REF0091

Written evidence submitted by Group

Introduction to Arriva

1. Arriva is one of the leading providers of passenger transport in Europe, employing over 46,000 people and delivering 2.1 billion passenger journeys a year, prior to the Covid-19 pandemic, across 14 European countries. We are owned by (DB).

2. We are a major train operator in the UK, last year we operated 363 million passenger journeys across 9.7 million passenger kilometres, utilising rural commuter lines through to long distance and inter-urban services. Arriva’s UK rail companies include CrossCountry, Chiltern, Arriva Rail (“the Overground”) and open access operator Grand Central. Arriva also provides rail maintenance services via our Arriva TrainCare business.

3. We also operate over 5,000 buses across the UK, in London, the South East, the Midlands, Yorkshire, the North East, the North West and North Wales, employing over 15,000 people. Arriva UK Bus also operates the innovative Demand Responsive Transport (DRT) ArrivaClick operations in Watford and Leicestershire.

Executive summary

4. The Covid-19 crisis has demonstrated how central our networks are to our way of life, economic prosperity and social inclusion. Buses and trains kept vital key workers moving and provided a lifeline to local communities and the economy.

5. Like other public transport operators, Arriva’s UK and European operations were hit hard by the Covid-19 pandemic and the ensuring national lockdowns that took place. As members of the public in the UK followed government advice and remained indoors, passenger numbers fell to extremely low percentages of comparable years. On rail this was as low as 4% and 10% on buses outside London in April 20201.

6. One benefit of these lockdowns was the marked improvement in air quality that towns and cities such as London experienced2. However, these improvements are being lost as lockdown restrictions have changed. In London, nitrogen dioxide levels have rebounded to pre-lockdown levels3.

7. Now is the time to seize the moment and ‘build back better’ for a post-pandemic world. Modal shift to public transport should be at the heart of transport policy and is necessary if the UK is to achieve its climate change targets. Safe, affordable and sustainable public transport should be a clear viable choice for people going about their daily lives in the changed world, helping to create prosperous and greener towns and cities.

8. People have also changed the way they work and travel4. Covid-19 has accelerated the changes the industry was already seeing in regular travel patterns, with increases in flexible working practices and home working being combined with less frequent visits to office and retail locations. Finding longer-term solutions for a changing world will be vital, such as new ticketing and fares products 5. This necessity was recently highlighted by

1 Gov.uk, Transport use by mode, https://www.gov.uk/government/statistics/transport-use-during-the- coronavirus-covid-19-pandemic 2 London.gov.uk, https://www.london.gov.uk/press-releases/mayoral/dramatic-improvements-in-air-quality 3 Centre for energy and research on clean air, https://energyandcleanair.org/ 4 http://www.passengertransport.co.uk/2020/06/commuters-planning-to-shun-public-transport/ REF0091

the independent watchdog Transport Focus, which conducted research amongst rail customers, showing that almost two in three former rail commuters expect to work from home more from now on.

9. If the country is to thrive in this new world, our public transport systems must be ready to meet its new expectations. This will require a significant acceleration to reform of our rail and bus sectors that was already underway before the pandemic. These reforms of public transport should be customer-centric and support join-up and collaboration across modes, boosting multi-modal journeys and active travel where possible.

10. Reform of the railway must deliver: a. a fares and ticketing system that delivers value for money and suits new working patterns b. a new public private partnership model that leverages the strengths of the private sector, drives out inefficiency, and puts customers and taxpayers even more fully at the heart of service and recognises the impacts of the pandemic c. long-term incentives for operators and a long-term strategic plan that will drive improvements for customers through innovation d. creation of a ‘guiding mind e. empowerment for operators and communities to address local circumstances.

11. Reform of bus policy must deliver: a. close working between the industry and government to accelerate the delivery of the National Bus Strategy that places bus travel at the heart of local and national government planning, allowing the preservation of the connectivity of communities in an economically effective manner b. processes and funding for bus prioritisation infrastructure c. greater use of digitalisation and innovation d. operators the flexibility to swiftly respond to passenger demands.

