Bus Services across the UK (HC 1317-i) Transport Committee 21 Jun 2006

Q88 Mr. David Clelland: Mr Parker has reminded us of the number of bus companies there were in the early days of the opening of the Metro system and the privatisation of buses, but could our witnesses tell us what percentage of services in their areas are not provided by the big five operators these days?

Mr Parker: Two per cent from Tyne & Wear.

Q89 Chairman: Anyone else? Any advance on two per cent?

Mr Smith: In Centro 80 per cent of our services are operated by Travel West Midlands.

Q90 Mr. David Clelland: Could the PTEs tell us what value for money they actually provide?

Mr Parker: That we provide?

Q91 Mr. David Clelland: Yes.

Mr Wicks: I will tend to start the questions if you like, Chair, to ease the process. We are about one per cent by the big two bus operators in South Yorkshire now that the last remaining small big operator, Yorkshire Traction, was taken over by Stagecoach. What value for money do the PTEs provide? You have only got to look around the major conurbations and you will see that the PTEs are providing a lot of the things that the bus companies are not providing. They are providing information, the timetables, and the telephone call centres that provide information. In West and South Yorkshire you will see, as in other PTEs, information now being provided to mobile telephones and computers and things with real-time information. We provide interchanges where we provide staff at the interchanges. If you benchmark how we provide that, it is not just about providing the services, I think you will see those services are provided very cost-effectively. They are all things that we provide that reduce the barriers to people making their journeys. We then step in to top up the commercial market. I would be quite envious of the Brighton position if I had 97 per cent commercial operation. In South Yorkshire ten per cent of the market is now tendered services and what we are finding - my colleagues would all be saying the same thing - is we are increasingly having to buy a bigger share of the market and it is costing us more each time we go out to the market to buy services because there is less competition for those services and the costs of those tenders are going up. We think we are very efficient organisations at procuring those services. We strongly believe that if we were not there as organisations, to go back to the Chairman's first question, the rate of decline in our areas would be greater if it was not for the initiatives that we are taking to intervene.

Chairman: Gentlemen, I should warn you that we might have to adjourn any minute for a vote. It is not a personal comment on our witnesses and I hope you will not go away. Please carry on.

Q92 Mr. David Clelland: In light of the reply, could I ask in terms of PTEs whether you feel that services in your areas are reliable? Have you managed to limit route changes and the removal of services and stop over-bussing and, if so, how?

Mr Wicks: Reliability is quite a complex issue. It is very easy and quite common for reliability just to be seen to be a matter of traffic congestion. Traffic congestion is an important factor, in our own surveys it is around a third of the reasons why buses are unreliable. The other two main reasons tend to be either presentation of the vehicle in the first instance and/or staff, so people do not turn up to run the buses or the bus itself does not turn up. The next chunk is boarding and alighting. I know it is an old joke that it is the passengers that get in the way of running a reliable bus service, but the way in which tickets are sold is critical to the speed at which buses move through the system. When you are looking at investments, speeding up ticketing, for example the introduction of Oyster-type travel arrangements outside London, can have equally as great an impact on the reliability of journeys as can investment in traffic systems. Certainly in South Yorkshire, and I am sure my colleagues can add, have concentrated on all of those. We have sat down with our own bus operators who had problems with staff shortages and vehicle presentation and worked with them to get them to reduce that, and that is now a declining proportion of the reasons for delay. We worked with the city council and the other highway authorities to regulate the traffic and improve the flow and hopefully we will be getting government funding to introduce a smart card ticketing system which can speed up the boarding of passengers.

Q93 Chairman: Mr Ferguson?

Mr Ferguson: In terms of our area, for the original question, around 50 per cent of the services are provided by the big three operators: First, Stagecoach and Arriva. The other 50 per cent are provided by around 100 other bus operators. If you look at reliability, for the big three I would say that, by and large, they try to provide a reliable service within the factors that they can control. Within that 100 other operators it is very, very variable, some try hard, some do not try hard at all to provide a reliable service.

Q94 Chairman: Mr Dowd?

