Written evidence submitted by Cornwall Council (BCC0042)

Summary

Cornwall Council is a large rural unitary authority that has made significant investment and improvement to its bus network towards its vision for a high quality, integrated and customer focused transport network. Recognising the importance of buses to the economic and social wellbeing of residents, the Council has worked hard to maintain a comprehensive bus network, even through periods of financial pressure. By maintaining services, bus patronage has not only recovered since the pandemic, but increased by 12% (2019-2023) in stark contrast to the picture across England as a whole.

Despite efforts to integrate services and deliver efficiencies where possible, the annual operational revenue cost of delivering the existing bus network in Cornwall is in excess of its identified budget, with operators in the south west indicating that between 2022 and 2023 their cost base has risen by 28%. Therefore, the allocation of long-term funding for the bus network in rural areas is imperative to ensure that communities remain connected to one another and to essential services.

Current funding models and governance structures would appear to be more effective in urban areas, where bus markets are more commercial. In rural areas, with dispersed populations and less consistent travel demand, the requirement for greater support, through both funding and appropriate governance to enable the continued provision of socially necessary services is key.

Cornwall welcomes the Government’s proposed reforms to powers over buses and a multi-year approach to future funding and will be exploring the opportunities available through the new Buses Bill to continue to support and deliver a comprehensive public transport network in this rural area into the future.

Introduction

As a large rural unitary authority that has made significant investment and improvement to its bus network towards its vision for a high quality, integrated and customer focused transport network, Cornwall Council is submitting evidence to the Transport Select Committee to ensure that the voice of rural authorities conveys the real challenges that are being experienced when delivering buses connecting communities.

Cornwall Council recognises the importance of buses to the economic and social wellbeing of residents and has worked hard to maintain a comprehensive bus network. As such, Cornwall has maintained significant levels of funding (committing £192m over 8 years) and supporting 50% of all bus mileage in the county. Even through periods of pressure on overall Council budgets, the bus has been prioritised. By maintaining services, bus patronage has not only recovered since the pandemic, but increased by 12% (2019-2023) in stark contrast to the picture across England as a whole.

Over the last 3 years, significant investment and improvement in Cornwall’s public transport has been made through Bus Service Improvement Plan and Bus Fares Pilot funding. Cheaper fares, interoperable tickets, upgraded vehicles, infrastructure and a partnership delivering information under the Transport for Cornwall brand have all contributed to the attractiveness of the bus network and resulted in Cornwall’s highest ever patronage figures.

Despite the patronage growth and network stability achieved, the biggest challenge to maintaining this is the increasing cost of delivering the bus network. While this is not unique to Cornwall, the impacts of rising costs are greater in rural areas where the commercial viability of services is much lower than in urban areas, increasing the requirement on the LTA to fund a greater proportion of the network and to secure long-term funding to safeguard this for the future.

How the Government’s proposed reforms of powers over buses in England, and recently-announced funding, should take into account the particular challenges of rural areas and local authorities outside major cities, and how authorities in these areas can make best use of those powers and funding.

The proposals to reform powers over buses through the Buses Bill will create opportunities for any LTA to pursue franchising or municipal bus ownership as a mechanism to deliver their local vision for buses.

A switch to franchising requires alignment of the whole authority if it is to deliver benefits for passengers. Service and policy alignment on transport priorities and funding, planning and highways are integral enablers that will support the LTA to prioritise bus franchising. Similarly, strong leadership will be required to navigate the difficult decisions and ensure that the long-term funding is in place to safeguard the franchise into the future. Franchising is potentially more challenging in a rural area such as Cornwall, but a robust governance model is vital to support the delivery of public transport networks that can offer a real alternative to the private car, particularly given the importance of transport’s role in delivering decarbonisation.

The cost of delivering franchising will, however, remain a significant barrier, particularly for LTAs in rural areas. There is a concern that the funding required to deliver franchising is not acknowledged, as well as the level of assets and related costs, risks and liabilities that would move under LTA control. The recognition that one size does not fit all is imperative to allow the LTAs, through the Buses Bill, to implement future delivery models based on local needs.

Those mayoral authorities already pursuing franchising in much more commercial and competitive markets have secured funding from Devolution Deals, City Region Sustainable Transport Settlements and precepts, and are supported by wider policies to restrict city centre car use and manage congestion.

