Written evidence submitted by The Go-Ahead Group plc (PEG0259) Background Go-Ahead is a leading UK public transport operator, providing high quality services in the bus and rail sectors. We run bus companies across the country, from Plymouth to Newcastle, with a quarter of London’s buses for Transport for London (TfL). Go-Ahead operates a fleet of 5,200 buses, which carry more than two million passengers a day. We have also led the call for the creation of a National Bus Strategy to revitalise a mode of transport which provides two-thirds of all public transport journeys in the UK. The Government’s stated commitment to a National Bus Strategy and investment in 4,000 new electric buses is now even more vital, and should be part of a green recovery from the Covid-19 pandemic. Internationally, we provide bus services in Singapore and Ireland, and rail services in Germany and Norway. Go-Ahead is responsible for nearly 30 per cent of all UK rail journeys through its Govia Thameslink Railway and Southeastern franchises. We employ around 30,000 people globally. Executive summary Public transport is pivotal of the UK economy, and 60% of public transport journeys being made by bus. Encouraging people to return to using buses and trains is essential to revitalising our towns and cities as part of post-pandemic economic recovery. It will also be vital to ensuring that recovery is socially inclusive, and beneficial to both the environment and public health. In line with the approach taken in other countries, the UK Government should positively encourage a return to using public transport. Long term economic and environmental damage is arising from the sustained use of a negative ‘avoid’ message. Buses and trains are clean and safe and people should feel confident to use them. We also calling on the Government to put more substance behind its drive to create UK skills-based manufacturing to fuel green recovery. This can be achieved by delivering on its pledge to deliver 4,000 new zero emission buses through a leasing model that recognises the challenging situation the bus industry now faces. The role of public transport as an enabler needs to be better understood to make Industrial Strategy effective at local and regional level, with an emphasis on deliverable quick-wins. And the Apprenticeship Levy needs more flexibility to enable spending on local resources and providers. NB – We have structured our response against the questions provided, whilst not responding to every specific question. 1. Before the pandemic, what were the constraints on growth that affected your business? Road congestion 1.1. Congestion has been a challenging issue within towns and cities in which Go-Ahead operates. Overused roads have meant slower journeys and inefficient use of urban transport infrastructure. 1.2. Congestion in the UK’s largest cities is 14% worse than five years ago, and traffic speeds are forecast to fall by almost 5mph from 17mph to an average of 12mph by 2030, and significantly slower in peak hours.1 Evidence has shown that a 10% decrease in bus speeds can reduce patronage by 10% or more, especially when increased congestion leads to increased variability in journey times. At the start of 2020 it was the case that five routes provided by our Go North East bus company each cost £100k extra to operate compared with five years ago. In January 2020 we removed our X90 service between Oxford and London after a 50% increase in journey time due to congestion. 1.3. By ignoring the congestion problem, we are missing the opportunity to create a virtuous circle where improved bus speeds attract passengers, leading to fewer cars, faster journey times for everyone and a multiplier on positive economic impact.2 1 Greener Journeys, The Impact of Congestion on Bus Passengers report, 2016 URL: https://greenerjourneys.com/publication/impact- congestion-bus-passengers-new-extended-version/ 2 Greener Journeys, The Impact of Congestion on Bus Passengers report, 2016 URL: https://greenerjourneys.com/wp- 1.4. Go-Ahead commissioned research found that commuters build in a 13-minute “traffic jam allowance” to their daily journey to work. Nevertheless, four out of ten have been late for work in the last six months due to traffic jams. 1.5. With Covid overall congestion has decreased but with car use already at 92% of normal levels, despite less economic activity and much working from home, the ongoing impact of the Government’s ‘avoid public transport’ message is likely to lead to more congestion problems ahead (see section 4). Labour supply (London and south east) 1.6. Prior to Covid, a constraint on our businesses in London and South East was the limited supply of labour, hence leading to cost pressures. The Government’s plans for a points-based system for immigration from Jan 2021 could potentially create challenges if bus driving was not viewed as constituting a ‘skills requirement’. 