Further written evidence from Lancashire
County Council (BUS 51a)
1. INTRODUCTION
1.1 Lancashire County Council welcomes this opportunity
to provide the Committee with our views on the funding of bus
services following the Comprehensive Spending Review.
1.2 Passengers in Lancashire make 170,000 bus
journeys every day. More than 25,000 children travel to school
by bus each year. The county council has invested significantly
in new bus interchanges at major urban sites across the county
in recent years. We work closely with operators and passengers
to design and deliver high quality bus travel in all areas of
the county—both town and country - and are committed
to providing safe, reliable, convenient and affordable alternatives
to car travel.
1.3 Lancashire has always been at the forefront
of modern transport in Britain—from the early days of steam
railways to the UK's first motorway. More recently, we have worked
with European partners through the CIVITAS programme to design
and deliver transport systems fit for the 21st century. We engage
with our passengers and bus users can express their views on our
services through an online feedback portal.
1.4 Our current Local Transport Plan recognises
transport's dynamic impact on the daily lives and aspirations
of Lancashire's million-plus residents. Given the fragile state
of the economy, our top priority will be to support private sector-led
economic growth by improving access to areas of economic growth,
job creation, education and regeneration. Boosting skills, employability
and opportunity through smarter public transport provision will
create the conditions for local economic growth and empower citizens
to improve their own lives.
1.5 Functional and affordable bus services are
integral to local economic development. The central issue for
Lancashire is the degree of connectivity between multiple
sector-based "clusters" (like the "aerospace corridor"
that runs from the coastal west of the county to east Lancashire,
or our university campuses), education and training sites and
larger residential areas. Local government has a vital role in
ensuring, wherever possible, that workers and job seekers can
access employment and training easily and affordably.
2. BUS SERVICES
IN LANCASHIRE
2.1 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.
2.2 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,
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.
2.3 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
Department for Transport 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.
2.4 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, changes to the system are proposed but much
of the funding will still remain poorly targeted.
2.5 Concessionary travel is the first application
for the NoWcard smart card scheme. The scheme has been
jointly established by Cumbria and Lancashire County Councils,
and Blackburn with Darwen and Blackpool Borough Councils.. NoWcard
is a smartcard platform that conforms to the national ITSO technical
standard.
2.6 All bus operators within the NoWcard
area have been equipped with ticket machines that will read a
smart card. This is with the exception of Preston Bus. However,
this company is expected to be "smart live" within the
next six months. NoWcard has provided operators with grants
to assist with purchasing the necessary on-bus and back office
equipment, although some smaller operators lease their equipment
via NoWcard, mostly those providing only contracted services.
2.7 Within each NoWcard smart card is
a small electronic chip. For concessionary travel, ticket machines
on local bus services read each NoWcard, check its validity
and ensure that passengers are offered the correct level of concession.
Personal details are kept securely by the appropriate Travel Concession
Authority and these details cannot be read by bus service operators.
The NoWcard allows the bus service operator and the local
authority to account accurately for concessionary fares so that
the concessions are paid for correctly.
2.8 The County Council and its partners are keen
to build on the NoWcard platform now it is established.
Within the next few months we will be introducing a pilot Stored
Travel Rights scheme within the Chorley, South Ribble and Preston
areas aimed at 16 to 23 year old people. This scheme, which has
been agreed by all bus operators in the area, will allow young
people to store a credit on their smart card and obtain a discount
of at least 10% off the relevant fare when paying in this way.
2.9 The County Council has noted and supports
the Government's commitment to delivering the infrastructure to
enable most public transport journeys to be undertaken using smart
ticketing by December 2014.
2.10 We have also noted the tremendous success
of the London Oyster Card and will be working with our partners
in NoWcard, other neighbouring transport authorities and
our public transport operators to deliver a similar range of ticketing
products. This would have clear benefits for facilitating expanded
use of public transport in general and could be used to help achieve
specific socio-economic objectives; like discount, reward or loyalty
travel schemes for those people, for example, who may struggle
with barriers to job entry such as access to transport. Such a
scheme could also be expanded by councils, bus operators and train
companies to incorporate other goods and services and take advantage
of expected changes to council's trading powers presaged in the
Localism Bill (General Power of Competence).
