Transport Committee
Oral evidence: Health of the bus market, HC 1425
Tuesday 30 October 2018
Ordered by the House of Commons to be published on 30 October 2018.
Members present: Lilian Greenwood (Chair); Jack Brereton; Ruth Cadbury; Steve Double; Huw Merriman; Grahame Morris; Graham Stringer; Daniel Zeichner.
Questions 1 - 96
Witnesses
I: Claire Haigh, Chief Executive, Greener Journeys; Linda McCord, Senior Stakeholder Manager, Transport Focus; Darren Shirley, Chief Executive, Campaign for Better Transport; and Claire Walters, Chief Executive, Bus Users UK.
II: Tom Forth, Head of Data, ODI Leeds; Neil McClure, Head of Transport, ODI Leeds; and Nick Richardson, Director and Trustee, Chartered Institute of Logistics and Transport.
Written evidence from witnesses:
Campaign for Better Transport, West and North Yorkshire;
Campaign for Better Transport, West Midlands
Chartered Institute of Logistics and Transport
Witnesses: Claire Haigh, Linda McCord, Darren Shirley and Claire Walters.
Q1 Chair: Welcome, and thank you for coming along today. You will know that I am very excited to be starting oral evidence to our inquiry on buses—the most important form of public transport in the country.
Unfortunately, I have to start our proceedings with sad news. I am really sorry that we are not able to be joined today on our second panel by Dr John Disney, who was a senior lecturer at Nottingham Trent University and a real authority on these matters. Sadly, he died last week. We of course express our condolences to his friends and family.
Welcome to our first panel. Before we get started, please introduce yourselves for the record.
Darren Shirley: I am Darren Shirley, the chief executive of Campaign for Better Transport, a leading charity that promotes sustainable transport.
Linda McCord: I am Linda McCord from Transport Focus. I am also the chair of the Bus Alliance in the west midlands.
Claire Haigh: I am Claire Haigh, chief executive of Greener Journeys.
Claire Walters: I am Claire Walters, chief executive of Bus Users UK.
Q2 Chair: We are looking forward to hearing your evidence. The first thing we want to know is what bus users think. What do they want to see from their bus services? I won’t put words in your mouth. I will just ask you. What are the main improvements that bus users would like to see? Claire, as you are from Bus Users UK, perhaps you can start us off.
Claire Walters: We are absolutely delighted that a strategy is being proposed nationally, because we need some parity across the country so that there are services and they are properly funded; there is not such a postcode lottery and people can get a bus and get on to a bus without walking miles to get there; and access the bus in a reasonably easy fashion. That is a fairly broad statement, but it sums it up: more and better.
Q3 Chair: There needs to be a bus service and people need to be able to get to it and on it easily. Claire, what other things are there?
Claire Haigh: Greener Journeys has looked at this from the perspective of car users in particular, because we are trying to attract more people on to public transport. The No. 1 switch factor that we have identified in our research is speed and convenience of services. That is absolutely fundamental.
If I may, I will say a couple of words about where that works. Where we see that really being tackled, we can see good growth. We all know that the headline stats are depressing, but there are some good pockets and examples of areas where we are seeing good growth and good benefits delivered to the wider economy. I have a couple of examples.
Q4 Chair: We will come on to good practice a bit later. The key issue for you is about the speed at which the bus is travelling.
Claire Haigh: Speed and convenience is No. 1. From our research, No. 2 is good information and No. 3 is ticketing.
Q5 Chair: Linda, obviously Transport Focus has also done its research. Do you concur wholeheartedly with Claire, and are there any other issues?
Linda McCord: We have done research on this, and we know from passengers that their top priority for improvement is value for money. Value for money is in the things that Claire has been talking about: punctual, reliable services. It is very much about delivering the basics. That is what we pay for. We pay on buses to get from A to B, and we want them to be on time. We want them to go where we want them to go, and we want them totally to be value for money.
Q6 Chair: Great stuff. Has Transport Focus looked at different groups in the population? Do different people have different priorities, whether that is older people, younger people or disabled people, or rural versus urban? Is there any variation?
Linda McCord: Basically, no. Delivering the essentials and the basics is what everybody wants. Of course, there will be some differences in rural areas where they need more frequent buses, but by and large it is the product. The product is timely buses.
Q7 Chair: Darren, at Campaign for Better Transport, you have done a lot of work on buses. What have you found? What are the improvements that bus users want to see? What are the problems they are facing?
Darren Shirley: We have had a campaign running for eight years called “Save our Buses,” trying to help local communities save services in their area. From that, we have gathered quite a lot of stories from users of buses. They tell us time and again what you heard from the rest of the panel. It is about a punctual and reliable service that is cost-effective and value for money for them.
To illustrate some of the problems we see, a disabled woman from Somerset got in touch with us. She cannot drive. She is considering resigning from her job because her bus service has been cut. She now cannot get to her job reliably. That is the sort of impact it has on people when services are cut.
We have a family whose 13-year-old daughter has a 10-mile bike ride to get to swimming training. She wants to compete, but she cannot do that because she has to cycle there and it takes more time. There is no bus service for her. A woman with cancer was forced to go and knock on neighbours’ doors to request lifts to go to medical appointments for her treatment. She cannot drive and she cannot get there on public transport because the bus service has been cut.
Time and again, we hear those sorts of stories across the country. We have seen over 3,000 bus services cut in the last eight years, as funding has reduced by almost 50%; £172 million of support has been reduced for supported services, which are the critical ones—the ones that are not commercially viable.
Q8 Chair: Are those problems purely in rural areas, or are they problems in urban areas as well?
Darren Shirley: It is a problem across the country. Rural or urban, we see the same impacts from cuts, but it impacts those in rural areas more acutely. They are more isolated and more disconnected from the transport system. They rely on their buses more because they have less choice. What is happening with a cut in services in rural areas is that they are now reliant on a car. They do not have another form of transport to take.
It means that younger people cannot access opportunities for education and work. Older people cannot attend health services, shops or social activities because they cannot drive. People on low incomes are disproportionately affected as well. It costs them more, and they are more isolated in terms of their ability to afford to go anywhere. Without a bus service, how do they get into work? We found from some of our work that a third of jobseekers say that poor transport options prevent them from getting a job. There is an acute impact on people across the country.
Q9 Chair: You have very eloquently explained the impact of inadequate bus services. What they want is a reliable, frequent and available bus service.
Darren Shirley: Exactly, yes.
Q10 Chair: One of the obvious distinctions is between what has happened in London, where the bus services have always been regulated, and what has happened in the rest of the country, where, since 1986, they have been deregulated. The thinking at the time was to encourage competition. I think I know the answer to this, but do you think that bus competition within local areas is a good thing? Linda, tell us from a Transport Focus perspective, is bus competition a good thing?
Linda McCord: Any competition is good because it moves people to do the right thing for customers, in our case for bus passengers. I chair the West Midlands Bus Alliance. That is predominantly National Express because they have 90% of the market in the west midlands. However, a lot of smaller bus groups come along to the Bus Alliance as well. The Bus Alliance, with a predominant operator—National Express—is very much thinking about the smaller bus operators who may go to different rural areas and, I think, are very demand responsive, and that is important. Competition is important, but what is more important is that, regardless of who is offering bus services, we completely work in partnership to deliver what passengers want.
Q11 Chair: The west midlands transport authority is in the area with the largest decrease in passenger journeys in the period 2009-10 to 2016-17. There were 48.96 million fewer journeys. There is a very dominant operator, so I am guessing that in most cases there is no competition for those passengers. If competition is a good thing, is lack of competition impacting the west midlands? Why are National Express allowing so many people to stop travelling?
Linda McCord: To respond to that, those are the figures up to 2016. What we have seen in the last year is only a 0.7% increase in patronage, but it is happening. We have seen a 12% increase in young people using the bus. That has been because of some of the things we have put in place through the Bus Alliance, such as better fares for young people and capping fares. We have also put in some major things to deal with punctuality, reliability and congestion. It is going in the right direction now.
Q12 Chair: Those all sound really positive, and as if they have had quite a rapid impact, but we have had competition for over 30 years and it did not deliver them. Has it been the intervention of the local authority, or the local authority in partnership with the bus operators? What has delivered the change that you say has happened since 2016-17?
Linda McCord: I think it is absolutely the partnership through the Bus Alliance. The Bus Alliance challenges the primary bus operator, National Express, to deliver what passengers say they want. Transport for West Midlands and the combined authority sit around the table at the Bus Alliance, plus MPs from all the different parties. It is a very challenging forum. We have a very clear strategy and very clear objectives, and they are being delivered through the partnership.
Q13 Chair: Do other members of the panel have a view on competition? Does it work? Doesn’t it work? Does it only work where someone is pushing the bus companies to actually do something?
Claire Haigh: From the Greener Journeys perspective, the most serious on-road competition for bus services is the car. That is replicated across the UK. We are suffering the impact of a policy decision for a predominantly car-orientated focus that dates back to the ’60s.
Over the last 50 years the impact of that has led to many more people relying on the car than the bus. Households with a car make, on average, 14 bus journeys a year. Households without a car make, on average, 150 bus journeys a year. The impacts on bus services of increasing car use and increasing congestion have been severe. You will perhaps be familiar with our research, which has shown that over every decade bus speeds have been declining by, on average, 10%. That has serious impacts on bus patronage. It is the big bogeyman. That is the really big thing that has to be tackled to get the conditions right for bus services to thrive.
No area is immune. We have seen it across the country. In market towns as well as urban centres, I have loads of evidence showing that the bus networks everywhere suffer from congestion. Even in London, which you mentioned at the start, we have seen sharp falls in bus patronage in recent times. It is partly attributed to growing congestion, but there are of course other factors as well. TfL is now consulting on quite serious cuts to bus services in London. From our perspective, it is about tackling congestion. The car is the primary competition, and that is really where we are focused.
Claire Walters: The issue of competition is becoming increasingly irrelevant outside the most lucrative markets where it is worth competing. In most places, there is hardly anybody interested in running buses because they are not especially profitable. Given the lack of subsidy and lack of support for local buses in quite a lot of areas now that section 63 of the 1985 Transport Act seems to have gone by the board, and nobody is worrying about socially necessary transport, you are relying on the commercial operators to cross-subsidise some of the routes that are less profitable or completely marginal, in order just to meet the needs that are there. That is not really their job. Local authorities should be doing that.
We believe one of the major problems is the fact that the regulatory environment, unlike every other regulatory environment, does not put the consumer at its heart. It has competition, which was never envisaged at the start, and safety, but it has no remit to worry about what the consumer needs. That does not make an awful lot of sense, given that every other regulatory environment has to look at the needs of consumers.
Q14 Chair: The theory would be that, if you have competition between bus companies, they will be competing for passengers and therefore they will try to do what consumers want. Why does it not work in bus?
Claire Walters: Because it is not a requirement. There are plenty of other things to worry about. Some of the better marketing, better strategy and more retail-minded bus operators will do that, but there is no requirement to do so, and there is nobody other than us passenger groups thumping the dash to make them do it.
Q15 Chair: I am interested in what you said about profitability. When we looked at some of the information on profitability, it showed that outside London and the deregulated environment the major bus companies seem to be making quite a high level of profit compared with what they might make on rail franchises, for example. Why do you say that it is not a profitable market?
Claire Walters: They are reducing the market in which they operate. For instance, there was a bit of a disaster in Norfolk recently when Stagecoach just pulled out. Frankly, the regulatory environment did not help what got put in its place. It got completely strangled in how many O-licences, how many this and how many that, instead of saying, “Okay, this operator is pulling out,” as they are entitled to do because they are not making enough money, “so what happens to the people who rely on its services, and how do we put something in place swiftly without passengers being too adversely affected?”
