Examination of Witnesses (Questions 74-105)
Q74 Chair: Good
morning, gentlemen, and welcome to the Transport Select Committee.
Could you give your name and the organisation you represent, please,
for our records? I will start at the end here.
Stephen Morris: I am Stephen Morris from Bus Users UK.
Stephen Joseph: Stephen Joseph, Chief Executive, Campaign for Better Transport.
David Sidebottom: David Sidebottom, Passenger Focus.
Greg Lewis: Greg Lewis, Age UK.
Q75 Chair: Thank
you very much. Where would you say that passengers and the public
rank bus services in relation to other public services? Are they
seen as something important? Would anyone like to comment?
David Sidebottom: I think so. We undertook some research ourselves in terms of passenger satisfaction, and levels of passenger satisfaction with bus services are extremely high and I think pleasantly surprising compared to some of the previous ones we had done on rail. Also, there has been some research undertaken for rural communities and it is placing passenger transport as a very high priority, particularly amongst rural communities. 28% of respondents felt that, in terms of things improving, public transport was one of the key priorities for improvement at a rural level.
Greg Lewis: The survey that Passenger Focus undertook also revealed that 39% of older bus pass holders made a greater number of local journeys by bus than before they obtained their passes. It was a very useful piece of research from our perspective as well and reiterated the fact that free local bus travel is a lifeline for many older people and is very highly valued by them.
Stephen Joseph: In the local consultations that some local authorities have been doing about the kinds of cuts people want to make and what choices they want to make, buses have come out as one of the top things people want to protect. There is some good evidence emerging that that is one of the things that people are really worried about and we are starting to see a lot of campaigning and so on going on around the maintenance of bus services in some areas.
Stephen Morris: There is a substantial sector of society that don't have access to cars for reasons of age, disability, etcetera. For those people, the bus service is just as vital as any other public service. If you live in a particular place you expect to have a postal delivery, mains electricity, gas, water, etcetera, and the bus service is just as vital as those services to enable you to access all sorts of opportunities, such as retail, work and education opportunities. The big difference, of course, is that the bus service does tend to be expendable and can be removed almost without any notice, unlike other similar services.
Q76 Chair: The
spending review is likely to have a significant impact on bus
services. Is there any particular aspect of the spending review
that you think will be more harmful than others and who is going
to be most affected by the likely cuts?
Stephen Joseph: Shall I start on that? In common with some of the comments made by the previous witnesses in the previous session, it is no one cut that is causing the problem. It is the combination of cuts. So we have seen a focus and the Committee rightly focuses on the Bus Service Operators Grant. But we are also seeing general cuts in revenue support for local authorities which are feeding through to tendered bus services and, also, the impact of concessionary fares changes. There is the change of going to transport authorities rather than district councils and the way that's changing. Also, there is the formula being used to reimburse local authorities and, in turn, the guidance on reimbursing bus operators. All of those are having an impact on bus operations and the combination is leading to some significant reductions in various areas.
David Sidebottom: It is also worth saying that the immediate threat, I think, is the 28% reduction in local authority grants and mentioning the work we are doing to write to all local authorities across the country to gather the information about what is happening in terms of cuts and how that is going to affect services being put in doubt, reduced or removed. But, also, we are finding in recent times as well that authorities are looking at saving some money on the provision of information, particularly at bus stops and where there are larger bus stations, the sort of ticket office facility. That, again, goes against the flow of trying to encourage people who don't use buses to find the kind of easily accessible information to make an informed choice about, "I will catch this bus to this destination at this time." That is the kind of consequence of a longer-term decision.
Greg Lewis: I would agree with that and say it is a combination of various cuts in the grants that affect bus provision. Our particular concern is the disproportionate effect that we anticipate it will have on bus travel for older people in rural areas, not least because of the fact that a large percentage of pensioner households in rural areas don't tend to have access to a car and therefore there is the impact that it will have on them. We would very much like to see a rural premium being taken into account when the provision of bus services in rural areas is considered.
Q77 Mr Leech: I
think you were all sitting in the audience when we had our previous
panel and I accepted that all political parties were in support
of the free bus passes for pensioners and disabled people. But
I asked a question, and I didn't really get an answer, as to whether
that £1 billion could be spent better than on a free bus
pass. Do any of the panel think that there is a way in which that
£1 billion could be spent better to improve bus services
without losing the sort of services from which a lot of elderly
and disabled people have clearly benefited?
Chair: Mr Lewis, do you
have any thoughts on this?
Greg Lewis: I think it is a very difficult question. I think the problem with the current system is its complexity. The funding arrangements are extremely complex; I struggle myself to understand them. The way bus companies are compensated currently by the Act provides a service whereby they shouldn't make any money out of the scheme, which obviously would be correct. The concern for us, I suppose, is that, if bus companies feel they are not being remunerated in a way that makes providing those services cost-effective for them, they will simply withdraw them. Therefore, a balance has to be struck between ensuring that bus operators can make a profit and run these services and provision of these services, particularly, as I said, in rural areas, but also in some of the smaller urban areas where these services are relied on particularly by older and disabled people. So I do think it is a balancing act. I think it is very difficult to encapsulate simply where those administrative changes should be made, although we support the Government's aims in trying to simplify the administrative arrangements as they currently stand.
