mondeo man" as a solution. There are interesting things going on there.

Q233 Kwasi Kwarteng: I am very interested to know how things have changed on the ground over the last year. Have you seen any real movement in terms of bus fares on the buses?

David Redgewell: There have been two things happening in the south-west. First of all, FirstGroup commercialised services in order to maintain as much regional presence as it could. That came from Tim O’Toole, the Chief Executive, and that was a good move. The other thing he did was to experiment with Giles Fearnley in reducing the fares. So we have had some drop in fares in the whole of the area to try and attract more people on to buses. We have just gone through a period of cheap offers across the region.

The other thing, generally, is that, as the council subsidies have come out, then fares have also gone up because, once you have taken the subsidy out, you have to raise about £160,000 to run the vehicle a year-that is about £160,000 a bus. So it is £320,000 just to have some more modern kit in Devon, Cornwall, Somerset and Bristol.

Fares are going up, and that is a real problem for the West of England Partnership, which has been trying to regulate fares between Bath and Wells, through Radstock and Midsomer Norton. They are trying to cap fares to get more people on to those bus corridors, and that is very difficult with the movement in bus operator grants being reduced by 5% a year, with no ringfencing for bus subsidies. If there had been guidance on bus subsidy ringfencing, and you take 20% in line with the crossparty councils up here, we might have maintained a better bus network. The point is that at the moment people are getting to rail stations and their bus connection is not there.

The other issue is travel cards and the issues to do with that. There is no doubt Bristol needs an integrated transport authority to cover a 50-mile range of Bristol and Bath. That is desperately needed and has been recommended by the previous Government and the coalition. The problem with that is that we just have not got it. But we need to keep fares low. In Bristol and Somerset we need to lower fares and we need to market more people on to buses.

Q234 Kwasi Kwarteng: But what has actually happened? You have described to me what you think should happen, but what has happened over the last year?

David Redgewell: A mixture of both. First have come in and commercialised some services, done a fair bit of marketing and spent a lot of time across Devon, Cornwall, Somerset and Dorset, trying to get people back on to buses with cheaper fares and cheaper offers. They have tried that experiment for the last two or three weeks. But, in the commercial world, where they have kept services, obviously the fares have been slightly increased.

But they are looking at the market. As the market moves, there is more commercialisation. I have been told this morning that this is probably going to go on until October. October is the big issue in our part of the world. Will these bus services survive into the winter months without any Government grant for the local authority? That is our biggest fear. That is how the south-west works. We have a lift in the summer and a down drop in the winter.

Q235 Kwasi Kwarteng: Let us get to the nub of what I am trying to get to. If there have been fare increases, on what sort of scale and what sort of percentages have we seen in the last year? If fares are going up, what is the typical bus fare now? Is it £1.20?

David Redgewell: It is not £1.20 in Greater Bristol. It is £1 for three stops in the Bristol area. It is £4 for a day ride around the city and it is £6 for Sunday. It crosses Somerset. They have gone up an average of between 20p and 50p per journey.

Ray Wilkes: The fares basket goes up with bus cost inflation, which is different from ordinary inflation. Individual fares will go in zones, and so certain individual fares will often go up by quite big percentages. It might only be 10p or 20p, but it might be a big percentage, whereas the annual cards tend to go up very slowly and are very good value.

Where we live, Metro continually condemn the bus companies for these bus fares that go up by a big percentage. They ignore the good value tickets and it makes it very hard for the bus companies to get people on board. Getting people on the buses is what keeps the fares down. If they cannot do that because the local politicians are against them, then they just keep going up.

Terry Kirby: Can I just add this? We have had a situation in Leicestershire, in particular, whereby some of the main bus operators, principally Arriva and First, have tried to mask their real terms fare increases by putting on their website and in other publicity a statement which says, "Even greater reductions for weekly and monthly season ticket holders". When you read the small print under it, it actually says that they have retained the weekly and monthly ticket rates at basically the same rates as before. They have not reduced them on most of them-once or twice they have-but they have put the cost of the basic adult single fare up by something like 10p or 20p. They have done this several times over the last few years and they have put a spin on it which says that regular travellers save even more, which masks the increase of the basic adult single fare. When they have done that, the average single fare has gone up by about 10p or 20p.

I think the cheapest local fare now in Leicester City from one stop to the next is probably £1.30. To go from Leicester to Leicester Forest East, which is four or five miles, it is about £2 single. To go up from there to Earl Shilton, which is another five or 10 miles, it is only about another 20p. It is about £2.40. But the basic single fares for journeys of about three or four miles are now nearly £2 single, and these have been going up constantly over the last few years.

With regard to return fares, Arriva Midlands do not now do returns. They have scrapped day return fares. They are trying to get people to buy their daily and weekly tickets. Other operators still do. When they do day returns, they have increased the return rates proportionate to that, but again they have tended to keep their weekly and monthly season tickets on a broader path.

Q236 Chair: Thank you. I think the picture is emerging very clearly. Mr Kirby and Mr Wilkes, I think that both of you use concessionary fares passes. Could you tell us how important that is and how you would react to any changes in the amount you could perhaps use those passes or how you would react to anyone wanting to charge you for having the passes? Mr Wilkes, can you tell us how you see it?

Ray Wilkes: I think at my income level I would have just paid the fares without grumbling, but obviously it is like getting a birthday present if somebody says you have got free travel, especially with the amount we travel. I have said in evidence that we are better off by at least £2,000 a year because of the free travel.

There are quite a lot of pensioners that can afford to pay and they all say, "We would rather pay than lose our services." Two thirds of the people on our rambling club coach are retired people who can travel free on the buses, and they pay £10 or £12 every Sunday to come out on the rambling club coach. It is one of these things where, if anybody says, "Do you want free fares?", you would say yes, but nobody has thought about all the implications and what people really would do if they understood all the choices.

Q237 Chair: Mr Kirby, could you tell us how important the concessionary pass is to you and people you know?