Conversely, in rural areas, characterised by dispersed and low-density populations, high levels of deprivation and a lack of regular travel demand, bus networks require a large proportion of ongoing local authority support. While Cornwall Council supports ‘socially necessary’ services that provide essential access to services, education, employment, etc. it would consider all services, both supported and commercial, part of this ‘socially necessary’ network - particularly as the financial sustainability of the commercial elements of the network could be at risk due to rise in industry cost.

Cornwall is unable to consider funding for the local bus network in isolation. The Council currently supports 50% of its bus network and has integrated over 130 school movements into it to create efficiencies and reduce the ongoing pressures on school transport. This has been necessary because Statutory School Transport continues pose a challenge, both in terms of resources meeting demand and financial pressures. The budget for Home to School Travel Assistance was uplifted by 33%, requiring a budget of over £35m (includes mainstream closed contracts and SEN transport delivered by specialist providers - taxis/minibuses).

Despite efforts to integrate services and deliver efficiencies where possible, the annual revenue cost of delivering the existing bus network in Cornwall is in excess of its identified budget. Further pressures are placed on the network and budgets due to Cornwall’s ageing population (24% of the population is over 65 years) and the increasing demand to fund concessionary trave. In addition, the appeal of Cornwall as a popular tourist destination and the demands this places on the capacity of the bus network – all of which must be absorbed within Council budgets.

The additional support to operators to deliver the network in recent years through CBSSG/BRG/LTF post-Covid, in addition to BSIP and BSIP+ network support, Bus Fares Pilot and Bus Fare Cap Grant, has been significant. However, the increased cost of delivering the network has been a prevailing factor in recent years due to unprecedented inflation, the financial impact of industrial action, staff shortages, etc. with the south west bus industry suggesting that its cost base increased by c.28% between 2022 and 2023. This will be further exacerbated by the forthcoming impact of national insurance liabilities, likely to cost an additional £800 per driver (CPT, 30 October 2024).

It is evident, therefore, that the true cost of delivering the network, whether in a franchised environment or the current EP, will require significant long-term revenue funding. Securing this long-term funding to maintain support for our network will ensure that essential links and connectivity are safeguarded for the future. Cornwall’s patronage growth and delivery of wider improvements are testament to the collective vision we hold for public transport. However, there remains a shared concern around potential changes to the governance of the bus industry and therefore the ability for Cornwall to secure the funding required to maintain its current network.

The Government’s recently announced funding relates specifically to a single year allocation of Bus Grant funding (capital and revenue) which makes no specific reference to the financial challenges of transport delivery experienced in rural areas. Cornwall welcomes the allocation of much-needed revenue funding to help protect its bus services, however, the proportion of capital funding allocated, with a focus on delivering bus priority measures within a single year, also presents its challenges as large-scale capital schemes are considerably complex to deliver. Nonetheless, it is hoped that rural LTAs can use this, and other appropriate opportunities, to make the case to government for continued long-term revenue funding and influence the future multi-year settlement for transport due to be announced later in 2025.

Cornwall identifies three key requests in relation to this question:

1) Multi-year settlement of revenue funding that allows Cornwall to maintain the current levels of services as a bare minimum

2) That this funding is ring fenced for public transport only

3) That the concept of ‘socially necessary’ services is flexible enough to account for the challenges and peculiarities of a rural authority where communities would be isolated without their bus.

b. The effectiveness of recent Government policy in tackling declines in bus services.

Through the National Bus Strategy, and the focus on the delivery of BSIPs, Cornwall has been able to continue its work to deliver customer-focused improvements to its bus network. Cornwall’s BSIP (2021) set out its intentions for delivering the Government’s National Bus Strategy aims and objectives, submitted as a bid for funding to implement this at a local level over 3 years. The initial £13.3m allocation allowed Cornwall to plan for the delivery of bus service improvements and capital infrastructure investment. However, this arrived at a time with a challenging backdrop - the recovery from the pandemic, short-term funding allocations for post-pandemic support and increasing industry costs. This required a balance to be found in delivering bus enhancements and capital improvements whilst protecting the existing network from service reductions.

