Written evidence submitted by Wellglade Limited (BSB0091)

Background

1. Wellglade Limited is an independent group of local bus companies based in the East Midlands. Its largest subsidiary is Derbyshire based trentbarton, and there are four other subsidiaries based in Derby, Loughborough and South Yorkshire. Wellglade is also a partner in the Nottingham Tramlink consortium, and in Nottingham Trams the operator of Nottingham Express Transit (NET). The Group employs nearly 1,500 people and has a fleet of almost 500 buses.

Whether the Bill addresses the correct issues

2. There is no more important an issue to the bus industry than traffic congestion. It is a problem that has faced the industry for many years and no Government has been prepared to tackle it seriously. The Bus Services Bill is the latest example of legislation which ignores this important issue.
3. Numerous surveys and customer research projects commissioned by Wellglade in the last 30 years consistently show that punctuality is rated as the most important feature by almost 90% of its customers.
4. Transport Focus, the independent transport watchdog recently identified buses arriving at the stop on time, journey speed, and value for money as the three top priorities for bus passengers. All three priorities would be addressed by tacking traffic congestion and its impact on bus services in particular.
5. Professor David Begg’s recent report ‘The Impact of Congestion on Bus Passengers’ commissioned by Greener Journeys concludes that there is a direct relationship between the decline in bus use and slower operating speeds of buses due to traffic congestion.
6. Bus passengers stop using bus services when they cannot rely on buses turning up at the stop at the scheduled time or arriving at their destination punctually. They revert to cars which can avoid bottlenecks, road works and hot spots when they occur. More cars further increase the pressure on road space.
7. Traffic congestion increases bus operators’ costs as they require more buses and more staff to operate their networks. Slower operating speeds is the cause of low productivity and hence higher costs.
8. Higher costs lead to higher fares which means that customers perceive less value for money, as identified by Transport Focus (above).
9. Higher costs also lead to higher prices for contracted bus services which means that local transport authorities are less able to maintain as many socially necessary bus services as they would like. Moreover, the combination of increased operating costs and a decline in patronage means that the weaker commercial bus services are no longer sustainable, and are reduced or withdrawn which in turn puts further pressure on local authority budgets.
10. Tackling traffic congestion will encourage much greater use of bus services, and will achieve far higher returns than any other improvement measure, including greater integration and coordination, improved ticketing, more comprehensive information and even reduced fares.
11. It is extremely unlikely that the powers provided in the Bus Services Bill which allow local authorities to introduce bus franchising will address the problem of traffic congestion and its impact on the decline in bus use. Local authorities accept that traffic congestion is a difficult problem and recognise that the solutions that will alleviate the problem for bus passengers will probably have an adverse impact on other road users, particularly motorists. As a result they move their focus to integration and ticketing issues which have no effect on others, but will equally have only a marginal impact on bus ridership.
12. We would propose that the Bus Services Bill requires local transport authorities that wish to take control of local bus services by franchising to explain in detail how they intend to speed up bus services and improve punctuality through innovative and imaginative traffic management measures.
     

How advanced Quality Partnerships and Enhanced Partnerships are likely to contribute to the Government’s aims of improving services for passengers and enabling a successful commercial sector.

13. We believe that local transport authorities and bus operators working together in genuine partnerships which include independent board members offer the best approach to improving bus services and bus use. Local transport authorities must have an input and an influence into the development of bus networks in their areas within the current deregulated framework. Genuine partnerships will ensure that the issues at the top of the agenda for bus operators and their customers such as traffic congestion are not ignored, whilst the priorities of local authorities such as integration and ticketing are pursued with equal determination. Only the partnership approach will ensure that all issues are properly addressed and resolved. For this reason we support the Advanced Quality Partnerships and Enhanced Partnerships proposed in the Bus Services Bill.

The likely effect of franchising on small and medium operators

14. The franchising powers available to local transport authorities in the Bus Services Bill will remove some small and medium sized operators from the market. It is likely that in order to achieve economies of scale local transport authorities will bundle up packages of bus services in franchises which will be too large for smaller operators to consider bidding. Furthermore even if some smaller franchise packages were offered, if those bus services were previously operated by larger operators with staff who carry pension entitlements inherited years ago from the public sector the TUPE and pension protections in the Bill will rule out any possibility of smaller operators being able to assume such liabilities, and hence bid for the work.

15. The Bus Services Bill provides for no compensation in such circumstances and fails to recognise the substantial goodwill built up over many years. Some SMEs have traded for generations in families or partnerships and some like Wellglade were bought by its managers and employees in an open market from the Government in the late eighties. In the intervening years those shareholders have re-invested and developed the Wellglade business into a business which achieves customer satisfaction levels in excess of 90%, has grown the market for bus services and has one of the most modern fleets of buses in the UK, much of which is equipped with audio-visual customer announcements, free wifi, USB charging sockets and other facilities which enhance the customer experience. We do not believe that any public authority should have the right to take away all or part of a business such as Wellglade from its shareholders without adequate compensation.

August 2016