Terry Kirby: A number of senior citizens have said to me that they would not mind paying half fare, or 50p or £1, or something like that, if it would help to guarantee keeping the bus services going. I have said to them, "Legally, there is nothing to prevent you paying the full fare if you want to do so. You do not have to use the pass when you get on the bus." I have told them, if they want to keep the bus services going that much, for every other trip they make they could pay the full fare and then every other trip they could travel free. That is one way round that. I have said, if they want to keep the bus services going, that is one way they could do it. I personally would be quite happy to pay something like a 50p concessionary fare, whatever it may be. I would not mind doing that. I think most people I speak to-

Q238 Chair: But how important is it that the pass exists?

Terry Kirby: It is crucial, absolutely. It makes a difference between the number of journeys I could make and I probably could not make because of personal circumstances in some ways. Some of the people I speak to can afford to pay and choose not to do so, but I think for most of the people I speak to it probably makes a substantial difference to the quality of their lives.

Q239 Iain Stewart: There has been some debate and publicity in the media about the offpeak nature of the concessionary passes. The national guidelines state you should not use it before 9.30 am, but local authorities have a discretion. Do you think that is the right balance, or is the fact that there is a 9.30 am cutoff causing problems?

Ray Wilkes: I was once waiting in Aberdeen for a bus, and one of the younger passengers was complaining that he was having to go to work by car because, there, it is all day free travel and he could not get on the bus because it was full of pensioners having a day out in Aberdeen. The fares were very high in that particular area, and I think it was because they had to squeeze the paying passengers more and more because such a high proportion of the passengers were concessionary.

Giles Fearnley, who is now the head of FirstGroup, who used to be head of Blazefield, told the CBT meeting that on Yorkshire Coastliner they were losing quite a lot of fare-paying passengers who did not like the overcrowding that the concessionary system had caused. People going out to Scarborough were causing people in York to drive to work instead of going on the bus, and they did definitely lose fare-paying passengers as a direct result.

David Redgewell: I agree with that. The problem we now have with the Somerset network packing up between 5 o’clock and 8 o’clock at night, with the exception of the routes to Wells and Bath and one to WestonSuperMare and the Minehead-Taunton route, is, effectively, that people now scramble in Bristol to get back. You get the pensioners and the disabled passholders all trying to get on to the last 7.20 pm commuter coach out of Bristol which goes down to Street. That last commuter coach used to be at 10.20 pm. You now have passholders effectively blocking up middle class commuters trying to get back to their Mendip towns and cities. So there are some issues to be resolved there.

There is also the issue of disability and what aspects you put on the passes for disabled people. But I understand also the Government have cut the half fare for pensioners and disabled people from the National Express Megabus networks, and that is coming through in October. So I am quite concerned about that. But I think there needs to be more regulation of those passes and I am wondering, as the railways restrict it at the peaks going out of London and Birmingham, whether we should have peak restrictions if we have limited buses in the other direction.

Q240 Iain Stewart: But do you think the local discretion on that should remain or should it be national?

David Redgewell: Yes, but I think there should be some guidance. What we are seeing from the coalition is a lack of guidance. Lord Adonis and his buses Minister issued lots of guidance. It was only guidance; it was not mandatory. But what we would like to see from the buses Minister is more guidance from the Department to local authorities on how to go about these things. The lack of guidance is leaving a big hole in the Transport Act 2008 and the 1985 Act.

Q241 Chair: Ms Harvey, did you want to add anything?

Victoria Harvey: Yes. In Milton Keynes, it is not so crucial and it actually stops it being so evenly distributed, but you are getting problems with early morning buses where, because pensioners cannot get buses in the early morning to morning hospital appointments, the hospital is having to send out an individual ambulance. The cost to the public purse has quadrupled.

On concessionary fares, the crucial thing about getting people to use the bus as a tool of marketing is giving people free bus passes. What happens is that, because they see granny going out and using the bus and having a great time, suddenly buses that were the despised form of transport become a way forward. There is a huge marketing tool. Around me, concessionary fares change the lives of a lot of my neighbours. The great dream of them is that you get more concessionary fares travelling; that would support more bus services; that, in turn, would then support people who needed to get to work, and cut congestion. There is a very clear example of that in Fife with Stagecoach.

But the tragedy with us is that, because of the cut to concessionary fares, you are basically thinking you do not want to promote this service because you will get lots of concessionary fares on it and it is not worth running. I am on the steering group for this service to the south of Leighton Buzzard, and we are actively thinking how to discourage concessionary fares because it is not worth it and it could destroy the commercial viability of the bus service. It could be the biggest opportunity to transform bus travel if it was properly reimbursed. The cuts in reimbursement are just heartbreaking, because you are seeing services closing because of that.

Chair: Thank you. On that note we have to conclude this part of our meeting. I thank all of you very much for coming and answering our questions so openly. Thank you very much.

Examination of Witnesses

Witnesses: Norman Baker MP, Parliamentary Under-Secretary of State, and Anthony Ferguson, Head of Buses and Taxis Division, Department for Transport, gave evidence.

Q242 Chair: Good afternoon and welcome to the Transport Select Committee. Minister, did you want to make any opening comments before we go to questions?

Norman Baker: Not really, except, since you have invited me, let me say that this is an interesting time for the buses. There are a large number of uncertainties at the present time. There is a Competition Commission inquiry, and we will find out shortly what their initial thoughts are. There have also been, obviously, changes to the finance arrangements through the spending review and the BSOG changes, and there is the extra money we provided through the Local Sustainable Transport Fund and for community transport. Quite a lot of different things are happening at the same time. So this is an interesting time, I think, for you to be having a look at buses.

Q243 Chair: Buses carry twice as many passengers as rail and the London Underground put together, yet perhaps around £200 million a year is going to be cut from funding for bus services under the savings and changes that you have put forward. Do you think that bus users are being unfairly penalised?

Norman Baker: No. I think, if anything, that is the opposite of how things are. I have been very careful, and the Department for Transport has been quite careful, to try to make sure that there is not an undue impact on bus users. Of course, with the spending position the way it is and the background economic position, we have had to accept this as a Department generally, and bus users as well have had to take their fair share of any savings that have to be made.