Embedding modal shift and achieving net zero

12. Embedding modal shift will be key to realising the UK’s target of net-zero emissions by 2050 and a sustained economic recovery.

13. In 2018, 28% of the UK’s greenhouse gas emissions came from the transport sector6. This will need to be significantly reduced if the UK is to hit its net zero target by 2050.

14. Some might argue that climate change targets can be reached by the introduction of large numbers of electric cars on Britain’s roads. While this will help, air quality and emissions are not the only issues which need to be tackled. 80% of Europe’s population is expected to live in an urban area by 20507. Trends in the total population of EU27 and UK from 1961 to 2018 show a decline in the share of population living in rural areas, while towns and cities experienced a smooth and constant increase.

5 Transport Focus, Aug 2020, https://www.transportfocus.org.uk/news-events-media/news/head-out-to-help- out-get-passengers-back-on-board-with-better-fares-deals-says-watchdog/ 6 DfT, Decarbonising Transport, setting the challenge, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878642/ decarbonising-transport-setting-the-challenge.pdf 7 EU Commission, https://ec.europa.eu/knowledge4policy/foresight/topic/continuing- urbanisation/developments-and-forecasts-on-continuing- urbanisation_en#:~:text=Europe's%20level%20of%20urbanisation%20is,a%20smooth%20and%20constant%20 increase. REF0091

15. By shifting towards public transport, not only can emissions and air quality levels improve but congestion can also be reduced. With growing demand for mobility, our towns and cities will become even more gridlocked with privately owned cars, electric or otherwise. Cars currently take up a third of dedicated infrastructure. These cars, however, are on average parked for 96% of the time with only 4% moving or idling on roads8. Road space could be prioritised for more sustainable modes such as public transport.

16. A full double decker bus can take the equivalent of 75 cars off our congested roads, and significantly more from a full (even socially distanced) passenger train. Decarbonisation need not wait for all vehicles to become zero/ultra-low emission. Existing buses and trains already emit far less greenhouse gases per passenger than internal combustion engine private cars. Supporting modal shift and building demand will create the conditions for further investment in zero/ultra-low emission bus travel. Government and local authorities may wish to consider models such as additional parking charges as a delivery model for raising funds for public transport schemes or the greening of fleets.

17. There are tangible economic benefits to removing congestion in urban areas. More people commute by bus than all other forms of public transport combined, generating £64bn in GDP (before the pandemic). Greener journeys suggest that if the trend for bus journey times increasing by almost 1% per annum continues, there will continue to be a loss of access to around 5,000 jobs per year consequently9.

18. There is another added benefit of modal shift: healthier communities. As the World Health Organisation notes, shifting to public transport is associated with a wide range of health benefits, including more physical activity and less obesity by encouraging more active travel10. Reliable public transport should be seen as the backbone of future mobility that integrates provisions for walking and cycling for the first and last mile of journeys.

19. In 2019 Public Health estimated between 28,000 and 36,000 deaths a year can be attributed to long-term exposure to poor air quality11. As we emerge from Covid-19, only a public transport-led recovery, rather than a car-led recovery, will mean we are not swapping one public health crisis for another.

20. Buses represent 5% of all journeys but represent 3% of all transport related emissions12 making them a relatively low producer of pollution. This will improve further if the rollout of ultra-low and zero emissions buses accelerates. Arriva supports and contributed to the CPT’ ‘Vision for 2030’ plan, which among other things, commits the industry to only purchase next generation ultra-low or zero emissions buses from 2025 (but starting this process by 2023 in some urban areas)13. Arriva has extensive experience with zero- emissions buses. For example, in the Netherlands, Arriva has passed the halfway point in its rollout of electric buses in . This significant milestone supports the province’s plan for public transport to go emission-free by 2026.

