Bus services after the Spending Review

Written evidence from TravelWatch NorthWest (BUS 18)

1. Introduction

1.1 TravelWatch NorthWest (TWNW) is an independent organisation representing users of all forms of Public Transport in NW England.

1.2 TWNW has made a number of responses to DfT and HOCTC in which since 2008 we have tried to address various potential scenarios and how they might impact on the bus industry. Most of these effectively rehearse the questions asked in this present call for evidence. The general theme of our responses has been to caution against reducing the overall level of support for unremunerative but socially desirable registered local bus services.

1.3 There are a number of strands of evidence in our previous responses [1] which we briefly summarise in an annex to this paper. References are made to these strands in our current response to the specific issues the HOCTC has

selected for this inquiry.

2. The impact of the reduction in Bus Service Operators' Grant,
including on community transport.

2.1 TWNW supported the extension of BSOG to Community Transport operators [2] on the grounds that they are increasingly used to provide public passenger transport and was subsequently pleased to note that (as we anticipated) the Local Transport Act 2008 now provides useful relaxations on the use of large Community Buses and smaller ‘Permit minibuses’ [3] to provide registered local services. As there are similar relaxations on the provision of ‘taxi bus’ services it seems logical to argue that they too should qualify to receive BSOG.

2.2 The local bus market is imperfect. It is contestable "on road" [4] but it is not transparent. Passengers are generally better off without "on road" competition. Where it exists they have great difficulty in ascertaining the fares for their intended journeys, which can, and often do, vary between different operators on the same route. Interavailability of tickets and integration of timetables is usually minimal. The creation of statutory Quality Partnerships or Quality Contracts (Local Transport Act 2008) could help to address this, but progress on establishing these is painfully slow.

2.3 Local Transport Authorities (LTAs) can have no certainty that when a service is deregistered this is because it has become non commercial. It may rather be that the operator in tactically deregistering hopes to win the subsequent tender for its replacement – always assuming the LTA wishes to and can afford to support this.

2.4 The market is also becoming increasingly oligopolistic resulting in fewer tender bids and at inflated prices.

2.5 A number of anti-competitive practices persist. "Spoiling registrations", to run just ahead of an incumbent operator, and predatory pricing, are common strategies intended to increase market shares and ultimately remove competitor(s).

2.6 Inevitably any reduction in BSOG will impact on operators. In such a competitive climate it will not be difficult for them to disguise some, or all, of the above strategies as being commercially unavoidable.

3. The impact of the reduction in local authority grant support to bus
services and other changes to the funding of local authority bus schemes and services by the Department for Transport.

3.1 Any reduction in LTAs’ funds for supporting non commercial routes is likely to result in service reductions, either total or at off peak times such as evenings and Sundays. LTAs’ financial inability to "buy back" such deregistered services might force them to seek more imaginative funding sources and more innovative solutions. Small scale initiatives such as the use of taxi buses at off peak times can sometimes be best value for money (BVM). [5]

3.2 The Coalition Government’s proposed consolidation of the plethora of revenue support mechanisms into a ringfenced single pot could be helpful. There are suggestions [6] , which could usefully be pursued, of including BSOG and funds to cover re-imbursement for Concessionary fares in these pots and of then paying them to the LTAs. This would have the effect of making many networks almost entirely non commercial and of giving the LTAs greater control through a tendering and franchising regime making competition almost entirely "off road" and "for the market" rather than "in the market". Greater reliability and network stability might also result.

3.3 Suggestions [7] that the level of support for local bus services could be linked to patronage should take account of how this could disadvantage rural services. A better suggestion might be to link funding to performance, but this must be predicated on complete transparency of operating data and also upon Traffic Commissioners and their executive arm VOSA being adequately resourced. There would need as well to be a statutory duty on operators to disclose relevant data.

4. The implementation and financial implications of free off-peak
travel for elderly and disabled people on all local buses anywhere in
England under the Concessionary Bus Travel Act 2007

4.1 There is a strong likelihood that the overall grant [8] to LTAs to cover the reimbursements they make to operators to compensate them for their "revenue foregone" will be reduced. There may well be a National formula based re-imbursement in England [9] . Although this could have the twin merits of correcting alleged historic overpayments and of reducing the number of operator appeals care must in this case also be taken to ensure rural transport services are not discriminated against.

4.2 Although LTAs and operators will doubtless complain of "rough justice" and the creation of "winners and losers" the above is probably the best compromise in the short term. However as smart ticketing and other operating data capture and sharing spreads the possibilities of more accurate and fair reimbursements will increase. In particular LTAs’ complaint that re-imbursement is based on journeys made rather than passengers’ residence would be addressed.

4.3 Even so, in the short term, operators will either claim to have experienced, or possibly will have done so, financial loss as a consequence of the provisions of the Concessionary Bus Travel Act 2007. They will also, with justification in some cases, claim that full fare paying passengers are being "crowded out" on some services with consequent revenue loss, forcing them (despite allowances in the reimbursement formula to compensate for additional costs such as extra capacity) to consider deregistrations.

4.4 Overall, any reduction, either intended or consequential, in funding LTAs and through them operators for their statutory requirement to offer free concessionary bus travel can only have a similar effect to the possible reductions in BSOG et al considered in response to the two earlier questions.

5. How passengers' views are taken into account in planning bus
services, and the role of Passenger Focus in this area.

5.1 TWNW has long argued for strong regional, multi modal passenger representation [10] . We welcomed the provisions of the Local Transport Act 2008 section 74 which enabled the extension of Passenger Focus’ (PF) remit from rail to cover also bus, coach and tram services. We argued in our evidence to the HOCTC that there should also be a standardised countrywide complaints handling procedure.

5.2 However PF does not is not currently resourced to take this on and we are now concerned that following the comprehensive spending review it may be downsized and/or some of its functions shared with the mono modal Office of the Rail Regulator (ORR) or even Consumer Focus [11] .

5.3 TWNW is technically the descendant of a statutory SubCommittee of the Rail Passengers Committee for NW England [12] and is able to give regional input to the now national Passenger Focus. Bus Users UK (BUUK) is an industry funded non statutory organisation which handles complaints on a voluntary basis and refers those unresolved to a Bus Appeals Tribunal. Like the TravelWatch network [13] BUUK’s geographic coverage is incomplete [14] .

5..4 There is thus demonstrably an unfulfilled role for some aspects of bus passenger representation in the regions which voluntary organisations such as ourselves would be willing to assume given the necessary funding and statutory authority.

(Author of paper – Paul Fawcett MPhil. FCILT)

Annex

December 2010