Examination of Witnesses (Questions 1-73)
Q1 Chair: Good
morning, gentlemen, and welcome to the Transport Select Committee.
Could I ask you, please, to give your name and the organisation
you represent? This is for our records. We will start at the end
here, Mr Richardson.
Nick Richardson: Nick Richardson, Chartered Institute of Logistics and Transport.
Steve Warburton: Steve Warburton from the TAS Partnership.
Professor White: Peter White, Professor of Public Transport Systems at the University of Westminster, but speaking in a personal capacity.
Q2 Chair: Thank
you. Buses are the most popular form of public transport in relation
to numbers of people using them and journeys made, yet buses are
relatively low profile and don't seem to get the same attention
as other modes of transport. Why do you think that is? Who would
like to give me their opinion on that?
Steve Warburton: My opinion is that it's because the market is so diverse and it's also made up of a series of short journeys for low value. Bad service for something that costs £1.40 has a lower priority than something that costs £264 or whatever the current fare is that you might be railing at paying for a railway fare. The bus market also tends to be seen, although there seem to be some changes, as the province of the less welloff, who are not so articulate in complaining and perhaps don't know who to complain to.
Q3 Chair: Are
there any other views on why this should be?
Nick Richardson: I think the bus industry suffers very much from an image problem. You only have to think of people in their 30s and 40s; their last recollection of a bus was going to school on one. It is the car-only generation and it actually has very little relevance for a lot of people, which is a situation that needs to be turned around.
Professor White: The social status of many bus users is lower than that, say, of rail users and they are less articulate perhaps in expressing their views and interests.
Q4 Mr Leech: Clearly,
there is a distinction between London and the rest of the country
on that image issue, though. Why is it different in London to
the rest of the country? Is it simply that some people have no
choice other than to use the bus in London and, therefore, all
sorts of people from all sorts of backgrounds do, or is it something
different in London?
Professor White: I have looked at the rapid growth in the bus market in London in recent years and it is certainly true that the level of bus use is much higher and probably a slightly higher socio-economic group is attracted, although none the less bus users in London tend to be of lower income than users of the underground, for example. Central London is a rather different case to the rest of London, where clearly you have a higher income group using buses, for example, in connection with rail commuting into the central area and then travelling to their final destination within zone 1.
Q5 Chair: How
does the provision of bus services here compare with that in comparable
countries?
Steve Warburton: There are some major areas where the provision of service compares very well. Some of the major operators such as in South Manchester and Newcastle provide almost as good a level of service as is provided in London.
Q6 Chair: But
what about other countries?
Steve Warburton: Than other countries it is better, I think.
Q7 Chair: Better
elsewhere?
Steve Warburton: No. I think London has a very good bus system.
Q8 Chair: Professor
White, how would you assess this?
Professor White: If we compare with other European countries, the bus system, as such, sometimes does compare quite well. We have a fairly good level of service in small towns and rural areas, compared with France, for example. A lot of the differences in public transport use, if we put bus and rail together, are in the large conurbations, not in London. But if we compare Greater Manchester, the West Midlands and so on with equivalent conurbations elsewhere in Europe, the public transport trip rate per head is relatively low when we put together the bus and rail trips as one indicator.
Q9 Chair: Are
the benefits of bus travel different in urban and rural areas?
Nick Richardson: Very much so. The level of service available varies enormously and with urban bus services you get a much more intensive service and often a much better quality of service. It is more reliable, for example, and, indeed, more affordable. There is a gradation from urban, through suburban to rural, in terms of the offer that is there and the number of people that are willing to use it.
Professor White: Another difference between urban and rural is that there are relatively few adult journeys to work commuting on buses in rural areas. The peak is very much dominated by school travel, but, on the other hand, they do serve a very important role for journey purposes like shopping, personal business, medical appointments and so on.
Q10 Chair: Is
there any hard evidence that buses support economic recovery?
Steve Warburton: We did some work for CPT recently where we were assessing the value of spend by bus passengers and the value of the industry for the economy generally. The consensus was that bus passengers may spend less per trip but they make more shopping trips than people who arrive by car, so their value is probably the same. Our estimate was that the value to the economy was over £4 billion.
Q11 Chair: Do
you have any other views on buses and economic recovery?
Professor White: I was involved in an earlier study of a similar form, which likewise confirmed that buses represent a substantial amount of shopping activity. It is perhaps not so immediately evident because one sees the cars parked in the shopping centre but not the bus as it moves on.
Q12 Chair: Bus
usage has been falling over recent decades, apart from in London,
and there has been a slight increase recently. What do you think
is the reason for that? Is it to do with the deregulated system
outside London or is there some other factor working?
Nick Richardson: There was already some decline before deregulation, which has been exacerbated since, I think it's fair to say. A lot of it derives from an increase in car ownership amongst many people, many groups in society, but also a lot of land use decisions. I am sure you can all imagine the business parks and shopping centres that are relatively poorly served by bus but have large car parks. Is it any wonder that people opt to use cars in those situations?