21% of our London bus drivers and 21% of our Oxford bus drivers are EU citizens, and we continue to value their contribution. In total 14% of our bus drivers nationally are EU citizens. Changing human behaviours 1.7. Shifts in social behaviour was already impacting the demand for bus services pre-Covid, including the move away from ‘people to goods’ towards ‘goods to people’. 1.8. This connects to the recent decline of the traditional High Street (the rise in on-line shopping had already led to a 30% decrease in physical shopping trips taken), alongside increased rates of mobile working from home (even before Covid, 31% of British workers were working from home at least one day per week3). 1.9. These changing behaviours, pre-Covid, involved Britons make 16% fewer trips than 1996, travel 10% fewer miles than in 2002 and spend 22 hours less travelling than we did a decade ago.4 2. Thinking more specifically, what restraints prevented your business from increasing: A. Investment in the net zero transition Accelerating the introduction of zero emission buses 2.1. A coordinated strategic approach involving both Government and private companies is required to enable an accelerated transition to low and zero emission transport, across both bus and rail. 2.2. Go-Ahead is the largest operator of electric buses in the UK and is committed to operating a zero- emission fleet by 2035. We have pledged to purchase no new diesel vehicles after 2025. 2.3. Go-Ahead led the industry by working with Transport for London and other local partners to establish the UK’s first all-electric Waterloo bus garage in 2017. 2.4. Go-Ahead is innovating to overcome challenges in transition to zero emission. In 2019 we introduced 30 new extended range double decker buses in Brighton & Hove that use geo-fencing technology to operate in zero emission mode throughout the city’s Low Emissions Zone. 2.5. The transition to zero emission fleets involves significant cost. This is due to several factors, including a low supply of competitively priced zero emission buses, high bus depot conversion costs and national grid capacity limitations. Charging infrastructure in depots is an additional £1m – £2m cost dependent on the availability of supply locally, coordinating power suppliers and planning authorities can be complex. 2.6. Effective liaison with power companies and planning authorisations is also important. The process and cost of electrifying depots is highly variable depending on the demands upon, and capacity of the local supply networks. These variable start-up costs require public sector involvement through a joined-up strategy to enable more depots across the country to be converted to all-electric. 2.7. To maximise the return on the investment, local authorities should discourage unconstrained private car use in city centres and incentivise use of public transport through prioritised road space and traffic management schemes to tackle congestion, reduce bus journey times and minimise delays. 2.8. The delivery of zero emission vehicles has been undertaken through capital investment from a mixture of ourselves and Govt funding. However, the funding model needs to change reflecting our inability to make profits in our commercial bus business post Covid. content/uploads/2016/06/Prof-David-Begg-The-Impact-of-Congestion-on-Bus-Passengers-Digital-FINAL.pdf 3 Virgin Media, Survey, 2017. URL: https://www.ispreview.co.uk/index.php/2017/06/virgin-media-asa-consider-homeworkers-ads- broadband-speed.html 4 Marsden, G. et al. (2018) All Change? The future of travel demand and the implications for policy and planning, First Report of the Commission on Travel Demand URL: http://www.demand.ac.uk/wp-content/uploads/2018/04/FutureTravel_report_final.pdf 2.9. Our industry body the Confederation of Passenger Transport is proposing a leasing model where operators pay a fee in exchange for long term usage of the bus. The purchase of these buses, which would all be zero emission, would be financed through a combination of £2bn of government and private investment. 2.10. We would like to see progress on a leasing model for zero emission buses, as part of a green recovery that reduces carbon emissions and protects highly skilled UK manufacturing jobs. Decarbonising rail travel 2.11. Nearly all of our rail services across GTR and Southeastern are electrified. However, rail as a whole needs to make further progress on decarbonisation with support from Government. As well as further investment in electrification, the Government needs to provide incentives within the franchising system towards innovation (eg for trials of battery powered trains and hydrogen trains). GTR has innovated through its Class 700 fleet which is recycling 15.8GWh of energy, being returned into the network, equating to a decreased energy demand of over 50% on the rolling stock it replaces.