Ticketing and Concessionary Travel on Public Transport

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House of Commons Transport Committee

Fifth Report of Session 2007–08

Report, together with formal minutes, oral and written evidence

Ordered by The House of Commons to be printed 26 March 2008

HC 84 Published on 1 April 2008 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 and Nantwich) (Chairman) Mr David Clelland MP (Labour, Tyne Bridge) Clive Efford MP (Labour, Eltham) Mrs Louise Ellman MP (Labour/Co-operative, Liverpool Riverside) Mr Philip Hollobone MP (Conservative, Kettering) Mr John Leech MP (Liberal Democrat, Manchester, Withington) Mr Eric Martlew MP (Labour, Carlisle) Mr Lee Scott MP (Conservative, Ilford North) David Simpson MP (Democratic Unionist, Upper Bann) 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.

Committee staff The current staff of the Committee are Tom Healey (Clerk), Annette Toft (Second Clerk), David Davies (Committee Specialist), Tim Steer (Committee Specialist), Alison Mara (Committee Assistant), Ronnie Jefferson (Secretary), Gaby Henderson (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].

Contents

Report Page

1 Introduction 3

2 Integrated Ticketing 5 The extent of integrated ticketing today 5 National rail 5 Local transport 5 Integrated bus ticketing 6 Integrated ticketing across modes 7 Sale of tickets 8 Integrated ticketing between different geographical areas 9 Government strategy on integrated ticketing 9 Transport Direct 10

3 Smartcard technologies 11 New technologies, new opportunities 11 The Integrated Transport Smartcard Organisation (ITSO) Standard 14 Smartcards in London—Oyster and ITSO 16

4 Revenue protection and the powers of ticket inspectors 18 Fare evasion—the scale of the problem 18 Ticket gates—not the only solution 19 Staff safety 20 The powers of revenue protection staff 20 The rights of the passenger 22

5 Concessionary travel 23 English national concessionary travel scheme 23 The costs and funding arrangements 24 Reimbursement of bus operators 26 Extending the scope of concessionary travel 28

List of recommendations 30

Formal Minutes 34

Witnesses 35

List of written evidence 36

List of Reports from the Committee during the current Parliament 38

1 Introduction

1. On 1 April 2008 the English national concessionary travel scheme will be launched, giving free national bus travel to older and disabled people in England. This provides an opportunity for the Government and transport operators to take a major step towards integrated ticketing, with the introduction of smartcard concessionary travel passes throughout England. We have, therefore, inquired into the extent to which integrated ticketing on public transport has been achieved for all users; the issues regarding smartcards; arrangements for revenue protection (stopping fare-evasion) which will be affected by new forms of ticket; and the impact of concessionary travel in England which is costing £1 billion per annum. We have not looked at fare levels as this issue was addressed in our previous report How fair are the fares?1

2. The history of public transport conjures up images of machines and infrastructure— Brunel’s Great Western Railway with its engines, tunnels and bridges; the London Routemaster bus; the reintroduction of trams in Manchester; and, more recently, St Pancras International Station and High Speed 1. By contrast, the humble ticket rarely gains a mention. Yet ticketing arrangements are just as important as vehicles and infrastructure from the passenger’s point of view. How and where tickets are sold, whether different tickets are needed for different stages of a journey and the form that the ticket takes, all have a bearing on individuals’ travel choices. The Government recognised this in its 1998 White Paper, A New Deal for Transport – Better for Everyone, which proposed more through-ticketing and easier ticketing arrangements as a central part of its strategy for raising the standard of public transport.2

3. Ticketing is an area which has seen rapid change in recent years: paper tickets served the railways for 150 years and the magnetic stripe ticket for 30 years.3 Contactless smartcards, usually in the form of a plastic card with an embedded chip that can be read without being inserted into a machine, have been in use for around 10 years and in London the Oyster card is now commonplace. However, even these systems are being challenged by new technologies, such as ticketing chips or screen displays in mobile phones and combined travel, credit and bank cards.4 We are grateful to Transys, who operate the Oyster system5 on behalf of Transport for London (TfL), for showing us some of this new technology, as well as giving us a demonstration of the Oyster system.

4. The latest rail franchises have varying commitments to introduce smartcard ticketing, and arrangements are in hand to extend the Oyster Pay-as-you-Go system throughout the National Rail network in London by 2010. It is already available on some routes. A zonal fares structure has been introduced and station equipment to facilitate smartcard use is to be installed, including ticket gates at Waterloo.

1 Transport Committee, Sixth Report of Session 2005–06, How fair are the fares? Train fares and ticketing, HC 700 2 Department of Environment, Transport and the Regions, A New Deal for Transport – Better for Everyone, Cm 3950, July 1998 3 Q 71 4 The Barclaycard “OnePulse” card combines Oyster, a credit card and a cashless payment card. In November 2007, the mobile phone operator O2 launched a trial of 500 telephones with embedded Oyster cards. 5 See Section 3 for an explanation of Oyster

5. Smartcards offer a range of new possibilities but it is important to remember that integrated ticketing and smartcards are separate, though related, issues. Greater integration can be achieved without smartcards and smartcards do not, in themselves, produce integrated ticketing arrangements. Technology must be the servant and not the master, assisting with the implementation of policy, not dictating its direction.

2 Integrated Ticketing

The extent of integrated ticketing today 6. None of our witnesses dissented from the view that integrated ticketing—the issuing of a single ticket which will cover several legs of a journey, sometimes by different modes—was a good thing. Many witnesses were also of the view that public transport ticketing in the England was still not sufficiently integrated, either between different modes (e.g. bus and rail), across transport authority boundaries and sometimes even within a mode (e.g. between different bus operators in the same city).

National rail 7. Comprehensive through-ticketing is provided between passenger train operators on the National Rail network. Train operators are obliged, as a condition of their passenger licences, to participate in through-ticketing arrangements covering most station-to-station journeys6 in the country. In addition, passengers can buy rail tickets that include other modes (London Underground, and some light rail systems and ferries) and even some major visitor attractions.7 Some 413 million rail tickets were sold in 2006/07.8 Of these, around 100 million included some sort of add-on, such as a London Travelcard or a passenger transport executive9 multi-modal ticket. It is also increasingly possible, under a voluntary initiative by rail and bus operators, to buy a combined rail and bus ticket called “PlusBus”10 for over 200 towns and cities outside the metropolitan areas.

Local transport 8. In London there is a tradition of integrated ticketing on public transport, between the rail networks and other services now provided by TfL. For example the London Travelcard allows the holder to use bus, tram, Underground, Docklands, Overground and National Rail services. It can be bought in paper ticket format (with magnetic stripe), or for period (season) use can be held on an Oyster card.

9. Outside London, there is no requirement for rail or bus operators to provide integrated ticketing. Since bus deregulation and the consequent reduction in powers of the passenger transport executives, this is left entirely to the market and to voluntary arrangements between operators and local transport authorities. In the metropolitan areas and larger cities, a range of multi-modal and multi-operator tickets are available for local buses, trains, trams and metro systems.

6 Train operators are also required to sell tickets that include London Underground but there is no statutory requirement to sell tickets to other destinations, such as metro or bus stops. 7 Ev 132 (It is not generally possible, however, to buy a through rail ticket with light rail as the first stage of the journey, e.g. Manchester Metro to London.) 8 Data provided by the Association of Train Operating Companies from the LENNON passenger revenue database. Statistics on the extent of multi-modal journeys were not available from the National Travel Survey. 9 There are six passenger transport executives in England: Greater Manchester, Merseyside, South Yorkshire, Tyne & Wear, West Midlands and West Yorkshire. Strathclyde PTE became a Regional Transport Partnership in 2006. 10 Ev 167

Integrated bus ticketing 10. Through-ticketing between rail stations has existed for so long that nowadays we do not even think about having to buy a second ticket when changing trains. Bus passengers, on the other hand, often have to buy a new ticket every time they change bus and on the return journey, unless a day ticket is available. Greater Manchester Passenger Transport Executive told us that this discouraged interchange and integration. For many passengers, they argued, integrated bus ticketing was more important than inter-modal integration.11 The problem is not a new one. Even before bus deregulation in 1986, some operators required passengers to buy a new ticket every time they boarded a bus.12 Though the Government recognised this problem in 1998, it confined itself to welcoming the limited work that was already being done by operators.

Rail operators are required to offer through-ticketing for all rail journeys. [...] There are no equivalent obligations on bus operators. We welcome the positive action taken by some companies to accept other operators’ tickets or participate in area ticketing schemes, but more needs to be done. We also welcome the increasing number of operators who are starting to introduce initiatives such as railbus tickets. We will encourage their wider use. We want to see more ‘travelcard’ schemes across the country.13

11. Ten years on, only limited progress has been made and in some cases the situation is worse. The Public Transport Ticketing Schemes Block Exemption Order 2001 (from the Competition Act 1998) has enabled more local authorities and operators to conclude joint ticketing agreements.14 However, the competitive structure of the industry outside London and fears of entanglement with the Office of fair Trading mean that, outside the main cities, multi-operator tickets are still an expensive rarity. Through and return tickets are often not available even from the same operator. A day ticket or period ticket may suit the frequent traveller, but it is not suitable for all travellers. A journey that involves buying two or more bus tickets each way will be expensive, which is likely to dissuade young people and others on low incomes from travelling.

12. The situation is somewhat better in the passenger transport executive areas where multi-modal, multi-operator travelcards are generally available. Even here, however, difficulties remain. In West Yorkshire, with 37 operators, a total of 88 different single- operator ticket types are available.15 Sometimes single-operator and multi-operator bus tickets will be in competition with each other. This provides choice for the passenger but it also makes the ticketing process confusing and expensive. There is virtually nothing in Putting Passengers First16 (the Government’s review of bus issues) that addresses these issues. A Government amendment to the Local Transport Bill, proposes revising the

11 Ev 76 12 We were given the example of Midland Red West in Bromsgrove, Worcestershire (Ev 166). 13 Cm 3950, p. 42 14 Q 75 15 Ev 85 16 Department for Transport, Putting Passengers First, December 2006

competition test to permit agreements between bus operators, so long as they are in the public interest.

13. Ten years after it expressed its commitment to promoting integrated bus ticketing, the Government has achieved too little of practical value. It is a nonsense that the everyday act of changing buses is still made unnecessarily inconvenient and expensive by poor ticketing arrangements. The Government needs to pay more attention to resolving these basic problems which penalise passengers and deter others from using buses at all.

Integrated ticketing across modes 14. Multi-modal travel cards are available in most passenger transport executive areas. For example, in Greater Manchester, one in twelve bus journeys (19 million) were made using multi-operator and multi-modal integrated tickets. However, these can be expensive for the occasional traveller. Passenger transport executive attempts to develop and promote multi-modal and multi-operator schemes can be frustrated by operators who focus on their own schemes in order to protect their own market share. The more limited, single- operator schemes do, however, provide a lower price option for passengers.

15. We recommend that the Traffic Commissioners be given powers, in response to a reference by either party, to arbitrate where bus companies and local transport authorities are unable to agree terms for multi-operator tickets.

16. In 2006, the major rail and bus operators launched PlusBus—a combined bus and rail ticket which allows unlimited bus travel in a defined zone within the main towns and cities outside the metropolitan areas.17 PlusBus tickets are now available for over 200 towns and cities. Sales are rising fast—76,000 in 2006/07 and a forecast of 150,000 in 2007/0818—but still amount to only a tiny fraction of total rail tickets sold and the scheme is still relatively unknown.19 This is a commercial venture which seems to have potential but it remains to be seen if the operators are serious about investing sufficient money in it to make it widely available and attractive to the public.20

17. In 2006/07 approximately 23% of the total distance travelled on passenger transport in Great Britain was made by coach or non-local bus.21 By comparison, local bus accounted for 24%. Despite the scale of coach travel, coach seems to be a stand-alone mode with little ticketing integration in place or planned. There was no reference to coach travel in Putting Passengers First. This lack of integration is surprising, given the fact that the principal operator of long distance coaches (National Express) also has local bus operations, metro and rail franchises. Only a handful of witnesses commented at all on coach issues, with the general consensus being summed up by Peter Tomlinson of Iosis Associates:

17 Ev 168 18 Local Transport Today 480, 25 October 2007, p14 19 Q86 [Mr Dobbs] 20 Q 440 21 Department for Transport: SB (07) 22: Public Transport Statistics Bulletin GB: 2007 Edition, p50

Long distance coach services are currently operated entirely separately from other modes, with no sign of a move towards integration with those other modes, either of ticketing or, in the larger picture, of services.22

18. Coaches are used by millions of passengers every year and they often serve locations and routes that are not easily accessible by rail. The Government seems to have a blind spot regarding integrating coaches with other modes, despite the potential to improve linkages with rail and bus services. The Government should give coaches greater consideration in future statements of public transport policy.

Sale of tickets 19. Train operators are promoting online ticket sales and use of ticket vending machines to reduce the transaction cost of sales, currently around £400 million per annum.23 Many passengers stand to benefit from this, both in terms of the convenience offered by online sales and in terms of operators’ cost-savings freeing resources to be used in other ways.

20. The increased opportunities to buy tickets through alternative outlets, such as the internet, is welcomed and of benefit to many passengers. However, it is slightly simplistic to point to growing internet sales figures to demonstrate popularity if passengers are effectively forced to use certain sales outlets because others are not available. The National Passenger Survey showed that while 65% of passengers were satisfied with ticketing facilities at stations, 19% were dissatisfied. Similar results apply to telephone bookings.24

21. A reliance on online sales leaves passengers without access to the internet or without credit cards at a severe disadvantage. A further problem for some passengers is that the full range of tickets—including PlusBus and cycle reservations—is not available online or through ticket vending machines. Combined with the reduction in the number of station ticket offices, and of the hours during which they are staffed, these changes in arrangements for the sale of tickets might bring benefits overall, but they conspire to make life very difficult for a minority of prospective travellers.25

22. The Rail White Paper promises a simplification of the rail fares structure to make it easier for customers to compare and choose the most appropriate ticket.26 Trainline.com has highlighted the derogation that allows train operators to sell certain tickets, such as the “megatrain” ticket, only through restricted channels, such as their own websites. This means that a potential passenger might need to search multiple websites to locate the best fare. “This situation will get significantly worse as smart ticketing is introduced because, in our view, TOCs [train operating companies] will use this derogation over a wider range of tickets.”27

22 Ev 67 23 Ev 133 24 Ev 131 25 See, for example, Ev 71 and Ev 185–189 on the problems faced by cyclists trying to book train and ferry tickets. 26 Department for Transport, Delivering a Sustainable Railway, Cm 7176, July 2007, paras 10.22-10.44 27 Ev 122

23. As the rail industry promotes online ticket sales and other methods that reduce ticket retailing costs, it is imperative that the full range of tickets, including multi- modal options, be available at all main outlets. We recommend that the Government explores this issue with the Association of Train Operating Companies and includes requirements for ticket availability in future passenger licence conditions if necessary. If not, the Government’s commitment to fare structure simplification in its Rail White Paper will be meaningless.

Integrated ticketing between different geographical areas 24. For those who live near the boundaries of transport authority areas, the lack of integrated ticketing between areas and sharp fare increases at the boundaries can present real problems. As we have already noted, the passenger transport executives offer multi- modal travelcards but a passenger whose routine journeys (for example, to work) involve crossing a passenger transport executive boundary, might be required to buy two travelcards or to rely on a combination of travelcard and individual tickets.28

25. There is currently a further problem with concessionary bus travel in England, with people on the boundaries of their local area often unable to use their pass for local journeys into neighbouring authority areas, even when these contain the shops, hospitals or other amenities on which they depend. This boundary problem will largely disappear with the introduction of national concessionary bus travel in April 2008. For those people living on the borders of England with Wales or Scotland, these problems will remain.

Government strategy on integrated ticketing 26. The Government’s approach to integrated ticketing has been to require through- ticketing (and now some smartcards) on the railways, but to leave integration of bus and other ticketing to the private operators and local transport authorities. It has largely sought to enable and not to direct. The strategy appears to be one of allowing market forces to drive implementation, through customer demand and industry initiatives. Key elements of its approach include: a) support for the development of smartcard systems through a common standard (ITSO – see section 3) for rail, concessionary travel and London; b) measures in the Rail White Paper, including a simplification of rail fares structure and proposals for zonal rail pricing in major cities; and c) support for Transport Direct which provides integrated travel and ticketing information.29

27. In the eyes of many witnesses, the Government’s strategy for integrated ticketing is far from clear or robust.30 Many witnesses commented that they were unaware of any such

28 See, for example, Ev 65 [Mr Horan]. 29 Ev 171–172 30 For example, Ev 67 and Ev 125.

strategy, including those in the industry who are keen to know. Coverage of ticketing issues in strategy documents is patchy. Whereas the Rail White Paper does address ticketing issues, Putting Passengers First (on buses) has very little to say on the subject.

Transport Direct 28. Transport Direct is a free, online journey planner run by the Department for Transport. As well as providing public transport, car and aircraft routes between any two locations, it currently allows users to: a) compare public transport options with car travel; b) obtain a car route that takes into account predicted traffic levels at different times of the day; c) get an estimate of the cost of a car journey; d) buy train and coach tickets from affiliated retail sites without having to re-enter journey details; e) use mobile phones to find out departure and arrival times for railway stations throughout Britain and for some bus or coach stops; and f) calculate CO2 emissions for a car or public transport for a specified journey.

29. Transport Direct is therefore a rather more sophisticated, though complex, tool than those offered by some other providers such as Network Rail and the AA. It is designed to promote transport choices based on a wide range of options and information. The Government says that Transport Direct is an important part of its integrated ticketing strategy. It was launched in 2005, costing £37 million over the first three years. Transport Direct now claims over 15 million user sessions since its launch, with 20% of users claiming they did something different as a result of using the site.31 This may be so but its profile is still low: it was mentioned by hardly any other witness.

31 Local Transport Today 476, 30 August 2007, p10

3 Smartcard technologies

New technologies, new opportunities 30. The era of the paper ticket may be drawing to a close. Technologies now exist that enable more sophisticated and integrated ticketing arrangements. “Virtual” tickets can now be included in smartcards or in mobile phones or other electronic items, which are read automatically (or semi-automatically) at some point on the journey.32 The most intensively-used system is the London Oyster. Launched in 2002, there are now 15 million Oyster cards in circulation, used for some 7 million journeys each day. The Oyster card allows users to mix a fixed period Travelcard with Pay-as-you-Go credits that can automatically charge for extensions beyond the Travelcard’s validity. They are also significantly quicker to read than magnetic paper tickets and this has increased passenger throughput at busy Underground stations, and, along with other changes, has helped to reduce bus boarding times.

31. TfL told us that

Overall, TfL considers that the introduction of the Oyster smartcard has been unambiguously positive. It has improved the customer experience in many ways. Certainly customers can proceed through TfL stations and board TfL buses much more quickly than used to be the case, and they are unanimously positive about this. […] Customers now have a wider choice of travel products including the Oyster Pay- as-you-Go stored value product which was impossible to deliver using paper tickets.33

32. TfL pointed out, however, that such a scheme does not come cheap: TfL pays its PFI contractor substantial service charges to provide and operate the Oyster system. These costs are deemed justified because of the benefits that the system provides.

33. Outside London, the take-up by the transport industry of smartcard technologies has been limited. It is mainly restricted to the metropolitan areas and some other cities, mostly those which have been part-funded by the local transport authorities. Smartcard systems can be complex and expensive and may not be appropriate in all situations, particularly for infrequent travellers or less intensively used transport systems.

34. Smartcards present new challenges to transport operators and public authorities. They offer the potential for a new level of passenger convenience, flexibility and choice in ticketing. The technology and economics are advancing fast and smartcards are likely to be commercially viable for a wider range of transport uses in future. In the right circumstances, they can also provide the transport operators with major benefits, including reduced costs of ticket sales, better monitoring, and more accurate allocation of costs and revenues. However, they are not appropriate for all people on all journeys. For example,

32 A related development is the contactless bank card, which can be used for low-value purchases in place of cash. Although Barclaycard already issue a card which combines Oyster, a credit card and a contactless payment, a contactless bank card could be used on its own for public transport, if the appropriate systems were installed. 33 Ev 159

long-distance rail passengers may not wish to have a high-value ticket included in a smartcard, which they cannot visually check. The Association of Train Operating Companies has been involved with ITSO from the outset but it is not convinced that smartcards are what the public wants for many journeys on National Rail.34

35. A ticket that can be easily bought, at an acceptable price, and widely used has to be backed by robust customer service arrangements and contractual agreements between multiple parties. The initial investment in the smartcard equipment can be costly but the greater challenge tends to be the ongoing operation of the system and maintaining it to a standard that retains the customer’s confidence.

Smartcard ticketing is inherently very, very different from paper ticketing. It is an invisible medium where people are unable to see the content of what lies inside their smartcards and it raises its own customer service challenge. The biggest customer service challenge around smartcards is that the customer needs to have absolute confidence that they will always be charged the right fare and that money is not going to disappear from their cards.35

36. A single national transport smartcard may seem an attractive proposition but it is currently impractical.36 The challenge is therefore to find the right combination of scale, functionality and sophistication at a price that is attractive to the passenger and which provides a worthwhile return on investment (in either commercial or social cost-benefit terms). An advanced system such as Oyster may be appropriate for London but it would be unnecessary and prohibitively expensive for, say, all buses in rural areas. London shows that the benefit of smartcards can be significant. But London is a special case, with an extensive, integrated public transport system, low car-ownership, measures to restrain car use, a large and growing population and a strong economy.

37. There are examples of smaller-scale smartcard systems that have been in operation for several years and proven themselves to be viable. Cheshire County Council’s Chester Travelcard for buses was established using the powers in the Transport Act 2000 and the Public Transport Schemes Block Exemption Order 2001.37 Three popular yet incompatible smartcard schemes also operate in Nottingham.38

34 Ev 133 35 Q 255 [Mr Verma] 36 Ev 125 37 Ev 192 38 Q 170 [Mr Jones]

Smartcards: lessons learned Lessons can be learned from the experience of London, Scotland and elsewhere with smartcard technology. Some of these are:

• Much of the challenge associated with the introduction of smartcards lies not so much in the technology itself as in the business processes and with the agreements necessary to allocate costs, payments and liabilities.

• Smartcards are not a simple solution. The London Oyster has proved complex and expensive but successful; the ambitious Scottish Entitlement Card has proven to be a more difficult project and is still being rolled out.

• It is important to keep in step with commercial operators and the technology industry. Some witnesses have suggested that Holland offers a good model for industry- government partnership.

• Passengers’ expectations rise and dissatisfaction can result from those parts of the system aspects that are not integrated, such as the parts of the London rail network that do not accept Oyster, despite the increase in some fares as a result of zoning.

• A single overall customer or “systems integrator” is crucial to drive progress as in London and Scotland.

38. The limited take-up by the transport industry of smartcard technologies is the result of two major factors: a) The structure of the transport industry, particularly the bus sector, is competitive and fragmented.39 This makes long-term planning more difficult and investment more risky. Countries that have implemented smartcards on a large scale, such as The Netherlands, tend to be those where the national or regional authorities have more direct control over transport operations.40 b) The business case for the industry to adopt smartcard technologies on a large scale has, until recently, been weak.41 The operators argue that integrated ticketing is not a high customer priority, and the returns do not justify the substantial investment, particularly in a declining market. The problem is greater for the bus industry.

39. However, the signs are that the industry is now more receptive as technical issues are being resolved and potential benefits recognised, although the structural difficulties remain.42 The necessary infrastructure and economies of scale through shared back-office

39 Ev 85 40 Ev 66 41 Ev 68 42 Qq 172–174

services have not been put in place. Outside London, the regulatory framework has not been sufficiently strong to require it to happen.

40. Conventional ticketing systems will still be needed to cater for those passengers for whom smartcards are unsuitable—at least, for the foreseeable future. This applies in London as well as elsewhere.43 Differential pricing—discounts for Oyster users but fare increases for those buying conventional tickets—are one reason why the Oyster card is much preferred. A single Zone 1 Tube journey with a paper ticket costs £4.00, comparable to the cost of a short black cab journey, whereas using Oyster it costs only £1.50. It is reasonable to charge a modest differential to encourage uptake of smartcards and to reflect any additional costs of issuing paper tickets, but those passengers who cannot or choose not to opt for smartcards should not be heavily or unfairly penalised. The Government must ensure suitable guidelines on differential pricing are included in decisions on rail fares, rail franchises and other fare regulations.

The Integrated Transport Smartcard Organisation (ITSO) Standard 41. As smartcards become more common it is obviously desirable that the products are compatible, as far as possible. A common standard is a good thing because it provides a platform for a range of products and uses and should reduce costs. The UK has developed the ITSO standard which is intended to ensure that smartcards and smartcard equipment are interoperable.

ITSO ITSO (the Integrated Transport Smartcard Organisation) was founded in 1998 as a result of discussions between various UK passenger transport authorities on the lack of suitable standards for inter-operable smartcard ticketing. ITSO’s initial role was to create a specification or industry standard to make interoperable smartcards a reality. It is supported by the Department for Transport and its members include bus operators, train companies, suppliers to the industry and local authorities. Originally a UK initiative, ITSO has been adopted as an international standard. The scope of the organisation’s work has spread beyond smartcards and ITSO has therefore been adopted as the official name and not merely as an abbreviation.

42. The specification for interoperable, contactless smartcards that ITSO has developed is intended to cover the entire system, from the dimensions of the smartcard itself, to how the data are written to the smartcards and the communication protocols for cards and readers. ITSO is a set of technical specifications and not a product or system in its own right. Two different systems could be designed independently that were nonetheless both ITSO- compliant and therefore interoperable. Agreements between all the parties (transport operators, ticket sales outlets etc) covering customer service arrangements, charges, allocation of revenues, liability, etc still need to be made for each ITSO product.

43 Q 288

43. There was a clear consensus among our witnesses that having a common standard, such as ITSO, was in principle the right approach. However, industry witnesses were critical of the ITSO organisation, the Government’s project management and the speed at which the ITSO specification has developed.44 Nonetheless, a significant amount of progress has already been made with ITSO: it is the standard for concessionary travel bus passes in England and Scotland45 and it has been included in the conditions for new rail franchises. It now seems certain that ITSO will be the standard for transport smartcards on bus and rail networks outside London, for the near future.

44. The Government funding for ITSO-compliant concessionary travel cards is likely, in the long run, to give a boost to the introduction of ITSO equipment on buses. However, this is proceeding slowly and few of the 15 million concessionary travel passes will function as smartcards in the first instance. Of the 324 travel concession authorities, 253 are non- ITSO-compliant; and only 5 to 10% of the bus fleet will be ITSO equipped by the end of 2008.46 Further take-up will depend on how well the Government and travel concession authorities encourage operators to equip their buses with ITSO smartcard readers. Given the potential of ITSO smartcards to provide passenger data, to allocate costs more accurately and to enable concessionary travel across the UK, it is important that ITSO continues to develop quickly.47

45. Transport authorities and operators have sought to ensure compatibility amongst these new technologies through a set of ITSO standards. The English national concessionary travel scheme passes that are now being issued are ITSO-compliant smartcards. A number of smaller ITSO-based smartcard schemes are also in operation or planned, such as Yorcard in South Yorkshire, which is to be piloted on three bus routes in Sheffield and on rail routes to Doncaster.

44 Ev 65 45 Although concessionary travel passes in Scotland have been ITSO-compliant for several years, the installation of smartcard machine readers on buses has taken longer than anticipated due to the need to conduct integrity testing on the ITSO equipment. Approximately 700 Stagecoach buses are now equipped. 46 Ev 198 47 Ev 65

Oyster on rail services in London Oyster is available on all London Overground services and on interavailable routes on other National Rail services. Oyster is available from around 100 stations served by National Rail.

The rules governing what journeys can be made from these stations are complicated as not all services accept Oyster Pay-as-you-Go. This causes a large degree of customer confusion. On the London Overground, which TfL took over in November 2007, Oyster Pay-as-you- Go is accepted at all stations and on all routes. Additionally Chiltern and c2c accept Oyster on all their routes within London; One Railway (now National Express East Anglia)accepts Oyster on all services in the Hackney area; and London Midland accepts Oyster between London Euston and Watford Junction.

The roll out of Oyster to the remaining London stations depends on when the Train Operating Companies and TfL conclude the commercial agreements. TfL expects this to be in 2009.

Smartcards in London—Oyster and ITSO 46. A major dilemma is that the biggest smartcard system in the UK is not an ITSO system, but the London Oyster. Despite its success, Oyster cannot be developed into a national system. Oyster was developed before ITSO and they are currently incompatible.

47. An interoperability study is underway, funded by the Government, to assess the feasibility of adding ITSO readers to the Oyster system. It was suggested to us by TranSys that it would be possible to produce a single card containing both types of chip, but the arrangements required to support both systems would be complex. There are also potential problems with the longer time it takes to read and write to an ITSO card compared to Oyster. Although measured in milliseconds, the difference can be critical at busy stations or on buses in London.

48. Given London’s status as the most heavily used public transport network in the UK, and its position as a major interchange point for National Rail journeys as well as several major airports, it would seem to be perverse if it were not compatible with the national smartcard standard. However, there are at least three major issues that need very careful consideration if compatibility is to be achieved. a) Firstly, doubts exist about value for money. According to TfL, to make London ITSO- compliant would cost in the region of £50 million,48 yet demand to use ITSO products (as opposed to Oyster) on the London network is currently small and growth uncertain. Since most users of TfL services are London residents or regular commuters who already have an Oyster card it is not clear what problem is being solved.49

48 Q 310 but see also Ev 122 in which Trainline.com suggests that an ITSO-compliant smartcard could be used on the Oyster system without modifying existing gates and systems. 49 Ev 160

b) Secondly, the complexity of the customer service arrangements could be formidable. For example, who would deal with a passenger who bought an ITSO-compliant smartcard in, say, Newcastle, took the train to London, and discovered that his ITSO- compliant smartcard did not work on the Underground?50 c) Thirdly, as we have already noted, TfL has concerns about the processing speed of ITSO products compared with Oyster. This could result in a reduced capacity at peak hours and additional costs.51 The problem is not merely the delay but also that a longer processing speed may result in more ‘torn’ transactions (i.e. those where the smartcard is not properly read by the reader and the passenger has to touch again or the transaction is simply not recorded). The Chair of ITSO described this as “a red herring”, with ITSO’s benchmark time of 0.6 seconds being perfectly adequate for use in London.52

49. Oyster is a proven large-scale system, used and trusted by millions of passengers. ITSO-compliant smartcards have shown themselves workable in smaller schemes but have yet to be tested on a large scale. The Government must not force ITSO onto the London Oyster system. It is imperative that any introduction of ITSO on the Oyster system be rigorously piloted to prevent any loss of operational efficiency or customer confidence in smartcards. Testing must include arrangements for supporting customers using ITSO products out-of-area. Given the uncertain level of demand for ITSO in London, the costs and benefits of the investment should also be robustly assessed. This must have regard to the need to avoid financially penalising TfL for having been at the vanguard of smartcard ticketing in the UK.

50. One of the clear lessons from Oyster is that, to make real progress, a strong customer or “systems integrator” is needed.53 Some industry witnesses have suggested that the train operating companies, through the Rail Settlement Plan,54 should take over ITSO as they have demonstrated their competence with running the Ticketing and Settlement Agreement. The Government’s strategy of using ITSO as a way to promote integrated ticketing is a step in the right direction, but not enough. It is fine in theory but not producing results in practice. ITSO may be a useful technical specification but it is designed to facilitate integrated ticketing, rather than to make it happen. The Government needs also to articulate a clearer strategy for the development of integrated ticketing in general and smartcards in particular. The current laissez-faire approach is inadequate. The Government must listen carefully to the transport operators and the technology industry. The criticisms of ITSO need to be addressed and the Government must ensure it has adequate technical capacity to provide leadership in this area.

50 Qq 255–256 51 Q 264 52 Ev 198 53 Ev 126 54 The Rail Settlement Plan is part of the Association of Train Operating Companies. It provides central retail support services to the UK train operating companies. This includes the distribution of fares and timetable data, the provision of other retail information to all National Rail retailers and the allocation and settlement of rail revenue to operators.

4 Revenue protection and the powers of ticket inspectors

Fare evasion—the scale of the problem 51. Approximately £400 million – about 8% of revenue – is said to be lost each year from unpaid rail fares;55 and further significant amounts are lost from unpaid bus fares. Additional, though smaller, amounts are lost on the Tube, trams and other public transport systems. This comprises ticketless travel and travel with a ticket that is invalid for the journey. This is as a result of a range of inadequate sales facilities, mistakes, and deliberate deception by a minority of passengers.

52. This is a substantial sum lost to the transport system and it is worrying that the transport operators do not have more accurate or consistent information. For example, First plc has quoted conflicting figures of £40 million and £15 million for its rail operations. Industry specialists are critical of the validity of the survey methods and the figures quoted. There is further confusion about how much is lost due to deliberate fare-dodging and how much due to failure to provide the passenger with the opportunity to buy the correct ticket.56

53. Some witnesses take the view that revenue protection is a matter for the operators: they alone should decide how much action to take as it is in their commercial interests. We do not share this view. Firstly, lost revenue impacts on the honest fare-paying passenger, not just the shareholder. There is also plenty of evidence that passengers are annoyed by fare- dodging and it undermines their faith in the system. Secondly, fare-dodging is often associated with other anti-social behaviour. Tackling one problem tends to alleviate the other.

54. Too much revenue is being lost through a failure of the transport operators to provide the appropriate ticket sales facilities, to sell tickets on-board, and to carry out basic checks. This is not the same as fare evasion. It is simply non-collection of fares. The view of several informed witnesses is that revenue protection investment represents good value for money and that there is nationwide scope for improvement.57

55. Revenue protection does not get the attention that it warrants: a bigger and more sophisticated effort is needed. The extent of the problem is poorly understood. It ranges from passengers willing but unable to pay their fares through to deliberate fare evasion. Fare-dodging is often associated with other antisocial behaviour and efforts to curb one are likely to impact positively on the other. More regular and coordinated research and monitoring of the problem are required. Leaving it to individual companies who are likely to be averse to sharing or publishing information means that no one has a clear picture and revenue protection measures are likely to be inadequate.

55 Ev 133 56 Ev 94 & 95 57 Ev 161

Ticket gates—not the only solution 56. The Government has recognised the unsatisfactory situation regarding lost rail revenue.

Lastly, the Government will review with operators the role of gating across the network. Operators estimate that around five per cent of revenue is lost on the network due to ticket-less travel. The Government considers this to be an underestimate, since every recent survey conducted on individual parts of the rail network has shown losses to be considerably higher.58

57. Gates (ticket barriers) clearly have value on a closed system such as the Tube and there are certainly those who support additional gating of National Rail stations. However, the focus on gates is too narrow and overlooks the complexities of the situation. According to Transport Solutions, “station gating.[…] is not necessarily cost effective, is often customer unfriendly and many of the benefits claimed for such equipment are overstated or misapplied.”59

58. The types of ticket gate deployed on the National Rail network accept only the credit card size magnetic paper tickets, and not the larger format tickets often delivered for internet or telesales, nor the number of other pass styles without any encoding. Further, there is a significant rejection rate on magnetic tickets, even when valid. As smartcards are introduced into the National Rail network, beyond the existing application of Oyster, these gates would require substantial modification. Taken with proposals to extend the reading by gates of mobile phones and barcodes on print-at-home tickets, this becomes an increasingly complex challenge, both for operation and systems support.

59. Passengers with tickets that do not, for whatever reason, work the barriers correctly, have bulky items of luggage or are in wheelchairs cannot pass the regular gates. They require prompt assistance. “Meeters and greeters” are effectively barred from platforms and general passenger movement is restricted or delayed. Gates can take up valuable space and isolate station trading facilities, while detracting from the appearance and customer environment of many historic or Listed stations. When no staff are available to supervise them they must be left open which rather defeats their purpose.60

60. There are moves to install ticket gates at more rail stations. Yet ticket gates are not a panacea. They cannot be used by all passengers and staff are still required to be present. Gates introduce new drawbacks including delays and obstructions for passengers; they are not in keeping with historic stations; and they are not always the best method of protecting rail revenue. The Government, in consultation with the rail industry and passenger groups, needs to review this one-track approach and develop a more holistic policy.

58 Cm 7176, para 10.44 59 Ev 95 60 Passenger Focus, whilst generally in favour of additional gating, identifies other shortcomings. See Ev 182.

Staff safety 61. Transport staff—particularly bus drivers and railway ticket inspectors—face an unacceptable risk of assault and abuse when checking tickets or undertaking revenue protection duties. In 2006/07, there were 299 recorded assaults on railway staff in London.61 On London buses in the same period there were 21 recorded major assaults and 115 minor assaults on revenue protection officers alone.62

62. The RMT makes the point that these risks are increased when ticket offices are closed or vending machines out of action.

All too often staff have to issue penalty fares to passengers who have started their journey at stations where the ticket office is shut and the ticket vending machine is out of use due to vandalism.63

63. The transport unions and passenger groups are concerned that cut-backs in ticket office staff and opening hours are making it difficult for some passengers to get the right ticket when they need it.

The powers of revenue protection staff 64. The laws and regulations currently governing revenue protection on public transport have developed over many years. Different laws apply to railways, to London Underground, to buses in London and to buses outside London.64 There is inconsistency across modes and even within modes.

61 Ev 197 62 Ev 162 63 Ev 184 64 Q 303

The legal framework for revenue protection

• Railway revenue protection is governed by the Railway Byelaws and the Regulation of the Railways Act 1889 (last updated in 2005). Under these byelaws, revenue protection staff may require a person refusing to pay the appropriate fare to give their name and address. If the person fails to desist or leave the premises, they may be removed using reasonable force. The National Rail Conditions of Carriage forms the basis of the contract between the passenger and the train operator.

• Section 130 of the Railways Act 1993 (as amended) allows the Secretary of State to make regulations regarding the charging of financial penalties (‘Penalty Fares’) to passengers unable to show a valid ticket when asked. The Railways (Penalty Fares) Regulations 1994 (SI 1994/576, as amended), allows the Secretary of State to make Penalty Fares Rules. All train operators wishing to charge penalty fares must submit a penalty fares scheme to the Secretary of State for approval. Penalty fares are a charge, not a fine, enforceable initially through the civil courts.

• Bus ticket inspectors function under sections 24 and 25 of the Public Passenger Vehicles Act 1981 and the regulations made under those sections which include the Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990 (SI 1990/1020). The Regulations contain provisions requiring passengers to have valid tickets (prepaid, paid on entering the vehicle, or paid on demand by a conductor or inspector) and a power for the driver, conductor or inspector to charge them an additional fare if they stay on the bus beyond the validity of their original ticket, or if they do not have a ticket. Passengers who contravene the regulations can be removed from the vehicle (by a crew member or, if necessary, the police), and/or prosecuted for an offence under s25 of the 1981 Act, with a maximum fine at level 3 on the standard scale (currently £1000).

• Bus revenue protection staff in London have additional powers. The Railways (Penalty Fares) Regulations 1994 also covers buses operating for TfL in London. This enables revenue protection staff to impose penalty fares. This facility is not available to transport operators outside the capital.

Source: Ev 175

65. The consensus amongst those who gave evidence to us seems to be that the powers available to revenue protection staff are generally adequate for rail but much less so for buses.65 The principle revenue protection concern of bus operators (outside London) is that staff have no powers of arrest or sanction of penalty fares. They also lack effective powers to verify the person’s name and address.66 The ability to secure a conviction therefore depends on intervention by the police whose “interest tends to be low”.67

65 Ev 143 66 Ev 74 67 Ev 143

66. An integrated ticketing system should be backed by an integrated revenue protection system. Whilst the current regulations for rail are generally satisfactory, those for buses are not. The powers of bus revenue protection staff should be strengthened. In the longer term, the Government should move towards a unified system of public transport revenue protection. The implications of new ticket types and technologies will also need to be considered.

67. TfL described to us some of the inconsistencies and limitations on revenue protection in London. This situation is likely to improve if the Transport for London Bill currently before parliament is enacted.

The rights of the passenger 68. It is equally important that the rights of individual passengers are respected. Whereas the transport operators and public transport authorities seem generally content with the current balance of powers, passenger groups are less so. Indeed, we received a disturbing personal account (in confidence) from one passenger alleging serious injustice, abuse and financial cost as a result of being accused of fare evasion. London Travelwatch provided evidence that this is not an isolated incident.

69. The rail industry has a statutory appeals procedure for passengers wishing to challenge a penalty fare. However, not all the appeals processes used by train operators are clearly and wholly independent.

The manner in which some of them work (most notably the self-styled “Independent Penalty Fares Appeals Service”) gives rise to frequent criticism in our casework, not least because what is effectively the same organisation also operates as a debt- collection agency (“Revenue Protection Support Services”) outside the scope of the penalty fares regulations, and thus beyond the supervisory reach of the Department for Transport.68

70. Bus passengers who wish to appeal against revenue protection actions have no independent body to turn to. The operators run a Bus Appeal Body but this is entirely voluntary and its findings are not binding.

71. The current appeals procedures for bus and rail are not sufficiently independent. The consequences of being accused of fare dodging can be serious and it is important that the procedures are just and rigorous. The current principal rail appeal panel is associated with the rail industry and this undermines its credibility as a truly independent arbiter, sitting equidistant from the passenger and the train operating company. The bus industry appeals body has no regulatory backing. The Government should consult on new arrangements. For rail this might involve giving responsibilities to the Office of Rail Regulation or Passenger Focus; for bus it might be the Traffic Commissioner or the proposed Passenger Transport User Committee.

68 Ev 81

5 Concessionary travel

English national concessionary travel scheme 72. Since April 2006, in England, residents aged 60 and over and disabled people have been entitled to free bus travel within their local area after 9.30am and before 11pm on weekdays and at all times on weekends and bank holidays. Some people have enjoyed additional concessions, such as travel before 9.30am, as a result of local enhancements paid for by their local council (travel concession authority).

73. We have looked before at the issue of concessionary travel. Whilst we have welcomed the principle, we have also raised concerns about the implementation, costs and anomalies: in 2006 we concluded that it was a mess.69

74. On 1st April 2008 the English national concessionary travel scheme will be launched and the national entitlement will be extended to allow free bus travel across England. This is the latest stage in the development of concessionary travel in England (see box), the result of the Concessionary Bus Travel Act 2007. We again welcome this move which will benefit millions of older and disabled people. It brings England closer to the standards of concessionary travel already enjoyed by residents in other parts of the UK.

75. The evidence presented to this inquiry shows that the extension by the Government of the national concessionary travel standard is popular and generally supported but the overall policy objectives are unclear. It has stimulated demands for further concessions. A few witnesses object to the free travel concession in principle but most are concerned about the costs, distribution of funds, reimbursement of operators and the unintended consequences, all of which are expected to increase with time.

76. Older and disabled people are travelling by bus more often as a result of the free concessionary fares scheme. However, the extent of the current and future benefits (economic, health, congestion, environmental, etc) and value for money are unclear. It is important that the anecdotal benefits of concessionary travel—reduced social exclusion and isolation for older people, improved health, fewer car trips, etc—are substantiated by rigorous research. We were not reassured by the Minister’s response that national concessionary travel was a “political decision”.70 It may be that concessionary travel represents such good value for money that it should be extended to other sections of society or modes of transport, as it has been in London. The Government has undertaken some preliminary evaluation of the benefits but this needs to go much further.71

77. The ability to travel for free across the country by bus is a great boon for those who enjoy it and we welcome it. There is, however, no such thing as a free lunch and such funds—over £1 billion per annum—must give value for money. The Department for

69 Transport Committee, Eleventh Report of Session 2005–06, Bus Services across the UK, HC 1317, 26 October 2006 70 Q 440 71 Tickbox.net, National Bus Concession Survey for Department for Transport, Feb 2008

Transport should commission an evaluation of the benefits of the national scheme for free local bus travel.

Development of concessionary travel

• Under the Transport Act 1985, local authorities have discretionary powers to provide concessionary travel for elderly and disabled groups. Most provided half-fares on off- peak buses within the local area. Although this is largely superseded by subsequent legislation, the power to provide local enhancements, such as concessionary rail travel and taxi tokens, continues.

• The Transport Act 2000 introduced a national minimum standard across England and Wales for concessionary travel. It imposed a duty on district and unitary councils to provide half-fare travel on buses within the council area between 9.30 and 23.00 and all day on Saturday, Sunday and bank holidays. A concessionary travel pass had to be issued at no charge.

• The Travel Concessions (Eligibility) Act 2002 equalised the age of eligibility between men and women at 60. The age for entitlement will increase for both sexes between 2010 and 2020 in line with women’s retirement age.

• From April 2006, the national standard was extended to provide free off-peak bus travel in the local area. The additional cost of free local concessionary travel is £350m pa for England, (£450m for UK).

• From April 2008 around 11 million older and disabled people will be entitled to free off-peak bus travel throughout England, as a result of the Concessionary Bus Travel Act 2007. The Act allows for reciprocal arrangements to be made between England, Wales, Scotland and Northern Ireland to recognise their respective concession schemes. The additional cost is £212 million in 2008/09. The Department for Transport has introduced a new funding distribution formula for travel concession authorities in respect of this element of 2008 concessionary bus travel.

• Concessionary travel is a devolved matter. Wales and Scotland introduced free national off-peak bus travel for elderly and disabled people in 2002 and 2003 respectively. The Wales concession now includes free rail travel for certain residents on Conwy Valley and Heart of Wales Railways on a 12-month pilot basis. Since April 2007 all Northern Ireland and Republic of Ireland residents aged 65 and over can avail of free internal travel on bus and rail in both jurisdictions.

The costs and funding arrangements 78. There are 324 travel concession authorities in England. These are the passenger transport executives, the London boroughs, the district councils and unitary councils. In London and the shire counties, the travel concession authorities are not the transport authorities, which can have repercussions for coordinating expenditure on bus services.

79. Concessionary bus travel costs around £1 billion each year. Local authorities in England reimbursed bus operators some £712 million for concessionary travel in 2006/07.72 The additional cost of the national scheme from April 2008 is £223 million in 2008/09, allocated to local authorities in Special Grant. The Government has also paid local authorities some £31 million to issue the new national concessionary travel passes. In addition, it has funded ITSO Services Ltd to support the 253 ‘non-smart’ travel concession authorities.

80. The experience of Scotland and Wales is that free national travel leads to significant additional demand and questions have arisen regarding the overall affordability of these schemes.73 In England, growth in ridership as a result of the free local bus travel introduced in 2006 has been significant. “For example all PTE areas who previously had flat fare concessionary schemes are reporting 20%–30% increases in use, and this may rise further as pass-holders gain a better understanding of the travel opportunities presented by the bus network.”74 The Government acknowledges that the turn-around in bus ridership outside London is primarily due to concessionary travel.75

81. The costs of concessionary travel are set to grow in real terms as bus industry costs and fares are increasing faster than inflation. Outside London, concessionary travel support exceeds the amount spent on supporting non-commercial bus services. (The Mayor of London provides a high level of revenue support for all bus services.) It is important that national concessionary travel is properly funded.

