Issue 25 June 2011

New start for the bus?Fifteen months into its two year inquiry, theCompetition Commission (CC) has given its provisionalfindings on the state of the bus industry, which could inturn trigger a major government rethink on how toswitch the sector from decline into growth.

The CC has backed buses Minister, Norman Baker’sview, that profits are higher in the industry than wouldbe the case if the market was working properly. The CC puts the cost of the failure of the bus market at£70 million a year. If all the externalities are taken intoaccount, the full figure is probably nearer to half abillion pounds over five years. More than enough totransform urban bus services - with smart ticketing andgreen, clean buses as standard.

The welcome surprise in the CC report was that theyhave turned their back on the traditional approach of the competition authorities, which is to break uplocal monopolies to try to trigger more on-street buswars between competing companies. This is goodnews as short lived bus wars do little to improve the bus's battered reputation and can cause trafficchaos in the process.

Instead of bus wars the CC favours establishing a more structured format for competition. Eitherthrough creating competition 'for the market' throughthe introduction of franchising, or through morecivilised competition 'in the market'. The latter wouldinclude ending sudden, and temporary fares andservice changes designed only to wipe out rivaloperators' services.

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r New start for the bus?Continued from page one...

Now that the CC has set out its draft conclusions andremedies there's an opportunity for all affected to pilein with further evidence and views. Then, later thisyear the CC will issue its final draft remedies, settingthe scene for a wider Government bus policy rethink.

Unless there are big changes in the final report, the three measures in the Local Transport Act 2008 -voluntary partnerships, statutory quality partnershipsand franchising ('quality contracts') - look likely toremain the basis for a future bus policy. These threetools are already being actively used by PTEs andlocal transport authorities elsewhere to make busesbetter. Several PTEs are using well developedfranchising plans as the engine for bus improvementsin their areas, Merseytravel has the UK's biggest suite of statutory quality partnerships at the heart of its bus strategy, and the West Midlands has one of the most comprehensive sets of voluntary partnership agreements.

With so much good coming from the Local TransportAct’s buses powers, PTEs will be making the case to Government to build on these foundations in anybus reform.

The CC report won't be the only factor in anyrethink. There’s a big political consensus around theneed to roll out simple, smart Oyster-style ticketingacross local public transport, with Norman Bakerwanting to see the infrastructure in place to enablemost public transport journeys to be undertaken usingsmart ticketing by December 2014. Smart isattainable - simple is harder (outside of franchising).Under franchising the local transport authority canspecify simple zonal fares across an entire busnetwork. Without franchising this is trickier toachieve. Also in the policy mixer will be how theGovernment can get more from the subsidy it alreadyputs in. The £500 million the Government currentlypumps in through a fuel subsidy known as BSOGgives them significant potential leverage in any newpolicy settlement.

David Brown, South Yorks hire PTE DirectorGeneral and lead for pteg on bus issues.

“There is a big opportunity here for the CompetitionCommission’s final report to cracksome of the remaining obstacles tobetter bus services that the LocalTransport Act 2008 didn’t quitemanage to do. This includessupporting the rolling out of simple,integrated, smart and multi-modalticketing that people in major urbanareas have a right to expect, andfine tuning the franchising andpartner ship options contained in the Act to make them moreeffective and easier to deploy.

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Following the recent McNulty report into rail valuefor money, emerging themes from the Government’sreview of rail policy are that the industry costs toomuch and is simultaneously too complicated and toocentralised. There is welcome recognition thatdevolution of more responsibilities for local rail ispart of the solution.

Examples from Merseyside, London and Scotlanddemonstrate that when powers over local rail aredevolved, levels of performance and investment aretransformed.

The upcoming refranchising of Northern offers anopportunity to test the potential for further devolution of local rail and all the PTEs are involved in workingtogether to build a case and a proposition on how this could be achieved in practice, drawing on theexperience of success stories like LondonOverground and Merseyrail Electrics.

