Written evidence submitted by Frank Rogers, Interim Chief Executive, Merseytravel, and Lead Officer, Transport, Liverpool City Region Combined Authority (BSB0014)

 

 

Summary of main points

 

 

 

 

1.              Introduction

 

1.1              Merseytravel is the executive body that provides professional, strategic and operational transport advice to the Liverpool City Region Combined Authority and to the Merseytravel Committee to enable them it to make informed decisions. It is also the delivery arm, and incorporates the powers of a Passenger Transport Executive.

 

1.2              In respect of bus, Merseytravel has developed the Liverpool City Region’s long term bus strategy, which seeks to achieve radical growth in bus patronage and quality locally, in recognition of its critical social, economic, and environmental importance.

 

1.3              Merseytravel, on behalf of the Combined Authority, funds non-commercial bus services, manages local bus stations, and provides new roadside infrastructure, publicity and information for bus users.  It also administers the local concessionary travel scheme and the ‘Walrus’ multi modal, multi operator smartcard and has been one of the driving forces behind the formation of the Liverpool City Region Bus Alliance – a new partnership between Merseytravel and bus operators.

 


2.              Why Merseytravel welcomes the Bill and its importance to the LCR

 

2.1              The Liverpool City Region welcomes the Buses Bill as a core component of its devolution toolkit.  The ‘enabling’ nature of the Bill is essential so that local areas are able to choose and tailor appropriate powers to address their specific needs and challenges. 

 

2.2              The Bill recognises the critical role of the bus to the Liverpool City Region’s economic success, with over 136 million passenger journeys each year accounting for almost eight out of ten trips by public transport. Buses are also vital to the social capacity of the LCR and to its wider policies around health, air quality, carbon and resilience. 

 

2.3              However, the LCR has witnessed a long term decline in bus patronage spanning decades. The reasons for this trend are varied, but it is clear that if the LCR is going to achieve its social, economic and environmental objectives this cannot continue.  A vibrant and continuously improving bus offer is central to achieving passenger growth.  Whilst 80% of public transport journeys in our City Region are made by bus, only 10% of these are commuter journeys, so there is a greater role that buses can play in growing the City Region’s economy, better linking people with jobs and opportunities and reducing the adverse impact of car-dominated journeys.  In addition, the most vulnerable in society are the most reliant on bus services, and as such bus services offer a way for many out of social isolation; 70% of bus passengers come from households with incomes below £20,000 per year and 84% from households with no access to a private car. 

 

2.4              The vision for the Liverpool City Region is ambitious, with plans to grow fare paying patronage on the bus by 10% by spring 2017.  It is hoped that the range of powers in the Bill will help the LCR achieve a ‘ground-shift’ in bus, from offering an improved, clearer network to simple ticketing and value for money fares. This is to make the experience better for those who already use it, and remove those perceived barriers for people who may otherwise want bus to be the mode of choice.

 

2.5              In addition, the provisions relating to open data and data sharing will support the city region’s ambitions to exploit the role of new technology and better information to attract new customers to the bus, and ensure that the data sources that people, especially young people, now expect to be able to access on their smartphones and tablets are made readily available.

 

 

3.              The importance of local decision making for bus services

 

3.1              Bus services, and the quality of the bus offer are not consistent across the country, and levels of performance and growth also differ greatly.  This means that a “one size fits all” policy approach is inappropriate, hence the importance of local decision-making, linked to wider devolved powers at a city regional level. 

 

3.2              The Liverpool City Region’s Devolution Deal will allow for the introduction of a directly-elected mayor for the Combined Authority area, with greater control over housing, skills, transport and planning powers.  This means that decisions around bus can be more fully integrated with decisions around these integral policy areas that directly affect demand for, or the quality of, the bus offer.  As an example, the LCRs’ Mayor will have responsibility for a Key Route Network of strategically important roads, meaning that decisions around the control and management of traffic can be more fully integrated with policies for growth in bus patronage.

 

3.3              The enabling nature of the Bill also allows the LCR the freedom to develop its preferred approach to improving the bus offer, whether through a franchised networks of bus services or through Enhanced Partnerships.  The city region will build its evidence base to inform any future decisions in respect of franchising. In the same vein, it will be important that the Bill doesn’t dictate a hierarchy of options and allows local authorities to take forward appropriate solutions without having to follow specific steps (e.g. an Enhanced Partnership arrangement ahead of a franchised arrangement), subject to the proposed 5-stage business case being satisfied to support such an approach.

 

3.4              However, the provisions in the Bill that prohibit the establishment of new, arm’s length municipal bus companies are considered to be at odds with the principles of devolution.  The ability to establish such a venture should remain a discretionary power for any local authority, subject to a clear business case and business model, not least in view of the strict competition laws that govern local authority arm’s length bus operations.  

 

3.5              Finally, the proposed franchising audit function should be established in a way that prevents the process from getting drawn into judgements on that decision.  This would merely replicate existing, largely unworkable arrangements for Quality Contracts that stem from the 2008 Local Transport Act whereby a Quality Contract Scheme Board must support a local recommendation.

 

 

4.              Opportunities presented by new partnership arrangements and also potential challenges

 

4.1              Under the provisions of the Local Transport Act 2008 and earlier iterations of the legislation, Local Transport Authorities can potentially control bus networks directly through the introduction of a Quality Contract Scheme.  This is a convoluted and demanding legal process, including complex public interest tests, and an independent assessment as to whether those public interest tests have been met.  It is not a surprise that no Quality Contracts have been successfully developed in the 16 years since the legislation was enacted. The ability to introduce Statutory Quality Partnerships has also existed, but many of the key ingredients of an enhanced bus offer, such as pricing, frequencies etc. are beyond the scope of such an agreement, being considered anti-competitive.  Statutory partnerships at present also require local authorities to invest in new infrastructure, irrespective of whether or not a need exists. 

 

4.2              The move towards a new style of enhanced partnership is thus welcomed.  Indeed, in support of the Bus Strategy, the Liverpool City Region has formed a Bus Alliance, comprised of the main bus operators and Merseytravel; whilst a Voluntary Partnership Agreement has been produced in draft in support of these aims, the ability to strengthen this approach in support of the delivery of the Bus Strategy’s aims through an EPA will be examined in depth as part of the Alliance’s annual review process.

 

4.3              In respect of the proposed voting arrangements that would govern the Enhanced Partnership approach, this voting mechanism should not allow veto from a small minority of operators on a scheme that is welcomed by the majority.  As such, proportionality should be embedded into the proposed arrangements, so that voting reflects the reach and prominence of specific bus operators, in the interests of the customer, transparency and fair play.

 

 

5.              Funding

 

5.1              It will be essential that the Bill gives clarity and certainty to both bus operators and local authorities in respect of significant funding considerations, namely the Bus Services Operators’ Grant (BSOG)  How BSOG funding from central government will be dealt with in a devolved franchising regime will have significant implications for any options assessment in respect of the Bill. 

 

5.2              As per Merseytravel’s very supportive stance on the principles of devolution, the clear aspiration would be for government to fully devolve funding streams to an LCR level (e.g. BSOG), subject to these remaining at a sustainable level. 

 

5.3              Merseytravel would welcome reform in this area which moves away from a link with fuel and mileage, but retains or even enhances support for sustainable, high quality, low emission bus operation.  It is of concern that the Bill is very light on any detail in this important field.

 

August 2016