82. Concessionary travel authorities continue to be concerned about the rising costs of concessionary travel and the distribution of funds by the Government.76 The Government has described the new funding as “generous” and says “We are confident this funding will be sufficient in aggregate.”77 We accept that the Government has increased the funding to local authorities for concessionary travel and that, in aggregate, it may be sufficient. However, this does not mean that the right amount always goes to the right places.

83. The Government has consulted on funding arrangements and modified them in the light of representations.78 For 2008/09, the Government has adopted a formula based on a combination of eligible population, bus passenger journeys, overnight visitors and retail floor space. However, this is a least-bad system and there remain winners and losers.

84. Some travel concession authorities receive significantly more than they spend whilst others are out of pocket. We were given the examples of Cheshire, Cumbria and Northamptonshire which show that, although the aggregate grant may be adequate, travel

72 Department for Transport, Transport Statistics Great Britain 2007, Table 6.14 73 Local Transport Today 488, 22 February 2008, p9 74 Ev 87 75 Department for Transport, Autumn Performance Report 2007, Cm 7266, December 2007, p31 76 Ev 196 and, following the announcement of the 2008/09 Special Grant allocation, Local Transport Today 484, 20 December 2007, p1 77 Department for Transport, National Bus Concessionary Fares: Additional Special Grant Funding Key Points and FAQs, www.dft.gov.uk/pgr 78 Department for Transport, Consultation Response Document: Local Authority special grant funding for the 2008 national bus concession in England, 19 February 2008

concession authorities that attract large numbers of visitors are underfunded. This problem could be substantially relieved if the Government reduced the number of travel concession authorities. Concessionary travel is an increasingly large financial risk for local authorities, particularly district councils and passenger transport executives79 and one over which they have little control: they cannot (and should not) constrain demand and they are not permitted to set a cap on reimbursement to bus operators. Although district councils are generally reluctant to cede functions and funding to county councils, it appears that, in respect of concessionary travel, this is something that at least some, such as Carlisle City Council, would now welcome.80 It would still be possible for district councils to issue the travelcards, under a voluntary arrangement with the county council, if this was deemed locally beneficial.

85. These budget constraints and distribution anomalies have had some worrying consequences. For example, in Greater Manchester, in order to balance its budget, the Passenger Transport Authority increased the child concessionary fare from 50 pence to 70 pence.81

86. The anomalies within, and disputes over, the distribution of concessionary travel grant to local authorities look set to continue, despite the ‘generous’ funding provided by the Government and the new funding formula. We find it is unhelpful that the transport authority and the travel concession authority are often not the same body and may inadvertently work against each other. These problems could be considerably reduced if the Government exercised its powers under section 9 of the Concessionary Bus Travel Act 2007 to transfer the travel concession functions from district councils to county councils. This would have the additional benefit of making the transport authority the travel concession authority in these areas. We recommend that the Government proceeds with this as soon as possible.

Reimbursement of bus operators 87. Reimbursement of bus operators is based on the principle that they should be no better and no worse off for carrying concessionary travel passengers.82 They are reimbursed for the fare revenue foregone and for any additional expenses incurred, for example if additional staff or vehicles are required. This is based on the premise that off-peak concessionary travel passengers will take up empty seats, at little marginal cost to the bus operator. Whilst this may seem simple in principle, it is far from simple in practice.

88. Although we strongly support the concessionary travel scheme, we have some concerns about the mechanics of the reimbursement calculation, which requires not only data on the actual level of concessionary travel (passenger numbers) but also an estimate of how much

79 Ev 78 80 Ev 197 81 Ev 78 82 Regulation 4 of the Travel Concession Schemes Regulations 1986 (SI 1986/77), made under section 94(1) of the Transport Act 1985 states: It shall be an objective (but not a duty) of an authority when formulating reimbursement arrangements to provide that operators both individually and in the aggregate are financially no better and no worse off as a result of their participation in the scheme to which the arrangements relate.

of the travel has been generated by the concessionary travel scheme. There are further assumptions to be made about the types of fare that would have been paid (standard or discounted fares, singles or travel cards, etc). It is almost impossible to work out what would happen in the absence of concessionary travel and what revenue has genuinely been forgone. Such calculations have kept bus operators, travel concession authorities and consultants busy of late. They have led to prolonged and acrimonious disputes between bus operators and travel concession authorities, resulting in over 100 appeals to the Secretary of State for Transport. Some authorities have accused bus operators of overcharging. Some bus operators claim they are running services at a significant loss.83 This is hardly conducive to partnership working.84

89. Despite guidance from the Government and various rulings by adjudicators on behalf of the Secretary of State for Transport, the problem does not appear to be abating. For example, according to the Centro-WMPTA Chief Executive, the major bus operators in the West Midlands are “unhappy with almost all the key aspects” of the reimbursement scheme for 2008/09.85

90. Even if the ‘no better, no worse’ calculation could be ascertained with confidence, there must also be questions about this funding principle in the long run. As concessionary travel increases, it is unclear where the incentive will come from for operators to invest in services where concessionary travel passengers form a high percentage of the customers.86

91. Some witnesses have argued that concessionary travel is distorting fare structures and having a negative impact on fare-paying passengers by giving a perverse incentive to operators to disproportionately increase off-peak and single adult fares.87 This may be the case but local authorities are not obliged to base reimbursement on a particular fare, as in Scotland. The Government has published a toolkit for local authorities to use when calculating reimbursement. Whilst some local authorities do base reimbursement on single fares they are encouraged to use a basket of fares. It is up to the local authority to negotiate a mutually acceptable deal.88

92. ITSO concessionary fare smartcards should make local enhancements easier to handle from the operator’s perspective (but passenger confusion may remain). A programme for ITSO readers on buses is needed.

93. The current “no better, no worse off” mechanism for reimbursing operators is unsatisfactory. It is arcane, time consuming and a recipe for disputes. It does nothing to promote good partnership working between travel concession authorities and bus operators. It is also questionable whether it provides a viable long-term funding model for the industry. A new, more transparent mechanism is required that compensates

83 Q 113 84 See, for example, the exchange of letters between South Yorkshire PTE and Stagecoach Yorkshire in Local Transport Today 477, 13 September 2007, p17 and Local Transport Today 478, 27 September 2007, p16. 85 Local Transport Today, 22 February 2008, p9 86 Q 111 and The Guardian, 10 March 2008, p28 87 Ev 87 88 In Scotland operators are reimbursed at 73.6% of an operator’s adult single fare, capped at £63 million in 2007/08, under a three-year agreement between the Scottish Executive and the Confederation of Passenger Transport.

operators and avoids the waste and rancour generated by the current system. The Government should investigate this as part of its review of Bus Service Operators Grant. Some people argue for a national reimbursement mechanism as in Scotland. Whilst this appears attractive we do not support it at this stage. England is much larger, with greater variation, and we fear this would simply increase costs as the Government would be unlikely to scrutinise claims as closely as local government. A rapid roll-out of ITSO equipment on buses would help improve the accuracy of ridership data. Fewer travel concession authorities would also help.

Extending the scope of concessionary travel 94. The concessionary travel scheme is in danger of becoming a victim of its own success and there are calls for it to be extended to other modes of transport and to other categories of people. The National Pensioners Convention is seeking “free nationwide travel on all public and local transport”. This would give concessionaires greater choice and would include tram, rail and community transport services and tokens for taxis.

95. Many local authorities continue to use their powers under the Transport Act 1985 to enhance the national concessionary travel scheme for older and disabled people living locally. Typically, the passenger transport executives will provide concessionary travel on local trams and trains; other councils permit travel before 9.30am; and in rural areas some councils provide tokens for taxis or allow concessions on community transport or dial-a- ride services. This can cause confusion and accusations of ‘postcode lottery’ but this is an inevitable corollary of allowing local enhancements.

96. The Government’s view is that this is a matter for local authorities. For example, regarding rail “The Government recognises that there will be people, particularly in rural areas, who have better access to a rail service than to a bus service. It remains open to local authorities to provide free travel by rail in such circumstances.”89 Travel Watch SouthWest and others have pointed out that, in some areas, free bus travel has abstracted significant numbers of passengers from local rail services, which makes no sense as both receive public subsidy.90

97. Help the Aged, the Joint Committee for the Mobility of Blind and Partially Sighted People, the Community Transport Association and other groups representing older and disabled people argue for a range of specific extensions to the national scheme. They point out that conventional buses are, in practice, not accessible to many older and disabled people and so the neediest are often unable to take up the concession to which they are entitled. This is not simply a lack of low-floor buses but a more fundamental point that many people entitled to concessionary travel find it difficult, if not imposable, to use public transport.91 Separate grants are available to people with more severe mobility impairment but these are much more limited and the freedom the freedom to travel at no cost, nationwide, is denied to them. These groups also make a cogent case for widening the range of people entitled to concessionary travel to on grounds of mental health difficulties.

89 Cm 7176, para 10.34 90 Ev 102–112 91 Ev 145–149

98. We continue to believe that local enhancements to the national concessionary travel scheme can offer important benefits. We agree with the Passenger Transport Executive Group and others that these enhancements are best determined locally. Extending concessionary travel to rail services would be costly and it is doubtful if rail services currently have adequate capacity. There may be scope and a good value-for-money case for extending the national concession to include lightly-used rail services, such as community rail partnerships, as in Wales. The Government should also consider in greater depth than it has so far the costs and implications of providing greater support for community transport, particularly in areas where bus services are sparse. Where local authorities are currently profiting from concessionary travel funding, perhaps as a result of a sparse local bus network, they should be encouraged to enhance local concessionary travel arrangements.

99. Concessionary travel schemes have been linked with major ticketing changes. In Scotland, where free national concessionary bus travel was introduced in 2003, the concessionary travel pass forms part of the Citizen smartcard (an ITSO-compliant card) which has other potential applications. In England, the Government has stipulated that the new travel passes (issued by the local travel concession authorities) must be ITSO smartcards. If and when buses are equipped to read the concessionary fare smartcards that have been issued, the operators should be able to handle local enhancements more easily. The current situation whereby 11 million concessionary travel smartcards have been issued but most buses are not equipped to read them is daft. The Government needs to agree a programme with bus operators for installation of ITSO smartcard equipment on buses.

100. There is a good case to be made for concessionary travel to be extended to other groups. Many young people and those on low incomes find bus fares expensive. In 2002, the Commission for Integrated Transport advised that greater benefits would be achieved at lower cost by extending half-fares to young people and those on low incomes, rather than free travel for those over 60.92 It is unclear why the Government ignored this advice. Local authorities have a well-being power.93 If the Local Transport Bill is enacted as proposed, the well-being power will be extended to passenger transport executives. Amongst other things, this permits these authorities to provide travel concessions for other groups of people. Implementation, however, depends very much on local priorities and the availability of local funding, which is unlikely if they are struggling to pay for existing concessionary travel schemes. If the Government is minded at any stage to extend the English national concessionary travel scheme, young people and others identified by the Commission for Integrated Transport should receive priority consideration for concessionary travel.

92 Commission for Integrated Transport, Public Subsidy for the bus industry, 25 February 2002 93 Part 1 of the Local Government Act 2000 provides local authorities with a discretionary power (the well-being power) to undertake any action to promote or improve the social, economic and environmental well-being of their area.

List of recommendations

Integrated Ticketing 1. Ten years after it expressed its commitment to promoting integrated bus ticketing, the Government has achieved too little of practical value. It is a nonsense that the everyday act of changing buses is still made unnecessarily inconvenient and expensive by poor ticketing arrangements. The Government needs to pay more attention to resolving these basic problems which penalise passengers and deter others from using buses at all. (Paragraph 13)

2. We recommend that the Traffic Commissioners be given powers, in response to a reference by either party, to arbitrate where bus companies and local transport authorities are unable to agree terms for multi-operator tickets. (Paragraph 15)

3. Coaches are used by millions of passengers every year and they often serve locations and routes that are not easily accessible by rail. The Government seems to have a blind spot regarding integrating coaches with other modes, despite the potential to improve linkages with rail and bus services. The Government should give coaches greater consideration in future statements of public transport policy. (Paragraph 18)

4. As the rail industry promotes online ticket sales and other methods that reduce ticket retailing costs, it is imperative that the full range of tickets, including multi-modal options, be available at all main outlets. We recommend that the Government explores this issue with the Association of Train Operating Companies and includes requirements for ticket availability in future passenger licence conditions if necessary. If not, the Government’s commitment to fare structure simplification in its Rail White Paper will be meaningless. (Paragraph 23)

Smartcard technologies 5. It is reasonable to charge a modest differential to encourage uptake of smartcards and to reflect any additional costs of issuing paper tickets, but those passengers who cannot or choose not to opt for smartcards should not be heavily or unfairly penalised. The Government must ensure suitable guidelines on differential pricing are included in decisions on rail fares, rail franchises and other fare regulations. (Paragraph 40)

6. Oyster is a proven large-scale system, used and trusted by millions of passengers. ITSO-compliant smartcards have shown themselves workable in smaller schemes but have yet to be tested on a large scale. The Government must not force ITSO onto the London Oyster system. It is imperative that any introduction of ITSO on the Oyster system be rigorously piloted to prevent any loss of operational efficiency or customer confidence in smartcards. Testing must include arrangements for supporting customers using ITSO products out-of-area. Given the uncertain level of demand for ITSO in London, the costs and benefits of the investment should also be robustly assessed. This must have regard to the need to avoid financially penalising TfL for having been at the vanguard of smartcard ticketing in the UK. (Paragraph 49)

7. The Government’s strategy of using ITSO as a way to promote integrated ticketing is a step in the right direction, but not enough. It is fine in theory but not producing results in practice. ITSO may be a useful technical specification but it is designed to facilitate integrated ticketing, rather than to make it happen. The Government needs also to articulate a clearer strategy for the development of integrated ticketing in general and smartcards in particular. The current laissez-faire approach is inadequate. The Government must listen carefully to the transport operators and the technology industry. The criticisms of ITSO need to be addressed and the Government must ensure it has adequate technical capacity to provide leadership in this area. (Paragraph 50)

Revenue protection and the powers of ticket inspectors 8. Revenue protection does not get the attention that it warrants: a bigger and more sophisticated effort is needed. The extent of the problem is poorly understood. It ranges from passengers willing but unable to pay their fares through to deliberate fare evasion. Fare-dodging is often associated with other antisocial behaviour and efforts to curb one are likely to impact positively on the other. More regular and coordinated research and monitoring of the problem are required. Leaving it to individual companies who are likely to be averse to sharing or publishing information means that no one has a clear picture and revenue protection measures are likely to be inadequate. (Paragraph 55)

9. There are moves to install ticket gates at more rail stations. Yet ticket gates are not a panacea. They cannot be used by all passengers and staff are still required to be present. Gates introduce new drawbacks including delays and obstructions for passengers; they are not in keeping with historic stations; and they are not always the best method of protecting rail revenue. The Government, in consultation with the rail industry and passenger groups, needs to review this one-track approach and develop a more holistic policy. (Paragraph 60)

10. An integrated ticketing system should be backed by an integrated revenue protection system. Whilst the current regulations for rail are generally satisfactory, those for buses are not. The powers of bus revenue protection staff should be strengthened. In the longer term, the Government should move towards a unified system of public transport revenue protection. The implications of new ticket types and technologies will also need to be considered. (Paragraph 66)

11. The current appeals procedures for bus and rail are not sufficiently independent. The consequences of being accused of fare dodging can be serious and it is important that the procedures are just and rigorous. The current principal rail appeal panel is associated with the rail industry and this undermines its credibility as a truly independent arbiter, sitting equidistant from the passenger and the train operating company. The bus industry appeals body has no regulatory backing. The Government should consult on new arrangements. For rail this might involve giving responsibilities to the Office of Rail Regulation or Passenger Focus; for bus it might be the Traffic Commissioner or the proposed Passenger Transport User Committee. (Paragraph 71)

Concessionary travel 12. The ability to travel for free across the country by bus is a great boon for those who enjoy it and we welcome it. There is, however, no such thing as a free lunch and such funds—over £1 billion per annum—must give value for money. The Department for Transport should commission an evaluation of the benefits of the national scheme for free local bus travel. (Paragraph 77)

13. The costs of concessionary travel are set to grow in real terms as bus industry costs and fares are increasing faster than inflation. Outside London, concessionary travel support exceeds the amount spent on supporting non-commercial bus services. (The Mayor of London provides a high level of revenue support for all bus services.) It is important that national concessionary travel is properly funded. (Paragraph 81)

14. The anomalies within, and disputes over, the distribution of concessionary travel grant to local authorities look set to continue, despite the ‘generous’ funding provided by the Government and the new funding formula. We find it is unhelpful that the transport authority and the travel concession authority are often not the same body and may inadvertently work against each other. These problems could be considerably reduced if the Government exercised its powers under section 9 of the Concessionary Bus Travel Act 2007 to transfer the travel concession functions from district councils to county councils. This would have the additional benefit of making the transport authority the travel concession authority in these areas. We recommend that the Government proceeds with this as soon as possible. (Paragraph 86)

15. The current “no better, no worse off” mechanism for reimbursing operators is unsatisfactory. It is arcane, time consuming and a recipe for disputes. It does nothing to promote good partnership working between travel concession authorities and bus operators. It is also questionable whether it provides a viable long-term funding model for the industry. A new, more transparent mechanism is required that compensates operators and avoids the waste and rancour generated by the current system. The Government should investigate this as part of its review of Bus Service Operators Grant. Some people argue for a national reimbursement mechanism as in Scotland. Whilst this appears attractive we do not support it at this stage. England is much larger, with greater variation, and we fear this would simply increase costs as the Government would be unlikely to scrutinise claims as closely as local government. A rapid roll-out of ITSO equipment on buses would help improve the accuracy of ridership data. Fewer travel concession authorities would also help. (Paragraph 93)

16. We continue to believe that local enhancements to the national concessionary travel scheme can offer important benefits. We agree with the Passenger Transport Executive Group and others that these enhancements are best determined locally. Extending concessionary travel to rail services would be costly and it is doubtful if rail services currently have adequate capacity. There may be scope and a good value- for-money case for extending the national concession to include lightly-used rail services, such as community rail partnerships, as in Wales. The Government should also consider in greater depth than it has so far the costs and implications of

providing greater support for community transport, particularly in areas where bus services are sparse. Where local authorities are currently profiting from concessionary travel funding, perhaps as a result of a sparse local bus network, they should be encouraged to enhance local concessionary travel arrangements. (Paragraph 98)

17. The current situation whereby 11 million concessionary travel smartcards have been issued but most buses are not equipped to read them is daft. The Government needs to agree a programme with bus operators for installation of ITSO smartcard equipment on buses. (Paragraph 99)

18. If the Government is minded at any stage to extend the English national concessionary travel scheme, young people and others identified by the Commission for Integrated Transport should receive priority consideration for concessionary travel. (Paragraph 100)

Formal Minutes

Wednesday 26 March 2008

Members present:

Mrs Gwyneth Dunwoody, in the Chair

Clive Efford Mr Eric Martlew Mrs Louise Ellman Mr Lee Scott Mr Philip Hollobone David Simpson

Draft Report (Ticketing on Public Transport), proposed by the Chairman, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 100 read and agreed to.

Resolved, That the title of the report be changed to the following: Ticketing and Concessionary Travel on Public Transport.—(The Chairman.)

Resolved, That the Report be the Fifth Report of the Committee to the House.

Ordered, That the Chairman make the Report to the House.

Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.

Written evidence was ordered to be reported to the House for printing with the Report.

[Adjourned till Wednesday 2 April at 2.30 pm.

______

Witnesses

Wednesday 14 November 2007 Page

Chris Austin, Director, Public Policy, David Mapp, Commercial Director, Association of Train Operating Companies, Richard Malins, Managing Director, Ev 1 Transport Investigations Ltd

Elaine Holt, Managing Director, First Capital Connect, Martin Dean, Business Development Director, First Group, First Group plc, Les Warneford, Managing Ev 9 Director, Stagecoach UK Bus, Ian Dobbs, Chief Executive, Stagecoach Group Rail Division, Stagecoach Group plc

Keith Halstead, Chief Executive, Ewan Jones, Director of Operations & Deputy Ev 16 Chief Executive, Community Transport Association UK

Wednesday 5 December 2007

Roy Wicks, Chair, pteg and Director General, South Yorkshire Passenger Transport Executive, Passenger Transport Executive Group (pteg), Neil Scales, Director General, Merseytravel, David Cook, Chief Executive, Kettering Borough Council, Ev 20 Adrian Jones, Director of Environment and Regeneration, Nottingham County Council, Greg Yates, County Transport and Regeneration Officer, Cheshire County Council, Local Government Association (LGA)

Shashi Verma, Director of Fares & Ticketing, Steve Burton, Deputy Director of Ev 30 Transport Policing & Enforcement, Transport for London (TfL)

Manuel Cortes, Assistant General Secretary, Transport Salaried Staffs’ Association (TSSA), Fran Hill, Chair of Unison Bus Sector, Richard Sherratt, Member of Ev 38 Unison Transport Service Group, Unison

Wednesday 12 December 2007

Stephen Joseph, Executive Director, Campaign for Better Transport, Anthony Smith, Chief Executive, Passenger Focus, Rufus Barnes, Chief Executive, London Ev 42 TravelWatch, Gordon Edwards, Company Secretary, TravelWatch SouthWest

Tom Harris MP, Parliamentary Under-Secretary of State for Transport, Bob Ev 51 Linnard, Director, Rail Strategy & Stakeholder Relations, Department for Transport

List of written evidence

1 Dr Roger Sexton, Nottingham Trent University Ev 62 2 The ALCO Group Ltd Ev 65 3 Jonathan Horan Ev 65 4 Iosis Associates Ev 66 5 Tony Cornah and Polly Blacker Ev 71 6 Stagecoach Group plc Ev 72 7 Greater Manchester Passenger Transport Authority and Executive (GMPTAE) Ev 74 8 London TravelWatch Ev 79, 83 9 Passenger Transport Executive Group (pteg) Ev 84 10 Simon Norton Ev 88 11 Transport Investigations Ltd (TIL) Ev 90, 94 12 Mr Kevin Chapman Ev 97 13 TransAction Resources Ltd Ev 100 14 TravelWatch SouthWest Ev 102 15 North-East Combined Transport Activists’ Roundtable (NECTAR) Ev 113 16 PA Consulting Group Ev 116 17 Trainline.com Ltd Ev 120, 122 18 Transaction Systems Limited (TranSys) Ev 123, 128 19 Association of Train Operating Companies (ATOC) Ev 131 20 Joint submission from Stockport College and Stockport Primary Care Trust Ev 135 21 Help the Aged Ev 137 22 FirstGroup plc Ev 141 23 Joint submission from The Joint Committee for the Mobility of Blind and Partially Sighted People; The Joint Committee for the Mobility of Disabled People; The Guide Dogs for the Blind Association; RADAR; National Autistic Society; Disabled Parents Network; Royal National Institute of the Blind (RNIB); Arthritis Care; Mind; Restricted Growth Association; Parkinson’s Disease Society; Community Transport Association and Spinal Injuries Association Ev 145 24 TravelWatch Northwest Ev 149 25 Dr John Disney, Nottingham Trent University Ev 151 26 Scheidt & Bachmann GmbH Ev 152 27 Merseytravel Ev 155 28 Transport for London Ev 159, 162 29 Greater Manchester Centre for Voluntary Organisation – Transport Resource Unit (GMCVO) Ev 163 30 Transport 2000 (Herefordshire and Worcestershire local group) Ev 166 31 Journey Solutions Ev 167 32 Department for Transport Ev 171 33 Community Transport Association (CTA) UK Ev 178 34 Passenger Focus Ev 179 35 National Union of Rail, Maritime and Transport Workers (RMT) Ev 183 36 CTC Ev 185 37 Unison Ev 190

38 Cheshire County Council Ev 191 39 Eric Martlew MP Ev 196 40 Transport Salaried Staffs Association (TSSA) Ev 197 41 Merseytravel Ev 198 42 P G Rayner Ev 199

List of Reports from the Committee during the current Parliament

Session 2007–08 First Report Galileo: Recent Developments HC 53 Second Report The London Underground and the Public-Private HC 45 Partnership Agreements Third Report Work of the Committee in 2007 HC 248 Fourth Report The future of BAA HC 119 Fifth Report Ticketing and Concessionary Travel on Public HC 460 Transport First Special Report Galileo: Recent Developments: Government HC 283 Response to the Committee’s First Report of Session 2007–08 Second Special The London Underground and the Public– HC 461 Report Private Partnership Agreements: Government Response to the Committee’s Second Report of Session 2007–08

Session 2006–07 First Report Work of the Committee in 2005–06 HC 226 Second Report The Ports Industry in England and Wales HC 6I-I & 61-II Third Report Transport for the London 2012 Olympic and HC 199 Paralympic Games: The Draft Transport Plan Fourth Report Department for Transport Annual Report 2006 HC 95 Fifth Report The Government’s Motorcycling Strategy HC 264 Sixth Report The new National Boatmasters’ Licence HC 320-I & 320-II Seventh Report Novice Drivers HC 355-I & 355-II Eighth Report Passengers’ Experiences of Air Travel HC 435-I & 435-II Ninth Report The draft Local Transport Bill and the Transport HC 692-I & 692-II Innovation Fund First Special Report Passenger Rail Franchising: Government HC 265 Response to the Committee’s Fourteenth Report of Session 2005–06 Second Special Roads Policing and Technology: Getting the HC 290 Report right balance: Government Response to the Committee’s Tenth Report of Session 2005–06 Third Special Report Bus services across the UK: Government HC 298 Response to the Committee’s Eleventh Report of Session 2005–06 Fourth Special Local Transport Planning and Funding: HC 334 Report Government Response to the Committee’s

Twelfth Report of Session 2005–06 Fifth Special Report The work of the Civil Aviation Authority: HC 371 Government Response to the Committee’s Thirteenth Report of Session 2005–06 Sixth Special Report Transport for the London 2012 Olympic and HC 484 Paralympic Games: The Draft Transport Plan: Olympic Delivery Authority Response to the Committee’s Third Report of Session 2006–07 Seventh Special Department for Transport Annual Report 2006: HC 485 Report Government Response to the Committee’s Fourth Report of Session 2006–07 Eighth Special The Government’s Motorcycling Strategy: HC 698 Report Government Response to the Committee’s Fifth Report of Session 2006–07 Ninth Special Report The Ports Industry in England and Wales: HC 954 Government Response to the Committee’s Second Report of Session 2006–07

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Transport Committee: Evidence Ev 1 Oral evidence

Taken before the Transport Committee

on Wednesday 14 November 2007

Members present

Mrs Gwyneth Dunwoody, in the Chair

Mr David Clelland Mr Eric Martlew Clive EVord Mr Lee Scott Mrs Louise Ellman David Simpson Mr Philip Hollobone Graham Stringer Mr John Leech

Witnesses: Mr Chris Austin, Director, Public Policy, and Mr David Mapp, Commercial Director, Association of Train Operating Companies; and Mr Richard Malins, Managing Director, Transport Investigations Ltd, gave evidence.

Chairman: Good afternoon, gentlemen. Firstly, we Q5 Chairman: We will allow you ITSO from now on do have a little bit of housekeeping of our own; since we have it on the record. Members with an interest to declare? Mr Austin: It covers that and it covers other forms Clive EVord: Member of Unite. of electronic ticketing, and other forms of ticketing Mr Martlew: Member of Unite and GMB. which are convenient to passengers, and proposes a Mr Clelland: Member of Unite. way of continuing to develop those over a seven- Graham Stringer: Member of Unite. year period. Chairman: There is a slight lack of imagination here! Gwyneth Dunwoody, Aslef. Mrs Ellman: Member of Unite. Q6 Chairman: Do you think the Government is doing enough to encourage rail operators to develop Q1 Chairman: Can I ask you gentlemen firstly to integrated ticketing arrangements, particularly in identify yourselves for the record, beginning on my relation to buses and coaches? left. Mr Austin: I think it is. I think the important thing Mr Mapp: I am David Mapp, the Commercial is to set the framework and to allow the operators Director for the Association of Train Operating then to work within that to develop policies to Companies. produce the results that are required. In some cases Mr Austin: Chris Austin, Director of Public Policy there may be help needed, and indeed there has been for the Association of Train Operating Companies. Government funding for ITSO in the development Mr Malins: Richard Malins, I am a director of my of proposals and some research work as well, but the own business, Transport Investigations Ltd. rest other less complex systems like PlusBus for example have been introduced entirely by the operators on their own initiative without the need Q2 Chairman: Did Mr Malins or Mr Austin want to for Government support. say anything specific before we begin? Mr Austin: No, Chairman. Q7 Chairman: The diYculty about that is when the Q3 Chairman: In which case you know how National Passenger Survey asked about ticketing concerned this Committee has been in the past about sales facilities at stations and by phone, one in five ticketing. Can you tell us what you understand as the passengers thought they were either “poor” or “very Government’s present strategy on integrated poor”. Do you think that is an acceptable level of ticketing? customer satisfaction? Mr Austin: Yes, the strategy was set out in the Mr Mapp: The National Passenger Survey does Government’s White Paper published in July and indeed ask a question about ticket buying at covers around a seven-year period making provision stations. The overall score from the last wave in the for smartcard and ITSO smartcard ticketing and spring of this year was that 67% of customers other forms of electronic ticketing. interviewed were either “fairly” or “very” satisfied with the ticket buying at the station which they had used. Q4 Chairman: Mr Austin, can we spell out ITSO, I do not think many people listening will have much of an idea what it is. Mr Austin: It is a bit of a mouthful. It is Integrated Q8 Chairman: How was the question phrased, in the Transport Smartcard Organisation. same way? Are we comparing like with like? Processed: 28-03-2008 22:38:54 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG1

Ev 2 Transport Committee: Evidence

14 November 2007 Mr Chris Austin, Mr David Mapp and Mr Richard Malins

Mr Mapp: I cannot remember the exact wording but controls the hours of opening of ticket oYces, so that eVectively it asks customers in the context of the is one area where the benefits are much more diYcult station which they have just bought their ticket from for us to realise. to rate how satisfied they were with ticket buying at that station. Q12 Clive EVord: The information we have is that some organisations have been critical of ITSO. Q9 Chairman: What are rail companies doing to There are new technologies coming in such as improve this? contactless credit cards; Barclaycard do one for Mr Mapp: There is a whole range— Oyster for instance. Is that the way forward then rather than investing in huge kit like ITSO? Mr Mapp: I do not think the issue is ITSO—and I Q10 Chairman: Even 67% is not what you would call should declare an interest here as a board director of a raging success, is it really? ITSO Ltd—which has developed a world standard Mr Mapp: 67% is the average. There are some in smartcard technology. Whilst that has perhaps elements of the market which are significantly more taken longer than some people expected, in satisfied. Longer distance travellers for instance comparative terms it has actually been developed were 80% satisfied with ticket buying at stations. I quite quickly. By comparison the magnetic stripe should also emphasise that the National Passenger bank cards took 25 years to develop. I do not think Survey question is specifically related to stations, ITSO is the issue; the central issue has been the lack and stations now account for less than 60% of all of a business case for commercial operators to invest sales. Over 40% are through the Internet, through in the fairly expensive infrastructure you need to call centres, through travel agents and other support smartcard schemes. As far as the rail sector channels, so the question itself only relates to a is concerned, the current Government strategy of proportion of overall ticket sales. We are not specifying ITSO enablement in every new franchise complacent about the 60%, or indeed the 80%, and is a very eVective method of leveraging in private there is a whole range of initiatives that we are sector investment to fill that gap, and I think that pursuing to improve our customers’ experience of strategy is likely to be fully eVective over time. retailing across the network. In particular we have invested significantly in the Internet to the extent that Internet sales represent 14% of all sales in total Q13 Clive EVord: How does the rollout of ITSO and nearer 30% for longer distance train operators. compare with for instance Oyster across London? There has been significant investment in the What is the diVerence? ticketing on departure network which now covers Mr Mapp: Oyster of course had a head start over 500 stations and through which about £500 million ITSO in the sense that the Mayor and Transport for worth of sales pass. There have been round about London decided to introduce the Oyster scheme 900 new self-service ticket machines installed at some years ago now. ITSO has taken longer to stations in the past three years. We are participating develop partly for the reasons that I have already fully in the development of smartcards, in particular articulated. It is now a franchise requirement in ITSO smartcards but also the Oyster scheme in several of the recently let franchises, most notably London as well. Looking further ahead there is South West Trains but also East Midlands, West active development work underway looking at print Midlands, Cross Country and East Coast as well. In at home tickets and also barcode tickets on mobile each of those franchise agreements there are phones. We certainly are not complacent. There are commitments to roll out ITSO over the next two to many things that we are doing which we hope will three years, so I think whilst it had a slower start improve retailing for customers in the future. than Oyster ITSO is likely to catch up progressively over the near future. Q11 Clive EVord: The industry appears to be reluctant to make a major investment in smartcards. Q14 Clive EVord: You have suggested that ATOC What do you think the Government can do to could provide “the client” for a national integrated encourage you to invest and make the business more ticketing system. What would this achieve? attractive? Mr Mapp: I am not sure I understand the question. Mr Austin: The investment required is quite high Mr Austin: I think I can help there. In our written and quite clear. There is a lot of ticketing equipment, evidence we said that our subsidiary organisation back oYce systems and software support required, Rail Settlement Plan has the technology to provide and so far the benefits coming from it have been less the back oYce support for these smartcard systems, tangible. There is some revenue generation but some and so whether it was rail only or rail and bus we of the other advantages or some of the other have the ability to do that for a national system. potential cost savings are more diYcult for us to achieve than for example for Transport for London. The increase in sales through smartcards and the Q15 Clive EVord: And how would that benefit either reduction in sales through ticket oYces will in the you or the travelling public? long run allow savings to be made in the cost of Mr Austin: The advantage is it would end up being operating ticket oYces. Transport for London have a little quicker because it is a ready-made system realised that at some of their ticket oYces. We are capable of adaptation, but of course there is a cost precluded from doing that by regulation which attached to it. Processed: 28-03-2008 22:38:54 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG1

Transport Committee: Evidence Ev 3

14 November 2007 Mr Chris Austin, Mr David Mapp and Mr Richard Malins

Q16 Clive EVord: Why are only 70 of the 330 stations appropriate ticket for their journey, so for the vast in Greater London capable of taking Oyster cards? majority of customers we believe that they are sold Mr Austin: That number has increased this week the correct ticket for their journey. We accept that with the introduction of the London overground some are not. We accept that we make mistakes and concession and a further almost 50 stations have 1% of one billion passenger journeys is a large been added to the network, and there are a further number; and we fully accept that. 14 or 15 stations to be added in January, so it is expanding. The main rollout for the entire network Q20 Mrs Ellman: Could I ask you a little more about within London comes in in 2009. That is the this survey. You say 99% satisfaction—that sounds timescale we are planning to. extraordinary. Mr Mapp: It is very high. Q17 Clive EVord: The situation for people in London is not satisfactory, is it? We have two Q21 Chairman: Where did you undertake your systems that are not compatible and are never going survey, Mr Mapp? You are stretching the to be compatible. How are we going to resolve this Committee’s credulous response. situation because it appears that in these 330 stations Mr Mapp: I think what lies behind it is the fact that across London we are going to have two separate the vast majority of ticket sales are actually fairly pieces of kit sitting side-by-side. How is that going to straightforward repeat purchases. It is for the next be resolved in a way that is easy for the travelling station down the line, it is a cheap day return or it is public? a saver return to London and so on, and booking Mr Mapp: I think strategically there is little doubt it clerks become very expert in issuing those tickets. would have been better to have one national Where we tend to make mistakes are with products smartcard standard, and indeed it was always the which are much less frequently issued where the intention that ITSO would be that national booking clerk in some cases will not be aware of smartcard standard. Nevertheless Oyster was some of the finer detail associated with the product. introduced earlier in London and it has been a It is those types of mistakes that tend to get success and it is well-established. I think at the publicised quite widely in the media, but the moment the proposed approach by the Department evidence suggests that for the vast majority of for Transport and the Government is the sensible, customers they are sold the right ticket for their pragmatic way of addressing that, which is that that journey. they are in discussion with DNT and they are in discussion with Transport for London with a view to Q22 Mrs Ellman: I find it very hard to believe this ensuring that all Oyster equipment is retrofitted to 99% figure. It just flies in the face of what I know to allow it to accept ITSO smartcards by 2010. be the case from numerous people who discuss this. There have been numerous reports of people not Q18 Clive EVord: That will mean that the travelling getting the correct information and having great public when they are confronted with a gate will diYculty in trying to access information. Are you have one single pad, and whether it is an Oyster card being complacent when you talk about 99%? or an ITSO card, they will strike that same pad? Mr Mapp: Are we complacent? No, not in the least. They will not have to have a pad that is half ITSO As I said, we fully accept we make mistakes and 1% and half Oyster where you are creating a huge of one billion passenger journeys is still a large amount of confusion? There will be one simple number of customers that get sold the wrong ticket; system for the public to understand? we fully accept that. Mr Mapp: My understanding is that there will be one yellow blob, yes. Q23 Chairman: We do not disagree, 1% is a lot of journeys; we sort of suspect it might be a bigger Q19 Mrs Ellman: How could a passenger feel percentage than one. confident that they are getting the best advice on Mr Mapp: As I say, the mystery shopping survey is cheap fares? conducted independently by a market research Mr Mapp: The obligation to sell both impartially company. We share the results with the Department and accurately is a regulatory obligation on train for Transport. companies through their franchise agreements and specifically through the ticketing settlement Q24 Mr Leech: You use the phrase the “most agreement, which is the main regulatory framework appropriate” ticket rather than “best value” ticket. in this area. That is an obligation which the train How do you make a distinction between what is the companies take very seriously indeed. As part of the most appropriate ticket, because some tickets are regulatory framework we are obliged to undertake open tickets and that might be considered to be the an annual mystery shopping survey. The survey most appropriate ticket when they are trying to sell currently includes just over 10,500 mystery shops the ticket to somebody? How do you make the which include stations, Internet sites and call distinction between that and ensuring that someone centres. Across a range of representative retailing gets oVered the cheapest ticket by telling them they scenarios through that survey, which is conducted could go on a fixed time and pay less? by an independent market research company, they Mr Mapp: In simple terms it is the cheapest ticket for have found that in around 99% of transactions the that point in time at which the customer wishes to customer has been sold accurately the most travel. 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Ev 4 Transport Committee: Evidence

14 November 2007 Mr Chris Austin, Mr David Mapp and Mr Richard Malins varying their travel time they will be made aware of simple terms the things that we will do and commit that, but in eVect it is the cheapest ticket for the time to doing to make sure that customers obtain the best at which the customer wishes to travel. priced fare for their journey.

Q25 Mr Martlew: I can believe your figures because Q29 Mrs Ellman: Are you planning to run down rail if you are travelling daily in from Eltham you get the ticket oYces? standard ticket but I think the reality, if you are Mr Austin: I touched on the point earlier. Run down looking at the amount of money people lose, it is is not the right word. probably much greater than 1% of the total because it will be on the long distance journeys that people will get the wrong priced ticket. This is partly Q30 Mrs Ellman: Reduce the availability of them? because of the fact that the staV have a very Mr Austin: Clearly, as more people buy away from complicated system to work at and it is also partly the station, the need for ticket oYce staYng levels to because some of the rail companies make it so be maintained at their present level will reduce and confusing, and deliberately confusing, that people so the expectation is, yes, there would be in the long just do not know what is the correct price. You say run as people shift away to other forms of ticketing 1% but what was the percentage lost to the customer a reduction in the cost of operating ticket oYces from this survey? through the reduction in staYng levels. Mr Mapp: We do not measure it in revenue terms but I think it would be a reasonable assumption to Q31 Mrs Ellman: You make it sound as if that is assume that that 1% is spread reasonably equally driven by cost and not the needs of the public. Do across all customers, in which case it would certainly you not think that there are many members of the intimate a 1% revenue loss as well. public who wish to go to a ticket oYce rather than use the other means, which might be very simple for Q26 Mr Martlew: How can you say that because the a lot of people but not for some people? cost of a ticket from Carlisle would be £100-odd and Mr Austin: Absolutely, and I am not suggesting in if you get it wrong by £25 that would be £25 but the any way that we will get to the point where there is one from Eltham would be about £4 so if you get no facility at main stations to provide the service that that wrong it is going to be a lot less, is it not? customers are looking. The fact is however that Mr Mapp: I think the simple answer to your point is more and more people, as Mr Mapp has indicated, I do not know what the revenue eVect is. are choosing to book oV-line from the comfort of their own homes, either via the Internet or via Q27 Mr Martlew: Thank you. telephone link or to use smartcard products like Mr Mapp: However, I think it is a reasonable Oyster which they can top up without ever going assumption that it should be very similar to the near a station. overall eVect in terms of the number of passengers aVected by it. Perhaps I could just come back to the Q32 Mrs Ellman: Do the current regulations specify point about complacency because I would really like a particular level of ticket oYce availability? to emphasise the fact that we are not complacent Mr Austin: Yes they do and that was my point. That about this. We understand that customers do get is set in aspic whereas the reality is that customer sold the wrong ticket and we are doing a number of demand is changing. We cannot respond to that things to improve our performance in that regard. because of the regulation. There are a number of things that we are doing over the next 12 months which we hope will improve Q33 Mr Scott: Do you think it is acceptable, if you matters for customers. take for example London, you are penalised financially if you use the old-fashioned commodity Q28 Chairman: Such as? called cash? Mr Mapp: Most importantly, our proposals for fare Mr Austin: Sorry to pause on that, I am not sure that simplification, which were set out in the White that is actually right. In what way did you have in Paper, which we plan to introduce during the course mind? I know there is diVerential pricing on the of 2008. That will introduce a simpler national fare Underground for Oyster but at the moment that structure based on four ticket types and we hope by does not apply to national rail; the tickets are the doing that, in conjunction with the way in which same price whatever method of payment is adopted. fares are presented on the Internet and other forms of communication, customers will be able more easily to make sure they understand the fares on Q34 Mr Scott: I was referring more to where you oVer and obtain the most appropriate fare for the would be adopting something such as that for rail? journey which they are making. There are other Mr Austin: Inevitably as a joint product we will be work streams that we also have, including having a moving to the same sort of oVer that London look at the way in which ticket fare choices are Transport has in areas where Oyster is accepted, yes. presented on self-service ticket machines with a view to improving those presentations. We are also Q35 Mr Scott: So people would pay a higher price if developing what we call the price promise, they use cash? something that was asked for by the Government in Mr Mapp: At the moment we are not allowed to do its White Paper, where we will set out in clear and that within the regulatory framework. Processed: 28-03-2008 22:38:54 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG1

Transport Committee: Evidence Ev 5

14 November 2007 Mr Chris Austin, Mr David Mapp and Mr Richard Malins

Q36 Mr Scott: You say, understandably, that the Q40 Mr Hollobone: Is that not an excessive amount Government’s concessionary fares policy only looks that could go into improving the public transport at one mode of transport and does not consider rail system? Given that you are having to make a guess services, but that extending it to rail services would of what that amount is, should data not be collected need careful thought. Can you see a sensible national far more comprehensively given the scale of the extension of free concessionary fare schemes that problem? would include some rail journeys without incurring Mr Austin: I think the answer is yes to both of those high costs or overloading already busy trains? questions. It is a lot and train operators are doing a Mr Austin: I think that is a very diYcult thing to do lot to address that, both through gating additional because it is quite diYcult to distinguish between stations and through providing higher levels of short distance and long distance travel. They tend to ticket checks on-train, which overcomes the share the same trains, for example between Coventry shortcomings of the gates. In the process of doing and Birmingham and Macclesfield and Manchester, this, they are also building up a much better store of and you have shorter distance passengers using information and time series data to demonstrate longer distance trains. The worry would be for us much more accurately the level of losses being that whilst we would welcome the extra business, incurred, so the two really go together. providing it was properly paid for, the experience with the bus industry is that it has led to considerable Q41 Mr Hollobone: I think that Mr Malins is of the overcrowding. We already have a lot of view that there is an over-reliance in the rail industry overcrowding that we are tackling on the rail system on introducing barriers to prevent fare dodging and at the moment so if that were to be the case, and to more sophisticated strategies are needed. Mr encourage a lot of additional oV-peak traYc, we Malins, would you elaborate on that? would need support to enable us to expand the Mr Malins: My point here that I put in the paper, capacity of the rail network to cope with it. and I repeat for you now, is that, first of all, as Chris has admitted, there is no sound or consistent method Q37 Mr Hollobone: To follow on from Mr Scott’s of measurement by most TOCs on the extent to point about the Oyster card and the diVerential which they have fare evasion or simply ticketless charging for cash and Oyster, in your answer, Mr travel, what I would describe as people who may not Mapp, you said under the current regulatory pay their fares for the very reason the Committee framework you are not allowed to diVerentiate the was alluding to earlier on, that it is actually quite price. Will that be the case then when the ATOC diYcult to buy a ticket in the first place. So we need companies introduce the Oyster card in London? to distinguish between people who are deliberately Mr Mapp: At the moment I am not aware that the trying to avoid paying and those who find it diYcult DfT plans to make any specific change to the to pay because the facilities are not there. The sort regulatory framework to allow for that. I think it is of numbers that Chris has been talking about would true to say that we have argued the case with the DfT embrace absolutely everything if the number were for there to be greater freedom with regard to pricing correct—and I suspect it might be on the high side. and indeed for us to be given the ability to diVerentially price, by which means we will be able Q42 Mr Hollobone: Whilst you are on the subject of to do that. Whether in the context of Oyster whether people are genuinely dodging fares or introduction we would choose to then introduce a accidentally dodging fares, do you have any estimate similar pricing regime to that introduced by of the number of people who are willfully doing this? Transport for London, I think is a question that we Mr Malins: All I can say is that one can draw a little have not fully addressed. pie chart which says if you look at the world at large there are people out there who always want to pay Q38 Mr Hollobone: As it stands at the moment there their fares and are committed to doing it. That could would be a substantial diVerence between a be 80% of the population but it will vary and I would passenger in London on an overground train on one not like to say that is an absolutely correct figure. of your companies where there would not be a Then there are people who if it is made diYcult to financial penalty incurred, as on the London pay they will not bother. Then there are people who Underground at the moment, in buying a ticket for are determined fare evaders. Quite what number cash? they represent is something that is very diYcult to Mr Mapp: That is correct. get at. I would say that the number Chris quoted is probably an outside number for fares not paid for all sort of reasons, some of them in fact not the Q39 Mr Hollobone: With regard to fare dodging, is customers’ fault. I do not think there is any it right that you think that nationally the loss of consistent measurement within that to know revenue from fare dodging amounts to some £400 precisely what the number is and therefore what the million or about 8% of revenue? reasons are and how best to tackle them. The point Mr Austin: That is the figure that we put in our I was making to the Committee is I think it is a knee- paper. I would say that it is an informed guess, an jerk reaction by train operating companies to revert informed estimate. There is no consistent across-the- to closing stations, which is the system we had years board survey of this although individual train ago, which meant people were standing around companies do research it on a regular basis. It is our getting bored so that we can check people at the best estimate of what it is likely to be. beginning of the journey. The sort of gates that are Processed: 28-03-2008 22:38:54 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG1

