Stephen Edwards.

Q138 The Chair: Welcome to the House of Lords Built Environment Committee’s public evidence session on our inquiry into public transport in towns and cities. Our inquiry is considering future trends in public transport use and innovation, but in towns and cities. We are also very interested in the extent to which local authorities are well equipped to deliver high-quality public transport services. We are going to make recommendations to the Government later in the year.

On the local authority theme, we are very happy today to have our witness Stephen Edwards, who is corporate director of public transport in South Yorkshire Mayoral Combined Authority. Our session is being broadcast on parliamentlive.tv. A full transcript will be taken and will be made available to you, Stephen, to make any corrections after the session. Can Members and witnesses keep their questions and responses as brief as possible, as we have a lot to cover this morning, including a second witness after Stephen?

I will kick off with a question about the patterns of transport usage in South Yorkshire post Covid. We are very aware that has had an enormous effect, particularly in your region. We would be very interested to hear about the temporary and permanent changes in behaviour.

Stephen Edwards: As you said in the introduction, patronage has obviously been significantly impacted over the last two years. Over the last six months, we have probably reached a period of relative stability if you take out various periods of holiday. Roughly speaking, our public transport is running at around 75% of pre-Covid levels. That is on bus and light rail in the region, but that disguises some underlying significant variations based on the type of person travelling and the area.

South Yorkshire is made up of four local authorities. They are very different in their make-up, from very rural areas to Sheffield, which is obviously a very urban city centre. The level of patronage return is very different across the region as a whole. Doncaster has the highest return of passengers overall; passenger return there on bus is between 80% and 90% of pre-Covid levels. Contrasting that, in Sheffield, passenger numbers are 60% to 70%, so significantly lower. Rotherham and Barnsley are in between.

The main underlying factor for that difference is the different economies in those areas and the type of work that is available to people, particularly when we look at farepayers. Doncaster has a significantly higher increase in farepayers travelling, which seems to reflect the economy and the type of work. There is more face-to-face work in which people cannot work flexibly or from home, whereas Sheffield has a much higher density of office-based workers and more opportunities for people to continue working flexibly and not return to the office.

We are also seeing differences across different types of traveller. Levels of concessionary travellers—generally older people—have been stubbornly low at 60% across all four local authority areas, and have probably only varied between 50% and 60% for the last 18 months. There has been very little increase beyond 60% of those people who would be travelling for free. From talking to colleagues around the country, that seems to be a common issue. There is a real drag on the return of those passengers.

As you might expect when schools have fully opened and returned, the percentage of schoolchildren travelling is up in the high 90s, so they are very close to pre-Covid levels. Farepayers are somewhere in between and vary quite dramatically over the four local authority areas.

On rail, our primary operator that carries the most people in this part of the country, Northern, is at around 80%. Leisure travel has been significantly higher than commuter travel. In some cases, leisure travel has been beyond 100% of pre-Covid levels, but commuter travel still seems to be very depressed, at below 50% of pre-Covid levels.

The Chair: That is absolutely fascinating. Do you see these behaviours as permanent? Is that how you are planning for the future, or is it just fear of the Covid that is around? Our clerk has Covid; it is about.

Stephen Edwards: In terms of the medium term, so the next 18 months to two years, we are seeing some continued increase in passenger numbers, particularly in terms of farepayers, but not a dramatic increase. We are projecting to get to 80% to 85% of overall patronage return over the next 18 months.

As I said at the beginning, looking back over the last six months, our passenger numbers are slowly increasing, but they are pretty stable now. There is no rapid increase as we saw when some of the restrictions were lifted. You could see some step changes then, but we seem to be in a pretty stable position.

What happens in the autumn from an infection perspective will be quite interesting. As the next cohort of school returns come back in the autumn, that period between September and Christmas is usually the biggest time for travel on our networks. That will really be a test of how passengers are returning.

The Chair: Are you worried about the concessionary travel having gone down so much? Is that the elderly not getting out and about?

Stephen Edwards: A couple of factors influence that. For some people, a concern about being in crowded spaces is undoubtedly still feeding through into that, but there are also just general changes in the way that people live their lives now: greater use of online shopping and just having less need to travel than previously. Having been exposed to some of those alternatives, people have found them attractive options in some cases compared with the way that they travelled previously.

Q139 Lord Stunell: Can I ask a question about interconnectivity? What is South Yorkshire doing to deliver better connectivity? How do you want ticketing reformed to improve connectivity and interoperability in South Yorkshire?

