Written evidence from P Spick (BUS 20)
CALL FOR
EVIDENCE—RELEVANCE
1.0 Undertake an independent, frontline sustainable
transport development role as Chair of the Estuary Commerce Park
Travel Plan Group, representing 13 tenants employing 6,000 staff.
Principally employed as Travel Plan Manager for one of these businesses
- independently promoting sustainable transport initiatives and
practice for 7,000 employees across the UK. This affords unique
insights across the differing spectrum of policy, practice and
implementation of the UK bus industry.
1.1 Promotional practice is at times hindered
by legislation and regulation that, as I will highlight, often
leads to an increased cost to the travelling public, a reduced
quality of service, deters patronage through instability and restricts
the implementation of cheaper ticketing options for the public.
1.2 Both user and non-user perceptions of the
bus industry greatly hinder efforts to reduce our reliance on
single occupancy vehicle usage, contributing negatively towards
a number of key transport targets for Local Authorities to deliver
upon to name but few of the issues of sustainability Government
are required to act in a positive, joined up manner.
1.3 Public transport is of the upmost importance
for it joins all aspects of society together as one in their motional
requirement. Good public transport can only enhance the rating
of our current society which the sitting Government wishes to
address.
PASSENGER FOCUS
"How passengers' views are taken into account
in planning bus services and the role of Passenger Focus in this
area"
2.0 Passenger Focus is barely referenced by Local
Authority / Integrated Transport Authority (ITA) supporting and
promotional staff, yet their relevance is of upmost importance.
In the same vein, no single public transport users at the 14 UK
sites I primarily cover have ever referenced Passenger Focus in
4.5 years in the role.
2.1 Employee experiences and insights have duly
been conveyed directly to bus operators / Local Authority and
ITA's, by-passing Passenger Focus, in-turn lessening their ability
to influence aspects of bus service provision. Frontline Travel
Plan and other independent practitioners require a mechanism with
Passenger Focus to input and share customer service and best practice
delivery options, eg through ACT Travelwise network.
SMALL / INDEPENDENT
/ COMMUNITY TRANSPORT
OPERATORS
3.0 Such operators undoubtedly face a multitude
of increased pressure from rising fuel expenditure, associated
Health & Safety requirements, driver training and improved
vehicle efficiencies to name but few of the obstacles to negotiate
in the continued aim of providing often critical community supportive
services to the public / or part-subsidised critical accessibility
services.
3.1 The proposed 20% cut in Bus Service Operators
Grant (BSOG) is likely to have a detrimental impact upon the range,
quality and variety of service providers and subsequent vehicles
able to operate within this field. It will also impact detrimentally
on the motional requirements of an aging population and takes
away from the table on which the "Big Society" is based.
Local Authority funding restrictions are also set to impact on
subsidised services to the excessive detriment of societal requirements
from 2011.
3.2 The financial squeeze on smaller / independent
operators is set to be magnified in certain urban and metropolitan
areas, owing to the necessity of the nationwide operators to further
streamline. Partnership working (as witnessed in Merseyside between
Arriva and Stagecoach on reducing timetabling clashes) and the
growing prevalence of Bus Quality Partnerships (referencing Greater
Manchester), can but sweep aside smaller operators, taking away
their ability to run on high-revenue routes. Removing access to
a slice of the profitable bus services that remain, impacts on
the quality of vehicles in operation for other routes, placing
smaller operators on a rapid downward spiral trajectory. Untargeted
BSOG reductions are set to harm overall accessibility levels and
the ability of the population to move at relative "free will",
and switch to more sustainable means of transportation.
3.3 A cut to BSOG may well see an influx of smaller
operators struggling to survive, scheduling services on major
routes. Might it be better to direct such operators towards merger
and maximising vehicle efficiencies, with Government providing
the conditions and parameters for a favourable BSOG rate in-tow
to achieve this scaled efficiency?
3.4 At the same time, across UK, conditions exist
to provide the framework for the major operators to tender for
established routes, or "equal" divisions / segments
of cities / metropolitan areas, thereby maximising efficient operation
without competition. The travelling public need not be forced
into making up the entire 20% fuel subsidy reduction, primarily
through noticeably cheaper ticketing possibilities (see 4.4 &
5.3).