Ev 6 Transport Committee: Evidence

14 November 2007 Mr Chris Austin, Mr David Mapp and Mr Richard Malins used are those designed for the Underground. I certain times of day more expensive because you think they are eVective where you have got high cannot do that with a single person or even two volumes of short-distance business where it is people, it has to be a team of people, very often diYcult to check by other means and also when supported by a rail enforcement oYcer or the British people are not encumbered by bags and are familiar Transport Police. That is part of a wider societal with the system. What alarms me—and I would like problem, it is not just limited to the railways, and the Committee to think about this—the spreading of that is a problem. We do try, I think assiduously, to this to inter-city business where I think it is a) protect passengers who do try to pay their fares. I unnecessary and b) wholly inappropriate in terms of know there are a number of anecdotal experiences customer service. I do not think it is necessary where, as we discussed earlier this afternoon, people because once people are on your system for longer, have found it diYcult to buy tickets, and I think the on-train check is far the most eVective, and that smartcard ticketing and Oyster will help that is what people should concentrate on. Ticket gates because of the amount of prepay that will be going where you have got a serious short-distance on. We try to do that with an increased number of problem, yes, but on long-distance business the train ticket machines around the system. Mr Mapp has is much the best place to do it. already mentioned over the last three years 900 additional machines have gone in across the Q43 Mr Hollobone: I understand the legal network. Then there is an appeals procedure for framework for ticket inspection on railways is people who feel they have not been treated fairly. diVerent to that which operates on buses. Would there be support for making that legal framework Q45 Clive EVord: Can I just follow up that point the same? And then to Mr Mapp: I believe in your about safety. Is it not a fact though that you can evidence you say that guidelines could be given on eradicate the problem by stopping people who are both prosecution and on sentencing which better obviously intent on causing problems from getting reflect the serious nature of fare dodging. on trains in the first place, and then does it not Mr Malins: I said in my note that because in my become a problem because you do not have stations business we do this as an agency activity for a manned particularly in oV-peak periods? number of rail operators—not all of them TOCs I Mr Austin: Up to a point in the sense that there is might say, one of them is Docklands Light evidence that gating of stations has helped in Railway—we find that the legislation is fit for keeping the railway for people who are passengers purpose. It goes back a very long way to the 19th not who are just using it as an area to congregate, but Century and the Regulation of Railways Act. That it is not always the complete answer. is the one we normally use and we do not want any change in that, it is fine for railways. I really could not speak for buses but clearly they could not use Q46 Clive EVord: In this age where people have got a that Act because it only applies to railways and is heightened sense of security on our public transport authorised by Acts of Parliament or other similar system, is having any stations unmanned on the means. network a sensible way forward? Mr Austin: Maybe I could answer that one. The Mr Austin: I think it is inevitable. There is a large other piece of legislation is the Penalty Fares Act and number of quite small stations with relatively light the Penalty Fares Rules which apply to certain areas usage all around the country, principally in rural of certain train operating companies, principally in areas but also in some suburban areas as well, where the London area but not entirely; it operates in the costs and the benefits of having staV on the Leeds and Birmingham for example. Again the rules station are just miles apart. there are written around the requirements of the Mr Malins: Could I add to that Chairman, I railway rather than a bus where the driver is mentioned earlier on that I do some work for the inspecting every ticket as you get on the bus. We put Docklands Light Railway and I think many of the the bit in our evidence about sentencing because Committee will know that is basically an unstaVed there was (admittedly anecdotal) evidence from railway as far as stations are concerned. We would train operating companies around the country that say that in fact they do not have the problem that sentencing of oVenders who have deliberately set out you are describing to any great extent, although they to travel without a ticket is pretty patchy, and some do to a small extent but it is kept under control. seem to consider it a more serious oVence than Partly of course that was a system designed to be like others and sometimes that sends the wrong messages that from the outset, so you can design out some of generally to people who are thinking about trying the problems by building the thing correctly in the it on. first place and that is more diYcult on an the established rail network. I would say, yes, you can have an unstaVed railway that is safe and the Q44 David Simpson: Given the links between fare Docklands Light Railway proves it. dodging and anti-social behaviour, do you think that enough is being done by the train operators to protect the honest passengers that are travelling and Q47 Chairman: Is not a lot of that because it was using their facilities? specifically built and tailored in a particular way? Mr Austin: I think you are right to raise that. It is a Does it not have automatic coverage by security very serious issue and it is one of the reasons that cameras, it is a very restricted railway anyway and it makes on-train ticket inspection in urban areas at tends, if I may say so without sounding pejorative, Processed: 28-03-2008 22:38:54 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG1

Transport Committee: Evidence Ev 7

14 November 2007 Mr Chris Austin, Mr David Mapp and Mr Richard Malins to be in places where there is going to be quite a big Mr Austin: Yes, I understand that. movement all the time on the stations, these are not isolated stations. Q53 Chairman: Which does not auger well for the Mr Malins: No, but they will be similar to suburban sort of numbers that you are talking about at stations elsewhere. Waterloo. Mr Austin: No but I mean they will have the advantage of the experience at the other stations to Q48 Chairman: Is that actually true? The DLR tends build on in the design for that, but you are quite to cover areas where almost by definition they will right— have larger numbers moving around than, say, some of the smaller urban areas even in London? Q54 Chairman: You mean having done it wrong Mr Malins: To some extent you are right, but I think once we can always pray we will not do it wrong it does demonstrate that you can have an unstaVed again? model that works; that is all I am saying. Mr Austin: More than pray, I hope—actually get it better. Q49 Clive EVord: Can I pick up something Mr Malins said earlier on about checking tickets on Q55 Chairman: So you are assuring us that all will trains. He said if you have people on a train for a be well? length of time it is sensible to have checks on the Mr Austin: I think it is certainly in our members’ train. What is a long period of time? Are you talking interests to make it work well because we do not about commuters? want to be deterring passengers by having a diYcult Mr Malins: Exactly where you draw the boundary struggle through the gates to get on the train in the perhaps is something we can debate, but let us say first place. notionally that on journeys of an hour or longer it should be quite practicable. For what I would call Q56 Mrs Ellman: Have you got any evidence of the intercity network you should be able to do it all passengers with free concessionary passes properly on-train. transferring from rail to bus? Mr Austin: Yes, we have a little. There has been a little bit of work done on local services which Q50 Clive EVord: Presumably you are not talking indicates no big swing as a result of the introduction about packed commuter trains because that would of concessionary fares in England but a slight not be possible? dropping oV in the rate of growth, because local Mr Malins: No. services have been growing quite strongly over the last ten years and there is some evidence over the last Q51 Mr Martlew: Mr Malins, you talked about year that that may have started to tail oV. In Wales mainline stations but can I ask Mr Austin, are you there is definitely evidence on the Conwy Valley line thinking of gating stations like Euston for example of quite a significant reduction in patronage once the where people are going through with lots of luggage bus concession was introduced and then the and will be travelling perhaps three, four or five opposite when the concession was extended to rail hours? Is that what you are thinking about? It seems and indeed, on the Heart of Wales line they have had to me that you may be. to double the length of the trains from one car to two Mr Austin: Yes there are proposals to gate. I am not cars to carry the extra people who are travelling. quite sure of the timescale, I do not have that in my head, but Waterloo, which is one of the larger Q57 Mrs Ellman: Would you welcome the extension stations that is not gated at the moment, and King’s of the concessionary schemes in England to rail? Cross, and Richard’s example, Paddington is Mr Austin: As I mentioned earlier, I think that already gated partially. I think the important thing would be quite diYcult unless it were accompanied there is to make sure that the level of customer by the funding to increase the capacity of the service service surrounding that is high enough to assist as well because it would, as we have seen in a small people who have tickets that will not go through the way on the Heart of Wales line, increase the demand gates or who have luggage. I know as a regular user on a railway that has already got strong growing of Paddington that the staYng levels at the barriers demand and some overcrowding problems— are quite high for that purpose. Q58 Chairman: And nothing frightens rail companies like the thought of having too many Q52 Chairman: If you use Victoria, Mr Austin, passengers does it, Mr Austin? which I am sure you do in coming back from the Mr Austin: We welcome that but what we do not airport, you will discover that you are enormously want to do is to have it in an unplanned way that we dependent on whoever happens to be at the gate at cannot provide for with additional trains and longer the time. I think they do make an eVort but if they trains, and in some cases additional platforms. empty one train at the same time, which is the Mr Mapp: I think it is also worth mentioning that we pattern coming from the airport particularly, there do already oVer a range of railcards targeted at parts are frequently occasions when it is extraordinarily of the market which are likely to be aVected by the diYcult to get through if you have an awkward-sized sort of concessionary scheme that you are piece of luggage or a child in a pram. highlighting. We oVer a railcard aimed at the senior Processed: 28-03-2008 22:38:54 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG1

Ev 8 Transport Committee: Evidence

14 November 2007 Mr Chris Austin, Mr David Mapp and Mr Richard Malins retired market, the young persons’ market and the basis that it is paid for by the train operators who family market, and those railcards have been participate in the scheme but on the basis of a flat remarkably successful, and they continue to be payment for each appeal, regardless of whether it is remarkably successful to the extent that there are accepted or not, so there is no financial incentive one now 2.2 million people in the country who have way or the other; it is a straight payment. railcards that can take advantage of the discounts which they oVer. Q63 Chairman: Can I ask you very briefly now, gentlemen, is it true that revenue protection staV Q59 Mrs Ellman: Would you be opposed to a have got too much power and occasionally are a bit proposal to extend the concessionary bus schemes heavy-handed? to rail? Mr Austin: I do not think they have too much power. Mr Mapp: It is a matter for government. It is really I think they have the powers they need to implement a matter of public policy. If the Government believes their responsibilities and duties. In the event of any that that is a policy objective which they wish to of them being, or appearing to be, heavy-handed pursue then, as Mr Austin has made clear, providing there is an appeals procedure. the necessary financial arrangements are put in place then of course in principle we would not oppose that, Q64 Chairman: This appeals procedure Mr Simpson but there are practical issues in terms of mentioned, you are quite convinced it is suYciently overcrowding that would need to be addressed and transparent and people will be quite reassured I think the implications of those issues should not be because they will know that it is separate from the under-estimated. people who have appointed those to run the system? Mr Austin: I think so, Chairman, and they are set up Q60 Mr Hollobone: A number of your members to be independent. allow police oYcers oV duty to travel free of charge on rail services on the understanding that if there is Q65 Chairman: Yes I understand that but does the trouble on the train they can assist the ticket passenger understand that they are totally separate? inspector or the other rail staV to deal with that. To Mr Austin: They are audited by the Department for what extent do your members oVer that service? Transport and Passenger Focus is also involved, and Mr Mapp: Are you referring to the agreement that I think if there were any concerns over the way the we have with the Metropolitan and City of London code was being applied there is a right of appeal to Police Forces in the London area? Passenger Focus as well. Mr Hollobone: I represent a constituency in Northamptonshire and I understand that the rail Q66 Chairman: So you think the passenger can be operator there allows oV-duty police oYcers to assured that this is a satisfactory appeals procedure? travel free of charge. Mr Austin: Yes I do. 1 Q61 Chairman: I think Mr Hollobone is referring to Q67 Chairman: You have not talked about PlusBus a custom and practice which has always been in most in relation to buses. transport systems. Nobody specifies it but I think it Mr Mapp: PlusBus is a scheme that eight train is accepted, it is one of those nod-and-a-wink jobs. operating companies have supported since its Mr Mapp: Right, okay. Well, in the schemes that I inception. It is a scheme that has been developed am aware of there is certainly an agreement with entirely by private sector bus and train operators police forces in Greater London and there are also without any central government funding. Over the some schemes around the country that I am aware of course of the past three or four years it has grown to where police oYcers receive free travel. In the case of the extent that there are now 227 PlusBus schemes London there is a financial arrangement in place. In across the country with more planned, including other areas it is on the basis that the police oYcers Crewe to be added during the course of 2008. Whilst provide support and assistance. initially numbers were small they have grown Chairman: We are getting a bit tight for time now so significantly, over the last year in particular, in Mr Simpson. response to the first national promotional campaign for PlusBus, and this year we are expecting there to Q62 David Simpson: I think, Mr Austin, you be over 100,000 issues of PlusBus tickets. I think it mentioned earlier on that customers had the right of demonstrates the ability of the private sector to work appeal and I understand also that train operators co-operatively together. There is, we believe, further appoint their own appeals panels. How can potential and further opportunity in PlusBus and the customers be sure that they are getting a fair deal? PlusBus product lends itself very well to delivery Mr Austin: There are two companies that oVer an through smartcards. appeals service, one of which is owned by one of our members and the other of which is independent. Q68 Chairman: You have spoken quite a lot about Independence is guaranteed by the fact that they do Internet sales and how the trend is upwards, but it is not exercise a personal discretion in that they are not possible if you have a cycle, to book the right of administering a code of practice set by the passage, is it, on the Internet? PlusBus is not Department for Transport, which audit them, so available on the Internet, cycle carriage bookings are that is the guarantee of independence. The other is perhaps the financial point, that the funding is on the 1

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Transport Committee: Evidence Ev 9

14 November 2007 Mr Chris Austin, Mr David Mapp and Mr Richard Malins not available over the Internet. The point you were Mr Austin: That was something we referred to in our being asked very specifically earlier, on which I think paper and I guess that is a concern. The suggestion is enormously relevant, is if you are moving towards was that, if possible, there should be a move with more and more technology do you understand how connecting rail/bus links to make the changes at some of this can exclude whole groups of around the same time as the train time tables twice passengers? I must tell you unless it is a three- a year, which are themselves governed by European wheeled cycle I cannot see myself fighting my way on requirements, so that there would be some co- to a train with a bicycle, but supposing I went mad ordination. and decided to put a bicycle on at Euston to get to Crewe, how could I book that if I cannot use the Internet (although you tell me that Internet booking Q71 Chairman: Integration is going to be enormous is the way to do it)? and we have been talking about concessionary fares, Mr Mapp: The vast majority of rail products are we have been talking about special simplified available on the Internet. systems, are you quite confident that if as an industry you are required to move forward the companies will Q69 Chairman: But this particular one is not and it not only be responsive to the complications that will is not alone, is it? All I am saying to you is why is it come with the new technology but they are in talks that you have a system that you are telling us you are with government about the implications of the going to use more and more, that you are telling us diVerence between the Oyster system and the2 ITSO is very helpful, that you are telling us provides the system? passenger with the right sort of information, and Mr Austin: Yes, I think it is very interesting to look then you are not able to say why certain groups of at the historical perspective of this because the card passengers are excluded from using the system? ticket lasted for 150 years, the magnetic stripe ticket Mr Mapp: I think the development of the Internet for 30 years and now we are already talking about has focused on the major products that the vast majority of customers wish to buy. I would accept changes to the Oyster system. It is going to change that there are omissions from the product range at more frequently and more dramatically over the the moment that need to be addressed and PlusBus next few years then we have ever seen before so we is one and cycling is a second, and I think that is are going to have to be pretty light on our feet, and something as an industry we do need to address. we want to be doing that. Chairman: I am sure we associate your Association Q70 Chairman: What about frequent and unco- with lightness of approach and the ability to dance ordinated bus timetable changes; is that going to round all the problems! Thank you very much, undermine PlusBus? gentlemen, I am very grateful to you.

Witnesses: Mrs Elaine Holt, Managing Director, First Capital Connect, and Mr Martin Dean, Business Development Director First Group, First Group plc; and Mr Les Warneford, Managing Director, Stagecoach UK Bus, and Mr Ian Dobbs, Chief Executive, Stagecoach Group Rail Division, Stagecoach Group plc, gave evidence.

Q72 Chairman: Good afternoon to you, gentlemen Q74 Chairman: Such as? and madam, you are most warmly welcome. Could Mr Warneford: PlusBus in particular which I think I ask you to identify yourselves for the record please. for its simplicity has a lot of potential to grow Mr Warneford: I am Les Warneford, I am the enormously. Managing Director of Stagecoach UK Bus. Mr Dobbs: I am Ian Dobbs, I am Chief Executive of Stagecoach Rail Division. Q75 Chairman: Do you agree with that? Mr Dean: I am Martin Dean, Business Development Mr Dean: I think that is right and that is a good Director, UK Bus Division for First Group. point, but one of the things to say in terms of what Mrs Holt: I am Elaine Holt, I am Managing the Government has done is the block exemption on Director of First Capital Connect. ticketing to the Competition Act which has been very, very useful in terms of allowing us to have ticketing agreements between operators and not fall foul of the Competition Act, and that is very, very Q73 Chairman: Thank you. Did any of you have important and that has led to the development of a anything you wanted to say before we begin? lot of schemes, and PlusBus is a very positive one. Nothing at all. You know about the Government’s strategy on integrated ticketing. What do you think they ought to do to encourage rail and bus operators Q76 Chairman: Since both of you have got major to develop integrated ticketing arrangements? bus and rail operations—Stagecoach for example Mr Warneford: I think they could probably help a have got nearly half of the shareholding in Virgin lot by putting some money with us into promoting Rail Group—why is it that there are not more the schemes that we are already developing. integrated ticketing schemes across all these diVerent modes? Mr Warneford, why can I not go from one 2 to another on a Stagecoach?

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14 November 2007 Mrs Elaine Holt, Mr Martin Dean, Mr Les Warneford and Mr Ian Dobbs

Mr Warneford: As far as I know, Chairman, where Q82 Mrs Ellman: What is the industry doing to make we know that there is some demand we are very sure that passengers get accurate information on the happy to provide that. best deals at all times? Mr Dobbs: I did not quite catch the question. Q77 Chairman: Where you know—? Mr Warneford: —There is a demand for it then we Q83 Mrs Ellman: What are you all doing to improve are happy to provide through ticketing. I am not the situation for passengers to make sure they get the conscious that there is a huge gap there. cheapest prices and best deals at all times? Mr Dobbs: I think the previous witnesses actually Q78 Chairman: You are not conscious, so we are not summarised very well some of the general schemes looking for customers, we are going wait for them to that are going on and the actual scale of the problem come to us, are we? as well. One of the areas where I think we are making Mr Warneford: No, we have already promoted some major strides is in making better the customer- schemes, we have joint ticketing. friendly nature of the ticket vending machines that we have got. That is one area where I think the first Q79 Chairman: Mr Dean, are you happy with generation were not particularly friendly in that everything you are doing? regard. Mr Dean: Yes, Chairman, if you look at a lot of locations throughout the United Kingdom where we Q84 Chairman: Vending machines? operate in an area and another operator runs in that Mr Dobbs: Yes, the ticket vending machines, and area as well, then there are examples of joint really with experience and feedback from our ticketing schemes and we have implemented quite a customers we are now looking at ways with software few, as Mr Warneford said, where there is the where we can make those far more interactive and demand to do that. simpler to use as well. We are actually seeing quite a Mrs Holt: I think when you are looking at customer distinct movement to ticket vending machines. They requirements and particularly the environment are becoming increasingly popular and I think that focus going forward, there is an increasing demand is something we see in other industries as well. In for integrated transport, whether it be cycling or bus some of our stations for instance we are getting up integration, and I think as train operators we are to 70% of ticket sales through the ticket vending doing quite a lot of work in this area to see how we machines. Waterloo is nearly 50% now, which is can better respond to customer needs. I think quite remarkable. customer focus is changing particularly around the environment and access to rail stations is becoming Q85 Mrs Ellman: Does anyone else have anything to more important to them, so I think that there is more add to that? that we can do, and certainly First Group rail Mr Warneford: I think the question, Chairman, operators are working very closely with the local bus probably does not much apply to the buses where we companies and indeed cycle groups and other bodies have got very simple fare structures and scales that to make sure that we do respond to customer are posted on the vehicle. I am not conscious that demand. there is a problem of awareness or information about them. Q80 Chairman: Can you give me oV-the-cuV—and I Mr Dobbs: Could I possibly comment on your am not going to hold you to it—two or three things earlier question about the appropriateness of the you think your company does. Government’s approach on integrated ticketing. I Mrs Holt: If we take First Capital Connect we are think one of the things that we would very much doing a lot with cycling. It is a particular issue for us applaud is the leadership the Government has taken because we serve Cambridge and Brighton and with regard to defining ITSO as the common places like that, so we have invested quite a lot in platform across all operators. It is an area where it is cycle facilities, parking, security, and that kind of very diYcult to develop smartcard technology but it thing to promote diVerent travel to stations because is certainly one that has enormous potential. I know car parking is an issue at stations. between the rail and the bus divisions in our company we are looking very much at smartcards as Q81 Chairman: I understand that but before we get the future. We have had PlusBus and other schemes on to that, how do I get my bicycle on a train in in the past but I think we have been scratching the Cambridge or to Cambridge? Do I have to book surface. We have to produce a product that specifically by going to the station; can I use the customers, the people out there in the street, are very Internet; how do I get my cycle on? comfortable with, something that is very easy to use. Mrs Holt: If you are travelling from Cambridge you I think a common smartcard platform is the way can leave your bike at the station. There are plenty to go. of facilities there. Peak trains are very, very crowded so we do not allow bikes on the train in the peak but Q86 Mrs Ellman: Is the PlusBus scheme undermined oV peak you can travel with your bike. You are not by frequent changes to bus timetables? required on our services to book in advance, but the Mr Dobbs: My personal experience is that is not point was made earlier about booking with bicycles necessarily the case. I think first of all although it is not being available on the Internet, and that is promoted it is not widely known about. 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Transport Committee: Evidence Ev 11

14 November 2007 Mrs Elaine Holt, Mr Martin Dean, Mr Les Warneford and Mr Ian Dobbs we serve, certainly in the south east of England, that Q91 Mr Scott: The industry has been reluctant to the preferred mode of travel to the station is the car make major investment in smartcards. Is the anyway. People have already got a car at home and government putting the long term structure and what we have been trying to do is encourage them to incentives in place to make the business case more leave it at the station and go forward from there, so attractive? we have been increasing car parking spaces. Maybe Mr Dean: The principle of ITSO is a good one bus has been a little bit further down the priority in because obviously if you create a common platform the Home Counties, but I think it is an area we have what it does mean is that you have the same to look at in the future, and again we have to make standards and you can buy products en masse which it visible. has to be a good thing. Mr Dobbs: Within the rail industry, the Q87 Mrs Ellman: Are there any plans to improve the government—I think as has already been PlusBus scheme? mentioned—is going through a process of specifying Mrs Holt: Yes there are. More stations are being smartcard technology to be implemented on all new added all the time and I think there is a lot of work rail franchises to either a large or to a small extent, going on to make sure that bus timetables and train depending on which franchises they are. We were timetables are linked. certainly with South West Trains the ﬁrst company to go through the process where we had to introduce a smartcard scheme across the entire train operating Q88 Chairman: There is an original idea! company. That is a huge challenge but I think it is Mrs Holt: Yes, startling, is it not! So I think we are moving in the right direction. We think there is a seeing that. We have been running the franchise for positive business case for it in our part of the home 18 months and we have seen a 58% growth year-on- counties, probably because of the sheer volumes of year on PlusBus sales because we are working a lot people involved and it will allow us far more ﬂexible more closely with other bus companies, so I think ticketing in the future as well, particularly with the where there is a will there is a way, and I think it is commuting market. In other parts of the country the important that train companies do build business case is far weaker. Clearly in rural areas, relationships. It does work when it is there and where the volumes of people are much lower and the advertised in the station. I think advertising and numbers of footfalls through each of the stations are better liaison on timetables is something that is very light in some cases, the business case is very, taking place and something that will improve. very diYcult to prove.

Q89 Mrs Ellman: Is fare dodging a problem? Q92 Mr Scott: Oyster is to be extended to all rail Mrs Holt: The previous witnesses talked a lot about stations in London by 2008. Do you think that is the level of ticketless travel. I think we should sensible, investing further in Oyster when it is not remember that 95% of our customers do pay for going to be compatible with ITSO? What is your their tickets. In First Capital Connect’s case it is view on this? about 5% of people that are fraudulent so, yes, it is Mr Dobbs: We are very happy to embrace Oyster a problem and we are making big investments into technology on mainland rail as long as we obviously gate lines, additional staV, and a variety of other get the commercial arrangements around it robust. I measures. The majority of people are honest and think it is sensible because extending Oyster across they pay their fare and it is the small percentage that the mainland rail system gives the consumer more we have to deal with. choice.

Q90 Mrs Ellman: Do you need any new powers to Q93 Chairman: I think we have to be clear about this make fare dodging more diYcult? because what Mr Scott was asking is, since there is a Mrs Holt: No, we do not believe we do on the rail gap between the two systems, are you assuming that side. you will be able to move or are you saying no, you Mr Dean: On the bus side outside London there is drop the ITSO standards and you go for the Oyster not the ability to levy a penalty fare. I think that is standards? I think there is a speciﬁc gap and a something that we would welcome the enabling speciﬁc disagreement, is there not? power to do. Mr Dobbs: No, I do not believe there is a gap. We are Mr Dobbs: I think from our side I would agree with cooperating with Transport for London to put Mrs Holt that the issue is being far more Oyster pay as you go onto all of our stations. We professionally managed now than it was a few years have had some very fruitful discussions with them ago. I think there has been a major tightening up on which we hope will lead to a resolution of that in the revenue protection. It is still a problem, of course it next few weeks. In the meantime, we are both within is a problem, and while there are people there not London and outside of London implementing the paying and can be seen by others not to pay, it is a ITSO smartcard as well so we are putting two major problem. It is, in the context of the overall systems in. I do not believe that is a problem. picture, a very small minority of people and the actual number of people within that 5% that was Q94 Chairman: Why? quoted there, whatever the number is, the hard core Mr Dobbs: As has already been mentioned, they are of people who are deliberately dodging is very, going to be interoperable. As far as the customer is very small. concerned, they will be able to use ITSO smartcard Processed: 28-03-2008 22:38:54 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG1

Ev 12 Transport Committee: Evidence

14 November 2007 Mrs Elaine Holt, Mr Martin Dean, Mr Les Warneford and Mr Ian Dobbs products in London that have Transport for for all the elderly and the disabled, with a standard, London fares on them and of course they will be able core time of day at which it can be used, each district to use Oyster cards on mainland rail stations with can then apply diVerent times of day to it. I just the Greater London area as well. cannot understand how the bus drivers are going to know what is going to be valid from one area to Q95 Mr Scott: You do not think it would be better another. Purely within your own area, within just to go with one system and, as Oyster obviously Kettering, our drivers will recognise a Kettering pass is around at the moment, to use that and not ITSO? will be available in the morning peak period. That Mr Dobbs: The Mayor has decided that Oyster is the will not be a problem but they might not know what right thing for London, bearing in mind that it came the rules are for Northampton or for Corby or for along earlier than ITSO as well, so it would have South Northamptonshire. I can see a real problem been silly waiting for ITSO. As the system evolves in there. the future and the technology evolves, I think the systems will technically probably come close Q99 Mr Hollobone: With regard to the rail service in together. As far as the passenger is concerned, it will Kettering, I am very glad that you are here, Mr not make a lot of diVerence. You will have a card Dobbs, because there is huge concern in Kettering at that you touch on a reader which is either valid or the moment that ticket prices are going to be going not valid, just the same as a normal ticket. up quite sharply under your new franchise arrangement. You are proposing to cut the number Q96 Mr Hollobone: Stagecoach basically runs the of trains from London to Kettering by a fifth, the public transport system in Kettering because you are number of evening peak trains from London to in charge of most of the buses and now the trains. Kettering by a third and halve the number of trains What plans do you have for somebody for example from Kettering going northwards throughout the in Burton Latimer in the Kettering constituency to day, eVectively downgradingth Kettering from an buy an integrated ticket to take him from Burton intercity station to an outer suburban station. Could Latimer to the station and then to London? I invite you, Mr Dobbs, to visit with me Kettering Mr Warneford: Kettering is one of the Plusbus railway station in this, its 150 year, so that you can stations so you can buy a rail ticket which has the bus talk with local passengers about the link between add-on. If you are asking will you be able to buy the ticketing and the extra prices that local people are rail ticket on the bus, that technically is a much going to have to pay with a severely downgraded huger problem and that will be the same problem service? anywhere in the country, to put the whole rail Mr Dobbs: Yes. ticketing system onto the bus driver’s machine. Mr Dobbs: Our contracted obligation is to install an Q100 Mr Martlew: Surely a lot of the problems are ITSO smartcard system at Kettering Station along with Victorian stations and integrated ticketing with the other mainline stations on that line and also because you cannot physically get the bus near the at selected stations in the East Midlands commuter station. Plusbus or whatever will not work if the area, let us call it, around Derby and Nottingham. forecourts of the stations are full of cars so local Our key priority is to get that technology in place government perhaps needs to clear the forecourts of first. Once we get things rolling, we will then be the stations to get the buses there. Is that correct? looking at how we can spread out greater integration Would that be helpful? but at the moment, as I think Mr Warneford has Mr Warneford: By and large I would say that where said, we have the Plusbus product and we will look the bus can get to the station sensibly as part of its to develop that further and see whether it can be route, we probably can arrange with whatever the integrated with smartcard but I think that is some train company is to make sure that there is space for years away. Our first priority is to get the rail the bus. In your own area, Penrith for example, there product working properly. When we have done that, is a bus/rail link and we have a place where we can then we will look at developing it. stop at Penrith. The bigger problem—and I do not have an answer to it—is the first part of your Q97 Mr Hollobone: We will come back to the rail question. A lot of stations are nowhere near product, with your permission Madam Chairman, convenient bus routes. You have to run dedicated in a minute. Pensioners in Kettering are looking services and they are expensive to provide. forward to their free concessionary bus travel from next April. The local borough council is looking to Q101 Mr Martlew: That is the problem you cannot extend that free concession into the peak period see the solution to? which the borough council will subsidise. Will your Mr Warneford: Not without some extra funds to smartcard technology be able to cope with that? whoever provides that service. Mr Warneford: Do you mean purely on the bus? Q102 Mr Martlew: There are two problems. One, Q98 Mr Hollobone: Yes. you are saying there is no bus route that goes by. Mr Warneford: The situation with the national bus Mr Warneford: In some places. concession scheme next April has a problem and you have crystallised it in your own question. Although Q103 Mr Martlew: The other one is, even if there is, there will be one national smartcard scheme from you cannot get near the stations anyway because the the government, from the Department for Transport forecourts are full of cars parked. Processed: 28-03-2008 22:38:54 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG1

Transport Committee: Evidence Ev 13

14 November 2007 Mrs Elaine Holt, Mr Martin Dean, Mr Les Warneford and Mr Ian Dobbs

Mr Warneford: Where we can easily access the clearly more capacity available oVpeak than there is station, we can probably overcome the parking in peak, but I think as has already been alluded to on problem because we can get space for a bus stop or the buses, the diYculty is once you start to apply two. diVerent rules in diVerent places it becomes very Mr Dobbs: It is down to us. We have to get those complicated. issues sorted out. They are not rocket science issues. Sometimes we have not been good at doing those Q107 Clive EVord: That is the second time that has things in the past. TraYc management at the fronts been referred to. I take it what you would be of stations is one of those things. We get a lot of advocating is a single standard for concessionary illegal parking around the fronts of stations as well fares so that it can operate nationally. and we sometimes do not do a lot about it. We need Mr Dobbs: I am not advocating that. I am just to work with local authorities as well. It is fair to say pointing out that I think there are many that there are many places around the country where complications, both practical and financial. If local authorities have been very generous in the help government wishes to move ahead with it as policy, they have given us in solving some of those traYc I think fine. We will address that and we will see if management problems. Some counties, some cities, we can work something out. At the moment I do not are more generous than others of course, but it is up believe that it is being put forward as a suggestion by to us to go and seek funds and sort things out and government. make sure that I can get the buses in the front, whether they belong to Stagecoach or First Group. Q108 Clive EVord: When you say that there are We do not discriminate in that sense because we problems, practical and financial, do you mean in know it is good for both our companies. administering it because it can be complex if it Chairman: We would all like buses and trains to have applies in diVerent ways in diVerent paths that some kind of coordination and we would like you to people use? think of trying to get your passengers to the railway Mr Dobbs: It is more about the volumes of people. stations. That would be very revolutionary. Mrs Holt: I do not think the rail industry has thought enough about it and that is what we need Q104 Mr Martlew: Mr Dean, do you see major to do. problems when the national concessionary fare scheme starts? Q109 Clive EVord: Is there any experience of these Mr Dean: When the national scheme starts, I think schemes in Scotland and Wales that you could bring a lot of the issues are already out in the open from to light that may assist people in trying to organise when the scheme became a free scheme in 2006/7. for extending concessionary fares to rail? The biggest issue with the national scheme is going Mrs Holt: There is going to be some learning from to be whether there might be some tourist hotspots the Scottish scheme which is just getting up and which might become overwhelmed with older people running. Once that has been up and running, there using their ability to use their pass. For example, a will be lessons we can learn from that. That is a London pensioner could go to Weymouth and use significant network and there are very diVerent his pass on a bus service in Weymouth and, if they all services across the patch, so I think there will be decide to do that at the same time, then clearly there some learning points from that. could be some capacity issues. That is something we will have to monitor very carefully. Q110 Clive EVord: Given that there could be diVerent schemes operating in diVerent areas, Q105 Chairman: Is Weymouth Council aware of this diVerent cards coming from diVerent areas, do you impending invasion of London pensioners? see the problems that we have seen in terms of the Mr Dean: I am sure they would welcome it. disputes between operators and concessionary travel authorities getting worse, continuing or being Q106 Clive EVord: Extending concessionary fares to resolved by the use of a national scheme? rail needs some careful thought. Have you any Mr Warneford: They are not getting any better. thoughts on how we can extend the concessionary They are a big problem. fare scheme to include some rail journeys without incurring high costs or overloading already busy Q111 Clive EVord: Would you like to elaborate on trains? that? Mr Dobbs: It is diYcult for me to add much to what Mr Warneford: Yes. In Scotland and Wales we have has already been said. As railway companies, we a uniform payment scheme funded through the want to encourage passenger growth. Of course we Scottish Executive and the Welsh Assembly. The do. We do need to have robust financial operators know where they stand. The authorities arrangements in place to make sure that it does not know where they stand and there are no disputes. I in any way work against us of course. Those are the think the result in both countries has been passenger kinds of arrangements that government decides as growth and investment. In England, the government policy, as to whether it is prepared to support that or the DfT—I know not which—chose to distribute kind of travel. Capacity is an issue, as has already the payments to the operators through all the district been mentioned. It is a critical issue in some areas. It and unitary councils without any standard payment is less critical in others. Applying national standards mechanism for the operators. Some local authorities to the system in this regard is very diYcult. There is were not given enough. Some were given the right Processed: 28-03-2008 22:38:54 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG1

Ev 14 Transport Committee: Evidence

14 November 2007 Mrs Elaine Holt, Mr Martin Dean, Mr Les Warneford and Mr Ian Dobbs amount. Some were given too much. Some of those Q115 Chairman: Why do you not name this wicked who were given the right amount chose not to pay authority? If they are costing you all this money I that amount to the operators. The operators have an think the least we can do is to give them some appeal mechanism to go through which is very time publicity. consuming and convoluted. The end result from the Mr Warneford: There is more than one. operators’ point of view is we now have a postcode lottery on what we receive for carrying the elderly Q116 Chairman: Tell us which ones. and the disabled according to which district it might Mr Warneford: The most extreme examples are in be in and it can be variable between over 70% of the Hampshire, Sussex and Gloucestershire. average adult fare to around about 40% of the average adult fare. Where it is exceptionally low, we Q117 Chairman: Are they local district councils? are now virtually at breaking point. We cannot run Mr Warneford: Ultimately it is the district councils a bus full of elderly at 40% of the adult fare without who have to pay, even though some combine into losing money. Unless we can resolve this, we will end bigger schemes. up reducing services. It is not where we want to be and we have persevered for 18 months now trying to get a solution. Q118 Chairman: When you say it has taken you 18 months, who are you negotiating with that has taken 18 months? Q112 Clive EVord: How does that work? If you have Mr Warneford: The particular authorities I referred a cost that you will incur in running a bus, regardless to use a third party agent who are not helping of whether there is one passenger on it or whether it matters. is full of passengers, and those buses are already running, presumably they have a turnover because Q119 Chairman: Let us give them some publicity. you are running them. The buses are now full of Who is this third party agent? passengers with concessionary fares. Does that Mr Warneford: MCL. mean that they are pushing oV fare paying passengers and costing you money or you are just Q120 Chairman: Which stands for what? running a full bus? Mr Warneford: I have no idea. Mr Warneford: Anecdotally, we believe that in some cases adult passengers are now being deterred from Q121 Clive EVord: Is it not the case that bus trying to board the bus. They are finding other companies have increased the price of single fares means to travel. I do not think that is an enormous disproportionately because the concessionary fares amount, but some. reimbursements are largely based on single fares? Mr Warneford: No, we have not increased fares Q113 Clive EVord: Why is that? Is it because these disproportionately, but the whole bus industry is pensioners are a bit rowdy, like schoolchildren? still subject to average annual cost increases which Mr Warneford: They are not at all rowdy. They are are well above the RPI index. Our annual industry very well behaved and it is a great scheme for them, cost increases are around 6 to 7% per annum and we but they fill the bus. At 9.30 in the morning every bus have to cover them. stop has a queue of pensioners. The bigger problem is where the numbers of pensioners have grown so Q122 Clive EVord: What is driving that? much that we have to provide even more buses. I Mr Warneford: Labour, fuel, insurance, most have some extreme examples, particularly on the recently fuel again. We thought it had stabilised a south coast, where we are not receiving any payment year ago and now it has rocketed again. at all and we have to pay the drivers, the engineers, the fuel and all the rest of it. In one particular Q123 Clive EVord: Is that the same for First Group? authority it is costing us about 1.5 million a year for Mr Dean: To support Mr Warneford, we would also the extra capacity. support the move towards a national concessionary fare scheme as there is in Scotland and Wales and, Clive EVord: You are running buses and you are not yes, we have the same sorts of cost pressures. running them on a franchise, so you are running them commercially. Q124 Clive EVord: London has a more extensive Chairman: I think this is a very interesting aspect of concessionary fare scheme than elsewhere in philanthropy I have never connected with England. Does this give rise to any particular issues Stagecoach. I am absolutely thrilled. I think you for operators or the public? should get more publicity for this. Mr Dean: Obviously in London it is slightly diVerent in that the revenue risk is taken by Transport for London. It is a well established scheme and I am not Q114 Clive EVord: They are full of non-paying fare aware of it causing any particular problems. One of passengers who are all on the concessionary fare the things that will be interesting, to use my example scheme and the other passengers have all of a few questions ago, will be that London disappeared? pensioners from April 2008 will now be able to flash Mr Warneford: No, the others have not all their London freedom pass in Scarborough, Whitby disappeared. I am not suggesting that. and all over the place. Processed: 28-03-2008 22:38:54 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG1

Transport Committee: Evidence Ev 15

14 November 2007 Mrs Elaine Holt, Mr Martin Dean, Mr Les Warneford and Mr Ian Dobbs

Chairman: We are going to have long day trips. I am otherwise use season tickets because they are casual getting very concerned about these. Are you also travellers, so we do have a disagreement about that providing resuscitation? going into the melting pot. The debate is not really about the level of fare at all. I know it has devolved Q125 Mr Clelland: If there were no concessionary into that because of the way the DfT has chosen to fares, is it not the case that bus operators would need produce what is called its toolkit, but the issue is to—and indeed would—themselves introduce really about what it costs to run the bus. If you concessionary fares in order to attract passengers cannot aVord to run the bus, then the elderly onto their buses at oVpeak times? cannot travel. Mr Warneford: I have heard that suggestion over a Chairman: Do you understand this commercial lot of years but I go back a lot of years in the industry argument, Mr Clelland? and there never were commercial concessionary Mr Clelland: No. fares oVered. I think the answer would probably be in some cases there would be and in others there would not and it would have to be a commercial Q131 Mr Martlew: You have both said that you decision as to the viability, the level of service, the would prefer a national scheme as in Wales and type of demography. You could not say a plain yes Scotland. Is that because you think you would make or no answer to it. more money out of it or it would be easier to administer and you would not have the bureaucracy and the diYculties that some councils get too much Q126 Mr Clelland: Certainly on the railways that is and some get too little? Can we exclude London? something which has been introduced over many Mr Dean: Yes. We think from the point of view of years. Given the fact that we now have commercial the operators and the local authorities it would be bus companies as opposed to public bus companies much better if we could focus our minds on customer that we used to have, I am quite sure that some sort service and running the buses rather than of concession would have been introduced in order negotiating on a number of schemes. Just to back up to attract more people onto the buses. Otherwise it Mr Warneford’s view, if you look at some would not have been viable to run buses in oVpeak companies, if they straddle a lot of administrative periods if there was nobody riding on them. In that areas, they have to negotiate with about seven or case, why is it that the bus companies insist on the eight concessionary fare authorities. This is very, concessionary fares being based on the prices of very time consuming for the local authority and the single fares—I think there is some evidence that they bus company. have been increased disproportionately—and make no contribution whatsoever to the increased ridership they are getting as a result of the Q132 Chairman: They are not exactly expecting to concessionary fare system? come out of it with no benefit, are they? Mr Warneford: To go back to the first part of what Mr Dean: No. you were saying, all the conventional price elasticity formulae suggest that we would be better oV if we charged the full fare for the elderly and carried fewer Q133 Chairman: You are not negotiating in an of them—i.e., discounting never generates more abstract; you are negotiating for hard cash which money; it generates more passengers. belongs to rate payers. Mr Dean: I understand that, but it would be better Q127 Mr Clelland: You have evidence for that? for everybody if we could get on with the more Mr Warneford: That is all the conventional wisdom positive aspects of managing the business. If there from the academics. was a nationally administered concessionary scheme, it means the amount of time that the local authorities and bus operators were spending on Q128 Mr Clelland: Do you have some evidence for negotiating the correct level of reimbursement that? would be considerably reduced. Mr Warneford: The Department for Transport rely upon it in the concessionary fares. Q134 Mr Clelland: I agree with what you are saying Q129 Mr Clelland: On the conventional wisdom or on the national scheme. I wish we did have a the evidence? nationally administered scheme rather than the one Mr Warneford: On the evidence. we have. You have suggested certain regional and county concessionary travel authority groupings. Is Q130 Mr Clelland: Can you produce this evidence that happening or is it still as fragmented as ever? for us? Mr Dean: At the moment there are some county Mr Warneford: It is produced by academics. There wide schemes so the money flows from the district are published papers. Would we provide commercial council but, for example, in the Essex area there is a concessions? Possibly. You asked about the single number of district councils but there is a lead travel fares. We do not insist that the calculation is based concession authority which is the county council. on the adult single fare. We are happy for it to be on That does make things a little easier, but it is not the adult single fare, the return fare where there is always the case. It depends upon the area and one and the day tickets. Where we do have some whether they decide to have a county administered disagreement is about how much the elderly would scheme or not. 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Ev 16 Transport Committee: Evidence

14 November 2007 Mrs Elaine Holt, Mr Martin Dean, Mr Les Warneford and Mr Ian Dobbs sort of a regional administered scheme, that would Mr Dobbs: With respect, the Department for be better than the situation that there is at the Transport is in the process of developing with moment. Transport for London what is called IOP, ITSO On Prestige, which has the dual reading ability for ITSO smartcards and Oyster to work on the same readers. You will be able to buy a travelcard— Q135 Mr Leech: I want to come back very briefly to Chairman: I will take your word for it. through ticketing. When I took a ticket from Manchester to London I can get a train ticket with Q137 Mr Leech: We do not need smartcards to be the tube added on but I cannot have the Metrolink able to add on the Metrolink before a train journey before the train journey. Why is that? Given that and we also do not need smartcards to add on a Stagecoach now runs Metrolink in Manchester, is it Stagecoach bus journey into Manchester and then a going to change? train journey. When are we likely to get some change Mr Dobbs: That is back to me because Metrolink and some movement so that these can be added, comes under the rail division. I hope in the future it because clearly that has a significant impact on the will change. Ticketing in Manchester is entirely the number of car journeys into railway stations and responsibility of the Greater Manchester Passenger persuading people to use public transport? Transport Executive. It is not ours. We eVectively Mr Dobbs: I, like you, would like to see it happen run the managing contract on Metrolink in sooner rather than later. I am not responsible for Manchester. I am already talking to the PTE about either ticketing or fares on Metrolink. That is a ways that we can improve integrated ticketing with GMPTE responsibility. I am working with them to the light rail system in Manchester and the heavy rail develop that but at the moment the technology on system, partly due to the fact that we are obviously the tickets that are sold there by the PTE is not compatible with London for instance or the doing a lot of the development work on smartcards mainland rail system. It is a diVerent kind of ticket. in the UK at the moment because we will be the first Mr Leech: If you buy a ticket in advance you could company that has them on the ground. I think we add something that does not need to go through any have the expertise to help the likes of our colleagues smartcard system or Oyster system or anything like in Manchester towards that end. We will look for that; it just needs to be shown. Surely it just needs similar developments in other parts of the country as someone to knock a few heads together between the well. As was mentioned earlier by Mr Hollobone, we companies and the PTE to make sure that it have just taken over the East Midlands rail franchise happens. in the last four days and we have the SheYeld Super Tram at the north end of that so we have exactly the Q138 Chairman: Mr Dobbs, go out and knock a few same issue. We want to work with those PTEs. The heads together. good thing is of course that the common platform is Mr Dobbs: I am sure my customers would be going to be an ITSO platform. The PTEs are delighted to hear that they were going to have their developing smartcard systems that are compatible heads knocked together. We will certainly work with with ours. It is the same platform and again the the PTEs, all of them, to see what we can do in travelcard add-on in London will be possible on our practical terms. I think smartcards will beat all of the smartcards, so if you get a smartcard ticket from rest of the systems in practical terms because we are SheYeld and you want to travel to Victoria— not far away. Chairman: Gentlemen and Madam, you have quite encouraged us. I have completely revised my view of at least one major company and I am so delighted to Q136 Chairman: Mr Dobbs, I should tell you that hear of these pacific, philanthropic and tolerant this is not the view of Oyster. This Committee was companies that I did not know existed. Thank you told very specifically that that would not be the case. very much for coming this afternoon.

Witnesses: Mr Keith Halstead, Chief Executive, and Mr Ewan Jones, Director of Operations and Deputy Chief Executive, Community Transport Association UK, gave evidence.