Mr Dowd: Could I mention finance because we are in a position, again on Merseyside, where we spend now in the region, on subsidised services, of around about £24 million.

Chairman: I am sorry about this Mr Dowd, we will have to hear about the 24 million when we come back. The Committee is adjourned and I will be grateful if Members could return within ten minutes. You are entitled to 15 minutes.

Q95 Chairman: Mr Dowd, you were about to make a comment.

Mr Dowd: Yes, finance. We were in the position when Mr Scales joined the organisation about seven or eight years ago where we spent in the region of £8 million or £9 million on subsidised services; we spend about £23 million now on subsidised services. Added to that, we pay the bus operators £20 million for concessionary travel for the elderly, £71/2 million for disabled people and £41/2 million for half fare for children which costs £32 million. We spend a huge amount of money. The thing about the £32 million is we have no say on when the buses begin, when they end, the routes, the frequencies or the fares and that is a great problem. Of course the bus operators laugh all the way to the bank and no wonder that they do. They really do not need to change the system because the system suits them as it stands at present.

Q96 Mr. David Clelland: That brings me nicely to the next question because you have all really in your written evidence said that you should have more power. Perhaps you could explain to the Committee what extra powers you think you need and how you could justify the extra powers?

Mr Dowd: Can I answer that. Over the past six or eight weeks I have actually been to Ireland, they have a regulated service with an increase of 12 per cent on patronage every year. London, last year, was £30 million. We know for a fact that London actually spend - this is Transport for London - £1,400 million on bus contracts, the actual subsidies are £550 million. Now they are in the premier league, we are in the Beazer league, that is the problem that we have got. People in London, I am talking about per head, it is around about £660 per head, people in the sticks around about £230.

Q97 Mr. David Clelland: You want the power to spend more money?

Mr Dowd: Yes. We need some sort of add-on for us so we can look after the people, our people ---

Q98 Chairman: That is not an answer, Mr Dowd, to the question you were asked. The question you were asked was about powers. Do you want just the money and then keep the powers or are you saying you want the powers and you would not then need the money, what is the answer?

Mr Dowd: The answer at the end of the day is obviously to give us the finance. What we can then do is have a bus service which the people that we represent can be proud of, similar to London, that is all we ask.

Q99 Chairman: Mr Ferguson, do you have these powers?

Mr Ferguson: We effectively have the same powers in Scotland as exist in England and Wales. Some of the details around the Transport Act 2000 are slightly different but by and large the ability to introduce quality contracts and statutory partnerships are the same. Like in England and Wales we have not used those powers, and the reasons that we have not used them are that quality contracts, although the rules by which you can introduce them, the wording is slightly different in Scotland, the guidance that sits behind them still makes it very clear that quality contracts are seen as the last resort after other opportunities have been taken to improve services. We do work with operators in terms of trying to improve services through partnership but because there are so many operators involved it has proved impossible to raise the general standard of services.

Q100 Chairman: Did you want to comment on that?

Mr Inskip: I would, yes, please. We do need more powers. We need more powers for network stability, to co-ordinate services. We need to organise the buses through the city centres, the town centres and the region, and we need simplified fare systems throughout the conurbations as well. The only way to do that is by having greater powers over the bus services. I do not think we would apologise for wanting to spend more money on raising the standard and giving people better quality bus services.

Q101 Chairman: Mr Wicks?

Mr Wicks: Mr Inskip has covered most of the points. The other one I would add is that I think what the highway authorities want is the confidence to invest in the reliability improvements and that comes from knowing the bus service will still be there after they have made the investment. I think having the powers over the provision of the service reinforces the investment and reliability.

Q102 Chairman: Mr Parker?