3.5 A realignment of legislation may be desirable,
but only feasible if smaller operators "forced" from
major routes receive a suitable BSOG to maintain critical, supported
services. Losing a vast base of smaller operators is not desirable.
Any merger / combination, partnership working, sharing / maximising
asset efficiency, or branding with community transport operators,
the charity transport sector, school buses and services may well
see a stronger, more locally focussed, efficient and deliverable
smaller operator base. Knowsley Community Transport is an example
of such developing practice.
3.6 Such a community transport base might go
on to provide a viable opportunity to shape the resources required
for aspects of the NHS Ambulance Patient Transfer Service, obtaining
additional economies of scale, as required by our changing demographic
profile. In the same breath dare we mention the impact of "choice"
upon the NHS' transport impact and future requirements?
3.7 Maintaining societal cohesion, accessibility,
critical access for our aging population and younger generation
priced away from driving, requires examination of the possibility
for maintaining vital rural community lifelines via establishing
a favourable BSOG rate for rural services.
NATIONWIDE OPERATORS
("THE BIG
5")
4.0 Bigger does not necessarily translate as
stronger and more able to handle a 20% cut in BSOG. As proclaimed
by one major operator, profits from the big operator's respective
bus sectors in 2009 roughly amounted to £450 million. The
20% BSOG cut amounts to around £430 million at 2009 levels.
Nationwide operators require profit to reinvest in more modern,
attractive, comfortable fleets. The Government requires this of
them. More importantly the paying passengers require this satisfaction
and mechanism to work, without overly pricing individuals away
from bus travel, for example, towards taxi services. How any legislative
table can be cleared, together with the shackles of the outdated
pre-requisite of "enforced competition" would be overly
welcomed by the travelling public to prevent over and above inflation
price rises in the coming years.
4.1 A rapid change is being forced upon the major
operators, yet as history records, no changes to the legislative
operating table are as nearly as quickly implemented, which is
set to disadvantage major operators and the travelling public.
What will the time lag be between penalising passengers with higher
fares and introducing free-functioning legislation based on past
changes of 1984, and 13-years of relative foundation stone laying
to 2010?
4.2 The benefits of Quality Bus Partnerships
are there for the passenger, operator and legislator. They were
already present ahead of the announced 20% reduction to BSOG,
but "slack in the system" has been allowed to prevail
for some time. This era has drawn to a close. Will operators be
allowed to function without competition, to enable absolute maximisation
of their resources, efficiencies and more to be able to deliver
uncluttered, recognisable, stable services, at a current or possibly
lower fare than what is set to be introduced when BSOG is reduced?
How can a 20% cut be implemented without accompanying changes
to operative legislation to mitigate the impact on the travelling,
paying public?
4.3 Nationwide operators are of a scale not
witnessed ahead of the 1984 watershed, yet they run in competition
to one another, struggling to attain market share from each other
in many metropolitan areas, towns and cities, resulting in frequent
over capacity, and "slack-in-the-system", which is set
to be stripped out by the BSOG reductions?
4.4 Where a "relative division" occurs,
for example, the vast majority of bus services operated in Northern
Manchester is by First Group (with South Manchester being overwhelmingly
dominated by branded Stagecoach services and subsidiary brands..),
greater efficiencies are possible. This is reflected in First
Group being able to offer annual ticketing deals, saving 21% in
comparison to a normal monthly ticket. Quite an attraction / stimulant
for growing passenger numbers, and worthy of investigating just
what impact zero-competition can have upon ticket prices without
impacting upon the frequency, standard or delivery of services?
4.5 The division of service operators based on
obvious geographical boundaries / partitions (north / south -
east / west) is possible across the UK, even where particular
divisions may have more obvious, profitable bus routes / sub-urban
areas. A tendering process to facilitate such a change of direction
would be required. In lean times, perhaps the only competition
should be between tender submissions in envelopes and not between
half empty buses trawling for passengers that are only able to
run thanks to the part state subsidy set to be reduced.