Q139 Chairman: Good afternoon, gentlemen. Mr Halstead: Yes. I wonder whether we could make Would you be kind enough to tell us who you are? a brief opening statement. The CTA very much Mr Halstead: Keith Halstead, chief executive of the welcomes the government’s concessionary fare Community Transport Association. scheme as it provides increased opportunities for Mr Jones: My name is Ewan Jones. I am deputy elderly and disabled people to travel and will chief executive of the Community Transport obviously bring many people improved Association. independence, mobility and choice. However, when you look across England, a much more mixed picture emerges and many older and disabled people Q140 Chairman: Thank you both for coming. It is will not be able to make use of their concessionary extremely helpful for us to have you here. Mr bus travel pass to which they are entitled because Halstead, did you want to say something before we either they cannot physically access a local bus begin? service or the may be geographically remote from Processed: 28-03-2008 22:38:54 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG1

Transport Committee: Evidence Ev 17

14 November 2007 Mr Keith Halstead and Mr Ewan Jones such services as to render them redundant. In these Q145 Mrs Ellman: What would the cost be of adding cases, such passengers will have to pay for their community transport to the concession? transport. Therefore, it is the CTA’s view that the Mr Halstead: The government has stated a figure of current concessionary fares strategy is not equitable. £25 million to extend it to cover all community transport operations and we would very much like to know how the department has arrived at that figure. Q141 Chairman: That is helpful. I do not know That is not something that has been shared with us. whether you heard some of the evidence that was Even if it was that amount, that is less than 5% of the given beforehand? current total spend on concessionary bus travel, 550 Mr Halstead: Just the last few moments. million, and less than a mile of motorway at 30 million. If the government is committed to social Q142 Mrs Ellman: If the concessionary fare scheme justice—and the Department for Transport’s own was extended as you ask, could community over-arching objective was recently extended to transport handle the demand? embrace access to jobs, services and social networks, Mr Halstead: Yes, we believe it could. By its very including for the most disadvantaged—then the nature, community transport is demand responsive current policy seems to go against the grain rather and services are by and large resource restrained, than with it in terms of social justice. limited by capital and revenue grant and other funding constraints. Therefore, I think we feel that if Q146 Mrs Ellman: Have you made any assessment it was extended to embrace community transport of the costs? our members could better respond to the demand Mr Halstead: No. We have not been able to do that. from community transport users. Also currently a Currently, we are undertaking a mapping exercise to number of older people and people with disabilities map more eVectively community transport are using community transport to get to other provision across England, but one of our diYculties transport provision to use their pass, so it is not as is that often there are small, voluntary car schemes though it would be a completely new raft of users. and a whole variety of diVerent types of community transport that we would need to capture. That is why Q143 Mrs Ellman: Have you done any feasibility we have embarked on this mapping programme. studies to establish just what the demand would be? Mr Halstead: We did undertake some research last Q147 Mr Martlew: Can I congratulate you for the year where we found that of the 295 travel work that you do? Would a national scheme be concession authorities, which embraced obviously better for you because you say that some authorities rural district councils, unitaries and PTEs, the do not give you any money; some of them give you majority did not reimburse community transport a bit? As long as you are included in a national and even where they did the rate of reimbursement scheme, do you think it would be a better system? was less than 50%. Mr Halstead: It would be a better system, yes. At the moment at best it is a postcode lottery, just Q144 Mrs Ellman: What would the extra number of depending on which travel concession authority you passengers be likely to be? Have you done any work live in. You either get some return or not as a on that? community transport operator for running eligible Mr Halstead: We have not done any specific work on services. If all community transport organisations what the extra number of passengers would be. were able to be included in the scheme, that would Mr Jones: Not specifically. Our information is be a much better position. largely anecdotal on that but we are aware that a lot of our members and community transport providers Q148 Mr Martlew: The situation is that even round the country are responding to demands and community transport will not be able to help some needs. They are delivering transport to passengers of these people because they do not have the facilities who are not able to travel on existing bus services in that particular area. Surely in that case the best because they are inaccessible or because there are no solution would be for some payment to be made to such services available where those people live. By its taxis or private hire companies? There is a network very nature community transport does have a high out there. That would seem a very simple solution. proportion of passengers who are older people or Mr Halstead: Yes. We want to look at the public disabled people. A lot of them are using community transport network in the round to meet those gaps. transport already and they are paying for that. The If there is no community transport scheme there, by point is, when they come under the national all means. Taxis are part of the local link to the concession, they will have an entitlement to travel on transport networks too. registered bus services but they will not be able to use that because they do not have access. Therefore, they are paying to go on community transport and we feel Q149 Mr Martlew: The way that that could possibly that, if they cannot access their concession, the travel be done because of the cost factor would be that an concession authorities should deliver the concession individual would be given a credit, so much a year, using a diVerent tool, be it community transport or £200 or £300 a year credit on a system which they something else. could use on taxis or community transport. Processed: 28-03-2008 22:38:54 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG1

Ev 18 Transport Committee: Evidence

14 November 2007 Mr Keith Halstead and Mr Ewan Jones

Mr Halstead: We can certainly go down that route, Q154 Chairman: While we are talking about lifestyle yes. choices, what about smartcards? Have you done any work on whether your members find smartcards acceptable? Q150 Chairman: Disabled people who cannot use Mr Jones: Not specific work but I think it is our mainstream transport are entitled at the moment to general view that a lot of concessionary travel pass concessions from the DWP, are they not, in terms schemes exist already. If you use a pass, if that pass of benefit? is replaced in some way or used in conjunction with Mr Halstead: Yes. a smartcard, I feel that is likely to be relatively easy for a lot of people to use. Particularly, given some of what was being said towards the end of the last Q151 Chairman: Are these adequate? Do you think contributor, it would improve the whole through this is the way round it? Is that what you are telling ticketing issue and access to diVerent services. Oyster Mr Martlew? cards are great when you come to London for people Mr Jones: Our key point here is that if there is a like me, who do not live here. It would be even better concession which is available to certain people in if I could use that everywhere else on any form of certain categories and the national policy is that transport. Disabled people and older people are disabled people over 60 are entitled to free transport using community transport or any other form of on registered buses, then there will be a group of transport and the same benefits could potentially people who cannot access that concession due to the apply. nature of the services and/or the vehicles. In those cases in order for a national policy to be delivered across the board locally, diVerent tools need to be Q155 Chairman: Have you experiences from the used. Yes, the registered bus service obviously is the other countries of the United Kingdom that would first choice but we are arguing that community help you in assessing the eVects of the changes transport, taxis and other mechanisms should all be towards, say, smartcards within England? there in the toolbox because this is an issue of Mr Jones: Yes. In particular we administered a discrimination potentially otherwise because certain programme of grants, the Community Transport people cannot travel. It is not about community Concessionary Travel Initiative, £3 million over a transport wanting funding. Community transport three year period in Wales, where that money went should be reimbursed for providing free travel and to 15 projects in Wales to deliver free transport to understands and accepts that it should be no better people who are entitled to concessions. The Welsh or no worse oV as a result of doing that because this Assembly Government are just in the process, I is about the concessionary travel for the individual, believe, of appointing external evaluators for that not about the Community Transport Group looking project which will be very interesting to see. Those for a funding stream. again were projects across Wales, north, south, east and west, operating in diVerent ways, diVerent types Q152 Mr Martlew: I accept what the Chairman says. of projects, some using dedicated vehicles, others It is called a mobility allowance, is it not? Would you linking in with existing taxi and community accept that it would have to be a cash sum? It would transport networks, to provide the free transport not be paid in cash. You could not give an open that concessionary passengers were entitled to. We ended commitment to some lady who lives at the top have yet to see the evaluation of that because we of a mountain to be able to travel in to do her administer the grant payment scheme on behalf of shopping every day, could you? It would have to be WAG and we service the independent panel that cash limited to some extent. Would you accept that made recommendations to the Minister in Wales as or not? to who should receive the funding. Obviously we are Mr Jones: Practically any scheme would have to be not involved in evaluating that ourselves. cash limited. The current scheme is cash limited. Q156 Chairman: That independent assessment Q153 Mr Martlew: The pensioner can travel every meant that you did not lay down a specific template day where there is a bus. It does not matter how to the various organisations dealing with it; you many times he travels; he or she does it free. If you simply said, “This is what you should be doing were using taxis for example that would not be overall”. Is that right? possible, would it? There would have to be a Mr Jones: Yes. What we said to groups was not that financial cap so that you could spend more over the they had to use this kind of model or this kind of year, I suspect in rural community transport as well. service, but, “You have come to the assessment Mr Jones: Yes. It is a question of agreeing where the panel. Tell us about your area, about the passengers balance point is, is it not? There is certainly an who are entitled.” The Welsh Assembly argument that for instance the problem with living in Government was quite specific. It was not across the an area where there are not services is partly because board disabled people. The term they used was there are not services, but it is partly a lifestyle choice “severely disabled people” so it was only a certain as well for a lot of people. The point is we need to try subset. It was not even the whole entitled market, if and find the balance. you like. “Come and tell us about your area, of your Processed: 28-03-2008 22:38:54 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG1

Transport Committee: Evidence Ev 19

14 November 2007 Mr Keith Halstead and Mr Ewan Jones definition of severe disability and why those people Mr Jones: Exactly, yes. One project in Powys brings do not have access and how you propose to . . . ”. together 20 plus diVerent organisations using diVerent community transport and car schemes to Q157 Chairman: Each individual project was provide the delivery. Others link up with local taxi tailored to the needs of that particular area? firms and provide a token service in Pembrokeshire Mr Jones: Yes. so there are diVerent models for diVerent areas. The word “pilot” is in there as well and that is another Q158 Chairman: It would be very flexible. There reason. It is action research as well, if you like. would be some common denominators but not a Chairman: Gentlemen, you have been very helpful series of templates that could be used across the and we are very grateful to you for being such good whole? witnesses. Thank you. Processed: 28-03-2008 22:39:41 Page Layout: COENEW [SE] PPSysB Job: 376402 Unit: PAG2

Ev 20 Transport Committee: Evidence

Wednesday 5 December 2007

Members present

Mrs Gwyneth Dunwoody, in the Chair

Clive EVord Mr Eric Martlew Mrs Louise Ellman David Simpson Mr Philip Hollobone Mr David Wilshire

Witnesses: Mr Roy Wicks, Chair of pteg, and Director General, South Yorkshire Passenger Transport Executive, Mr Neil Scales, Director General, Merseytravel, Passenger Transport Executive Group (pteg); Mr David Cook, Chief Executive, Kettering Borough Council, Mr Adrian Jones, Director of Environment and Regeneration, Nottingham County Council, and Mr Greg Yates, County Transport and Regeneration OYcer, Cheshire County Council, Local Government Association (LGA), gave evidence.

Chairman: Good afternoon to you, gentlemen. You are three points we have to make constructively are very welcome here this afternoon on the second about things which have been done which are very session of our ticketing inquiry. For those of you helpful on funding and three things which perhaps who have been here before, you know the ground are not quite so helpful, which might be of rules. The microphone in front of you records but information to the Committee. does not project, so I am going to ask for a little voice, and I am going to ask if you would be Q161 Chairman: And they are? indulgent for a moment because we have a little bit Mr Cook: The three things which are very helpful are of housekeeping to perform. Mr Martlew, any that there is funding for smartcards so that local interests to declare? authorities can bring smartcards in, there is a specific Mr Martlew: A Member of Unite and the GMB grant to pay for the costs of the concessionary travel, Trade Union. and the things which are likely to be problematical Clive EVord: A Member of Unite. are whether or not that specific grant is suYcient, Chairman: A Member of ASLEF. whether the distribution of it will be accurate and Mrs Ellman: A Member of Unite. whether or not there are arrangements in place to Mr Hollobone: One of our distinguished witnesses, review the suYciency of it swiftly, which we think Chairman, is the Chief Executive of Kettering would be necessary. Borough Council, of which I am very proud to be a member. Q162 Chairman: Are you suggesting the Q159 Chairman: Gentlemen, beginning on my left Government does not have a policy on integrated and your right, would you like to identify yourselves ticketing? for the record? Mr Cook: No, Chairman, I am not suggesting the Mr Yates: Greg Yates, County Manager of Government does not have a policy on integrated Transport and Regeneration, Cheshire County ticketing. I am talking specifically about the funding Council. of concessionary travel. Mr Jones: Adrian Jones. I am the Director of Planning and Transport in Nottingham City Q163 Chairman: Yes, we will come to that, Mr Council, which is a unitary authority. Cook, but what do you think is the Government’s Mr Cook: Good afternoon. David Cook, Chief policy on integrated ticketing? Executive of Kettering Borough Council and Mr Cook: Chairman, if I may, my colleagues have Chairman of the District Chief Executive Network. probably got more lineage and credibility in those Mr Scales: Neil Scales, Director General of areas than myself. Merseytravel and Chairman of ITSO, the Integrated Mr Jones: I think, Chairman, outside London there Transport Smartcard Organisation. is not a very credible or eVective policy on integrated Mr Wicks: Roy Wicks, Director General of South ticketing and it is a fairly major problem for a city Yorkshire PTE and Chair of pteg. like Nottingham.

Q160 Chairman: You are all coming at this from Q164 Chairman: Whose fault is that? slightly diVerent angles, but does anybody have Mr Jones: I think it lies in the legislation which anything they want to say before we begin? Mr underpins the whole structure of the bus industry at Yates, are you taking a breath there? the present time. Mr Yates: Chairman, I will pass over to Mr Cook. Mr Cook: I think from looking at the terms of reference of the Committee it is clear that you are Q165 Chairman: Mr Yates, is that your view? looking at a number of issues. One of the things I Mr Yates: It is my view as well, Chairman. think we are keen to do is answer the Committee’s questions, of course, but the issue of funding would Q166 Chairman: Is there anything else you wanted go to the heart of the success of this and I think there to add to that? Processed: 28-03-2008 22:39:41 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

Transport Committee: Evidence Ev 21

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates

Mr Yates: I think the achievements we have made in Mr Scales: Yes, they are easy to use. They are very Cheshire have been done with the assistance from convenient for passengers because they are the Department, but we have only gone partly along contactless so you do not have to push them into a the road of being able to get a fully integrated slot on a vehicle or on a platform. Therefore, you get ticketing system in Cheshire and it is almost as if it reduced fraud; you get better data sets for planning has been a very uphill struggle, despite the assistance public transport going forward. As my colleague Mr we had from the Department. Wicks said, there is another pilot on the way now and our colleagues in Scotland are already rolling out more than a million ITSO-compliant Q167 Chairman: You do not think the Government smartcards. ITSO itself provides a framework, is doing enough to help you develop an integrated which is Crown copyright, so it is open to everybody, system, is that what you mean? and that will allow diVerent manufacturers to bid for Mr Yates: Yes, I do. We have had some help, but it smartcard projects. I think the English national has not gone far enough in terms of getting the concessionary travel scheme with potentially 11 system spread across the whole totality of the bus million cards in England being introduced on 1 April provision within Cheshire. We have got about 60% provides a good base for the smartcards, a suYcient of the way and I gather we are well ahead of other volume for other applications to get noticed, things areas in the country. like banking applications, as is happening here with Oyster, but you can extend them into local authority Q168 Chairman: Is there a national scheme for uses such as library cards, access to schools. There integrated ticketing? I am not talking about the are lots of applications, so we think smartcards are deﬁnitely a step in the right direction and ITSO standards for ITSO, but is there actually an provides an interoperable framework which will integrated scheme throughout the whole of the help that. United Kingdom? Mr Wicks: No, Chairman. I think, as my colleagues have said, the issue for us really, particularly in the Q170 Mrs Ellman: Would that apply equally to the larger cities, is that even if you can achieve some non-metropolitan areas? degree of integration within one bus company, the Mr Scales: Yes, indeed. There are 291 issuing problem we have is that we have buses and trams and authorities in England, all of which have the we are trying to operate a simple single ticket for operability to go for a smartcard-type solution, people. We do that and all of the PTEs oVer such a maybe not now but in the future, and with support ticket. The diYculty we have is that because it has to from Government and our colleagues in the be commercially negotiated the pricing of that ticket Department for Transport we have set up ITSO has to be a suYcient distance in practical terms from Services Limited, which will capture all the data on the operator’s own tickets. So in relation to oVering the non-smart operations and when they go smart an integrated product—which you can get in most of then they get all the data sets back. So we have taken our cities which allows you to travel anywhere by adequate and suYcient precautions to protect the bus, tram or train, or in my colleague Mr Scales’s data until they go into a smartcard solution. case even by ferry, I suspect—it is actually can you Mr Jones: In Nottingham we have actually got the price that ticket suYciently attractive for people to highest take-up of smartcards outside London per take it up? head, but we have got a problem in that there are three separate smartcard systems which are not compatible. Q169 Mrs Ellman: How important are smartcards? Could not improvements be made by improving the existing paper systems? Q171 Chairman: Is that because they are not part Mr Wicks: Certainly—if I could start on that and of ITSO? ask Mr Scales to come in—we think smartcards are Mr Jones: That is correct. very important. You only have to see the success of Mr Scales: They are Legacy systems, Chairman. the Oyster card in London in encouraging people to Mr Jones: Yes, so actually getting the operators to make more trips by diVerent modes of transport. agree to a common smartcard is really fundamental The Government is funding a pilot of smartcard to moving forward with integrated ticketing and ticketing in SheYeld, which will get underway in that is extremely hard to do, sometimes for March, but I would not want to underestimate the commercial reasons and sometimes because it is a diYculties there are, compared with London, in way of actually preventing the requirement for actually introducing such a scheme. In London, TfL integration if you have not got a smartcard system. can take the revenue risk in eVect and the There are integrated tickets at the moment in Nottingham which is quite successful—it is actually consequences of that. We have had to negotiate with a paper scratch card—even though we have got a all the bus and train operators to make sure they are very high number of people with smartcards. comfortable with the processes that you put in place behind it. So, yes, smartcard is an important way of getting people a good ticketing oVer, but there are a Q172 Mrs Ellman: Mr Wicks, in your evidence you lot of practical implications behind that to do with say that some of the commercial operators have the commercial deregulated market outside questioned the commercial beneﬁts of smartcards, London. some of the private operators. Why would that be? Processed: 28-03-2008 22:39:41 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG2

Ev 22 Transport Committee: Evidence

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates

Mr Wicks: It has been an interesting experience that, you could have a single operator eVectively because we have been on that project for four or five because you will have franchised the services. You years and certainly at the beginning the operators can simplify the fares structures and you can were concerned for two principal reasons. They integrate better with the other modes without having needed to be convinced, first of all, that it would to worry about the issue of preferential pricing for actually give them productivity benefits in terms of any one operator. Also, it would have benefits in speeding up the buses. They actually thought some terms of the concessionary fares issues my colleagues of the processes might take longer in fare collection. were referring to earlier because you would not be I think we can demonstrate that is not the case. The into this complex round of negotiations with second real issue for them, which is the diVerence operators about what they might claim for between London and outside London, is how the concessionary fare reimbursement costs, you would revenue is allocated because at the moment a bus be dealing with the actual costs themselves. So operator collects all his money, if you like, on the certainly the Local Transport Bill through the day in cash and knows he has got it. If you have a quality contract route oVers the most eVective way smartcard system you actually have to put in place a of achieving both integrated ticketing and good back oYce which allocates the money between concessionary fare reimbursement. operators, and operators were concerned that might Mr Scales: The wellbeing powers contained in the represent a threat to their revenue – Act will also allow us to oVer concessionary travel to other market segments such as asylum seekers, Q173 Chairman: Why would it represent a threat maybe, or diVerent groups of children that are not unless they are not giving you accurate figures now? captured by the concessionary travel regulations Mr Wicks: I think it is probably a threat because now, so that would be another benefit we would get basically they would not get their money straight from the Act. away, they would get it through some handling system, and secondly there might have to be Q176 Mrs Ellman: Are you satisfied the provisions commission paid to agents who sold the tickets. So in the Bill will be adequate to deal with these issues? if you went to top up your smartcard somewhere Mr Wicks: Provided the quality contract process is else, at a pay point or somewhere like that, that deliverable within the timescales of the political company might charge a commission. What we have aspirations of the authorities which want to do it. said and what we want the pilot to prove is that Provided we have a speedy process for implementing whilst there may be risks, they are more than the franchising and it does not become a drawn-out outweighed by the benefits to the customer and the bureaucratic process, then I think all of the passenger, and it should actually give you two provisions in the Bill are very helpful. critical things. The first one is a growth in patronage, Mrs Ellman: Thank you. which should be good for the bus operators’ business, and secondly they should get a lot more Q177 Mr Martlew: Can I concentrate, gentlemen, on information about their customers, which is the concessionary fares scheme which is about to certainly helpful for them in being able to target come within the spread. Mr Cook, I think you oVers to those customers and other things. What I initially said there were reservations about this. Can said at the beginning was that yes, the operators were you expand a little on that? sceptical. Recently, it has been quite interesting to Mr Cook: I think the issues are in respect of see the sea change and now certainly companies like reimbursement of the costs, so if the scheme goes to Stagecoach are very keen to see the products a national scheme there will be additional costs. We implemented, as they have seen the Government start with the proposition that neither the bus encourage, particularly through rail franchises, the operators nor the local authorities should be out of take-up of smartcards and as Oyster cards become pocket or in pocket as a result of these changes. One more successful. It did take some persuasion to of the very good things is that a specific amount has translate the London lessons outside London, but I been set aside for local government, £212 million, to think now they can actually see those benefits for ensure that local authorities get reimbursed for themselves and I think they believe they can capture reimbursing the operators for the cost of travel. As the productivity benefits. colleagues have said, the smartcard would allow us to be more accurate about which people are getting Q174 Mrs Ellman: So you think there is a change on buses and what the price of journeys are, but that now? aside I think the first concern might be is £212 Mr Wicks: I think there is a definite change, and that million the right amount of money? That question is why I am optimistic about the pilot when it starts might be raised because experience in Scotland and in SheYeld next March. Wales has shown that take-up is quite high. Anecdotal evidence we have from local authorities is Q175 Mrs Ellman: You also mentioned problems of that people have persistently and consistently joined smartcards in a deregulated environment. What concession travel schemes such as, for example, the diVerence will the Local Transport Bill make? local one which came in in 2006. So take-up does not Mr Wicks: It will oVer local authorities the option of step up and then plateau, take-up continues to rise, moving to a more regulated market, which would so £212 million may or may not be the right amount clearly enable two things to happen. First of all, of money. Secondly, we have a distributional apart from all the other benefits that might flow from problem in that the £212 million may not go where Processed: 28-03-2008 22:39:41 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

Transport Committee: Evidence Ev 23

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates it is needed and there are four options being Mr Yates: I think I would support something that consulted on by Government in terms of how one either provided an open-ended—well, I cannot say distributes the money. Just as a little colloquial open-ended, but a more responsive method of example— funding so that the settlement responded to the actual amount of travel or that there was an aggregation of the authorities that dealt with it, Q178 Mr Martlew: It seems to me—and I live in an because at the moment there is a massive amount of area where it is two tiered and the local district what I call non-Gershon eYcient energy that has councils are like ferrets in the sack at the moment gone into all these separate little negotiations. about who is going to get the money. Surely it makes logical sense for the Government to give it to the Q182 Chairman: Sorry, Mr Yates, what was that transport authority, which in our case is the county lovely phrase? council? I realise you are a district council Mr Yates: Non-Gershon-like, you know, the – representative, but surely there is a logic in that? Mr Martlew: We remember it, yes. There is no logic in giving it to the district council? Chairman: Yes, we remember it only too well. I Mr Cook: Chairman, the logic is that it is the thought we had made another new name. Sorry, go districts that are reimbursing the operators and on. therefore the districts which need to be reimbursed, even if it went through some sort of collective agreement, and the capacity exists at the moment for Q183 Mr Martlew: Does anybody else want to authorities to get together in clusters to manage this comment about the way the money is distributed? in a certain way if they want. So we could get Mr Jones: I am sort of neutral, being for a unitary, together in clusters, but that would not deal with the but there are lots of inequities in the way the money fundamental issues of (a) is it the right amount of is distributed under all of the formulae and I think money, and (b) is it being distributed correctly, the key thing is that we have got to readdress this because even if it was county-wide and you have a because it is going to happen in April and I think it county agreement, it still does not take account of is really important that quickly the Government the fact that distortions occur depending upon comes back and learns from what happens in the ﬁrst whether or not one is a destination for journeys, or six months rather than just leaves us to solve the not, and there is too wide a spread in the problem. consultation options at the moment. Q184 Mr Martlew: What you are saying is that you think it will not go right and we need to look at it Q179 Mr Martlew: Can I ask Mr Yates, who I very quickly? understand is from a county council? Mr Jones: That would summarise my view, yes. Mr Yates: Yes. We broker a county scheme on behalf of six districts and two unitaries. I broadly Q185 Mr Martlew: The two gentlemen at the end are support Mr Cook’s point that we have both a very quiet! funding and distribution problem. It would be Mr Scales: We are very happy because the grant is diVerent if the funding went to county councils going to the passenger transport authority in a direct because our main diYculty is the inequities between grant, rather than going through our district council the individual districts because they have all got very colleagues. diVerent settlements so far, and are likely to get again, which brings out certain authorities which Q186 Chairman: I do not want to spend too long on have got a 5% shortfall on their overall expenditure this. What you are really saying is that if the unit is and others are in surplus. big enough you get economies of scale and everybody will come back if the units are too small? Q180 Mr Martlew: That is the failure of the Mr Scales: Yes. present system? Mr Yates: It is the failure of the present system, and Q187 Chairman: It is not a new theory. Yes, Mr that was based on a district scheme, which was Cook? meant to just provide local travel, but obviously we Mr Cook: I think there is also an issue about recognise that local district travel is of limited use to reviewing the quantum, whether the amount of lots of people who live in a rural-ish county like money is right. The Government has indicated a Cheshire with a lot of boundaries. So we strove early 2.5% increase in the £212 million for the next two on to make sure the county-wide facility was there, years. Our concern is that as the number of people even though it was above the basic scheme. The eligible for the scheme rises signiﬁcantly— diVerence is now that the new scheme is going to be Chairman: Yes, I think you made that point actually. a country-wide scheme, so there is even less argument for targeting the pockets of money into Q188 Mr Hollobone: Mr Cook, you cited examples small district-based things which are bound to pick from Wales and Scotland, where take-up has been out little inequities by virtue of doing that. rather higher than was initially expected, and therefore the same could happen in England. What is the LGA’s view of the potential under-funding of Q181 Mr Martlew: So you would support it going to that £212 million? What is your best estimate of what the county, would you? that £212 million ought to be? Processed: 28-03-2008 22:39:41 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG2

Ev 24 Transport Committee: Evidence

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates

Mr Cook: If we ran the assumption it was right now, Scarborough and they were leaving from another which we cannot really validate because we do not district authority area, the authority from where know how many people will take it up and how they live would pay for the journey to Scarborough many genuines we have, but even if we ran that but it would be the local authority in Scarborough assumption now it is probably going to be something that would have to pay for the return journey. like 10% out in a year or two. Therefore, presumably attractive parts of our country which attract a lot of tourists are going to Q189 Mr Hollobone: A number of authorities of the find themselves with a rather large bill to pay, but my 291 are issuing smartcards and some are not. What is understanding is that this £212 million is not your understanding of the percentage of the issuing allocated on the basis of tourist areas, it is allocated authorities which have got smartcards? on the basis of resident population? Mr Cook: I would not know that, but perhaps one Mr Jones: If I could answer part of that, the issue is of my colleagues would. not just about tourist areas. Wherever there is any big shopping centre, Nottingham, York, somewhere Q190 Chairman: Mr Scales, do you want to have a like that, there is a big problem because people come go at guessing? We will not hold you to it. in from the suburbs, which are outside the Mr Scales: No, but what I will do, Chairman, is I will boundary, and then the city centre authority has to provide the Committee with a note. I will go back pay for them to go home, so that is a big problem for into ITSO and ITSO services and get a very accurate us. My understanding—my colleagues may correct response for you. me—is that the formula being consulted on does to Chairman: Thank you very much. some extent take this issue into account. It is a question of whether they take it into account enough. Q191 Mr Hollobone: My understanding is that Chairman: I think we have made that point. I think authorities are not required to have the cards until some of these questions will be arguments between 2009, and please correct me if I am wrong. Is not the you and whichever authority is giving you the cash danger that local authorities are issuing the when it comes down to it. smartcards but the actual bus operators are not incentivised to actually incorporate that smartcard facility into their own operations because the bus Q194 Mr Hollobone: It is essentially about the fact companies are going to get paid on the basis of the that if you are introducing any new system you are average single fare. Therefore, if there are a lot of meant to reimburse the local authorities for the cost. pensioners who are taking short journeys that is to When you have put these issues to Her Majesty’s the benefit of the bus operators and it is to their Government what has been the response? benefit that nobody knows about that? Mr Wicks: If I could give a brief answer, in the Mr Cook: There is certainly some rough justice in example you are looking at, which is how is the terms of what gets paid and if we had smart buses as money distributed, we went to the Government and well as smartcards then, for the reasons colleagues said, “We think it would be much better if you mentioned earlier, we are actually able to say we actually did a specific grant to authorities,” and the know where someone got on a bus and where they Government has listened to that and has come back got oV the bus and what the precise fare is as with four proposals. It has consulted on four opposed to the sort of averaging, which has some diVerent methods of distribution and we will know elements of rough justice in it. For the integration tomorrow what the outcome of that distribution is. reasons colleagues have talked about, the sooner we So to that extent they have listened. I think on some get a smart system which is both smart for the of the other issues about the 2.5% for next year we customer and is smart for the operator then the have made those points quite strongly to better that will be all round. Government. As yet, they have not changed their Mr Jones: I think there is an issue, in that because we minds, but then they have not said they will not have not got an eVective smartcard scheme across change their minds either. I think the Government is the board we are having to go into a position now of as keen as we are in making sure the policy very expensive survey work, much more expensive actually works. than we have previously had to do, which is really a complete waste of public money. Q195 Chairman: You mean they do not want it to collapse. Mr Cook? Q192 Chairman: So that you can make sure you Mr Cook: I think the important thing is that know where everybody is and what they are using, is currently some local authorities are disincentivised that what you are saying? from encouraging this scheme because of the Mr Jones: Yes, that is right. We have got to do damage it does to the bottom line, which would be a manual surveys in order to validate the agreements shame because it is an otherwise wonderful scheme. of what we charge the bus companies. The key issue would be if the funding was reviewed after six months of practical operation, that would Q193 Mr Hollobone: I wonder if members of our allow us to have the evidence and the experience of panel could just run us through the problem that how it is actually working and to flex it, but we tourist areas have with regard to concessionary would not want that to be impossible because a fares, because my understanding is that say, for figure had been determined and no matter what, that example, somebody wanted to go for a day out in is the figure— Processed: 28-03-2008 22:39:41 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

Transport Committee: Evidence Ev 25

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates

Q196 Chairman: Although, to be fair, Mr Cook, in to have the national logo on so that the operator can local government you spend all your life doing this, tell two things: first of all, that this person is entitled do you not? There is no central government that is to the national concession and then, for example, in going to say to you, “This is the figure and if we do the case of South Yorkshire where you can also not like it we might come back to you in six months’ travel on the tram or the train and before 9.30 as a time and ask you whether you are doing the right local concession. So you will get those cards out. The thing.” If it is, then I can only say all the local challenge, I think, is getting the cards out to people, authorities I deal with have been missing out. but most of us are well on the way with contacting Mr Cook: I think my point, Chairman, is that— people. The Government has put in place a central contract for us to draw down the cards from, so Q197 Chairman: I understand your point, Mr Cook, providing the manufacturer is able to meet the but it does not happen in anything else in local demand and local authorities are able to process the government, does it? You are saying, “This is a new demand in the right size—in other words, if scheme. If it doesn’t work, we want the chance to go everybody waits until March to do it, then the back to us saying, ‘Yes, fine’”. But that would make system will collapse, but those authorities that are it fairly unique in local government. getting on with it now, that part of it should work. Mr Cook: There are things where local authorities So if that helps on the card issue side, then that are funded on their expenditure. should minimise the risk to the bus operator of the Chairman: Yes, I do understand that. bus driver recognising the card because the bus driver should only be presented with the national Q198 Clive EVord: Mr Cook, you answered a card. There is some leeway in the system for people question from Mr Martlew earlier on when you said to continue to use their existing cards for a short things are likely to go wrong with the concessionary period afterwards, as I understand it, and that is the fares scheme in April. Who is it going to go wrong risk area for fraud and those sorts of things, but the for? Is it for the local authorities or is it for the intention is that everybody should have a new card passenger? by 1 April. Mr Cook: If I did say that, then I have misled the Committee. Mr Martlew: No, I think I said that. Q203 Clive EVord: And the equipment to recognise the card? Mr Wicks: No bus companies, other than those Q199 Clive EVord: I did not hear you disagree. which have existing smartcards projects, will be able Mr Cook: Local government has got a good record of delivering things at relatively short notice and to recognise the card. The card will be visually making them work, and I am sure this scheme will recognised. It will in eVect be a dummy smartcard. It work. The question for local government is whether will be a smartcard which has the capacity to act as the funding mechanisms are more likely to make it a smartcard, but there are very few systems around harder to make it work and harder to make people the country which can read it, and that is really what take it up and reach the hard to reach people we the push is for and what your colleague was referring want to reach. to. We want to see the smartcard system rolled out. In our own case we have the pilot starting and I am Q200 Clive EVord: Right. Can I just pursue that sure the DfT is watching carefully how the pilot point for a minute? Local authorities are getting £4 works. That will finish in October. We will be per ticket they issue to assist with setting it up and advocating there is a strong business case, which that is part of the money that is being distributed, is comes to your earlier point. There is both the that right? commercial interest for the bus operator and a Mr Scales: Yes. public interest case in terms of getting better value Mr Wicks: Yes. for money on surveys and understanding the Clive EVord: Presumably people choose to get a market, which should come together and say, “Just concessionary card or not and then use it or not, so get the buses fitted with the equipment,” because at where is the problem in that for the passenger? the moment if you take south and west Yorkshire, rolling out smartcards across those two authorities Q201 Chairman: Mr Yates? will cost in the region of about £30 million. That is Mr Yates: Chairman, I did not want to interrupt this for ticketing equipment on the buses, establishing a strain of thought. I have got another point. back oYce and for the other equipment you will need to do it with. Q202 Chairman: All right. Mr Wicks, do not interrupt your strain of thought! Q204 Chairman: What size of movement are we Mr Wicks: What certainly most of the PTEs have talking about? done is we have written to everybody who currently Mr Wicks: That is a population of about 3.5 million has a pass. We have been in contact with them across the two authorities. probably for the last two to three months with massive marketing campaigns to make sure that people are aware that they need a new pass. We have Q205 Clive EVord: That equipment will be in place to issue a new pass to everybody because the new for how long? How long before it is obsolete? Do you smartcard enabled pass is a diVerent pass and it has have any idea? Processed: 28-03-2008 22:39:41 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG2

Ev 26 Transport Committee: Evidence

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates

Mr Scales: Probably seven to ten years is a good smartcard system it will act as the present average for the on-bus or on-vehicle equipment. concessionary fare pass, which you will show to the With smartcards it depends on the use really, but driver and he will visually inspect it and then allow because there will be so many in the ﬁeld the price you to carry on your journey. will come down.

Q206 Clive EVord: Mr Jones, what sort of Q211 Clive EVord: Mr Scales, how smart is a complaints do you receive from passengers in your smartcard then? Just exactly what will we be able to area because you have got three incompatible learn from them in the future in terms of where systems? people bought their smartcard, where they started Mr Jones: We get quite a lot of complaints because their journey? people find it is a barrier to movement. It makes Mr Scales: The answer is, it depends, because we ticketing very expensive because you have to buy have gone from a straight flash pass with some very two tickets if you are making two journeys across the basic data on all the way to microprocessor-type city, and all the buses in Nottingham terminate in cards which have got lots of what we call the city centre, or nearly all of them, so we do get “functionality” on them, so they can do lots of quite a lot of complaints, which is why we have diVerent things. Again, if it will assist the developed the non-smartcard, the integrated ticket, Committee, Chairman, I can give you just a straight and that sells quite well. guide on what all the issues are from a basic card all the way to a microprocessor card and the Q207 Clive EVord: Do you get a sense from the explanation? operators in your area that they see the smartcard as Chairman: I think it would, because I am slightly a solution to that problem? confused. Mr Jones: They see smartcard as the solution to their own problems about how they can improve their Q212 Clive EVord: So am I, but I just wonder if ITSO data and how they can reduce costs, et cetera. I do is setting a minimum standard that it wants to not believe they see it as a solution to an integrated achieve, identifying these sorts of problems of system because I do not believe they want to see that. reciprocity and being able to compensate the right authority? Smartcards could the solution to that if Q208 Clive EVord: You described people coming we plan it now? from outside Nottingham, travelling in and having Mr Scales: Exactly, and what ITSO does is to give to pay the return fare. If a smartcard registered you an open specification that is Crown copyright. where that person started his journey and that could Certainly there are over ten smartcards that needed be recorded as where the cost should be borne, standards. There is a number of on-station machines would that assist local authorities and transport and there are at least two back-oYce systems that operators? are all ITSO standard, so they have got full Mr Jones: It would allow us a diVerent system where interoperability. So we are avoiding the VHS/ the costs were attributed to the resident authority Betamax video recorder argument, where Betamax rather than where you start your journey, but that was much the better product but VHS got more into would require a complete smartcard system in place for the whole country. the field and then took over. So it is very much to create an environment that is open and is interoperable, so that many diVerent manufacturers Q209 Clive EVord: So if we have a complete can bid into it, so that you are not locked into a smartcard system across the whole country, should single manufacturer or two manufacturers that the card be identified wherever it is used, for instance might use mutually exclusive technology. It is all if someone came from Nottingham and started using about that. their card in London, travelling around the tourist spots of London? Should it be possible to identify that smartcard as being a Nottingham one and be Q213 Chairman: I want to ask you about ITSO. charged back to Nottingham? How eVective are you? Mr Jones: I am sure that would be technically Mr Scales: I think we are very eVective, Chairman, possible, yes. after four and a half years of trench warfare to get the specification out! Yes, it has taken a long time. Q210 Chairman: Can I ask you a child’s guide question, because I am not sure I have got it quite right. Did you say it was going to be a visual Q214 Chairman: You are good at trench warfare, recognition, or is there going to be a machine? If it Mr Scales. I am not worried about you! was a true smartcard, then you simply have a reader, Mr Scales: I think we are pretty good. We have got and I do not know how long that is going to take to all of the key players around the table. We have got get into the buses. Another 50 years! the bus operators, the rail operators, the Mr Wicks: In the pilot we are doing in SheYeld we manufacturers, the local authorities, the Passenger will be equipping a number of buses on a couple of Transport Executive group—Transport for London routes with readers, ticket machines and the have yet to take their place, but they have got a place equipment, but anywhere else in South Yorkshire, there—and the Department for Transport, so or indeed anywhere else where there is not a live everybody is there. Processed: 28-03-2008 22:39:41 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

Transport Committee: Evidence Ev 27

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates

Q2155 Chairman: So we were given wrong Mr Scales: Yes. information when we were told that you were failing? Q220 Mr Martlew: I represent a constituency which Mr Scales: I think I am nearly there, Chairman. I am is nine miles from the Scottish border and the reality nearly there. The specification is out there. It is now of this concessionary fare scheme at the moment is version 1.2. Version 1.3 will be issued soon. We have that I think will all be able to travel north? great resources supplied from the Government, the Mr Scales: Yes. Department for Transport, and I think the big impetus is the English National Concessionary Q221 Mr Martlew: But is the technology that is Travel Scheme, which will get potentially 11 million going to be used compatible so that they will be able cards into the field. If you get that volume of cards to travel there, or even into Wales, or catch the ferry into the field, then the banking sector gets interested. to Northern Ireland? Mr Scales: Scotland is part of ITSO and the Scottish system is ITSO-compliant. Wales is part of ITSO Q216 Chairman: So would you accept the idea that and their system when it is introduced will be ITSO- the technology has moved on so fast that some of the compliant, so you should be able to join it all up. We authorities are ready to leapfrog it, so move on? have not gone across the water yet, but I am sure we Mr Scales: It is all just the standard, Chairman. All can do. we do is provide the framework. As long as you are operating within that framework it means that if you Q222 Clive EVord: ITSO is slower than the Oyster have bought cards and other ITSO standard of cards card system. Is that a problem for it in the future? Is and the future ITSO standard they are compatible it already becoming slightly obsolete? forwards and backwards. I think that is the key Mr Scales: I think that is a myth now, because I thing, so that other manufacturers can bid into it, think what that was about—and we had a lot of and that is what it is all about. technical discussion about it—was the speed at which it captured the data at the gates on the Underground station. Again, I can provide the Q217 Mr Hollobone: What incentive is there for bus Committee with a non-technical explanation of companies to get smart with their smartcards? what it means, but the problem is not there, Mr Mr Scales:EVectively they get better data sets, so EVord. It is not a problem now. know where people get on and get oV, so they will be able to plan their services better. They have got Q223 Chairman: I have only got a few minutes, better security; ITSO is to banking standard gentlemen, and I want to ask you one or two things. security. It means that they can do other things as How eVective is Transport Direct? well, so they can oVer, say, ten journeys and you get Mr Wicks: I think in terms of integrated ticketing your eleventh one free. You can do that within the the diYculty at the moment is that Transport Direct smartcards as well. You would be able to go in the cannot provide bus fare information. It can provide non-bus or non-transport applications and therefore rail far information because the rail industry is spread the commercial activity. So there is a lot of organised for that. The software, as I understand it, incentive to do that. You see the beginnings of that on Transport Direct will allow the inclusion of bus with Oyster in London, where they have got Oyster fares but the problem you have—and it goes back to banking cards now so that you have got small value the first point—is that there is often more than one transactions as well as the data sets. The key for me bus fare between two points if you have got more is that it is easier to attract car users into steel wheels than one operator and reconciling how they provide than rubber tyres and this is one way to help do it, that data I think is a really big issue. because it is a way to take the payment uncertainty away if you have got a smartcard. So what we are Q224 Chairman: There are two information systems doing, and actually all my colleagues are doing, are when there ought to be one, ought there not? How two things on technology. One is moving down the quickly are we going to move to that? You have got smartcard route, and the second issue is real-time Travel Direct and Traveline. information, so you know when the vehicle is Mr Jones: I think yes is the answer to your question. actually going to appear, so you are taking the We ought to be moving towards one system and I uncertainty out. It is a way of attracting and think it is confusing to the public to have two. retaining people to the network and that is what really we see the bus operators being interested in. Q225 Chairman: Yes. We do not quite know when that is going to happen. If ITSO-compliant systems are working so well, why is TfL so worried about it? Q218 Mr Hollobone: But there is no specific Mr Scales: I do not think they are worried. I think incentive to get smart with concessionary travel we are married without a dowry! There is a road map scheme smartcards? that we spent a lot of money on—not me personally, Mr Scales: No. but the Department for Transport. It is published on the Department’s website and I think it is a matter of changing out of their existing contract and who Q219 Mr Martlew: I think on two occasions you pays for it. So the analogy is that we are married and have mentioned it is the English concessionary fares? we are just arguing about how much the dowry is. 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Ev 28 Transport Committee: Evidence

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates

Q226 Chairman: I know we have talked a bit about Q229 Chairman: This is a rather sensitive subject. new technology, but they did specifically say to us— How secure is all this personal information that you and you can understand it because you must have are going to obtain? One reason why I am, frankly, the same problem in Liverpool -because of the not very keen on the system in London is that I see numbers they are handling and the speed at which no particular reason why my dear friend Ken should the reader can cope with that, they are very know when I get on a train and when I get oV it. I concerned that Oyster cards can be read in 200 did not tell my husband, so I am certainly not telling milliseconds, which is actually an item of time which the Mayor! means nothing in my life at all but which I am sure Mr Cook: If I might start the answer on that, I think is very important, whereas ITSO cards take 700 the local authority holds a massive amount of milliseconds, or whatever it is it is rather more than sensitive data about individuals— the 200. You yourself know from the numbers handled by the Underground system here that we are talking big numbers and the diVerence in time, even Q230 Chairman: Mr Cook, I am not arguing with if it was a couple of second for each traveller— what they have got now. What I am saying is, you Mr Scales: I will not trouble the Committee, are going to add a whole lot more and Mr Scales has Chairman, with the intricacies of fast frequency shift made it very clear this is the only way they are going keying, but I will provide you with a note which will to make their economics actually make sense, make it understandable in non-technical terms. because they need to know how many people, where Chairman: If you ever want to appear here again, Mr they get on and where they get oV. You are holding Scales, you will write that in big letters and put it a lot of secure personal information, particularly if over your desk! Thank you very much indeed. they are concessionary travel cards. We need to know really. What is the level of uptake, for example, you are experiencing? Q227 Mr Hollobone: Kettering Borough Council is Mr Cook: As far as security is concerned—and this going to extend this concessionary fare scheme to is the issue that runs with any smart system—any peak times as well. Mr Cook, could you just run smart system depends on data, so that goes with through the thinking of the council as to why it is smart systems. The uptake we have had is that— prepared to do that and what are the implications for other authorities if diVerent authorities are taking a diVerent approach to peak and oV-peak? Q231 Chairman: Mr Cook, I think you are making Mr Cook: I think the thinking of the council was that us more unhappy. I think you should move on. Mr parts of the area are rural and the access to bus Jones, do you know how secure it is? services after 9.30 might be non-existent or might be Mr Jones: I think we are reasonably happy with the extraordinarily patchy. We talked about tourist security. I think it has passed all the relevant destinations earlier. Kettering is a hospital compliances and there is a massive amount of data destination, so if people want to come into the out there in private hands about what you do which hospital, or whatever, they might need transport and you might be more worried about than it being held we have quite a number of villages which are poorly by local authorities. You question about the uptake served by bus networks and the council felt they comes back to a point which I do not think was could diVerentiate in that way and they wanted to answered earlier, which is about how we actually see bus travel encouraged, full stop, and they wanted incentivise uptake eVectively. I think that was the to make sure that those hard to reach groups who point Mr Cook was making, that we have got a might have diYculties were also able to have the perverse situation at the moment. It is actually in our benefits of this. That was one of the reasons. I think interests not to incentivise— if someone undertakes a journey from an authority which has exercised that discretion into an authority which has not exercised that discretion, then if they Q232 Chairman: Yes, I understand that. want to make another onward journey before 9.30 Mr Jones: But it is really important that we do. In they might find that they are having to pay for that our particular case, we have managed to get to 93%, journey, but in most cases if they were going, say, for which is very, very high. That is a direct result of employment somewhere then they would be coming targeting hard to reach groups like elderly Asian out, back home again, as it were, in oV-peak time women, which is a group with a particularly low and so would not therefore pay. Our thinking and uptake and we have managed to dramatically the members’ thinking was to make it fair and increase it by targeting it. It is actually against my accessible and to reach all aspects of the community. interest.