Stephen Edwards: On the point about ticketing in particular, we have a long-established, multi-operator ticketing scheme in South Yorkshire that is well used. Of people making fare-paying journeys, probably about a third of all journeys in South Yorkshire are made with a multi-operator ticket, which is valid on any operator across the region. In effect, that gives people capped travel for the day, week or month, depending on the type of product they purchase.

Underneath that, there is a wide complexity of ticketing offers. Each operator has its own range of tickets, from single fares through to return, daily, weekly and monthly tickets and a number of other variations. It is an incredibly complex area, particularly for non-regular bus users or public transport users. Although there is a good offer here, a lot more can be done to simplify that whole pricing regime.

The other area is the technology that would support tap-on, tap-off type usage and daily and weekly capping, for which the reference point is the type of system that works in London and the south-east. That is something that we are aspiring to implement across the region. That was part of our bus service improvement plan bid for funding, but unfortunately we were not successful through that process.

Lord Stunell: Does the existing offer covers all modes, or were you talking only about buses as the usage of that particular pass?

Stephen Edwards: There are variants that cover all modes. Within the area the Supertram system operates in there are bus, tram and rail options. It covers all modes. For travellers in South Yorkshire, bus is by far the biggest mode by market share in terms of numbers of passengers travelling, but the offer extends across all of the public transport modes in the region.

Lord Stunell: Are the barriers purely financial? If the Government gave you the money, would you do it? Are there some organisational or cultural problems to overcome to get a more comprehensive offer?

Stephen Edwards: Funding is a challenge. In this part of the world, there was obviously an initiative that Transport for the North was leading to look at ticketing across the north of the country. To some extent that has slowed progress.

There is still large use of single tickets, which still make up a large part of the market. There is also a need to educate and communicate to people, but to some extent that is the complexity of the ticketing system. Tap and cap and daily capping in particular help you remove and cut through a lot of that complexity. The offer to passengers is much more straightforward if you know there is a maximum charge that you are going to incur for a day’s travel regardless of how many journeys you make. That message is much simpler and more comprehensible to people who travel, particularly those who do not travel frequently.

Q140 Lord Best: You are the boss of public transport for the mayoral combined authority. Structurally, in governance terms, how important is it to be part of a combined authority, in terms of having a strategy across your region?

Stephen Edwards: It is really important because of the footprint for people who travel, particularly for work, education and leisure. Those people are travelling not just in one of the local authority areas; we have people travelling across the region to access the range of employment, education and leisure opportunities. Being able to plan transport across that geography is really important to ensure that the infrastructure and facilities are there to support those journeys.

Q141 Lord Moylan: Mr Edwards, thank you for coming. Could I turn to the bus service improvement plan bid that South Yorkshire submitted, which did not receive any funding? Would you like to comment on why that was in the first place? What factors influenced that decision?

Stephen Edwards: We have had some feedback, but it is fairly limited on the aspects that were not considered strong in our bid. The process that we went through in South Yorkshire predates the national bus strategy launch. Our previous mayor instigated a bus review when he was elected. That was a wide piece of work that drew on input from the public and various stakeholders and made a number of recommendations for improvements for bus services in South Yorkshire.

On the back of that, we developed an improvement plan locally that sought to do a bottom-up review of our bus network and what would be appropriate for the region in the future. That work overlapped with the national bus strategy but was slightly out of kilter in terms of the evidence coming back from that process to support the submission of the BSIP.

In part, the timescales were difficult from our perspective. Having something with very strict timescales did not reflect the position locally in terms of the evidence base that we were collecting. We have a very robust evidence base of where demand is, where demand is going to be in the future and what the shape of our bus network needs to look like, but that work was not completed in time for submission in October last year.

We shared this with officials in the department, but the process meant that, although we complied with all of the requirements of the national bus strategy, we have already implemented our enhanced partnership here, the timing just did not work for us. One of the challenges of having a very rigid process is that it does not flex to meet the different positions that each area is in in terms of making the most of the opportunity that was available through the national bus strategy. The timing just did not work from our perspective.

That is a missed opportunity. We have a really strong body of evidence, backed up by solid research and information, of where interventions would be beneficial in the region, but because it did not fit into the time window it feels as though we have missed out.

Lord Moylan: So it was essentially a matter of process and timing rather than content. How will that affect bus services in your region? Will it make a dramatic difference or are you carrying on regardless?

Stephen Edwards: We are carrying on with our plans to improve services where we can and where we can find funding from other sources to support that. A significant part of our improvement plan was to support fares to encourage people back on to public transport, and there are obviously limited resources that we have available locally.