David Sidebottom: The work we did talking to concessionary fare passengers was published in 2009. Clearly, it was a very popular scheme and people have made an informed choice by leaving their car behind. There is some evidence in modal shift, so there is some benefit in the scheme. If additional money was to be put back into the bus industry, whether it came from concessionary fares or elsewhere, there is the issue now of those very marginally profitable routes that may exist on the edge of town or rural services, if run commercially, which may be tipped into being unviable and there may not be the local authority spending there to pick up those tendered services. So, if money was to be redirected in, it would be better for a passenger to have a service than have a bus pass. The challenge here is that many passengers in the immediate term will have a bus pass but no service, so maybe some funding allocation might be something to look at.
Stephen Morris: Certainly, quite a lot of the people we talked to at our bus users surgeries suggest that they would be quite happy to pay a flat fare to travel on the bus, say, 50p, to ensure that they still have a bus service, rather than to see the bus service disappear because of the cost of the concessionary fares system.
Q78 Chair: How
extensive is your research on that?
Stephen Morris: We do about 20 surgeries a year in England in different locations around the country. They are typically attended by about 150 people. Out of those, we probably get that comment 10 or 15 times at each surgery. It is not hugely comprehensive, but we do meet ordinary people in the street rather than people who have specifically come out to go to a meeting.
Q79 Chair: Mr
Lewis, in your evidence, though, you talk about the value that
people attach to the free pass. From some of the evidence, and
certainly many of the comments submitted, it seems that funding
free concessionary fares is emerging as a problem rather than
something beneficial. Is that something that would be a concern
to you?
Greg Lewis: It would be a concern to us if there was any move to alter the universal nature of the bus concession. We have always opposed the idea of the concession, for example, being means-tested. Because of the amount of people we think potentially would be taken out of the system as a result of that, and the administrative cost of means testing, we don't think it is a viable option. You won't be surprised to hear me say that. We think that the bus concession has been a great success. We think it is very, very popular with older people.
I would agree that there is an opportunity here to do more research, and Age UK is about to try and embark on some research to find out exactly how much use is made of the bus pass by individual older people and disabled people, because I think there is some suggestion that it is a small number of older people making a large number of trips. I think that information would be very helpful.
Q80 Mr Leech: Is
there much evidence that the free pass has given access to people
who were not accessing bus services before, though?
Greg Lewis: There is evidence that there has been a high takeup of the bus pass. That may not necessarily be the same thing and it comes back to getting the data. Some of the discussion prior to this session was on the use of the smart cards, and, undoubtedly, where smart cards have been introduced, the data that has been obtained from that and the use of the bus pass amongst older people has been very useful. So we are looking at that quite closely now because, clearly, we want to be able to demonstrate value for money of the bus pass and we clearly think the social benefits and the services that it provides to older people and access for them to local services is absolutely vital. I think it's early days. I would not want to be in a position to suggest that the bus concessions should be changed now or the universal nature of them should be changed until that research has been done and we can get the data to examine more closely how these bus passes are being used.
Q81 Mr Leech: Can
I just come back to Mr Joseph, because he did not get an opportunity
to offer an alternative way of spending £1 billion?
Stephen Joseph: The only point I was going to make is that, in theory, of course, you could put £1 billion into the bus industry and possibly get better returns in terms of numbers of services available in the way that David talked about. In practice, what I have noticed is that money removed from transport tends to go elsewhere, so I am not sure this is a real choice. If £1 billion was going to go, in ringfenced terms, into local authorities for bus services, I guess it might be able, in many cases, to be better used if you had the kind of flat fare arrangement that Mr Morris was talking about, charging people and so on. In practice, what we have noticed—and some of the cuts that we have seen coming forward from local authorities suggest this—is that transport, and bus services in particular, tend to be in the firing line when cuts are considered.
Q82 Mr Leech: That
leads on to my last question. Out of the comprehensive spending
review, railways did, relatively speaking, quite well. Have the
buses always been the poorer relation in public transport terms
and what needs to be done to turn that around? Given that most
people using public transport use buses, why is it that we have
this attitude that buses tend to be the first victim of any cuts?
Stephen Joseph: It is really a version of the previous answer I gave, which is that bus funding is atomised. It comes in lots of different packages. I am not saying that Government sat down and said, "We are going to do this for buses and this for rail," because they couldn't. You had different Government Departments making decisions about different funding for buses, the Department for Transport in the case of the Bus Service Operators Grant, and the Department for Communities and Local Government in relation to local authority revenue support and the allocations within that. You have had changes in fuel duty and so on being made by the Treasury. All of these have had an impact on bus services.
If you had single funding for bus services from central Government in the way that rail has a single pot of money handled by the Department for Transport, you would be able to make rather better choices in this kind of thing, but that's not the way it has worked. In addition, there is a problem that has particularly emerged for this Government's emphasis on localism, which in principle we support, which is that, on the one hand, a lot of these decisions are being left to local authorities and ringfencing has been removed. On the other hand, it is quite clear that some of the bus cuts that are being considered will have big impacts on other Government Departments and other major Government objectives. For example, the Secretary of State for Work and Pensions made some comments to people in Merthyr in south Wales about people getting on buses to Cardiff to find access to jobs.
