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Public transport in towns and cities Contents

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Chapter 5: Local government and planning

87.While central government sets the national agenda for public transport reform and holds the purse strings, state involvement in local public transport delivery is largely down to local government decision making and local transport authorities working with operators. Local authorities also have leverage through the planning system.

Local government

88.There are various local governance arrangements for public transport. Many of the larger cities fall within one of the 10 mayoral combined authorities in England (including London). The devolution deals for each region grant different powers in relation to transport funding and decision making. Given that metro mayors have responsibility for whole regions, this arrangement can reflect travel patterns, where people cut across local authority boundaries for work, education and leisure. Andy Burnham said the “key ingredient” to good public transport policy making is the “ability to have a single policy for the system so that all modes can pull together in a single vision.”141

89.Our evidence showed some hesitance about the Government’s commitment to devolution. Transport North East said “So far many warm words have been spoken about the benefits of devolution (including in the Levelling Up [White] Paper), but this needs to translate into action on the ground and a substantial shift away from remote control and micromanagement from Whitehall.”142

Box 6: Public transport governance in London

Transport for London has responsibility for most of the transport network in London, including buses, the underground, overground, principal road routes, cycling provision, light rail, and the Elizabeth Line. The underlying services are provided by a mixture of wholly owned subsidiary companies (including London Underground), private sector franchisees, and licensees. Transport for London was created under the Greater London Authority Act 1999. Transport for London controls bus services and fare levels, including specifying service frequency, setting and monitoring quality and safety standards, and setting vehicle capacities and minimum standards. Transport for London is funded through a mix of revenue from fares (£4.9 billion in 2019–20); revenue from other charges, such as the Ultra-Low Emission Zone and Congestion Charge (£1.2 billion); grants including business rates retention and borrowing & cash reserves (£0.9 billion). In recent years, Transport for London also received £3.4 billion funding for Crossrail. In August 2022, a funding settlement was agreed between the Government and Transport for London for until 31 March 2024. This base funding of around £1.2 billion is in place to give Transport for London ongoing revenue support should passenger numbers not recover post-pandemic.

Source: Transport for London, ‘How we are funded’: https://tfl.gov.uk/corporate/about-tfl/how-we-work/how-we-are-funded and Transport for London, ‘TfL Statement—Update on Government funding settlement’, 30 August 2022: https://tfl.gov.uk/info-for/media/press-releases/2022/august/tfl-statement---update-on-government-funding-settlement [accessed 27 October 2022]

Bus services regulation

90.Since the mid-1980s, bus services outside London have been deregulated. As a result, most bus services are now run by private bus companies on a commercial basis. These companies range from large multi-nationals through to small, family-run businesses, with a handful of municipal bus companies owned by local transport authorities. Most decisions about local services—including routes, frequencies and fares—are taken by individual bus companies. Bus operators can struggle to sustain routes and services to rural areas and the outskirts of towns and cities. Where the market fails to provide these services, local transport authorities tender these routes and services from private operators.

91.We heard criticisms of the deregulated approach to bus service provision. Transport East told us: “The complexity of the region’s network (with multiple private operators) means passenger transport services are often not well integrated, with limited timetable or ticketing coordination between services and, in some instances, unattractive infrastructure”.143 Coventry City Council stated: “the system is provided by the private sector with relatively little opportunity for public influence” and “Given that the Levelling up White Paper has identified the objective of rolling out London-style public transport across the rest of the country, this can only be achieved with all forms of public transport coming under some form of local authority management, as is the case with Transport for London.”144

92.In efforts to address some of these issues, the Government’s National Bus Strategy (published in March 2021) required local transport authorities (by April 2022) to introduce either an Enhanced Partnership or a plan to establish a franchising scheme.145

93.Provision for Enhanced Partnerships and franchising schemes was made in the Bus Services Act 2017, but before publication of the National Bus Strategy take-up had been limited. Hertfordshire County Council was the only local transport authority to introduce an Enhanced Partnership, Intalink, which served as a case study for the national strategy.146 Greater Manchester was the only metropolitan area to begin the process for franchising services before the National Bus Strategy was published.