There is a more significant consequence. As part of the current support funding that is available, we are doing a network review with our operators, as we are required to under the terms of that funding, to look at what the network will look like in October when that funding comes to an end. As things stand, from those discussions, that will result in significant scaling back in commercial services that operate in the region.

Although our improvement plan and the funding that we sought through it were not a direct support to those services that might not be viable beyond October, the amount of money that will go into bus services in other areas that have been successful in terms of revenue will undoubtedly have an impact on the overall position of commercial operators in those areas. It will also affect their willingness and ability to support services that are not in themselves commercially viable but that, as part of an overall offer, are affordable for the operators to continue running. We are going to see the opposite situation in South Yorkshire: operators are going to withdraw from a significant number of services, which will dramatically impact people’s ability to move around the region.

Q142 Baroness Cohen of Pimlico: Good morning, Mr Edwards. That is very clear. If I were you, I would be spitting feathers about the whole thing because the overall bus grants have been heavily cut already and you seem to have just lost out at the end. I take it you do not quite know what you are going to do; it depends on how bad it will be. I see you are also struggling with franchising. Will that help, as opposed to your present arrangements? Will that make life any easier, or is it just going to be really rather a disaster because of shortage of money?

Stephen Edwards: Franchising does not directly improve the funding situation for services, but to give you an example of some of the other challenges that we have, we have a number of services that the current operator is no longer able to continue with. We have just been through an exercise to try to tender those services to look for alternative operators to provide them. For a number of those services we have had no bids from operators in the region, so no one is willing to operate them. In some cases we have had bids that have been up to 1,000% higher than the current cost.

Franchising offers alternatives in the way we can intervene in those situations. For some of the things that we talked about earlier in the session, such as 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.

There are challenges that come with franchising as well. It is not a cure-all, but it gives access to other tools that we could use to make changes to services that could be for the better of the region, which would address some of the challenges we are focusing on. As I say, they would not be without their own challenges and issues. Fundamentally, the challenge around funding is one of getting more people to travel. If we can get more people to travel on public transport, that will be the holy grail because it will address a lot of those funding issues. We really need to be able to kick-start that whole process.

Baroness Cohen of Pimlico: If you are going for a franchising process, is there any evidence that the people who are asking to franchise might take a view, because they are running a profitable franchise somewhere close to you and are prepared to carry on with a less profitable franchise in South Yorkshire in the hope that they will grow into it, that they can afford to carry it? Perhaps not.

Stephen Edwards: We have obviously had approaches from various commercial operators at different times. There is interest. One of the things that franchising would open up is the opportunity for new operators to come into the region, because they would be presented with an opportunity that would give them some security in terms of the term of a franchise contract for operating a number of services, which gives a degree of certainty that is quite different from what you would have with a commercial operator looking to enter a market afresh.

There are quite significant barriers to entry in terms of the capital outlay you would need to make to enter into a new region. Some of that would be mitigated through a franchising regime and would open some doors for operators to come into the region. We have certainly had approaches from operators that have expressed interest if we were in a position to move towards a franchising arrangement. We are at the very early stages of that process at the moment, but there are clearly opportunities there.

Q143 The Earl of Lytton: Good morning, Mr Edwards. My question is principally about what can be done to improve the processes for allocation of central government funding to local areas and, allied to that, which schemes have worked effectively. There is another little thing that I would like to tag on to that, because our notes say that the Department for Transport has said that “areas not showing sufficient ambition” would not get funding under a bus strategy scheme. I would be interested to know what you think “sufficient ambition” looks like and what metric sits behind it.

Stephen Edwards: On the question about ambition, I have spent a bit of time looking at the bids from some of the other metropolitan areas that are similar. I am a little unclear about what degree of ambition we would have needed to show to get over that hurdle.

We feel that our bid was ambitious. The time window for the funding was realistic about what we expected to see, particularly in changes in passenger movement, given where we are starting from and the uncertainty, particularly if you cast your mind back to October or this time last year, when we were preparing our BSIP. There was a great deal of uncertainty about where we would be in terms of any restrictions that would be in place and the legacy of Covid on passenger returns. We think that we were realistic in our expectations in that time window.

Our ambitions for seeing a significant modal shift in the region are strong. Without knowing the criteria that were applied, I am probably unable to draw a very firm conclusion about whether we were sufficiently ambitious. We feel that we were but that we were realistic in terms of what we expected to achieve in the timeframe.

I am sorry; I have forgotten the other part of your question.

The Earl of Lytton: The first part, which you may not be able to answer either, was about what could be done to improve the process for the allocation of central government funding to local areas.