Clearly, if a big operator pulls out, they will be affected. That is happening in various places. It has happened in Scotland and Wales. Lots of operators are now reducing down to the services that make a significant profit. That is fine for them, but what happens to the people left behind?
Q16 Chair: It sounds to me as if you are saying that there is market failure. What should happen in a competitive market is that another operator should step in and set up the service. But you are saying that is not happening.
Claire Walters: It is not always happening. It is happening in some places, but it is quite hard for it to happen because the regulatory environment is not supportive or helpful of that. Okay, traffic commissioners have a job to do, but they are not there to decide how many licences should be given, and that is what happened in the Norfolk area.
Q17 Chair: Are you saying that it is difficult for new entrants to come into the market, or for an existing entrant to expand their services?
Claire Walters: Absolutely.
Q18 Chair: I thought it was relatively easy. Am I wrong?
Claire Walters: You seem to be at the moment. That does not seem to be the information we are getting.
Claire Haigh: To add a couple of points to what Linda was saying around the Bus Alliance in the west midlands, we have seen fantastic growth in Liverpool with the alliance there. The Bus Alliance model tackles a lot of the issues that Claire is highlighting.
Claire Walters: It does.
Claire Haigh: It makes it much more accessible. It gets away from over-bussing and there is more strategic planning and so forth.
On the question of margins, my perception is that margins are shrinking for all the bus companies quite dramatically. It is a very challenging operating environment. I have talked about congestion, but there are other factors at work. Online shopping is a big one. I could go on. There are a lot of factors.
To get to the point, we are seeing that in fact, more and more, operators are having to think very creatively about what to do where it is not possible to justify a full bus service. We are seeing more demand-responsive solutions. That offers a lot of scope for filling in the gaps as we go forward.
Q19 Chair: Darren, do you have a view on whether competition is helping?
Darren Shirley: The points made so far reflect the issues there. It is where competition is actually happening. It is not about competition on the road or for the market, where there are franchises. It is about competition between buses and cars. That is where consumers are making the choice. It is the choice of, “Do I take the car or a bus?” If the service is not there, and the funding and the policy to support a network of services is not there, they will choose the car. It is somewhat of an irrelevance at this point to talk about competition when, frankly, we are looking in the wrong place.
If we were to look at where funding and policy heads, it is towards routes; it is not towards the network in an area. It is not towards the whole that creates a network that passengers can use to get from A to B to C. If they cannot do that easily and conveniently, they are going to choose the car. They will choose another form of transport. That is where competition is taking place, in my view.
Q20 Chair: What is it about car use that makes it so much more attractive? Is it about the changing real cost? We know that the cost of motoring is largely flat. The cost of bus fares has gone up quite significantly. Is it about last-mile connectivity—getting to your bus stop and getting from your bus stop to where you are going? Is it about speed?
Darren Shirley: It is all of those. Also, if you are going into work for 9 o’clock in the morning but your bus service ends at 4 pm and you cannot get home from work, you are not going to take a bus if you cannot get back at the end of the day when you finish at 5.30. You are going to choose a car or another form of transport.
The erosion of evening and weekend services, and the reduction in frequency, makes it easier to choose a car rather than choose a bus. The erosion of support and funding for services, and a reduction in frequency, with curtailing of routes, leaves the passenger a simple choice: “Why would I take the bus to work when I cannot get back? I’m going by car instead.” That is the choice being put on passengers at the moment.
Q21 Jack Brereton: I want to understand a bit more about the point Claire made about regulation. From what I have experienced previously, I thought it was quite easy to apply. Anybody can set up a bus company and apply to the traffic commissioner to run a specific route. There is very little anybody or anything can do to stop that route being run. What is it specifically about regulation that you and the industry have concerns about?
Claire Walters: In theory, that should be the case, but there are spectacularly intense requirements for financial standing that bar an awful lot of people, including young people who want to get into running buses by and for young people. They cannot meet the financial standing requirements. When all of this was set up, there was a fairly fully-funded bus transport network and it all looked perfectly easy. You just applied, waited an amount of time and on you would go.
Q22 Jack Brereton: That is more an issue of the financial viability of running a route, isn’t it?
Claire Walters: It is, but if you need the financial standing and the good repute, those are quite extensive hurdles unless you are already in the market. I am not suggesting that we should sweep it away, but you do not need that level of financial standing in the bank to set up your own business generally. Some easing of that could be done. We have suggested that another model might be possible, to have a community interest-type company, or that kind of thing. It is not impossible, but it is not as easy as it seems.
Q23 Chair: That is a useful issue for us to pick up in later sessions and with future witnesses. It seems to me that one of the things that stops people using buses is that they are not quite sure how much they are going to pay, how they are going to pay, what ticket they need to buy and, if so, what the restrictions on the tickets are. How well understood are bus fares and ticketing? How could it be improved?
Linda McCord: This is one of the key issues. It is strange to sit here saying that there are people who do not know how buses work. We saw this through a piece of research that we did with young people fairly recently. The embarrassment factor was one of the key barriers: “Do I need to have the right change? Will I know where to get off? Will I make a fool of myself in front of my mates?”
This is all the stuff that we as an industry really need to make very clear. The transparency agenda—open data—needs to be made very clear. We will attract people into the industry once they are confident that they know how to use buses, where they go and how much they have to pay. It is a critical issue.
Q24 Chair: Do you want to add anything on how you make it easier for people to understand fares and ticketing?
Claire Walters: Greener Journeys has done some really good research on this, so Claire is probably far better placed. Our information is that the focus on simply having everything online is clearly the way to go, but they are not all there yet. Something in the region of 15% of people do not have access to a smartphone or the internet at any point in their lives. We should not forget them, because without buses a lot of those people might be left behind, especially if they happen to be in low-income groups as well. I am talking about working people, by the way.
There is also all the smartcard stuff. It is great to have all these different options to get on a bus and to speed up boarding times—I am not suggesting otherwise—but it is interesting to look at cashless buses. TfL went for that despite two thirds of the consultees saying, “Don’t do it.” It has caused problems in London. Yes, congestion is an issue, but it is also the idea of cashless buses.
We are the only country in Europe that has lots and lots of contactless banking. The Americans mainly do not have it. When tourists get on a bus, it is like a cuckoo clock watching people in London nowadays. They get on and they get off: “What do you mean, I can’t pay cash?” They get off again. It is a barrier when you know you cannot have cash. You cannot buy an Oyster card without leaving some money on it. It costs you money, and not everybody has got that money to lie around.
I know that it seems like a very small minority, but without buses that small minority has nowhere else to go. Information needs to be available more easily. I know bus operators do not particularly want to put timetables on bus stops, but they need to put them on bus stops. They need to be able to send them out to people when the timetables change.
I am sure that everybody else has stories from poor souls who are trying to get to college for the first time on the bus. They research it over the summer holidays, get to the bus stop on the first day of term and the bus they thought was going to come is no longer there because the timetables have changed. If it is not on the bus stop, where else are they going to get the information?
I know it is available on apps. I am not against technology. I know it makes me sound like a terrible dragon, but it is a really important issue for quite a lot of people. I am a gadget queen along with the rest of them and I use apps, but not everybody can or wants to. We cannot lose sight of that for the people who really need to use buses.
Q25 Chair: Two things in there are really interesting. Why do bus companies not want to put timetables on the stops? Is it just because they cannot be bothered to go and replace them?
Claire Walters: It is not that they cannot be bothered; it costs them money to go out and change them all the time. Plus when more than one company is running buses to a particular stop, there is the habit of putting one on top of the other, which is very cheerful for everybody trying to use them. RTI just is not there for everybody.
It is not actually there in London. Everybody thinks that London is perfect. I live in Bromley, and half the bus stops there do not have it. They had RTI, and then they took it out again and replaced it with a board that says, “Text this number.” If you do, it gives you complete nonsense.
Q26 Chair: Let me come back to the question about not taking cash. Obviously it makes it much faster to load passengers on and off if you do not have to take cash or you do not give change. London introduced cashless buses quite a long time ago, and bus use has continued to increase. Are you saying that it would have gone up much faster?
Claire Haigh: May I say something on the cashless point? Greener Journeys has looked at this very much from the perspective of car users. All our research is very much around what is going to get people to use the bus more. As I have highlighted already, the lack of good information is the second biggest barrier.
The top one, coming back to the start, is speed and convenience. It is availability and arriving on time so that you can rely on it to get to work, and so on. One of the things we have been calling for is contactless on all buses. That is part of the miracle in London. Contactless has speeded up boarding time no end.
If we were to replicate that across the whole of the UK, we could see bus journey times improving by 10%. Essentially, that would halve dwell time at the stops. A 10% improvement in bus journey times is associated with 50,000 more people in work. The crucial link with economic activity was highlighted by Darren earlier. We have stacks of evidence showing just how important availability and reliability are for getting to work.
We would fully push for contactless. It is good to see that it is starting to roll out, but we need to go much faster and quicker if we are to tackle congestion and speed, which I would say are the biggest barriers.
Q27 Chair: There is a balance. Contactless leads to lower dwell times and does not mean you have to charge up your Oyster card with money, but it may be an issue for people on very limited budgets because you cannot control it quite so easily, and there is convenience in people being able to pay cash. Is that right?
Claire Walters: You can do both. The vast majority of people, given a speedy option, will take it. An awful lot of bus companies have now put in contactless technology. They are starting to get there. It is nowhere near complete, but they are not then saying, “You can’t pay cash.”
Chair: I have an Oyster card. I have a Robin Hood card. I have a Mango card. I have an Easyrider Anytime card. It drives me absolutely mad. I have a mobile phone app and you still have to try to work out which is the right one to use.
Q28 Huw Merriman: I was reminiscing back to my days as a 16-year-old taking a 20-mile bus ride daily to college for my A-levels. I think we would agree that bus usage has actually gone down, yet the amount of information that the customer has and the range of payment has gone up. Of course, I did not have access to the internet to work out online when things were happening. I did not have the choice of a card. I had to have the right amount of cash. It was a pain but I still used the bus.
How can it be that you talk about lack of information, yet we have more information now and bus numbers have gone down? Is it really down to information?
Linda McCord: There is a difference around the country. There are some people who are getting it very right, and there are other areas where maybe they just need to get better with the technology and the information. The information and technology is there; it is making sure that it reaches the correct people.
On the point about cashless and not, our industry needs to show a little bit of flexibility, particularly with tourists. For goodness sake, let them on the bus. Without going into detail, we had a teenager who was put off buses, practically for life, because she did not have the right change in Huntingdon. All her friends got on the bus and they left her standing there. I contacted the MD and he said the driver should have let her on. It is about encouraging people, giving them a sample of what the bus is. Our industry needs to be more flexible.
Q29 Huw Merriman: Isn’t it also the case that we as consumers actually demand more, and if there is not a perfect information menu we do not use the service, whereas back in time, when we did not have the luxury, we were willing to put up with a harder task to navigate our way through the system?
Linda McCord: There is a point there. Our industry needs to get better at getting information out to people.
Claire Haigh: I completely concur with what Linda is saying about some areas getting it right. The big problem, and why this has got so much worse, is repeated policies that, bluntly, are in favour of motorists and car travel. For example, we have been lobbying to unfreeze the freeze in fuel duty. Our research shows that the freeze in fuel duty has led to 4% more traffic than there would otherwise be, and up to 200 million fewer bus journeys. Big picture stuff like that is not helpful for bus use.