Q13 Chair: Can
we encourage more people to leave their cars and get on the bus?
Is that the same market or is it a different market?
Professor White: That will depend on the destinations to which people are travelling. Obviously that is most likely to occur where people are travelling into congested town centres where there may be limits on the amount of parking and environmental constraints on the amounts of cars one can accept. In cities like Oxford and Brighton, for example, one sees high levels of bus use, with a combination of some indirect restraint on car use and a positive approach by the operators in marketing their services, improving quality. Of course, Park and Ride would be a clear example of that.
Q14 Chair: How
important is the marketing?
Professor White: It's difficult to quantify exactly but we do know it is a major factor. For example, even in an area where the population and jobs don't change, individuals come and go all the time, so it is necessary for bus operators to remind people of the product they are offering. Companies like Trent Barton, for example, do this quite successfully by using liveries and the image of the service to increase public awareness of the services that they offer.
Q15 Paul Maynard: This
is addressed to the TAS Partnership mainly but I would welcome
other views. I was struck in particular by paragraphs 12.3 and
12.4 of your evidence where you contrasted the decline in post-war
demand and post-war service levels and said that demand has dropped
very sharply but service levels less so. Clearly, those factors
have declined and the cost per passenger has increased. What moral
or lesson, shall we say, do you draw from those figures in terms
of what you expect to see happening in the future and whether
it is predictable and acceptable or not?
Steve Warburton: I would say, in general, that that trend would level out, because there is some evidence that the drop in demand is levelling out already. The cost pressures on the industry are the one thing that really drives the increase in fares now, largely driven by wages, because they are such a big proportion of the industry costs. Until you can get a level of cost controlling, I don't think we are going to get away from the above inflation fare increase.
Q16 Paul Maynard: You
mentioned specifically that Western Greyhound in Cornwall and
Konectbus in Norfolk have been able to drive up passenger levels.
Can you explain how they were able to do that? What steps did
they take that improved levels of ridership?
Steve Warburton: I think the Chair's earlier remark about marketing has a lot to do with it. In the case of Western Greyhound, certainly, they have brought themselves up as the good local bus company with feelers in all fields. To take another example, Norfolk Green in north Norfolk have what should be very unpromising bus territory but they have made a really good success of that company.
Q17 Paul Maynard: It
is a sort of cultural sense almost of soft power rather than hard—
Steve Warburton: There is a feeling that it is part of their own service. With regard to their marketing, if you go to any tourist place in north Norfolk, there will be something from Norfolk Green in the rack somewhere.
Professor White: I also referred to Western Greyhound and Norfolk Green in my memorandum in very much the same terms.
Q18 Mr Leech: Has
the concessionary bus pass—the free bus pass for pensioners—masked
a further decline in bus patronage by increasing the number of
free concessionary journeys, and has that been responsible for
that slight increase in passenger numbers in the last two or three
years?
Nick Richardson: In many cases that is exactly what has happened. The concessionary scheme, you could argue, aims to increase accessibility for many people, or is it in reality increasing mobility for the minority who would be using it anyway? They may make more trips rather than new entrants making new trips.
Q19 Chair: Has
any detailed research been done to distinguish those two users?
Professor White: I could comment on that point. I have referred in my memorandum to some work that was done in conjunction with one of my students in a case study, where we found that one feature of introducing the free concessionary travel was not only that the people travelling on half fare now travel more often, as one would expect, but quite a lot of people in the eligible age group took up a pass for the first time. It seems to have increased awareness of the availability of bus services in a group who may not have used them very much before.
Q20 Mr Leech: Given
that the bus operators are not supposed to make any money—it
is supposed to be cost neutral to the bus operators—that
therefore means that the cost to other passengers who are paying
other fares is significantly increasing as a direct result of
the free bus travel. Am I right to make that assumption?
Steve Warburton: It can be, but that's indirect. There was one case of Rossendale Transport in Lancashire who expressly put in a 10p surcharge on their normal passengers when Lancashire reduced the rate of reimbursement, so there is a correlation. But, generally, in terms of adult passengers, some of the larger companies specifically make reference to recording nonconcessionary passengers so that they can report increases on that front as well, and there have been some.
Q21 Mr Leech: I
think, politically, all parties agree that the free bus pass is
generally a good thing, but from your perspective would you say
that it provides value for money?
Nick Richardson: One of the major difficulties is that the proportion of eligible people will be increasing into the future, so if it is regarded as affordable now, that may be very different in a few years' time.
Q22 Mr Leech: Given
the level of funding that goes into that scheme, could that money
being spent in bus services in a different way be spent better
and more efficiently in creating a better bus service?
Steve Warburton: You could argue that, if there is a chance that there is a large reduction in service provision but you still have a free pass, it is better not to have a free pass but have a service, which is definitely the scenario we could be facing in the near future. One of the things we concluded is that in its current form the scheme isn't sustainable without some additional finance or contribution by the users.