The current Government policy to support more affordable fares has delivered a positive impact on patronage in Cornwall, contributing to the 12% increase in patronage achieved between 2019-2023 through the Bus Fares Pilot (BFP) and also the national Bus Fares Cap Grant. The £23.5m 4-year BFP, funded by the Government, commenced in April 2022 and saw the introduction of simplified fares and ticket products (including a standardised discount for children) across all bus operators, interoperable tickets and an average discount of 36% across all fare products. The BFP ran in isolation for 9 months, prior to the introduction of the Government’s £2 Fare Cap in January 2023 which collectively provided even better value bus travel for passengers in Cornwall. These schemes have provided valuable insight into the passenger response to more affordable fares and the way in which fare prices influence passenger behaviour that is beneficial to both operators and LTAs when considering future policies and governance and application of funding.

c. How effectively bus services function as part of integrated multi-modal networks that improve mobility for people who live in areas with declining services.

Cornwall’s vision for a high-quality, integrated and customer focused public transport is at the heart of our work to provide a functional and attractive network for all. Integrated multi-modal networks function most effectively where planning and responsibility for all modes can be undertaken centrally; without the overarching control, it relies on strong partnerships and a shared vision to deliver - an area that Cornwall has worked hard to develop and maintain.

Cornwall’s bus network functions well as part of the wider transport network, providing links to rail, onward connections, walking and cycling opportunities. Timetabling, information and ticketing (payment) are the areas most challenging to integrate across modes. A specific focus on integrating bus, rail and active travel requires consideration and coordination of local factors.

Cornwall’s bus network is planned using local insight, travel patterns, connection opportunities with other services and access to key towns. All efforts are made to serve small communities and conurbations, but service disparity is experienced across the county due to factors such as the geography of local areas, demographics and demand, nearest towns, location of nearest employment, education and health centres.

Where possible, every effort is made to integrate with rail and active travel modes. With bus-bus and bus-rail integration priority must be given to those connections that offer the best journey outcomes and options. Stability of these connections is vital and reliant on securing funding that ensures this integration is possible. Any reductions in funding and service levels will begin to make the network overall less sustainable and less attractive to users.

Cornwall aims to continue to deliver a network and schemes that improve multimodal integration, where funding allows. A recent example is the delivery of Pay-As-You-Go rail ticketing in west/mid Cornwall in 2023. This project is being extended up to and including Plymouth during Summer 2025 utilising Levelling Up Funding from Mid-Cornwall Metro and opens up opportunities to consider the first steps toward digital bus/rail multimodal ticketing.

d. The social and economic impacts of poor connectivity on access to education, healthcare, employment, and social inclusion in communities, as well as on the economy of towns and villages.

Cornwall has often found it is marginalised by its geography and more limited transport connections in comparison to other parts of the country. A lack of transport provision and poor connectivity can constrain the growth of the economy, but good transport has the ability to bring settlements closer together, link people to jobs, deliver products to market and facilitate supply chains. When people are unable to access employment, education or services because of limited transport options, the individual and society lose out. For people who are unable to, or choose not to drive, barriers due to geography, disability, age and affordability can limit the opportunities that are available.

Sixty one percent of Cornwall’s population live in small, dispersed settlements in areas that are defined as rural. Very few of these settlements have a full range of key services available, making travel an essential part of everyday life for a large proportion of the population. The barriers encountered by people living in rural areas have been magnified by the centralisation of many services, removing them from local communities and relocating them further afield.

Cornwall has some of the highest levels of deprivation in the country. Two in every three households in Cornwall either have no access to a car or have access to one car (Nomis, 2021), elevating the importance of good public transport.

Physical barriers to using the transport system can limit access for people who rely on it most. Limiting long-term illness, health problems, disabilities and even just having young children in pushchairs can reduce people’s physical ability to travel by public transport. Difficulties with accessing public transport can be compounded by inappropriate infrastructure at bus stops, deeply rural stops in particular.

The rural nature of Cornwall often creates longer end-to-end journeys which come at a higher and less palatable cost to the passenger due to increased operational cost (currently mitigated through the BFP and BFCG). Longer journey times also impact reliability causing direct costs on people and business, affecting productivity and efficiency and reducing confidence in public transport. As such, the bus has not always compared favourably as a viable alternative to private car use.