Add to that everything I have been saying around congestion. Of course, congestion is getting worse because of the change in the mix of traffic. There are more and more online deliveries slowing traffic down because there is no self-regulatory thing. A delivery journey has to happen anyway, whereas car users might be put off. That is another factor. It is a very challenging environment.
Chair: Let us move on to bus strategy.
Q30 Daniel Zeichner: I want to start by thanking you all for the written evidence. There is a fantastic wealth of written evidence. We have had 600 pages of submissions and there is lots of brilliant stuff in there. What struck me was the almost universal support for some kind of national strategy. As you said, Chair, the Government have indicated that that is the direction of travel.
It is a really good opportunity, but the question is: what should the main focus in those strategies be? A number of you raised that in your written evidence. Perhaps you could tell us what you think the national strategy should focus on.
Claire Haigh: I have done quite a lot of work on this. Thank you for raising it. We are very grateful to groups like Campaign for Better Transport, which have raised the profile of the issue.
There needs to be a national strategy. There is not one for bus. There is for everything else, including walking and cycling. It is mad. There needs to be funding from central Government. There needs to be commitment from central Government. Bus operators and local authorities need to make a commitment to work together and to deliver the wider social, economic and environmental benefits of the bus. The strategy needs to be focused on linking desperately needed new housing to areas of employment. It also needs to be focused on tackling pollution and congestion. Demand management will be key.
From the Greener Journeys perspective, there are five key aspects or areas of the bus strategy. No. 1 is that we have to continue support for bus revenue funding: BSOG, concessionary travel and supported services. That makes the difference between a service being economically viable or not in many cases. It enables people to get to work, to education, shopping or whatever. Our research shows that the value of bus revenue funding is between £2 and £3.80. It totally delivers. There is no need to cut bus revenue funding. That is the first point.
Secondly, we need increased investment for urban transport. We fully support the National Infrastructure Commission and the assessment that came out in the summer that the next big tranche of funding should be for urban transport and cities. It should be given to local transport authorities in devolved, secure, five-year budgets so that they can plan effectively and have integrated strategies for housing, transport, employment and so on. Bus infrastructure needs to be at the heart of that.
That leads me to the third point. We need increased investment in bus infrastructure. I was trying to get in a couple of stats at the start, and I am going to get them in now. Investment in bus infrastructure typically delivers £4.90 for every £1 invested. It is a no-brainer. For the high performing schemes such as Crawley Fastway, which I was going to refer to earlier, or the Hampshire Eclipse, we are seeing up to £8 of wider social, economic, environmental benefit for every £1. It is a no-brainer.
Fourthly, we need to go with the grain of change. Essentially, we need to use platforms and all the innovation we are seeing out there—Mobility as a Service and other platforms of those kinds—to encourage modal switch. Let’s get back to the thinking of 20 years ago and the 1998 White Paper, which is all about modal switch. We will encourage modal switch by reducing car dependency. We need to see local authorities, bus companies and technology firms working together to maximise the value of those platforms.
We can do all of that, but, finally, the thing that will make this work, and which is absolutely essential to get the benefit, is to embrace demand management. That means more workplace parking levy. It means city centre restrictions. It means road pricing. It means that we need to move to a fairer and more sustainable way of paying for road use. We will not tackle congestion by building roads; it does not work. If you build more roads, they just fill up again with traffic. The only way we will tackle congestion and get the benefits from bus is by making much better use of the existing road space we have. That is going to involve some measure of demand management.
Q31 Daniel Zeichner: That is quite a big bus strategy. Let’s see what others might add to the mix.
Darren Shirley: I agree with Claire about the direction of the strategy. A useful starting point for the Government would be to look at the cycling and walking investment strategy. Cycling and walking are also an issue for local delivery, as are buses. A national strategy there is about providing a coherent policy framework at national level. Direction in terms of funding and coherence of investment strategy will help local authorities and sub-regional bodies to produce a plan that is relevant for their area.
There are three elements that we would suggest for a bus investment strategy. One would be pulling together all the central Government spending. We have money coming from MHCLG, from DFT and from the Department for Education for various parts of transport. All of that needs to be put into one pot and looked at as a coherent mass for funding our transport provision by bus.
We have local investment plans in the cycling and walking strategy. That is about local authorities deciding locally where they are going to invest and what is appropriate for their network; and how they want to define needs for their local area and for their community.
Finally, there is a piece about supporting policy making across governance, so that there is a coherent agenda for the whole of Government rather than policy seen in isolation within different Departments. The bus investment strategy should pull together all Government policy so that we have a coherent piece of direction.
Q32 Daniel Zeichner: I have two points on that. First, there have been the Total Transport pilots. What do you conclude from those? Secondly, if the funding is going to pass to local authorities, which are really struggling for cash, how do you make sure that it goes to transport rather than to solving the problems in schools and social care?
Darren Shirley: That is the final point on funding. That is where we have seen an issue so far. Local authorities have had funding, and they have chosen to fund critical services locally where they do not have the ability to finance them. In the broader scheme of things, that may be right, but it has left our buses in crisis. We need to have the funding from central Government given to local authorities ring-fenced, so that it goes towards funding transport services locally, especially buses.
We have a report coming out very soon, which I will share with the Committee after the session, looking at everything that has happened on the 35 Total Transport pilots. They are an incredibly good example of when a local authority looks across its transport needs, at what it is doing on school transport, patient transport as well as the other needs for buses, and how it can integrate those to get savings across what, at the moment, are different budget streams. Money for school transport comes from DFE; money for non-emergency patient transport comes from the CCG; and then there is local authority funding of bus transport. When those are looked at as a whole, you can commission a service that delivers across all those needs rather than in isolation, potentially duplicating spending. There is a real benefit from the Total Transport approach at local level.
Q33 Daniel Zeichner: Claire, where do passengers fit into a national strategy?
Claire Walters: You will be shocked, I know, to hear that we would like to see a requirement for consultation with communities and potential passengers, not just actual current passengers, on what they need, so that a local authority plan could be based on what people actually want rather than what is already there and what is easy to tweak. We are way past tweaking. We need a root-and-branch review.
Those words might be familiar, because they are doing that on the rail system. We need a full transport strategy review of all modes, much as Darren was saying, and to look at the first mile and the last mile. There is a lot of talk about the last mile, but the first mile is the most important one in many ways. If the infrastructure is not there, the 400-metre walking distance, which is not feasible in lots of places anyway, is too much for a lot of people who might use the bus. We need to look at how we join everything up, from the front door to the destination point. It may not be feasible to meet all those needs, but at least you will know what is there.
Demand-responsive transport is a useful part of the jigsaw, but you cannot get concessionary fares on it. You cannot get it refunded, so operators cannot get the money back and passengers cannot actually use it. That puts in the barrier of having to fork out a fiver for something that your concessionary fare would help you to achieve if you could use it on a local bus. There needs to be much better joined-up thinking, and it needs to be based on what passengers and people in communities want.
Q34 Daniel Zeichner: Linda, is there any danger for an area like yours, which compared with other areas works rather well, from a national strategy? Would you see it as a risk, or do you think it would work?
Linda McCord: A national framework that supports local strategy is needed. We have seen in the west midlands that a very strong strategy is bringing really good results. Would we in the west midlands want to be dictated to on certain things? No, and I do not think the operator, Transport for West Midlands and others would want that. We need a framework that ensures that there is more funding for bus, because it is badly needed and supports people in local areas that have strategies.
At an event fairly recently, we were talking about strategy for bus. Around the table, lots of local authorities were saying, “I have a strategy for road and for rail. Why don’t I have a strategy for bus?” They were asking themselves that question. It is a no-brainer. We need a strategy that ensures that everybody is working together. The integration agenda is hugely important as a framework nationally that supports some of the local stuff.
Q35 Daniel Zeichner: Claire Haigh made a point about the fuel duty freeze. That is a big strategic decision that the Chancellor made yesterday. If that roughly £8 billion a year could be transferred to bus, for instance, what difference would it make?
Claire Haigh: It would make a massive difference; it would be huge. That is the key point. The framework is what we need, but it is not just the framework; it is the funding. We have to put our money where our mouth is. As we look to the future for mobility, with everyone thinking about where we are going, if we do not provide for high-capacity mass transit, especially in dense urban areas, we are really going to struggle. It needs that level of priority.
We have a lot of support. We work very closely with DFT and I believe they understand the value of the bus. Their evidence will say that BSOG is keeping fares 3% lower, and improving frequencies and so forth. What is needed from central Government and the Treasury is that the overall funding settlement changes to reflect the crucial importance of urban transport. The short answer is that it would make a huge difference.
Daniel Zeichner: I doubt whether any of you would disagree with that.
Q36 Steve Double: If I may say so, that is a very urban-centric view. I represent a very rural constituency in Cornwall. Putting fuel duty up where there are no bus services would just put a huge burden on my constituents. To be blunt, even with £8 million I doubt we would be able to have a comprehensive bus network in places like Cornwall. I think that is a very urban-centric view of the situation.
Claire Haigh: May I come back on that? It is a really important point and thank you for raising it. When we move to a fairer and more sustainable way of paying for our road use, all of that needs to be taken into account for starters, because there is more dependence on the car, particularly in deep rural areas.
If you look at rural versus urban, rural covers quite a wide range. We have deep rural, where it is challenging and we have to look to aggregate demand as much as we can, through platforms like Mobility as a Service and so forth, but in market towns buses are crucial. The University of Leeds did some research for us that showed the option value that villages around Shrewsbury place on having a bus service, whether they use it or not. Irrespective of whether they use it or not, they would pay £2.50 a week just for it to be there. That is really crucial.
The other point, which I mentioned earlier, is tackling congestion. From our research, some market towns in Gloucestershire have seen the worst increase in congestion across the country. In some instances, bus journey times have doubled over the last 25 years. I would not want to suggest for one moment that this is purely urban.
The economics are harder as you get away from the centre. That is correct. However, it is even more socially necessary. We have research that shows that a 10% reduction in bus service connectivity would lead to a 3.6% increase in social deprivation. As we look at policy as a whole, we absolutely have to be mindful of all of that as well.
Q37 Daniel Zeichner: That is useful, Claire, because my next question is about the suggestion in some of the written evidence that you need different strategies for urban and rural areas. Back in the late ’90s there were the urban and rural White Papers, and rural service standards that tried to give a guarantee to people in rural areas that certain settlements of certain sizes would have a certain level of service. Is that the kind of thing we should be aspiring to? Should we aspire to real targets, effectively, and say to people, “This is the offer”? If you do not have a promise, people have to turn to their cars in rural areas.
Claire Haigh: Bus speed targets, for a start, could apply everywhere. As I said, congestion is challenging in all areas of different shapes and sizes—absolutely. Yes, as you go into the detail, there are different configurations, but the principles are not wildly different. I agree that it is reliability; it is being able to depend on the bus. If you cannot rely on it to turn up on time, you are not going to rely on it to get to work. It is that sort of thing.
Claire Walters: I am reeling with lots of different things that want to come out. To go back briefly to BSOG, our position on it is rather different. I know that this discussion has been had and rejected for reasons we do not understand, but why do buses have to pay fuel duty when the railways, which are much filthier, do not, and the aviation industry does not? If we could stop having to do all the work involved in BSOG and just exempt buses and coaches from fuel duty, it would make life a bit easier for the people running those services. I will go on to some other points while you all sit there shaking your heads.