8 RAC Foundation, https://www.racfoundation.org/motoring-faqs/mobility#a5 9 https://greenerjourneys.com/wp-content/uploads/2016/06/TTBusReport_Digital.pdf 10 World Health Organisation 11 Gov.uk, https://www.gov.uk/government/news/public-health-england-publishes-air-pollution-evidence- review#:~:text=Air%20pollution%20is%20the%20biggest,lung%20cancer%2C%20and%20exacerbates%20asth ma. 12 DfT, Decarbonising Transport, setting the challenge, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878642/ decarbonising-transport-setting-the-challenge.pdf 13 http://www.movingforwardtogether.uk/ REF0091

21. In 2018, greenhouse gas emissions from rail (passenger and freight) made up just 1.4% of the UK's domestic transport emissions, while 10% of passenger miles travelled in Great Britain were by rail14. This clearly makes rail a low emitter of greenhouse gases. However, according to the Institution of Mechanical Engineers, the UK's proportion of electrified railways is 42% with the remaining largely only accessible to diesel trains15. The DfT has also set the challenge to remove all diesel operated passenger trains by 2040. Rail’s Traction Decarbonisation Network Strategy estimates there are 15,400 Single Track Kilometres (STKM) that will need holistic interventions for the railways to be completely decarbonised by 2050. The share of electrified routes will need to be significantly boosted (an additional 13,000 STKs of electrification). For the remaining branch lines, other options such as hydrogen and battery traction will need to be exploited (2,100 STKM). There are 300 STKs where a technology choice has not yet been made16.

22. The technology to run hydrogen and battery traction locomotives already exists and has been trialled. This should be a priority for future Government support. Arriva is also involved in a joint venture with the French rolling stock provider Alstom and other partners in the province of in the Netherlands that is trialling trains powered by hydrogen. This was the second area in Europe where such trains are in use17.

Rail specific interventions

23. Dynamic and responsive private sector involvement will be a key driver in the recovery from Covid-19. Over the 25 years preceding the pandemic, passenger numbers more than doubled and thousands more services were run by operators everyday while public subsidy reduced. However, new models must be created which place customers at the centre. The Williams Review and the expected White Paper represents a once in a generation opportunity to reform rail, so that it more fully benefits customers, makes the railway more agile and responsive and embeds behaviours that will bring people safely back to rail.

Ticketing and Fares reform

24. The pandemic has changed the way that many people work with millions adapting to work from home. This is a trend that we were already seeing before the pandemic, fewer people commuting on Fridays for example. Traveling off-peak could become more important as fewer passenger choose or need to commute during the peak hours. This will require new fares and ticketing options to be made available which will have revenue implications. The existing fares structure which has been in place since privatisation is a key driver of distrust in rail18. The system is archaic and fragmented. Customers should not need to utilise split ticketing to get the best price possible. Reform must remove inefficiencies and drive to a lower-cost model that uses modern technology.

14 DfT, Decarbonising Transport, setting the challenge, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878642/ decarbonising-transport-setting-the-challenge.pdf 15 https://www.railway-technology.com/features/will-uk-ever-get-electrification-back- track/#:~:text=According%20to%20the%20Institution%20of,in%20Glasgow%2C%20Manchester%20and%20Lo ndon. 16 https://www.networkrail.co.uk/wp-content/uploads/2020/09/Traction-Decarbonisation-Network-Strategy- Interim-Programme-Business-Case.pdf 17 https://www.railtech.com/rolling-stock/2020/02/28/hydrogen-train-on-test-tracks-in-netherlands/ 18 Transport Focus, Passenger Survey. https://d3cez36w5wymxj.cloudfront.net/wp- content/uploads/2020/07/16180916/Main-Report-Spring-2020.pdf REF0091

25. Arriva supported the Rail Delivery Group’s consultation on fares reform and corresponding paper “Easier Fares”19 and a simpler fares system must be a critical part of change for the railways.