It is quite clear from the work we have done, and particularly some work we did with Citizens Advice, that in many cases people are not able to get off welfare and into work because of transport problems of various sorts. Either the fares are too high or the services don't exist, or you can get a service there but not back and so on. There is a problem that the mix of funding and the differences between national and local objectives have not been clearly spelt out, and that makes it much more difficult to prioritise buses.
It has always been seen, as a former Prime Minister said, that people getting on buses are, in general, "losers"—I don't think that's quite the word she used—whereas trains are used more generally. It's worth saying, in continuation of some of the previous conversation, that London is an exception. The percentage of people who don't use buses in London is somewhere of the order of 20%, and that's very different from elsewhere.
Q83 Mr Leech: Haven't
you made an argument there for means testing of free concessions,
and possibly to include jobseekers?
Stephen Joseph: First, there is a general question with means testing of whether you end up absorbing all the savings you might make in the costs of the testing. That is a general problem. It is worth saying, by the way, that I notice from some Age UK polling of pensioners themselves that they value the bus pass above the winter fuel allowance, for example. So it is clearly valued. If you asked pensioners themselves what priority they would give among the benefits they get, that implies that bus passes would be at the top of the list. Even if economic theory would tell you that you might want to do things with bus passes, it implies that electorally and politically there might be some issues with that.
Secondly, however, the point you made about job seekers is very relevant. There is a real question for a number of other Government Departments than Transport. There is an assumption among the policy making they are doing at the moment that buses will be there and that local authorities or operators will provide those bus services. In the case of Welfare to Work or the freeing up of schools or access to hospitals and health services, where all the Government's reforms are pushing people in the direction of having the freedom to choose and perhaps in some cases having to travel further, the bus services will not be there, and yet it implies that policy makers want them to be there. That requires—and we will be saying this across Government next week with a number of charities—that Government needs to take a coordinated view of this and look at other kinds of national funding for bus services but recognise the wider national value that they give.
Q84 Gavin Shuker: Assuming
that constant change is here to stay in the bus industry as a
result of the spending review, and we are expecting to see changes
in services, how good is the industry at consulting about change
with passengers?
David Sidebottom: It is very patchy. As somebody else said previously, we have done an extensive study, writing and talking to authorities about what they are doing, and we have seen two extremes, at both ends of the spectrum. One authority has made a decision and then has gone out with a form of consultation to the public and sought views, but the decision has fundamentally been made. But equally, Central Bedfordshire did a very thoughtful and considered consultation where they put options to passengers and residents about how to rank certain things. They have set aside a bit of money, £100,000—more than a bit of money—to look at community transport. So it can be done. In our letters to all authorities we suggested a best practice approach to consultation because it's often that the passenger is not part of the partnership. We have heard previously about how important it is for an operator and an authority to work in partnership, but often the passenger is missed out of that, so it is patchy at best.
Greg Lewis: We personally think the needs and views of older people need to be taken into account in all transport planning. Our concern is that the Government's own citizenship survey showed that older people were less likely than younger groups to feel that they could influence decisions locally. Bearing in mind the levels of social exclusion and isolation amongst older people and the importance they place on the provision of bus services, an integrated approach to ensuring their views are taken into account is very important.
Stephen Joseph: It is worth saying we have been doing a lot of work recently in finding out what is actually going on on the ground in relation to local authorities. One of the things we have found, as Mr Sidebottom said, is a huge variation in consultation that is going on but, also, in the ability of operators and local authorities to think broadly. Our local campaign group in Leicester did a lot of very, very detailed work with operators and local authorities when the local authorities then proposed cutting a number of services and were able to suggest creative ways of changing or adding to commercial routes, diverting them to serve areas which might have more passengers and so on. They were able to save about a third of the proposed cuts. Sometimes, that kind of detailed discussion, starting from looking at what the markets are that you are trying to serve and where the business is, isn't done, because, particularly with tendered services, there has been a tendency by both authorities and operators to think that these are provided for a declining market rather than thinking creatively about how exactly you can provide them or even telling people about them.
One of the pieces of evidence in fact from other pieces of work by the Government—the sustainable travel towns work and personalised journey planning—is that when you tell people about the bus services available lots of people who use cars all the time start to use them. So it's fair to say that authorities and operators have not always been very good at promotion, marketing and information.
Stephen Morris: I would agree that local authorities particularly are very variable in that respect. Consultation may just consist of, "This is what we propose to do. Take it or leave it," or, "Do you like that or do you not like it?" Surrey County Council recently have done a very good and openended consultation. The first phase of that has come out with some very beneficial results and quite substantial cost savings.
When bus operators are altering their commercial networks, there is very little history of any consultation when bus operators change their own networks outside the local authority structure. We feel that that is something that also needs addressing. The classic case recently was the one in Milton Keynes where the network was substantially revamped by the bus company with no consultation. There was a substantial backlash from the public and part of what was there before has had to be put back into place. But, typically, the commercial bus operator will not consult on changes on the commercial network.