The other thing we need to look at is the postcode lottery for bus services. It is unacceptable. It is patchy. Clearly people in rural areas have a much worse choice. The infrastructure we have all talked about is just not there. Even if people want to catch the bus, half the time they do not know where to go to catch it and the information is not there. It is the perfect storm that Claire talked about, and it is a massive issue.
One of the things we have not really addressed in this session is bus priority, in order to compete well with the car and to make congestion slightly less, so that people watch the buses go by and say, “Why am I sitting in a jam?” I am not just talking about bus lanes; all the lower-tech, easy and cheap things that local authorities could do should certainly be part of a national bus strategy, so that buses sweep through traffic lights ahead of the car. We have to make it more appealing for people to catch the bus. Buses must be more reliable and less subject to the traffic jams, which, again, is much harder in rural areas with narrow lanes. You need to find ways to prioritise buses, even if that means closing off certain routes to cars.
I know that, politically, it is terrifying to start having a go at car users, but if you know your area, you know your routes; you know where people need to go from and to, and you can make it easier for a bus to get through, even a little one.
Daniel Zeichner: There is much more that could be said but I am conscious of the time, Chair.
Q38 Ruth Cadbury: I have lived in London since just before the 1985 Act and I am a London MP. In answer to Mr Zeichner’s question, you all talked about a stronger framework and more funding. What about more regulation that almost requires certain levels of bus service? Do you have views on that? Ms McCord, you effectively said no, but what about the other three?
Darren Shirley: This goes to the national strategy. If there is a bus investment strategy, it can set targets, ambitions and objectives to be achieved at national level that have to be reflected through what happens at local level. As in the cycling and walking strategy, it is a way you can use your national ambitions to help give some direction to the local plans that are produced. It is important not to have central Government diktat, but to shape the policy landscape and direction so that local authorities are all heading the same way. They will each have different circumstances. If you have a deep rural community, you will need to put in place a very different service compared with an urban environment such as London.
It is not all about regulation. It is not all about competition. It is not all about franchising versus partnership models. It is about local areas having control of how they can provide for their community, as appropriate for that area and for what that community needs, so that we have a network that is properly funded rather than a series of routes that are underfunded and eroding. That is where a bus investment plan has a real role to play.
Claire Walters: I mentioned section 63 of the 1985 Transport Act. I agree that we probably do not want to be too heavy-handed in regulation, but it would certainly help a lot of transport planners and funders locally if we had section 63 of the Act. I am sure you can all quote it; it is the bit about socially necessary transport.
When it was set up in 1985, clearly it was not intended that a local authority should consider the social need for bus services and fund it if necessary. It was never envisaged at that point that they would consider it, spot the need and then decline to fund it. A small tweak to that particular bit of legislation, saying that it is a requirement and not a consideration, would allow local authorities to understand that it is a responsibility. They should be given much more leeway in how they meet it, and the strategy should allow that to happen. It is a regulation that needs tweaking.
Claire Haigh: I have a couple of final comments to echo what Darren and others were saying. The strategy needs not to be too prescriptive. The Bus Services Act provides a range of powers. It is for local areas to decide what they do and how best to get the benefits. We have to go with the grain of devolution. That ship has sailed. The most important thing that the strategy needs to do is show the benefits and the kinds of things that matter, irrespective of framework, whether it is regulated or not. It needs to be around bus speed targets—the kind of things we have been talking about today, which you have to have in place for a bus network and a bus service to survive. That would be my point.
Q39 Chair: Could I have a one-word answer from each of the panel? Do local transport authorities have the expertise to develop local plans to improve bus usage?
Darren Shirley: Potentially.
Linda McCord: Again it is inconsistent. Definitely yes in the west midlands. Other areas may need more help.
Claire Haigh: It is a collaborative effort. We all need to work together on it.
Claire Walters: Occasionally.
Chair: We started to look at examples of best practice, but I am sure there are things to add.
Q40 Jack Brereton: As we have heard already, some areas are doing a lot better than others. Bristol, Brighton, Herefordshire, Oxfordshire and Reading are the top five in increasing bus ridership. What is happening in those areas that is so different from everywhere else?
Claire Haigh: There are a couple of things. Brighton is a case where they have given the bus priority on the roads. It is one of the highest areas of growth and passenger use. Oxford is a really good example of how you need car restraint; 50% of journeys in Oxford are by bus. It is incredible. It is because there is so little parking, and it is so hard. Geography helps, and there is good partnership work as well. Those are a couple of points.
Claire Walters: I would point, unusually I think, to a local authority way of going about it. Wiltshire County Council, some years ago, had a plan of cuts for buses. They were not terribly sure how to consult on it, so they asked us for advice. We went a bit bonkers on it and really consulted hard. We got to a lot of areas they would not have otherwise reached. They expected a few hundred responses and they got just under 20,000, so it freaked them out slightly. They redesigned their whole plan as a result and got a lot more community buy-in. They still had to make changes. They had to do a bit of cutting, but they still got a lot more community buy-in and people’s ideas. Obviously I would say this, but I think the key is involving the community you are supposed to be serving and getting their buy-in.
Linda McCord: An example from the west midlands was bus stop rationalisation to tackle lack of punctuality. The aim was to improve journey times. The Bus Alliance agreed to take out 60 stops to help punctuality in south Birmingham. It was completely done as a trial and in full consultation with passengers. It showed that journey times were better, but seven stops were put back because they were seen to be in areas that absolutely needed them.
Picking up Claire’s point, it is having something that ensures you are bringing passengers and users on the journey. That had a huge impact. Patronage went up and there were increased fares. There were lots of different things, but the stops were put back for those who did not benefit. It is really important that consultation with passengers is undertaken.
Darren Shirley: I would point to an example in Merseyside, where they have been seeking to tackle reductions in patronage on their bus networks. I believe they submitted evidence on this as well. They introduced an under-19 discount to travel on the bus. Since introducing that, usage has increased 186%. That way of easing access, making it cheaper and more affordable for younger people to use the bus, has increased their usage. It is an example of what an authority can do very clearly and simply to drive uptake in the use of bus.
Q41 Jack Brereton: We have heard a number of good examples. How do you think they can be shared and transferred more widely around the country?
Darren Shirley: That is a job for the likes of us on the panel. Bus operators can work together and share their learnings across different areas. Local authorities can collaborate. There is the Urban Transport Group, where the major metro areas are working together to share best practice. There is a real need to take all of these examples. The Committee has a very strong role as well, when you report back on where you find best practice through this inquiry, to make more visible what can be done with the powers that are available and the opportunity that is currently there, and to take the best practice from Liverpool, Reading and Brighton and other areas and spread it across the country.
Linda McCord: That is so right, because we are all in this together. It is the bus industry’s reputation. It is the likes of ourselves, operators and others who need to share good practice to make sure that it is happening right across the country.
Claire Walters: One of the matters that really makes Brighton, Reading and others of that nature shine out is the way they have knitted themselves into the fabric of the town or community they serve. It is much harder in a really big diversified area, but in those areas they are part of the community and people know that. Brighton has a Helping Hand scheme. You might know of it. Basically, people might need help, and if they want to they can write it down. That has gone way beyond the buses; the Helping Hand scheme is in cinemas and all the rest of it. It goes beyond the boroughs involved, and beyond the town. Those examples of best practice really need and deserve a lot of credit.
Q42 Chair: I want to pick up the Merseyside example. Then Huw has a question about concessionary fares for young people versus older people.
Who paid for the concession? Was it that the bus companies recognised that if you get young people on the bus they will continue to be bus users, or did the authority have to do it?
Darren Shirley: There is a Bus Alliance in Liverpool that the Campaign for Better Transport has sat on, and we have worked very closely with Merseytravel. There is an agreement between the bus operators and the transport authority on how they want to fund it. I am pretty sure that they put some information in the submission they have sent through already, but I will be happy to share more information that we have as a follow-up.
Q43 Chair: It is a combination.
Darren Shirley: There is an opportunity for bus operators and local authorities to work together, to find the best way to encourage people to use the services that are there and how they might grow the services that are available in an area. That might be with some form of discount or concessionary fare that helps those not currently served by concessionary fares.
Q44 Huw Merriman: Linda, let’s assume that the public funding is not going to increase. I am a 66-year old millionaire. I have two Jaguars and I get a free bus pass. I am a 17-year-old student in East Sussex and I am required to stay in education, and it costs me £135 per term to use a bus to get to studies. How is that fair?
Linda McCord: In those situations, areas have to consider and know their people. In the west midlands, a concessionary fare for people over a certain age is offered. At one point, they consulted on whether they should remove that, and the feedback from passengers in general was that, no, they felt it was something that should be in place. Instead of saying, “We are funding that and we are not going to fund anything else,” through the Bus Alliance, working with Transport for West Midland, the combined authority and the bus operators, they are now offering very good discounts for younger people as well. They have extended them for 16 to 18-year-olds, so that fares are very good for that group. It is about the decisions that people make, and the west midlands is an example where they actually went out and asked people.
Q45 Huw Merriman: But is there an argument that the free bus pass for those over 66 is effectively public money going straight to the bus operators? Some 45% of their revenues come from concessionary bus passes. The big bus companies make a profit margin of over 10%, whereas in rail it is 5%. Effectively, they are not making discounted offers because the taxpayer is paying it for free. Do you not think that, if there were some changes, not only would it perhaps be fairer from an intergenerational perspective, but bus companies might have to make better offers to 66-year-olds and older?
Linda McCord: Therefore we should ask people, as we did in the west midlands more widely. We should ask people what their preference is. Your point around the fact that it should not be one or the other is important. There is room to meet the needs of all those groups. Again, we have seen in the west midlands how that can work, and fairly recently, with the capping of fares, it has become very attractive to non-users. It is about all working together to make sure that we are meeting the needs of every group.
Q46 Chair: We had a section about why people do not use buses, but in the course of our discussions I think we have already dealt with that. Do members of the Committee have any further questions for our first panel? Panel, are there any key points you want to leave us with before we allow you to escape?
Darren Shirley: There is one element of the bus investment strategy that needs careful consideration. We are going to have to clean up our cities. Air pollution is a major problem. The way to get there is not just electric cars or electric trains; it is also electric buses. If we are going to make the move to electrifying our bus fleet, we need to consider carefully how we fund and support the capital costs that come with buying new buses, the charging infrastructure and the need to reinforce the grid to support that. All of that needs to be looked at as a whole in the investment strategy, so that we have a cleaner bus system as well as one that operates for its passengers. It is not just about increasing bus patronage. It is also about cleaning up the bus routes so that we reduce the amount of air pollution in our cities.
Linda McCord: We have touched briefly on demand responsive. That is an area where we are keen in Transport Focus to do a bit of research. There are some very good examples out there. Just this week, Milton Keynes launched ViaVan, which is helping an urban area where schedule 106 money is coming to an end. There are some very good examples, and as an industry we should be embracing some of these demand-responsive type things, even uberPOOL. They are ideas that we need to consider. They can fill the gaps in areas where traditional buses are not able to operate.
Claire Haigh: I have two quick points. First, the analysis we have done on concessionary travel shows £3.80 for every £1 invested, so the bus pass is really good value. The big point is that we need much more funding for buses anyway. It would be a false choice to say it is between young and old. We need much more support.
I have a quick point on air quality, as you raised it. You are absolutely right about the move to electrification. In the immediate short-term crisis we are facing right now, Euro 6 is fantastically clean. With a Euro 6 bus, there are fewer emissions overall than in a Euro 6 car despite having 15 to 20 times the carrying capacity. There has been a revolution in bus diesel technology that we want to make the most of, while absolutely on the roadmap to pure electric, ultimately.