94.In March, the Government reported that all 79 local transport authorities had published a local Bus Service Improvement Plan, and that most local transport authorities (76 of 79) had opted to form an enhanced partnership for bus services.147 Of these, the Department for Transport told us that around half of the authorities pursuing enhanced partnerships now have the partnerships in place. Three mayoral combined authorities planned to franchise bus services (Greater Manchester, Liverpool City Region and Cambridgeshire & Peterborough), while others are in the scoping phase.148

Enhanced partnerships

95.Under enhanced partnerships, local transport authorities agree to provide certain facilities and measures and, in exchange, local operators agree to deliver certain service standards. For example, local transport authorities may agree to fund bus lanes, parking restrictions or other facilities which make bus services more attractive and profitable. Operators, in return, agree to a set of standards, such as the time and frequency of services.

96.Professor John Preston explained: “Enhanced partnerships are much more of a partnership between the public and private sector, with the private sector having more control over ticketing, fares and timetables but with an encouragement to have joint ticketing and co-ordinated timetables.”149 The Chartered Institute for Logistics and Transport in the UK (CILT) said “Enhanced Partnerships can achieve an amount of integration, albeit without the same level of compulsion that would come with bus franchising.”150 Witnesses were hopeful that enhanced partnerships could build an ongoing forum to help improve the coordination of services.

Franchising

97.Under a franchise model, a local transport authority specifies the local services it wants—the routes, services, fares, vehicle standards, etc. Operators compete in a tendering process to run some or all of these specified services, with the service specification set in a contract between the authority and the operator. Franchising powers enable local transport authorities to grant operators exclusive rights to run services on a route or in an area. Outside London, only metro mayors and Cornwall Council have automatic access to franchising powers.

98.Franchising is used in London and is common in mainland Europe. Greater Manchester and Liverpool City Region are pursuing bus franchising and hope to introduce their schemes by 2023. The Local Government Association said that “Other authorities will be able to learn from their experience and follow on more easily over the next decade.”151

99.We heard mixed views on the potential effects of franchising. Stephen Edwards, Corporate Director of Public Transport, South Yorkshire Mayoral Combined Authority, said that for “fares and ticketing, it gives greater influence for the region in terms of how we can intervene and simplify some of those situations where the market makes that more complex.”152 He added that franchising may open up more opportunities for different operators, including SMEs, to enter new regions, as the “franchise contract for operating a number of services … gives a degree of certainty that is quite different from what you would have with a commercial operator looking to enter a market afresh.”153 James Freeman, Former Managing Director of First West of England and Chair of Bus Rapid Transit UK, added that operators’ attitudes towards franchising have changed since the pandemic:

“Although at one stage the operating business was very scared about franchising, it is much less scary than it was … if I can get a guaranteed payment for running a service to somebody else’s specification, I would much rather that than not make enough money out of running a deregulated operation.”154

100.A major barrier to widespread implementation of a franchise system is the initial cost. In Greater Manchester, the transition resource costs are expected to be around £20 million, with similar costs expected for the Liverpool City Region.155 Including additional costs, such as depots and fleet acquisition, franchising is expected to cost around £134 million in Greater Manchester and £161 million in Liverpool.156 CILT told us: “For buses, franchising offers direct control over bus services but at a significant cost which may be too much of a risk for many authorities.”157 The unlimited transfer of fares risk is also a disadvantage of franchising.

Box 7: Public transport franchising in Manchester

Greater Manchester began the process of franchising the bus network in 2018, with a plan to join together buses, trams, cycling, walking and rail under a single integrated network: the ‘Bee Network’. Under franchising, the Greater Manchester Combined Authority will coordinate the bus network and contract bus companies to run the services. Their view is that this will address the declining use of bus services—from around 400 million bus journeys a year in the mid-1980s to around 200 million in 2021—as well as reduce fares and introduce capped network-wide tickets. As the first area to use the Bus Services Act 2017 framework to franchise services, Andy Burnham said that the legal framework was “imperfect”: “The Act allows too much scope for challenge, because this is a very difficult process. We recently successfully defended ourselves against a judicial review of the process, and we are now being challenged on very minor technical grounds about the audit of our COVID-19 assessment, which is frustrating”. He also raised the risk that the “slow” return to public transport after the pandemic could lead to a funding gap. In the region, bus patronage has returned to around 80% of pre-pandemic levels, while tram patronage is around 70% of pre-pandemic levels.