If you take BSOG for example, there has been no cut at all this year. There is a 20% cut next year, which is less than the average cut of 28% for revenue savings in the Department for Transport. The bus operators themselves have said that the level of cut, first of all, and, secondly, the fact that we have given them effectively a year and a half’s notice of it have meant that they are able to plan ahead. They have told me they are hopeful that, in general terms, there will be no consequence for bus passengers as a result of that particular change. That is an example of how we have managed to bring things forward in a sensible way to avoid an impact on bus passengers. That, of course, relates to the main support mechanism for bus operators. Of course, 78% of services or thereabouts are commercial services and they are therefore subject to that level of support from the Government more than any other. I am hopeful that, in fact, the impact on bus passengers will be relatively little as far as commercial services are concerned.

There is a secondary issue about supported services which are predominantly through tendered services in local councils. There, we see a varied picture across the country as to how local councils are responding to their particular financial settlement from Communities and Local Government. Some councils are responding by protecting bus services entirely; others are choosing, because it is a non-statutory service, to reduce those services. But, ultimately, it is a factor of localism as to how they respond to their situation with the finance they have.

Q244 Chair: The evidence we are receiving from around the country paints a rather different picture. Areas like Somerset say there will be a 50% reduction in local authority funded services. Cambridge and Northamptonshire say they are going to phase out all of those services, and we have reports of fares increases, in Arriva, for example, of up to 8%. Does that picture surprise and disturb you?

Norman Baker: As I say, we are getting a varied picture across the country, and you have quite fairly drawn attention to individual councils where they have chosen to save money-I would say disproportionately-from bus services, in order to protect other services they are delivering. I could equally quote to you East Riding, Kent, Luton and Peterborough, where there have been no cuts in bus at all for the year 2011-12. We are seeing a varied picture across the country, which is a reflection of the new localism agenda and the ability of councils to make their own choice as to what is important for them in their areas.

Q245 Kwasi Kwarteng: I am very interested in what you said in terms of the regional variation because, clearly, in the last session we heard people were worried that there had been big cuts. You are saying that in certain areas there have not been, which may well be true. But what can you do to reassure the people in areas where they have had cuts in their services that this is not going to be part of an ongoing trend and that the Government still remains committed to bus services in general?

Norman Baker: This is partly the intention of localism. We are committed to bus services and I want to see more people on buses, but, also, we are not in charge of every single bus route and bus service up and down the country. Local authorities are quite rightly the bodies that are responsible for deciding the level of supported services in their area and they choose to exercise that in different ways.

Our job, centrally, is to make sure that the framework and the legislation is correct to make sure that we do not have chops and changes in policy which cause bus companies uncertainty about the future. I think we have given them some certainty. We are seeing, for example, bus companies investing now in new buses. There are a large number of new orders coming through. The Green Bus Fund, for example, has been very sensible and helpful in setting a direction about low carbon buses. We are doing what I think is appropriate for the centre, but, ultimately, for local areas it is up to local councils what they choose to do in their individual patches.

Q246 Kwasi Kwarteng: Can I just ask you a question on that? Sure, many MPs-certainly on the Government side-have signed up to the localism agenda. But, as a Transport Minister yourself, do you see any minimum provision that the Government should guarantee should be provided all across the country, because, clearly, if we take a thought experiment, we could have a local authority that decides for whatever reason not to have any bus services at all? You are not saying to me that, as a Government Minister, you would say, "I am quite happy with that, because that is the localism and that is the decision they are taking." Surely there must be some minimum provision that you have in mind that you can guarantee.

Norman Baker: What is the function of a bus service? Let us go back to basics, if you like, on that. It seems to me that the bus policy ought to have three objectives. One is to deal with the environmental impact of transport and to try to persuade people to use the bus for environmental reasons. There is an economic benefit to buses directly, by providing access to employment, but also by, for example, leading to a method by which congestion in urban areas can be reduced because more people are on buses and fewer are individually in cars. So there is an economic benefit from buses. Then there is a social benefit from buses by providing access for people who otherwise would not be able to get from A to B.

It seems to me that, largely but not exclusively, those first two objectives-the economic and environmental ones-are delivered through commercial services which carry the vast bulk of people in this country and which are not, I believe, under threat because of the way we have restructured BSOG. Those will continue largely without change-change in terms of services or even change in terms of fares. So those two objectives continue to be met. The third objective-the social objective-is one which is met by bus services which are largely uncommercial and therefore subject to local authority judgment. It is up to local authorities in each area to say what they think their social objectives are. Personally, I would regard it as very regrettable if individual councils decided to withdraw all subsidised services. Personally, I think it would be a mistake if they were to do that in terms of looking after their individual populations. But, ultimately, it is their judgment to make and not mine.

I do not see a minimum level of provision in the country as something which we should dictate centrally. I do think we should put in place the architecture to try to ensure that we send the right signals both to the industry, which I think we are doing through BSOG and through our support for green buses, for example, and also to local authorities. The Local Transport White Paper "Creating Growth, Cutting Carbon" sets out very clearly the two high-level objectives the Government want to achieve in transport: using transport to create growth and cut carbon.

We have also provided, as you know, the Local Sustainable Transport Fund, which can be used for enhancements in bus services and to secure modal shift. Local government are quite clear what they want to do. But we have to accept in the new era we are in that it is not possible for central Government, on the one hand, to give local councils freedom and then to criticise them when we do not think they are doing the right thing and just say, "We’ve decided you won’t have the freedom after all. We will take the power back in the centre." They have to be free to make their own mistakes, if you like. We are taking away to Government. We are taking away ceilings from local councils and we are also taking away floors, and we will see a much more varied approach across the country.

Q247 Chair: But local government has a basic cut of 28% in its formula grant and in many cases a lot deeper cuts on top of that. Is it not totally unrealistic for you to expect local government to make up for the additional cuts that Government are imposing on local transport?

Norman Baker: First of all, the formula for local government is a CLG matter, of course, rather than a DfT matter.

Q248 Chair: Nevertheless it is a fact, is it not?

Norman Baker: It is a fact that there has been a significant challenge given to local authorities in terms of funding this year, that is absolutely right, but in terms of how it is structured and the amount of money per council, of course, that is a matter for CLG.