Claire Walters: The funding saved by not administering BSOG could be used for the greener bus fleet.
Chair: Thank you very much for coming along today.
Witnesses: Tom Forth, Neil McClure and Nick Richardson.
Q47 Chair: Thank you for coming along today. It is good to see Neil’s tie having a first run-out, as previewed on Twitter yesterday. For the benefit of our record, please introduce yourselves.
Tom Forth: I am Tom Forth. I am the head of data at the Open Data Institute Leeds. I am also a software developer who uses a lot of bus open data to provide services across the country.
Neil McClure: I am Neil McClure. I am the head of transport innovation at the Open Data Institute in Leeds, a pioneer node of the ODI based in London.
Nick Richardson: I am Nick Richardson, representing the Chartered Institute of Logistics and Transport.
Q48 Chair: We are really interested to hear your take on what the priorities are for increasing bus use. In your evidence, Neil and Tom, you described deregulation as a disaster for the economy of the UK’s big cities, but we are where we are and we cannot turn back the clock to 1986. If you could reinvent bus services in England, outside London, where would you start?
Tom Forth: Manchester, Birmingham, Leeds and Liverpool; probably Glasgow as well, but that is an issue for the Scottish Government. What Andy Burnham is currently talking about in Greater Manchester is going down the right path. It is regulation, and competition between bus operators, not at the level of buying your ticket on the bus but in bidding for franchises that are managed and run by the city for the city’s benefit. It looks very much like London, Barcelona, Amsterdam and Munich—any of the cities that Manchester, Leeds and Birmingham aspire to be like.
Neil McClure: There needs to be greater focus on delivering what passengers and customers want. That means customers and passengers who currently travel by bus, and particularly those who do not and who avoid the bus by travelling by car on a regular basis. It means greater use of technology, and a more innovative approach to the use of technology and ticketing in the bus industry. Unsurprisingly, as we are here representing the Open Data Institute, there should be better information through the sharing of consistent open data.
Q49 Chair: Do you agree with Tom that it is about regulation London-style, or are there different ways of getting to the same outcome?
Neil McClure: I agree with Tom. What has been proven is that it is almost impossible to deliver a London-style customer experience for bus passengers in the entirely deregulated competitive market in Manchester, Leeds and other cities across the country.
Q50 Chair: Nick, what do you think?
Nick Richardson: Bus operators are doing their best under very difficult circumstances. I am sure they would argue that they are over-regulated rather than under-regulated, and cannot get on with the business of delivering a good service. For example, they are penalised for being late on journeys through no fault of their own. They have no control over external circumstances—traffic congestion.
Q51 Chair: In what way are they penalised? Previously, this Committee has taken evidence from traffic commissioners, and we found precious little evidence of traffic commissioners penalising bus companies.
Nick Richardson: It has happened. Traffic commissioners are generally sympathetic to what operators are trying to do, but there have been instances where they have simply taken a very different view.
Q52 Chair: What things would you like to do? Where would you start in terms of the priorities for increasing patronage on our buses?
Nick Richardson: We would certainly look at examples of best practice. That has been achieved through partnership. It is very much a case of working with the consumer. It is also working with people such as big employers and with education establishments. The student population is growing, and there is huge potential in younger people, many of whom do not have an aspiration to drive a car and do not have a driving licence. They can get around in buses. They are the future generation. There are an awful lot of opportunities, if only they could be exploited.
Q53 Chair: If those are the ideas for increasing the use of buses, do you agree with the previous panel—you were listening to them—in diagnosing what the cause of the problem is, and why bus use generally in our big cities and most metropolitan areas is falling? Do you agree with the diagnosis that it is about congestion, lack of information, uncertainty or even lack of provision at all?
Tom Forth: It is pretty important to separate different types of bus market. If you are operating a small city bus system, we have not done as terribly as a lot of people would make out in the UK. Some cities are now going to get upset with me calling them not big, but Edinburgh is quite small compared with Leeds or Manchester. The buses work quite well there; Reading and Brighton, similarly. We have not had a huge disaster in some of the smaller cities.
In terms of rural bus use, people can afford cars and they choose to drive. Rural congestion is not as bad as it is in the big cities. In those two markets, we have done quite well. We have not done fantastically, but I do not see a great opportunity for an easy win or an easy fix. It is in the bigger metropolitan areas where there has been a huge amount of congestion caused by traffic, and failure to invest in alleviation and bus priority measures. Bus journeys have got slower and slower over time, and it is simply not worth taking a bus because you cannot get there. We regularly have people at our events in central Leeds, at ODI Leeds, living three, four or five miles away, who say, “I can’t come to your event at 6 o’clock because it will take me two hours or an hour and a half to get to you.”
Our big cities simply do not function because of the current congestion, and there is a lack of incentive for local authorities to invest in schemes that would fix that. If Manchester invests in a huge number of new bus lanes, it makes Stagecoach a lot of money; it does not make Manchester local authority very much money. It makes a few people happier that they can get to work a bit earlier, but there is no huge payback on it. It is mostly in the big cities. We have got the incentives wrong. We could fix the incentives to make investment in faster journeys the right thing for local authorities to do.
Q54 Chair: I could not help noticing that, of the three smaller places you talked about, Edinburgh and Reading both have a municipal bus operator. There are only a handful of municipal bus operators, but those are two of them. Is that relevant to their relative success?
Tom Forth: Neil would probably know a bit more about that. We see good examples of both.
Neil McClure: There is a common thread. In the best practice examples that were mentioned before and that Tom mentioned, the common thread is that, through one reason or another, there is one major operator that dominates most of the services in the area. What we have seen in those areas is patronage growth.
There are a number of external factors outside the control of bus companies that affect their day-to-day operations. Tom mentioned congestion. One of the main reasons for declining patronage in some of our major cities is that, through competition, the bus industry has inadvertently put up a significant number of barriers to travel for passengers.
To give some specific examples of that, Leeds—we are both from Leeds— is a city that has three major operators with relatively equal market share all competing on the major routes, plus a number of other smaller competing operators. Each of those operating companies has their own different product set and fare variations. Some of them have their own apps and services that promote and sell just their own products. For a passenger to get a full view of all the available products, fares and services that are relevant to them in the city where they travel, they require multiple bits of research, apps, websites, journey plans and so on, to build a view.
If they board a bus and buy a product, often they are incentivised to remain loyal to an individual bus company by buying a particular day, week or month product, or whatever it is. That means that individual passengers are disincentivised to turn up and travel. Central and local government, local authorities and passenger transport authorities have an incentive to encourage urban mobility. The current scheme that we have set up in many of our major cities disincentivises urban mobility.
Q55 Chair: I certainly recognise that from using my Nottingham City transport card. I get a better deal than when I use my multi-modal card.
Tom Forth: Nottingham is very good as well. Nottingham is among the better cities for bus travel, as well as the tram.
Q56 Chair: Absolutely, but even then there are problems. Tom, you said something quite provocative and I do not think I can get away with not asking you about it.
Tom Forth: It is true that I say provocative things.
Q57 Chair: You said that generally wealthier people live in rural areas and they can afford to drive. Isn’t there a real danger there? There are people who live in rural areas who cannot drive through reasons of disability, and there are young people in rural areas who are not wealthy. There is a danger that a whole group of people who live in rural areas, and do not have access to a car, are going to get completely left behind if we just think that they do not matter so much.
Tom Forth: There is, and we must make sure that that does not happen. We need strong local government that invests in the right thing. Looking at how we support rural mobility at the moment, a big part is BSOG—bus service operators grant—and a big part is journeys on free bus passes. Quite a lot of money goes into that, to run empty buses around rural areas.
There are new technologies and options for mobility that local government could use more efficiently to provide the mobility that people who need it in their areas require. Although I live in a city now, I grew up 15 miles east of York in one of the most rural parts of England. There were two bus services a day, so no one used the bus. I am sure it continues to this day that empty buses run around east Yorkshire with no one on them, or maybe one or two people tapping on with a free bus pass to get a free journey. I do not think that is providing that person with a good service for the money that is being spent on it. I am confident that the same amount of money spent intelligently by the local authority would provide that person with a better service. The requirement that all the support is for buses and not for mobility is the problem in rural areas.
Q58 Chair: We will come back to that in a moment. We have a whole section on innovation, and I think that is where to pick it up. My last question is to you, Nick. What do you diagnose as the key reasons for the fall in patronage and how does it shape the priorities Government should have?
Nick Richardson: As we heard earlier, we should take a step back and think about what mobility is offering, and the whole business of the cost of running a car and the availability of parking in an urban centre. If you know you can park there, you will drive. If you know there is absolutely no way you can find an affordable parking space, you will not. That increases that market. The only growth in the bus market is not fighting for the people who use buses at the moment; it is about extending that use, and most of those people are car users.
We could think about the other enormous benefits of buses. All buses are now fully accessible. That is an enormous step forward, because virtually everyone can use a bus. We have heard about air quality. We have a strange situation at the moment where the talk, quite rightly, is of low-emission zones in a lot of urban centres, but the initial schemes are penalising buses, not cars. It is the wider theory that says, “What are we trying to achieve, particularly in our urban areas?” It seems to be a very mixed patch at the moment.
Chair: You are absolutely right about low-floor buses. There is accessibility for people getting on the bus, but there are nowhere near enough audiovisual announcements. When we went to Leicester a couple of weeks ago there was an example of a route with audiovisual announcement, but someone found that the driver had turned it off because it was annoying, which I found absolutely astonishing.
We want to look at innovation in the bus market, which will allow us to explore some of Tom’s points a little further.
Q59 Grahame Morris: Tom touched on it initially, and Neil mentioned congestion management. Nick, in view of the chartered institute’s written evidence that talked in some detail about bus priority measures, what needs to happen for those measures to be successful?
Nick Richardson: They need to be in the right place. There has been a tendency in some places not to put them in the right place. You put them in where they are easy, which is not actually where you need them most. It involves a very difficult bit of local politics to say, “We are going to reallocate road space in favour of buses and therefore take it away from someone else.”
Everyone is trying to share the same space. Cyclists have particular needs. There are bus users, car users, deliveries and all the rest of it. Some of our urban centres simply do not have the space to deliver comprehensive measures. There are other ways of going about it that are a little more radical, where you have exclusion zones for certain types of access, but it makes a pretty important difference to bus operators and bus users.
Q60 Grahame Morris: It is generally controversial to have bus priority lanes and restricted areas. In Durham city, around the central area, automatic bollards were installed, creating a great deal of work for the local garages when they popped up. Given the difficulty and the controversial nature of applying them locally, is there a role for national Government in identifying bus priority measures?
Nick Richardson: There is. It is fair to say though that the capacity of local highway authorities to move forward with these things is restricted. Many of their staff have gone as a result of spending cuts, and indeed the budgets that go with them. Basically, they are more concerned with filling in potholes than thinking more creatively.
Q61 Grahame Morris: You also mentioned rural bus services and that the challenges are rather different. Thinking about rural areas in particular, can you give some examples of innovation? ArrivaClick has been identified. Is that the way forward for the more isolated areas that Tom mentioned to have improved bus services and access?
Nick Richardson: It is. Market segmentation is an interesting point. If we think about the more profound impacts of losing your bus, if you are of job-seeking age and you cannot get to work or you cannot even get to the interview, what do you do? Basically, you move to an urban centre because that is where the work is. There is a churn in the population of rural areas, which makes them the preserve of car users—often older people—and the younger generation simply are not there any longer. It is very destabilising for a small community. We have seen the demise of the post office, the village shop and the bus. All these things matter, so there are some very difficult issues.