Q23 Mr Leech: Have
you done any work on the additional cost to the scheme in coming
years?
Steve Warburton: We have done some. We have measured that the cost of the scheme is lower than the value to the passengers in terms of benefit, so we contend it is a good thing to have socially.
Q24 Steve Baker: What
could the Government do to reduce bus operators' costs?
Nick Richardson: One of the big items for a bus operator is fuel, and that is always going to be the case. Changes to the amount that the operators pay makes a significant impact, which is often only recoverable through the fare box.
Professor White: The other point one might add is that most of the costs of running a bus service vary with time. You pay your staff by the hour and you have annual depreciation of leasing charges for vehicles, for example. The most effective way of reducing bus operating costs, assuming wage levels don't change, is to make them go faster. Even a very modest increase in speed, from, say, 18 to 20 km an hour in an urban area, could give quite substantial financial savings to an operator and that could be achieved, for example, by bus priority measures and also by ticketing systems which speed up boarding time at stops.
Q25 Steve Baker: You
mentioned bus priority measures. Is there any research on the
commercial value of that legally privileged access to road space
that is priority access through bus lanes and so on? What is the
value of that privileged access to bus operators?
Professor White: There are wellestablished rules for evaluating bus priority that have been followed for many years. We evaluate both the financial gain in terms of reduced operating costs but also, more importantly, the time savings to the bus users in the vehicle and any offsetting time losses to other road users. The main element, in fact, is the economic gains and losses in terms of time savings to users. The operating cost saving is important, but it is a relatively small part of the economic evaluation of a bus priority system.
Q26 Steve Baker: The
key thing here is to try and assess the indirectly known costs—the
costs which you can't measure through the price mechanism.
Professor White: Yes, but there are wellestablished values of time used in economic evaluation of transport schemes, which can be applied in this case.
Q27 Kwasi Kwarteng: How
likely is it, do you think, that people will stop using cars and
move on to buses?
Nick Richardson: This is always the crunch issue because the growth in the bus market is dependent on a transfer from car use. You used the word earlier, Chair, of "encouraging" people away from car use, and over the years policies at all levels have very much talked about encouraging a shift to bus. What would be helpful is if, instead of encouraging, we were facilitating that shift to bus. That does mean addressing some of the issues that make people drive. I have mentioned land use decisions, but there is also parking availability and pricing. These are fundamental issues in terms of how people make their travel choices.
Q28 Kwasi Kwarteng: I
would like to hear from the rest of the panel on what their view
is on that.
Professor White: I think there are two factors. One is that there is some underlying growth in car ownership. For example, it may be that some of the recent growth in concessionary travel by those aged 60 upwards is reversed as further people coming into that age group have a higher car ownership than traditionally people did in that sector. On the other hand, it is very interesting to note in London that car ownership per head has increased very little for the last 15 years. What you can also see in London is quite a substantial growth of car clubs; that is to say people are happy to use public transport most of the time but hire a car for the occasional journey for which it would not be convenient. If we maybe move away from this idea of some intrinsic benefit of car ownership to seeing the car as more of a utility, people might be more selective and perhaps willing to hire cars when required rather than necessarily thinking in terms of, say, having a second car in the household.
Steve Warburton: We have seen some development of the principle which park and ride schemes use as well, in that using your car to get to a bus to go into a city centre has switched, to a degree, to using the bus for the whole journey, which is no bad thing. The number of car owners who make bus journeys is now higher than it was.
Q29 Julian Sturdy:
You touched on concessionary travel and the impact it's having
on operators through the growth that has been developed through
the free bus pass. Mr Leech has already touched on the fact that
it has support from all political parties, but, having regard
to what is happening with concessionary travel and the impact
it is having, do you think rural areas are suffering more than
urban areas because of the knockon consequences?
Steve Warburton: There are two ways I think that's true. The main way is because of the proportion of the fare that is refunded to the bus operator. A proportion of the high fare for a long rural journey means there is a bigger gap between a normal fare and the fare that they would actually get as a result of this. I am sure Professor White will agree that, compared to the early 1980s, for example, there are many rural areas that have better bus services than they have had in years. They are very dependent on public funding, and if that drains away then the impacts on the rural areas are bound to be higher, but we must not overlook the impact on the smaller urban places as well because they often get overlooked.
Professor White: I think it is true to say that the free travel probably had a bigger impact on growth in bus use in rural areas, partly because fares initially were somewhat higher. The problem is that, if local authorities have constrained budgets and you have a mandatory responsibility to fund free concessionary travel, you may squeeze even further the budget for tendered services. So, as Mr. Warburton said, in fact we've had a marked improvement in rural bus service levels in recent years, which the National Travel Survey confirms. There is a danger of that being reversed with some fairly drastic cuts in support for tendered services.