Source: QQ 114–116 (Andy Burnham)

Municipal bus companies

101.In five areas in England outside London, Blackpool, Ipswich, Nottingham City, Reading and Warrington, the local transport authority owns a municipal bus company which provides local bus services.158 Municipal ownership is common elsewhere in Europe. The Bus Services Act 2017, however, prohibits the creation of new municipal bus companies.159

102.Andy Burnham told us that the prohibition of the creation of a municipal bus company complicated the process of franchising in Greater Manchester: “The existence of a potential public operator in a franchising process could secure better value for money for the public, rather than asking only the commercial sector to bid.”160 During our visit, Nottingham City Council told us that the municipal bus company arrangement enabled them to take long-term decisions, such as updating the fleet.161 However, we did not hear evidence on both sides of this debate.

Government’s view

103.The Minister said she was “mostly agnostic” about whether transport authorities should follow the enhanced partnership or franchising route set out in the National Bus Strategy. On enhanced partnerships, she said “In our view, most areas could achieve the same thing more quickly and more cheaply by doing the enhanced partnership route”, but “it depends on your relationship with your local operators. If you have a good relationship with your local operators, an enhanced partnership is absolutely fine. If that is not working out quite so well, you might want to do franchising.” She added that franchising “may well work in Manchester”, but “it is turning out to be quite expensive and taking quite a long time.”162

104.We heard evidence that the Government’s ambition for ‘London-style’ public transport throughout England would be difficult to achieve under the current deregulated environment. Initiatives such as enhanced partnerships are a step in the right direction as they provide an opportunity for operators and local authorities to collaborate to improve services. Local and central government should monitor their effectiveness.

105.Some areas may seek to move towards a franchise system, where the local authority specifies the bus services to be provided, determines the routes, timetables and fares and operators deliver these following a competitive tendering process. As with enhanced partnerships, the Government should keep under review the value for money and effectiveness of bus franchising.

Planning

106.Planning has a pivotal role to play in increasing the connectivity of towns and cities. As Transport for West Midlands put it, “How land is used, and where things are located, have a big impact on where and how people travel”.163 Yet transport planning is often disconnected from planning for new housing developments and spatial plans—competing demands mean that transport can be an afterthought in the planning process.

107.Local transport authorities outside London were required to produce Local Transport Plans (which outline policies and implementation plans) every five years under the Transport Act 2000. However, the Local Transport Act 2008 removed this requirement. The Department for Transport told us “61% of authorities have not updated their Local Transport Plans since 2011, leaving many local authorities with outdated plans which do not reflect recent national priorities such as decarbonisation, levelling up and housing.”164 The Minister added that some plans are “so out of date, [they are] basically useless.”165

108.Local authorities criticised the steady stream of requests from central government for new transport plans, bids and assessments. In recent years, this has included Bus Service Improvement Plans, Strategic Transport Plans, Local Transport Plans, and Local Cycling and Walking Infrastructure Plans, among others.

Density

109.Housing density plays an important role in shaping public transport systems. CILT said: “Public transport functions best where fairly high densities of demand exist and complementary land uses are allocated along corridors which can be served on high frequency routes.”166 Public transport is more commercially viable in urban areas which are denser than in more car-based, lower density urban areas.167

110.The Centre for Cities explained that mainland European cities tend to have more mid-rise built form and apartment living, which makes tram or metro systems more viable. They cited the examples of Leeds and Marseille, which “have a similar population size, but 87% of people can reach the centre of Marseille in 30 minutes by public transport, compared with 38% in Leeds.” Marseille has a tram system, however they said even “if Leeds had a similar-sized network to Marseille, 61% of its population would be 30 minutes from the city centre”, adding that gap cannot be closed “without changes to its built form.”168