On concessionary fares, we have to remember that the subsidy is to the user, not to the provider of the service. There is the rather odd situation that lots of people are entitled to a bus pass but actually have very few opportunities to use it. That cannot be right. Somewhere along the way that needs to be ironed out because it seems very strange.
Q62 Grahame Morris: Tom, are there any other examples of innovation? Technology is wonderful, but I keep thinking that on a Sunday it does not matter what technology we have. We do not have any bus services, so, even with the best innovation, we could not access them without an improvement in the numbers.
Tom Forth: ArrivaClick has been very interesting. Oxford Bus does some things that serve outlying science parks around Oxford. There is a massive opportunity for, effectively, dial-a-ride for the 21st century to work well. That is what we have to be looking for.
I am less positive about innovation in big cities. We know what works: buses. We need to make them work and run on time, but there are huge opportunities for providing for rural communities. Neil, can you think of any more opportunities rurally?
Neil McClure: Not rurally, no. I can point to a number of themes of innovation that could work across urban and rural areas. Some of those are open data and more information. I would look at ticketing, particularly more mobile and contactless ticketing. There is demand-responsive travel. ArrivaClick has been mentioned, and there is Vamooz, and lots of others are springing up, some as independent start-ups—SMEs—and some as spin-offs from some of the larger, traditional companies, like ArrivaClick. The big innovation that is coming and which will hugely disrupt the bus industry, with it or without it, is Mobility as a Service. The bus industry, urban and rural, needs to be much better and adequately prepared for that.
Q63 Daniel Zeichner: On innovation in rural areas, where there has been a long-term problem and issue, Nick, you made a point that I often make. There is absolutely no point in having a bus pass if there is no bus. In some areas, couldn’t the bus pass be turned, in effect, into a mobility offer? We are talking about a whole range of possibilities, whether it is a dial-a-ride bus, a taxi or something else. Basically, that is the offer that people need, isn’t it?
Tom Forth: I agree 100%. If you took all of the bus support that currently goes to rural local authorities and said, “Spend that on getting people who need mobility to the places they need to be,” I suspect they could do fantastic things with it. It needs to be freed up to do it. I do not imagine that the UK Government could decide extremely well what type of mobility issues there were in the Lake district. I suspect that Cumbria County Council would be very good at it. There is a big need for the interventions and the money to be in the right place.
In the last session, there was a lot of talk of postcode lotteries. This is going to be a postcode lottery. We should embrace it and not say that everyone should get the same service. It is ridiculous to think that. The needs of urban bus users are completely different from the needs of people living in rural local authorities. There need to be different answers for those different people. That should come from their local government, which they elect, deciding what it needs to provide.
Q64 Daniel Zeichner: It does not have to be the same service, but it needs to be the offer of being able to get you to roughly where you need to be. It is the old joke about there being a bus going there one day and coming back later in the week. Basically, people in rural areas need some guarantee that there will be some form of mobility that works for them.
Tom Forth: Yes. I think that is fine.
Q65 Chair: I have two questions. Tom, there is huge potential through new technology and demand-responsive transport, but how do we ensure that that is accessible to some of its users? We know that a lot of older people in particular do not have smartphones. They might not be on the internet, particularly people who are in poverty in rural areas. Do you think there is a way of doing that to make sure that they are not digitally excluded?
Tom Forth: We do a lot of work at ODI Leeds on digital exclusion. I actually wrote the bin app, which is one of the most used apps in local government. Through that, in Leeds, everybody who uses a smartphone can check when their bins are going to be collected and what they can recycle.
One of the most fascinating results of that work is that what we think of as digital exclusion does not really exist. It is a different type. Almost everyone in Leeds, even in the poorest areas, can afford a smartphone and can use it. What they struggle to afford is data connectivity on it. It is one of the reasons why a lot of bus companies now provide free wi-fi on the bus. It is so that the people they are carrying on the bus can access the internet for maybe the only half-hour of the day that they can afford to do so. For rural communities and the elderly, there might be more of a challenge. That will require services to be provided, such as dial-a-ride or phone services, and all those traditional forms. We can still do intelligent, clever innovation stuff with telephones and people ringing up and talking to people. There is not a problem with that.
The big chance is in the very poorest parts of our inner cities, places like Beeston in Leeds or Moston in Manchester, where at the moment the innovation that I think would help people’s lives more than anything is not a clever smartphone app from Stagecoach or First; it is a card that looks like this one and which they just tap when they get on a bus. We do not have to look to magical future innovations all the time. A lot of innovation is already here. We do not have to reinvent it; we can just start doing it now. There are some massive opportunities.
Q66 Chair: When you say a card, do you mean like an Oyster that you can use somewhere else?
Tom Forth: An Oyster card, yes.
Q67 Chair: Neil, you made reference to Mobility as a Service. We have not finished our report yet, but we have done a lot of work around Mobility as a Service. One of the things that we identified is the potential for it to actually lead to less bus use, and people using more private hire vehicles and so on. What do you see as the dangers to bus services from Mobility as a Service, and what things should bus companies and local authorities be doing to respond to that?
Neil McClure: As a wider trend outside bus and even outside public transport, increasingly customers and consumers are making more informed decisions based on increased amounts and quality of information and data. That is now becoming a very real thing in public transport and bus use.
Mobility as a Service is hugely data intensive. In my view, it is a huge opportunity for customer-focused travel options. It potentially threatens some bus services and bus patronage in some areas. However, if it is to work in the larger urban areas, undoubtedly buses will play a huge role in the delivery of Mobility as a Service options for customers. I think bus companies should get on board with Mobility as a Service now, particularly the operators in large urban areas.
Q68 Chair: I was at a conference last week and they were talking about ArrivaClick, which has just launched in Liverpool. They were talking about modal shift and were saying that 50% of the people using it are previous car users. That is great, but it means that 50% are probably abstracted from local bus services. Is a danger of introducing those sorts of demand-responsive new services in an urban area that they undermine the local bus service?
Neil McClure: There is a chance of that, yes. As more specific demand-responsive options spring up like the one you mentioned—ArrivaClick—it has the potential to take customers off big bus. That is the nature of the industry. The bus industry has to adapt to how technology is changing. It is not just the bus industry and it is not just public transport; it is every other industry.
Q69 Chair: Nick, you talked about the loss of expertise in local authorities. Can you say a bit more about the political barriers? Nottingham is the only place in the country that has a workplace parking levy. It was a pretty painful political decision to introduce it. I do not think it would have happened in an authority where there was any prospect of political change. In Manchester, when they consulted about a congestion charge, it was completely thrown out.
How can local authorities take quite radical measures to try to disincentivise car use when the political consequences are so significant? Should central Government be doing more to stand behind them, or is it just not going to happen?
Nick Richardson: Central Government has a role to play. The emergence of the combined authorities is proving very interesting, in that there is a centralised political lead. Some of the decisions that face them are unpleasant, but there is a different way of viewing it. Instead of Manchester and Edinburgh saying, “Do you want to be charged for something that you are not charged for at the moment as a congestion charge?”, you say, “Do you want to help towards urban pollution and congestion?” You can turn it around. If you have a positive vision of what you are trying to achieve, some clear measurable objectives, and funding and everything else in place to do it, the mechanisms are there.
Plenty of examples in Europe and elsewhere show that that has been achieved. It has taken very bold, daring and risky political leadership, but they have an enormous result from it.
Q70 Chair: What are the best examples? Is it Copenhagen and the Netherlands?
Nick Richardson: It is. The Dutch have the right idea. They link it with land use. Where do you put housing estates and industry? How do you connect those sorts of areas? There is provision for cyclists that does not share space with cars or buses or anything else. There is a bus service that works because the barriers are not there. You get on and it is simple. That is the sort of thing we should be aspiring to.
We spend an awful lot of time navel-gazing at regulation and legislation and one thing and another, and we can very quickly lose sight of what people actually want. The classic example is whether you are 400 metres away from a bus stop. Your car is probably 4 metres away. The choices become very obvious then. It is making the bus relevant to people. That involves things such as restricting parking, or a fairly mild workplace parking levy to start with, but it also involves getting people to understand what their options are and working with you. It does not have to be against people; you can work with people.
Chair: We want to explore best practice a bit further.
Q71 Jack Brereton: As we touched on in the previous session, there are a number of parts of the country that are doing pretty well at improving bus ridership. Why is it that some areas of the country are doing much better than others?
Nick Richardson: There is no simple answer to that. It has been patchy. Despite regulation being with us for some years, there was the legacy of what was before. There is a certain territorial way in which services are supplied. There was talk in the previous session about new entrants to the market. There are not many, because the risks are so high that it discourages people from trying. You tend to find that the vast majority of services—some 80%—are run by the big five. I am sure that was not the original intention of a competitive market.
Q72 Jack Brereton: We have a lot of small operators as well. Do you think there is a difference between larger and smaller operators and the flexibility they have?
Nick Richardson: Yes, there is. Most of the smaller operators I have come across cannot wait to retire. There is an awful lot of grief for very little return, and it has been grinding them down. The bigger operators, in combination, could have an enormous effect on moving things forward. Things such as ticketing have been very slow in coming. If you compare buses with the retail market, which has had contactless for years, bus operators are still catching up. They tried smartcards, and it took a good 10 years to agree a standard. These things can be very piecemeal and they do not need to be.
Q73 Jack Brereton: Do the other panellists have a view on what other parts of the country are doing so much better?
Neil McClure: One of the common threads in the areas, towns particularly, that have seen the greatest increases in patronage—for example, Bristol, Brighton and Reading—is an environment where there is a dominant operator, or an operator with a majority of services in that area. That creates certainty for passengers, in that they are familiar with the services operating in the area. If they use a card, for example a smartcard, or they buy a product for their travel patterns, they can use it on most of the buses in the area. Removing some of those barriers to travel creates an environment where passengers are more willing to travel. That is reflected in the data.
Q74 Jack Brereton: That has not always been the case. We heard about the west midlands; it probably has one of the most dominant operators, but it did not seem to have the effect of continuing to improve bus ridership. What are the things encouraging places like Bristol or Oxford to have more people travelling on buses?
Tom Forth: If you are Preston, Burnley or any other similar-sized place somewhere in the country that I do not know, you can learn a lot from Reading and Brighton. I do not think that Birmingham, Manchester or Leeds have much to learn from those places because they operate on a completely different scale. You do not have two-hour delays on the bus trying to get into Reading. It doesn’t happen. But in Birmingham, some buses just sit for an hour and a half trying to get into town.
The impact of congestion on a city of a scale of 2 to 3 million, which is what our big cities are, is completely different from the impact of congestion in a city of the scale of 200,000 to 500,000. There is a lot of learning and working together to do on the smaller scale, but on the bigger scale I do not think we have a single example of excellence in the UK. We are looking abroad to see what good public transport looks like.
I am always a bit reluctant to look at what I call the obnoxious countries, such as Sweden and the Netherlands, which always win every league table. We are probably not going to be there, because we are probably not going to have as large a state and as empowered local government as they have. I would love it, but we are not going to do it. We would be better off looking at some less glamourous places for an away-day, I am afraid.
In Lille, in north-east France, which is twinned with Leeds, and a very similar city in many ways, a great example is the bus fare. How much does a bus fare cost in Lille? It is €1.50. How much is a tram fare? It is €1.50. How much is the metro? It is €1.50. What if I want to get a bus and then a tram? It is €1.50. They have a completely open fare system for the whole of Lille because it is €1.50. In Leeds, there are probably about 1,000 different tickets I can buy.