Q85 Gavin Shuker: Mr
Morris, you cited Somerset in your evidence. Is that correct?
Stephen Morris: Yes.
Q86 Gavin Shuker: What
was the particular issue there? Why did it make it a decent case
in point about consultation?
Stephen Morris: To the best of my knowledge, Somerset are not actually consulting on the changes that they are going to put into place for the service cuts. I certainly have not been able to find evidence of consultation anyway.
Q87 Gavin Shuker: I
have one other question. Consultation is great, but if the money
is not there, what is the point in consulting?
David Sidebottom: I think it is Stephen's point particularly. Particularly it is about engagement. In the bus industry—and I say generally—there are operators and authorities that do it on a regular basis, and it is about informing passengers. One of the concerns that we have, whatever the decision and whatever we think about consultation or transparency, is that there is an impact here and passengers need to be informed. Our overriding concern is that those people who are elected to make the decision may not be armed with all the evidence in terms of impact assessments, patronage and the detail to make those decisions. It is knowing that a passenger has absolute faith in the process and then, when the decision is taken, how they then find out, because they don't want to get to the bus stop on a Monday morning and find out the bus has gone. That is the crux of this.
Q88 Gavin Shuker: Mr
Sidebottom, you said in your evidence: "In a time of cutbacks
it is important that the industry does not marginalise the passenger.
It is crucial that passengers' views are sought and taken into
account when determining priorities." What are passengers'
priorities generally when consultation goes out?
David Sidebottom: In terms of the actual journey itself, we have done some research into passenger priorities for improvement and the number one there is improving punctuality. I think we heard from the previous session that, if you can get buses to arrive on time and get to the destination on time, and where operators and authorities work in partnership to deliver that, it can be successful. We can all rattle off the same areas that win the awards every year for best operator of the year and so on, but that is the number one priority: passengers want buses to arrive on time, get them to their destination on time, and provide value for money.
Q89 Chair: Are
fares important?
David Sidebottom: We tend to look at it more from a value for money perspective. With regard to individual fares, because of the nature of the low fare aspects, sticking another 20p on may not tip the journey for the passenger. It is the overall experience, and the work we have done through passenger satisfaction has focused on that.
Q90 Gavin Shuker: Just
finally, Chair, at the moment there is no statutory requirement
for bus companies to consult before a major change. Do you think
there is a case to be made for that, considering the evidence
that you have just given?
Stephen Morris: We would particularly like to see the bus operators adopting a voluntary code of consultation. The problem comes that, if you make it statutory, for a small operator it's additional cost and red tape. Many of the smaller operators are poised on the edge at the moment. They are finding it difficult to run services profitably, and they are getting more and more bound up in legislation on this, that and the other. If you took another approach and said that service changes over a certain level would need consultation, I think we would end up with the worst of all worlds, with the larger operators making lots and lots of small cuts to try and get round that, with more and more uncertainty. In an ideal world we would like to see the bus operators doing it on a voluntary basis. But if that weren't to work then, yes, we would support a statutory approach.
Gavin Shuker: I think
many people would be surprised to hear there isn't already a voluntary
code.
Chair: Last one, Mr Shuker.
Q91 Gavin Shuker: My
apologies, Chair. Would anyone else have any views on bringing
in a statutory requirement?
David Sidebottom: I think a voluntary requirement might be something. It is small steps, yes.
Q92 Kwasi Kwarteng: Looking
at these figures and hearing a lot of the evidence, I feel that
there is not enough attention given to the regional variation.
Clearly, in London, in the last six years, something has happened
and people are using buses a lot more. In other areas, if you
look at the figures for the English rural areas, it is much more
of a mixed picture; it goes up and down. In the urban areas in
England, as I see from these figures, the usage has actually gone
down. This is over the last six years, from 2004, that we have
this information. What are your thoughts accounting for this,
because it seems to me there is quite a lot of regional variation
going on? The danger for us is just to look at it all as one big
picture of bus services, but when you break it down you are seeing
lots of different pictures.
David Sidebottom:
Outside of London—we have heard about Oxford, Nottingham
and Brighton—there is great attention to a partnership working
and a lot of attention to marketing. A lot of commercial operators
do see themselves as almost on the high street and they think
that way when attracting new customers and hanging on to customers.
There is a lot of engagement through things like Facebook, and
it is very modern and very alive. In other areas, it is more driven
by the big operating groups in terms of core culture. I am talking
about Stagecoach and First. It is driven that way. But equally,
in London of course you work very much on a franchise level, where
a lot of money goes into that and the rewards for operators are
quite significant.
We talked earlier about the quality contracts framework, which has not been taken up as yet. Interestingly, in West Yorkshire we have just done some recent consultation with passengers there about some next steps, moving towards a quality contract. We don't know whether that will deliver the kind of things that passengers want, but we are keen to see what the inputs are from passengers in terms of a franchise and what the outputs are from a passenger perspective. But the difference between London and outside is revenue and the surety of the fact that there is some stability in the market working to a franchise.