Q228 Mr Hollobone: Would you have any feeling at Q233 Chairman: Yes, but what I am saying is that all for the number of authorities which might be that is actually a policy decision by your authority to looking to extend the scheme in this way? give you this broad set of remits and say, “Get on Mr Cook: I have not any feeling for that now, but I with it”? am sure we could ﬁnd that out with colleagues in the Mr Jones: Yes, but surely it is underpinning what the LGA and provide a note, if that would help. Government wants the concessionary scheme— Processed: 28-03-2008 22:39:41 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

Transport Committee: Evidence Ev 29

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates

Q234 Chairman: I am not saying it is a good thing, Mr Scales: I would not like to guess, Mr EVord, at Mr Jones, I am just trying to ﬁnd out what is going this point. I will provide you with a note that gives on. So you are consciously targeting hard to reach you a full answer to that. groups. Are there very obvious variations between one section and the population of the borough? Q242 Chairman: You are going to be writing us the Mr Jones: Yes. In our experience—and it may not be Encyclopaedia Britannica of buses, Mr Scales. Are typical—certainly Asian groups were very hard to your bosses aware of this? reach, new immigrant groups particularly. In our Mr Scales: I think, Chairman, I will be writing you particular case because of the structure of fares a good paper on smartcards and bringing the inner-city residents tended to use buses less because Committee’s knowledge up as far as I can take it, they were relatively not cost-eYcient compared with hopefully. outer-city residents. Clive EVord: Well, I will wait until I get a piece of paper. Q235 Chairman: I am getting a nod from Mr Wicks. Mr Yates, you have got a slightly diVerent situation. Is that true of your area? Q8243 Chairman: I want to ask pteg about the Mr Yates: We have got a very high take-up now written evidence you gave us, because you talked compared with what there was with the half fare about unintended consequences. scheme. Mr Wicks: I think the unintended consequences, particularly on concessionary fares, are where authorities are put in the position, such as the Q236 Chairman: So what are you talking about in example I cited earlier, where we have to consider ﬁgures? whether we can continue to oVer a concession on rail Mr Yates: It has gone up to about 90%, probably. A or – massive increase in Cheshire from two years ago, hence, as my colleagues have said, the split interest in incentivising any further take-up. In our case the Q244 Chairman: That is exactly what I think we district council do the local work and, for example, want to know about. Have you cut back on any in your own constituency there might be some other concessionary schemes? special eVorts taken to target— Mr Wicks: We have not had to yet, but then we do not know what the funding will be for next year. We Q237 Chairman: Everything happens in my are in the position now of trying to set our budget for constituency, Mr Yates, it is special, starting with 2008-9 and we have two problems: we do not know the Member of Parliament and working downwards, what funding we will get from central government or, on the other hand, as some people say, working for the existing scheme and the operators are able to upwards. What is the level of fare-dodging in your appeal against the reimbursement that they had both areas? for this year and for next year, both of which could Mr Wicks: That is commercial information, so we be budget challenges. My own authority is very keen do not actually know. to make sure that when it introduces this extension to concessions it is just that, it is not a replacement for something else. But clearly there is a set of Q238 Chairman: Oh, Mr Wicks, you are giving circumstances which could mean that even if we kept money to men and you do not know an answer to those sets of policies going we might have to reduce something like that? the amount of money we spend on tendered services Mr Wicks: We are not giving money, no, because it for something like that. is the bus operator’s fares and so it is their revenue which is being lost. Q245 Chairman: What you are really saying is that Q239 Chairman: Has nobody been indiscrete you cannot estimate that at the moment because it is enough to give you an indication? very dependent upon monies. Mr Wicks: No, certainly not in our area. Mr Wicks: Also, just to assist the Committee, there is the whole process, which I think my colleagues have referred to, whereby the operators can appeal Q240 Chairman: Gosh, that is interesting! against their reimbursement and there is no Mr Wicks: They would argue it is non-existent, I disincentive to appeal because there are no costs suspect, if they were here. involved in appealing. So we have this constant Chairman: I am sure they would argue something to uncertainty. the eVect. Q246 Chairman: They do not pay any costs? Q241 Clive EVord: It is about the security of the Mr Wicks: Only the costs they incur in actually information, because what we have been told is that putting it together, but they are not at any risk in the new concessionary cards will contain the challenging our assumptions all the time. information on the non-secure section of the card about the personal details of individuals. Do you want to comment on that? Why is that and why is Q247 Chairman: Is that continuing? that necessary, and should the information not be Mr Wicks: That is continuing. We certainly have more secure than it appears to be? appeals against us for the current year, even though Processed: 28-03-2008 22:39:41 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG2

Ev 30 Transport Committee: Evidence

5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones and Mr Greg Yates we implemented the arbitrator’s findings. One Mr Yates: Just one other unintended thing, or operator is still pursuing us for 2007/8. possibly intended, is that there appears to have been a general strengthening to the bus network in our Q248 Chairman: You made that very clear to the shire county since this came to pass. Obviously 60% Department? more passengers are doing it good, but the Mr Wicks: Yes. reimbursement may be helping the buses more than it was perhaps intended to do. But it has got a positive eVect in the sense that the county council Q249 Chairman: Is there any actual evidence of pays for the bus support, so on the one hand it is metropolitan councils not passing concessionary benefiting whilst the cost to the district councils are travel money to PTEs? rising and maybe not adequately met. So that is Mr Wicks: I think certainly all the evidence we have another argument for balancing the whole bus is that all the money the Government is putting into financing equation under one roof, possibly, to bring concessionary fares is being passed through. it all together. Certainly with my own authority it is passed through Chairman: I think that has all been extraordinarily as a transparent amount. helpful, gentlemen. Thank you very much indeed.

Witnesses: Mr Shashi Verma, Director of Fares & Ticketing, and Mr Steve Burton, Deputy Director of Transport Policing & Enforcement, Transport for London, gave evidence.

Q250 Chairman: Good afternoon, gentlemen. Q254 Mrs Ellman: London has got the most Would you be kind enough to identify yourselves for advanced smartcard scheme. Do you think you have the record? a duty to cooperate with other operators introducing Mr Verma: I am Shashi Verma. I am Director of other smartcards? Fares & Ticketing for Transport for London. Mr Verma: Yes, and we do. We do cooperate with a Mr Burton: I am Steve Burton, Deputy Director of number of people both in the UK and outside and Transport Policing & Enforcement for TfL. we are cooperating with the Department for Transport on the introduction of ITSO in London. Q251 Chairman: Thank you. Have you got anything you wanted to say to us? You have submitted written Q255 Chairman: Are there any problems with ITSO evidence. as far as you are concerned? Mr Verma: Just that I am not entitled to be called a Mr Verma: I think there is a number of issues with doctor. I think you have got to finish your PhD to do ITSO. I would not necessarily call them problems, that, and I did not finish mine. but there is a number of issues with ITSO which need to be thought through and thought through quite Q252 Chairman: It might be a bit embarrassing if carefully. We have the advantage of saying this with somebody has a coronary! If you were in Germany the experience of running a very large smartcard you would automatically be a doctor. How reliable scheme, indeed the largest smartcard scheme in the is the Oyster card system? world right now. Smartcard ticketing is inherently Mr Verma: Very. We process ten million very, very diVerent from paper ticketing. It is an transactions a day. Not one of them goes wrong. It invisible medium where people are unable to see the is a very reliable system. The transactions are always content of what lies inside their smartcards and it secure and reliable. The cards themselves have a raises its own customer service challenge. The failure rate that is incredibly small. We have 0.03% biggest customer service challenge around of cards failing in any given month, which is a record smartcards is that the customer needs to have that is even better than the banking industry has absolute confidence that they will always be charged right now. the right fare and that money is not going to disappear from their cards. One way of dealing with Q253 Chairman: If a customer thinks they have done that is to deal with the security of the system, which the right thing and “touched in and out” correctly is very important, of course, but irrespective of how with their card but finds they have been charged secure the system is there are always customer wrongly, can they get compensation? queries, customer complaints which come up and Mr Verma: Yes. We have a process of correcting there has to be a very clear and clearly articulated customers’ journeys where they think they have means of addressing those customer queries. The done the right thing but they may not have done the concern we have with ITSO is that the customer right thing, or something may have happened with service model behind ITSO is not articulated at this the system. They can get a refund from any ticket present moment. oYce on the London Underground or by phoning the help line. Where there has been a major incident, Q256 Chairman: Simply because it is older such as we have had with floods in July or the snow technology than the one you are using, or because incident in February when people were unable to the remit is diVerent? What is the basic diVerence? “touch in and out” because of excess crowding at Mr Verma: There is a lot of work which has been stations, we have processed a direct refund to all done in coming up with the ITSO standard and the customers of our own accord. specification for ITSO, which is a technical standard Processed: 28-03-2008 22:39:41 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Shashi Verma and Mr Steve Burton about how the data on the smartcard itself is going that is a step we would rather not cater to. We do not to be configured, which is very important in and of want to build ticket machines if people do not need itself. There is an ambition to see the ITSO to buy the tickets. The second very important factor smartcard be interoperable, but the question we in the introduction of Oyster was gate throughput, have in our minds is, if you take the example of a throughput through the gate, throughput through customer who has got an ITSO smartcard, maybe the bus network, and this is where very fast read from a library in one of the cities somewhere in the speeds becomes very important. There are 25 UK, and who then goes and buys a ticket from a stations on the Underground network where in the ticket retailer and takes the national rail train down morning, every weekday morning between 8.00 and to London and then arrives at our gate and the ticket 9.00 we put more than 25 people per minute through does not work, what is that customer supposed to the gate line, so just over two seconds through the do? With Oyster it is very clear. We deal with the gate line. This is not just the time it takes to read the customer queries. Irrespective of where the customer Oyster card, this is the time it takes for a customer to came from, the query goes back to Transport for present themselves at the gate, tap the Oyster card, London. In that model is it the issuer of the card or walk through the gate and clear the gate for the next the seller of the ticket, who could be anyone, or the customer to go through. If that transaction time person who brought that person down to London, starts to decline, so if you start to put fewer than 25 which could be GNER or Virgin, or us? Who is people through the gate line, that will mean that we going to deal with that? These are questions which need to increase the size of our gate lines, put more are actually quite important when you start thinking gates through, and with the kind of Victorian about the way we deal with smartcards because network we have got in many instances that is a very people are not able to see what ticket they have. expensive proposition, often costing tens of millions of pounds, because there is not the space to put more Q257 Mrs Ellman: What stage are you at in trying to gates even if we wanted to. Those are both very deal with that? Are there any discussions going on? important things. The third factor was that the very Mr Verma: There is a number of discussions going limited logic that was available on paper tickets on right now about making the Transport for meant there was a number of ways in which people London network capable of accepting ITSO were able to travel through the system at a fare which smartcards in a technical sense, but the Department was lower than the fare they should have paid. An for Transport and the ITSO organisation have left example of this would be if you bought a zone 6 only commercial arrangements between operators to the operators themselves. We have not been approached paper ticket from Heathrow a few years ago you by any operator who wants to run an ITSO could travel all the way to Upminster in East smartcard-based scheme in London yet. London, which is also a zone 6 station. The fare should have been a zone 1 to zone 6 fare. You would have paid only a zone 6 fare. You cannot do that any Q258 Chairman: Forgive me, but that is a slightly more with Oyster and as a result of the improvement disingenuous reply, Mr Verma. Nobody is actually and logic of that kind the lost revenue through—I going to come to you and say, “We are running one would not necessarily call it fraud because it is not system and we are making a reasonable profit on it intentional as fraud, but the lost revenue from the and we would like actually to move to another one,” unless you say to them, “The basic advantage will be system has declined quite markedly, so we are saving X, Y, Z,” and presumably that is not what you a large amount of money on that count as well. have done? Those are the benefits we have realised. Many of Mr Verma: What we have been able to tell people is those benefits may be replicable in other parts of the the advantage of using a smartcard that we have country as well. Some may not, but some others realised. may be. Chairman: I think you have started some hares running there! Q259 Chairman: That does not surprise me altogether. I think that is probably quite an eYcient thing to do, “Look, I do mine better than him. Mr Verma: Well, it is not a question of me doing Q260 Clive EVord: I have always been obviously mine better than him. There is a very specific labouring under the misunderstanding that the rationale for introducing Oyster in London, leaving problem with our Victorian London Underground aside the technology. The challenge we faced ten was that there were too many people down there, years ago was a three point challenge. The number getting down there too fast, not that we could not get of tickets being sold in the system was very, very them down there quick enough. I am frequently large. We have, through the introduction of Oyster coming through Victoria Station, where I am forced and through the introduction of Oyster pay as you to stand on the concourse because you cannot get go particularly we have cut down the number of any more people down on the trackside. tickets being sold in our system by 60%. Where we Mr Verma: Victoria has a very special and very used to sell 1.8 million tickets per day we are selling specific problem in that the station was built with 800,000 tickets per day right now. So a million times one entrance when it should have been built with a day someone is not walking up to a ticket machine two. That is something we are correcting at very to buy a ticket, which is a huge advantage both to us large expense over the next few years. As a result of as an operator and to customers. As an operator, that there is a lot of crowding on the southern end. Processed: 28-03-2008 22:39:42 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Shashi Verma and Mr Steve Burton

Q261 Clive EVord: It is not just Victoria, is it? There Mr Verma: Yes, and the Docklands Light Railway. is a lot of stations. The Committee has actually been to visit the London Underground and we have had Q266 Clive EVord: Who paid for the kit? the health and safety processes described to us where Mr Verma: The kit was procured through a PFI they have to count the number of people passing contract. Eventually Transport for London ended through the ticket barriers to ensure they do not get up paying for the kit through the PFI contract, but too many people going down. it was financed by the PFI contractors. Mr Verma: Chairman, I would not like to pretend here that the only congestion we face on our network Q267 Clive EVord: So the purchase of the equipment is at the barriers. There is congestion at the barriers, on buses and its installation was all TfL on the there is congestion on the platform, and there is operators’ buses? congestion on the trains, so there is congestion in a Mr Verma: All TfL, yes. number of diVerent places. Q268 Clive EVord: So it is TfL’s equipment which is Q262 Clive EVord: So the argument about the speed on their buses. What degree of fare dodging is there of ITSO is a bit overblown, is it not? in London? Mr Verma: I would not say that at all because there Mr Burton: On the figures we have, the average for is a number of places where the problem is entirely buses at the moment is 3.5% and the average for at the barriers. There is no problem at the platforms. London Underground/DLR is 3%. Mr Burton: If we slow down the number of people going through the barriers, that potentially just Q269 Clive EVord: How do you monitor that? transfers the problem to the front of the barriers. I go Mr Burton: We do quarterly surveys. through Victoria as well and, as you will have seen, a lot of the congestion actually occurs—it does occur Q270 Clive EVord: That is people out there with on the platform as well, but it also occurs in the clipboards, presumably? ticket halls with people trying to get through the Mr Burton: Yes. barriers. Q271 Clive EVord: If I have got an Oyster card in my pocket and I get on a bendy bus and I do not swipe Q263 Clive EVord: Particularly when you stop them it, how do you know that I have got a valid ticket to going through. be on that bus? Mr Burton: Yes, indeed, but there are moments Mr Burton: We have our revenue protection oYcers when getting people through would provide an who carry Oyster readers which will tell them how optimum crowd flow rather than stopping people at the card has been used. the gate. So it gives us the flexibility to manage it, which I think is quite important. Potentially, if we slow down the throughput of people through the Q272 Clive EVord: And that is what happens? When gates then we would focus the problem on one side revenue protection oYcers go onto the buses they of the gates. That is the issue. will ask people for their Oyster card and swipe it to see if it was swiped to get on that particular bus? Mr Burton: Yes. Q264 Chairman: Only if you could not get them oV the platforms. I think the trouble the Committee Q273 Chairman: How many revenue inspectors do face is that we are struggling a bit to understand your you have? problems. We do sympathise, but if you are actually Mr Burton: There are 290 on the bus network, just going to use this as an argument then I think you over 200 on the Underground network. have to come up with something a little bit more concrete. Q274 Chairman: Do they all work 24 hour shifts? Mr Verma: One very concrete example of this is we Mr Burton: They focus on day shifts because that is sat in this room, the same committee room, for the when there is a lot of people travelling, but we do do Crossrail Bill hearings where we heard the example night shifts. We have a night shift which goes on of Liverpool Street, where with the introduction of night buses. Crossrail the congestion at Liverpool Street was all concentrated on the London Underground ticket Q275 Chairman: What spread of population would halls and at the instruction of the Committee an you expect to cover? additional provision was introduced into the Mr Burton: We check approximately 16 million Crossrail Bill to deal with that at a cost of £40 people on the buses every year. million. That is specifically a ticket gate line problem. That has nothing to do with the London Q276 Clive EVord: There has been a lot of publicity Underground platforms. That is a very concrete recently around antisocial behaviour associated example a place where £40 million is having to be with moving around on buses. Are TfL doing spent because of congestion behind the gate lines. enough to protect the public in terms of how public transport is used to facilitate antisocial behaviour? Q265 Clive EVord: Oyster was introduced in 2002 Mr Burton: We think we are. Obviously we are not and it is on all buses and London Underground, and complacent about this and it is an issue which is now some mainline railway stations? raised by our passengers. We are doing a number of Processed: 28-03-2008 22:39:42 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Shashi Verma and Mr Steve Burton things around it. We have got over 2,000 oYcers Chairman: Mr Burton, if you can instil moral values policing the network from the police agencies. We by posters, I think you will have an enormous have got the revenue oYcers. We do a lot of audience amongst all sorts of other institutions! marketing around behavioural issues and we will carry on doing that in the New Year. We are looking Q281 Clive EVord: TfL say—and this is a quote— at ways of improving the ticketing product, using that it “has yet to reach the levels of performance in Oyster to make it more secure. For example, in the this area,” that is revenue protection, “to which it early part of next year we will introduce a photo aspires”. You have more control over transport Oyster card for 11 to 16 year olds, which we hope will services than any other local passenger transport improve the ability for drivers to check tickets on the authority in England, so is this because you have just front end of buses. We have got CCTV on all buses taken your eye oV the ball? in London. There is a whole raft of things we are Mr Burton: No. I would say we are doing a good job doing for this. We actually do think that that is on this. I think there is a couple of issues that we have impacting on the levels of crime and antisocial identified going forward. One is, as I have said, behaviour on the bus system in particular. We look targeting where we put the resources. We can always at the crime statistics very carefully. In the first six do that better and that is where travel information months of this year crime on and around the bus and passenger movements come into play. The network has gone down 11% and the number of second issue for us is that there is a small powers crimes per million passenger journeys on both the issue in the fact that our oYcers have no right to find Underground and the bus network is approximately out people’s names and addresses when they find 15 per million passenger journeys. them travelling without a ticket. There is no legal power. We have got something in the current TfL Q277 Clive EVord: You say that crime has gone Bill which is going through Parliament which will down on buses. Are you confident that that is not give them that power, because obviously one of the just because people are not bothering to report issues is if you are not travelling with a ticket and you them? are not willing to give your name and address then Mr Burton: I am pretty confident of that. Actually, the only recourse to our oYcers at the moment is to a lot of the crime on the buses we record is criminal call the police in. We would prefer to have the legal damage and pick-pocketing, both of which people right to know someone’s name and address. We have tend to report, particularly criminal damage. If got something going through Parliament at the anything, over the last few years we have increased moment and I think that would improve our the rate of reporting, I think, because we have eYciency dramatically. encouraged bus operators in particular to report graYti and etching because we want to deal with that Q282 Clive EVord: Are there any other powers that criminal damage, and we have through CCTV. Our you think might be needed? experience is the more visible policing we have on the Mr Burton: Again, we certainly keep it under review network, the more people are willing to report crime and one of the issues we have been looking at is because they see we are taking an interest and taking whether accreditation as PCSOs would be an option. care of our customers. It is an option open to us under the new police powers which came in through various policing Q278 Clive EVord: You say you have got 291 Acts. At the moment there is not a clear case for us revenue enforcement oYcers? to do it, but again we will be looking at the over the Mr Burton: Yes, 290 plus. next year or so.

Q279 Clive EVord: That is less than ten per borough? Q283 Clive EVord: Is it a safe job? Mr Burton: That is right. Mr Burton: It is, I think. We train our people in how to deal with potentially confrontational situations. Q280 Clive EVord: Is that suYcient? We train them very well in how to speak to people, Mr Burton: We keep that under continual review. At how to manage their safety on the network, and we the moment, as I say, we check 16 million passengers get a relatively low level of assaults. a year. We are looking at how we can improve targeting the revenue oYcers. We are doing a lot Q284 Chairman: Are you asking for extra powers, more analysis of the statistics and the travel patterns for example, to detain people or talk to people? of people and we are starting to target revenue Mr Burton: Not at this moment. oYcers, we think, in a more eVective way. We are doing a lot of marketing. It is arguable whether Q285 Chairman: Not at this moment. You mean you checking tickets or changing people’s behaviour is are contemplating it? the most eVective way to deal with this issue. One of Mr Burton: We are not contemplating that. That our big drives is to convince people that fare-evading would be one of the things which might come with is actually an antisocial behaviour in many ways. It accreditation as a PCSO. It is not part of our aVects our ability to invest in the network. So we are programme at the moment. doing a whole portfolio of things to do this. We keep the number of oYcers under review. We increased Q286 Chairman: It is not just a question of your them by 40 last year and if we see it as an issue again, money, is it, Mr Burton? It raises all sorts of we will look at that again. questions about the roles of PCSOs. Processed: 28-03-2008 22:39:42 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Shashi Verma and Mr Steve Burton

Mr Burton: Indeed, which is one reason why we are Q291 Mrs Ellman: Have you made any assessments? not considering in detail accreditation at the Mr Verma: We have made assessments of the traYc moment. The power we are looking for is the name that we would expect coming from the concession and address power because we see that as a small scheme. step which may well make our oYcers much more eYcient. Q292 Mrs Ellman: What have you concluded? Mr Verma: I cannot recite the numbers oVhand, but I can provide you with the numbers if you are Q287 Mrs Ellman: Is there any future for people who interested. The numbers are not numbers that we do not like electronic systems and just want to pay would get particularly worried about carrying. It to travel? also is important to note that the concession scheme, Mr Burton: That is an interesting question. whether it is the Freedom Pass or the English national concession, has a watershed hour, nine Q288 Chairman: All our questions are interesting! o’clock or half past nine, depending upon the Mr Verma: You are asking a crystal-gazing question scheme. The real capacity constraints that we face on here. From the work we have been doing around the our system are all before half past nine in the future of technology around ticketing it does appear morning, typically between 8.00 and 9.00 in the that closer integration with the ﬁnancial payment morning, so we do not expect that this should system and closer integration with mobile phone provide any capacity problems on the network. They systems are things which are likely to happen very will result in higher operating costs, there will be quickly in the near future. Having said that, at this more buses running around in the middle of the day, moment we cannot see a way of eliminating but we do not expect this to cause further capacity magnetic stripe ticketing. There will always be a problems over what we have got today. market for some infrequent users of the system who do not have the right currency, whether that is an Q293 Clive EVord: How is the cost of the Oyster card, a credit card or a mobile phone, and as concessionary travel scheme in London covered? a public organisation we have the obligation to carry Mr Verma: It is covered by the London councils everyone who shows up. In many ways the easiest under the London boroughs. way to cater for people of that kind is to cater for them through magnetic stripe ticketing, which is a Q294 Clive EVord: So you pass the cost on to local technology that already exists, it is tried and tested authorities? and it works relatively ﬂawlessly provided it is in Mr Verma: Absolutely. small numbers. If it was in very large numbers it would be a real problem for us, but in small numbers Q295 Clive EVord: Is that not why you are a bit it is something which I think is going to be available ambivalent about the cost at the moment? for a long time to come. Mr Verma: I did not comment on the cost. I was only commenting on the fact that carrying these people is Q289 Mrs Ellman: What are these numbers? You not going to be a problem for us. There is a cost to make it sound as if in the world of the future it, undoubtedly. As I said, there is an operating cost somebody who wants to pay cash for a ticket and go of carrying these people and we would seek to on a journey is going to be seen as some kind of recover that. The point I was making was that freak. people sometimes get exercised about the fact that Mr Verma: 2% of people on buses and 3.7% on the this is going to cause capacity problems on the Underground still buy cash tickets, cash single network, but we do not foresee that happening. tickets. One day travelcards are also available on paper tickets, which comprise another 9% of Q296 Clive EVord: So if we have lots of people journeys on the Underground. travelling to London and using their national concessionary card in the tourist centres of London, for instance—and my local authority, Greenwich, is Q290 Mrs Ellman: What about the impact of the one of the biggest tourist destinations outside central National Concessionary Scheme, which is due to London—will you be calculating where those cards take eVect next year? are used within London and then charging those Mr Verma: I think in London, given that we have the local authorities, or will that cost be spread across Freedom Pass, which allows pensioners to travel London? across all of London, not just within their own local Mr Verma: We provide information. We have a authority areas, we have had a mini scheme running common deal with the London councils based on all for many years. When the English National the London boroughs. We provide information to Concessionary Scheme comes into force there will be London councils which enables them to apportion some people from outside London who would want the cost between the London boroughs and we will to travel on our transport services, and indeed there continue to do that. will be pensioners from London who will want to travel in other parts of the country. We do not think Q297 Clive EVord: Based on what? it is a major problem. There will be some increase in Mr Verma: Until a few years ago it was based traYc along that road, but it is not something which entirely on surveys. We now combine the is not manageable. information from surveys with the information Processed: 28-03-2008 22:39:42 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Shashi Verma and Mr Steve Burton which comes out of the usage of the Oyster card. One Q302 Mr Hollobone: Coming back to enforcement, of the things to keep in mind about relying upon the presumably Transport for London is responsible Oyster card data is that it is not mandatory to tap in now for enforcement on London Overground. Are and out on National Rail and that is part of the cost there disparities in the rules and regulations between that comes through of the users of the Freedom Pass. bus passengers, Tube passengers and Overground So there is a number of ways in which we cannot rely rail passengers with regard to enforcing conditions entirely upon the Oyster data for travelcards, of travel? Freedom Passes, or concessionary passes. Mr Burton: Yes, there are. They are subject to diVerent by-laws and diVerent regulations and that Q298 Clive EVord: I am still not clear. How in the is one of the issues which going forward we would future are you going to calculate how you are going look at to rationalise, because our view is that it is to recharge local authorities for use of the Freedom confusing for passengers to have diVerent rules and Pass in the future? regulations applying to diVerent parts of the Mr Verma: In the near future that will remain network where you are using the same ticketing something which we do with surveys until we start product. getting the bits of data directly counted through the system. Q303 Mr Hollobone: Are those the rules and regulations you were talking about being covered by this Transport for London Bill which is going Q299 Clive EVord: So are local authorities which are forward? likely to attract a high level of tourists who could be Mr Burton: Partially, but not entirely. Without using the Freedom Pass right to be concerned? going into too much arcane legislation, there is a Mr Verma: Well, they are right to be concerned in number of rules and regulations which apply to that they need to make sure that they have enough diVerent modes of transport. So there is a national funding from central government to pay for that. set of regulations for public service vehicles, which are buses and coaches. There are rail regulations, Q300 Mr Hollobone: When is Oyster going to be there are London Underground regulations, the extended to the overground lines from south and trams in London have their own regulations, so south-east London? there is a number of diVerent pieces of guidance and Mr Verma: We extended the Oyster to London regulation that we need to look at to rationalise that. Overground on 11 November. We are extending it to So it is quite a complex job to do. It is one of the three train operating companies, Chiltern, c2c and things we are very keen to look at, particularly for the West Anglian services on the One railway in TfL’s own network because, as I say, I think it is very January 2008. The remainder will come in at some confusing for passengers if you have diVerential point in 2009. activities around revenue and enforcement.

Q301 Mr Hollobone: What has been the problem Q304 Mr Hollobone: Is it for the Mayor to sort that with getting those rail companies to be part of the out, or is it for Her Majesty’s Government to sort scheme? that out? Mr Verma: This has been under discussion since Mr Burton: I think it is for the Mayor and TfL to put before Oyster was launched and at successive stages together a coherent package of things that need to the Mayor has had to sweeten his oVer to the train happen to regulate it in an even way, and then there operating companies to come on board. Last year is a number of agencies within the Government, the Mayor and the Secretary of State agreed a deal including the DfT, and other agencies in the where the Mayor will pay for all the equipment Government to enact the changes that will make which needs to be installed when the train operating that happen. companies start accepting Oyster, and likewise the Secretary of State will pay for the acceptance of all Q305 Chairman: Do you think the contactless bank the equipment which is required for the acceptance cards and mobile phones are going to make ITSO of ITSO on Transport for London services. We have obsolete? now spent, since May of last year, eighteen months Mr Verma: I would not go so far as to say they will in commercial negotiations with the TOCs to make make ITSO obsolete. Again, I think we are sure that they can agree to the scheme, they can agree considering the use of contactless bank cards and to the revenue apportionment coming out of the mobile phones for a very speciﬁc reason, which is scheme, and I am pleased to say we are near the end that our system, what we call a ticket, is just a means but we are not quite at the end yet. There is a lot of of payment. What we are trying to do is collect a technical discussion also going on in parallel, but payment when people travel through our system. there is a very intense phase of installing new They do not get a reserved seat, they do not get any equipment. It is worth just reminding everyone here of the other attributes that you would normally that there are 275 stations on the London associate with a ticket. So what is important to us is Underground network, which is what we launched to be able to collect the required payment from the Oyster on four years ago. We have 250 stations on customer in a fast and eYcient way every single time the national rail network as well, so this is a they travel, but at the same time to make that process challenge of a similar proportion in extending of collecting that revenue as unintrusive as possible. Oyster over National Rail. Despite all the advances we have made with Oyster Processed: 28-03-2008 22:39:42 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Shashi Verma and Mr Steve Burton cards, and clearly we feel very proud of it, it is still that we have spent a large amount of eVort building the case that the basic method by which we are technical capability within our team to make sure collecting revenue is unchanged for the last 150 that we are not being given answers which are years. When you arrive at a TfL service, whether inadequate. that is a bus or the Underground, you have to change your currency into something that we have Q310 Chairman: Have you got any idea of how given you before you are allowed to travel. This is much it will cost to integrate the two systems? the way we have done ticketing for the last 150 years, Mr Verma: We expect that it is going to be in the but it does not need to be that way. If you go further region of about £50 million. back into history, people were collecting cash on buses. The reason we stopped doing that was Q311 Chairman: Is that just the marginal cost of because a large portion of the cash used to go adding ITSO? unaccounted for and was typically taken by the Mr Verma: That is just the marginal cost of adding conductors. The ticket was largely invented as a ITSO. means of accounting for the revenue which was being collected. We have moved on from that point, Q312 Chairman: So no other upgrades are included but for the last 150 years at every point where new in that figure? technology has been introduced we have had to Mr Verma: No upgrades, no. invent it. For the first time the banking industry seems to be coming up with a product that will Q313 Clive EVord: Mr Verma, if you can tell us, if actually work for us and will be there in the hands you have got the information, what proportion of of a large majority of the people, if not all. So this is the cost of the Freedom Pass in London do the local something we are looking at adopting because this authorities currently get back from central would remove the hassle for the vast majority of government? people from buying tickets in the way they have to Mr Verma: I am sorry, I do not have that do today. information to hand. I can provide you with that information if we have access to it, but I do not have Q306 Chairman: Is it reasonable that TranSys, who that information to hand right now. actually have the Oyster contract and have a vested Clive EVord: If you could it would be useful. interest in protecting Oyster, should be carrying out the study into whether ITSO can be integrating with Q314 Chairman: Could you give us the figures about the system? the young people who are travelling with free bus Mr Verma: Unfortunately, because the system right travel? now is provided by TranSys and at the front end, Mr Verma: About 16% of people travelling on the which is at the gates or on the buses, it has to be buses are travelling on under 18 concessions. integrated. There is no option other than the fact that we have to go to TranSys. This is the PFI Q315 Chairman: What impact has that had? contract that the Government – Mr Verma: We do see a more pronounced peak in the afternoon which we did not see before. This is Q307 Chairman: So you have built in some when people are coming out of school between 3.00 independent checks and balances, have you? and 4.00 in the afternoon. But the afternoon peak is Mr Verma: I have a very large team which oversees not as sharp as the morning peak. So the morning everything which TranSys does. peak is still the one that drives the total provision of bus capacity in London. Q308 Chairman: If a large team is a guarantee of independence, life would be a lot easier! Q316 Chairman: Do they cause an enormous racket? Mr Verma: The point I would make to you is that a Is there a lot of overcrowding and antisocial large part of the new technology work that is going behaviour? on is actually going on within my team not within Mr Verma: As I say, the peak bus capacity is in the TranSys, so the work that is going on to adopt— morning. The same bus capacity operates in the afternoon, so it is diYcult to make the case that there Q309 Chairman: I understand that, but all I am is overcrowding. The point about antisocial saying is these people have the Oyster system. They behaviour as well has been trailed very widely. supplied the Oyster system. You have asked them to Mr Burton: Just on the capacity issue, London Buses look at whether it can be integrated with ITSO and works very actively to monitor where there is under- if you are not careful they are going to be doing the capacity on the network and we have added a final arbitration. I may be an untrusting creature, number of additional buses to routes where capacity but it seems to me they might have a vested interest is an issue, and that is kept under constant review. in saying no. With regard to antisocial behaviour, our feeling is Mr Verma: There is no doubt that they have a vested that the noisiness and low level disorder has interest. They are a technology provider. They have increased. That is mostly to do with the increasing a long-term contract. They have essentially a number of young people on the network and that is monopoly position for 17 years and the means that the way young people are. We think you deal with we have at our disposal to control that is to build a that through behavioural information, through similar capability within our team. I can assure you visual policing, through making kids more aware of Processed: 28-03-2008 22:39:42 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Shashi Verma and Mr Steve Burton the impact of their behaviour on other people, and from the school, one of the most eVective ways we we are looking at doing all that over the next year have got of dealing with that is we work with schools or so. who actually have teachers out just to be a figure of authority around the queues. So there is a number of Q317 Chairman: Yes. It will put oV a lot of people, ways in which we can deal with this and we are doing particularly pensioners, from travelling, will it not, if a number of things. the level of general antisocial behaviour is higher Chairman: I just want to ask you about your own than it used to be? It is a fairly urgent problem is revenue protection. what I ought to have said to you, is it not? Clive EVord: Perhaps if people sent their children to Mr Burton: We are dealing with that issue in a the local school it would reduce the problem. number of way. I think a lot of the noise and stuV like that probably is not antisocial behaviour even, Q320 Chairman: What a good idea. TfL you say has it is just generally young people being rowdy on the not reached the levels of performance in the area of network. revenue protection to which it aspires. You are in total control of that, better than anybody else Q318 Chairman: Yes, but in spite of what people say anywhere in England. Does that mean you are not most pensioners can sort out the diVerence between very good at it? somebody who is making a row and who is making Mr Burton: It does not. I would say that, would I themselves perpetually deaf by having an industrial not? If you look at it the other way round, we think level of noise in their ears through some tin and levels of evasion on the network are about 3%, which someone who is actually doing something which is means pretty much 96 to 97% of the public are causing the atmosphere to deteriorate for everybody actually paying, if you turn that around. We have else on the bus. some regulatory issues which we have talked about Mr Burton: Yes, we recognise that and one of the already. We have diVerential regulations between issues for us is to find the most appropriate way to the modes. We think our oYcers could work much deal with those issues. For that low level stuV one of more eVectively if they had a legal right to find out the things we found to be very eVective is over the someone’s name and address. last year we have put out 440 PCSOs into the outer London boroughs and their roster and their shift Q321 Chairman: Yes, we have done that, but what pattern is focused around that school run, 3.00 to training and supervision standards do you apply to 5.30 time period and they are very visible on the your revenue protection staV? buses. The thing about PCSOs is that they are there Mr Burton: They get very good training including to be visible to the public. We have had very positive how to deal with confrontation, how the Oyster feedback about that and that is one of the ways we system works, how the ticketing system works on the are dealing with this. But I think it is really network. We think they work very eVectively. I think important to say that there has been approximately they do a very, very good job and will keep the levels a 35% increase in young people travelling on the down very low. You can always improve, which I network over the last two years because of the know is always said, but you can. If we can get the concessionary travel, which we are very positive name and address stuV sorted out I think we can about because it does allow people to travel around drive the levels of evasion down even lower. the network. If there is a very small number of those children—and I actually do believe it is a small Q322 Chairman: How often do they get assaulted? number—who are committing disorder/antisocial Mr Burton: We have no more than two assaults a behaviour then we will deal with them month at the most. Again, I can write to you with appropriately. I think it really is important to say the details. that our experience is that it is a small number of the kids who are problematic rather than the majority, Q323 Chairman: I need your health and safety as sometimes you read in the papers. records for your staV, I think, in relation to the Chairman: Yes. I did have an agent who was a bus revenue protection. If you could tell us about the driver who used to do the school bus runs and who health and safety regulations. alleged that they came out of some of the best Mr Verma: Could I make a specific point on the use disciplined schools and behaved like absolute of smartcards on revenue protection. As I said, since maniacs, so I hope it is something you are dealing the introduction of the Oyster card the money lost with seriously. through the system has reduced quite sharply. On the Underground particularly the largest amount of Q319 Clive EVord: Just on that line of questioning, loss of revenue is through the misuse of concessions. do you get the majority of complaints about the So this is people who are not entitled to a concession school bus run or is it about the young people who making use of the concession and the revenue are now using the buses where they did not in the collection eVort has focused very largely on that past because it is now free? particular problem. All other means of travelling Mr Burton: The peak time of those sorts of issues is without an appropriate ticket have largely been during the 3.00 to 6.00 period when the kids are taken into account in the design of the Oyster travelling home mostly in general terms, and that is system. The system is partially gated. It is not fully when we focus our resources. There is a number of gated, despite some miscomprehensions some options. 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5 December 2007 Mr Shashi Verma and Mr Steve Burton which are not gated, including some very busy Mr Burton: It is both types actually. We have a small stations like Finsbury Park, but the Oyster system is hard core of serial oVenders, as you do in many areas not designed to run on a system which is fully gated. around antisocial behaviour. The way we deal with It is designed to run on a system where a large that is we keep records of who we are issuing penalty proportion of the ﬂows have one end gated, so either fares to, which is where the name and address would the origin or the destination is gated, because we really help us. I have a prosecution section within my collect a maximum cash fare when people enter the department which takes a very active role in taking system and we refund them the diVerence when they people to court when we think that is the appropriate exit the system to bring the fare down to the sanction and we work very closely with the criminal correct level. justice system to ensure there are appropriate sanctions in place. But yes, we do have a small hard core of serial oVenders and those are people whom Q324 Mr Hollobone: On the fare dodging which does you will not change their behaviour by posters and take place, to what extent is there serial fare they are the people where enforcement and visible dodging? Is there a hard core of people who policing is a way to deal with it. persistently try to evade their fares, or is it lots of Chairman: Gentlemen, thank you very much. You people making the occasional mistake? have been very instructive.

Witnesses: Mr Manuel Cortes, Assistant General Secretary, Transport Salaried StaVs’ Association, Ms Fran Hill, Chair of UNISON Bus Sector, and Mr Richard Sherratt, Member of UNISON Transport Service Group, gave evidence.

Q325 Chairman: Good afternoon. Can I ask you to do so actually, if not with the approval, without identify yourselves. I am sorry we are a little bit late. encountering the wrath of the DfT, and just come Forgive me. back with recycled proposals and the booking oYces Mr Sherratt: Richard Sherratt. I am a member of opening hours get reduced. While we welcome the UNISON’s Transport Service Group. introduction of Oyster, although its roll-out has Ms Hill: I am Fran Hill and I am from UNISON’s been somewhat slow, TfL is now using that as an Transport Service Group. excuse to close down 40 booking oYces within the Mr Cortes: Manuel Cortes from the TSSA. London area. There are proposals for 40 complete closures and then in addition to that they are looking Q326 Chairman: Mr Cortes, can I ask you to do me at reducing the hours in many others. Clearly, we a favour and extend the best wishes of the think the general public does not want that. In Committee to your General Secretary? We are sorry addition to that, if you do not use an Oyster card to hear he is not well. We hope he will soon be back now you pay what can only be described as a penalty firing on all cylinders. fare because a single fare with an Oyster card is £1.50 Mr Cortes: I will do so. for central London and without it it is £4.00. That cannot be in the best interests of passengers. I think Q327 Chairman: Did anybody have anything they I will leave it at that at this stage. wanted to say to us before we start? Mr Cortes: Yes, if I may, please. Just a few general Q328 Chairman: Can I ask all of you, do your remarks before we start the session. As a union we members have any idea how smartcards or favour integrated ticketing, but what we see is that integrated ticketing can develop in the UK? Is it there is not enough of it and we believe the something you have debated at all? fragmented nature of our public transport systems Mr Sherratt: Not what we have debated, but the do not assist the eVorts of gaining further ticket actual bus company I work for has just started trial integration. We have also got particular concerns on electronic smartcards using the GPS system. Yes, with regard to what has been happening with the there are benefits. The plus side for our members is provision of tickets because over the last decade that the administration of it looks complex and is what we have seen is that the introduction of new certainly more involved than we are used to in the technology is being used as a way of reducing choice bus industry— for passengers. So what we have seen is a steady deterioration in the amount of booking oYces available, for example, on the railway and Q329 Chairman: Was that a fleet which already had supplementing those with ticket machines, call GPS in it, or are they having new technology put in centres, et cetera. This has been done in many and paid for by somebody else? instances against the wishes of passengers. What Mr Sherratt: No, it is new technology paid for by the seems to happen—and we have got a good example bus company. It is linked to real-time information. of what happened in South Eastern only a couple of All the bus stops have to be GPS located and the idea years ago where there was a very successful is that the customer will have what we call a campaign to stop the plans to significantly reduce “mango” card and touch on, touch oV, and the the opening hours of booking oYces—is that these current discount on a single fare is 25% and then it proposals resurface a couple of years later. So is capped at a daily rate, but I am not aware if that although passengers are against it, the operators will is ITSO-compliant or not. Processed: 28-03-2008 22:39:42 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Manuel Cortes, Ms Fran Hill and Mr Richard Sherratt

Q330 Chairman: Can I ask you the average age of guess, but it is our view that in order to increase take- your bus fleet? up you need to have a good concessionary fare Mr Sherratt: It is round about five to seven years. process in place, and in that respect we do support what the Mayor has done in trying to get more Q331 Chairman: The turnover on most, certainly people to use public transport, and particularly fleets outside London, is about eight years. How young people, because I think research does suggest many of these buses you are dealing with are having that if people get used to using public transport they the new system put in? are more likely to continue to use that mode of Mr Sherratt: At the moment the trial is on about 18 transport in the future, and in this era when we are buses on one particular route. all concerned with global warming and its eVects actually getting more people onto public transport Q332 Chairman: Is that a requirement of the networks must be a positive and good thing. contract they have got with the local authority? Mr Sherratt: No. Q337 Mrs Ellman: Are there any views on the gating of railway stations? Does anybody have any views Q333 Chairman: So it is something they have on that, in terms of its eVects on passengers or on decided to do because they could see it happening staV? and they are also paying for it themselves? Mr Cortes: I think that while it may help to protect Mr Sherratt: Yes. revenue, it also in some instances has led to aggravation and conflict at barriers, et cetera, where Q334 Mrs Ellman: We are told that the reason some people have become very excited about the fact booking oYces are closing is because passengers that they did not have the correct fare or they could want electronic means of payment and that it is not get through the barrier, and because there has market-driven. What comments would anyone have not been enough staV around people have just got on that? even more exasperated with the situation and then Mr Cortes: I have seen no evidence to that eVect and when a member of staV has actually attended to actually when we did question London them they have caught the brunt of the person’s Underground about their proposals to close discomfort with the situation. We are not against booking oYces in London one of the things they barriers, as long as they are not, again, a substitute have not at first, or actually even today, fully shared for a physical presence, because there might be good with us is what research they have undertaken reasons why people might have bought the wrong specifically in those stations which are threatened fare, may not have a fare, et cetera, and if all you with closure that shows that is what customers have got are barriers and people then having to favour. The opposite is our experience because when extend their journey while they wait for someone to we have gone out there and engaged with the public deal with their inquiry, all it is going to do is which uses those services we have had thousands of aggravate and potentially lead to a conflict situation. people signing our petitions against the closure of their booking oYce. So what we tend to find is that people are actually against the closure of booking Q338 Clive EVord: Do revenue protection oYcers oYces. I think that people will want to see a mix. We have suYcient powers, particularly on buses? are not against using a mix of ways of being able to Ms Hill: I can only speak for the area I work in, I purchase fares, but we should not be using new suppose. I work for First Group in Stoke on Trent technology to limit the choices of passengers. We in the Potteries. I suppose to a certain extent as well should be using it to actually extend the range of it depends how many bus inspectors the diVerent choices passengers get. companies want to employ.

Q335 Mrs Ellman: Has anyone any diVerent comment on that? Q339 Chairman: How many have you got in Stoke? Ms Hill: We do not actually cover—I think Manuel Ms Hill: We have only got four. is talking about mainly rail oYces. Mr Cortes: Well, TfL covers the buses in London, it Q340 Chairman: How far does that extend beyond covers the whole thing. Stoke on Trent? Ms Hill: Yes. We cover people outside London Ms Hill: North StaVs and south Cheshire. We only mainly, so we do not see the same problem the TSSA have four inspectors. It depends how much money has seen. each company—because they are paid by the bus companies—want to spend on revenue protection. Q336 Mrs Ellman: Young people in London now have free bus travel. Has that led to any problems for staV? Q341 Clive EVord: So the bus companies in that area Mr Cortes: We do not represent many people who just assume that everyone is particularly honest, do work within the bus sector, so we have not seen any they? signiﬁcant increase of trouble, et cetera, to do with Ms Hill: I do not think it is that. I think it is the fact people getting onto the public transport network. I that they do not want to spend any more money presume this is more to do with the buses, I would on it. Processed: 28-03-2008 22:39:42 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Manuel Cortes, Ms Fran Hill and Mr Richard Sherratt

Q342 Clive EVord: Has anyone to your knowledge Ms Hill: The inspectors and the drivers? ever done any cost beneﬁt analysis of whether having more revenue oYcers would actually bring in more Q347 Chairman: Does anybody divide it into bits? fares? Ms Hill: I do not know, to be honest. I do not know Ms Hill: I think the only cost analysis the company what kind of – did was how much it cost in wages for the inspectors when we were having ﬁnancial diYculties. We did have ten inspectors and we are now down to four, so Q348 Chairman: What is your impression? perhaps that might show you. Ms Hill: We do not get too many assaults on the inspectors. I only know of one instance in the last twelve months. We do get more instances with the Q343 Clive EVord: And no corresponding reduction drivers. in income through the fare box? Ms Hill: I would not have thought so. We have recently introduced new measures where we have in Q349 Chairman: Is that drivers where they are sitting eVect a penalty fare if you have not got the right in one man or one woman buses? ticket. Ms Hill: Yes.