Mr Parker: I think we look very enviously at the powers of Transport for London, particularly over the strategic highway network where Transport for London is able to drive bus priorities more flexibly than we are able to do in partnership with local authorities. We also need powers on bus operator performance. Colleagues have mentioned poor performance before but we have no powers, the Traffic Commissioner has powers but in terms of Tyne & Wear our local Traffic Commissioner is based in Leeds and I understand he has two individuals responsible for looking at bus services between the Trent and the Scottish borders. We would like powers like Traffic Commissioners to ensure that bus operators perform and provide the buses that they register. In Tyne & Wear we have about four per cent of bus services, which I think is quite a good statistic, I am told, but four per cent of bus services just do not operate because either there is not a bus or there is not a driver. If I do that on my Metro I would be shot.

Q103 Chairman: Mr Smith, same ideas?

Mr Smith: Yes, indeed. I think what is required is a system where the public sector specifies what is to be provided and the private sector does what it is good at which is providing for that specification. It allows bus operators to concentrate on what they are good at and it allows local authorities clarity of their particular role.

Q104 Mr. David Clelland: Finally, are there any powers which local authorities currently have which would be better exercised at the PTE level?

Mr Wicks: There is one power in that Passenger Transport Executives are not actually able to own buses whereas some Shire counties and district councils have that power. It ought to be put in place fairly easily.

Q105 Chairman: Unlike somewhere like Cheshire, you cannot offer a complementary or alternative system?

Mr Wicks: We cannot own vehicles. It is as simple as that.

Q106 Mr. David Clelland: What about things like common rules for bus lanes, for instance, which is a big problem in some areas?

Mr Parker: Chairman, it is a real problem when you have got five local authorities in Tyne & Wear who all have different rules for bus lanes. Trying to get them all to agree to have the same rules, the result is the police are more reluctant to enforce bus lanes because they claim that drivers can always use the excuse that they are confused and they are not quite sure whether they are in Gateshead or Newcastle.

Q107 Chairman: In what sense can they not combine them, Mr Parker? You are not saying you have a bus lane which finishes up in a dead end and then the next one starts.

Mr Parker: No, no, it is not combining. For instance, one local authority may have a no car lane which allows taxis and vans as well as buses and cyclists, another might not. One might operate between seven in the morning and seven in the evening, another might operate in the rush hour.

Q108 Chairman: Is there any attempt to standardise?

Mr Parker: We have tried very hard, Chairman, but have yet to succeed.

+++

Mr Inskip: Madam Chairman, there is just one point I want to make as well. It is great giving people free travel but they have to have the buses and the services there to use them. If there are no services it is no good having free travel.

Q132 Mr. David Clelland: I accept that last point, but on this question of giving concessions to young people, it is possible to give concessions to students in full-time education under 18.

Mr Parker: Under 18 it is but not over 18. Over 18 it has to be a commercial decision of the bus operator, not allowed to put public subsidy in.

Q133 Mr. David Clelland: Even then, young people under 18 in full-time education, some might be going to further education colleges, not necessarily all going to sixth form, may have to travel across the boundaries of the Passenger Transport Authorities. Is there a case for having a wider than PTE regional scheme?

Mr Parker: Absolutely, Chairman, yes.

Q134 Mr. David Clelland: In order to finance that, presumably you would need the co-operation of other partners in the region. Is this something which Regional Development Agencies might help out with?

Mr Wicks: If I could add to the comments which have been made and respond to the question. There are two or three things here which come together on what I would call the city region agenda. I think there is a strong argument and it is part of emerging government thinking to look at the role in the city regions and to recognise that transport does not necessarily neatly fit into the current administrative boundaries but it should fit within the city region boundaries. I think all the PTEs feel quite strongly about an alignment of powers which gives them more local accountability and local flexibility about how they organise those transport services, and it goes back to the debate about quality contracts and the debate about concessionary fares. It would seem to me they are local decisions at the city region level, not necessarily national decisions, and I think if you align those powers then you can address the cross-boundary issue.

+++

Q151 Mr. David Clelland: Given everything that has been said, how profitable are the bus companies compared with other businesses in your area?

Mr Dowd: Rich.

Mr Parker: Extremely. The return in Tyne & Wear in 2004 was over ten per cent in the three big bus companies.

Mr Smith: We have been told in Birmingham by a Director of Travel West Midlands that their return is around about 19 per cent.