Nick Richardson: That has some quite deep consequences as well in terms of which sectors of the community are trying to travel and for what purpose. The concessionary scheme at the moment obviously targets people who are eligible by age or disability, but there is also very much a need for people of younger age groups, who are perhaps job seeking who need that accessibility, and it is quite possible that either they can't access bus services because they don't exist or because they are unaffordable. That has lots of implications in terms of where people live and work and the structure of some of these rural communities.
Q30 Chair: What
is the evidence on the impact on people seeking work?
Nick Richardson: At the moment I think it is fair to say it is a bit difficult to tell because we haven't had the fundamental changes that might well be round the corner. But I know of instances, for example, in South Dorset, where people in rural communities, younger age groups, tend to move towards the larger urban centres because that's where their work is and they have no means of getting there other than a car, and if they don't have a car they inevitably move.
Q31 Julie Hilling:
Mine is a little bit of a chicken and egg question. You talked
about some services that are very successful. London is an example
of this—I certainly park my car here if I drive down, and
then I don't use it again until I go home—but you also talked
about South Manchester and a couple of other places. What is it
that is fundamental about people using a bus and having a very
regular good service and people not using a bus and perhaps having
a poor service?
Steve Warburton: In a way, success breeds success. We have found that those who have taken the plunge and simplified their services on higher frequencies tend to have built on those initial frequencies. What was a mishmash of hourly buses going different ways became a 15-minute doing the same thing, growing to a 10-minute doing the same thing. If you look at the Manchester-Stockport corridor, it's every three or four minutes now on the 192, and that's a London frequency.
Nick Richardson: There is also some market segmentation, particularly in South Manchester, where you have the cheap and cheerful bus offering running against others of generally higher quality. In that particular instance, it's one operator operating under two brands for different markets, which is a most peculiar situation. In one sense it's competing against itself, but on the other hand it's also generating a culture of bus use.
Professor White: As the other witnesses have indicated, there are benefits in concentrating high-quality, high-frequency services on trunk corridors, which also makes it much easier for the passenger to understand the network that is being provided. We also find that, once you run a headway better than about every 10 minutes, people no longer need to consult a timetable; they just turn up and get the next bus. That, again, makes the service easier to understand and use.
Q32 Julie Hilling:
What then needs to be done to encourage people to run a more frequent
service?
Nick Richardson: A key issue for most of the users is reliability. Is it going to turn up when they expect it to turn up? One of the key causes of unreliability is traffic congestion. So we come back to the issue of whether you can reallocate road space or put in other measures that make the bus turn up when it should. It is this idea of facilitating bus improvements rather than encouraging them. Coupled with that is punctuality, and a key element of that is information. Are people getting the information about the services they need? Do they understand it? Is it in the right format and is it available when they are making their travel choices?
Q33 Chair: Are
aspects such as reliability more important than fares?
Nick Richardson:
I think it's fair to say that it depends. People will pay for
the product if it does what they think it's going to do because
they value it as providing the service they need. The thing about
buses, certainly in my experience, is that it takes a combination
of a whole range of things to make it work. There is no one particular
thing. Yes, it is marketing, information and reliability, and
a host of other things as well. All those in combination produce
the quality product that generates the growth, and too often that
is thwarted by unreliability.
Q34 Mr Leech: Going
back briefly to fuel prices, you said that was obviously impacting
the industry. My understanding is that a lot of operators bulk
buy in advance so they get different prices. They may get it at
a good level or they may get it at a bad level, depending on when
they bought it. But where is the balance between that and the
cost to motorists, persuading motorists out of their cars and
on to the buses?
Professor White: If motorists look directly at petrol costs as their main perceived cost of travel, that can be quite significant in modal choice, whereas it is a comparatively smaller share of the bus fare, around 10%. So an increase in fuel prices should relatively assist buses if it achieves the modal transfer from car, even if bus operating costs as such are increased.
Q35 Mr Leech: Would
you argue then that higher fuel prices are good for the bus industry
as opposed to bad for the bus industry?
Professor White: That depends on the cross-elasticity of demand with respect to car fuel price, but yes, that could be a significant effect.
Steve Warburton: Could I just add to that? If you were a bus company that has been used to getting 20% of your fuel duty rebated but the level of rebate is frozen, you end up with very significant fuel price increases for bus operators above what motorists experience, because the proportion of fuel that you are paying for has increased by over 50% in about the last seven or eight years.
Q36 Paul Maynard: Continuing
on the issue of fuel and in particular BSOG, there were some interesting
parts of your evidence where there was a suggestion that BSOG
favoured larger operators over smaller operators who had a more
fragile economic base. In its complexity, BSOG, focusing on things
like fuel efficiency, having smart card machines, information
and so on, was almost distorting the market. How can BSOG be improved,
and are there any ways in which it could be locally assigned,
i.e. there will be parts of the country where some things matter
more than others perhaps? How could BSOG be made more local in
what it can incentivise?
Nick Richardson: One of the difficulties with BSOG in its various forms has always been ease of administration with what is a very fragmented business in many ways. I think it might be quite difficult to have more local inputs there. But, as you rightly say, changes to encourage people to adopt smart card ticketing, for example, incur quite a considerable expense for an operator and there is a danger that those with the bulk buying power become more distant from those who, generally, are relatively small.