New developments

111.Aligning with the evidence received for our housing inquiry, witnesses were concerned about the transport planning and infrastructure in place for new residential and non-residential developments. A 2018 report by Transport for New Homes reviewed 20 urban extensions and found that, in many cases, they were being built without any links to public transport.169 The Local Government Association told us that competing demands require councils to shape “density, design and location of new housing in Local Plans to hit national housing targets, meet net zero ambitions and deliver modal shift”, which can leave “residents stranded when the local transport funding or infrastructure is not delivered or quickly withdrawn.”170

112.Graham Vidler said if public transport was better integrated into spatial planning it, “would lead to developments of a certain scale and certain density such that they could more easily support public transport”, on top of “making sure they are designed in such a way that buses can go through them and that there are suitable bus stops for people to access.”171 In our report Meeting housing demand, we highlighted the opportunity to increase residential development on land around railway stations close to major cities to help meet housing demand.172

113.We also heard that engaging local stakeholders can also encourage take-up of public transport services, with potential passengers drawn to stations that are clean, attractive, well-lit and safe. Jools Townsend, Chief Executive Officer of the Community Rail Network, advocated involving communities in taking care of their stations. There are 76 community rail partnerships (involving one or more staff members working with rail industry partners) and over 1,200 station adoption groups (consisting of volunteers carrying out localised work around stations, such as community gardening, community events, arts projects and working with local schools).173 The Community Rail Network found that railway lines with community rail partnerships experienced a 42% increase in patronage in the ten years to 2018, compared with a 35% increase on lines without this resource.174

114.Coordination between spatial planning and transport policy, for example through the Local Plan process, could help shape placemaking which builds in strong transport links.175 The Government has committed to “revitalising” Local Transport Plans and is encouraging all areas to submit a new Local Transport Plan during this parliament, which the Department for Levelling Up, Housing and Communities said will “facilitate greater strategic planning, more efficient spending and, ultimately, better delivery of local and national transport objectives in local areas.”176 The Minister said she was considering the disconnect between Local Plans and transport plans:

“One of the things that I think is missing, however, and that I hope we will be able to resolve, is the interrelationship between a local authority’s spatial plan and its [local] transport plan, which because, as I have mentioned, it is so out of date, is basically useless.”177

115.Effective integration of land use and transport planning will be key to ensuring that new developments encourage public transport use. In some cases, this may involve increasing housing density or building around existing public transport links.

116. Given competing demands and timeframes faced by local authorities, spatial and transport planning can be disjointed. To help integrate transport planning, the Government should formally link the production of Local Transport Plans with Local Plans.

Developer contributions

117.We heard that developers should contribute to funding public transport and infrastructure projects related to their developments. In our report Meeting housing demand, we raised concerns about the Government’s proposals to replace Section 106 agreements and the Community Infrastructure Levy with a new Infrastructure Levy.178 A concern about the proposed Infrastructure Levy is that the developer contributions will be paid at the point of occupation. This might inhibit the development of transport and infrastructure schemes at the start of projects, by requiring local planning authorities to take on the risk of funding any new transport or infrastructure. Jonathan Manns, then Executive Director of UK and Monaco at Rockwell Property, gave an example to our housing inquiry:

“A new road would be required to make a development acceptable. However, the money for that road would come in only when the tax is paid when the homes are sold … you are asking local authorities to borrow against anticipated future receipts from a tax, which requires local authorities to make assumptions about what those receipts will be, but also in effect requires them, as opposed to the developer, to carry the development risk for the scheme, which opens up risks such as: what if the developer does not build out the entire site, or what if the values that are achieved are not as were anticipated?”179

118.We reiterate our recommendation in our previous report, Meeting housing demand, that any system to replace Section 106 agreements and the Community Infrastructure Levy should ensure that the resources raised are spent on delivering affordable homes or necessary infrastructure early in the development and are tied to identified needs. We are concerned that the new Infrastructure Levy could have some of the same disadvantages as the Community Infrastructure Levy.