Chair of pteg Geoff Inskip explains:

‘Devolved transport authorities are in a betterposition to make the right calls on investment andcost control than remote civil servants in Whitehall,For example, in the city regions there is enormouspotential to bring down costs by convertingtraditional heavy rail services to tram-train, as wellas for operating less busy lines in less costly ways. Ticketing costs could also be reduced throughincluding heavy rail within the wider smartcardticketing that we are introducing.’

Transforming local rail

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Merseyrail ElectricsPerformance and investment in the Merseyrail Electricsnetwork have seen a major boost since Merseytravelbecame responsible for the franchise. The network is now one of the most punctual and reliable in thecountry, as well as one of the most intensively used. It consistently tops passenger satisfaction league tablesand has benefited from a completely refurbished fleet as well as substantial investment in stations.

London OvergroundSince Transport for London became the franchiseauthority, what is now known as London Overgroundhas been transformed out of all recognition thanksto a £1.4 billion investment programme. The networknow benefits from a brand new fleet of longer trains;faster, more frequent and more reliable services; new direct services and stations; improved safety and security and; smart and integrated ticketingthrough Oyster.

ScotrailThe Scottish Executive now has powers to manage and monitor the performance of Scotrail. Devolutionhas seen the reinstatement of 15 miles of track to provide a new link between Edinburgh andGlasgow as well as the reopening of the 21 kilometre Stirling-Alloa-Kincardine line. There are plans to reopen a further 35 miles of track and some 130 new carriages are on order. Delays on Scotrail have halved and passenger numbers are up 20 per cent since powers were devolved.

pteg represents the six English Passenger Transport Executives (PTEs). Leicester City Council, Nottingham City Council,Strathclyde Partnership for Transport and Transport for London are associate members of the group. If you would like to be added to our mailing list for future copies of the newsletter, and other information on pteg, then contact us at:

pteg Support Unit ■ 40-50 Wellington Street ■ Leeds LS1 2DE ■ Tel: 0113 251 7204 ■ www.pteg.net ■ Email: info@pteg.net

• Investment in walking and cycling has been found to have benefit to cost ratios of 10:1 – two thirds of which is due to savings in health care costs.

• Just one Ring and Ride service for disabled people in the West Midlands has saved the healthsector between £13.4m and £58.5m due to reduced need for care, home help and meals, reduced use of costly alternative transport services (such as taxis), reduced need for escorts and improved access to employment.

• A new bus service connecting disadvantaged com munities to a specialist health centre saw missed appointments reduce by 60 per cent. Missed outpatient appointments cost hospitals £600m a year.

• Some 80 per cent of beneficiaries from a PTE-led scheme to overcome transport barriers to work said they would have struggled to reach employment opportunities without it.

Just some of the ways public transport, walking and cycling support other sectors

Transport is often viewed simply as a means of getting from A to B. However, scratch beneath the surfaceand it is clear that it is so much more than merely something that happens while you’re on your way to other things.

For the many households who either do not have a car, or choose not to rely on it, a good public transport,walking and cycling network is vital in enabling them to connect to opportunity. Opportunity to work, play,learn and to stay healthy and happy. Such a network can also be an end in itself, promoting good health by challenging the sedentary lifestyles that cars promote and creating cleaner, safer and more pleasant environments.

As such, public transport, walking and cycling have a significant contribution to make towards achieving policy goals in a range of areas, from tackling obesity to reducing unemployment.

Despite the benefits to other sectors, it is transport that tends to foot the majority of the bill for schemes like these. A new report from pteg suggests a move towards a ‘Total Transport’ approach is needed in order to safeguard the future of this important work in light of spending cuts that have hit transportparticularly hard.

Total Transport would see agencies from the worlds of transport, health, education and employment get together to pool their transport resources and expertise. In doing so it would be possible to eliminateunnecessary duplication of effort and focus on the best, most efficient and cost-effective ways of achieving the outcomes we want.

Our report sets out a series of practical steps towards a more joined-up, cross-sector approach to the delivery and funding of transport. It also explores the contribution transport can, and does, make to other sectors, demonstrating that public transport, walking and cycling offer so much more than simply ways of getting from A to B.

Total Transport – from A to B and beyond...

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