Stephen Edwards: There are various routes through which funding comes into bus services in particular across the country. Particularly if you look at things like the bus service operators grant, there is clearly a case for reforming the way that funding is provided. That is something that the department is going to look into.

One of the things that we have seen through Covid and the emergency funding that has been made available is how funding is routed into the market, and used and targeted at the needs of the region. At the moment a lot of the funding goes directly through to operators. Across large parts of the country, that means that how that feeds into the system is based on where operators believe there is commercial opportunity to operate services. That does not always reflect the needs of the communities that we are responsible for.

Based on what I have seen over that period of time in terms of prioritising where that funding goes and having local accountability and input into it, there would be benefit in looking at how much of that funding comes through organisations such as the combined authority or the equivalent in other parts of the country, so that there is greater local input into how that funding is used and what services it supports and provides. We need to make sure that the routes that are not commercially viable on their own get the support that they need, because they may be the only linkage for people to access education, employment or leisure activities.

Q144 The Chair: Can I come in with a question as a businesswoman? Would it be better if you were just given a block of money for buses, trams or whatever and allowed to get on with it, rather than having lots of penny packets of money coming in from the centre? Is there an overall problem? Linked to that, I was rather disappointed to hear that you had not had feedback from the department on the criteria for the bus improvement decisions. Should that be required, and within a certain time, which would be what one would try to do if you operated in the private sector?

Stephen Edwards: On the first part of the question, from my perspective, there should be a single allocation that comes through the combined authority. That could be matched to the priorities the region has and we would have discretion, to an extent, over how we used it. There are mechanisms with other funding that comes through, particularly around capital funding, that have checks and balances to make sure that the money is used wisely. That would be welcome from our perspective.

We have had feedback but, to be honest, it was pretty light in its detail. That is an area that we will follow up to look for more detailed feedback. If there are genuine issues with the plan that we put forward, we want to understand where they are and what we need to do to improve them.

The Chair: So the timeliness was fine but the detail was not good enough. Perhaps the department is worried about you appealing or something. Is there a concern? We are trying to make recommendations on bidding as to how to improve things.

Stephen Edwards: I am not sure whether there is an appeal process. That may be a concern; I am not sure.

Q145 Lord Carrington of Fulham: I really want to explore this whole process of central funding allocation. The way it is done at the moment leaves a suspicion that it is a method of exercising control over what you and the other operators do. In other words, you get the money provided, you tick the boxes that are predetermined to produce the result that somebody somewhere thinks is the result you should have had in the first place, whether you liked it or not. In other words, it is a way for the Treasury or the Department for Transport to exercise control on the ground that it cannot or will not do openly. Is that a fair characterisation?

Stephen Edwards: I am sure that there are probably elements of wanting to make sure that funding is used wisely. There may be different views on what the definition of “wise” is, depending on where you are sitting. The debate we are having about levelling up across the country is highlighting that there are significant differences. There is a real problem with having a one-size-fits-all approach to the way that funding is used and devolved around the country. It might work in some places but it does not work everywhere.

Certainly from this side of the telescope, our view is that we have a good understanding of what is important now but also how that fits with the wider ambitions of the region. That is not just the combined authority but our local authority partners and our partners in terms of employers in the region or organisations like the universities and what they will need in the future. We think that we have a better understanding of that and would be better able to direct the use of funding that comes through to support those wider ambitions.

That is sometimes how it feels at this end of the process. If you ask people at the other end of the process they might have a different view and might have examples of where they have tried that in the past and had their fingers burned. From our perspective, we would expect to see some sorts of checks and balances to make sure that we use the funding correctly and sensibly. That is no different from many other funding sources that come through that have that process in place. That is how we would see things here.

Lord Carrington of Fulham: For a long time it has been one of the great political conundrums in this country, ever since local authorities stopped being able to raise the money they spent locally from their local rate base. If you are going to change it, it is a function of whether you do it on some sort of metric, such as per capita, or some other calculation. How would you replace the bidding process for funds centrally? You said earlier, in reply to the Chair, that you thought it would be better if it came in a block amount of money which you could then use as local requirements dictated, but somebody has to determine what the quantum of that block of money is. How would you do it? Would you do it on population, deprivation scales or any number of different metrics?

Stephen Edwards: If I was being cheeky, I would want to take a bit of time to work out which one would give us the best outcome in South Yorkshire. That is a genuine challenge: whatever mechanism you use, some people may benefit more than others. You would probably like to be able to pick and choose which one works best. I do not know which one would work best for our situation in South Yorkshire from a transport perspective. There will always be some sort of compromise, whether you do it purely on head of population or something else.