Steve Warburton: It is the recent addons to BSOG that have added the complications. The basic principle of BSOG that you get a rebate per mile operated was a system that was very fair and easy to administer. The one downside was that perhaps it rewarded poor fuel consumption, because that was taken into account, but a simple move to a rebate per mile operated would be quite fair, because you would get more miles in a rural area and more rebate.
Professor White: You should also bear in mind that, compared with bidding for a tendered service, the BSOG claim procedure may be relatively simple for a small operator. One effect of BSOG, by lowering costs, is to make some services commercially viable that would otherwise go through the tendering process.
Q37 Steve Baker: I
am just thinking about road charging, which I know the Government
has ruled out. To be absolutely clear, we know it has ruled out
road charging. We have talked about fuel and the cost of fuel
to bus operators, and it is obvious it would be a major cost.
If one were to have substantially lower fuel taxes but introduced
road pricing, how do you think that would impact on bus operators?
If I may, I will give you a steer while you think about it. It
just strikes me that a full bus is highly likely to outbid a single
occupancy car for scarce road space during rush hour. It seems
to me that perhaps road pricing is good for bus operators or potentially
good for bus operators. Is that something the industry has considered?
Steve Warburton: I would totally agree. One of the main things that sways the balance of car versus bus is cost. If you add that significant cost to the car journey, the balance is tipped a little. The same principle could apply to city centre parking. If there is a high premium on city centre parking, such as there is in somewhere like Nottingham, and with the workplace parking levy coming in there, that is likely to have the same balancing effect.
Professor White: If revenue from fuel tax effectively were replaced by income from road user charging, that would make the charging system far more selective, with higher charges where congestion occurs. That would clearly be to the benefit of buses in congested urban areas. On the other hand, in rural areas, of course, buses might be in a less favourable position as the direct perceived costs of running cars would be lower if some of the fuel tax revenue from cars had been replaced by income from road user charging.
Q38 Chair: This
is not an inquiry into road pricing, I emphasise, but quick comments
may be helpful to us.
Nick Richardson: I would certainly concur with the views expressed so far. It may well be in the dim and distant future.
Q39 Chair: What
is the overall impact of the spending review going to be in relation
to transport? Is it going to have a drastic effect on services,
and who is going to suffer the most? Is it possible to make predictions
at this stage?
Nick Richardson: It is difficult to make predictions, quite clearly. But, yes, if you have less money to distribute, particularly for what are basically more marginal services, it is quite possible that many of those will disappear, because there is no alternative funding stream for them. That is a real danger, because it undermines not only those services at the margin but commercial services also. You can imagine a situation, for example, where you want to use the bus to go to work and come back in the evening after six o'clock, but there is no bus after six, and the net result of that is you don't use the bus at all. There could be some quite severe ramifications.
Q40 Chair: Is
that view generally shared? The Department for Transport says
that a reduction in BSOG will result in an overall 1% change in
fare levels and services and a 2% change in rural areas. It's
not just BSOG, is it? It is a combined effect.
Steve Warburton: The BSOG thing is fair enough. If it was only the change in BSOG, the world could probably live with it by means of some adjustment to service and some increase in fare. I would not query the 1% to 2% for that. The really dangerous one is the change in the way concessionary fares are paid for, which is going to lead to some significant reductions in payments to operators. The thing about the concessionary fare payments is that they are across the board, it's the commercial network, tendered network, everything. We are working for one large shire county in East Anglia which is reducing its payment level by 33%, and that's not a level of reduction of payment that operators can tolerate.
Q41 Chair: Can
increased bus fares compensate for a lack of income or a reduction
of income?
Nick Richardson: In many cases they can, but to the detriment of attracting new users, and indeed putting off some current users. There is no standard fare across the country, and some places are just prohibitively expensive.
Professor White: As I mentioned in my evidence, the typical price elasticity is minus 0.4, which means that an operator normally will get a net gain in revenue if they increase prices, albeit at the loss of some ridership.
Q42 Chair: Should
entitlement to concessionary travel be extended to community transport?
Professor White: Yes, it would be logical if one argues that the purpose is to benefit the types of user who require such services.
Steve Warburton: Many local authorities do extend the scheme to cover community transport schemes, but it's not part of the mandatory scheme.
Q43 Paul Maynard: On
that point, clearly there is a national set of guidelines for
the concessionary fares scheme. Some councils choose to go over
and above what is mandated nationally, either by extending it
to community transport or adjusting the hours. How can the national
scheme be improved to make it more locally responsive? I am thinking
of my own constituency, Blackpool, where we have high numbers
of tourists coming in who aren't local and there are always concerns
that we are not getting the proper rebate that we should for the
amount of mileage. Is there any way that the concessionary scheme
can be tweaked so that it is more locally responsive and then
councils can make better decisions, as it were, over how they
spend that money, or does it need to be nationally mandated or
else it will just fritter away?