Local government resources

119.The Government’s proposals to strengthen transport planning will require sufficient resource in local authorities to develop and implement the plans. Witnesses emphasised the lack of transport planning resource in local authorities. CILT warned “Given the squeeze on local authority funding, there are limited opportunities to do much more than maintain services and renew assets.”180 In relation to buses, James Freeman said: “The fragmented nature of local authorities tends to mean that they have very small public transport functions, which have become much smaller with reducing budgets, and their knowledge and understanding of how buses operate has dwindled very dramatically”.181 Concerns about a lack of planning resource in local authorities were also a theme of our inquiry on housing.182 Witnesses such as the Home Builders Federation warned of “chronic under-resourcing and under-staffing” in local planning authorities, causing “discrepancies, administrative errors and additional delays”.183

120.The Minister recognised this, saying “My concern has been the hollowing out of dedicated transport resources in local authorities, and it is what we have been putting funding back into.”184 The Government has spent £62 million on transport capability in local areas through the Capability Fund for active travel, which was designed to “support staffing and resources to draw up infrastructure plans and behaviour change initiatives.”185 The Minister added that the Department has “a much more supportive relationship with local authorities that are not doing so well.”186

Central government policy coordination

121.Public transport touches on the work of a number of government departments and agencies, including the Department for Transport; HM Treasury; the Department for Levelling Up, Housing and Communities; the Department for Business, Energy and Industrial Strategy; and the Department of Health and Social Care. Public transport affects a number of core government policy objectives, including levelling up and decarbonisation.

122.Witnesses highlighted a lack of coordination between these departments, and the policies and funding pots which affect public transport decision making. Transport East warned that better integration between departments would be needed to “unblock and accelerate” public transport infrastructure, as decision making is “separated across Government departments which makes the planning and delivery of major transport infrastructure more difficult.”187

123.Transport North East said that the Government’s approach to decarbonisation of transport:

“deals with emissions from different sectors and sub-sectors in isolation, rather than make connections between them. For example, work to electrify private vehicles is separate from that concerned with greening the bus fleet and from the wider energy infrastructure network.”188

124.We heard that policies in the Department for Transport were also uncoordinated—for example the approach to the Transport Decarbonisation Plan, National Bus Strategy, and the Gear Change Active Transport Strategy. As Transport for the South East said: “Having separate, unlinked Department for Transport programmes for bus and active travel is challenging for local transport authorities who have to reconcile conflicting demands for buses and/or active travel within finite road space.”189

125.Some witnesses called for a national cross-modal transport strategy, to set overarching objectives and help inform local plan making. Coventry Council said it would welcome a national strategy setting out key goals and priorities across modes.190 Jonathan Bray, Director of the Urban Transport Group, cautioned against changing strategies and priorities too often, pointing to Switzerland and Germany which have a long-term national strategy.191

126.The Government requires the seven sub-national transport bodies (which were introduced in 2018 and cover all of England apart from London) to develop a transport strategy for their region. The Department said these strategies would form “a framework for a place-based approach which helps government identify transport schemes to invest in. As part of this, the seven sub-national transport bodies are working to turn national priorities into actionable plans for their region.”192 Martin Tugwell, Chief Executive of Transport for the North, illustrated the risk of too many changes to regional structures, as they can have a destabilising affect and muddy the waters of decision making—he said having seven sub-national transport bodies was the third incarnation of local transport strategy making over the course of his career.193

Government policy on cars

127.We heard evidence that targets to reduce private car usage are increasingly common among local authorities. During our visit to Birmingham, Transport for West Midlands told us that meeting the region’s 2041 decarbonisation target would require (over the next 10 years): a 35% reduction in car travel distance; a 50% reduction in the length of all trips; a 100% increase in public transport use; an 800% increase in ‘wheeling’ journeys (bike, scooter etc.); and a 5- to 6-year acceleration in electric vehicle uptake. They added that meeting the national 2050 net zero target would require a 10% reduction in car travel distance by 2031.194 Transport for West Midlands identified a “preference towards, and perhaps apparent unwillingness to give up, the private car” as the “biggest barrier to improving public transport”: in surveys of the region, 87% of respondents said that their current lifestyle requires them to own a car or van and 94% said that they enjoy the independence which car ownership gives them.195 Leeds has a stated target of reducing the distance travelled by car by 30%.196 A report commissioned by the Mayor of London found that London should reduce car vehicle kilometres by 27% by 2030 (relative to 2018 figures) to meet net zero emissions targets.197 In evidence to the House of Lords Environment and Climate Change Committee, witnesses advised that reductions of between 20% and 30% in miles travelled by car are necessary to meet net zero targets.198