Secondly, I gave you a list of some councils already making no cuts in bus services. It is perfectly possible for some councils, it seems, to be able to construct a mechanism within their own area where bus services are protected. Others are making very deep cuts; so that is a matter which they are choosing to exercise locally. The third point I would make to you is that there are opportunities for local councils to make significant savings, in some cases, without affecting front-line services on buses. What I mean by that is, first of all, engaging in a more productive way with their local bus companies. Some councils, like Brighton & Hove and York, for example, have done that very well indeed and are providing in those two cases a good level of service at good value to the taxpayer locally. Other councils have a much more frigid and unhelpful relationship with their bus companies and I think that is reflected in the level of bus service locally.

It is also the case that some councils have found savings, for example, in how they structure their own services, but there are still councils you can find where there is one lot of people dealing with supported tendered services-bus services for the general public-and there is a different lot of people dealing with buses which are run for adult social care, and another lot of people dealing with buses which are for children, and indeed three different sets of buses in some cases. I do not believe that local councils, in all cases, cannot find savings. I think some are finding savings; some clearly find it more difficult.

I do not want to pretend it is not a problem. I do not want to pretend that local councils are in a wonderful position. They are not. Clearly, they have a very challenging settlement. But I do think that, with some imagination, they can protect services, by prioritising them if they choose to do so. Surrey County Council, for example, have restructured their actual tendered services and their routes to make sure that people are protected as far as possible within the saving. With some imagination, that can be done. Other councils are showing less imagination.

Q249 Iain Stewart: We have received some evidence in our inquiry that there is an issue and a problem with local authorities cooperating with each other where the nature of travel to work patterns or basic geography inevitably means buses have to cross from one authority to the next. In some areas there seems to be a lack of cooperation and forward planning. Do you think it is sufficient to rely on the localism agenda, and these authorities will naturally start to work together more, or is there a need for some other body- perhaps the LEPs or some other body above local authorities-to take a coordinating role?

Norman Baker: A good local authority will identify the opportunities and the constraints within which it operates for the delivery of bus services. If one of the constraints is what is happening across the border, then that local authority, I would have thought, would be in touch with its neighbour, because presumably there will be value for the second local authority in having a common position. In many cases that works quite well. I know, for example, on my own patch there are discussions between East Sussex and Kent about buses that run through from Brighton, a unitary authority in fact, through East Sussex and on to Kent. Those sorts of services can be planned. That is a commercial service but, still, the local authorities are involved in it. That could be sensibly planned. I would hope that local authorities would take the opportunity to work sensibly together where that is necessary.

I do not think the answer to a local authority which fails to show imagination is to impose an unelected body over the top of it to deal with that problem. LEPs have an important function. I think there is a regional transport function but I do not see it personally as being one that delivers local bus services.

Q250 Chair: If I may move on to a slightly different area, we live in an era of high petrol prices, which, as far as anyone can predict, is going to be here for the foreseeable future. That creates a golden opportunity for a renaissance in bus usage for people that cannot now afford to use their cars. Who should be in the driving seat, if you pardon the pun, for marketing that opportunity? Is it the bus companies themselves, the Department, the local authorities, or a mix of all three?

As a supplementary to that, to what extent do you see the potential for a cross-subsidy from increased patronage of commercial routes into supporting the socially supported ones?

Norman Baker: That is a rather separate question. I will try not to lose that one. I am not sure in my own mind that the increase in fuel prices provides that much of an incentive to switch from the private motor car to the bus. Bus operators will tell you that they also have fuel costs which are rising in line with fuel which is purchased by private motorists, although of course they do benefit from BSOG, which gives them a rebate. It is also the case that buses are becoming heavier and less fuel efficient, which is a problem which concerns me, because of the air-conditioning, the lower floor platforms and everything else which is now going into buses.

Where I do think buses have success, and in areas like Brighton where they have grown, is where the environment for the motor car is unfriendly. I am not suggesting as a public policy that towns and cities should make themselves unfriendly to cars, but as a matter of fact that seems to be the determining factor as to when buses are used more. I would not recommend anyone in this room to try to drive into Brighton. I would strongly recommend you get the train or the bus if you wish to do so, because it is a nightmare getting in and you cannot park. I think those factors are more important in causing modal shift to bus than perhaps a temporary or limited change in fuel prices, which also, as I say, affects bus users.

On the second point about cross-subsidy, that is a very significant and important question, if I may say so, and I imagine that it will be one which the Competition Commission themselves are seeking to address. But there is, it seems to me, a tension between a commercially run service and a tendered service. If you look at the three objectives of bus policy which I outlined a moment ago, the economic and the environmental ones tend to be delivered predominantly but not exclusively by the commercial operators, and the social bus objective tends to be delivered predominantly but not exclusively by tendered services.

If you want to get, for example, carbon reduction from transport-and one of the ways of doing that is to make the bus service really attractive-that would lead you to a conclusion that what you should do is run a high frequency bus service along main roads such that people turn up at the bus stop, they know the bus is going to be there, and they do not have to wait and look at the timetable.

That is a different proposition from a bus which goes along the main road a bit, then diverts to meet Mrs Miggins down a side street and then it picks up at the post office and goes to the hospital and back on the main road again, because that would be unattractive to the people you want to attract out of cars, who want to get from A to B quite quickly for business or school or for other purposes.

I personally think, in my own mind, it is dangerous in terms of securing increases in bus use to seek to do too many things with the same bus. Different buses do different things.

Q251 Kwasi Kwarteng: Can you tell us a bit more about the decision to reduce BSOG by 20%? Was that something that you felt was on a temporary basis inasmuch as it was driven by the financial situation we are in, or did you feel that there were some more fundamental reasons why perhaps you wanted to reduce this amount of money?

Norman Baker: As the Department for Transport, we had a requirement to deliver savings to the Treasury, as did every other Department in Government. We obviously had discussions among the ministerial team and others about how best that can be delivered, about how to make sure that we identified the waste that there was and the unnecessary spend first, and then, where that was not always possible, to see whether or not you could minimise the impact on services by particular choices. It was quite a detailed involvement and exercise to try to work out where best to go on that. Obviously, the Treasury then had to be happy with what we were recommending on that.