Professor White: One thing that would help is more comprehensive use of smart card technology, because at the moment we have a national entitlement within England but relatively poor data in some cases on the use by nonresidents in places such as Blackpool, even though many of the passes have been issued as smart cards. If that technology comes into wider use, we should at least improve the statistics to establish how many trips have been made by residents local to the area and how many by visitors. But if you then attempt to introduce a lot more local variation, that would be very difficult for operators who already have problems where they cross boundaries of different authorities. One or two may give the concession in the morning peak and the other does not. So there are some operational feasibility issues as to the degree of complexity you could have.
Q44 Paul Maynard: On
both concessionary fares and BSOG, you appear to be arguing that
the virtues lie in simplicity and that that is a price we therefore
have to pay for the local kinks in the system, as it were. Would
that be a fair assessment?
Nick Richardson: That is generally the case, yes.
Q45 Chair: You
are all nodding. Does that mean yes, because we can't write nods
down?
Witnesses: Yes.
Q46 Paul Maynard: Finally,
where we have a socially necessary route—define that how
you want—which is uneconomic, what in your view is the best
way to try to sustain that route? Who should be paying and how?
Professor White: Under the present system it comes out of the budget of the local authority, and it probably would be sensible to continue making that decision at a local level. One underlying problem, which also arises in the case of transport investment, is a very high dependence of local government on central government grants. We don't have, for example, some of the local sources of tax revenue one sees in other European countries, like the Versement Transport in France, which enable local financial objectives to be set and money to be raised to provide, for example, a better public transport system.
Q47 Julian Sturdy: Just
going back to community transport, what do you see as the role
of community transport and its role in delivering greater accessibility
to areas where the bus services are quite poor at the moment?
Then, following on from that, do you think that existing operators
see community transport as a threat to them going forward as well?
Nick Richardson: On your last point, no, I don't think they do see it as a threat. They see it as a complementary service. But it's worth remembering with community transport that they too require quite a substantial subsidy. In most situations that's always going to be the case. They provide a very valuable service. Various schemes have attempted to attract a very broad audience rather than just elderly or disabled people, with mixed results, I think it is fair to say. It is a different type of service but a very valuable one none the less.
Professor White: You need to distinguish between community transport in the sense of services provided by volunteers, where you are dependent on a pool of local volunteers which may need to be replenished continuously over time to sustain that service, and other services which may involve use of paid staff, such as demand responsive minibus services which can incur rather high costs per trip, albeit providing very useful benefits to the local community.
Steve Warburton: I think community transport and bus services are very much different beasts, and there isn't a lot of crossover between the organisations that do one or the other. There are a handful, probably, in the entire country who dabble in proper bus operations, if you could call it that. I don't think there is an army of willing community transport people wanting to take on bus services out there.
Q48 Paul Maynard: Looking
forward, given what you have just said, do you think it would
be helpful to try to redefine bus provision and incorporate all
other forms of publicly funded transport by local councils, i.e.
not just community transport but post buses perhaps or the work
done by hospitals transporting people around the local area? There
is clearly an awful lot of publicly funded transport going on,
moving people around an area. Do you think that, if we are going
to see the impacts you have suggested in terms of levels of bus
services in the future, we need a more radical reappraisal of
what transport is being provided at a local level out of the public
purse?
Steve Warburton: I would fully agree. One of my colleagues specialises in doing precisely this—working with local authorities to pull together all the different strands of social services transport, nonemergency patient transport by the ambulance service, volunteer-run things, the whole gamut. Some of the local authorities are very good at doing them and others all operate in little, isolated spheres.
Q49 Paul Maynard: Would
you say there is an awful lot of duplication going on?
Steve Warburton: There can be.
Nick Richardson: There is a certain amount of an awful lot of people all running services for their own requirements. One of the remits of local authorities is to try and coordinate transport at that sort of level, and, as Mr Warburton says, with quite a lot of success and savings. But you also have to remember that, for example, those services provided by the NHS have specific requirements in terms of the times of journeys and so on and so forth. It is very circumstantial, but yes, I think there is significant room for improvement.
Q50 Julie Hilling: I
want to push more on what needs to be done because buses are a
public service as well as being public transport. Hopefully, all
of us will reach a point in our lives where we need to use buses,
and certainly at the start of our lives we need to use buses.
There is an issue about interconnectivity and you have said before
that some bus companies have been more successful. What is it
that the Government, local authorities and operators should be
doing to ensure that we are not going to lose services during
this period of time now and that we have better bus services rather
than worse ones?
Chair: What can the various
participants do to make things better?
Professor White: An element of stability in funding, particularly for changing services in rural areas, is important. Another, which the Local Transport Act 2008 has helped with, is removing some of the barriers which competition policy has created to sensible cooperation between operators. Particularly in the early phase of deregulation, it was quite difficult to have joint ticketing and timetabling. That has now eased, but there is scope for encouraging more interoperator cooperation in some cases so that we can promote a single network more effectively to the user. You can now see this occurring in some respects in Oxford under the quality partnership there, for example.