In a small city such as York, which I know well, it is First Bus. You know what First Bus costs and those are the only buses you can get. They have a chat with the local authority and agree not to rip everyone off too much. It kind of works. But if you are in Manchester or Leeds, there are five different bus companies, none of whom will accept the other’s tickets. As a user you are just baffled and you think, “I will buy a car then. It’s the only way I’m getting to work.”
There are two different scales. We need to look at them very separately. At the big city scale, we need to be looking to other places in Europe for inspiration and not to other cities in the UK.
Q75 Jack Brereton: I have a further question for Nick. Earlier, you touched briefly on regulation, particularly in relation to timetabling. Do you think there should be more flexibilities there? I am thinking of routes where we have high frequency of services. Obviously, we did not have real-time information when the legislation was thought up. Do you think there should be more flexibility when we have a bus every 10 minutes, so that there can be more flexibility to arrive early or late?
Nick Richardson: It might be helpful. The 10-minute requirement is actually quite useful, in the sense that you can have more than 10-minute frequency without re-registering it. That has proved to be quite helpful. There is a bit of an obsession with the punctuality targets. You need to step back and think why. What is the cause rather than what is the symptom? There are all sorts of things that can delay buses along the way, but a lot of it is cars getting in the way.
Chair: I have been to see the transport system in Lille; it is very easy to go on Eurostar, so I recommend it. Huw, you had a question that I missed in the last section, so do you want to pick it up now?
Q76 Huw Merriman: Yes, thank you, Chair. It is still live in terms of what has just been talked about. It is about the inability of companies to break into the market. We are talking about a market where the profit ratio is about five times that of rail, yet companies are still bidding for rail franchises. Why is it that we are not seeing more entrants into the bus market? There is money to be made.
Dare I add that there might be a bit more intervention? For example, if a bus company in a rural area decides to drop its hourly service and it is a two-hourly service, maybe that has to be put completely out to tender again, using some of the innovative offers that Tom discussed. Do we need to be a bit harder on the bus companies that seem to be making pretty big profits? Forty-five per cent. of their revenue seems to come from taxpayer concessionary bus passes.
Tom Forth: Why aren’t there new entrants? I will give you a perfect example in Leeds. There was a new entrant on a route. The incumbent very quickly dropped its fares to £1. The new company was not there any more. If the Competition and Markets Authority was nimble and quick enough, and in Leeds, to address that issue, good on them. They are not going to be nimble and quick enough. They are not going to be in Leeds to address it, so we have a situation where the incumbent can just bully small entrants out of the marketplace. That is what you see.
I would not start a bus company. I know that one of the big companies would put me out of business within a few months.
Q77 Huw Merriman: I will challenge you on that. In Brighton, where there is a partnership, there is a bigger company and a smaller company. In fact, the big company collects on behalf of the second company. If it can work in Brighton, I don’t see why that company, which is one of the big five, is so benevolent so—
Tom Forth: It’s GoAhead.
Huw Merriman: I challenge your Leeds model on that basis.
Tom Forth: They can work with them. Who’s making the money in that partnership? Great that private companies want to work together and be friends. As a big fan of capitalism, I have never seen that really happen. No private company—
Q78 Huw Merriman: Let me come back to you on Brighton. The partnership works through the local authority being involved. It is incredibly innovative as a private company. We talked about audiovisual; they were operating that as a matter of course years back—a private company. They had mobility officers there—again, a private company—before they needed to be spoon-fed by the local authority, because they work as a partnership. They all make profits. We see from the House of Commons Library stats that bus patronage in Brighton has gone up, so I challenge your whole statist view of that. It is possible to do it.
Tom Forth: I don’t think it is. Brighton is a small place. I don’t think the great cities of this country can be considered on the scale of Brighton, with 200,000, 300,000 or 400,000; it’s not a 2 million world city like Manchester or Leeds. I can give you an example from Leeds of companies working together. A company, Yorkshire Tiger, started up. It ran buses and was bought by Arriva. We could say that they both make nice profits by working in partnership. They work in partnership by one buying the other.
Brighton has been a success on that scale. Good on them. I am surprised that the larger company offers to collect fares and help the smaller company to run, but they will have their reasons for doing it. I am not convinced that it is scaleable to the cities where we really need improved buses.
Nick Richardson: I think it could be. Bus operators working together, not in a formal sense like a cartel, but actually thinking about the consumer, have a lot to offer, because they are not competing against each other; they are competing in a much wider market. They know that if people recognise a bus, even if it is not theirs, as a worthwhile thing, it improves the image of the bus for everyone.
Chair: It is probably time to turn to the issue of regulation. There was a lot of hope when the Bus Services Act 2017 came into play, and we will explore some of the issues about whether that helps us to go forward.
Q79 Ruth Cadbury: We have had quite a lot of examples today of things working well in England, Wales and Scotland, and examples of a lot of problems; there are the costs of congestion and there is declining ridership. Do you think we need to do more to monetise those costs and potential benefits and share them in a way that brings us more towards what we have seen in other cities, or are changes in regulation part of the answer?
Nick Richardson: There has been a tendency for costs to creep up; part of it is fuel and the taxation on that, and part of it is labour.
Q80 Ruth Cadbury: I didn’t mean the cost to the bus companies per se, but the overall monetisation to society, local economies and so on.
Nick Richardson: That is where I was heading. The only way they can cover those costs is by raising fares, and a lot of people do not understand that it is as basic as that. There are savings, not just benefits—for example, in health expenditure. People missing appointments because they cannot get there is expensive, or people who do not attempt to get to the treatment they need because they cannot get there. There are all sorts of issues. We have heard a lot about loneliness lately, and mental health. A lot of people become excluded from healthcare simply because of a transport issue, not because of anything else.
There are savings on the health budget, particularly with the co-ordination that Total Transport has been trying to achieve. That has been an objective for decades, and no one has quite cracked it yet, but there are some positive moves. A lot of people in Government and on the regulatory side are involved with transport even though you would not think so initially. It is not just DFT, but people like DEFRA or the Department of Health. Everyone is involved with or affected by transport in some way, so there are definitely savings to be had. The benefits of a bus service are very many more than might appear to be the case. Monetising those would be really helpful and there have been interesting attempts to do that.
Tom Forth: What Nottingham did with the workplace parking levy was fantastic. It was a way of saying, “Better public transport, which the levy will pay for, will increase the value of your city centre property, and therefore we’re going to tax you in advance to pay for it.” A lot of other cities should be looking at themselves and saying, “Why didn’t we dare to do that?” It has worked in Nottingham. It has provided one of the better services. It has allowed investment in trams. Other places should really look at it.
It is another case where the economics of public transport are quite special, in that a big part of the win of good public transport does not accrue to the passenger or to local government; it accrues to the city. There are some examples in London of using some of the money from business rates to pay for very big infrastructure investments. There is a reasonable chance, in the big cities especially, for money to be taken out of city centre property and used to pay for the public transport that will make that city centre property valuable. I always think that sounds great, so why isn’t it happening? The reason, ultimately, is that it requires you to let local government raise taxes, and the UK is particularly bad at letting local government raise taxes. That is the challenge, but in theory, it is how we should pay for the investment.
Q81 Chair: Do you think that the current regulations and the guidance that followed the Bus Services Act are the right basis for doing something, or do they need further refinement?
Neil McClure: Some of the work we have done as part of the ODI in Leeds has been with the Department for Transport to facilitate the consultation process for the Bus Services Act. Over summer 2018, we facilitated a series of events across the country to get input from the bus industry on the proposed regulations. There are three main elements of the potential changes for the industry in the Bus Services Act: franchising, which we might come back to; open data regulations; and audiovisual, accessible information.
The UK is already typically quite good with open data. The UK has established national standards for the provision of some datasets, including timetables, stops and stations. The Bus Services Act seeks to take that even further and develop national standards for, hopefully, fares, which is absolutely the right thing, and a national standard for the provision of real-time information on bus locations. They are absolutely welcomed. There are significant challenges for many bus operators in providing that data in the required format and to the required standards and timeliness, but we welcome them.
There are opportunities to take them even further. If we look at other industry examples, there are some gaps. The rail industry is working to provide even more real-time information, be that about real-time locations or seat availability. Increasingly, informed consumers are demanding those types of information from our services. Aviation is another non-directly- regulated industry and has provided consistent standard data and information about tickets, fares, seat availability and even dynamic pricing, facilitating the creation of third-party comparison sites such as Skyscanner. There are more opportunities.
We welcome the accessible information regulations, and the requirement that operators provide audio and visual information for bus passengers on board buses. That is absolutely welcome. Linking the two, open data can provide support for the delivery of the audiovisual requirements. Transport innovation is not just about buying new shiny things, be it screens, platforms or mobile phones and devices; data and better quality information as an industry can provide all those requirements.
Tom Forth: Previously, there was the idea that you could get quite close to franchising. In Newcastle, Nexus, the transport body there tried it, and failed. We could not get there before. Under the Bus Services Act and the possibilities for regulation, it is right to look at city regions first. That is the right way to look at it. I think it can be done now. We will wait for Greater Manchester, whose stated ambition is to do it, to see how much they think it will cost them in lawyer fees to try to make it happen.
There is a holy grail in franchising and data that we have not yet talked about. One of the key bits of data we do not have about our buses is how many people use them in detail. We know how many journeys there are in a local authority, but in London I can tell you by 30-minute chunk on every bus route how many people are going to and from every place. In Manchester and Leeds, I could not even give you a guess, because it is commercially sensitive information held by the bus operators.
Franchising offers us a big extra step forward in terms of open data, which is that for the first time in 30 years we can understand how people move around our cities. We heard earlier about the need to plan the best priority measures. At the moment, it is quite hard for local authorities to plan the best priority measures because they do not actually know where people are moving on buses.
The Bus Services Act is a big step forward in enabling bus regulation and franchising. What is quite nice is that we might get a lot of benefits from it without seeing any regulation and franchising. Transport for West Midlands was here earlier. I lived in Birmingham for three and a half years, and it was quite noticeable, when the possibility of franchising reared its head, how keen National Express became to work in partnership with everyone. That led to some productive outcomes.
It would be quite nice if we got 90% of the benefits of franchising merely by having to threaten it, and then we would not have to do anything more, but the threat has to be credible. I think it probably is, in the Bus Services Act, but I am not quite sure. Ask Greater Manchester combined authority how much they think it will cost them in lawyers’ fees to win the battle.
Q82 Chair: There are some interesting questions there. Neil, on the question about open data, should Government have a role? Should they help to cover the cost to business of providing open data, and are there differences between the needs of the big five and smaller operators in respect of open data?
Neil McClure: Looking at other industries and the way consumers purchase other products and services, businesses in the private sector often see that the provision of accurate, high-quality information is a necessity to sell their product or service. I do not know if any of the Committee has purchased insurance products or washing machines, for example. Often, first you google it and have a look online, and you find almost infinite amounts of data and information about washing machines and insurance products, things you did not even think you wanted to know. Those organisations believe that they have to provide that information to help an informed consumer make an informed choice.
We do not seem to have that in the private bus market. The Bus Services Act goes some way to encouraging bus operators to provide some elements of data and information to help customers make informed choices. One of the challenges with the market is the size, capability and capacity of operators to provide that information, which I think is what you were getting to. The big five, with technology teams, big budgets and existing technology in place, would find it relatively simple to provide real-time information in a live format to a certain standard, even, as Tom mentioned, the holy grail of patronage numbers and some of the other bits of data they would consider commercially sensitive.