But for those without access to a car, bus services are vital – 44% of Cornwall’s passengers use the bus because they have no alternative. A lack of transport may mean not taking a job, pursuing educational opportunities, taking care of health needs or simply not seeing friends and family (DfT, WebTAG Table A, 2017).

Service provision helps to strengthen communities, sustain town centres and reduce social isolation. Particularly for older and younger people and those in less-connected rural areas, access to a stable bus network is key; users are disproportionately from less advantaged social groups and places.

e. The effectiveness of current funding models and governance structures in enabling local transport authorities and commercial operators to improve, sustain and keep bus services outside major metropolitan areas affordable, and the potential effectiveness of alternatives.

Outside of major metropolitan areas the current funding models and governance structures associated with the delivery of bus services are severely challenged. While all areas seek the long-term certainty of sufficient funding to maintain services and keep fares affordable in order to ensure that residents can rely on services to support their daily lives, it is the rural areas in particular that are unable to realise the benefits of these models and structures, without a larger injection of funding. Those mayoral authorities already pursuing franchising are benefitting from multi-year funding agreements including Devolution Deal funding, City Region Sustainable Transport Settlements and mayoral precepts, and supported by wider policies.

In the main, it would appear that current funding models and governance structures have been more effective in more urban areas, where bus markets were already more commercial and where the provision of a strong public transport network provides a demonstrable economic benefit to the area, helping to solve wider issues such as access, congestion, air quality and lack of highway space.

The same issues exist in rural areas, but their impacts are exacerbated by the lack of a critical mass of the travelling public, a lack of regular travel patterns, the increased cost of operating services and annual funding allocations that are impacting the LTA and operators’ abilities to continue to maintain the networks they have. This has resulted in an ongoing requirement for public sector funding to provide a large proportion of the funding for transport in rural areas.

As previously stated, Cornwall has achieved 12% patronage growth since 2019. This growth was preceded by growth pre-pandemic, as a result of the delivery of the One Public Transport System for Cornwall programme that saw significant public and private sector investment into buses since the 2015 Devolution Deal for Transport and subsequent Growth Deal funding rounds.

However, despite the improvements, investment and growth, the authority and operators are struggling to afford the network they have worked hard to achieve, and to fund the gaps that have been created through industry cost increases and reductions in funding to operators for fares schemes such as the £2/£3 Bus Fares Cap Grant (BFCG). Operators require additional financial support to maintain the existing network and, while BSIP funding is available, the Council recognises that maintaining the network as far as possible is essential to provide stability to passengers who rely on buses to get to work and education, health and shopping.

While further announcements on the future policies around funding are awaited, this will have to be considered in line with the cessation of the BFCG funding to operators in Dec 2025. It is likely therefore, that without specific targeted Government intervention, further service reductions will be required in the near future.

f. Evaluating the potential of alternative service models, including Demand Responsive Transport (DRT) and community transport, and other innovations or technologies which could support or replace buses serving less populated communities, and what steps the Government should take to support them.

Where DRT models can work well under appropriate conditions, the level of resource and support required to deliver DRT is a value for money challenge for very rural areas – the vehicle must have multiple functions to maximise its opportunity to generate revenue. It is the overall lack of consistent local travel demand that is often cited by LTAs as the reason for their discontinuation.

As an essential part of the mix of transport providers, Cornwall continues to aspire to invest in a comprehensive public transport network, supported by community transport providers that can deliver local transport solutions to meet specific transport demands and needs.

Cornwall currently benefits from 16 community transport providers offering a combination of services, mainly focussed in the north and east of the county where local bus services can be less frequent or are unable to serve some extremely isolated communities. These invaluable services deliver a more bespoke transport offer than a local bus service is able to but are often financially unsustainable without considerable local authority support.

