Bus Services after the Spending Review - Transport Committee Contents

Written evidence from Lancashire County Council (BUS 51)

I refer to the inquiry that the Transport Committee is to undertake into the funding of bus services in England (outside of London) in the light of the outcome of the Comprehensive Spending Review. I set out below the position with regards to public transport in Lancashire and would be grateful if you could give the following comments some consideration.

Lancashire County Council boasts a bus network which is 80% commercially operated by bus operators with the remaining 20% of the network being provided by subsidised bus services.

Net funding for subsidised bus services in 2009-10 in Lancashire was £6.5 million and this mainly provided rural, evening and weekend services across the County. These are services that are deemed socially necessary and which the bus operators are unable to provide on a commercial basis. In addition to this, we also fund other passenger transport services, namely community transport, home to school transport, SEN and Adult Services transport with a total spend in the region of £32 million per annum.

However, there are other significant funding streams to operators which in the main are not targeted towards particular areas but is "blanket" funding provided to the bus industry. In Lancashire, according to the most recent DfT figures, £9.8 million in funding was provided to the bus industry through the Bus Services Operators Grant (BSOG). Whilst this grant is due to decrease in the coming years as a result of the Comprehensive Spending Review, it is still set to remain a significant source of bus industry funding. The previous government had announced their intention to move towards a payment based on an incentive per passenger (IPP), but this would still leave this funding as an uncapped and untargeted funding stream. There are also concerns that IPP has the potential for moving resources from rural to more urban operation.

The other main area of bus service funding within Lancashire is that of the concessionary fares scheme with a total £23.9 million per annum being spent on the provision of the scheme. Again, there are changes proposed to the system but much of the funding will still remain poorly targeted.

A recent report by the Local Government Association, titled "The Future of Bus Subsidy" proposes replacing the whole subsidy package with a single stream of public subsidy for bus services. The stream, it proposes, should be devolved to local transport authorities who would be empowered to commission bus services from providers at local level through a competitive tendering regime thus maintaining competition for bus service operation but through a substantially increased targeted formula.

Under such an arrangement genuinely commercial bus services would not receive flat rate subsidy and local authorities would be able to choose to subsidise a single service over routes which currently receive multiple subsidy streams for numerous providers.

Adopting such an approach in Lancashire would allow us to specify subsidised route coverage in order to support local economic, social and environmental objectives. It would also allow us to integrate school, social care and accessible transport with mainstream public transport and have the potential to make efficiencies through better procurement.

We would be very keen to develop a pilot scheme within Lancashire based on the above as we would be interested in procuring bus services utilising the Government's BSOG subsidy joined with our own subsidy for passenger services. Obviously, this would require good effective partnership working with bus operators and a new way of working but it is something that we feel there is merit in pursuing.

January 2011

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