Stephen Joseph: From observation, it is down to variations between both local authorities and operators in fact, and not just in relation to buses but wider policy. We have seen local authorities who have boasted about taking up bus lanes and freeing up space for motorists. In those circumstances, as previous comments have been made, as your previous session said, buses will struggle. On the other hand, where you have had wider supported policies, where buses have been given access to the centre of the town, where there have been some parking charges imposed to reflect the costs of providing car parking as opposed to subsidising parking, making it very cheap, then you have seen people using buses.
On the other hand, there are operators who have not been particularly responsive and some that are very good. In a way, there are smaller operators like Trent Barton. Western Greyhound was mentioned in the previous session. But also, one thing I have noticed is a variation between subsidiaries of some of the big groups. You find that some subsidiaries, depending on the local manager, are very good at building up local services and working with local authorities, and others who seem to have lost interest, where the focus is entirely on the bottom line this week and making very short-term changes. What you see is a bit of a patchwork across the country and, in a way, because buses are very local, you would expect that.
I come back to the point I made earlier, which is that, unfortunately, if you are trying to have a national programme for, say, getting people off welfare and into work, that gives you a problem, because in some places it will simply be very difficult for the bus services to be there.
Q93 Kwasi Kwarteng: Just
following up on that, you were saying that clearly there are these
two factors. There is the local authority, and there is a massive
variation amongst those; and there are the operators, and there
is a massive variation amongst those. If you times those two together,
you are going to get an infinitely varied picture. That being
the case, do you think there is anything that perhaps a Government
could do to try and cull best practice and standardise that across
the country, or do you think it is inevitable that the local differences
will mean that we will always have a system with this patchwork,
as you say—with different quality?
David Sidebottom: The local difference will always exist. The work we have done through our passenger satisfaction research has at least levelled out some. You can see from the bottom to the top of the league table that there is little variation. There is about 8% in general, if that. It is part of our work, particularly about best practice, trying to unearth from that research and find out what the nuggets are that make someone top of the pile, if you like, in terms of passengers, because I think everyone wants to work to have more and happier passengers on buses. That, I think, is a success story. It happens, and I don't think the industry is particularly good at telling that story, but I think we will always have those local variations.
Stephen Joseph: There is a role for spreading good practice. I have heard the current Minister for Local Transport, Norman Baker, talk on radio about the need for the Local Government Association to do more in this area. Certainly, we have noticed that as local authority councillors—and I know a number of members here have been local authority councillors—it is quite difficult to find out what other authorities are doing in relation to bus services, providing the services and what good practice there is about.
There are a lot of myths around as well, on, for example, the Competition Act meaning that you can't possibly have operators cooperating. We have done some work, as our evidence said, in St Albans in Hertfordshire, which is about disproving that and having four bus operators, two train operators, the city and county council working together to plan buses across a whole area as a voluntary partnership, because we wanted to show, particularly with the changes in the Local Transport Act 2008, that that cooperation is much easier. There are a lot of councils that don't know that, and even Cabinet Members for Transport who don't necessarily know what is possible and what is being used, and I think there is a role for good practice. Maybe this is for Government across the piece, working with the LGA and the local government family, to do a bit more in that area as well.
Stephen Morris: There are certainly best practice factors that go across all the best bus operations. But, essentially, there are few businesses that are more localised than local bus services. So a solution that will work in town A may not necessarily work in the same way in town B, but there are, obviously, certain common components. In particular, there is a real commitment to the locality. We very often see management being moved on from one location after a very short time and we end up with a poor bus service in that area. One of the things that is notable is that the places that have really good bus services are places where local management has stayed in place a long time and developed a good understanding of the locality and a real empathy with the local people and the local authority. That is very often a factor that makes things work well, along with a sort of local political will to make sure that the bus service works.
Q94 Paul Maynard: Mr
Sidebottom, could I return to the issue of consultation? Irrespective
of whether it is statutory or voluntary, would you not agree that
the quality of the consultation is what matters?
David Sidebottom: Yes.
Q95 Paul Maynard: Would
it be too crude to suggest that good consultation looks at the
network overall and a poorer consultation focuses on retaining
an individual route or not retaining it? Can you explain how Passenger
Focus can facilitate good consultation with bus surgeries and
the like? What do they amount to?
Chair: What's good consultation?
David Sidebottom: Good consultation is about putting good information in the hands of the recipient in terms of what options are available, explaining it so that passengers or other residents will completely engage with the process, a commitment to go back with, "Here are the decisions we have taken and how we have arrived at them," and then something about measuring the impact of them down the line. The work that we have just started now in looking at what authorities are doing around England with the proposed cuts to tendered services is reinforcing the best practice. As Stephen said, now we need to get into resources allowing individual conversations with local authorities but also through the likes of the Association of Transport Coordinating Officers, who plan the services, the likes of LGA and other fora as well, to make sure that from what we learn from this exercise there will never be changes again in the future.