Q51 Chair: Are
quality partnerships important in improving the situation?
Nick Richardson: Very much so. Partnership works. It is a complex business, but what you need is commitment from all parties and that is local authorities acting as the highway authority and, clearly, operators and other players as well. The way to take partnership forward is to have a coordinated programme of improvements because everyone has the same objective. They want more people on the buses and they want better services. They have a common goal, but negotiating all the hurdles to achieve that is quite an intricate process.
Q52 Chair: Mr
Warburton, do you have any thoughts about that?
Steve Warburton: Probably, if you asked a lot of bus operators, they would like to be left alone more. We have had innumerable OFT investigations in the industry, the OFT investigation into the whole industry and now the Competition Commission investigation into the whole industry.
Q53 Chair: Ms
Hilling's question isn't, "What would any individual party
in provision of transport like?" It is what should be done
to make the best of reduced funding, in the interests of the public.
Steve Warburton: Partly, that goes along the same avenue that there is this sort of sword hanging over bus operators about doing things which would benefit the passengers but would be seen as anti-competitive. We have worked with local authorities that want to do that as well, but they have run scared of the competition authorities.
Q54 Chair: Yes,
but what should be done? We are not asking you how each individual
participant sees things. The question is: what can be done by
the various parties providing public transport to make the best
use of reduced resources?
Steve Warburton: I think partnership working is very important. There are some very successful ones which, above the ones that are usually quoted which are the Brightons and Oxfords of this world, have done some useful things.
Q55 Chair: So
partnership working?
Steve Warburton: Yes.
Q56 Julie Hilling: When
you talk about the sword of Damocles, what do you mean?
Steve Warburton: Because the penalties for infringing competition law can be so severe, it acts as a stifling aspect on a lot of things, such as sharing frequencies or perhaps acquiring a smaller operator that may not be worthwhile in the end because you have this investigation that costs a fortune and you may have to divest and that sort of thing.
Professor White: It may inhibit some aspects of smart card ticketing technology, not the period travel card but pay as you go systems, equivalent to the Oyster Pay as You Go in London, where you need some harmonisation perhaps of fare structures between operators in the same area for a card to be easily interavailable. Sometimes competition policy makes that rather complicated for the operators to do.
Q57 Julie Hilling:
You are saying that operators should not be competing. They should
be working together to plan a bus service across an area.
Nick Richardson: Indeed. That is very much the case. In the context in which operators work there are an awful lot of challenges and they need to pool resources to achieve improvements. Ticketing is one. Apart from the actual fares charged, you have incompatible systems, and that is gradually working through to a more positive outcome. There is joint information and that sort of thing. Some of them are easier than others but they all need to happen.
Q58 Julie Hilling: Therefore,
what is the barrier then to quality contracts and to having that
as competition? We have a device now to say, "Okay, you can
have quality contracts". Why are we not doing them?
Nick Richardson: Operators tend to think in the very short term and recent events have bumped them into a longer-term view. They realise that, as you say, they are not competing against each other; they are competing against car users by and large. That is the share of the market that they need to tap into. But with that realisation comes a whole host of practical difficulties, partly to do with the regulation and competition issues. Cooperation doesn't come easy to some of them and there is very much a role there for local authorities to try and guide them through the process. Everyone is in the same boat, as I say. They all have the same objective, but it often takes many years to work through the system and that ought to be accelerated and encouraged.
Q59 Kwasi Kwarteng: On
the issue of cars and buses, do you think there is any way in
which the bus companies can aggressively market themselves in
order to attract car users? My colleague asked you about coordination,
and you said that you felt the bus companies should be more coordinated
in terms of planning routes. At what level do you think this planning
should take place? Is that a Government thing or a local government
thing, or is it something that they should be planning within
themselves?
Nick Richardson: On your latter point, yes, it is very much a local authority scale of planning, although having said that, of course, you often end up involving more than one local authority, particularly with buses that go from smaller towns to a larger urban area, for example. Hence, you end up with a dose of politics in there which can be very difficult.
Q60 Chair: What
does that mean?
Nick Richardson: For example, in the West Midlands you have one authority that has been busy taking out bus lanes while others have been putting them in.
Q61 Chair: You
mean different decisions are made by different authorities?
Nick Richardson: Yes.
Chair: That is a clearer
way of expressing what you meant.
Nick Richardson: Yes, and a different political complexion with a different view towards how you operate buses.
Q62 Chair: And
independent integrated transport authorities?
Nick Richardson: They tend to be more successful in trying to coordinate things. Again, there are no guarantees and, of course, they only apply in six areas. There are plenty of large conurbations where that framework simply isn't in place.
Coming back to your first question, on what we can do to facilitate a shift from car use, marketing works. It tends to be relatively short-term in impact, though, and you have to keep renewing it and coming up with new ideas. But there may well be other opportunities for operators, for example, running their own park and ride site rather than a local authority and that sort of thing. It is teasing out what car users want out of a bus operation. I think, historically, many bus operators simply haven't asked the question.
