House of Commons Transport Committee Bus Services across the UK Eleventh Report of Session 2005–06 HC 1317 House of Commons Transport Committee Bus Services across the UK Eleventh Report of Session 2005–06 Report, together with formal minutes Ordered by The House of Commons to be printed 18 October 2006 HC 1317 Published on 26 October 2006 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Transport Committee The Transport Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Transport and its associated public bodies. Current membership Mrs Gwyneth Dunwoody MP (Labour, Crewe) (Chairman) Mr David Clelland MP (Labour, Tyne Bridge) Mr Jeffrey M. Donaldson MP (Democratic Unionist, Lagan Valley) Clive Efford MP (Labour, Eltham) Mrs Louise Ellman MP (Labour/Co-operative, Liverpool Riverside) Mr Robert Goodwill MP (Conservative, Scarborough & Whitby) Mr John Leech MP (Liberal Democrat, Manchester, Withington) Mr Eric Martlew MP (Labour, Carlisle) Mr Lee Scott MP (Conservative, Ilford North) Mr Graham Stringer MP (Labour, Manchester Blackley) Mr David Wilshire MP (Conservative, Spelthorne) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/transcom. A list of Reports of the Committee in the present Parliament is at the back of this volume. Committee staff The current staff of the Committee are Tom Healey (Clerk), Annette Toft (Second Clerk), Clare Maltby (Committee Specialist), Louise Butcher (Inquiry Manager), Tony Catinella (Committee Assistant), Ronnie Jefferson (Secretary), Henry Ayi- Hyde (Senior Office Clerk) and Laura Kibby (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Transport Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6263; the Committee’s email address is [email protected] 1 Contents Report Page 1 Introduction 3 2 The current situation 5 Regulatory structure 5 Declining passenger numbers 5 3 Making Quality Contracts Work 10 Problems in Passenger Transport Authority areas 10 The PTA view 12 PTA relations with bus operators 14 The London comparison 15 4 Quality Contracts in PTA areas 17 Why have there been no Quality Contracts? 17 Possibility of legal challenge 17 The need for Quality Contracts 19 5 ‘Beefed up’ Traffic Commissioners 20 6 Securing socially necessary services outside the PTAs 23 Rising costs and operator profit 23 Operator withdrawal from non-core routes 24 Community transport 25 7 Competition Act 27 8 Congestion and bus priority 29 Impact of congestion 29 Enforcing bus priority 30 9 Concessionary fares 31 Target groups: pensioners and children/students 31 Reimbursement system for operators 32 10 The Image of the bus 34 Crime and anti-social behaviour 34 Role of the Department 35 11 Conclusion 37 Conclusions and recommendations 38 Formal minutes 43 Witnesses 44 2 List of written evidence 45 Reports from the Transport Committee since 2005 48 3 1 Introduction 1. The issue of bus provision is at a critical juncture. Bus ridership has been in decline since the 1950s and the deregulated regime introduced under the Transport Act 1985 has failed to reverse that decline. In fact, in the English regions, it seems to have exacerbated the decline. Although there have been successes in some areas of the country, there is a particular problem in larger metropolitan areas where the Passenger Transport Authorities are finding it difficult to provide what they consider to be an adequate and attractive service within the current regulatory framework. There is a particular concern that the large metropolitan areas do not have the tools to improve bus provision and reverse passenger decline, as has been done under a regulated regime in London. The bus strategies that local authorities are compelled to develop as part of the Local Transport Plan (LTP) process are, it is argued, unlikely to be successful without some reform of how bus services are managed and delivered. 2. It is in this context that the Committee determined to look at the particular problems local authorities face in developing and implementing effective bus strategies. In this Report we aim to set up a vision for the future of the bus, one where this vital form of transportation is given the priority it deserves. It will require hard work from all involved to ensure that buses are clean, safe, reliable, and comfortable for all their passengers, long into the 21st Century. 