Q344 Clive EVord: How eVective is that if you have Q350 Chairman: So they are easy to get at? only got four oYcers? Ms Hill: It depends. The most recent case we have Ms Hill: It has been quite successful because what just had is where there was some kid messing about they are now doing is following through, which they at the back of the bus and they got the engine cover have not done. It has only started the last twelve oV, so the driver got out of the bus and was then months, where they were following through. If the assaulted. In a lot of cases now they have protective passengers will not pay the penalty fare they will take screens when they are sitting at the wheel. them to court and follow them through that way, so they have put quite a lot of publicity out about that. Q351 Clive EVord: How could they raise the alarm? Ms Hill: If they are assaulted? Some vehicles have an Q345 Chairman: Do you have any diYculty in alarm on that will just set oV and it sets oV a warning. getting people’s names and addresses, or are In other cases it would be using the mobile phone, I Stokesters very good at volunteering information? would guess. Ms Hill: We have got a few smartcards which are used within the Crewe and Chester areas in Q352 Clive EVord: That is a bit ad hoc. conjunction with Cheshire County Council, but Ms Hill: We have got CCTV on a limited amount of most of our tickets are paper tickets or the tickets services, but we have not got— you can buy in advance for a week or a month, or three months, and to get those tickets then you Q353 Chairman: What is the average age of the bus, provide a photograph and proof of your name and do you know? What is the bus fleet? address, so that is kept on a central database for our Ms Hill: Our fleet must be about the same as Mr revenue inspector. So we do not have the same Sherratt’s, I would think, five to seven years, because problem the gentleman was talking about from we are part of First Group so we have quite a London in actually getting the names and addresses decent fleet. because we have got them on a protected databases. Chairman: If you will forgive me saying so, a visual Mr Cortes: Could I comment on the railway check might not lead one to believe that they were specifically with regard to revenue protection? What five to seven years old, but I am sure that is wrong! we find is that where there are staV about the stations, whether they are revenue protection staV, barrier staV or booking oYce staV, revenue is far Q354 Clive EVord: So there is no panic button they better protected than when you have not got people can press to alert people to the fact that they are around. So there is a direct correlation between the being assaulted? amount of people and the visibility of staV at Ms Hill: Only on a few of the fleet, and certainly not stations and the ability of companies to maximise all of ours. their revenue. Whether or not people have got enough powers is a very delicate situation because Q355 Clive EVord: Is it an issue you have taken up these people are not police oYcers, they are ordinary with the bus operators? workers. They are subject to assault and clearly there Ms Hill: It is something which is taken up, yes. We has to be good cooperation, not just with the law used to have a system which was a global positioning enforcement authorities but also with the employers system, but that got too expensive and that got taken putting into place good quality training on how to out, but it is something which is brought up under avoid conflict, et cetera. Our view is that it varies health and safety. They are looking at putting in a from operator to operator in the railway. radio system which keeps the driver in contact with the central control system. Q346 Chairman: Let us ask Ms Hill, because I think this is very important. What is the health and safety Q356 Clive EVord: But that is mainly to tell him record in relation to assaults on your staV, both when he is being late than for him to raise the alarm revenue and presumably – is he is being assaulted? Processed: 28-03-2008 22:39:42 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG2

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5 December 2007 Mr Manuel Cortes, Ms Fran Hill and Mr Richard Sherratt

Ms Hill: Well, everything. It would be for anything. created more work behind the scenes, if you like, Mr Cortes: Could I just make a comment on where because constantly questions are being asked such as we have seen a significant reduction in assaults? That how many more people are travelling, where are they has been in the London area because significant travelling, when are they travelling, because we have additional resources have been put into the BTP by to provide info to the local authorities to get the Mayor and with them working closely with reimbursement for the travel. They are constantly London Underground and other operators within worrying about how much it is going to cost them the London area there has been a significant because in some instances the costs have shot up reduction in assaults. So that shows how quite a lot with the extra patronage. We cover cooperation actually does work. mainly clerical work, obviously, and I actually work in that area myself, so we spend a lot more time both Q357 Clive EVord: Good. To go back to your earlier from within the companies that we work for point, has there been a reduction overall in station analysing all these figures for the local authorities. staV on Network South East? Mr Cortes: I have not got a figure for the whole of Q362 Chairman: But they are, of course, benefiting Network South East. I know that within the Greater from that? London area there has been, yes. Ms Hill: Yes.

Q358 Chairman: Could you give us those figures? Q363 Chairman: So it is not exactly pro bono, is it? Mr Cortes: I should be able to. Ms Hill: No, definitely not. The other concern that Chairman: I am not going to hold you to it. we have about our members is because it is costing the authorities such a lot more money, and obviously they are worrying about what it is going to Q359 Clive EVord: I use the train regularly every day cost them next year, they are cutting back in other and I have noticed that at my station now the areas such as looking to see what tendered services barriers are open during the day. They are only and things like that they can have because they are closed at peak time. They are never closed at any like everybody else, they have only got a finite other time. I put that down to a lack of staV on the budget, so they are looking to perhaps try and cut station. Is that your experience? back in those areas. Obviously, if a lot of the Mr Cortes: That would be our experience. Clearly if tendered services are taken oV then we have got the you have got a barrier system, because people might worry about whether that is going to cause any job get on the network legitimately but not been able to losses to our members. buy a fare, or whatever, you would need staV at those barriers to be able to deal with people who Q364 Chairman: Is there anything else you would would have a ticket enquiry or not paid the correct like to tell us that you think would be useful? fare, et cetera. So you cannot close the barriers Mr Cortes: Just one point I would like to make. We unless you have got staV available. have just had the opening of the high speed line from St Pancras and we are talking about ticket Q360 Clive EVord: Are you aware of any integration and it just shows how ludicrous this information about more evasion, people avoiding current situation is. Many people cannot go into paying the fares because there are less staV and more their local station and buy a through ticket all the barriers open? way to Paris. That just shows how ludicrous it is. Mr Cortes: The reason they brought barriers in in the first instance was to maximise fares, so if you Q365 Chairman: You are expecting too much, Mr have got them open it is defeating the purpose of Cortes! why they were there in the first place, so the answer Mr Cortes: Well, we are in the twenty-first century. to that has to be yes. Maybe I am asking for a bit too much. Chairman: Fifteen years ago I went in to Crewe and Q361 Chairman: Have any of you noticed any bought tickets not all the way down through Italy impact on your members since there has been the but right the way down to Sicily with no trouble at introduction of a national concessionary bus travel all. I had seats booked and it was all tremendously scheme? eYcient. That is totally impossible now. If I want to Ms Hill: The eVect that it has had within the bus go to Chester it is another city, which may indeed be companies is that obviously there is a lot more true. Lady and gentlemen, you have been very people who are travelling with concessions, so it has helpful. Thank you very much indeed. Processed: 28-03-2008 22:40:32 Page Layout: COENEW [SE] PPSysB Job: 376402 Unit: PAG3

Ev 42 Transport Committee: Evidence

Wednesday 12 December 2007

Members present

Mrs Gwyneth Dunwoody, in the Chair

Mr David Clelland Mr John Leech Clive EVord Mr Eric Martlew Mrs Louise Ellman Mr Lee Scott Mr Philip Hollobone Graham Stringer

Witnesses: Mr Stephen Joseph, Executive Director, Campaign for Better Transport, Mr Anthony Smith, Chief Executive, Passenger Focus, Mr Rufus Barnes, Chief Executive, London TravelWatch and Mr Gordon Edwards, Company Secretary, TravelWatch SouthWest, gave evidence.

Chairman: Good afternoon to you, the Committee is with the use of mobile phones and Oyster now in session. Members with an interest to declare, acceptance. That, we believe, is good and welcome Mr Clelland? news. Mr Clelland: Member of United. Clive EVord: Member of Unite. Q368 Chairman: Mr Barnes, I am going to stop you Graham Stringer: Member of Unite. there. Do you think possibly as the questions come Chairman: ASLEF. up you can answer the particular points and point Mrs Ellman: Member of Unite. out to us if there is a gap between what you said originally and what is happening now and why. If Q366 Chairman: Thank you very much. Gentlemen, there is a diYculty and at the end of the time you feel you are most warmly welcome. I am sure several of we have missed something by all means raise it. Mr you already know the House rules, if you agree with Smith? one another please do not repeat what somebody Mr Smith: I think the Committee’s investigation is else has said. If you want to catch the Chairman’s eye extremely timely as the number of passengers going it should not be too diYcult because the clerk will dig through Britain’s railway network increases day by me in the ribs. If there is anything else you want to day and in recent research we have done—which say we will ask you whether you want to say it. unfortunately was done prior to our report being Would you like to identify yourselves for the submitted—reducing ticket queue time, something record, please? as simple as that, actually came out as the sixth Mr Edwards: Gordon Edwards, Company priority among Britain’s rail passengers on a Secretary, TravelWatch SouthWest. national survey. Subsequently we have also done Mr Barnes: Rufus Barnes, Chief Executive, London some research on the passengers’ attitudes to the TravelWatch. future of ticketing and future ticketing technology Mr Smith: Anthony Smith, Chief Executive, which I will refer to in the course of questions. Customer Focus. Mr Joseph: Stephen Joseph, Executive Director, Q369 Chairman: Mr Edwards? Campaign for Better Transport. Mr Edwards: Our evidence was obviously submitted nine months ago and most of it remains relevant today. However, there has been one change, and we Q367 Chairman: Do any of you have anything you welcome the Government’s decision to pay the want to say briefly? additional £212 million towards the cost of free Mr Barnes: I would just like to say that the paper concessionary travel from the first of April next year was written nine months ago and certain things have by specific grant using option four. moved forward since then. I think it is important to make sure that your members are aware of the changes that we wish you to take into account. We Q370 Chairman: Thank you. Mr Joseph? made reference towards the beginning of our report Mr Joseph: I wanted to say that we would like to to ticket queues on the underground. We believe take this opportunity, if the Committee wishes, to London Underground has made progress but things update the Committee on something that it have got worse recently at King’s Cross St Pancras expressed interest in in its report on the draft Local following the transfer of the Eurostar service and the Transport Bill in relation to the Competition Act opening of the First Capital Connect station there. and ticketing and bus services. If the Committee We have noticed, rather worryingly, that there are wants to explore that I am happy to update them on queues for the ticket oYce and the ticket machines where we have got to on that. that are actually causing movement problems within the station. Secondly, we believe that there has been Q371 Chairman: That would be helpful. Let us see some very useful progress in relation to mobile how we go and if you think we have missed bits out phones and telephones. We referred to this in our it is not above you to attract the Chairman’s report but we believe that Transport for London has attention. Do you all think that the Government has recently announced that they will be experimenting got a strategy on integrated ticketing? Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

Transport Committee: Evidence Ev 43

12 December 2007 Mr Stephen Joseph, Mr Anthony Smith, Mr Rufus Barnes and Mr Gordon Edwards

Mr Smith: In terms of the national railways the on the national rail network. The diYculty with integrated ticketing works quite well inside the smartcards on the national railway network is that railway network; it works less well when you try to where you get longer distance journeys, where the use rail and bus or a combination of some other form price is high and variable, there is a great reluctance of public transport. There are schemes which are to store large amounts of money onto a smartcard. now being promoted, the PlusBus scheme whereby It works very well for urban areas and, as my you can buy a bus ticket relatively easily on top of colleagues have said, it would be great if those urban your rail ticket but we simply do not think that the areas and smartcards could talk to each other so you promotion is high profile enough at present. could use them in Manchester, London or SheYeld, but for longer distance journeys it is much harder to Q372 Chairman: What about smartcards? see quite what the benefit is. Mr Barnes: I think the smartcard is good in principle and we are delighted that the Government has Q378 Mrs Ellman: What about outside the pressed national rail to accept Oyster in the London London area? area. We are worried about the implementation Mr Smith: There are plenty of examples outside of arrangements for that. London—the Travelmaster card in South Yorkshire, the Trio in Merseyside, System One in Q373 Chairman: In what sense? Manchester—where smartcards work. People like Mr Barnes: We are very aware that the them; they are understandable. As long as you have Government’s concern is that the ITSO product a clear pricing structure, a zonal fair structure, and should not be undermined by Oyster. We are pleased people know what they are going to pay. that the Government has said that Oyster has to be accepted on all national rail stations in its pay as you Q379 Mrs Ellman: Do you think that enough go concept but we are aware that there are going to attention is given to the views of travellers outside be diVerences across London that are going to be London and there is not too much focus on really problematic and confusing for passengers. travelling within London? Mr Smith: I think the existence of these other Q374 Chairman: You have presumably drawn that smartcards indicates that it is a popular product in to the attention of the Government; what response all types of area and could be extended outside urban have you received? areas. The fact is that the Oyster card is a very Mr Barnes: The Government appears to be saying prolific product in London; people have seen it and that if some companies oVer one thing and another a lot of people use it. In many ways it is leading company oVers another thing, then that is the perceptions. commercial world. Mr Barnes: I think the issue about London is that Oyster works and Oyster has been seen to work and Q375 Chairman: That is what I am asking you: is Oyster has been popular with users. It is first there a strategy behind this. Mr Joseph? generation. It is obviously the case that people need Mr Joseph: In answer to that precise question we to be able to have a product that is useable elsewhere have not identified a strategy. In particular what we and I understand your question, but we do not want have not identified is a strategy which would fit with to lose the benefit we have seen of Oyster in London the current transport secretary’s express wish to because people want to have the ITSO product that focus on door to door transport. There is, as my has a national benefit. colleague to my right said, a strategy for integration Mr Edwards: To go back to your original question, within the railway; there is no strategy for there needs to be more done now, yes. In the south integration between rail and bus or between creating west of England there are 102 destinations without a smartcard that will allow door to door transport railway stations where you can buy a through ticket such as you find in many other European countries. to. You can only book on the internet to 20 of those 102. For the other 82 you actually have to go to the Q376 Chairman: Is that your view, Mr Edwards? station and buy it. You cannot buy the add-on fare Mr Edwards: Yes, there is no strategy whatsoever with any advantage purchase ticket. Why cannot the and we have made representations to the railway industry, with the technology that is Department for Transport when they have been available today, just deliver that? letting new rail franchises, that we wanted to see some commitments in there around integrated, Q380 Mrs Ellman: Mr Smith, can I ask you from multi-model ticketing. Nothing has happened Passenger Focus, do you think enough work is done whatsoever. on looking at the needs of people who want simply to be able to go to a station and buy a ticket on the Q377 Mrs Ellman: Are smartcards important or do day? Is there not a drive to everything being through you think improvements could be made by existing Smartcards and other technologies to the exclusion payment systems? of passengers—I do not know how many—who Mr Smith: The research we have done with want to be able to buy tickets and travel? passengers shows that the smartcard is instantly Mr Smith: I think it is a fact that the move on the recognisable, people can see the benefits, they want railways is very much towards pre-purchase for all it, they would like it to be more available especially types of travel whether it is through Smartcard or in the London area with the pay as you go concept through booking ahead. As we have seen in the Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

Ev 44 Transport Committee: Evidence

12 December 2007 Mr Stephen Joseph, Mr Anthony Smith, Mr Rufus Barnes and Mr Gordon Edwards current fare rises the relentless pressure on walk up Q383 Mr Scott: How eVective do you think and go fares continues and we are moving towards a Transport Direct is? very diVerent type of railway which, in some ways, Mr Barnes: Transport Direct is an organisation that on longer distance travel, is becoming more of an is providing information rather than ticketing. It is EasyJet type booking system. This is happening one of the organisations that fulﬁls this role, but it without any public debate and really at the behest of is just one of those organisations, the National Rail the operators largely to suit their convenience. Enquiry Line is another. It is one organisation . . .

Q381 Mrs Ellman: Passenger Focus is there looking Q384 Chairman: Is it eVective? at the needs of passengers, have you done any Mr Barnes: I cannot really comment on whether it is research on the views of passengers and particularly better or worse than any of the others? those who do not want to have to go down this Mr Joseph: In principle what Transport Direct is route? trying to do is admirable and certainly some of the Mr Smith: It is quite clear that many passengers new features that it has added to allow, for example, value the ability to be able to turn up at the railway carbon calculations of journeys and so on are station and purchase a ticket on the day of travel admirable too. Nobody else is providing car and either because they want to be suYciently flexible public transport comparisons. The problem seems about their plans or they want to talk to a member to be when you get down to the very local level of of staV which is very important. I do not think the journeys in that it seems to fail to notice the rail industry is ever going to be able to get rid of opportunities for walking any distance or for cycling ticket windows because people want to talk to staV. and therefore does not include those as options and Some of the products are complicated; they need to some of the first and last legs of the journey are still have a discussion with a human being about them. very odd. It is also reliant on the local public People like the railway because it has that turn up transport information, for example the location of and go ability. I think it is one of the railway’s great bus stops, provided by Traveline and from that the attractions and selling points that you can do that, local authorities. We have evidence from some of you can turn up and go. our local groups that some of those basics are not very well done. We have some concerns about the Q382 Mrs Ellman: Has Passenger Focus made detail although we think in principle the case for representations to the operators and to government Transport Direct is very strong but needs to be to pursue the views of those people? developed. Mr Smith: Yes, we have. We have made strong Mr Edwards: The key barrier to the use of public representation both to government and to the transport is the availability of information. At the operators and to the Association of Train Operating moment we have both Transport Direct which gives Companies but I think some of the realities of the live travel news but also provides a journey planning pressure on space on the railways is pushing the system which people find quite diYcult to use operators towards trying to get people to book in initially but once you get used to it it is fine. Then we advance. A lot of people are very comfortable doing have all these regional travel line organisations that and we should not decry it because you can which do not have a standard format and do not travel very, very cheaply if you book in advance. The cross regional boundaries. Really we want to see the great benefit of the railway is that you can turn up to Government take some lead in joined-up thinking to go. It is a social service, it is a public service and it ensure that there is just one source of accurate public should be available when you want to use it within transport information which is easily accessible. Rail reason. fares are available on the National Rail Enquiry site, Mr Joseph: We have recently been focussing on the they are also available on the Transport Direct site, closure of travel centres at various railway stations. but on Transport Direct you cannot get bus fares. South West Trains are leading the way on this and On Traveline South West from 2 January you will be we think other operators will follow it. We are able to get the bus fares but no train fares. All these concerned about this for a number of reasons, firstly bodies are publicly funded so can we please have because, as Mr Smith said, some of the railway some joined-up thinking. products are complicated and people like to be able Mr Smith: I think Transport Direct is a big step in to have the leisure to explore the options for them in the right direction. Information is key prior to relation to travel which travel centres provide. ticketing and I think what they are trying to do is Secondly, we are concerned—from the aspect of one interesting because in a sense they are competing of the other things the Committee is interested in— with the satellite navigation technology you are with penalty fares. If you have no travel centre and seeing in use in cars increasingly, that sort of relatively few staV at ticket oYces people will simply pinpoint accuracy of journey information. Public be caught by penalty fares regimes because they have transport has to keep up so it is a step in the right not had time to actually buy the ticket in advance. direction, but clearly there is more work to do. We have certainly raised these issues with South West Trains; we have, as usual I am afraid, come across a split between whether this is required by the Q385 Clive EVord: Has the ticket fares on trains franchise or a decision made by the operator. coming into line with the zones improved the Responsibility, as often with the railway, seems to be understanding of the prices and the link between the divided or passed between the two. diVerent modes of transport in London? Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

Transport Committee: Evidence Ev 45

12 December 2007 Mr Stephen Joseph, Mr Anthony Smith, Mr Rufus Barnes and Mr Gordon Edwards

Mr Barnes: I think when you start from the position Q387 Clive EVord: How will that work? If you have a that prior to the introduction of zonalisation you smartcard and you are travelling around the system, had vastly more fares options, anything that brings you could go from one section of the network that about a simplification of that helps people’s oVers the discount and one that does not. How will understanding of the fares they are likely to have to you know? pay for the journey they make. That must be a good Mr Barnes: Because you have to click in and click thing. Zonalisation is also a vital prerequisite to the out of each section. acceptance of Oyster on the national railways in the London area—Oyster pay as you go—otherwise you would not have been able to introduce Oyster pay as Q388 Clive EVord: Does it tell you? Until you have clicked in or out, supposing there is a display screen you go on the national railways because the system there to tell you what has just been taken oV your could not cope with such a large number of smartcard, how do you know? individual fares. Yes, it was a good thing; yes, it goes Mr Barnes: The current situation with Oyster on towards simplification and it is a prerequisite before Transport for London services is that there is a daily we see Oyster pay as you go extended to the national cap; it cannot take more than the daily cap oV the railways. service. The detail of how it is going to work on the Mr Smith: I agree with my colleague’s comments national railways has not yet been worked out, but I that overall it is a good thing but it has been painful can foresee some very real problems. Southern in its implementation because some of the fare rises recently decided to accept Oyster pay as you go on which have been implemented following the their service from Clapham Junction up to Watford introduction of the zones have been quite significant. Junction; that parallels the service operated by the Individual passengers I think got quite a nasty shock London Overground. That is good news for in terms of what might happen. We saw I think rises passengers. However, as I say, South West Trains in the order of 30% which were relatively small have made it clear to us that they believe in their monetary amounts but still quite a big jump and franchise bid there was no provision at all in the what we have yet to see is what the overall impact financial bid that they put together for them to give will be of turning London into a complete zoned a discount. area on travel from outside of London. There are many forces at play here, including the government regulation of certain types of rail fare which apply to Q389 Clive EVord: This is disastrous, is it not? If, for the whole of a train company’s activities. Now you instance, South Eastern were to say that they are not get a sort of ring in London which sets certain things going to oVer the discount on pay as you go Oyster happening in terms of price which we thing has a cards that means that the Oyster is irrelevant for potential consequence of reducing the train commuters in a quarter of London, is it not? company’s room for manoeuvre with prices outside Mr Barnes: It is not necessarily irrelevant because it of that area so what could be good news for London does speed up the passage, for example, through the might not be quite such good news for Kent. ticket gates and it does enable people to travel more easily if not more cheaply. However, I would agree with you that the confusion that could result from Q386 Clive EVord: It is not good news for south east diVerent train operating companies in the London London. How satisfactory is the Oyster card from area applying a diVerent policy could be very the passengers’ perspective. unacceptable, confusing and in many respects it Mr Barnes: Oyster has been a massively beneficial could result in passengers believing that Oyster pay product for London but there are some uncertainties as you go is going to deliver one thing and it delivers about the future. I think everybody needs to be very something else. clear about those uncertainties. One of the reasons Mr Smith: From our research the Oyster card has that Oyster has been so beneficial with the pay as you been a tremendous success. The only downside that element of Oyster has been the fact that on we can pick up from our research is the inability of Transport for London services you get a discount in passengers to be able to see what they have got on it the fare that you would pay compared with the fare or what they have got left. It is a relatively dumb that you pay if you pay by cash. I think that there has piece of plastic in that respect unless you actually been an expectation that when Oyster pay as you go have some sort of contact with the system. I think is extended to the national railways that discount Oyster’s success has been built on the fact that we will automatically be applied to national rail fares have had one organisation specifying the where pay as you go is accepted. There is no introduction of it—Transport for London—and one guarantee of that at all. In fact, some train operating contractor delivering it and they meet exactly companies have said that they do not intend to give together. Once you get 23 train companies or that discount. Whereas we have seen some however many trying to do this there has got to be a companies in the recent pass actually accepting common agreement otherwise the chaos that you are them, others have said they positively will not. This predicting will come about. will cause confusion and cause massive Mr Joseph: Going back to Mrs Ellman’s earlier disappointment I suspect potentially to your question about whether there is a strategy, there is constituents if South Eastern were to decide not to no strategy. The Department for Transport needs to give the discount that currently applies to travel on specify and be an intelligent client that creates an TfL services. Oyster style product across the country. Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

Ev 46 Transport Committee: Evidence

12 December 2007 Mr Stephen Joseph, Mr Anthony Smith, Mr Rufus Barnes and Mr Gordon Edwards

Q390 Clive EVord: What is your understanding of Q394 Clive EVord: What is the future for the the conflict between the technology involved behind travelling public? At the moment if you start your ITSO and Oyster? journey on a bus you cannot buy your train ticket, Mr Barnes: Oyster has been developed by a what would solve this through-ticketing problem for company, as Mr Smith has said, and is basically a the public? What do you envisage? monopoly product, monopoly supply, monopoly Mr Barnes: We would definitely advocate wider cost, et cetera. The interface of the ITSO product I sales opportunities for multi-model tickets and am told is extremely diYcult in respect of the pay as perhaps this is the right point to draw your attention you go element of the stored value ticket. As you to a further potential problem with the ITSO/Oyster know Oyster is a double product, on the one hand it product because it has to do with ticket sales. Again can be a period ticket, on the other hand it can be a South West Trains, under its agreement with the stored value ticket. It is the stored value element Department for Transport, will, we understand, be where there is a problem on the interface and I accepting the Oyster pay as you go product but it believe, although I am not a technical expert, that does not intend to sell the Oyster pay as you go the problem is having the information stored on the product; it only intends to sell the ITSO product. ITSO product that can be read by the Oyster Other train operating companies in the London area machinery in respect of pay as you go. I believe that have said that they will both sell and accept it so in the South West Trains area—and maybe elsewhere, is where the problem lies. I do not know—passengers who wish to top up their Oyster pay as you go product will not be able to do it at their local South West Trains station, they will Q391 Clive EVord: Are you aware of an internet have to go to another ticket sales outlet. We think ticket sales line that claims it can provide an ITSO this confusion is absolutely awful and perhaps a type smartcard that will work on the current Oyster further indication of lack of integration and systems without requiring any new gates or readers? ticketing policy. Mr Barnes: I am not personally aware of the detail of that; I have heard of the company that is making that claim but I do not know the details. Q395 Clive EVord: Can I just clarify that they are actually saying they will not allow TfL to put their machines on their station forecourts so that Oyster Q392 Clive EVord: Are you aware of the current rail card users can top up their cards? legislation that allows train operators to stop sales of Mr Barnes: I think the problem is that South West certain promotional tickets and that this is likely to Trains would have to invest in the cost of that increase under smartcards? product. Mr Barnes: Certainly the rail companies can sell promotional tickets as much as they wish to. They Q396 Clive EVord: What if TfL suggested that they have to sell a particular core range of tickets but put the machines there themselves? above that they can sell any tickets that they believe Mr Barnes: They would be very happy to accept are in their commercial interests. anything free. Mr Edwards: Could I just make the point that from the first of April next year all concessionary pass Q393 Clive EVord: This question is about something holders in England are going to be issued with an more than that, it is actually blocking the sale of ITSO smartcard for their concessionary fare travel. other sorts of tickets that might be in a passenger’s This is a major investment by the Government but interest but not in the train operator’s commercial they will be of no use getting on a bus in London interest. because they will not be able to operate the Oyster Mr Smith: I am aware of this because I would have machines there so they will be taken as paper tickets. thought it would still have been in the train There really needs to be something joined-up here. operator’s interest to sell products which are specific Mr Smith: I think trying to guess the future is always to perhaps just that train company, whether it is a bit dangerous but we did ask passengers what they Virgin or South West Trains or whatever. You are thought the future as being and funnily enough it quite correct in your analysis that that benefits does not look that diVerent from where we are now, consumers because you have a degree of choice. which is quite reassuring. People see the smartcard Mr Barnes: What I suspect it may not be feasible to as being the key where you can use a smartcard in do is to sell it through the Oyster product or through diVerent parts of the country, in diVerent urban the ITSO product because the benefit that the areas, a smartcard which has this element of both companies have from their promotional tickets is stored value and pay as you go, but that is not a that they are usually only sold by that company and replacement for that ability to have staV to talk to, they get all the money for it. When you go down the to have other methods of buying a ticket. I think the future is smartcards. route of an Oyster product or an ITSO product it is a shared value and they have to share the money that they get in. I suspect what you are alluding to is that Q397 Graham Stringer: Will you tell us what if a company wished to sell a promotional product it progress you think there is being made on the would still have to be outside the ITSO/Oyster conflict between composition and cooperation on product. ticketing? Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

Transport Committee: Evidence Ev 47

12 December 2007 Mr Stephen Joseph, Mr Anthony Smith, Mr Rufus Barnes and Mr Gordon Edwards

Mr Joseph: The short answer is some, but not Mr Joseph: The lawyers we commissioned, who do enough. The opinion that we commissioned said know the competition law very well, were clear that the way in which the OYce of Fair Trading had about the public interest test that needs to be applied interpreted the competition law with respect to bus to such agreements. Where it is in the public interest services was too narrow and in fact not in the for operators to agree to accept each other’s tickets passengers’ interest. It proposed in summary that or indeed where an area-wide ticketing system can be the OYce of Fair Trading would be able to allow set up, then there is not a problem that is against the agreements between operators subject to the public public interest. That does not give a blank cheque to interest test that is being proposed to apply to operators to shut out other operators to agree deals quality partnerships. In other words, that all that are against the public interest, but agreements between operators that met the public overwhelmingly, in situations outside the areas interest test should be allowed. The result has been envisaged by the Local Transport Bill where you some progress in the sense that the bill now removes have quality contracts, where you have multiple some of the rather extreme penalties that were operators, the evidence is that people want to be able threatened through the Competition Act against the to get a single ticket that is valid on each other’s bus operators who happen to catch each other’s eye services. The operators want to provide that and the in the street and obviously deemed to be a cartel interpretation of the competition law by the OYce of arrangement. First group and Stagecoach, are at Fair Trading is impeding that. least not now threatened with dawn raids and 15% fines on their entire turnover. Some of the penalties have been removed but we are a long way from Q399 Graham Stringer: Just staying with our friends seeing an approach by the competition authorities from Stagecoach and First Group and the other that actually facilitates the integrated ticketing that members of the big five, they survive by and large by this Committee is seeking in this inquiry. We tendering their services through public subsidy. understand that draft guidance has recently been Have you analysed that there may be, or have been produced as part of the Local Transport Bill where concessionary fares have been, unintended proceedings. The lawyers who have been consequences for people who are not concessionary commissioned on this have said they will scrutinise fare payers in the passenger services provided? I that for us and we are due to go back to the OYce of hope that question is clear. When you bring in the Fair Trading and the Department of Transport and concessionary fare scheme it changes the level of suggest ways in which that guidance can be changed. demand, the kind of demand. It enables the bus We have also said to the Department that subject to companies to target their services more on public what the lawyers say we will suggest amendments to subsidy. Are you aware that that has changed the the bill either in the other place or when it comes to services in any sense? this House in order to give eVect to what passengers Mr Joseph: We are starting to get anecdotal evidence actually want, which is the ability to be able to get a of that happening. We have not done a full survey ticket which is valid on all the services on a particular and it is probably premature to do so until after the route. The discussion we have had has been about first of April. We have, for example, seen in Sussex London where there is at least some product that a situation where there have been serious cutbacks in allows people to get on diVerent buses run by services around Worthing, for instance. We have diVerent companies because they are part of the had press coverage turn up other evidence on that. network. Outside London we are a very, very long We have started to get ordinary people writing to us way from that. We did actually get examples from saying—it looks as if the concessionary fares have an passengers, not just in rural areas but in places like inadequate compensation for operators in this— SheYeld, where there are strong examples of where, that this is resulting in worse services in certain areas if you want to use the tram, you have to buy a and it also has an impact on the other fares charged, Stagecoach Dayrider but if the Stagecoach buses do particularly oV-peak fares charged by operators as not run you also have to buy a day ticket for First well. I think the previous evidence the Committee Buses. We are a very, very long way from the vision has had does not, in this case, lead to a debate that we were discussing about London a few minutes between the local authorities and the bus operators. ago, in which you can get a single product that will I think all the evidence we have had has tended to put take you door to door. the blame for this at the door of the Government in terms of the formula they have used to compensate Q398 Graham Stringer: That is very interesting. I operators and in particular routing it through have to say, I am rather in favour of dawn raids on district councils rather than the passenger transport First Group and Stagecoach, there have not been executives or county councils and the level of enough. What I would like your views and advice on, payments that the Government has given. As my Mr Joseph, we all want, with a guiding public mind, colleague from TravelWatch South West said, we sensible integrated ticketing. Is that going to open will have to see how the extra £212 million that the the door for more anti-competitive monopoly Government has made available for the scheme after behaviour that is not in the interests of the the first of April works out, but I think there are still passengers between the big five bus companies, of concerns that particularly in tourist areas and in which there has been some evidence in the past, there places of high demand there will be problems if there have been some prosecutions but not nearly enough is not full compensation given through the local when you look at the overall evidence. authorities to operators. I think, to put it brutally, Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

Ev 48 Transport Committee: Evidence

12 December 2007 Mr Stephen Joseph, Mr Anthony Smith, Mr Rufus Barnes and Mr Gordon Edwards there is a danger that pensioners will get free travel Mr Smith: I think that is a good question, does it concessions and not have any buses that they can use matter? From the passengers’ point of view of course them on. it is potentially of great benefit in the short term, but Mr Edwards: Since the first of April 2006 there have in the longer term the railways in these areas are been a large number of commercial services in south subsidised by the Government for a purpose and if west England withdrawn and on many occasions the that purpose is not being fulfilled you would hope bus company—a subsidiary of the major groups— there would be a bit of joined up thinking about stated that the revenue from the routes has fallen due which mode of transport is going to be favoured by to inadequate concessionary fare reimbursement. the public subsidy, but it appears to be approached We obviously do not have access to any financial in separate parts. information to state whether that is true or not true. What we do see, therefore, is that the local authority then has to go out and put out a contract for a service Q402 Graham Stringer: Is there anything to be which usually, because of financial constraints, is learned from the experience in Wales or Scotland or less good than the service that was previously Northern Ireland in relation to the introduction of provided at substantial cost to public funds. the national concessionary fares scheme? We have Mr Smith: Again some anecdotal evidence, but the had some very interesting examples, but are there introduction of concessionary fares on the buses of other lessons that can be learned which the course has had an impact on the railways in some Government should be applying to England? parts of the country. Previously there was the bizarre Mr Joseph: Specifically on the point that has just situation where the bus fare was more than the rail been raised about rail, in Wales there has been a new fare in many rural areas. The introduction of free approach and now three community railway lines bus travel has, to a degree, diverted quite a few have been added to the National Concessionary passengers onto the buses and away from the trains Fare Scheme and these are ones that are regarded by where similar concessions are not available at the the Welsh Assembly Government and all parties in present time. Wales as being important as lifelines for parts of rural Wales. It seems important to keep them going so they have been added to the National Q400 Chairman: I think what worries the Committee Concessionary Fare Scheme. The written evidence is how accurate is the information about this of TravelWatch South West to the Committee because—I am not saying this in any sense in a suggests—and we certainly support this—that pejorative way—a lot of the information is after all initially the lines designated as community railways anecdotal. How would we obtain accurate research in England should be added to the National that says what is happening and how widespread it Concessionary Fare Scheme. Scotland actually went is in the event? through a process where they did try the kind of local Mr Edwards: If I could draw your attention to a reimbursement that is being used in England and report which was 179 from the Scottish Executive found that it was much, much simpler to organise it Development Department after they introduced free nationally. We think that it would be appropriate to concessionary fares, they looked at the Lothian and learn from that experience from Wales and Scotland Strathclyde areas and said a significant switch from and move towards a genuinely national scheme. rail to bus was measured by on-train surveys before Mr Barnes: Can I add that it is worth considering the and after the introduction of free fares. The London situation as well which of course is entirely abstraction was between 19% and 66% and it diVerent in its funding regime. For many years now averaged 46% for those two regions. I could give you senior citizens have had the opportunity to travel on examples where we have seen abstraction on certain the bus, the underground and national rail, trams in railway lines in south west England from rail to bus. Croydon and Docklands Light Railway, and We now have a line like the Exeter to Exmouth line because they are able to travel on the mode that is which is basically becoming a commuter railway, appropriate for the journey they wish to make well used in the morning peak by commuters who people do not have to think, “This is the free option; come back, of course, in the evening. During the day this is the option I am going to use” and it has not the over-60s who used to use that service now go by had the worrying impact that quite clearly my bus because it is town centre to city centre every 12 colleague in the south west is concerned about. If minutes, low floor, free. you have the concession only on one mode it has an impact on other modes. Q401 Mr Martlew: Is that a problem? Mr Edwards: In the south west we are worried about Q403 Mr Clelland: Our colleagues here will be aware the financial viability of our railway lines because of the fact that the introduction of the scheme many of our railway lines are community railway impacted particularly badly on Tyne and Wear lines, have been designated by the DfT and they are Transport Authority who found themselves with a supposed to grow custom. However, you have £7 million shortfall and in order to make up for that somewhere like Looe to Liskeard, Penzance to St some smaller services had to be cut and in particular Ives where, in the winter, people, because of the high the Team Travel Scheme (which was a scheme to percentage of concessionary fare holders in those help young people travel on a concession) had to be area, are now using competing bus services and not cut back as well. Are you aware of any other using trains. unintended consequences of the concessionary Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

Transport Committee: Evidence Ev 49

12 December 2007 Mr Stephen Joseph, Mr Anthony Smith, Mr Rufus Barnes and Mr Gordon Edwards travel scheme? Have other concessions been cut we have West Devon which spends less than 50% of back in order for authorities to be able to its current money for concessionary fares actually on implement it? concessionary fares. Mr Joseph: One example where this unintended consequence came to South Yorkshire was as a Q407 Mr Clelland: Mr Joseph mentioned this rather result of the shortfall the Passenger Transport novel idea of the bus companies charging passengers Executive started to charge buses a departure tax at to use certain bus stations. Are there any other bus stations. Stagecoach, for one operator, charged consequences for the fare paying passengers by the an extra fare if you were going to those bus stations. introduction of concessionary fares? Mr Joseph: As I said in my earlier answer to Mr Q404 Chairman: That is a unique idea, charging at a Stringer, I think it is very much about cuts in the bus station to get on a bus. commercial services, increases in oV-peak fares and Mr Joseph: Exactly. This does not make any sense to other things and Mr Edwards has also mentioned passengers at all. In answer to an earlier question this too. It is much less high profile than the charges about where we can get evidence from on this, what at bus stations or the loss of a particular scheme; it we can get evidence on is the percentage of the is incremental eating away of the bus network and average adult fare passed over to operators in each incremental increases in fares. local authority area. That evidence is available. In the Sussex example I gave 41.9%, for instance, of the Q408 Mr Leech: Mr Joseph, the implication from average adult fare is being passed over compared what you said was that you were advocating direct with 73.6% in Wales, which does give you some payment from government to bus operators for indication of the level of shortfall. I think the journeys that are taken with concessionary fares, is particular argument in SheYeld or the result in Tyne that right? and Wear are not defensible but to go back to the Mr Joseph: That is correct, as in Wales and point I made, the root of this is the level and formula Scotland. for reimbursement. Q409 Mr Leech: Why do you think it is that the Q405 Mr Clelland: Do we think that the new specific Government will not support that? Is it anything to grant is likely to go anywhere at all towards do with the fact that it is going to cost an awful lot resolving any of these problems? more than they say it is? Mr Joseph: I think the jury is out on that. Actually Mr Joseph: We are not experts on this but I think when I have heard presentations from the relevant actually the evidence from Scotland and Wales was Department for Transport oYcials they have that by the time you took in the transaction costs of admitted that it is fingers in the air stuV. They really actually routing it through local authorities it was do not know where the travel is going to be; they actually cheaper for those respective devolved have made a best guess. We area concerned that governments to do it directly and that is why they particularly in things like tourist honey pot areas or, ended up with a direct system. It actually ought to be for that matter, in London and some other big cities, cheaper. The problem we have at the moment is that that there will be a significant shortfall which will we have the imbalances that Mr Edwards referred appear in places like Blackpool, for instance, and to, money going to places that do not spend it so there will be problems with that. there is actually wasted money in parts of the system Mr Edwards: Another unintended consequence, and shortfalls elsewhere and a national scheme because the money goes down to district councils would put that right. there are of course a lot of district councils that have received far more money for concessionary fares Q410 Mr Leech: Why do you think the Government through the Rate Support Grant than they actually is so against the idea? need to pay out. They are therefore able, because it Mr Joseph: I think that is very hard to say and you comes as part of the EPCS element, to use that are going to have to ask the Minister after this money on other services. If we had it all done by session that question. As far as we can see it is simple specific grant—which we support—a lot of district inertia and in-fighting between diVerent government councils in the south west of England would have a departments in terms of routing through local major problem in how they fund certain services authorities. which are currently being funded by concessionary fares money which is not being used for that purpose. We would fully support this Committee Q411 Chairman: Inertia is very seldom simple. Mr taking district councils out as travel concession Edwards? authorities. Mr Edwards: It is nonsense to have 291 travel concession authorities in England all able to do their own arrangements for issuing cards, all with their Q406 Chairman: Are you saying that they are not own rules, all with their own local arrangements, all good value for money anyway? with their own back oYce, all being encouraged by Mr Edwards: No, we are saying they are excellent the Government to sign separate contracts for 2008 value for money, the concessionary fares, but as Mr ITSO cards. Mr Joseph is quite right, we need, like Clelland has said, he has a shortfall in Tyne and Scotland and Wales, a national scheme with Wear and we have a short fall in greater Bristol, but national reimbursement; we need to stop all these Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

Ev 50 Transport Committee: Evidence

12 December 2007 Mr Stephen Joseph, Mr Anthony Smith, Mr Rufus Barnes and Mr Gordon Edwards arguments which are destroying relationships should be given to making sure that people on those between local authorities and bus companies lines actually all pay up. In particular, where you arguing about concessionary fares reimbursement. have severe crowding on parts of the network and a pay as you travel on-train ticketing system, you Q412 Mr Martlew: Various local authorities have often find that the conductor or guard physically diVerent schemes that go beyond. In my area there is cannot make his way down the train to collect the no time restriction. How would you deal with that if fares which is another loss of revenue. We are you decided on a national scheme? Would you concerned that it is the local services where the destroy that? revenue protection ought to happen most is not Mr Edwards: I think that to get a national scheme, happening. whether with the advent of smartcards you would Mr Smith: We support the concept of penalty fares then be able to say a local authority would be able to as long as they are consistently applied and also top it up— passengers have the ability to buy the correct ticket before boarding. The great concern here is ticket Q413 Mr Martlew: Smartcards are not working at queues. the moment. Mr Edwards: No, but with ITSO smartcards and Q416 Chairman: Yes, we have had that point. Mr with bus operators being able to accept them and Barnes? read them, it would be possible to load cards issued Mr Barnes: I think it is very important to recognise in a certain district with special features. I think the that some of the new train operating companies have current system is just so complex; 291 diVerent travel installed a number of new gates at the stations and concessionary authorities is a nonsense. it is very interesting, when talking to the managing directors of the companies, that some of them are Q414 Mr Hollobone: How bad is fare evasion? Is saying that they are raising far more money then enough being done to tackle it and is enough being they ever realised they would as a result of the gates done to diVerentiate between deliberate fare evasion they have put in. and passengers who make an honest mistake? Mr Smith: Industry estimates say that something in Q417 Chairman: I want to ask finally about the the range of 5% to 8% of the revenue is lost as it is English National Concessionary Fare Scheme which not collected. At the moment passengers put in is estimated to cost around a billion pounds per about £5.5 billion into the revenue stream each year annum. Is that good value or not? and that is soon going to creep up to £6 billion. That Mr Edwards: It certainly is, yes. It has been a equates to about £400 million, that would pay for tremendous success. You only have to go out on 400 new carriages tomorrow. It is a lot of money; it is buses and talk to elderly people to see how it has a tremendous loss. Passengers who have paid deeply revolutionised their lives, their ability to access resent the fact that other people have not because hospitals, health centres, to go to the shops regularly they are subsidising them and the industry should and get fresh food, to go out and see their friends. It collect what it is owed before it puts the fares up. is a great success story and it is only a pity that it has Mr Edwards: The only comment I would make on been so overshadowed by these arguments between this is that obviously we support all passengers operators and local authorities about paying the correct fare for their journey, but the reimbursement. For the customer it is a great, great railway companies have to make available ticket success story and it has led to phenomenal growth in oYces with suYcient windows and ticket machines bus patronage. that work and issue the full range of tickets. Q418 Chairman: It does rather cut out young people Q415 Chairman: I think the odd person looking at or anybody on a low income who might actually those tickets would help too. benefit from a diVerent scheme. Mr Joseph: That is correct. We are concerned that Mr Barnes: Yes, I think that we have in London seen the emphasis on revenue protection happens on the number of concessions for young people intercity lines and that some of the local lines that introduced by the Mayor of London. They have actually need that revenue most do not get the raised separate issues which I am sure you have not revenue protection that they need. Lines like the time to look at at the moment, but there are other Severn Beach Line in Bristol or some other lines in options for concessions which over time need to be that market, as we have discussed in relation to looked at. concessionary fares, need that revenue to support Chairman: You have been very tolerant, gentlemen; them and do not seem to have the priority that thank you very much indeed. Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

Transport Committee: Evidence Ev 51

Witnesses: Mr Tom Harris MP, Parliamentary Under Secretary of State for Transport and Mr Bob Linnard, Director, Rail Strategy and Stakeholder Relations, Department for Transport, gave evidence.

Q419 Chairman: Good afternoon, gentlemen. Could the diVerent schemes working alongside one you introduce yourselves for the record, please? another? What are your views of where you want to Mr Harris: I am Tom Harris, the Parliamentary end up with these schemes? Under Secretary of State for Transport and on my Mr Harris: When you say “these schemes” do you left is Bob Linnard, Director of Rail Strategy for the mean the local authority base concessionary Department for Transport. schemes?