I do not hide the fact that I wanted to make sure we did not have a particularly severe impact on buses. Of course my objective as bus Minister was to try to secure that. We saw in the press, in the runup to the spending review, all sorts of scare stories suggesting that BSOG was going to be abolished. Actually, there turned out to be no cut this year at all, which is a good achievement for the Department. Then, secondly, the cut next year is lower than the average revenue cut for the Department. It is clear that we wanted to do our best to protect BSOG and we value it, as indeed do the bus operators and local councils.

That is not to say that BSOG in its present arrangement is perfect. We have a commitment in the Departmental Business Plan to look at how BSOG is delivered. By March 2012, we have chosen ourselves to come up with an alternative way forward of looking at BSOG and reaching our conclusions and putting them out for discussion by that time.

To deliver that, I am obviously talking to all interested parties about BSOG in preliminary discussions. They are helpful. It is helpful that they are not particularly high profile at the moment because, obviously, we want to have a full and frank exchange of views. We will look at what BSOG is, how best it is delivered and whether or not any changes are needed there. But the 20% cut was delivered to meet the desperately difficult economic background we have as a country rather than any philosophical dispute about BSOG.

Q252 Kwasi Kwarteng: What I am slightly unclear about from your various answers is the extent to which you feel that the reduction to BSOG has been reflected in cuts to services. From what you are saying, I think you are suggesting that it was the local variation and it was the responsibility of councils to keep services going, and it has very little to do with the general picture of austerity.

Norman Baker: I do not believe there are any cuts, or hardly any cuts, in bus services now which are as a result of the changes to BSOG. Apart from anything else, they have not come in yet and they will not be coming in for another 12 months. As I said earlier on, the operators themselves felt that, in general, the BSOG reduction next year could be absorbed without an impact on services. We projected in the abstract what might happen before I talked to the bus companies. I think that was sent, to you, Chair, as part of the DfT initial thoughts early on, and officials predicted 1% or 2% changes at most as a consequence. I hope even that will be avoided, given the notice we have given. It is not commercial bus services that are being cut. They are services which are supported by local authorities through the tendered process.

Q253 Chair: The evidence that we have received reflects great concern about the combined impact of a number of cuts, including the cuts to local authorities in general, some having much bigger cuts than others; there is a major problem there. Then there are the cuts in funding for concessionary fares. The Department expects to save over £77 million a year on funding for concessionary fares, with the BSOG cuts to come. It is that combined effect that seems to be inflicting the greatest damage.

On concessionary fares, there are areas like Oxfordshire which are receiving over 50% less than they have before in funding for concessionary fares, and we have a lot of evidence from different parts of the country saying that the revised funding for concessionary fares is unfair and is having a very disastrous effect on local bus services. Are you concerned about that and do you intend to revisit that area?

Norman Baker: Let me deal first of all with your cocktail, because it is not a cocktail I want to accept and therefore I want to deal with that first. You say there are three things. First of all, I do not believe the BSOG is a problem, for the reasons I have given. The cuts to local authorities in terms of their grant are, in some cases, having an effect on local services in the 21% of services which are supported, but not in all cases. That is a matter for local councils. They have a challenging settlement but some have avoided making cuts. But there is an impact there on some of them.

Q254 Chair: But, Minister, some local authorities have far fewer cuts than others, have they not? Some local authorities, particularly those in the most deprived parts of the country like Liverpool, have actually had massive cuts, higher than anyone else.

Norman Baker: If you are asking me to comment on the CLG formula, I am not able to do that.

Q255 Chair: I am not asking you to do that. I am just reflecting the facts about what has actually happened.

Norman Baker: In terms of the impact on local bus services from the local government formula settlement, as I say, some councils are protecting services entirely; others are making swingeing cuts. Most of them are making cuts of about 15% to 20%, I think it is.

On the third element, the concessionary fares to which you referred just there, we have simply issued new guidance to local authorities in order for them to meet their statutory obligation, which is to ensure that bus companies are no better and no worse off from administering the concessionary fares scheme. That is what we have sought to do in terms of what the DfT has done and we have issued that guidance. The evidence was that the new guidance is more accurate in delivering that legal objective. We are not changing the entitlement of concessionary fares; we are not changing the primary legislation. All we are doing is issuing and have issued new guidance to enable local councils, if they choose to use the guidance, to deliver that legal objective which remains unchanged for them. It is up to them whether they want to do so or not. We have taken a poll of about a third of travel concession authorities. Of those about three quarters, we think, are using the guidance that we have issued.

Q256 Chair: The bus companies say that they are a lot worse off and they may have to recoup their losses by other means, such as putting fares up and changing other services. Is that something you just expect the bus operators to say or is it of concern to you?

Norman Baker: Let me put it this way. The position before we issued the guidance was that bus companies could expect to be no better and no worse off from operating the concessionary fares scheme. The position after the guidance was issued is that they should be no better and no worse off from administering the scheme. So nothing has changed in that regard. If bus companies are much worse off, it is because they were being overpaid before for the work they were doing in administering concessionary arrangements. If they believe that they have been unfairly treated, then they can of course appeal, which they are entitled to do.

Q257 Chair: Are there any appeals going ahead?

Norman Baker: From this year?

Chair: Yes.

Norman Baker: Anthony, do you know that?

Anthony Ferguson: The window does not close until 25 May.

Norman Baker: Okay.

Q258 Chair: Are there any appeals pending?

Norman Baker: The window is not open yet, as I understand it, for this year. But, in terms of the appeals in previous years, I think I am right in saying that last year-Anthony will correct me if I am wrong-there were about 30 appeals, of which only about three or four were found in favour of the bus companies. Indeed, the conclusion was that, had it been possible under the regulations at the time to find in favour of the local authorities, then that would have been a conclusion which would have been reached for a reimbursement of local authorities. I am actually changing the rules to ensure that, when a matter goes to appeal, it is possible for local authorities to win as well as bus companies. I think it is only fair that that should be the case. That is a new rule coming in shortly.

Q259 Chair: Would the local authorities have the extra funding to give if they have already been cut back?

Norman Baker: Extra funding to give in what sense?

Q260 Chair: If appeals were won and the companies showed they were right to get more funding, how could that be given to them with the cuts that have already taken place?