3. Since we finished taking evidence, the Secretary of State for Transport, Douglas Alexander, has made clear his commitment to the bus as the key mode of public transport for most people.1 In contrast to this, the situation in one of the country’s main metropolitan areas – Greater Manchester – has deteriorated. Reports indicate that warnings from the Greater Manchester PTA that the main bus stands in the city centre are stretched to capacity have been ignored by competing companies UK North and Stagecoach who are running, between them, 30 buses an hour on key routes.2 The Traffic Commissioner for the North West will hold a public inquiry into the situation in January 2007.3 4. The terms of reference for this inquiry were as follows: • Has deregulation worked? Are bus services meeting passenger need? Are they sufficiently co-ordinated with other forms of public transport? Are buses clean, safe, and efficient? • Is the provision of high quality bus services compromised by the Competition Act? • Are priority measures having a beneficial effect? What is best practice? • Is financing and funding for local community services sufficient and targeted in the right way? 1 Speech to the Labour Party Conference, 27 September 2006 2 “Public inquiry over bus war?”, Local Transport Today, 22 September 2006 3 “Minister’s pledge on bus wars”, Manchester Evening News, 28 September 2006 4 • What are the problems with the current approach to concessionary fares? Does the Government’s proposal to introduce free local bus travel across the UK for disabled people and the over 60s from 2008 stand up to scrutiny? • Why are there no Quality Contracts? • Are the powers of the Traffic Commissioners relevant; are they adequately deploying the powers and resources that they currently have? Do they have enough support from Government and local authorities? • Is London a sound model for the rest of the UK? • What is the future for the bus? Should metropolitan areas outside London be able to develop their own form of regulated competition? 5. The Committee extends its thanks to the Minister, Gillian Merron MP, and the other witnesses who shared their time and expertise with us. We also thank our specialist adviser, Malcolm Wren, and Flo Ashley and her colleagues at the National Audit Office for their contribution. 5 2 The current situation 6. The Transport Act 2000 requires a local transport authority to develop as part of its Local Transport Plan (LTP) and after consultation, a bus strategy that will secure the provision of appropriate bus services in their area. In formulating those policies they must have regard in particular to the needs of the elderly and people with mobility problems. Local authorities, through their LTPs, have the opportunity to take a more strategic view of public transport provision in their area and related expenditure. These cover both capital and revenue funding for five-year periods. Local authorities are encouraged to set objectives and targets for such factors as tackling congestion, delivering accessibility, safer roads and improving air quality. There is also a requirement to secure value for money in providing bus services and to ensure a smooth integration between bus strategies and LTPs. Regulatory structure 7. The bus industry outside London was deregulated by the Transport Act 1985. Road service licensing was abolished from October 1986.4 Any operator holding an operator's licence was free to operate services where and when they wished provided that the Traffic Commissioners were assured that the route was suitable for use by buses. As a consequence of the 1985 Act, local authorities are no longer permitted to provide blanket support for bus services in their areas. They are, however, allowed to subsidise services required to meet social needs that would not otherwise be met. Most bus services are now operated commercially, but some 16 per cent are subsidised. 8. In London the London Regional Transport Act 1984 transferred responsibility for the bus network from the Greater London Council (GLC) to London Regional Transport (LRT). The 1984 Act placed on LRT a duty to tender activities and operation where it thought appropriate. This resulted in progressive competitive tendering of bus operations in London over the period since 1985. In London therefore there has been regulated competition – competition for the market rather than the ‘on the road’ competition of deregulation. The Greater London Authority Act 1999 transferred responsibility for London's bus services from LRT to Transport for London (TfL), its successor body. Declining passenger numbers 9. Bus deregulation has been with us for a little over twenty years. It has failed to arrest the decline in bus passenger numbers since 1950 but neither has it accelerated it. Statistics show that since 1985 journeys outside London have fallen whilst journeys in the capital have increased significantly, exceeding the 1985–86 figures. Journeys in the rest of the country have declined,5 as the tables below demonstrate: 4 While the 1985 Act privatised the English bus companies, a similar duty was not placed on the Scottish companies until the Transport (Scotland) Act 1989 came into force.