128.While central government has set targets to reduce congestion and decarbonise transport—including through promoting the purchase of electric vehicles—it has not set a target for a national reduction in private car usage.199 We heard that central and local government can be reluctant to set explicit targets for reduction in car journeys as this can be unpopular: the Local Government Association said “Government ambitions about increasing public transport use make little sense when HM Treasury freezes fuel duty every year and cuts funding to public transport. This is a political rather than policy problem.”200 The Martin Higginson Transport Research & Consultancy identified: “A significant barrier is the unwillingness of governments, both central and local, to commit to policies that constrain car use.”201

129.The Government has, however, committed to ending the sale of new petrol and diesel cars by 2030.202 To encourage a switch to electric vehicles, the Government has supported various discount schemes for the purchase of hybrid and battery-powered motor vehicles since 2011. The electric vehicle discount currently stands at 35% of the cost of a new plug-in car, capped at £1,500. In addition, the Government has discount schemes for electric vehicle chargepoints for homeowners, businesses and local authorities.203

130.The Minister told us there was no set target for a reduction in car journeys, stating: “The Government’s position is very much that we should provide different types of modes of transport in urban areas such that people have a good and viable choice, whether that is for cycling and walking or public transport.”204 She described some of the drawbacks of electric vehicles and cars more widely: “Electric vehicles have tyres, and tyre wear is a very important contributor to particulate matter and so poor air quality. They can also create noise from the tyres, and, of course, there is the impact on congestion and in the public realm.”205

131.The inquiry reports a consensus among experts and policymakers that a reduction in trips by private car of the order of 30% is needed to help meet net zero targets. However, there are various contributing sets of evidence that point to different conclusions and, as yet, there is no target recommended by Government. The Government’s policy of promoting the use of electric cars will help work towards net zero, although electric cars would still contribute to congestion and pollution from tyres and brakes.

132.While the Government does not have an official, national target for a reduction in car journeys, some local authorities have adopted local targets for their areas. The Government should provide a clear statement of its policy on journeys made by car, as it has for active travel, bus and rail journeys.

Road space

133.We heard that the allocation of road space was key to building public transport systems that work. For example, in many cases bus services will be attractive for users only if they have some priority over the rest of the traffic and are, therefore, able to compete with undertaking the journey by car.206

134.Improvements to cycle networks can have the unintended consequence of increased congestion for buses and cars. James Freeman noted: “At the moment, to favour the cyclist—because that is where the money and focus are—public buses have found themselves back in the queue, and the bus service becomes unreliable and slow as a result.”207

135.The Urban Transport Group said with road space there is a need to reconcile many, often conflicting, requirements from central government: “from bus priority to cycle lanes, from climate resilience to deterring terrorist attacks and from accommodating e-scooters to walkable neighbourhoods.” They added: “Conflicting demands are made more difficult to manage not only by the limited available road space, but also the severe constraints on local government resources.”208 This issue is compounded by the lack of government coordination on funding streams. In Graham Vidler’s words:

“Over the last couple of years, local authorities received funding for active travel before getting it for buses. That meant in some cases—by no means all—they invested in temporary bike lanes, which in some cases removed bus lanes altogether and in other cases interfered with their operation.”209

136.James Freeman said:

“There have been a number of circumstances across the UK where buses have found themselves pushed back into the general traffic and a lane created for bicycles. I am all in favour of cycling … but that has worsened the bus operation … The difficulty is that, if you do not think about the whole offer, those sorts of things will happen.”210

137.The Minister informed us of plans for metro mayors outside London to be responsible for ‘red routes’—the busy travel corridors in their areas—mirroring the responsibilities of the Mayor of London.211 This could help deliver a more coordinated approach to those specific routes and ease congestion.

138.An uncoordinated approach to public transport policymaking in Whitehall has left local areas with often irreconcilable targets—for example on allocating road space to bicycles and buses. This can be a drain on resources in local transport authorities, an inefficient use of road space, and can cause delays and congestion.

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