Norman Baker: It is quite a detailed process for a bus company to submit an appeal in the first place, and therefore they have to be reasonably sure that they are going to be successful, I would suggest to you. They have to be even more sure than they would have been last year because there is now a possibility that the award can go against them and in favour of the local council, which was not the case last year. But if a local council have perversely and obviously not applied the guidance and the bus operators are much worse off unfairly, then it is only right that they should have to meet their legal obligations to ensure that bus companies are no better and no worse off.

Q261 Iain Stewart: I would like to ask some questions on the operation of the national concessionary fares scheme. Is it now a good time to have a review of how it is operating? We have had some evidence presented to us that many users of the scheme, while of course welcoming free travel, would in fact be willing to make some payment if services were better protected.

Norman Baker: One of the questions from you, Chair, was about the uncertainties in the differences and the changes which have been made. So I am not sure that you necessarily want to add further changes which might give more uncertainty, if that is the concern that you have. I understand why some people feel that would be a sensible policy. I understand also that people might feel in a time of economic difficulties, when we are having to save money, that asking people for a contribution might be a sensible way forward. I can say, however, that this matter was considered very carefully by Ministers. The Prime Minister himself, and indeed the Chancellor in his spending review, made it very plain that there was no intention to change the present entitlement. That remains the position of the Government and that will be the position, I anticipate, for the foreseeable future.

Q262 Iain Stewart: Was any research carried out on whether the concessionary scheme could be means-tested in some way? Is there any evidence that the cost of conducting that means-testing would negate any revenue benefits?

Norman Baker: Theoretically, if you were doing to do something at all, you would have a flat fare to be paid either for a journey or a flat fare for the pass each year, because that could be administered relatively cheaply. That is not the policy, I stress, but if you wanted to do something that is what you would do. If you were to means-test it, that would be enormously expensive. It would, indeed, negate the benefits of the pass and cost a lot of money for either the councils or the Government to administer.

Q263 Iain Stewart: I have one final question, if I may, on this. The national guidelines suggest a 9.30 am cutoff, to not allow the pass at peak times. Do you think that is working, or is there any revision planned for that guidance?

Norman Baker: It is right in principle that the concession, so as not to become unaffordable and also not to put excess strain on existing services, should not be used by people who are going to work and earning money. I think that is right. Disabled people would be in a different category, but it is certainly right for pensioners and so on. It seems to me that the purpose of it originally at least was, and still largely is, to provide something to those who have retired.

It would be quite wrong in some ways if you ended up with a system whereby those in work and earning good money were subsidised by other people to take their bus journeys. It would also have the consequence of putting more people on buses when those buses were busy and therefore may lead to extra buses having to be put on by the operators, which would then further drive up the cost of the concessionary fares scheme. I personally think that the 9.30 am arrangement is about right, although, if local authorities wish to supplement that by a 9 o’clock start or an 8.30 am start, indeed, they are free to do so.

The one area where I have some sympathy, and I have come across this in my own constituency, is where you have a bus at 9.25 am and the next bus is at 11.25 am, and someone has a doctor’s appointment. In those circumstances it is open to local authorities either to exercise some flexibility on the individual services or to move the time by, say, five or 10 minutes, if that is the problem. I know one or two authorities who have actually said, "It will be a 9.30 am start, but on these services we will allow it where people turn up for those particular individual services where there is a two-hour gap until the next one arrives." That seems to me to be a common sense, practical response to the situation.

Q264 Chair: Is the Department carrying out any research on how the national concessionary scheme is working?

Norman Baker: We carry out research on a regular basis by talking informally and formally to people in the bus industry and to local authorities. I chair a bus forum which takes place every six months at which issues such as that are raised and we get feedback. If it appears to be the case that there are individual issues which are arising and we get some background knowledge on something, then clearly we dig into it further.

Q265 Chair: But, at the moment, there is nothing specific you are looking at.

Norman Baker: I have not sent officials off with a particular remit to come back with a specific formal report on something, no.

Q266 Chair: You are not looking at any restrictions on the scheme.

Norman Baker: No, not at all. The scheme is what the scheme is, and it will carry on in the indefinite future with the entitlements it has. The national scheme will carry on. Obviously, local authorities can add to that if they wish to do so.

Q267 Chair: Bus operators have expressed concern about the impact of ceasing some tendered routes on the rest of the commercial network. For example, if people are going out for the evening and want to use a bus, if there is not a bus back which might have been paid for by local authorities before, they might not travel by bus at all. Is that something that you have come across and on which you have done any research?

Norman Baker: I think there is an interesting synergy between commercial services and tendered services, perhaps not in the way you have suggested, nor in the way of individual routes, which was discussed earlier on. Over the last 10 years in England, outside London, commercial services in terms of vehicle miles have gone down 17.5%, whereas subsidised services have gone up 25.4%. It seems that local authorities have been providing more and more services in the last 10 years, while commercial services in terms of mileage have to some extent retracted. That may be a reflection on bus use that local authorities have tried to maintain. That may be one explanation. Another explanation possibly is that those services which are marginal in commercial terms have been withdrawn by bus companies, perhaps in the expectation that they will be retendered with a subsidy from the local council, because a subsidy from the local council would obviously be marginal itself for a service which is near-commercial. So there is a synergy in those two elements.

If bus companies find tendered services withdrawn and they have bus drivers who are employed and not being used, then they may well take a fresh look at whether or not commercial services might fill the gap for some tendered services which are withdrawn.

Q268 Chair: Do you have any concerns about the way commercial services operate or are you awaiting the results of the investigation that is going on now?

Norman Baker: The Department has provided information to the Competition Commission about the operation of the market. I do not think it would be appropriate at this stage, ahead of the Competition Commission, to go into too much detail about what we have said on that. Obviously, there are concerns that we have expressed in some areas. We have drawn attention to various facts. We published the report from LEK Consulting, as you will know. But I would rather wait, if I may, until the Competition Commission have reported and then give you a proper response when I have had a chance to see what they have to say about that.

Q269 Chair: When do you expect that to be?

Norman Baker: Very shortly. I expect them to publish their interim findings and suggested remedies. As you know, there is then a further period in which comments can be made before a final report is produced.

Q270 Chair: When is that? Is that this month or next month?

Norman Baker: Very shortly.

Chair: This month.

Norman Baker: Yes.