But I think you are right. It has to be at a network level because when you look at the number and the frequency of individual service changes they are probably far too often to have that level of consultation. But we do know from the research from passengers where there are service changes that the one way they want to find out is on the bus or at the bus stop. That is a worry for us in terms of where some of the cuts are made in terms of information provision.
Q96 Paul Maynard: Can
I just ask Mr Joseph this on a wholly separate matter? I have
listened very carefully to all you have said today, and you have
fired my imagination, which might frighten you. Clearly, as a
policy maker, I feel I have to start to consider more publicly
funded transport as a concept, rather than public transport. To
what extent, from your experience of your mini-campaigns around
the country, do you think that voluntary providers and the third
sector in the form of community interest companies are able to
be the innovators in that gap in the publicly funded transport
market between the commercially viable and the commercially unviable?
I am sorry, but that is a complex question.
Chair: Can community,
social enterprise, voluntary sector groups, fill the gap?
Stephen Joseph: I think they can fill some gaps. We have noticed that some of the better consultations that have been run by local authorities are actively engaging in the community transport sector, looking at what they can do and seeing whether it is possible to help them fill some of the gaps being left by mainstream fixed route services being withdrawn. I think that is valuable, but it does depend very much on the capacity of the local community transport providers. In some cases, that capacity will be there, and in other cases it won't be and will be affected by other cuts made by local authorities or indeed by national Government in support of the voluntary sector. Age UK may want to come in on this, because they are a provider in some ways.
In relation to community interest companies, there are a number of community interest companies now running bus services in various places. There is one in Brighton and one in the Yorkshire Dales, and Hackney Community Transport is a large one. They would argue that, given a level playing field, they can fill some gaps, but this depends very much on the scale and pace of reductions in other services. What we are seeing in some areas is a very, very large speedy reduction in services.
We have been looking, as I said, at services around the country. Hartlepool Council, for instance, is talking about taking out all supported services after April, and that includes DialaRide and hospital buses. So they are not even supporting some community transport services. In those circumstances it will be very hard for community interests or any other kind of provider to step in.
Q97 Chair: You
said, Mr Joseph, "some of the gap". How much of the
gap could be filled by these enterprises and will it vary in different
parts of the country?
Stephen Joseph: I think it will vary in different parts of the country. One of the operators we have been working with in the St Albans partnership is in fact the university of Hertfordshire, which has its own bus service. It runs an 80-vehicle bus operation, which they found more effective than contracting it, as some other universities have done. They've said that they have been able to build a large local network on the back of staff and student services. It is not a social enterprise as such, but it's run as a subsidiary to the university. They have been able to take, as a local operator and as one rooted in the community, some decisions that a larger and more remote commercial operator might not have taken.
There is an opportunity where you have large journey generators, if you like, such as universities, hospitals, schools and colleges, to provide services there and then build networks on the back of those, and that hasn't always been looked at. Community transport can do that, and Hackney Community Transport has been very successful in doing that.
Q98 Julian Sturdy: We
have talked about sharing good practice, looking at the networks
overall and better partnership workings, with all of which I agree.
But isn't the key thing connectivity? This is something that frustrates
me at a local level when I see great park and rides around the
city I represent but then the lack of connectivity into those
park and rides. Where I live we have a bus service which provides
poor connectivity into the local station, and if that was better
publicised and better sold then I think the bus operator could
build on that.
Also, across the region we see local authorities
running different transport access schemes, and then the lack
of joined-up thinking where you cross over one border and you
are on to a different transport access scheme as well. Then it's
not about connectivity within the bus services, but it's connectivity
of buses to rail, airports, etcetera. How do you think we can
build upon that? I know it's a very broad thing but, to me, it's
quite frustrating that we are at this stage.
Stephen Joseph: In relation to stations specifically, we promoted, as an organisation, the concept of station travel plans, which has been taken up by the Government and the rail industry. The remarkable thing about the 30-odd pilot travel plans is the extent to which they have revealed, just by getting people to talk to each other, the lack of common-sense connections that have happened. For example, the Leighton Buzzard station travel plan found that all the buses arriving at the station arrived two minutes after all the peak hour trains to London. That kind of framework of travel planning for stations, and, indeed, in relation to my previous answer, to other big journey attractors like schools, colleges and hospitals and so on, is a way into this and can be used to help the people who are generating travel to think about how people are going to get there. I know from the experience we have had in Hertfordshire that Hertfordshire have a partnership, as a county council, with Lister Hospital where they help the hospital staff work out how patients are going to meet appointments. That is very rare and needs to be much more widely used as an example.
You are right to focus on connectivity. It is something that needs to be given much more emphasis. We are currently doing some work on doortodoor journeys, looking at how you can make some of the best practice more general. The Government's stated ambition on smart cards will help in this area. But, as well as throughticketing and integrated fares, you also need proper doortodoor information, better interchanges and connections. All of those things are not provided routinely. In relation to stations, one of the things that should not be lost in reforming rail franchises and making them more light-touch is some of the integration, because that won't always be provided by the market. It will need to be specified in franchises, and rail franchises are a way in which that can be done.