26. Reform of fares and ticketing could, in the short-term at least, provide the scope for products that could encourage people back to rail travel. Transport Focus suggests that consideration should be given to accelerating the provision of carnet/flexible season style tickets (as are available to bulk buy and use over a defined period on the Paris Metro)20.

New flexible relationships

27. The old contractual arrangements were overly specified and inflexible which acted to stifle innovation and the capacity to rapidly change to meet passenger expectations and operational demands. To ensure that the system has the flexibility to meet evolving needs and is robust enough to react to any future crises like the Covid-19 pandemic, these arrangements need to be reformed. Key to success is the quality of specification of contracts. More flexible and possibly longer contracts are needed which will give operators the certainties necessary to plan and invest in passenger improvements more effectively. New relationships should also take account of where financial risks rest in the system, so they don’t stifle investment.

Creation of a ‘guiding mind’

28. The current industry structures create an impression of a lack of clear accountability to customers. This is especially apparent in times of disruption.

29. Arriva supports the creation of an independent system operator or ‘guiding mind’ with clearly defined long-term goals and a set policy framework. Train operating companies should retain their relationships with customers as they are best placed to react to their needs.

30. A properly resourced, independent guiding mind would be better equipped to deliver government policy objectives and manage trade-offs appropriately. In the current system where the DfT assume most of those responsibilities, it both sets the direction and is an active participant in the delivery of rail passenger services.

31. The conflict is most notable in circumstances where things go wrong and became particularly evident in the face of the disruption caused by the introduction of a new timetable in May 2018. The inquiry that followed this timetable change and the ensuing disruption to customers concluded that, in the case of major network changes, there was a gap in accountability which led to the failure of any one party to take control of the situation and manage the issue appropriately.

A national network that can factor in local needs

32. The railway is not homogenous, with long distance and intensive commuter services (sometimes sharing the same infrastructure) and we should avoid a ‘one size fits all’ solution. Arriva has significant experience operating different types of rail services; from the long distance CrossCountry via the traditional franchise model, to the high capacity

19 https://www.bigplanbigchanges.co.uk/easierfares 20 Transport Focus, https://www.railway-technology.com/news/transport-focus-requests-for-reform-in-rail- fares/ REF0091

London Overground metro-style service for TfL via a concession model, and open access operator Grand Central.

33. We firmly believe that a greater understanding of local needs drives better results from contract specification through to contract management. The creation of a national guiding mind need not come between the increasing move to devolve management of contracts to local parties. Local priorities must be balanced against a wider national picture ensuring that trade-offs are assessed to best deliver the defined national purpose of the railway. There may be a case for applying the concession model in other urban areas, however the maturity of the client would be critical to its success.

Bus specific interventions

34. A vibrant bus industry will help drive forward the nation’s economic recovery. Before the pandemic local bus services were responsible for 59% of all public transport journeys, connecting communities, linking people with jobs, educational opportunities and leisure, and directly supporting 250,000 jobs21.

35. Our bus companies are deeply embedded in the communities which we serve. They are best placed to work with local and regional authorities to build local bus services back better. Buses also play a major role in building social inclusion by combatting loneliness and linking smaller, often hard to reach communities.

36. If local bus services really are to be attractive and suitable for the post-Covid-19 world then coordinated and sustained must take place in several areas. The Government’s Decarbonising Transport challenge will only be realised if there is a joined-up approach between Whitehall, operators and local authorities.

Delivery of the National Bus Strategy

37. Arriva supports the CPT’s ‘Vision for 2030’ plan which calls for serval key interventions from Government to22: a. decrease bus journey times b. avoid making sudden, radical changes to the Bus Service Operator Grant (BSOG), and ensure that any future reform is phased, recognising the devastating impact that a sudden loss of funding could have on the bus market c. ensure that bus travel is core to future infrastructure schemes d. work in partnership to create a joint roadmap to zero emissions transport under the Road to Zero Strategy e. continue support for the significant extra purchase cost of ultra-low and zero emissions vehicles, and associated infrastructure, until prices progressively align with diesel comparators.