Q271 Chair: What about community transport? Are you expecting community transport to fill the gap when other services are removed?

Norman Baker: Community transport fulfils a number of functions, social functions mainly, because obviously they are not running a commercial service, otherwise they would be run by commercial bus companies. But they have a range of different functions. One function is to help those individuals who, for reasons of disability or whatever, might not be able to access normal commercial transport.

They also have a function in identifying the needs of particularly isolated rural communities. This is where they may come into their own, and I have given, as you know, £10 million extra funding to local authorities to try to kickstart a drive in community transport. We are also giving extra help by way of advice to local councils as to how they might deploy that money in the best way. We are giving six hours’ consulting to each local authority so that they can get the expertise from us, in so far as we can give it, to help them best deploy that money.

In terms of providing an alternative to commercial services, it seems to me that, irrespective of the savings agenda that we have had, there is a question in my mind as to whether or not it is sensible for a doubledecker bus to be trundling around country lanes to pick up two people, or whether there is a better way of doing that anyway. If we are dealing with those isolated rural communities, I think perhaps they are entitled, to some degree, to some support from the local council for their transport needs, but it should be tailored to their needs. It seems to me, as a general point of principle, that having a vehicle which is appropriate for a very small group of people is something which makes commercial sense anyway, rather than, as I say, deploying an inappropriate vehicle. I would hope that local councils, irrespective of the savings agenda, will be looking at how best they can deliver transport for rural areas which are isolated in particular.

Q272 Chair: The Community Transport Association tell us that they can fill only 10% to 15% of the gap left by the removal of tendered services. Do you accept that? Have they spoken to you about changes that you might make? They have said to us that, for example, the concessionary fares scheme should apply to community transport and that would help them operate. Is that something you have thought about?

Norman Baker: It does apply to community transport in so far as they are running bus services. If they get a section 22 permit, then they qualify for BSOG and the other arrangements which relate to normal bus services. Where they do not qualify is if they have a section 19 permit when they are not running a commercial or commercially or publicly advertised service. That is the difference. In so far as they run bus services like the community bus service in my locale, then people do qualify.

In terms of filling the gap, the community transport sector is patchy. Obviously, it is stronger in some areas than others and it does not necessarily follow, unfortunately, that the areas where it is strong are the areas where the bus services may be reduced beyond the average by local councils. I have asked officials to build up a picture for me as to what the impact of local authority decisions is on bus services so that we can have a good picture as to decisions they have taken in their own areas. We are also trying to match that with community transport provision to find out whether there are indeed individual areas where people are significantly disadvantaged by decisions taken locally.

Q273 Chair: Does that mean, then, that you are looking again at how community transport could be helped to expand?

Norman Baker: We are helping community transport, as I say, by the £10 million provided to local authorities to enable them to enhance their provision. I meet community transport organisations on a frequent basis in my capacity as Minister. So, of course, we are looking at how best we can help them.

Q274 Chair: What more could be done about bringing different transport providers together: health providers, hospital transport, social services, education? Is there anything the Government or anybody else should be doing to look at that again?

Norman Baker: I think you are right to pick up on that. That reflects the point I made earlier on, which is that you sometimes have local councils with three different lots of people doing three different lots of things, with three different lots of buses, and some of them sitting empty all day. But that really is a matter either for the county council or unitary authority in a particular area to try and deal with. They are the transport authority; they are the ones who deal with adult social care; they are the education authority. They are very well placed indeed to get maximum use out of bus services and their own vehicles in the way that some but not all of them do. That is a matter for them to take forward. It is not something in which it is appropriate for central Government to intervene except to draw attention to it.

Q275 Kwasi Kwarteng: We have heard in a previous submission that people were worried that you were not giving enough guidance in general to local authorities. Could you say a little bit about that, particularly in respect of the concessionary fares reinvestment to local authorities, because there was a suspicion certainly earlier in the year that the Government had not been specific enough about certain guidelines they should be giving?

Norman Baker: I am surprised to hear you say that, because we are normally criticised for having too much guidance coming out of Whitehall. If you made the case on concessionary fares a year ago to say the situation is unclear, it would have been a fair criticism. But we have now refined the guidance, thanks to the University of Leeds, and that guidance has been issued. We have had, I think I am right in saying, seven hours where we have been able to talk to local authorities and explain to them what we are trying to do and help them with any questions they have. It is on the website, with Q&A, and everything else we have provided for them. So I think we have done quite well on guidance.

We have also issued guidance in other respects to local councils to back up, for example, the Local Transport White Paper. We have produced a carbon tool, which is an attempt to help local councils work out how best to save carbon from their transport operations. What we are trying to do, in a way, is to provide the extra which is not reasonable for local authorities to provide themselves. We cannot expect every local authority to provide a Carbon Tool. That would be a bad use of funds. But we can provide that and then let them use that in the best way they can to decide their own transport priorities.

Q276 Chair: The Local Government Association have put a proposal forward about putting all bus subsidies in one stream under the control of the local transport authorities. What are your views on that?

Norman Baker: We are in discussions, as I have mentioned to you, with both local authorities and the bus operators about what might be done in terms of BSOG for the future. Those discussions are continuing and we will reach a conclusion which we will be able to share with you in less than a year. That is, I think, what they are referring to there. In terms of other support, then it is there in the formula grant from CLG.

Q277 Chair: What about their main proposal that all subsidies should be put together and controlled directly by the transport authorities? Do you agree with that?

Norman Baker: The formula grant already has the subsidy which is recognised for concessionary fares already there. The BSOG arrangements are the ones which I have identified and we are discussing the question as to whether or not further local devolution is appropriate or not.

Q278 Chair: Are you intending to issue any guidance about consultation?

Norman Baker: On what?

Chair: Consultation on changes to bus services.

Norman Baker: No, not really. I think that is a matter for local authorities to take forward themselves. We have seen some good examples of consultation. I know Passenger Focus have done some research to look at which councils have consulted well and appropriately with their local areas. For example, East Sussex, which is my own patch, Shropshire, Surrey and Worcestershire have consulted in a way that Passenger Focus believe is good practice. Others have done less well.