One challenge with transport is that if you have a very dense urban area the cost of support is much lower, because you generally have shorter journeys. If you have rural areas you have longer journeys that require longer journey times, so the cost of operation is greater. In South Yorkshire, we have a mixture: we have some dense urban areas and some very large rural areas that are sparsely populated. Some of the metrics that are used at the moment give us some challenges.

I am conscious that I have not given you a specific answer, but we would have to accept that there would not be a perfect solution to how that would be done. Having something that changed the current situation and gave us greater autonomy in terms of how we use that money to best serve the needs of the area would be welcome, even if we might argue about which was the best mechanism for doing it.

Q146 Lord Grocott: Thanks very much for the information you have given us so far. Can I ask one general question and one rather more specific one about the tram train scheme that has been in operation for a few years now? Could you give us your observations on the successes, lessons and failures, if any, of the scheme? How well is it going, basically?

More specifically, we have had evidence from other witnesses that one of the advantages of tram, tram train or fixed-rail systems is that there is some evidence that they get people out of their cars. In other words, the people that use them were people who previously commuted by car. Can you tell us, perhaps more specifically, where the passengers from the tram train service have come from, as far as you know? Have they come from the buses? Are they people who were using other forms of transport, including cars? Have they got people off the roads? Those are the two questions.

Stephen Edwards: On the latter question about where passengers are coming from and the impact that is having, where people have come from is a mixture. People might not be familiar with the route that the tram train takes. It links a place called Parkgate, which is on the eastern side of Rotherham, comes on the heavy rail network through Rotherham Central station, links up with the existing tram network just on the other side of the M1 at Meadowhall and then comes into the centre of the city.

It picks up some users who would have used heavy rail and some users who may have used bus, but it also picks up a number of people who would have been driving across that very busy road network around the M1, so yes, it is picking up some car users. We are actually in the process of adding two park-and-ride sites. We are expanding the park-and-ride site at the far end of the scheme at Rotherham to provide a bigger park-and-ride location because of demand there.

At Tinsley, which is just on the Rotherham side of the M1, we are building another park-and-ride site to pick up traffic that is coming through there. It is one of the busiest and most congested parts of the road network, but it is also one of the areas that has some of the worst air pollution in the region. A lot of additional work is going to build on the current footprint of the tram train network to get even more people out of their cars and making that journey into Sheffield.

On its success and some of the challenges, the challenges would be in the process of building the tram train connection in the first instance. Probably the main learning point would be being very clear and specific about what you want the system to do in the first place and being able to stick to that. A lot of changes happened through the design process that complicated the design of the tram. Originally, there was an expectation that the main rail line would be electrified, so the trams would need to be able to operate on both the power system on the light rail network and the heavy rail network. The trams are equipped with dual power supplies.

Ultimately, that electrification did not happen, so the electrification on the heavy rail network is the same system as on the light rail network. That means that there is some redundancy in the equipment on the trams that would not have been required. It also meant that all that equipment that was used to electrify the heavy rail network was new to the heavy rail network and had to go through a fairly extensive and long safety process to make sure that all that equipment was properly certified as safe to use on the network.

All those things added delay and complication and were, primarily, the result of changes that happened through the development of the scheme and its implementation. Some of those things will be lessons that have been learned. Obviously we were doing this for the first time. Part of the purpose of the pilot was to understand some of these challenges and to provide that learning. Systems that go through that process a second or third time will certainly not have to have that learning experience.

Having that clarity of what it is that you want to achieve and being able to stick to it is not always possible, but that would have been very helpful and would have improved the speed and probably reduced the cost of implementation.

Lord Grocott: Very briefly, how well is it used? What are passenger numbers like?

Stephen Edwards: I could not give you passenger numbers just for the tram train bit offhand. I can certainly make sure that we can provide those for you, but it has been very popular on that link from Rotherham into Sheffield. It has certainly seen strong returns as we have gone through the various challenges over the recent years. We have seen a strong return of passengers on that route.

We have ambitions to expand the tram train service across the region as well. There are lots of opportunities that it opens up in terms of the flexibility of having that combination of making use of existing rail infrastructure but being able to terminate services in parts of our urban centres that you would not have from heavy rail systems.

The Chair: We are out of time, sadly. Members might have a couple of follow-up questions; perhaps the clerk can ask you those separately. We would certainly be interested to hear about those passenger numbers on the trams. That tram train sounds like a big positive. Thank you very much, Mr Stephen Edwards of South Yorkshire Mayoral Combined Authority, for some very interesting evidence.