Q63 Kwasi Kwarteng: Can
I ask a followup? It seems to me from your answers that
you envisage a big role for local authorities in this area, and
I just want you to expand a bit more on that. What do you see
as the function of the local authority?
Nick Richardson: A lot of it boils down to local authorities in the fact that they are the highway authority. We have spoken about bus priority measures; they are the people who implement them. You have to work handinhand with them to promote that. They take that overall view on coordination so that they can stand back and see the slightly bigger picture and also act as a useful role for consultation, because channelling the views of the users and the various other sectors of the communities and enabling change is important.
Q64 Steve Baker: Following
up from an earlier remark, heaven forbid that politicians should
be considered unhelpful in any way to transport policy. But, given
the experience of the last 100 years, the remarks you made earlier
about the sword of Damocles and the levels of intervention in
bus operation today, what reasons are there to believe that it's
possible to come up with a rational transport plan at any level?
Nick Richardson: We all share an impending problem. We all know about traffic congestion, yet we blame it on everyone else. We all know about air quality issues; we all know about peak oil. What are we going to do there? There are some very significant things just around the corner, and one way of addressing that and a whole host of social and environmental issues is promoting public transport in a positive and forthright way.
Q65 Chair: Are
there any other views on rational transport policy?
Professor White: The Local Transport Plan framework also provides the means by which local authorities can address these issues in a comprehensive way, including bus priorities, parking policy, highway construction and so on.
Q66 Steve Baker: If
I may, I think the imperative is absolutely clear. I think the
question is: should we, based on our experience and current circumstances,
increase the levels of intervention in bus operation and transport
generally, or should we have a much more open and dynamic system
for enabling people to make rational choices about how they travel?
Nick Richardson: Certainly my view is that there ought to be more intervention. Of course, the difficulty is that you upset an awful lot of people through doing that and there is a balance to be struck, quite clearly. The lessons of history over the past 20 or 30 years have suggested that maybe we are not quite heading in the right direction.
Q67 Steve Baker: If
they won't make the right choices, just force them.
Nick Richardson: No. One of the things about transport is that you can't force anyone to do anything. What you want to do, basically, is to facilitate the means through which they can make rational choices. If people are volunteering to do it, they will be an awful lot happier.
Chair: Are there any different
views to that? No. Mr Maynard?
Q68 Paul Maynard: Part
of our inquiry is looking at the adequacy or otherwise of the
consultation processes. Do you think local areas are consulting
adequately or not with a view to the current set of changes that
is going on?
Steve Warburton: I think there are as many areas of consulting or not as you could possibly come up with.
Q69 Chair: But
what is actually happening?
Steve Warburton: We are aware of examples of local authorities just deciding at committee level that services are not going to be supported in the evening or Sundays, without any public consultation. We have others that consult the public on what the options are for certain patterns of service or replacing them. The same equally applies to operators. Some are very good at consulting their passengers if they want to change something and some just go ahead and do it.
Q70 Chair: So
it is a mixed bag?
Steve Warburton: Very much so.
Q71 Paul Maynard: Is
Passenger Focus playing the role that you might like them to play
or do you think they are the people to play it in managing this
period of change?
Chair: Does anybody have
any views on Passenger Focus's role?
Professor White: Yes. I think they play a useful role, particularly in identifying the relative priorities which bus users attach to differing aspects of service quality, reliability, price and so on. It is also worth bearing in mind in terms of consultation that the other effective thing to do when you change a bus network is to monitor the changes in the levels of demand and usage which follow. After all, one feature of bus networks is that they are relatively flexible. It is not like consulting on some piece of infrastructure that is going to be unchanged for 50 or 60 years. As you change networks, by monitoring the impact of that change on users, you can then be responsive where problems arise, for example.
Q72 Chair: Does
Passenger Focus have sufficient powers to be a bus watchdog for
the public?
Professor White: It certainly provides a welcome balance to the previous emphasis, which was very strongly on the interests of rail users, who in any case are more vocal and articulate. But, also, at the local level you do need bus users to stand up for themselves a little more perhaps.
Q73 Paul Maynard: In
Blackpool, we have had regular focus on whether individual routes
should be retained or not in periodic consultations. Do you not
think it would be better at a particular time of change if we
have wider consultations that focus on the networks that people
want to see rather than this gradual erosion of services and an
argument every few months over, "Why has this number bus
disappeared?" Would that not be a more sensible approach
at this stage?
Nick Richardson: I think that would be the case. One of the difficulties with consultations of the sort you mentioned is that it is very difficult to change the outcomes. It is all about taking things away and reshaping, rather than looking at the bigger picture. One of the features often in transport consultation is that it is an information exercise rather than an engagement exercise, which is generally far more effective.
Chair: Thank you, gentlemen,
for coming and answering our questions.
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