COMPETITION AND
PRICING
5.0 Unfortunately competition is not viewed favourably.
This is not based on pre-1984 perspectives (13 at the time…),
but through a variety of observations that, as a front line public
transport promoter, and more importantly user, remain a hindrance
and barrier to attracting passengers to core bus services operated
by the nationwide providers.
5.1 I reference purchasing one particular operators
monthly pass, who provide services along a route from a home destination
out beyond the core urban area (and where another operator ceases
to run) to an edge of city worksite. Yet upon wishing to travel
in the opposite direction from that home location for evening
or weekend pursuits, all too frequently, a rival operator comes
along and doubt is placed in the passengers mind? Do you chance
that your operator will turn up on time? Do you make friends and
family wait at the bus stop for longer to accommodate your pre-paid
travel? I appreciate smart-ticketing will rule out such doubts
- but will ticketing be as cheap as a single operator, providing
services without competition through a tendering process, as certain
operators are prepared to offer in monthly or annualised ticketing?
See 4.4 & 5.3.
5.2 In 2009 I was fortunate to witness the introduction
of competition to bus services in a medium sized market town (pop.
95.000, surrounding County pop. 556.000). Prior to Spring 2009,
one nationwide operator handled all services into the town, with
discount ticketing options available for monthly, half-year and
annual passes. However, the knock-on effects of 2008's fuel spike
came home to roost, resulting in more than noticeable increases
to ticket prices (except for individuals insulated through half-year
or annual passes until they expired).
5.3 Such rises, and the charge to the nationwide
operator by the Local Authority / County Council that service
levels were poor considering the scale of operation and resources
at their disposal, resulted in the controlling authority seeking
to "open-up" established services to competition. The
result of this introduced competition was not at all favourable
to bus passengers based on the experiences of colleagues I represent:
A - The nationwide operator decided it was no longer
viable to operate evening services.
B - This left passengers with monthly, half-year
and annual passes high and dry!
C - The introduced operator was initially decreed
to honour such valid passes from the nationwide operator by the
Local Authority / County Council.
D - The introduced operator found they too could
not viably run evening services, partially due to the level of
external passes they were having to honour.
E - A 50p surcharge was introduced for external pass
holders travelling on the introduced operators evening services
- pushing up the price of travel by £2.50 / week (an outstanding
increase in annual travel expense of £115 for one colleague).
F - The introduced smaller operators spare resources
and driver reserves were not of a sufficient standard to cover
emergency situations / breakdowns / driver sickness, with the
depot located an unacceptable distance away from where services
operated, resulting in the frequent absence of crucial evening
services, deterring continued patronage or attracting growth to
services - resulting in an additional parking facility lease and
expense to business.
G - With 550 employees, a site operational from 7am-11pm,
380 staff on flexible shift or annualised hours contracts, current
bus service arrangements are but unhelpful, increasing the cost
of travel and preventing the introduction of a ticketing arrangement
that would save 6% on the monthly cost of travel in the area (at
current rates with competition in services - possibly lower if
that competition were not present)?
SUMMARY AND
CLOSE
— — Passenger
Focus require greater promotion / visibility to the travelling
public.
— — Small
/ Independent / Community operators need to merge, pool resources,
and look to diversify - but away from developing Quality Partnership
routes operated by the big 5 nationwide operators.
— — A
more favourable BSOG is required to assist smaller operators et
al who merge in such a way as to provide critical accessibility
and community services as part of the big society umbrella of
ideas.
— — Nationwide
operators (big 5) require tendering process to bid for area's
/ segments in a logical geographical order - to then run without
competition (thus reducing costs, in turn reducing unnecessary
expense to passengers).
— — Legislation
required to match the scale and pace of change within the bus
industry owing to BSOG and Local Authority funding cuts
— — Cheaper
ticketing options are available through just the one operator
providing services. Evidence that the arrival of competition in
2009 was wholly detrimental to service standards, reliability
and price.
To close, apologies for the lack of statistical and
financial punch to accompany this evidence submission. Travel
Planners do, as a whole, suffer from a lack of the heavy internal
facts and figures, which may well be used to help interpret some
of the representations from passengers we deal with at first hand.
Naturally, frontline sustainable travel promoters do not have
to live in fear of the Competition Commission!
January 2011
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