Bus prioritisation measures

38. New infrastructure improvements to roads for bus services are required to reduce the impact of congestion in urban areas. Delay minutes make services less reliable and far less attractive to potential customers considering public transport post-Covid-19. The benefits of improvements such as additional services on busy routes are also undermined if those extra buses are stationary in traffic and not collecting customers.

21 Campaign for Better Transport, The Future of Bus, Sept 2019, https://bettertransport.org.uk/sites/default/files/research-files/The-future-of-the-bus-August-2019.pdf 22 http://www.movingforwardtogether.uk/ REF0091

39. The Campaign for Better Transport has called for Government to provide capital funding for local bus infrastructure to encourage investment by local authorities in bus lanes, urban traffic control, priority at lights, bus waiting facilities, interchanges and bus stations23 . Protecting existing bus infrastructure is also important as local authorities reassess their local transport strategies.

Digitalisation and DRT

40. Transport networks can sometimes feel disjointed. There can also be gaps covering the first and last mile of people’s journeys. One option for filling these voids is Demand Responsive Transport (DRT). DRT is not a new phenomenon with services such as Dial- a-Ride and community transport provision having been around for a number of years. Technology now blends the convenience of a taxi service with the cost and environmental benefits of public transportation. Urban infrastructure currently treats taxi and bus provision as two distinct modes, which needs to adapt in line with the possibilities created by new technology which will only grow in relevance. The Government should also consider supplying additional funding for DRT in urban areas in addition to the initial £20million announced for rural areas in 2019. There is also the opportunity to couple DRT funding to other funding streams as shown by ArrivaClick in Leicestershire. This service is part funded by s.106 money contributions from a nearby largescale housing development.

41. However, DRT is only one aspect of a wider trend towards digitalisation in the bus sector. On all Arriva bus services outside London, customers can now pay for their ticket in advance on an app or by using contactless payment. Whilst originally intended as a measure to make bus travel more convenient for customers, reducing the need for cash handling has also helped to make travelling by bus safer during the pandemic. Customers are going to be looking for reassurance that public transport operators are helping to protect their wellbeing and safety.

Where the current legislation works well

42. The partnerships and the enhanced partnership models of local bus services, facilitated by the , allows operators such as Arriva to be highly reactive to changes in passenger numbers and demands presented by uncertainty while still delivering an excellent service to customers. This flexibility, coupled with our commercial model, has allowed us to respond swiftly to the rapidly changing environment presented by the Covid-19 pandemic. Arriva currently operates these models with local authorities on Merseyside (partnership) and in Hertfordshire (enhanced partnership). Such swift responses to rapidly changing situations, and the alignment of the bus industry speaking with one voice via the CPT, may not have been as effective or possible had the sector been operating under multiple different franchising regimes.

43. Partnership agreements, like the City Region (LCR) Bus Alliance have brought increases in passenger numbers, up 16% in four years24. The Alliance has invested £37.5 million in new vehicles meaning that the average fleet age is no more than 7 years old. Every new LCR bus is fitted with free-to-use Wi-Fi and USB charging points with retrofitting underway for older buses. Low, ultra-low and zero emission buses now make

23 Campaign for Better Transport, Covid19 Recover: Renewing the Transport System, https://bettertransport.org.uk/sites/default/files/research- files/Covid_19_Recovery_Renewing_the_Transport_System.pdf 24 Liverpool City Region Combined Authority Transport Plan, https://www.liverpoolcityregion-ca.gov.uk/wp- content/uploads/LCRCA-TRANSPORT-PLAN.pdf REF0091 up almost 70% of the fleet (including many hybrid, gas and electric buses). These significant improvements correspond to the period of pre-Covid19 passenger growth.

September 2020