David Sidebottom: On that particular point as well, commercially, bus operators will say there is not a great demand to take people from certain estates to the train station because there is not the demand there, so it is something like marketing, I guess. But, equally, with the opportunity for authorities to look at statutory quality partnerships and quality contracts, the specification might come in that in terms of, if that's a model, it will force operators to bid for that particular kind of work. But, equally, the smart ticketing one is a good one because a passenger cannot get integrated inter-transport if he or she is carrying a ticket for a particular operator in a corridor where there are two or three bus operations. They can only use it on one operator and buses go sailing past. It is right at that level that passengers need to feel part of the integration.
Also, with regard to planning as well, we have seen the big redevelopment of Birmingham New Street going on at the moment and there is an issue there about how bus stops are being moved away from Birmingham New Street. It is the whole planning thing of making sure that everyone is involved in the planning of these big schemes.
Stephen Morris: There have been some very good examples of it in Cornwall and in Lincolnshire, on a rural basis, where, in Cornwall, Western Greyhound have developed a number of hubs and they have opened up all sorts of journey opportunities with just one simple change that wasn't there before. In Lincolnshire, there is the Connect network, where a rural service just goes as far as the main road and there is a connection point there where it links into a trunk service. That has been very successful. I do understand the rural part of that network is under threat from the service cuts.
One very simple barrier to making connectivity work between bus services is the Traffic Commissioners' window whereby the Traffic Commissioner will allow a service to be up to one minute early or five minutes late, and if an incoming service is running late there is pressure on the driver of the connecting service to leave on time or within five minutes rather than wait for that service. I believe the Traffic Commissioners are prepared to be a little bit more flexible in those circumstances, but the bus operators need to be aware of that and need to communicate that to their drivers.
Greg Lewis: I would agree with most of that. The key issue for older people is the accessibility or reliability of services, and connectivity is going to be a vital part of that. If they feel that they are going to be stranded in a town centre and not be able to travel on to their destination, if there is going to be a significant delay or even a significant amount of anxiety in making that journey, they won't make that journey. That is the important point for them.
There is one point about hospitals, which is quite an important one, which is probably about hospital administration as much as provision of bus services. For people who need to travel long distances to make hospital appointments, there is not much point in making those early in the morning if there is no bus service for them to utilise to get there. But, as I say, that is probably the other side of the argument in looking at hospital administration to ensure that older people or people who rely on public transport can make those hospital appointments, for example.
Q99 Steve Baker: Is
it in operators' commercial interests to cooperate in respect
of connectivity? I ask the question deliberately simply.
Chair: Who has a view
on that? Is it in operators' interests?
Stephen Morris: It depends very much on the circumstance. There are situations where diverting a bus service into a railway station will extend the journey time for the bulk of passengers who just want to get into the town centre. In that situation it is seen very much as a disincentive by the bus operator rather than serving the bulk of the market in a more appropriate way. On other hand, as in the situation I have already cited in Cornwall, the operator there has seen tremendous commercial opportunities in being able to link up services at interchanges, and that has certainly worked very favourably in the operator's favour.
Stephen Joseph: I think the operator won't always see it as in their interests to do this. In fact, competition law has, as was previously mentioned, in the past been applied in such a way as to give priority to the theoretical extra operator rather than cooperation between operators. From an operator perspective, you want people to travel on your own buses and so you do tickets that are only valid on your own buses. From a public perspective, what you want is to be able to go out by the first operator that comes to your stop and come back by the first operator that arrives. There is a conflict between the individual operator interests and network benefits. It is one of the areas, referring to an earlier question of yours about market failure, that pervades transport across the entire thing. Transport is an area that has massive market failure all the way through it and this is one area where network benefits just simply aren't recognised enough, either in operators' interests or, in some ways, in the way in which the operators are regulated.
Q100 Steve Baker: It
is very interesting that you talk about that market failure because
that is really the point I was, of course, driving at. If it is
in an operator's interests to maximise throughput, surely it is
in their interests to serve the maximum number of people with
the maximum interchange between different transport services.
Actually, you have answered my second question inasmuch as I think
we have all agreed that operators will sometimes not talk to each
other where they otherwise might in order to better serve people's
interests precisely because they are so heavily regulated in that
regard. Then, on top of all of that, we seem to be saying that
that's a market failure, when in fact it seems to me it's a regulatory
failure. Where does that leave us?
Chair: Who would like
to try and give a short answer on that one?
Stephen Joseph: A short answer on that. First, when I said "market failures", I was talking in a very broad sense that transport across the piece, including road transport, has large market failures in relation to people causing congestion for other people in other cars and in buses and, also, wider environmental impacts of pollution and, indeed, climate change and so on. Those are all market failures which economists would argue are not fully priced in. You talked about road pricing earlier and that would be one way in which you could do that.
In relation to this, the problem has been not that they have been too heavily regulated but they have been regulated in the wrong way, with the wrong incentives. That was changed a bit with the 2008 Local Transport Act. The St Albans pilot I mentioned that we have been involved in was about proving that. Once you had got the changes in there, it essentially means that, where the local authority says it is in the public interest for operators to cooperate together, then it is deemed to be in the public interest, the Competition Act doesn't apply and the penalties that were referred to earlier don't apply. It seems to me that is the right direction. We have seen operators in places like Oxford, Nottingham and so on being prepared to join together to do partnerships that are in the wider public interest.