Potentially, there is a role for Government in supporting some of the smaller operators to meet the standards. They would be the direct beneficiaries of the provision of that information to their end customers. If the bus industry focuses on its core competence of driving buses and providing services to customers, it can work in collaboration with other third parties, technology companies that are expert in providing customer-facing journey planning apps, ticketing apps and services, and others, to grow the bus market.
Q83 Chair: Is it in their interests, particularly the big five, to provide that data? They hide behind commercial confidentiality. Is there enough in regulation to force them to provide the sort of data that would allow more sharing and get potential passengers the information they might need to decide whether to travel or not?
Neil McClure: There are huge benefits to the operators in providing better-quality open data. London is an example. TfL’s unified API and high-quality live real-time information has typically led to an increase in patronage over the last 10 to 20 years. The evidence suggests that that is the case.
At the Open Data Institute, we would obviously be supportive of more organisations providing more open data.
Q84 Chair: But is there enough to make them do it if they do not, for whatever reason, see the benefits themselves?
Neil McClure: I think there is, in the Bus Services Act. The timelines are slow; for example, the provision of bus fares is an incredibly complex, multi-year technology programme. Some of that is because of the current regulatory regime and the myriad different product variations that have been created and exist within private operators.
Tom Forth: In the whole of the UK, we are very good at open data on buses. I was in Northern Ireland recently. I went on to Google Maps and said I wanted to go to Portrush—I wanted to go to Bushmills, for obvious reasons. It told me which buses to get and they came at the time it said. I was in the Lake district recently. Again, the app told me which buses to get. It works right across the UK. You can search Google Maps and have the correct direction given to you. That is all because of open data.
It is not a given. In France and Spain, for example, you will not get that. In some parts of Germany, you will not get that. We are doing quite well on open data provision. It has helped bus companies with added ridership. I was an extra rider because I could find out when the buses went. It is in their interests to do it. Some of them will need a little bit of help, and the Bus Services Act probably gives them the kick they need without kicking them too hard.
Q85 Jack Brereton: I want to touch a bit more on the Bus Services Act, particularly your comments, Tom, about the use of the Act. We have not really seen the powers being used much across the country. You mentioned Manchester, but few other local authorities seem to be pursuing the powers at the moment. What more do you think needs to be done to incentivise them? Do additional powers need to be put in place to allow local authorities to take up the powers in the Act?
Tom Forth: Being able to look at regulating buses again is quite new. It is currently restricted to areas with an elected mayor, I think, so there are seven or eight of them.
Q86 Jack Brereton: If you are not an elected mayor area, you can apply to the Department to get permission to do so.
Tom Forth: Okay. Applying to the Department for permission: maybe that would happen. Who am I to judge? In West Yorkshire and Leeds, which does not have an elected mayor, my feeling is that it is likely to be a struggle to get anywhere on that.
We have to think about where we are starting from. This stuff is quite new. My feeling is that the west midlands is keeping open the option of bus regulation, but is probably not going to do it, because the fact that it might be possible has encouraged the Bus Alliance to come here to give evidence. It has pushed people in a useful direction. I think Greater Manchester will do bus regulation, unless it sees the bill that it thinks it needs to win a legal fight and gets scared.
I would keep an eye on what Greater Manchester is doing. If they say, “We’ve had a look at it and we think we’re going to throw £10 million or £20 million away trying to win a legal case against Stagecoach and First, and we will lose,” it means that the law is not currently able to let the democratically elected government of Greater Manchester govern transport in Greater Manchester. If they say they can’t do it, the law needs changing so that they can.
Q87 Jack Brereton: Do you think other local areas are looking to see what happens there as to whether they test it in the future?
Tom Forth: Yes. When we run events on transport at the Open Data Institute in Leeds, we get people from all over the country, and they always talk about what steps are needed. They are trying to understand the current limitations and laws. They are pretty good at sharing with each other what is going on. The bus companies are there as well, and they are generally quite interested in figuring out how they fit in with what people want to do.
There is a surprisingly well-intentioned good set of people in the industry, more or less. If we get the law right, and it is pretty close to being right, good things will happen. People are not protecting dreadful business models and being bad generally. There are lots of good players in the industry.
Q88 Graham Stringer: I have two or three questions. I have never thought of Brian Souter as having good will towards regulating the buses, but, putting that on one side, are you aware of any delay from the Government in introducing the necessary guidance and detailed regulations under the Act that is slowing down the process in Greater Manchester and Merseyside?
Tom Forth: All I am aware of is what is written in the Manchester Evening News by Jen Williams. I think Andy Burnham has said that he is waiting on Chris Grayling to sign an order or something. All these delays and blocks are easy to jump through if the other side wants to do that, and they are not easy to jump through if the other side doesn’t. Exactly what is going on is always a bit of a mystery to everyone on the outside. That is what I have heard. I do not know anything more than I have read in the papers.
Q89 Graham Stringer: Previously, you said that introducing bus lanes just led to Stagecoach, First Group or anybody else using the bus lanes having bigger profits, but it is worse than that, isn’t it? If we see the bus as a profit centre going down that route, First Group, Stagecoach or any bus company will transfer their buses to that route, and the total network will shrink. Do you agree that that has happened in the past?
Tom Forth: This is one of the most important parts of why franchising is worth trying. The example we all know in Manchester is that, if you want to travel from the centre of Manchester south along the Oxford Road corridor, you will pay £1.50 and there will be a bus every 90 seconds. It carries lots of quite wealthy people from the city centre to quite nice southern suburbs. If you want to go from the centre of Manchester to somewhere in the north of the city, where people need a very good bus service, and deserve it, so that those who currently do not have them can get better jobs, you might pay £2.50 or £3 to go the same distance on the same company’s bus.
I think there is a role to say, “We are Manchester. We are a city. It’s one fare, and it’s £2.” It would be cheaper for people in a poor part of Manchester and it might be a tiny bit more expensive for someone in a wealthy part of Manchester, but we are in this together. It is about making Manchester a prosperous and productive city that everyone can access. There is a huge need in franchising to cross-subsidise routes for the good of the city and its growth as a whole.
I suppose that would be the case for introducing bus improvement schemes. Buses going out of Manchester to the south have been improved because of the Oxford Road corridor. There should be more such corridors in Manchester. There needs to be the ability to raise money from everywhere to invest it for the good of the whole city.
Q90 Graham Stringer: I agree with that. The cross-city corridor you mentioned means that there is a bus lane going to the poorer parts of north Manchester, a constituency that, by and large, I represent. That has meant that for people away from that corridor in Moston, which you mentioned, the bus routes that feed the corridor are no longer there, by and large. People who live on the corridor might be getting a more frequent service, or might not, but other people, who are just as poor cannot get there at all. The point I was hoping you would agree with is that in a deregulated system bus priorities lead to a shrinkage of the total network, and I think there is empirical evidence to show that.
Tom Forth: Yes, I completely agree with that. If Manchester invests in one corridor, the private operators will use that corridor. Fine. In a regulated system, Manchester might still invest in one corridor, because it has only a certain amount of money, but then it will say, “Hold on a minute. You don’t get to run every bus there. You still have to go through here.” Yes, I completely agree.
Q91 Chair: In the current regulations and guidance, do you think the balance is right between focus on the industry and focus on the customer? Does there need to be any rebalancing of the two?
Nick Richardson: I think there does, from the point of view of the consumer particularly. We have heard a lot about data. The operators have a huge amount of data and do not use it as fully as they might. We need to get to the nitty-gritty of why people are travelling, what they actually want out of it and, importantly, what non-users are doing, because that is where the growth will come from.
Why do people make the choices they do? Is it about availability? Is it about price? Is it about timing? Whatever it is, we have to get to the bottom of it before we can present any way forward.
Q92 Chair: What should Government be doing through their regulations or guidance to enable that to happen?
Nick Richardson: It could probably happen within the existing framework, but it needs greater emphasis. A lot of it is survey information rather than hard data at the moment. You can download a ticket machine, but you cannot download people’s opinions quite so easily.
We need to explore that. It varies from place to place as well. Bus markets can be very local, so it is about getting to understand that. The lack of demand data has been a nightmare; I have worked in transport for 30 years or so, and it has always been a stumbling block. That would help.
Q93 Chair: Neil, do you have anything to add?
Neil McClure: The bus industry needs collectively to be significantly more customer-focused to deliver better customer outcomes. The current regulatory system makes it significantly harder to deliver London-style bus passenger outcomes in the rest of the country. The Bus Services Act definitely helps, but the Department for Transport has other powers that could be better used. I would look at the bus service operators grant as an opportunity for incentives for some of the other aspects we mentioned—for example, the provision of open data. From some of the work we have done with the Department for Transport on the BSOG process, I know that it is due for reform, and I would welcome further reforms to incentivise some of the positive customer outcomes in the bus industry.
Q94 Chair: Are there any other comments on how bus funding, including concessionary fares and BSOG, should be reformed? You heard some of the comments of the previous panel. Do you have anything to add?
Nick Richardson: It is very patchy at the moment. For example, grants towards new forms of bus are on a competitive basis, so inevitably there are winners and losers, and lack of co-ordination to some extent. The 15% or so of services that have been revenue-supported in the past are now dwindling at an alarming rate, so we have to step back and take a big view of that. Is it worth while? Is there a return? We believe there is, and there is evidence for that. How can we stem the decline?
It does not mean reinventing what we have had before. It does not mean preserving the networks we have. A lot of things have to change. Some funding changes would definitely help.
Q95 Chair: Any comments, Tom or Neil?
Tom Forth: Buses are brilliant. I genuinely think that. Buses in this country have a huge role to play in making up the 30% productivity gap between our big cities and big cities on the continent. If we get them right, they are by far the most cost-efficient way to achieve that. We are generally going in the right direction at the moment, after a long time of not going in the right direction.
Chair: That seems a good point to end on. Nick, you made a really important point about the importance of cross-departmental working. Buses are not just about transport or the economy; they have important consequences for health and sense of place—place creators.
Do members of the Committee have any further questions for our panel?
Huw Merriman: I know you have just ended it, so I am sorry to do this.
Chair: No, I haven’t ended it.
Q96 Huw Merriman: I wanted to come in on data. It is quite specific. The sharing of data is absolutely fantastic, but the issue is that if a bus company decides to pull a route it just walks away. Do you think there is something to be said for adding some kind of reinforcement, almost like an asset of community value, so that a bus company has to continue to run a route for a certain period of time, almost as a notice period, to enable new entrants to look at the route, assess the data and then decide whether to bid? We all know that once a bus route closes it is very difficult to restart it.
Tom Forth: That is a fantastic idea. At the end of the east coast franchise, which you have dealt with at length, Neil and I wrote a blog post. The point we made was that the incumbent operator had made projections and had models and knew who was on each train. Suddenly, they walk away or they cannot continue their agreement. At that point, if the state is going to take over, we should get to see all of that data.
It is a really good point. If the operator walks away, we should say, “Now show your cards.” It would be fantastic if other operators came in, had a look and said, “Oh well, I can run that for a profit. I’m in.” It would be a very useful thing. Obviously, we would love to see all the data about all the economics of the bus industry. I appreciate that might be difficult outside a regulated system, but I cannot see a downside to the example you gave. How much money do they make on the route? They say they cannot afford to run it any longer. Show us. It seems good.
Chair: Great. Thank you very much for giving evidence today. That concludes our public session.