With BSIP funding in place for 2 years, Cornwall Council is currently supporting an alternative model for community transport in south-east Cornwall. Following the withdrawal of a handful of underused bus services in October 2022, a new Community Bus service was developed in response to local concerns that some very rural communities would be left isolated without access to public transport. Saltash Red Bus (SRB) and Go Cornwall Bus (GCB) began working in partnership with Cornwall Council to operate 7 routes under a Section 22 Registration in April 2023. GCB assisted with timetabling, supplied ticket machines and associated infrastructure and supported the service set-up and registrations. SRB supplied the vehicles and drivers to operate the services between existing school runs to nearby towns for health, work, shopping and social opportunities. Services have since been amalgamated to 4 and patronage remains steady. The service remains under review to identify future opportunities for service improvement and potential expansion of this operating model. Future Government support for this type of model which utilises both a local bus operator’s expertise, alongside a community transport provider’s resources, could be a new approach worth further exploration.

g. How successful Enhanced Partnerships (EPs) have been so far in improving bus services outside major urban areas, whether franchising is likely to provide a better framework for these areas, and whether there are alternative models worth exploring.

Cornwall has delivered transformational improvements to its public transport system since making the decision in 2016 to defer the use of franchising powers granted in the Devolution Deal (2015) and instead exploring what could be achieved through partnership working with operators. Initially, this was through a voluntary partnership arrangement which was followed in April 2022 by the formalisation of Cornwall’s Enhanced Partnership.

Cornwall has delivered much in partnership with its operators in recent years that has attracted public and private sector investment and delivered significant benefits for passengers in respect of a lower emission fleet of new buses, upgraded infrastructure, joint timetable and customer information, a combined website and app, Customer Charter, reduced fares and simplified, interoperable ticketing, all delivered to the customer under a single brand – Transport for Cornwall. Cornwall has used its EP to gain positive commitment from operators to work together for the benefit of passengers and as such is regarded as an exemplar authority in the delivery of rural transport. This is underpinned by a robust contractual arrangement governing the supported network and the management of network performance for both commercial and supported services.

A positive passenger response is evidenced in satisfaction results from the Your Bus Journey survey undertaken by Transport Focus.

As the recent challenges of delivering bus networks have increased, the effectiveness of the EP in Cornwall has become harder to deliver in practice, although the need to use the EP to achieve the joint vision is arguably greater if Cornwall is to continue to maintain and evolve its network. In some areas, namely around the network and service registrations, there remain ongoing challenges. Cornwall Council has not requested the Traffic Commissioner’s registration powers but this could be a future solution to address those specific concerns.

One EP variant which provides further power over the delivery of the network is the EP+ model adopted in Leicester, offered to the LTA by the operators as an alternative in response to a potential move to franchising. Given the challenges in Cornwall around the delivery of the network, this model is of interest as a potential vehicle to continue to work in partnership with the operators while obtaining a greater level of control over the network itself.

EPs need additional powers to achieve the practical delivery of the commitments it has agreed. Without supporting legislation to hold partners to account and/or take recourse for non-compliance, the practical execution of the EP remains a challenge for LTAs. To this end, Cornwall welcomes the Department for Transport’s forthcoming review of EPs in 2025 and is keen to contribute, as required.

The new guidance on franchising presents a number of options for LTAs to consider such as the franchising of a single route, evening services, a particular area, or all services in order to meet local objectives for bus. Cornwall will be exploring these opportunities to gain a better understanding of the costs, risks and benefits to the LTA and operators, and how these delivery models may best achieve demonstrable benefits for passengers.

h. How well policy, funding and oversight of bus services allow services that straddle rural and non-rural areas, and local government boundaries, to be managed.

Cornwall is content that policy, funding and oversight of bus services is an appropriate function and responsibility of Cornwall Council, ensuring that local insight, informs local policy and translates into informed delivery for our residents.

Cornwall Council has an established relationship with local authority neighbours in Plymouth City and Devon County Councils and collaborates positively on the delivery of cross-boundary services and public transport schemes that provide benefits to residents and visitors on both sides of the border.

Cornwall and Devon County Councils’ administrative areas are characteristically most alike with regard to their rural nature. While Plymouth City Council covers a mainly urban area, Cornwall contains a large proportion of Plymouth’s Travel to Work Area (up to Liskeard/Bodmin) and Cornwall’s residents contribute significantly to cross-border travel.

To that end, these relationships allow us to engage and collaborate where appropriate and relevant. Cornwall Council is currently working with Plymouth City Council on the delivery of a joint ZEBRA2 scheme to introduce 50 electric vehicles into Go Ahead’s Plymouth Depot, six of which will operate in south-east Cornwall.

Cornwall Council also has positive relationships with south-west regional local authorities and is a member of the Peninsula Sub-national Transport Board.

January 2025