Q101 Steve Baker: A
final yes or no question. Is it true or not that bus operation
is characterised by subsidies, price controls, heavy intervention
and lack of market in the scarcest resource, which is road space?
Chair: Who can offer,
if they wish to, a short answer to that one?
Stephen Joseph: Yes, and so is other road transport. They all have subsidies and market failures in them.
Q102 Julie Hilling: If
buses are the building block of public transport—and I think
they, are in terms of that connectivity that we have talked about—can
I ask first of all who you think is going to be hardest hit by
the changes that are likely to happen? We have talked a little
bit about older people, but are there other groups in society
that are going to be hard hit by the reduction in services?
David Sidebottom: I think the immediate impact through the local subsidy will affect particularly the marginal services now which are supported by councils. What we are seeing very generally is weakened services and evening and mid-week services being cut. That is going to affect, disproportionately, those people that obviously use them, which will be shift workers, maybe, and people going into town, not just for the night out but who work in the places that serve the night out. I think there is something there about that and older passengers, I think, particularly as well. But the evidence coming through is that shift for edge-of-town rural inter-urban services, and people who rely on those. Yes, there may be higher car ownership in some of the areas we are talking about, but there is still a significant market there which will be disadvantaged by this.
Stephen Joseph: The surveys we have done have shown quite a wide variation in what local authorities are doing, but what you are seeing, apart from the cuts in keeping weekend services, is cuts in a lot of rural services in places like Cumbria and Lincolnshire, in services to schools and colleges. We are also seeing reductions or ending of concessionary fares for other groups, like Mr Leech's comment earlier. For example, East Cheshire is removing services to colleges, and Darlington is moving concessionary fares to the statutory minimum of 9.30, away from a more generous scheme.
In fact, young people are going to be particularly hit because some authorities are reducing the concessions, so that they have to pay more, and reducing concessions to colleges at a time of the ending of the Education Maintenance Allowance, which has partly supported the transport cost to colleges. So that is a double whammy that hasn't been fully appreciated yet.
Q103 Julie Hilling: Is
it too easy for operators to stop services and put them in the
hands of local authorities—I have forgotten the correct
word—and, I guess, for the local authorities to stop services.
Is it too easy?
David Sidebottom: I think, traditionally, that has been the case. We will see now, with the impact of cuts to BSOG and maybe concessionary fares reimbursement in the next year or two, tipping some of those services which traditionally would have been put into the hands of councils. But I just wonder as well how much councils have been supporting services for many years now without reviewing the network on a more regular basis. It has been continuing on, and we have reached a point now where the scale of the cuts and the impact is going to be quite severe, rather than being marginalised over a particular time.
Q104 Julie Hilling: What
should all the partners be doing in terms of protecting the service
and making it better going forward? What is the responsibility
of everybody?
Stephen Joseph: In our evidence we talked about a range of things that we thought both local authorities and national Government need to look at. We talked about better commissioning of services across the piece, as I think has already been talked about, bringing ordinary tendered services together with schools and social services transport, looking across the piece and tendering them together so there would be better commissioning. The social enterprise point has already been mentioned and looking at options there. There are the kinds of quality partnerships we have talked about and options including creative use of the quality contract legislation so that, rather than tendering little bits of services, you might tender whole networks. Also, we talked in our evidence about looking at integrating taxis and buses, as happens in other European countries. That is something the Conservatives talked about in opposition and we have seen that happen in Government. Also, we need better marketing and promotion, as I have said.
But, for Government, there is an issue about other Government Departments recognising and perhaps bringing funding to the table for buses where it's important for meeting their objectives. One example is the WorkWise Scheme that has been funded by the Department for Work and Pensions which has been about helping job seekers. That has not, I think, been continued and certainly the local authorities that have run passenger transport—the ITAs in particular—have found that it has been very valuable.
Long term, and this perhaps goes to Mr Baker's point about being market orientated, we might want to look at what a number of other countries, including the US, do in relation to providing employerprovided vouchers for transport to work, which was done partly to recognise market failures, like the failure to charge for parking, of taxing parking at work as benefit in kind and that kind of thing, which has also been used in places like the Irish Republic and so on.
Finally, I think there is an issue about the planning system. The Government is deregulating the planning system at the moment; it is revising planning policy. I think there are some things in current planning policy on transport assessments for new major developments and parking standards that ought to be kept because they have been very helpful in providing a framework within which markets can organise themselves.
Q105 Chair: Mr
Sidebottom, Passenger Focus is under review in terms of its remit
and its budgeting. Can you tell us where those discussions are
up to and are they likely to affect any of the work you have been
discussing with us this morning?
David Sidebottom: Following the announcement from the Cabinet Office review of quangos, we are to be retained but substantially reformed. We are in the final throes of conversation with the Department over our final budget, and that will be announced, I believe, towards the end of this financial year.
Chair: Thank you very
much, gentlemen, for coming and answering our questions.
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