2.11 As the Coalition's Programme for Government
(and associated Departmental Business Plans) makes clear, service
integration must be a feature of future public policy making in
the UK. Smart card technology promises to drive better integration
between a range of publicly-provided services, including transport,
employment, education, health and social care.
2.12 We note that from April 2011, all funding
for the statutory concessionary travel scheme will be provided
through formula grant. This will give councils new freedoms over
the use of funding and negotiations over cost-effectiveness with
operators.
2.13 We have been informed by government that
the Department for Transport is "considering options for
the long-term future distribution of bus subsidy, working with
bus operators and local authorities to look at smarter ways of
administering the subsidy to get better results for both taxpayers
and passengers."
2.14 Guidance for the Local Sustainable Transport
Fund has now been published. We wrote recently to the Parliamentary
Under Secretary of State, who informed us that Fund proposals
will "need to clearly demonstrate how they will contribute
to supporting economic growth and reducing carbon emissions."
The government made it clear that "it will be for local authorities,
working in partnership with their communities, to identify the
right solutions for their areas."
2.15 Government also reiterated its intent to
bring together all funding streams into just two revenue pots
- Formula Grant and the Local Sustainable Transport Fund - giving
local authorities "the power to decide what's best for them
and prioritise resources accordingly."
2.16 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 is proposed, should be
devolved to local transport authorities who would be empowered
to commission bus services from providers at the local level through
a competitive tendering regime, thus maintaining competition for
bus service operation but through a substantially increased targeted
formula.
3. THE FUTURE
OF BUS
SERVICES IN
LANCASHIRE
3.1 Lancashire County Council would be very keen
to develop a pilot scheme within Lancashire based on the above
and would be interested in procuring bus services utilising the
Government's streamlined subsidy pot, along with bids to the Local
Sustainable Transport Fund and our own subsidies for a range of
specialised passenger services.
3.2 Adopting such an approach in Lancashire would
allow us to specify subsidised route coverage in order to support
the local economic priorities referenced earlier. We can use our
own local knowledge, coupled with the expertise of the bus companies.
It would also allow us to integrate school, social care and accessible
transport with mainstream public transport and create the very
real potential to make efficiencies through better procurement.
3.3 Under a system of streamlined single-pot
funding, 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. The current system
throws up unintended consequences that can sometimes undermine
partnerships between councils and bus operators, such as when
operators rely on councils to subsidise "feeder" routes
to more profitable "major" routes once private sector
support for the secondary route is removed.
3.4 As referenced earlier, greater flexibility
to organise and fund bus operations in Lancashire will allow councils
to capture savings through better "systems thinking"—for
example, by ensuring that we maximise outlay on non-emergency
hospital transport (eg adult social care) through better integration
with "general" public transport services, or through
an expanded smart card. This sort of system integration has clear
implications for the future of both personalised and community-based
budgeting.
3.5 It is possible, although not certain, that
such new pilot arrangements could be managed via emerging Local
Enterprise Partnerships (LEP) arrangements which may well include
bus and other local transport providers as part of an individual
LEP governance structure. Any new products or services—not
to mention new ways of working—will require effective partnerships
and we are committed to ensuring close consultation with bus operators.
4. CONCLUSION
4.1 Connectivity is the golden thread that links
economic opportunity and aspiration in many deprived areas. We
want to increase the ease and use of public transport in Lancashire
so we can boost economic development, particularly in these more
deprived areas. Beyond the environmental benefits of expanded
use of public transport lie the benefits of greater access to
education and training and employment. With greater freedoms and
flexibilities to design and deliver truly local and intelligent
bus services in Lancashire, we believe we can make a real difference
to the lives of thousands of residents who want a better life.
March 2011
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