Q420 Chairman: Minister, is there something you Q423 Chairman: The evidence we have taken has want to tell us before we start? been very interesting because we have taken Mr Harris: Yes, please, I have a very short evidence both about the diVerence between the statement. At the risk of being accused of trying to Oyster cards and the areas around London but we curry favour with you, can I begin by wishing you a have also taken evidence from some of your happy birthday? immediate predecessors about the impact that this is having on some domestic rail lines and all sorts of other schemes. You realise the complexity of this; Q421 Chairman: Do you realise I am seven today? what we really want to know is whether you have a Mr Harris: I was not going to mention the age! Can very clear view of what you want out of this scheme, I first of all thank you for the opportunity of where you are going, how you are going to get there appearing here on my first oYcial appearance in and what you want at the end of it? front of the Transport Committee. I think the subject of your inquiry is very welcome to us. The Mr Harris: I think there are two aspects to it and I Government sees ticketing choices as being think the general social benefit of the concessionary absolutely crucial to the travelling public because we fare schemes is one area that you might want to come believe they should be fair, they should be back to. The other side is the technical transparent and importantly passengers should be implementation of it. Because they are ITSO absolutely confident that they have made the right compliant (you know that ITSO is the integrated choice in the product they have bought. It is the transport smartcard organisation although it does Government’s job to make sure that the structures not stand for that any more) all these local authority are in place to make sure that that all happens. Smart schemes are actually compliant because it is a ticketing, which I know is part of your inquiry, is national scheme anyone with an ITSO already a reality in five of the rail franchises in terms concessionary card can move from one scheme to of ITSO requirements being built into them and all another physically. future rail franchises that come up for renewal will also have those requirements put in them. As you Q424 Chairman: I am going to stop you there. I am know we are working with Transport for London to very happy that the Committee should discuss the integrate ITSO and Oyster cards across London. implementation but frankly I need to know what The English Concessionary Bus Travel Scheme is your basic strategy is. Tell us how you see the overall encouraging the roll out on a massive level of ITSO future and implementation and particularly what cards because, as you know, all of the concessionary your policy is in relation to these schemes. Tell us cards are ITSO compliant. I believe that is going to that first and then we can actually put you through help create the commercial case for the roll-out of the wringer on the way you make your mistakes. further ITSO products. More generally on the Mr Harris: Essentially our vision is to allow as concessionary scheme, I think this is going to be of seamless as possible a local transport experience huge benefit to millions of eligible people who will from buying the ticket in the first place to saying qualify for a card. I should also point out that the what product you want until right through to Act itself does allow for changes in the structure and arriving at your destination. That will increasingly administration of the scheme at some point in the mean doing it on a cashless basis although it would future if that is required. You will also know that the not necessarily be cashless but a lot of people prefer Department is working closely with the Association not to use cash, to use smartcard technology. If we of Train Operating Companies to provide a brand are going to encourage people to use more modes of new structure—we hope a very much simplified transport to make their journeys rather than use structure—of rail fares which will take eVect next their private car then one of the keys to that is to year in fact. That is basically where I am starting make it as accessible as possible and that does not from. just mean physically it means a seamless transaction. Crucially it not only has to be seamless, we have to Q422 Chairman: Thank you for that, Minister. You provide a product and an experience that people will not be surprised to learn that there has been a lot understand how it is working. If it is not transparent of praise for the impact of the concessionary fare I feel that people are not going to trust that they are scheme on people’s lives in the quality of the passing paying the right amount of money on a particular of their days, but I do think that there is one question product. They have to be reassured that it is that we really do have to ask you before we start and transparent and that it works very, very eYciently. that is: does the department have an overall strategy No doubt I will have an opportunity to come back on how it wants all these diVerent schemes to work? later on to the technological side of that because that Has it thought through the implications of some of is absolutely crucial. Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

Ev 52 Transport Committee: Evidence

12 December 2007 Mr Tom Harris MP and Mr Bob Linnard

Q425 Mrs Ellman: You spoke about cashless Q430 Mrs Ellman: Will the Government maintain transport, what about the people who want to use any instructions on the availability of ticketing for cash and just go and buy tickets? Is there going to be people who want to pay cash or pay on the day? any room for them in the future? Would the Government put any regulations on that? Mr Harris: Yes, absolutely, as there is at the moment Mr Harris: I do not want to perjure myself in front in London, if you do not want to use an Oyster card. of the Committee by saying that we can oVer that guarantee. At this stage, although I do not foresee a situation where people will be forced to use a Q426 Chairman: It will cost you a hell of a lot if you smartcard, I am not aware of any mechanism that want to stick with your commitment to cash. Some the Government actually has to enforce that. of us have this strange, old fashioned commitment to the pound, shilling and pence as were. Q431 Chairman: Mr Linnard, you always get the Mr Harris: Indeed. diYcult ones. Mr Linnard: There is on the railway something Q427 Chairman: We like the feel of it. called the Ticketing and Settlement Agreement Mr Harris: To answer Mrs Ellman’s question, I do which governs a number of technical issues about not foresee a position in the future where it will not the availability of tickets, including things like the be possible to use local transport without a opening of ticket oYces. One of the things that the smartcard. There will be an opportunity to use cash. Government would not agree to would be changes in Obviously in London, as you say Mrs Dunwoody, that that reduced the availability of the ability to pay there seems to be a premium on using cash. I do not cash for tickets unless it was quite clear that that was want to make predictions about how that situation not going to disadvantage people. might be rolled out for the rest of the country and I would not want to set any hares running or Q432 Mrs Ellman: We have had evidence from local newspaper reports that say that the Government authorities and the PTEs saying that it is diYcult to supports a scheme where you spend far more money introduce integrated ticketing and smartcards in the using cash than smartcards. That is what has deregulated environment. What diVerence do you happened in London, but I just do not see the think the Local Transport Bill is going to make to situation arising where you would not be allowed to that? use cash. Mr Harris: The Local Transport Bill will eliminate some of the obstacles that local authorities and PTEs across the country are having to navigate at the Q428 Mrs Ellman: What is the Government going to moment if they want to move to quality contract. do to ensure that that is the case? We have had This Committee will know far better than I some of evidence that operators might find it cheaper not to the complaints and problems that local authorities have cash and want to make booking facilities more have had trying to move towards quality contracts. diYcult? Is the Government going to do anything to The Local Transport Bill grew out of an awareness restrain that? in Government that that situation should not go on. Mr Harris: On trains the Government has a lot more Obviously we have never said and we do not intend influence, as you know, than as far as buses are to go back to the situation pre-1986; I do not think concerned. Buses are completely deregulated anyone wants us to go back to that particular era. outside London. However, I do hope, not just in quality contracts, that the fact that local authorities and PTEs will be able to get a quality contract more easily than at the Q429 Chairman: “Piratical” is the word you are moment will serve as an incentive to some bus finding diYcult to find, Minister. operating companies to cooperate more fully with Mr Harris: That may be a word you are comfortable local authorities. Even before the Local Transport using, Mrs Dunwoody; I will stick to “deregulated”. Bill comes into eVect and becomes an act there is The Government has little or very little influence on quite a lot of movement among the bus operating the level of fares charged by bus companies outside companies in terms of cooperating with local the capital. In terms of guarantees that I can oVer, I authorities, with Passenger Transport Executives to could not, with hand on heart, tell you that we can produce more integrated ticketing. Obviously that oVer a cast iron guarantee that that would not has to be done in cooperation with the Competition happen in terms of bus operators. The Local Commission because it is illegal for bus companies Transport Bill which I probably should have to talk to each other and set fares together; that is mentioned in my introductory comments will allow why we have the block exemption from the new structures in place where local authorities will Competition Commission, but where that happens have to a certain degree more influence over local there is actually quite a lot of cooperation between bus operations and that may well include fares in a bus companies and between those bus companies quality contract context. As far as trains are and Passenger Transport Executives. However, you concerned, obviously we do not foresee any change are right, things will improve I hope with the Local to the regulation of train tickets that currently exists Transport Bill. up to the end of the next control period in 2014; decisions beyond that will obviously be taken in the Q433 Mrs Ellman: How much do you expect them to next few years. improve? Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

Transport Committee: Evidence Ev 53

12 December 2007 Mr Tom Harris MP and Mr Bob Linnard

Mr Harris: I am sorry, I am not going to oVer you a might want to come back to that—I think the hostage to fortune; I think it will be significant. principle of oVering pensioners, older people and disabled people free bus travel is one which is very Q434 Mrs Ellman: What can be done to make it diYcult to criticise. easier to have bus tickets that enable people to travel on diVerent buses instead of keep having to get Q437 Graham Stringer: I just wondered whether the diVerent tickets? Government is moving or has thought of moving or Mr Harris: In January this year I was invited to would move beyond the sort of anecdotal evidence launch not PlusBus but it was the advertising available—social inclusion, pensioners getting out campaign for PlusBus. PlusBus—I am sure you have who were housebound previously—to some dealt with this already—is an add-on to a train ticket measurement, some objective research that might be so that when you are travelling to one of the 220 related to social inclusion, it might be related to diVerent towns throughout Great Britain, if PlusBus health, it might be related to education. Have you is operating in the town or city you are going to you looked at that or is the Government just relying on can be oVered a £2 add-on to your train ticket and anecdotes? that allows you to use bus services at the end of your Mr Harris: Going back to smartcard technology, it journey. It is the only such system in Europe which is is actually very diYcult to calculate the precise completely organised, paid for, administered by the number of people using a particular concessionary private sector. In that respect I do not foresee the travel scheme unless you have smartcard technology Department for Transport trying to elbow in on to back it up. An awful lot of the evidence that you that; I think it is actually a good product. My only are looking for about movement of people, about reservation about this—I raised this with the numbers of people, is something that you will be able Association of Train Operating Companies just to glean far more eVectively once ITSO is being used yesterday—is that you could perhaps lay a criticism nationwide. at the train companies that this is a tick box exercise, they have ticked the box saying they do integrated Q438 Graham Stringer: I was thinking of something transport. The reason I am saying that they are more than movement of people. When those people vulnerable to that accusation but I am not actually move, apart from them moving, is their quality of making it myself is because the marketing budget for life either in health, education or in other ways, is the PlusBus is between £40,000 and £60,000 a year, Government looking at measuring that? which is almost nothing, and yet if you look at the Mr Harris: To be honest I am not aware of specific take-up of PlusBus it has increased by more than bits of research that the DfT have made in this case. 100% in the past year, so there is a market there. I am not sure that the Association of Train Operating Q439 Graham Stringer: That is slightly surprising, is Companies are properly exploiting that market. it not? There is a billion pounds being spent on Chairman: Heaven forbid, Minister, that you should concessionary fares, or thereabouts, more than £200 suggest that the Association of Train Operating million nationalising the scheme, would it not be Companies do not take up commercial challenges; I normal to look at a cost benefit analysis to look at cannot believe you could make such an unwarranted the benefits of what is happening? slur on these entrepreneurs. Mr Harris: We will do once the 2008 scheme is fully implemented. Q435 Mr Leech: Do you think that this could be extended to include trams in areas where trams are Q440 Graham Stringer: So you are going to do this in existence, like Manchester for example? kind of research. Mr Harris: In principle I have no problem with that Mr Harris: There will be an analysis after it is fully at all, but as I said at the beginning this is and will implemented. By then of course the scheme will have remain a completely private sector initiative. been implemented. I should think this is a political decision the Government has made. This is political Q436 Graham Stringer: In your introductory and we have made a deliberate political decision statement and once or twice since you have said that because we think this is a good thing. there are enormous benefits from concessionary travel, it is always a benefit if you pay nothing or you Q441 Graham Stringer: You and I signed up to the pay less. What other benefits are there? same manifesto and the same policies which are Mr Harris: In terms of social inclusion, in terms of based on evidence, are they not? What I am trying to saying to a group of people who perhaps did not feel do is get to what evidence there is because there has they could aVord to travel before, to say that you can been criticism of the scheme in that you could spend now travel from A to B completely free of charge. I money to better eVect if you did not give free know from personal experience pensioners who are transport to pensioners and made them pay taking up the opportunity this scheme has aVorded something but you extended the scheme to young to them in Scotland who are making journeys that people, poor people, the unemployed and so on. they would never have considered before. It is Have you looked at that or is this a straightforward incredibly popular among those who qualify and I political decision without evidence? just think that in terms of social inclusion that is by Mr Harris: We have looked at making the scheme as far and away the highest benefit. Whatever you may flexible as possible within the legislation so that in consider the drawbacks of its administration—you future, depending on experience and basing any Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

Ev 54 Transport Committee: Evidence

12 December 2007 Mr Tom Harris MP and Mr Bob Linnard changes we might want to make, we will base that constituencies near either the Welsh or the Scottish decision on the experience of running the scheme up border. Does the Government have any plans to to a certain point. I do understand the argument for come to agreements with Wales and Scotland so that widening the scheme. our constituents, when they go on holiday to Wales or Scotland, can have the same facilities as if they go Q442 Graham Stringer: What the Commission for to the south west of England? Integrated Transport was saying was not widening Mr Harris: The short answer is no, although I it, it was using the same amount of money to have a understand there are some local arrangements in diVerent scheme which would be wider but would Cumbria and in Chester so far as cross-borders not be free. services there are concerned. The reason I say no is Mr Harris: Yes, I was going to say widening some because the scheme in Scotland for instance allows areas perhaps and narrowing other areas. I think free travel for concessionaires at all times of the day that is a perfectly legitimate approach to take. but on weekdays the one in England will only be Within the current legislation there is flexibility for from half-past nine onwards. There are major individual local authorities to add increments to the technical diYculties to be overcome if you are going baseline national scheme. to allow that scheme to be Great Britain wide purely and simply because the baseline schemes are not Q443 Graham Stringer: I understand that but what exactly the same. That makes it very diYcult to I am trying to get at is whether there is an evidence actually roll out the same scheme throughout base or not behind the Government’s choice Great Britain. between the free scheme for pensioners and, as you Mr Linnard: There are powers within the described it, the more extended scheme. Concessionary Travel Act to put in place reciprocal Mr Harris: To be honest, Mr Stringer, that is arrangements between England, Scotland, Wales something I would have to write to the Committee and Northern Ireland should that be agreed with the about, unless Mr Linnard has extra information devolved administrations in the future. which I am not privy to. Mr Linnard: We know the costs of extending the Q448 Graham Stringer: What you are saying is that concessions from half price to free and then from there are no current negotiations underway. within the local area to national. We have not tried Mr Linnard: That is right. to do an assessment in economic terms of the benefits of it. As the Minister has said, it is essentially Q449 Graham Stringer: Do you not think it would a a political decision for wider reasons. good idea to try to overcome some of these technical diYculties with the devolved administrations? Q444 Graham Stringer: We had some witnesses Certainly my constituents would rather like it. earlier on who were talking about the perverse Mr Harris: I absolutely agree with you. I would love consequences of the current concessionary fares in to see a Great Britain-wide scheme. I am a Scottish the south west in particular (this is before the scheme Unionist; I think people in Scotland and England goes national). The way the concessionary fare should swap locations as often as possible. If there scheme has been implemented has meant that is technically feasible and cost eVective way of doing services have been withdrawn, dealing with larger that then I think the Government should be doing companies who are looking for subsidy, who will that. look at the change in demands and change their services. Are you aware of any evidence or have you Q450 Mr Leech: Mr Linnard, you said that you done any analysis of what is likely to happen, knew how much it was going to cost going to a whether there will be any perverse consequences national scheme, but is it not the case that the when the scheme is nationalised? Government does not have a clue how much it is Mr Harris: I am not aware of examples like that, but going to cost; it is your best guess. In fact, the only what I can tell you is that the actual number, the net way of ensuring that local authorities do actually get number of bus services that are operating outside the the money to pay for the concessionary travel in major conurbations has actually increased more in their area is for the Government to actually pay the those areas than in conurbations since the 2004 costs of each concessionary journey directly to the scheme was actually introduced. I do not see this as operators. Can the Minister explain why the some kind of disincentive to running services at all; Government is so opposed to this idea of direct I just do not accept that. payment to operators to ensure that every local authority area gets a fair deal? Q445 Graham Stringer: So you do not accept the Mr Harris: I am very confident in the financial anecdotal evidence we heard earlier today. settlement that has been agreed that local authorities Mr Harris: I was not present. are not being short changed over the concessionary scheme. There is, as I said before, flexibility in the Q446 Graham Stringer: Will you look at that? current Act to allow a change of administration, Mr Harris: Yes, of course I will. probably initially to county level rather than district level and, if necessary, to a national level. You asked Q447 Graham Stringer: Going to the nationalised about reimbursement arrangements and although it scheme, I have just done a quick count round this is mandated at a national level by the UK table and I think there are six of us who represent Parliament, this particular concessionary scheme is Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

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12 December 2007 Mr Tom Harris MP and Mr Bob Linnard going to be operated by the local authorities for the The Committee suspended from 4.16 pm to 4.31 pm very simple reason that they know who the for a division in the House. concessionaires are, they are issuing these passes and I think it is better that these passes are actually issued Q455 Graham Stringer: I take it that you do not see by the local authorities. It makes sense for those that fares on trains and buses are wholly a private reimbursement arrangements to be between the operators matter because when fare dodgers do not local authorities and the bus companies. pay their behaviour is often related to other antisocial behaviour. What action do you think the Q451 Mr Leech: If it is a national scheme why can it Government should take to cut fare dodging? It is not be administered nationally? People are going to rather surprising that the private companies do not have the opportunity to travel all the way round the do more, but what do you think the public country, surely that is the fairest way of doing it. authorities should do? Mr Harris: It is a national scheme but they can only Mr Harris: Let us take trains first. Private use it on local bus services. companies do take measures to protect their own revenue and consider their own interests. There was a lot of publicity recently about South West Train’s Q452 Clive EVord: How are you going to sort out the revenue enforcement oYcers being a bit too heavy technical problems between Oyster and ITSO? handed according to the media reports and maybe Mr Harris: We are working on it and I am very not giving people who were on board a fair confident that we will get to a stage fairly soon where opportunity to defend themselves and explain why. those two systems will be completely That is one side of the coin. Another side of the coin interchangeable or integrated. It is a big task clearly; is that there are other ways of enforcing revenue, one no-one is under any illusion about that. I am of them is gating. Part of the South West Trains confident that in the next few years we are going to franchise, as it happens, is a commitment to gating have a situation where, if you are staying within at Waterloo. So there is gating and there are revenue London or coming in from outside London—for protection oYcers. I think any level of revenue loss, example South West Trains are going to be ITSO whatever the percentage—somebody suggested the compliant too—that you will be able to use your figure 5% to me—is too high a figure and I would not ITSO card throughout the London area as well as on be happy unless that figure came down to zero. South West Trains and ultimately other train However, there has always been fare dodging on the operators. I am fairly confident that that is going trains, going back to British Rail days and train to happen. operating companies, because they are private companies and because their responsibility is Q453 Clive EVord: So you do not think there is any revenue collecting, it is incumbent on them to do as risk that incorporating ITSO will reduce the much as they can to protect it. I am not aware of any performance of London’s transport system? particular train operating company being Mr Harris: No I do not at all. I was looking at the complacent about it. figures for the technical specifications on ITSO versus Oyster and it is something like 300 Q456 Graham Stringer: I am a northern MP and I do milliseconds for a transaction on an ITSO card and not travel on the London rail system very often but 200 milliseconds for a transaction on an Oyster card. the odd times I travel on it after eight o’clock at night Chairman: We were given diVerent figures for that. it is free; transport is free in London on the trains at Clive EVord: We were given 300 for Oyster and 700 that time of night and it is dangerous, it is for ITSO. threatening. Often fare dodgers are young men with aggressive behaviour. Do you not think that the Q454 Chairman: Which actually would make a public authorities should do something about that? material diVerence. The diVerence between 200 and It surprises me that train companies allow it, but do 300 is acceptable; the diVerence between 300 and 700 you think, for instance, ticket inspectors on trains is not acceptable. and buses should be given more powers to take Mr Harris: On the tests we have done, Mrs names and addresses? What action do you think Dunwoody, it takes about a second, regardless of the could or should be taken? millisecond measurement for exactly when the Mr Harris: Can I pick up on one point you made computer recognises that chip. It takes about a earlier on in that question, you said that travelling second for someone with an Oyster card to swipe the on the train is threatening. You said it was card and go through the turnstile. There is no dangerous and then you said it was threatening and perceptible diVerence in the amount of time it takes those two are quite separate. you to do exactly the same thing with an ITSO card. Clive EVord: We had an answer earlier on from Q457 Graham Stringer: Threatening is a better London TravelWatch that said that there is a word. problem between ITSO and the pre-pay Oyster Mr Harris: Threatening is more accurate I think. At system. There is some information on the card that the moment a ticket inspector is entitled to ask for can be read by the pre-pay which apparently creates the name and address of whoever they have caught. a technical problem. Are you aware of any of that? I received a letter the other day from one of our Chairman: The Committee is adjourned for the colleagues representing a constituent whose name division. and address he claims were given completely falsely Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

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12 December 2007 Mr Tom Harris MP and Mr Bob Linnard by somebody else. There is always a danger that even not think that travel by train is a particularly if you get a name and address it is not actually the dangerous activity. It is not, but I do understand right person. I am actually quite concerned about that people do feel vulnerable so it is very important the safety of train staV in that situation. If somebody not just on trains but at stations as well. I mentioned is employed to collect and inspect tickets I do not gating earlier on. I accept there is only anecdotal think it would be fair, certainly not on every evidence but there is evidence that gating at a station occasion, to expect them to start to tackle anti-social can make people on the other side of the gates feel behaviour. I met a delegation yesterday from GMB quite secure because they then know that nobody union who are very concerned about perceived without a ticket is going to join them and a lot of the increases in very violent and sexual crime on the diYculties and trouble caused at stations, especially Nottingham tram. These are people who are not on at night, are by people who do not have tickets and terrific wages in order to protect and collect revenue. who are just using stations to congregate at. I do not think we should be putting people unnecessarily in harm’s way by asking them to do Q460 Chairman: Can I ask you about ITSO? Are more than simply collect tickets and identify where you quite confident that it is fit for purpose, if it is safe and the people who are evading the fares. I actually is evolved right the way across the United think it is a very diYcult issue but I think the actual Kingdom? apprehension of people who are creating anti-social Mr Harris: Yes, is the short answer to that. I think behaviour has to be left to British Transport Police ITSO has many advantages. The comparison is rather than to staV who are trained in checking always made between ITSO and Oyster for obvious tickets who are not trained and should not be reasons—I am a big fan of Oyster; I have two Oyster expected to tackle sometimes quite violent people. cards—but I think the ITSO standard allows us to do more with an ITSO card than will ever be possible Q458 Graham Stringer: Do you think that there with Oyster. should be more funding for British Transport Police? Q461 Chairman: I should explain to you that we had Mr Harris: I am always in favour of more funding evidence that it is a slow system, that it is not very for the British Transport Police but the one caveat I businesslike, it is two years behind programme have on that is that British Transport Police should because it has not been fully tested in-house. continue to be funded by the train operating TranSys have made it clear that someone really has companies. to take control of this programme. How eVective is ITSO as an organisation? Q459 Graham Stringer: With all respect your answer Mr Harris: The DfT has committed to funding ITSO is saying that there is a problem; you are accepting over the next year by £750,000. A condition of that there is a problem, particularly on the south London funding is that we are going to carry out a full review network, but actually there is nothing the of the organisation to make sure that they have Government can do about what is at least a proper resources, expertise, personnel to make sure threatening situation. Incidentally, the estimate it is eVective. given by previous witnesses was £400 million lost in fare dodging. There are two questions there, do you Q462 Chairman: How likely is it that all these new not think that the public authorities should do more technologies such as contactless bank cards and to protect people, it is not just a private sector mobile phones are going to make ITSO obsolete? problem? Secondly, you are the train minister, will Mr Harris: ITSO is not a smartcard, it is a standard. you be having discussions with the train operating companies to ask them what action they are taking Q463 Chairman: A standard that we are told has to protect their shareholders and their bottom line as been overtaken by all sorts of other new bits of it were to collect tickets which will have a technology which can do the job better and faster beneficial eVect? and perhaps more eYciently. You know yourself, Mr Harris: Yes, I will be raising this with the Minister, from your own oYce that when you came Association of Train Operating Companies next in here originally you must have had one level of time I meet them. Train operating companies have a computer, we are now waiting on diVerent commitment in their franchise for revenue technology, faster, smarter, easier to use for people protection but they are also, I think, under an like me. It is not beyond belief that this standard has obligation to make sure that the service they provide now been past by other people going faster and which, after all is paid for and specified by the better. Government, is a service that is of a certain minimal Mr Harris: The big selling point of ITSO is that it is quality and that is not just in terms of how punctual very flexible. For example, although it has been they are, it is also about how safe people feel on rolled out as part of the concessionary scheme next board a train. We are progressing very successfully April, it is currently possible, if the commercial will with the Secure Station Initiative; certain stations is there, to put ITSO information on your mobile are certified by the British Transport Police as secure phone and use that as a smartcard. ITSO is not stations if there is a certain level and type of lighting, simply a credit card sized card with a chip in it, it is presence of close circuit television cameras et cetera. a standard which can be applied to all sorts of things That has proved very successful in reassuring that in future will become far more normal to people. I think that is what it is about, people should consider using. Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

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12 December 2007 Mr Tom Harris MP and Mr Bob Linnard

Q464 Chairman: Is Transport Direct fully integrated an ITSO card. The £50 million or whatever the figure with the system? is of the capital cost is about changing the actual Mr Harris: With ITSO? readers throughout London so that they will read ITSO and Oyster cards. When that happens that is Q465 Chairman: With the travel information when you get almost a negligible diVerence in the coming from local authorities and PTEs? time it takes to read an Oyster and ITSO card. Mr Harris: Transport Direct is a website which gives up to date information about, for example, carbon Q470 Chairman: Is all the personal information that footprint of diVerent modes of transport, travel is stored on this card going to be absolutely safe? times et cetera. There have been 20 million visitors Mr Harris: No personal information is stored on since it was launched. I am not aware of any direct the chip. interface with ITSO but in future whatever journey you are going to make I hope more and more people Q471 Chairman: Why are we being told that district become aware that Transport Direct can absolutely councils are placing personal information like name, contribute to making that journey seamless. age and address on smartcard chips? Mr Harris: They certainly do not need to on ITSO. Q466 Chairman: Your view is that ITSO is a good All the information on an ITSO card is held in the standard, it is flexible, it can be adapted to new back oYce. The only information in total on the card increases in diVerent technology. That is your view. is what is on the face of the card, your photograph Mr Harris: Yes. and your name and that is for fraud purposes. All the other information about you should not be held on Q467 Chairman: You intend to do a very full the chip, it should be in the back oYce. assessment of the workings of these systems. Mr Harris: There has been an on-going assessment Q472 Clive EVord: Just before we broke for the vote of ITSO’s workability, if you like. Once we are into I asked you about the information that is stored on the new National Concessionary Scheme we will the ITSO card that apparently, we were told, can be certainly do an analysis of that and that does use read by the pay as you go Oyster card which causes a ITSO smartcard technology. delay when the card is swiped. Are you aware of this problem? Q468 Chairman: What about people who are not Mr Harris: There are two ways of making ITSO and very happy with all the new gadgets and who like the Oyster compatible in London. One way is to allow old fashioned tickets and money and things like the Oyster reader to read both cards. That is where that? Are you going to look at the price diVerence you hit the delays and nobody wants that. I between electronic tickets and conventional tickets? understand why Transport for London do not want Mr Harris: Whether you choose to pay by cash or that because you end up with having a lot of people whether you choose to use a smartcard on trains backing up on the turnstiles and causing a lot of your fare will continue to be capped if it is a delays and probably some safety issues as well. What regulated fare by 1% above the rate of inflation. If a we foresee happening in the next few years is the train operator, however, wanted to reduce the cost actual readers being replaced so that they will read of a regulated fare as much as through a smartcard ITSO and Oyster cards and you do not have to then they would be perfectly entitled to do that choose which reader to go; you can go to any reader provided that nobody choosing to pay by cash is whether you have an ITSO or an Oyster card. The going to pay above what the regulation states should time taken to read that, because we are actually be paid. That is the flexibility that train operating upgrading the hardware and not just the software, companies could use; whether they will or not is will be negligible; there will be no noticeable another matter. diVerences. There is a diVerence, as I said earlier on, between 200 and 300 milliseconds. Q469 Chairman: Is Transport for London right when it says that the cost of adding ITSO to Oyster Q473 Clive EVord: Are you aware that one of the on- would be £50 million? line ticket sales companies believes that it can Mr Harris: I do not have a figure. provide an ITSO type smartcard that will work with Mr Linnard: It is subject to the study we were the current Oyster system without requiring any new describing earlier. It is only when we have seen that gates or readers? and when we have the negotiation with TfL Mr Harris: I am not aware of that but I would be informed by that study that we will know how much very interested to read what they have on oVer. Let it is going to cost. me make it clear, I do not have an interest in making Mr Harris: This takes us back to the question that any of these processes either longer or more Mr Stringer was asking just before the break about expensive than they have to be. this diVerence between the time it takes for an ITSO card to be read through the reader and an Oyster Q474 Clive EVord: We have introduced the zones in card. I think the point here is that if we were simply London to make through ticketing easier to going to change the information on the card so that understand between diVerent modes of transport an Oyster reader could read an ITSO card, that is and we have allowed huge fare increases on the basis where the delay comes in, that is where you have of that from which train companies are currently quite a big diVerential between an Oyster card and benefiting, is that fair on the travelling public to Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

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12 December 2007 Mr Tom Harris MP and Mr Bob Linnard introduce those zones well ahead of the benefits Mr Harris: You mean on concessionary fares? actually coming along and should the increases not be delayed until such time as they accept, say, Oyster Q477 Chairman: Yes. pay as you go. Mr Harris: There are 291 travel concession Mr Harris: I do not think it is accurate to say that authorities outside London; there are 1500 bus the train companies have benefited. We made it quite companies they have to negotiate with. I am not clear when we gave a derogation on regulated fares confident in the DfT’s ability to devote the number that the move to zonal fares would have to be of man hours necessary to achieve those revenue neutral and I am not aware of any evidence negotiations. to say that it has not been revenue neutral. There were some people, because of historically artificially low fares, when the zonal system was introduced Q478 Chairman: Could it not be done on a county they did find themselves paying a much higher level or a regional level because each district council percentage increase on a one-oV increase. So there having to negotiate with bus operators not only were losers when that happened but there were also takes up an inordinate amount of time and winners. If the Committee has any evidence that the administration, it does not always produce the result train operating companies have made substantial that people want, does it? profits rather than being revenue neutral I would be Mr Harris: No, I think that is absolutely valid. very interested to see that. My understanding of the second point of your question, was it necessary to Q479 Chairman: They have no control over the level move to this right away, I suppose the argument of charges, do they? could be made that it could have been postponed. Mr Harris: That is right. Once the scheme is up and There may be a technical reason why it had to be running and once we see how it is working if a done earlier—Mr Linnard might want to come in on consensus emerges that we do want to move to this—but I do suspect very strongly that whenever county level then there are powers within the act for that change was made the kind of increases that we us to be able to do that. The caveat on that is that we are seeing would have happened. have just agreed a three year local government settlement. I think it would be very diYcult to move to county level before the end of that three year Q475 Clive EVord: Let me give you south east period. It is not impossible and if the authorities are London as an example. There is no alternative to determined to go down that road I think the travelling into London other than the rail network; Government have to listen to them, but I think it buses are not an option for the length of journey so would be very diYcult before the end of that three far as commuters are concerned in my part of south year period to start disaggregating the capital sums east London yet they are paying massive increases or the revenue sums that have been given to the on the basis of the London zones being introduced councils and start recalculating that at a county with no justification whatsoever. level. That is why I think it is more likely to happen Mr Harris: The south east, of course, is slightly in three years. diVerent from most of the other franchises because of their 3% cap on average on regulatory fares Q480 Chairman: Do you have a workable estimate because of the very substantial risk that is going into of the increase in bus patronage because of the rolling stock in that particular area. However, I take English National Concessionary Travel Scheme? your point that smartcard technology has not yet Mr Harris: Not to hand. been introduced but that one-oV increase—and in Mr Linnard: I do not think we have. What we do some cases a decrease—because of the introduction know is what has happened since 2006 when the of zonal fares. Can I just point out to the Committee concession was extended from half price to free and that we have moved from a position where there there there has been a substantial increase in were more than 97,000 diVerent fares to a situation patronage, particularly outside the metropolitan where there are 21 because of the introduction of areas. zonal fares? I said right at the beginning that part of the attempt to encourage people onto public Q481 Graham Stringer: Are you going to make any transport is to make that journey more transparent, attempt to keep the statistics that the department more seamless; I fail to see how that can be done keeps in such a way that you can compare 2009 when there are 97,000 diVerent combinations of statistics with 2003 statistics? We are going to be in fares. a diYculty in looking at what happens to bus patronage when we get to 2010 or 2009 because we Q476 Chairman: You have done that, Minister, but will have had three diVerent systems over that period you have not actually sorted out the business of the of time. Has the department looked at whether it can district councils who have to negotiate with disaggregate the figures so that they can be individual bus companies, have you? Since all of this compared? is funded at national level why is that not done at Mr Linnard: It is quite diYcult to do. national level? We have taken evidence of the numbers of individual district councils that are still Q482 Graham Stringer: It may well be but will you negotiating; they are very large. try? Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

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12 December 2007 Mr Tom Harris MP and Mr Bob Linnard

Mr Linnard: What we can look at is what has Mr Linnard: It is not necessarily where we need to happened to bus patronage in areas where there was end up. As long as we have got—and we think we already free travel, some of the PTEs for example, have—a fair system for distributing funding to the compared to what has happened to bus patronage local authorities that are going to meet the most when free travel was introduced. Looking at the costs. diVerence between those gives you some idea of the underlying trend in bus patronage compared to what is happening as a consequence of more generous Q487 Clive EVord: Can we ever have a fully concessionary travel being introduced. operational smartcard or concessionary fare scheme whilst we have a deregulated market out of London or a fragmented market on the rail system? Q483 Graham Stringer: It is an important point Mr Harris: Yes, I think you can. Once you have that because it is a matter of both political debate and of system there may be avenues for improving the government policy to increase patronage. We need whole scheme by changing that regulation, but I to understand what is happening, so would you give think it is certainly possible to have an eVective a commitment to at least look at preparing statistics smartcard system that works throughout the so that we can make those comparisons? country that people understand and which give Mr Harris: Absolutely. I see no benefit in the people the best deal for their particular journey. It Government trying to make those kinds of statistics happens in Scotland although the readers have not less available or less transparent. yet been introduced on the buses there, but there is a smartcard system, there is a concessionary bus Q484 Clive EVord: Are you stipulating on the system which is nationwide. The buses are not any smartcard technology for the concessionary fare more regulated there than they are here. that it should identify where the card was issued from? Q488 Clive EVord: Do you think we will ever get to Mr Harris: I think all the cards do actually contain a position where either the train operating a mark about which authority issued them. companies or the bus operators will not act in their own interests against the interests of through Q485 Clive EVord: In the long term, some local ticketing scheme, whether it is smartcard or any authorities you will be aware of are concerned about other form? reciprocity, who is going to be paying for the journey Mr Harris: I think there is a very good commercial undertaken, so if somebody comes to a tourist area, argument to say that the bus operators should uses their concessionary fare card, goes back home, embrace this kind of technology. I do not think this that local authority gets billed for that journey. If is a threat to bus operators’ revenues; quite the that could be recharged back to the local authority opposite. I think there is a lot to be gained by bus where the card was issued then some of those fears operators in introducing this kind of technology. I might not come about. Is there any plan in the long do not accept the argument that bus operators will term to have the smartcard technology able to not want to have some kind of integrated identify where the card was issued no matter where smartcard system. it was used so that recharge can be made? Mr Harris: Mr Linnard may wish to come in on this Q489 Chairman: I take it you do not know any bus after I have spoken. I am not aware of any plans to operators. change the funding regime but, as I said earlier on, unless you have a working smartcard system you are Mr Harris: I have met a few of them. never going to be able to actually trace and calculate what those passengers’ journeys are and where Q490 Chairman: Are you satisfied that people can people are travelling. I think the information we are appeal satisfactorily against penalty fares? going to get from the use of the smartcard system Mr Harris: It is an independent appeals process. will actually make the funding regime more robust because we will actually now who is using it and what the numbers are, but I do not know whether Q491 Chairman: Forgive me, Minister, but it is not that is part of the act. exactly, is it? The railway companies themselves Mr Linnard: The way it will work is that the local actually appoint whoever is dealing with the penalty authority in which the journey takes place or starts fare system and it is not very clear how they operate has to reimburse the bus operator; that is the basis or what their criteria are. principle of it. To get a completely diVerent system Mr Harris: The criteria I think are quite clear. where the home local authority system pays for any Penalty fare systems have to be approved by the journey regardless of where in the country it was secretary of state for transport. made you would need readers in all the buses which do not exist at the moment. You would need a Q492 Chairman: There is not an independent completely diVerent level of technology. appeals panel, is there? Mr Harris: It is certainly arm’s length from the Q486 Clive EVord: If that is the way you want to end company where the dispute has taken place and up you should be planning for it now. anyone not satisfied with that can appeal. Processed: 28-03-2008 22:40:32 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG3

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12 December 2007 Mr Tom Harris MP and Mr Bob Linnard

Q493 Chairman: That is not total independence, is Mr Harris: We are never going to have a railway it? If someone was criticising you and I was the one system in this country that is completely closed. who was sitting there, of course I would have your best interests at heart. Q499 Chairman: No, but with respect Minister, Mr Harris: It is certainly industry run but I have to many stations will be gated and this is going to tell you that I am not aware of any major serious present a hazard for anyone with a disability or causes for concern in terms of its eVectiveness. young children or large bags or bicycles. Mr Harris: I do not think that will be the case. The Q494 Mrs Ellman: If you do not know what the Government will expect the station operators at any extent of the increased patronage will be from the station where there are gates to have staV available National Concessionary Fare Scheme, how do you to make sure that disabled people, people with know it is going to produce value for money? What prams, people with bikes are able to access stations. are its benefits actually going to be? It is everyone’s right to access those stations. At Mr Harris: I think the benefits are in terms of social Waterloo, for example, there has been some inclusion, in terms of extra mobility and extra criticism along exactly the lines you have just opportunity for people who qualify for the expressed, and that gating simply will not happen if concessionary card. I accept that those are benefits it results in significant numbers—or anyone—being that cannot be quantified; there is no cost benefit excluded physically from Waterloo Station. ratio. What we are trying to achieve is something you probably cannot measure in terms of giving Q500 Chairman: You will understand that this is not freedom to people who might previously have felt a question that can be lightly dealt with because that they cannot aVord that level of freedom. many people using railway systems will have considerable amounts of baggage. I notice that Q495 Mrs Ellman: The Commission for Integrated Virgin has put a notice on Crewe Station which says, Transport suggested that better value would be “Only travel with luggage which you can gained from extending low fares for young people conveniently carry” which is very kind of them, but and for people on low incomes. Did you ever if I wanted to limit the amount of luggage I would consider that as an option? not go by train. As long as you can assure us that Mr Harris: The act is flexible enough so that that companies will not be allowed to get away with could be an add-on to the system at some point in the gating stations in such a way that somebody who is future. We have made a deliberate policy decision disabled or someone with young children in prams that older people and disabled people are, for the are going to find it very diYcult to use the station. moment, a priority. However, for a number of years Mr Harris: I can give an absolute guarantee that we have allowed local authorities to have their own there will be very strict obligations on any station add-ons or increments. If they want to add operator to make sure that where a station is something on to the base scheme, whether it is young currently accessible by people in those categories people, whether it is the carers of disabled people, that they will continue to have access after gating then that is something that the local authorities have comes in. The reason I phrase it like is because there the opportunity to add onto the scheme. are a lot of stations around which are not accessible already, but where they are already accessible when new gating goes in there must be accommodation Q496 Mrs Ellman: Would there be any financial made for those groups. support for that? Mr Harris: No, that would be at the expense of the Q501 Chairman: Minister, it has been very local authority. interesting listening to you, but we are very concerned about the problems of integrating these Q497 Mrs Ellman: Does the Government have a two very diVerent systems. Am I misinterpreting you view on that? if I say that you are assuming that within the first Mr Harris: Their view is that local authorities year of the operation of new schemes there will a should be able to have the freedom to decide how to proper assessment not only of the risk element but spend their own income. I do not think it would be the benefits and general advances that are right for us, having set out the base scheme, to say represented by working with these new schemes? that if you want to have any increments at all we will Mr Harris: Do you mean the Bus Concessionary meet the costs of that. I think that would defeat Scheme? the purpose. Q502 Chairman: Yes. Q498 Chairman: One of the ways in which your Mr Harris: Yes, we will be doing our own smartcard systems would work would of course be assessments on the eVectiveness and getting as much making the whole system a closed system. That is information as we can about the success of the why London Underground is so eYcient because it scheme. is easier to organise. Do you have any idea of the implications for passengers of making stations Q503 Chairman: Mr Linnard, how long do you which at the present time are open stations closed think it will be before ITSO and Oyster are stations? completely compatible? Processed: 28-03-2008 22:40:32 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG3

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12 December 2007 Mr Tom Harris MP and Mr Bob Linnard

Mr Linnard: I would not like to give a prediction of Oyster could actually read ITSO cards right now if exactly when, but we would hope broadly within a you wanted it to and that is just being held up couple of years. because you want to roll out ITSO before you actually have them compatible. Q504 Clive EVord: Is that because of the roll out of Mr Harris: I am afraid that is a new one on me; I am the equipment or because train operating companies not aware of any deliberate action by the department will not agree to it? in that respect. Mr Linnard: First of all there has to be the Q506 Chairman: Can you assure us, Mr Linnard, completion of the study into the way we are that there is a constant monitoring of the changes integrating it. There then has to be negotiation and any possible gaps that could develop between between the department and TfL and its suppliers. ITSO and any new technology. That is obviously not entirely possible to predict. Mr Linnard: Yes.

Q505 Clive EVord: Are you holding up the process Q507 Chairman: Minister, you have been very by which Oyster could read the ITSO cards until helpful. We are delighted to have had you here this ITSO is fully integrated on the rail network. Are you afternoon and doubtless you will come again. blocking it? Are you stopping it? I understand that Mr Harris: I hope so. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [SE] PPSysB Job: 376402 Unit: PAG4

Ev 62 Transport Committee: Evidence Written evidence

Memorandum from Dr Roger Sexton, Academic Legal Studies, Nottingham Trent University (TPT 01)

1.Introduction—ThreeSeparateInquiries? The terms of reference of the inquiry divide into three very distinct issues: A Integrated ticketing—including smartcards; B Revenue Protection; C Free Public Transport for Seniors (and other “socially disadvantaged” groups).

2.IntegratedTransportImpossible inBritain The legal regimes governing British public transport (bus deregulation and over-centralised rail franchising) means that it is impossible to integrate public transport in the way it is done by the Swiss and by some of our EU partners (notably the Germans and the Swedes).

2.1 European Best Practice As I have explained in previous memoranda, the integration in Sweden is achieved by organisations called Lanstrafiken (regional PTEs). Each Lanstrafiken controls all the local public transport in its area. The control extends, of course, to ticketing and fares. There is one ticketing system for the whole of a Lanstrafiken region. The Lanstrafiken tickets are valid on all operators (except certain long distance intercity services). Similarly, every major German-speaking conurbation in Europe has a “Verkehrsverbund” controlling all public transport within its area. Eg the Rhein-Ruhr Verkehrsverbund covers the whole of the industrial Ruhrgebiet. There is one ticketing system for the whole of this vast region; the tickets are valid on all public transport except Inter-City long-distance trains.

2.2 Integrated Ticketing Impossible in Britain As I have explained in previous memoranda, bus deregulation, with operators competing against each other, is the antithesis of integration. Each bus operator has its own fare structure and its own tickets, and (except in rare cases) tickets are not inter-available between operators.. Tickets which are valid on both buses and trains (the norm with Lanstraﬁk or Verkehrsverbund tickets) are very rare in Britain.

2.3 Conclusion—Integrated Ticketing Through Franchising The only practical way of achieving a comprehensive integrated ticketing system is to have all public transport controlled by franchising bodies. The franchising structure I would adopt in Britain is set out in my memorandum to the committee regarding Rail Franchising—see page 212 of your report on that subject.

3.Smartcards—LookAbroad I am not qualiﬁed to comment on the technological issues raised by your questions 3, 4 and 5. I would however urge the committee to look for lessons from abroad, as well as looking at the London and Scottish schemes. In particular, the committee should pay a study visit to the Va¨st (West) region of Sweden (main city Gothenburg) where the existing ticket system is being replaced by smartcards. ALL passengers on ALL local and regional public transport (buses, trains, trams and ferries) will be using the same type of smartcard.

3.1 Nottingham— Two Operators—Two DiVerent Systems of Smartcards For many years now, my “easyrider” season ticket on Nottingham City Transport has been in the form of a smart-card which I hold against a reader as I get on the bus. (On the tram I hand it to the conductor who holds it against his portable reader.) The other major bus operator in Nottingham (Trentbarton) is about to introduce an apparently totally incompatible smartcard system. The Trentbarton cards will have to be held against the reader both as the passenger gets on and as he/she gets oV. (Check in—check out.) Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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3.2 Conclusion—Smartcard Standards Prescribed by Legislation The Nottingham example I have just given is not known nationally. By contrast, every one knows that Mayor Livingstone was having problems (possibly now resolved) getting Train Operating Companies to accept Oystercards. The truth is that the current legal structure of British public transport is such that each public transport operator will opt for whatever smartcard (if any) it considers best suits its commercial purposes. If Britain wants to achieve an integrated ticketing system through the use of smartcards, then (whatever other legal regulation there may or may not be) legislation will have to be passed (a) compelling operators to accept smartcards, (b) laying down uniform technical standards for smartcards.

4.RevenueProtection—ComplexLegalIssues The committee’s questions 6, 7 and 8 require a lot of empirical research which it would be impossible for anyone to accomplish in the four weeks allowed for the preparation of memoranda. I will therefore conﬁne myself to a few remarks of a rather general nature.

4.1 Level of Penalty Fares In the few places in Britain where there are spot fines for ticketless travel, the fine is, typically, ten pounds. This is much lower than elsewhere in the EU, where the spot fine is now (typically) 60 (or even 80) Euros. I would (however) be unhappy with granting privately owned democratically unaccountable bus operators the powers to impose “fines” in the region of £45. Spot fines are acceptable, but only if they are administered by inspectors working for a democratically accountable body such as a regional PTE.

4.2 The Adequacy of Revenue Protection Measures Taken by Operators Question nine is of a very diVerent nature from questions six, seven and eight. The short answer to question nine is that some operators take adequate measures, others do not.

4.3 Revenue Protection by Rail Operators Those operators (including the London Underground) which have “gated” their stations obviously take revenue protection very seriously. Where stations are not “gated”, then it is essential to have an adequate number of roving conductors on the train (or tram). There is a major problem in the mornings (and on Saturdays) on lines which have busy unmanned stations (or stops). The conductor does not have time to collect all the fares. This problem would be ameliorated by employing (part-time) staV to man the otherwise unstaVed stations. The exact hours of staYng would depend on local conditions.

4.4 Revenue Protection by Bus Operators The old-fashioned bus inspector is almost extinct. With all passengers boarding past the driver, the driver can normally ensure that everyone has a ticket (or pass) of some sort. But the driver has no time to check for forgeries. (I gather this is a problem in some areas, even with Seniors’ passes.) On busy routes, the driver has only a limited chance to check against overriding, ie the passenger traveling further than they have paid for.

4.5EVect of Free Travel for Seniors on Payment Morale of Other Passengers There are already some bus routes where Senior passengers (who go free) outnumber fare payers. Many of those fare payers are likely to be between 18 and 25, and either unemployed, in low-pay employment, or students running up ﬁve-ﬁgure debts. Increasingly, I fear that this younger generation will be thinking, “Why should I pay for my ticket when others—more well-oV than me—go free?” They will be increasingly tempted to evade payment. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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5.FreeTravel forSeniors and other“Disadvantaged”Groups I would again ﬁrst ask the committee to re-read what I said in section 10 of my memorandum to the inquiry on public transport overcrowding. I continue to adhere to those views, even though they have now been very much overtaken by events. The free bus travel for pensioners has in England (as it did in Scotland and Wales) produced an upsurge in bus usage, especially on inter-urban routes. But it is to the long-term detriment of buses as a means of public transport.

5.1 The Social Services Image of Bus Travel Outside London, many British citizens view buses as a means of transport only used by the less wealthy. Buses full of people over sixty strengthen that perception.

5.2 Things are Worse for Existing Fare-paying Passengers There are three aspects to this. Firstly, there is the danger (which has now materialised on long inter-urban routes such as the Nottingham–Manchester “Transpeak”) that fare-paying passengers wanting to get on at intermediate stops are crowded oV by the “freebies”. Secondly, there is the eVect of the “freebies” on the level of fares. In most areas, re-imbursement to the operator is on the basis of a percentage of the adult fare. The higher the fare, the greater the re-imbursement. If (as happens on some routes) the majority of passengers are “Seniors”, the operator will be tempted to set the normal adult fare as high as possible. Thirdly, there are signs that operators are now deliberately targeting the Senior “market”. In particular, the elderly do not like going out in the evenings. Operators who focus on the Senior “market” will have their buses back in the depot by 1900. The (fare-paying) younger generation want buses which run 18 (or even 24) hours a day.