Q152 Chairman: So they are not doing badly. Anybody else?

Mr Inskip: Similarly, in Greater Manchester I would say that typically bus operators where they run railways are making four to five per cent, on coach operations now eight per cent and certainly on bus operations I think in excess of 25 per cent on some routes.

Q153 Chairman: Mr Stagecoach still earns the bulk of his profit, does he not, from buses?

Mr Inskip: Yes.

+++

Q185 Mr. David Clelland: On concessionary fares, is the current concessionary fare system fit for purpose?

Mr Lynch: If we are talking about England then our belief is it is not. It is a very disjointed system, as recognised by the Budget this year in which it was said that there will be changes again in two years' time in 2008, which we welcome as an organisation. There are all sorts of inconsistencies. I live in Cornwall. Cornish residents have a very good deal at the moment, they have a 24/7 availability of concessionary fares. There may not be quite the same availability of buses, of course, but they can at least use their passes at any time of day. Come the national scheme in 2008 it is quite possible that the same restriction of 9.30 will apply and I believe that Cornish residents, for example, could end up with a worse scheme because you will have great difficulty in having a local variation in time just for Cornwall where everyone else, if you live in Blackpool say, can only use it after 9.30 in Cornwall but if you are a Cornish resident that would be okay. I do not think you can do that. There is a whole raft of questions to be answered. Is it going to be a scheme that lifts up to match the best that is available now or is it going to be one that goes down to be a basic minimum for all users?

Mr Moffatt: The concessionary scheme in Northern Ireland is very similar to the GB model in terms of reimbursement but the difference is de facto it is a national scheme, it applies across the whole of the Province. It has been extremely successful in starting to rebuild confidence in public transport after the years of troubles. We are now extending that into the Republic of Ireland. Senior citizens can use concessionary passes on the trains right down into the south of Ireland. I think that is very, very important. We all have the issue of reimbursement rates and so forth, but our system works pretty well and the key is to have a uniform system because people do not necessarily travel according to local authority boundaries.

Q186 Mr. David Clelland: Can I ask Ms Kavanagh if she thinks the Freedom Pass system should be used throughout England? What are the pluses and minuses of that?

Ms Kavanagh: The Freedom Pass system works very well in London. For one thing, it is much longer established than anything else. One of the key reasons why it does work is that it is a joint agreement with all the local authorities, so residents of one borough have access across London to free travel. That element of it provides a lesson for the rest of the country. We still have boundary issues, as with any of these schemes, but the key issue is to try and solve those boundary issues.

Q187 Mr. David Clelland: The Mayor recently announced a new concessionary system for students in London. Who does that apply to and how is it financed?

Ms Kavanagh: Currently under-16s travel free and it is being extended in September to under-18s in full-time education. It is funded from the general grant.

Q188 Mr. David Clelland: Just two quick questions from something Ms Kavanagh said earlier. You talked about bus growth in the outer areas and the question was whether the Congestion Charge had been responsible for bus growth and you were saying it had grown anyway in the outer areas. How many of the extra people using buses in the outer areas are using them to travel in and out of the Congestion Charge zone?

Ms Kavanagh: Again, a relatively small number. Your average bus trip is about three kilometres, so a huge part of our bus trips are to outer suburbs, for example to a town centre like Croydon and all the feeder services to that area. It is a very small number of people who transfer from Outer London to Central London.

Q189 Mr. David Clelland: Finally, on bus priority lanes, who sets the rules and regulations for those? Are there common rules right across the TfL area?

Ms Kavanagh: No, unfortunately there are not. That comes back to the political negotiation about what is acceptable. From Transport for London's point of view we would like all bus lanes to operate seven days a week, 24 hours a day, but that is a matter of negotiation with the local authority who control those as to what levels we can get.

Q190 Mr. David Clelland: So there are different rules in different areas. In some areas perhaps taxis can use lanes and in others they cannot?

Ms Kavanagh: No, taxis can use them. It is things like the hours of operation that vary. That is not by borough, it is individual bus lanes that have their own set of requirements.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.