Q279 Kwasi Kwarteng: I am interested in your view of the relationship between the Government and the local authority. Clearly, you are saying that because of localism it is really up to them, but what could you tell me about how you think the relationship between the bus operating companies and the local authority should be? Is that an area which you are satisfied, as a Minister, is going well?

Norman Baker: There are provisions under the Local Transport Act 2008 which enable local councils, if they believe the arrangements are not working well with bus operators, to move towards a quality partnership or, indeed, a quality contract, if they choose to do so. We have not made any changes to that legislation as a Government and we have said that we will wait for the Competition Commission to report to consider whether or not any changes need to be made to that architecture. That is the main way in which, I think, from the centre we would influence the relationship between bus companies and local authorities.

Under the present arrangements, which, as I say, do include the option for partnerships and contracts, it seems to me that the performance is, frankly, mixed across the country. There are authorities-again I mention Brighton and Hove; Oxford; and Cambridge-where it seems to me there is a buyin from the local authority and the operators which is leading to a good bus service for local people and which is leading to, in many cases, an increase in patronage of buses. There are other areas where local authorities are providing, frankly, very little support. SouthendonSea, for example, has a policy of not having any subsidy or help at all for bus companies. There are other areas where you have a bad relationship between bus companies and local authorities, and obviously the passenger is the one who suffers.

Q280 Kwasi Kwarteng: You have identified areas where there could be improvement. Do you see it as the job of central Government, perhaps through legislation, to make that work in a more satisfactory way?

Norman Baker: It is our job to make sure that, first of all, we give that high-level certainty over the direction of travel to bus companies. We are giving high-level certainty over BSOG. We have set out what we are doing for three or four years. We are giving high-level certainty over low carbon issues by the Green Bus Fund. We are giving high-level certainty over, for example, the smartcards, by the consistent message we are giving to the bus operators and local councils that we are serious about smartcard roll-out and technology, which we think has the potential to drive up passenger numbers and make a real gear change in terms of bus usage, and train usage for that matter, in this country.

We are also responsible for the architecture of the legal arrangements between bus companies and councils through the Local Transport Act 2008, which, as I say, we have not sought to change. That is our job. I do not think it is our job to tell Much Hadham Borough Council how they should negotiate with Much Hadham Bus Company.

Q281 Iain Stewart: There are quite a number of areas of bus operation where you have painted a very mixed picture across the country. There are some very good examples and some poor examples. What is the most effective mechanism of sharing best practice? Is that through, perhaps, Passenger Focus or is it through the Department? What would be your thoughts on the best way of sharing that?

Norman Baker: There is no one answer. There are a number of different avenues which we try to use. First of all, I do value the fact that Passenger Focus are now engaged in some bus work. I think they are a competent organisation and I work well with them, as in fact does my colleague Theresa Villiers on the rail side. Equally, I value the work of Bus Users UK, which is useful on some of the nittygritty stuff on buses and reporting individual problems. The Bus Appeals Body, which comes out of Bus Users UK, is also helpful in identifying problems.

From the centre, as I mentioned, I have these bus forums or bus fora, which meet on a sixmonthly basis where industry, local authorities and others come together to talk about issues, for example, such as disability on buses. We can share ideas there and identify problems. I have had two of those so far. They have been, I think, very useful meetings. I call ad hoc meetings to discuss issues. I called one between the bus and train operators to talk about the integration of bus and train. We have those sorts of meetings as well.

In terms of other avenues of best practice, I think the LGA needs to do more. I am quite open about that. In this new era of localism, the LGA should not simply see itself as a body which lobbies central Government, as I think too often it has been. It increasingly needs to step up to the plate and identify good practice and bad practice and spread that through its own members in a way that I do not think it has so far.

Q282 Chair: Do you support quality contracts?

Norman Baker: It is no secret, Chair, that the Lib Dem manifesto did support quality contracts, and you will know my position from the Local Transport Bill Committee that that was strongly my view. It is also no secret that the Conservatives, before the election, opposed quality contracts, which is why we have taken a rational and mature decision between us to do nothing about the architecture until such time as the Competition Commission report and then look at the evidence. I think that cannot be faulted as a process.

Q283 Chair: What does that mean for now? Are you for them or against them?

Norman Baker: What it means for now is that any authority that want to use the provisions of the Local Transport Act are free to do so and they will get no obstruction from the Department if they want to go down that road. But what it also means is that we will wait and see what the Competition Commission report. I will be astonished if quality contracts do not feature in their report, and we will wait and see what evidence they bring forward. If they bring forward compelling evidence that competition is not working, then clearly that enhances the case for a change to the architecture. If they come back with a report that says everything is fine, then clearly that weakens the case.

Q284 Chair: What are your major concerns at the moment about bus services?

Norman Baker: That could be a very long answer.

Q285 Chair: I said "major concerns". What do you think you should be doing?

Norman Baker: The major concern is not what I should be doing. One of my major concerns is how one or two local authorities appear to have decided to cut drastically their bus services without, I believe, very much consideration of the consequences. But that is not something I should actually do something about. That is a localism agenda. I note it, and I am concerned about that.

In terms of where we are going, I want to make sure that the concessionary fares reimbursement guidance is bedding down well. I am obviously keeping an eye on that. I want to make sure that we are doing our best to provide certainty for the industry about direction of travel, and I hope we are doing that. I want to make sure smartcards are being rolled out and we are getting the benefits, which I think are enormous, from that. I think the White Paper talked about the majority of local public transport journeys being by smartcard-enabled technology by 2014. That is still very much an aim that I have, and I think that is going to be a transformation if we can get that going. That is a high priority for me. Beyond that, I want to make sure that we are working productively with the industry and local councils, as I think we are, to make the experience for the bus passenger as good as possible. That means looking at, for example, everything from driver behaviour at one end to making sure that buses are safe at the other.

We have seen, I think, a transformation in rail journeys in the last 10 years when the quality of rail travel has improved markedly for the average passenger. I am not saying it is perfect on the railways, but, in general, the passenger experience has improved significantly. I want to see the same sort of improvements in buses. We are getting there. Some bus companies are better than others and some local authorities are better than others. Driving up that general performance, I think, is something with which I can help.

Chair: As there are no further questions, thank you very much, Minister.