You wait ages for reform, then three come along at once – driving better local bus services

Presentation to L G Group Annual Conference - ‘Localism Works’

David Brown, SYPTELead DG for pteg on bus issues

29 June 2011

 Choppy waters ahead

• Concessionary Travel cost is going up but DfT funding going down

• BSOG cut on the horizon in 2012

• Tendered services are a major area of non-statutory local government transport spend and thus vulnerable

• Rising industry costs, eg labour and fuel

• Main funding block for local government capital improvements for bus infrastructure (the ITB) halved in a year

 Policy Challenges

• Government policies offer choice = greater desire/need to travel

• Growth in economic activity is not always complimentary to carbon reduction

• Localism and sub-regional travel patterns

• Changes to land use planning rules

 How is local government responding?

• Some Shires and Counties disposing of their supported networks – or nearly

• Bus networks in Met Areas are more extensive and enjoy more cross party political support - so big reductions in tendered networks are a last resort we generally haven’t reached yet

• Where efficiency savings don’t bridge the gap – then PTEs are turning to changes to CT fares and charging for services where they can

• But this is year one – and year two gets tougher and budgets less able to cope with unforeseen shocks (eg higher levels of commercial de-registrations)

• Are we moving to three Englands for buses – London, the Mets and cities, the rest?

 Lifting our eyes to the horizon

• Getting through the next few years will be tough but…

• Funding levels do begin to pick up again in a few years’ time

• The essential advantages of the bus as a key tool of urban transport policy remain

• The planning for a smartcard revolution is picking up speed – transformatory potential in a few years’ time

• Buses getting more politically resonant – as the recent BSOG and Save our Buses campaign shows

• Buses recognised as essential to social mobility and addressing worklessness

 LTA 2008 bus powers

• LTA 2008 was a big breakthrough by making VPAs, SQPs and QCs more effective tools

• We have been making good use of these tools – in partnership with operators wherever we can

• In any review of bus policy following on from the Competition Commission investigation we want to see these powers retained and strengthened

• Reducing or removing any of these powers will take the bus sector backwards

 Making more of less funding

• Financial support for the industry is falling so we need to do more for less

• Better targeting of that funding is key

• In the Met areas we think we can work with operators to make sure the funding is targeted on local priorities

• We need to collectively look at total resources – Commercial, Tenders, CT, BSOG

• Devolved BSOG could be targeted on bus priority (to reducing operating costs and increase patronage), on supporting smart ticketing, travel planning or on vehicle standards

• Window of opportunity for operators / PTEs on BSOG reform – before something is done to us

 Competition Commission Investigation

Provisional Findings:

• Some features of local bus markets which “prevent, restrict or distort competition”

• These features are present in a large proportion of local markets

• They have ‘an adverse effect on competition’ (AEC)

• CC estimate detriment to consumers and tax-payers in excess of £70m per annum

 Competition Commission Investigation

Potential Remedies:

• Market opening measures:

- Ticketing- Regulation of operator behaviour - Service frequency

- Fares changes- Access to bus stations

• LTA–led initiatives

- Franchise approach – QCs- Partnership approach

• Tendered services

• Other remedies - Ruled out divestment and direct control of outcomes

 Conclusions

• The key advantages of the bus in urban transport policy are as strong as ever

• We need to ensure that bus policy is quick to take advantage of new and wider policies on smart travel, sustainability and economic growth

• But we can’t wish away the fact that the story of the bus in urban areas in recent decades has been one mainly of decline – and the funding climate is not encouraging

• Empty platitudes about partnership won’t change that - practical application will

• Instead we need to redouble our efforts using the tools in the LTA 08 – as appropriate

 Conclusions

That means:

• “Crunchy” Partnerships based on an evidence base and real measurable and delivered commitments

• SQPs that deliver better services using more bus priority

• The QC option retained in legislation and tried out on the ground Government to reduce transition risk?

• Devolution of BSOG

• It also means making the best use of the available funding (through better targeting)

• A more cohesive and effective structure for understanding, monitoring and where necessary enforcing performance improvements