5.3 A Massive Subsidy to Democratically Unaccountable Bus Operators As a matter of pure legal theory, free travel for pensioners is meant to be a subsidy for pensioners, not bus operators. The practical reality is now very clearly otherwise. Throughout most of Britain, enormous sums of taxpayers’ money are now being paid to bus operators who (unlike their continental or London counterparts) can decide when they are going to run their buses and the fares that that they are going to charge.

5.4 Subsidising Seniors’ Inter-Urban Journeys Most (but not all) of the current English schemes already allow free direct bus journeys from a Senior’s home district to towns which are on a direct bus route from that home district. I personally see a lot of Seniors making long free inter-urban journeys, eg Nottingham to Chesterﬁeld or Lincoln to Skegness. Is it right that the taxpayer should pay for such trips? I answer this question with a resounding “No!” And I give that answer even though I am in my sixtieth year, and I am retiring at the end of September. I do indeed intend to spend some of that retirement travelling around the country on buses, but I do not think that my fellow tax-payers should pay for my joy-riding.

5.5 The Cost of Free Travel for Pensioners Partly as a result of the “inter-urban” phenomenon just mentioned, the free bus travel for Seniors is already (in England) costing more than anticipated. There are also a large number of disputes regarding re-imbursement rates for operators. Free travel for Seniors (and I shall soon be one) is becoming an unacceptable burden on taxpayers. It is particularly unfair on rural areas, and on Seniors who (for any reason) are unable to use bus services.

5.5 Conclusion—Abolish Free Travel for Seniors Free travel concessions (except perhaps for the disabled) should not be expanded. Rather, they should be abolished. To soften the blow (and the potential political consequences) I would enact two straightforward proposals: A. All public transport operators (train, bus, tram and ferry but not air) must charge the over-60s half the fare a normal adult would pay. There would be no time restrictions on this concession, and there would be no reimbursement for operators. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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B. At least two-thirds of the money saved by the abolition of free travel should be used to increase the basic state pension payable to those who do not have a private pension. These “poor” pensioners lose their free bus travel, but they get more money to spend as they wish. February 2007

Memorandum from the Alco Group Ltd (TPT 02) 1. ALCO is a strategic consultancy in ICT. One of its founders, Chris Oulds was the TfL (then London Transport) Project Manager during the development of the Oyster Card. Alan Leibert was an editor on the design of the ITSO Specification, the first General Manger of the ITSO organisation and is currently a consultant to ITSO. In addition, he is currently an editor on the European standards committee developing the pan-European equivalent to the ITSO smartcard transport ticketing system. 2. On the issue of integrated ticketing, rail has long had an integrated ticketing system managed by the Rail Settlement Plan (RSP) division of the Association of Train Operating Companies (ATOC). However, the same cannot be said for buses; indeed the deregulation of buses has meant that competition positively works against integrated ticketing. The Government’s strategy of using ITSO as a way to promote integrated ticketing would be fine if the strategy was supported by a fully proven product and by the management activities of the ITSO organisation; however since neither is the case the strategy falls down. Why should rail operators with a perfectly adequate ticketing system pay out millions of pounds to implement smartcards to achieve the same result (for them)? Why should bus operators support their competition by agreeing to integrated, multi-operator ticketing? 3. While ITSO, as defined and implemented, meets all the requirements of the DfT, the transport industry and passengers, take-up has been slow as a result of poor management of the development of ITSO by both its organising body and the DfT which has resulted in it taking far too long to be completed. This in turn has led to lack of confidence by operators that “it will ever happen”. In addition, the lack of ITSO in-house testing before it was made available to the operators and their implementers has acted as a positive disincentive to early adopters. 4. One knock-on eVect of the long gestation of ITSO is that new technologies are overtaking ITSO; examples being the growing use of the mobile phone as the prime user interface, Near Field Communication (NFC) to allow mobile phones to replace smartcards, and contactless payment cards to be used directly as pay-as-you-go tokens. A number of operators and local authority transport planners are now considering whether to leapfrog ITSO straight to these. 5. Experience in London, where Oyster was an eYciently developed, implemented and tested project, shows us that smartcard ticketing is very acceptable to passengers, works well and speeds up throughput of passengers, including reducing bus boarding times. However, it must be remembered that the London environment is essentially a closed system and does not parallel the competitive multi-operator environment in the rest of the country; and Oyster was designed specifically to meet this requirement. 6. The current Scottish implementation of ITSO is of very limited assistance at present as it is solely for concessionary fares at the moment and is still in its deployment phase. Essentially it is acting as a test-bed for ITSO. 7. Wales and Scotland have both gone the route of a national, free concessionary scheme and it is hoped that England will follow this same path. In order to properly manage concessionary travel spanning the English and Scottish border and the English and Welsh border, as well as properly to support multi-modal travel, the use of an ITSO smartcard scheme is essential, subject to ITSO getting “its house in order” as discussed in paragraph 3 above. February 2007

Memorandum from Jonathan Horan (TPT 03) There are a couple of points I wished to make under question one of the ticketing consultation: 1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? In London, yes. In other areas, even where the Plusbus exists, no-one knows about it and it doesn’t apply to all operators. The West Midlands seems to be a bit better, but when you’re going from one area to another there’s no consistency. I live in StaVord, which is semi-rural. The only example of integrated ticketing is where I can use a train ticket on one of the bus routes. Apart from that, all the bus operators have their own tickets and fare structure. It’s a nightmare, and despite not owning a car I ﬁnd it diYcult to defend public transport because of its inadequacy and complexity. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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2. When I want to take my bike on the train, there are additional barriers. I can’t reserve my bike place on line any more, because they’ve removed the option from online ticketing systems. So, if I want to reserve a bike place, I have to visit the station. What’s the point in having bought the ticket online in the ﬁrst place? February 2007

Memorandum from Iosis Associates (TPT04)

IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? 2. From my point of view, in general terms, nowhere near, despite the 1998 Integrated Transport White Paper and the new Bus White Paper “Putting Passengers First”. The new White Paper totally ignores integrated ticketing, although it does mention “through ticketing” without defining the term. Also the new White Paper is generally internally inconsistent and sloppy in its use of terms. See the Annexes to this submission for analysis and comment on the White Paper. 3. My viewpoints are two: — that of passenger, using bus services in my local near-metropolitan area (Greater Bristol), bus services in other areas that I visit, long distance coach services, heavy rail services, metro services (eg London), and the half-way house of Merseyrail Electrics; and — that of technologist in ICT areas that include the ITSO secure ticketing and journey management environment 4. As with so many questions in an area of service delivery to a large number of people, the 80/20 rule comes into play. If the service oVered is perfectly adequate for 80% of the people or for 80% of the transactions, is that good enough? DiVerent situations of course produce diVerent splits 60/40, 90/10, 99.99/ 0.01 . . . DiVerent people will therefore give diVerent opinions. 5. In terms of expectations following the 1998 Integrated Transport White Paper, the answer to the Committee’s question is overall “No”. In terms of the desire to minimise the growth of private car traYc, even reduce it, the answer is very definitely an overall “No”. 6. Geographically, in some areas of the country the answer is “Almost Yes and improving”—London is the example most often cited as having good ticketing provision. Oyster demonstrates, as does for example the current national scheme in The Netherlands, that integration must be organised and managed at the level of a natural geographical and demographic region. To some extent the PTEs have been able to provide integration across diVerent operators and even, as in Merseyside, across bus and rail modes. But overall the application of competition law has brought about a deterioration in the progress of integration, and has even caused the ceasing of some integrated ticketing schemes. 7. To people who live in another town or city that has public transport that the local residents rate as “poor” together with heavily congested roads (eg Greater Bristol, which does not have a PTE and has recently been described as the largest metropolitan area in the country that is not a metropolitan county), once we learn how the Oyster scheme works we want it in our area. Those of us who know that the current Oyster technology is not scalable and not interoperable with clones of itself in other urban centres are aware that the forthcoming overlaying of ITSO technology on the Oyster scheme will be a boon. 8. The initial integration of further heavy rail London local services into the Oyster scheme is a start, but essential is resolute and expert progress with the growing commitment by DfT to ensure that longer distance heavy rail services implement ITSO technology and do it properly. However, the longer distance heavy rail service ticketing provision, currently supposedly at the start of implementation, is the subject of very considerable internal disagreement within the industry, and DfT gives all the appearance of not having the expertise or knowledge to resolve the problems. 9. We should temper the answer “No” with an assessment of the possibility of doing better without significant extra cost. Here we frequently hear about, and some of us experience for ourselves, public transport systems in European cities or further afield (eg the far east) that in metropolitan areas are better integrated. If we look at the diVerence between their way of doing things and ours, we very often see a publicly owned service (eg Brussels, Paris), or at least a much better partnership between public and private sector (eg1 Holland). In fact Holland is a good place to study, for they are currently installing a fully integrated public transport ticketing system from one of the only two companies recognised as being capable of delivering (with suitable partners) a fully integrated ticketing system over a complex multi-modal network.

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10. A major characteristic of the public transport networks in the urban areas of those other countries is consistently and carefully applied capital investment. It is the careful application of that investment that really matters: we fall down on that in this area of technology, as we do with many areas of technology applied to public services. Thankfully, there is a move (eg Transformational Government, but perhaps more importantly a growing feeling that more and more civil servants are determined to do better) to be more careful in our use of investment money, but I still believe that there are major lacunae that continue to negate much of the possibilities for beneﬁts. 11. A ﬁnal note: long distance coach services are currently operated entirely separately from other modes, with no sign of a move towards integration with those other modes, either of ticketing or, in the larger picture, of services.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? 12. Not any more; perhaps it never really did, as it may well have been that only a small number of civil servants (the key one in DfT, Eric Sampson, has recently retired) really understood what ought to be done, although I submit that their concept of how it should be done has never2 been adequate: nowhere enough application of the needs for thorough planning and for engineering discipline. 13. Having been working recently with the trade association PSSG on this topic, I do not know of any such strategy, despite the commitment to seamless travel as long ago as the 1988 Integrated Transport White Paper. Indeed, on heavy rail services ticketing has become more fragmented and increasingly diYcult for either customers or sellers to understand. In particular, the selling by or for TOCs of tickets for use on specific, timed rail services has been causing considerable distress, because ticket validity is not checked at the point of boarding: after departure, those who get on the wrong train are charged the full open ticket fare by the Train Manager. The “Putting Passengers First” paper (see Annexes below) about bus services concentrates only on proposals that attempt to improve punctuality and reliability (note that those are very technical terms in the industry and in regulatory circles, not necessarily having the meaning that the common man or woman assign to them), to the exclusion of all other benefits to the passenger. For long distance coach services there are no government strategies for integration of ticketing, either within that mode or between that mode and other modes. 14. The strategy has to have two parallel streams: — commercial arrangements that benefit the traveller; and — technology and management that enables eVective and eYcient delivery. 15. Commercial arrangements have been severely restricted by the application of competition law. There have been some improved guidelines recently, but I believe that that is nowhere near enough for the large commercial organisations currently operating most of the UK’s surface and sub-surface public transport. Despite guidelines from OFT, there is always the risk that massive commercial disruption will be caused if OFT changes its mind. An operator of public services needs a long term stable environment,3 and so do the passengers. I have repeatedly used the phrase: “its no good accepting a guideline if the OFT can on a whim change it and come and hit you with a hammer”—they can stop what you do, tying up company executives in a long and expensive investigation, and levying massive fines. Bus operating companies in particular run lean on supervisory, admin and managerial staV, so that any investigation is extremely disruptive. 16. Technology has to be carefully planned and managed: its an engineering job. The TfL Oyster scheme in the end came good after a shaky early development period, but with its present technology it is not scalable much further than its present scope, and separate Oyster technology schemes in diVerent areas of the country4 cannot link up in the way that ITSO-compliant schemes are designed (and proven) to do—thus there is no interoperability between Oyster technology schemes. Oyster may, however, by adding ITSO technology, be capable of being economically applied to other urban areas linked into national interoperability —but present tests indicate that, even with some optimisation, performance of an ITSO compliant mode embedded in an Oyster scheme, in terms of throughputs through station gates, may not always meet the current contractual performance commitment to TfL. 5 17. Currently it is unfortunately the case that ITSO Ltd and its developments are not managed as a Best Practice engineering company and project, and DfT, despite its significant funding for ITSO Ltd, has failed to trigger improvements. The generic problem with a Company Limited by Guarantee without shares is that the Members have little opportunity to influence the incumbent management, and most of the Directors (generally operating as volunteers) find it extremely diYcult to influence a dominant cohort of managers (or even of Directors). By contrast with ITSO Ltd, Network Rail works extremely well, through having an excellent team in charge, but in the long term such a corporate arrangement has some in-built risk. Nevertheless, Network Rail is successful in delivery terms and has gained the financial strength to source

2 3 4 Public Sector Supplier Group. See their statement on this topic (submitted to Transcom and also available at www.pssg.biz) badged scheme. 5 The big groups organise their bus operations into many regional operating companies. Eg in a competitive procurement process it might be that another metropolitan area purchases an ITSO compliant Oyster

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additional funds. It is therefore sensible for Network Rail to look beyond the rail network and consider supporting all modes of surface and sub-surface public transport. With DfT policy now being to spread ITSO technology onto heavy rail, and the financial needs of ITSO Ltd, it makes sense to fold one Membership Company (ITSO Ltd) into the other one (Network Rail). 18. The present commercial arrangements (with the competition problem mentioned above, and the short termism still built into rail franchising) militate against significant investment by the service providers, and of course central government doesn’t want to fund large capital programmes. But there may be a light at the end of the tunnel as far as ticketing systems are concerned, although the tunnel appears to be currently blocked by DfT inaction—hence the statement made by PSSG this week. 19. It has recently become clear that there are two6 strands being discussed and perhaps developed within DfT: — in a similar manner to the Scottish project , roll out electronic ticketing over all 50,000 service buses in the UK (the public sector to use the functionality to manage concessionary travel); and — roll out electronic ticketing right across heavy rail (perhaps 25,000 items of ticketing equipment). 20. But there is no co-ordinated action, and, at the March 19th Supplier Briefing session for the DfT procurement of services for Concessionary Bus Travel, there was a clear statement that there is no DfT policy to roll out ITSO technology across all of surface7 and sub-surface public transport in England. 21. The probable timescale is five years, ie roll out to be completed by 2012. If that is coupled with eVective on-line ticket purchasing across the internet , it should be possible to leverage a large proportion of the capital investment out of the private sector—that is because with multi-modal deployment there will be a long term future for the methods. I believe that Eric Sampson was right when he said to me that the8 big service operators have to get to the stage where they all decide to move together and authorise the investment in interoperable electronic ticketing. Currently I believe that none of the major operating groups has a positive business plan for the rollout on their own: they see costs but not enough financial benefit , but they will invest if they see a national policy announced and taken forward. DfT has to show us a coordinated five year project if integrated ticketing is to be delivered, and DfT has to manage the programme far better than hitherto. 22. It should be noted that the ticketing environment resulting from a nationwide rollout will not just be a rollout of smart cards. Other physical formats of smart media will be used, as will (with care) print at home (using bar codes for security) and “show and go” ticket to mobile phone. New secure short range technology is coming along9 (Near Field Communication is currently the best suggestion, embedded in mobile phones), and could fit onto the front end of ITSO style schemes. The ITSO Method is capable of adaptation to these diVerent ticketing media, although currently a very rigid DfT mandate for “all cards to be usable everywhere” is inhibiting, and there is no credible way for extensions to be managed.

TheUse ofSmartcardTechnologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately?

23. No, but why should it? “Industry” in the shape of the set of public transport operators has an overwhelming duty to its shareholders, and until recently there have been indications that they see introduction of the technology as having a massively negative business case for them unless about £250M is pumped in by government. Also, in the absence of measures to promote growth in public transport, the necessary parallel introduction of interoperable ticketing has a negative business case to a service operator, because it increases competition. But now I believe that they see the beneﬁts of improved service management that the ITSO Environment delivers, plus a determination within government to improve public transport services. 24. The answer to this one is already presaged in the answer to Q2: we need: — a co-ordinated 5 year strategy and programme from DfT, designed to leverage most of the investment out of the private sector; and — a change in the way that the technology is managed.

6 7 8 But it must be managed much better than the Scottish project. grant as subsidy that, divided by the number of buses in their fleet, came out at £3,000 per bus—however, since then many Notof them using have the clumsy already method invested apparently in new ticket currently machines, being so put the forward—see per bus figure later will in now this be submission. lower. Get them to move together, Aboutjustifying three the years capitalisation ago someone of the from funding, one of and the they big transport will do it service themselves. groups showed me his figures: they were looking for a 9

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25. But, even if the technology stays as it is now, it will still need over £100 million of investment from the public sector , plus on top of that will be perhaps £50 million to re-issue all 10 million concession passes, although some of that pass issuing funding will already be budgeted for over the ﬁve year period as part of the normal cycles of replacement and accretion of new entrants. 26. Scotland may soon get its second wind, after a stuttering start to its ITSO-compliant smart media bus-based ticketing scheme. Wales has issued ITTs for an all-Wales scheme similar to that in Scotland.

4. Does the ITSO system cater for the needs of all passengers and travel providers? 27. No, but it is capable of extension (needs capital investment for development, and a security management organisation that also needs public funding). 28. Some extensions (to diVerent media) have already been mentioned above, but the particular missing link is that there is no provision in the ITSO Method for on-line purchase11 of tickets for direct download into the ticket media. This extension is particularly important for heavy rail. It requires a signiﬁcant re-think of security methods, and, if a competitive market in systems and equipment is to be maintained, a rigorous application of the international systems level standard ISO EN 24014-1 , which the UK has been very active in developing out of the basic principles of the ITSO Method. Currently ATOC/RSP, after a request from DfT Rail, has proposed a centralised architecture rather than the distributed one described in the standard and implemented in the ITSO Method—that proposal must be rejected. 29. There is also the problem that reading the ticket or tickets in the smart media cannot at present be carried out with a low cost reader, thus requiring tickets for a complex multi-leg multi-modal journey to be 12 sold with a printed itinerary. 13 30. At the management level, the ITSO Licensees (scheme owners/operators) have recently agreed to form a co-operative of the schemes. However, there is no provision for overall security management across the network of schemes , and some key supporting ITSO speciﬁcation material has not been delivered. 31. DfT is currently looking at BIBO technology (Be-In Be-Out), ie automatic detection of the passenger’s token as the passenger enters a vehicle, automatic charging, and automatic detection of exit. Revenue protection is exceedingly diYcult with this method.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? 32. London’s scheme is not scalable (or interoperable with other schemes using the same Oyster technology) unless it is updated by adding ITSO technology. Considerable funding has already been provided for this upgrade, but may not be enough. London’s scheme is expensive to run and more expensive to change; it does not translate well to more rococo areas (eg rural areas). 33. Scotland got the contractual organisation massively wrong, and their attempt to marry up transport ticketing with use of smart cards for citizen services was bungled. A recent presentation to the DfT- supported Transport Card Forum, by Anne Gibson of Transport Scotland, illustrates the diYculties that they have been and are having. An oYcer from the NoWcard scheme (Cumbria, Lancashire, Blackpool and Blackburn) indicated at the time that they have made the same mistakes. 34. Planning for system integration in Scotland was neglected, with delays to rollout of the acceptance network now14 apparent and serious concerns by the commercial software contractor. The same delays can be seen in the NoWcard project (Lancs and Cumbria—the same consultants as were used in Scotland were used for NoWcard). DfT has recently published a report on the early stages of ITSO and Oyster integration , again showing project planning failures, causing signiﬁcant delays—the same consultants were involved (and many of us knew about the contractual diYculties that would be encountered).15 By contrast, Merseytravel’s Stage 1, to issue ITSO-compliant concession passes and outsource much of the operation of the scheme, had project planning and system integration managed in-house by an expert Information Systems team, and has quietly and successfully started issuing smart media passes. 35. Revenue protection is often very diYcult in an electronic ticketing system, but most publicly owned public transport schemes in dense urban areas (ie in other countries, and perhaps also TfL) don’t concern themselves too much about people who travel without paying: public transport is a public service.

10 submission in work done for Merseytravel, but it has yet to be deployed; DfT have been made aware of this method but have not responded. 11 A lower cost transitional method where only passes have to be accepted has been partly developed by the author of this 12 piece of work for DfT and an agency acting for ODPM; that proposal was signed oV by DfT “for discussion” and sent to the Integratedembryo Association Fare Management of ITSO Licensed Architecture, (and currently would-be awaiting licensed) publication Operators. after a successful ﬁnal ballot. 13 That follows a proposal made over three years ago by Dr David Everett and the author of this submission, as part of a joint 14 15 Here the new (draft) Information Assurance framework from Cabinet OYce CSIA applies. Systems Manager at Merseytravel, should be able to provide information about the management methods used. http://www.dft.gov.uk/pgr/scienceresearch/otherresearch/itsooysterinteroperability The author of this submission was technical adviser on the ITSO level aspects of this project; Paul Oakley, Information Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 70 Transport Committee: Evidence

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate? 36. This is not an area about which I am knowledgeable.

7. What appeal mechanisms exist for passengers, and are they adequate?

37. As a user of public transport, I do not know of an16 appeal mechanism, other than to write to the operator of the service. More generally, the notices on First Group buses list a general complaints procedure which is misleading: it appears from the notice that the ultimate authority is the TraYc Commissioner when we know that the Commissioner’s powers are very limited.

8. Are the rights of passengers and the powers of ticket inspectors well-balanced? 38. Again I do not know.

9. Do operators of public transport take adequate measures to protect fares revenue? 39. Yes, by definition, because they are private sector companies and so their measures are adequate until shareholders (or in some cases govt) discover that they are not. From the public sector’s point of view, I do not know what government’s attitude is to public transport as a public service, and am aware that the present controls over the application of public sector funding for concessionary travel are, for a significant number of local authorities, significantly inadequate. 40. However, for revenue protection of concessionary travel funds, there is no need to have a rollout of the complete ITSO method: costs could be saved by using a lower cost method of accepting slightly modified ITSO media—this has been partially designed by the author of this submission, using Merseytravel funding. That stage of the Merseytravel project is shortly to be taken forward in a limited way: at the gates on Merseyrail stations; DfT is aware of the concept but ITSO Ltd ignores it.

ConcessionaryFares—TheRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? 41. From the debates in the Lords on the Concessionary Travel Bill (about which I have had some contact with both Lord Bradshaw and Lady Scott), the Lib Dems clearly think not on the technology front and in terms of the eligibility criteria, and both Lib Dems and Conservatives think not in the way in which the funds are administered, so this is partly a political question. However, I think that I detected in Lord Davies’ answers in the Lords that govt may be thinking about extensions of eligibility (but probably only in association with rolling out better management of the services, using the ITSO smart media method, so we are looking at 2010–11). 42. Certainly I personally find the extended timeline of eligibility of concession passes provided in Greater Bristol to be a boon (09.00 to well past midnight), and would welcome this extension being applied nationally. 43. Technically, information reaching me (verbally, not confirmed) about the ideas within DfT for a five year rollout of the ITSO Method show no sign of taking advantage of the lower cost method mentioned in the answer to Q9 above. 44. The current proposal from the Concessionary Bus Travel team in DfT is for framework agreements with suppliers capable of re-issuing perhaps 6 million to 8 million passes before April 2008. Such a crash programme is unlikely to hit the target date, and the exchanges in the Lords suggest that, at a high level, govt is not expecting to by any means fully resolve the revenue allocation problems in time for the 2008–09 financial year. Such a crash programme might well trigger compensation payments on existing contracts between local authorities and their suppliers, and is already in trouble because LAs in some cases cannot fund the necessary database cleaning within the timetable. Much better would be to set up an 18 month programme to re-issue, and also to group local authorities by regions, with regional branding, rather than have a single national brand. For the summer of 2008 there could be special local agreements to accept all passes at holiday hot-spots such as Blackpool, along with DfT funding for training and inspectors.

16 having their normal meaning) matter, when delivery against every parameter of a service is essential for its overall success. Putting Passengers First gives the impression that only punctuality and reliability (both technical terms in the context, not Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? 17 45. No, but, for geographical areas, the legal minimum 2008 provision will considerably improve matters; local arrangements for enhanced eligibility in dense urban areas (such as Greater Bristol) with multiple CTAs will beneﬁt many travellers. For transport modes, there are clearly numerous areas where multi- modal eligibility would be sensible from the customer’s point of view. 46. The author of this submission is an independent ICT Strategy and Secure Technology consultant, particularly for e-government and electronic transport ticketing methods. He is also working with Smartex Ltd on the development of PSSG, a new trade association for businesses active in the same ﬁelds. Further information may be found in a CV already submitted to the Committee. February 2007

Memorandum from Tony Cornah and Polly Blacker (TPT 06) To put us in context, we are Cycle Trainers, we rely on cycling as our main means of transport (we don’t own a car) and are members of the SheYeld Cycle Campaigning group PedalPushers (so we have a feel for what other regular cyclists in the area think too). We feel that provision for integrating cycling with other means of transport is so poor as to be laughable. To take train travel in Britain first: 1. We can’t book our bikes onto trains at the same time as we book our tickets online. This means that we can’t really book online as we then risk not getting our bikes onto the trains we’ve booked. The facility did exist in the past (can’t remember when it last did) but was removed by the operating companies. 2. Calling one of the train operators to try to book tickets and bikes at the same time often results in various levels of frustration when the person you’re talking to either doesn’t understand what you want or seems not to have been trained in how to use the system to provide it. 3. Even when we go down to the station, and therefore suVer the inevitable enormously lengthy queues, the ticket oYcer has to book tickets first and then use a separate system to confirm that cycle spaces are available. This often results in several attempts before a suitable service can be identified (and increases the length of the queue behind us!). 4. Many services restrict the number of bikes on any service to 2: how then can a family plan a trip? 5. Some train operators don’t provide a facility to book bikes onto their trains: to be fair they are often the most flexible companies with the more helpful staV but it means that a long weekend away with bikes is potentially subject to others’ demands rather than being bookable. With diVerent operators having diVerent rules there is a pressing need for all staV to be trained to be as flexible as possible in all circumstances. 6. To see a functioning cycle-friendly service try Deutsche Bahn’s website (in English too) at http:// reiseauskunft.bahn.de/bin/query.exe/e which covers all of Europe: how’s that for integration? Next, consider trying to plan a trip by train and bike to Europe: 1. First reference is to the website above http://reiseauskunft.bahn.de/bin/query.exe/e which enables onward travel after the Channel with relative easy and integration. 2. Now to Eurostar, who won’t guarantee that a bike booked onto one of their services will arrive until up to 24 hours after you do: how do you plan a journey with that sort of restriction in place? Continuing with coach services: 1. I think it is the case that no coach service will allow a conventional bike to be carried. When we travelled fairly extensively in Central and Southern Europe for a year we were invariably able to book our two bikes on to local and international services as luggage: we took responsibility for removing front wheels where necessary and stowing the bikes in the hold but there was rarely any conflict with other demands on the luggage space. More locally, the SheYeld Supertram (but it applies to all other tram services in the UK as far as I know): 1. The service operators will not allow a conventional bike onto their trams under any circumstances. 2. It would make far more sense for the operators to allow bikes to be carried on the less busy services (and at slacker times of the day) always with the proviso that pushchairs, buggies, wheelchairs, sudden influxes of passengers, etc would have priority.

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Ev 72 Transport Committee: Evidence

I hope that the above comments fall into your committee’s remit as the integration of all modes of public transport with non-polluting options at either end (or even in the middle) seems to us to be vital to helping tackle pollution and climate change. March 2007

Memorandum from Stagecoach Group plc (TPT 07)

0.0.Introduction

0.1 Stagecoach Group welcomes the opportunity to contribute to this inquiry and present evidence to the Transport Committee. 0.2 Stagecoach Group is a leading international public transportation group, with extensive operations in the UK, United States and Canada. The Group employs around 27,000 people, and operates bus, coach, rail, and tram services. 0.3 In the UK, our fleet of around 7,000 buses connects communities in more than 100 towns and cities across the country. We carry nearly two million passengers a day on a network stretching from the Highlands of Scotland to south-west England. It includes major city bus operations in Liverpool, Newcastle, Hull, Manchester, Oxford, SheYeld and Cambridge. 0.4 We also operate express coach services linking major towns within our regional operating company areas. The Group runs the market-leading budget inter-city coach service, megabus.com, which carries around two million passengers a year on a network covering more than 30 locations. Scottish Citylink, our joint venture with ComfortDelGro, is the leading provider of inter-city express coach travel in Scotland. 0.5 Stagecoach Group is a major rail operator and has an involvement in running around a quarter of the UK passenger rail network. The Group operates the South Western rail franchise, which incorporates the South West Trains and Island Line networks. South West Trains, the UK’s biggest commuter franchise, runs nearly 1,700 trains a day in south-west England out of London Waterloo railway station. Island Line, on the Isle of Wight, has been designated a Community Rail Partnership. We also operate Supertram, a 28 km light rail network incorporating three routes in the city of SheYeld. In addition, Stagecoach Group has a 49% shareholding in Virgin Rail Group, which operates the West Coast and CrossCountry inter-city rail franchises. 0.6 The Transport Committee is considering ticketing arrangements and concessionary travel on public transport, specifically the way in which ticketing is organised, handled and enforced. We believe that ticketing is an important contributory factor in attracting passengers, delivering modal shift and driving growth in the future. 0.7 The information below outlines Stagecoach Group’s views in response to the specific questions set out in the Transport Committee’s call for evidence, published on 8 February 2007.

1.0IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas?

1.1 It is fair to say that ticketing is already highly integrated across rail. Indeed, the structure of rail franchising requires full through ticketing and inter-availability to be maintained, and there are strong commercial imperatives to do this as well. It could be argued that integration is less eVective between diVerent modes, although great strides have been made in the past ten years with the introduction of bus links and bus-rail schemes under the “PlusBus” banner, to feed into rail stations from communities remote for the network. There is still plenty of scope for enhancing these schemes as they are still somewhat sporadic. The best example of integration remains the example of travel to and within London, where integration between national rail and Transport for London ticketing has existed for over 20 years. ITSO could provide the common platform to make greater integration possible. 1.2 Each of the metropolitan areas has a range of integrated multi bus operator and multi modal tickets as do many Shire Counties. The Transport Act 2000 enables Authorities to require bus operators to introduce ticketing schemes where none exist. There is, therefore, no reason why integrated bus tickets are not oVered wherever they are needed. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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2. Does the Government have an adequate strategy for developing the integration of ticketing systems? 2.1 The Government has made an important step in facilitating easier integration between modes by mandating ITSO as the national public transport smartcard standard. Going forward, this will provide a common platform for schemes on all modes. By speciﬁying the format of data across each interface, ITSO enables scheme implementers to mix and match their system component suppliers in the knowledge that they will be able to work together. 2.2 However, technical solutions need to be complemented by commercial strategies that ensure incentives exist for deals to be made between diVerent ITSO users. Clearly, there needs to be a business case to support each such strategy. 2.3 It is important that scheme promoters—whether they are public authorities promoting concessionary travel schemes, or bus or rail operators promoting their own commercial ticketing schemes—should drive forward the appropriate commercial mechanisms. They are best placed to ensure that they are appropriate, adequate and eVective in achieving the desired objectives.

3. Is the industry taking up modern smartcard technologies adequately and appropriately? 3.1 The last 12 months has seen the rail industry increasingly take up smartcard technologies, spurred on by inclusion in rail franchises as they come up for renewal as well as local authority sponsorship of ITSO- based concessionary schemes. Stagecoach is fully supportive of the take up of smartcard technologies in the bus and rail industries and is actively developing schemes for its bus and rail companies. 3.2 It is widely accepted that it is diYcult to make a stand-alone case for commercial smartcard systems on buses. However, the business case improves considerably when the system infrastructure is already in place. Thus the introduction of nationwide smartcards for concessionary travel on buses is an important ﬁrst step in developing the use of smartcards for commercial ticketing applications.

4. Does the ITSO system cater for the needs of all passengers and travel providers? 4.1 In theory, there is no reason why ITSO cannot cater for the needs of all passengers and travel providers. As ITSO is an open standard, it has the added advantage that a scheme promoter does not need to lock in to one sole supplier. This has further beneﬁts when consideration is given to system replacement, which can be undertaken on a component-by-component basis. However, as discussed earlier, while ITSO deals with the technical issues arising from the need to operate from a common smartcard platform, it does not in itself address commercial issues. Whether the necessary commercial agreements that drive integration are made will depend on operators being incentivised to make a positive business case.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? 5.1 London has worked well as an example of how a transport smartcard can work, although it has also thrown into relief some of the issues that need to be overcome. On the positive side, Oyster works well from the customer point of view, as it is popular and flexible. There is no doubt that the rapid movement of passengers over to Oyster has been very heavily influenced by pricing strategies that charge significant premiums to passengers choosing to pay with cash. On the systems side, the use of a PFI contract between TfL and a sole supplier has created numerous hurdles to the eVective and rapid rollout of Oyster to TOCs. The principles behind the ITSO platform are far more straightforward in permitting the organic growth of individual schemes and linkages between them. 5.2 In Scotland the scheme is still in the implementation phase, but it is already producing benefits for the rest of the UK in that a number of ticket machine suppliers have been contracted to provide the necessary on bus equipment to the ITSO specification. They will, therefore, be well placed to provide equipment for English systems when called upon to do so.

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate? 6.1 Stagecoach Group believes the legal framework in which ticket inspectors operate appears both fair and reasonable. We believe the respective rights of passengers and ticket inspectors are well balanced and appropriate, providing they are properly and consistently applied and managed. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 74 Transport Committee: Evidence

7. What appeal mechanisms exist for passengers, and are they adequate? 7.1 There is no doubt that the area of rail penalty fares is a sensitive one that requires the highest standards of stewardship. To ensure that stewardship is carried out in a fair and reasonable way, passengers currently have the right of appeal to an independent appeals body IPFAS (the Independent Penalty Fares Appeals Service). 7.2 In the case of buses, Stagecoach companies have not experienced any issues that they have been unable to resolve with those who have been charged penalty fares. Should it prove necessary, the TraYc Commissioner would arbitrate in such cases.

8. Are the rights of passengers and the powers of ticket inspectors well-balanced? 8.1 Clearly, one of the keys to a successful revenue protection policy is communication, ensuring passengers know what the rules are, how they are to be applied and what recompense is available. It is clearly in everyone’s interest, not least that of the genuine fare-paying passenger, that all available revenue is collected. The best environment is one where a combination of education and enforcement convinces people it is simply not worthwhile economically trying to travel without a ticket. 8.2 However, it can sometimes be diYcult for bus ticket inspectors to establish a person’s identity, which can make penalty fares diYcult to collect.

9. Do operators of public transport take adequate measures to protect fares revenue? 9.1 Stagecoach, through its bus and rail companies, is adequately incentivised to collect as much revenue as possible from passengers and to do everything possible to minimise ticketless travel. 9.2 Stagecoach designs its bus ticketing systems to enable drivers to visually check all prepaid tickets, which itself limits fares evasion. The introduction of smartcards would enable more sophisticated fares oVers, which are currently precluded by this visual inspection constraint.

ConcessionaryFares—TheRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? 10.1 Stagecoach would ideally like to see a nationally administered concessionary travel scheme in England, modelled broadly on the Scottish arrangements. 10.2 While it is for DfT to determine how the English national scheme will function, Stagecoach would wish DfT to ensure that the funds available to reimburse operators under the scheme are suYcient to minimise the need for appeals against the proposed reimbursement arrangements.10.3 Stagecoach would also welcome the use of smartcards by all concessionary bus pass holders as this would minimise the potential for fraudulent use and provide accurate recording of trips made, thereby aiding reimbursement arrangements.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? 11.1 The introduction of English national concessionary travel on buses from April 2008 will increase the geographic coverage of concessionary travel signiﬁcantly. 11.2 Local concessionary authorities are currently able to extend the concessions to tram and rail modes if they so wish and some already do so, within their area of jurisdiction. 11.3 Whether or not such facilities should be provided across all modes nationwide, or across the whole of Great Britain is a matter for Government. March 2007

Memorandum from Greater Manchester Passenger Transport Authority and Executive (GMPTAE) (TPT 08)

Summary — The range and pricing of public transport tickets available in Greater Manchester is over-complex and acts as a disincentive for passengers to travel and to change between modes or services. — On-bus cash fares and ticket sales cause signiﬁcant boarding delays and can negate much of the investment that has taken place in bus priority measures. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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— Premium pricing of all operator bus tickets, together with discounting of single operator tickets mean that, in Greater Manchester, only 12% of all paid-for tickets are valid on all buses — We believe that developing an easy-to-understand, easy-to-use ticketing system is a key factor in determining the attractiveness and eYciency of public transport services. — However, even with the simplest of schemes, tickets must remain aVordable. There is evidence in Greater Manchester that ticket complexity and fare levels restrict the mobility of the most disadvantaged members of the community. — ITSO compliant Smartcards have the potential to facilitate better inter-operability, interchange and cross-boundary travel. The government should fully fund the roll out of ITSO smartcards in England as has happened in Scotland and Wales. — In pursuit of our social inclusion objectives, Passenger Transport Authorities should have the power and funding to grant concessions to groups other than the elderly, disabled and children, including unemployed people, those on low incomes and young people.

B.Background

B.1 GMPTA/E, working with its partners, the district councils, are responsible for the planning, co- ordination and development of the public transport network in Greater Manchester. Public transport services are however, provided largely on a commercial basis by private operators, including around 70 bus operators, each responsible for their own fares and ticketing arrangements. GMPTA/E has an aspiration for a ticketing system that is “easy-to-understand and easy-to-use”, but the reality is very diVerent; there are approaching 100 diVerent ticket products available to passengers, not counting individual operators’ single trip tickets

B.2 In common with other transport authorities, our Local Transport Plan represents the policy framework and scheme programme for the conurbation over a ﬁve-year period. However, our long term vision and strategic direction is provided by the Greater Manchester Integrated Transport Strategy (GMITS) which was produced jointly by GMPTA/E and the local authorities in April 2005 and forms the basis for our Transport Innovation Fund (TIF) bid currently being prepared for submission to Government in July 2007. GMITS emphasises the importance of transport investment to secure future economic growth, regeneration and quality of life improvements across the conurbation. A range of measures is proposed to deliver a sustainable network which reduces car dependency through a combination of demand management measures and extensive investment to improve the quality and coverage of the public transport system. The development and design of a ticketing and fares system is identiﬁed as a key factor in determining the21 attractiveness and eYciency of the future public transport network so as to achieve our modal split and social inclusion objectives.

B.3 GMTL provides a range of tickets valid on all operators’ services. However, it is widely regarded that the complexity of tickets and fares is a major disincentive to using public transport, which then limits the potential to increase the modal share of public transport. Ticketing and fares for local bus services are particularly complex, with diVerences in the level and structure of fares levied by individual operators and a number of single-operator period tickets oVered.

B.4 On average, buses in Greater Manchester spend a third of their journey time stationary or moving slowly. Boarding and alighting accounts for about a third of this (11% of overall journey time). There is considerable variation in individual passenger boarding times, ranging from an average of around four seconds for pass users, to six to nine seconds for a single or return ticket and 12–15 seconds for the initial on-bus sale of day/weekly tickets. A high proportion of single-operator weekly tickets are sold on Monday mornings leading to a signiﬁcant variation in boarding times over the course of the week. GMPTE is currently working with bus operators in Greater Manchester to identify ways of improving boarding times by increasing the level of rules of oV-bus tickets, including the provision of on-street ticket machines.

B5 Developing a pilot ITSO compliant smartcard project.

A pilot scheme with a local bus operator to promote oV-bus ticket sales.

B.6 It is against this background that GMPTA/E oVers the following comments on the questions posed in the Committee’s Terms of Reference and Call for Evidence.

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Ev 76 Transport Committee: Evidence

IntegratedTicketing

Q1. Is ticketing suYciently integrated across diVerent modes of transport between diVerent geographical areas?

1.1 Within Greater Manchester there is a fairly comprehensive range of inter modal tickets covering day, weekly and longer period travelcards. However, there are still gaps in coverage—for example there is no ticket that is available to peak travellers that covers all modes. 1.2 Overall there is insuYcient integration amongst modes. This in part stems from the fact that ticketing policies are diVerent between bus and the other modes. On train and tram, it is nearly always possible to buy a through ticket from any point on the network to any other point—“one journey, one ticket”. This has made it easier to have through ticketing between train and Metrolink in Greater Manchester. 1.3 In contrast, bus passengers have to buy a new ticket every time they change bus routes, unless it is cheaper to buy a day ticket (if one is available). This discourages interchange and integration as there is not full ticketing integration across bus as a mode. For many passengers this is more important than inter-modal integration. Journeys requiring interchange can be even more diYcult where they involve travel across local authority boundaries. 1.4 Apart from the national rail network, diVerent operators have their own ticketing systems and this can lead to problems with automated ticket checking. Where there are inter-modal, integrated tickets they are always priced at a signiﬁcant premium to other tickets valid only on one mode or for one operator. For example, the two main bus operators in Greater Manchester, First and Stagecoach, oVer weekly tickets priced at £13.00 and £9.50 respectively whereas the all operator bus weekly is £15.00. As a consequence, only 12% of all paid bus journeys (ie excluding use of concessionary passengers, school and employee passes) involve a ticket valid on all buses. There is evidence in Greater Manchester that some passengers avoid travelling outside the territory of their local dominant bus operator because they cannot aVord to buy a more expensive multi-operator ticket. Because making an inter modal journey or even changing buses often carries a ﬁnancial penalty few passengers interchange—hence operators argue that there is no demand for interchange. 1.5 GMPTA is one of the few Authorities that has made a statutory Ticketing Scheme under the provisions of S.135—138 of the Transport Act. However, whilst we have powers to require integrated tickets we cannot control the price of those tickets as in a deregulated bus market, operators are free to set their own fares.

Q2. Does the Government have an adequate strategy for developing the integration of ticketing systems?

2.1 We are unaware of any overall government strategy for integrating ticketing systems. DfT has supported the development of the ITSO speciﬁcation for Smartcards (which can facilitate but not in themselves create integrated ticketing). The Department has insisted that it will not fund smartcard ticketing systems that are not ITSO compliant. 2.2 However, this is, in many ways, negative. There does not appear to be any strategy to encourage development of integrated ticketing—this is left to PTA/Es and operators. However, bus operators are still more concerned with maximising market share than with increasing the overall market for public transport through better integration.

TheUse ofSmartcardTechnologies

Q3. Is the industry taking up modern smartcard technologies adequately and appropriately?

3.1 A number of Authorities started work on adopting smartcard ticketing technology in the early 1990s, an example being TfLs Oyster card system which was launched in 1998. 3.2 It was quickly recognised that interoperability of ticketing schemes between authorities, operators, transport modes and with other applications was essential and ITSO was established as a consequence in 1998. ITSO is the most comprehensive and secure ticketing interoperability ticketing standard in the world. However, with the beneﬁt of hindsight it took too long to develop and did not involve industry suppliers early enough in its development. The outcome is that there have been too many latent technical issues which have delayed its implementation and wider adoption. During the development of ITSO those authorities who were contemplating the introduction of smartcard ticketing decided correctly to defer its introduction Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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until the final specification of ITSO was published. The cost of migrating a non or partial ITSO system to full ITSO certification is substantial, as TfL has found. Those authorities which had an existing smartcard system essentially required funding support from DfT to migrate to ITSO compliance. 3.3 The extent of the technical modifications since the final ITSO specification was published in March 2003 has caused a number of authorities to defer a decision on adopting ITSO until they see it operating successfully on more than the current handful of individual bus routes. 3.4 The only major smartcard ticketing systems which have proceeded since ITSO was launched have been in Scotland and Wales where the funding has been provided by the Scottish Executive and the Welsh Assembly respectively. Thus the industry is not currently taking up smartcard ticketing technology adequately because it recognises the inherent risk. Scotland and Wales are proceeding because the risk has been minimised by the provision of full funding. 3.5 Most authorities would like to see ITSO systems operating successfully on diVerent bus routes involving multiple bus operators, across boundaries and ideally on multimodal transport before they will regard the risks to be minimal. One solution would be for central government to fully fund new ticketing systems as in the case of Scotland and Wales.

Q4. Does the ITSO system cater for the needs of all passengers and travel providers?

4.1 ITSO has been designed to provide interoperability across ticket types for diVerent modes of transport and to allow multiple applications to co-exist including multiple purses. From a technical perspective ITSO does provide passengers with a secure multiple choice smartcard and scope to use other media, for example, mobile phones. 4.2 As there are no ITSO systems currently operating in UK on a major scale involving multimodal travel across ticketing authority boundaries there are still some operational unknowns. 4.3 Some bus operators have expressed concerns about the level of ITSO licence fees and charges. 4.4 ITSO per se does not solve many of the practical issues of using a smartcard or a mobile phone for ticketing. For example, should passengers be asked to validate their journey when they get on and oV a bus (check in/check out) as occurs in closed rail systems; what time period should be allowed for passengers to interchange between routes and modes when using one ticket type. ITSO does provide the technical means to solve these policy options. 4.5 A stored value ticketing solution is probably the simplest approach to interoperability for the vast range of tickets on sale today in UK. The use of ITSO and the ticketing system software enables the calculation of “the fairest fare” based on actual usage eg it emulates a single trip, a daily or weekly ticket based on the journeys undertaken by the passenger. A passenger buying a weekly or monthly ticket in advance and then unable to use the full value due to changes in work requirements or illness would only pay for the journeys actually made.

Q5. What can be learned from the experience of areas such as London and Scotland where smartcard technology is already in place?

5.1 The most obvious and least practised lesson is to develop standards for interoperability before introducing new technology. The problem is that technology is commercially driven and normally develops much faster than standards which are generally government driven and funded. Where the need for standards has been legislated by governments in advance, such as in mobile phones the resulting interoperability has allowed almost three billion mobile phone users to operate across over 170 countries today. 5.2 The second lesson is that there needs to be far more consultation both between transport authorities and with suppliers before introducing major new technology schemes. 5.3 Smartcard ticketing interoperability would have been achieved far earlier in the UK if each tender for a new ticketing system had mandated the requirement for open system interfaces (standards) and included a 10–15% retention amount which would be held and only paid if interoperability is fully achieved with other systems within a given time period. Industry is far more adept at achieving interoperability if there is a financial incentive. 5.4 Finally, simplified flat fares in London have been the key to the successful adoption of Oyster card and have helped to speed up journeys by taking cash fares oV buses in central London. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 78 Transport Committee: Evidence

RevenueProtection andThePowers ofTicketInspectors GMPTA/E has no comments to oVer on Q6–Q9.

Q6. Is the legal framework within which ticket inspectors’ function appropriate?

Q7. What appeal mechanisms exist for passengers and are they adequate?

Q8. Are the rights of passengers and the powers of ticket inspectors well-balanced?

Q9. Do operators of public transport take adequate measures to protect fares revenue?

ConcessionaryFares—TheRightStrategy?

Q10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? 10.1 The Government’s decisions to firstly introduce a local free bus fares scheme for pensioners and disabled people from April 2006 and then, from April 2008, to make this available on a national basis has been widely welcomed by concessionaires. In Greater Manchester we have taken the decision to also make free travel available on local tram and rail services. This scheme is undoubtedly leading to greater use of public transport and a reduction in car use, particularly among younger pensioners amongst whom car ownership and car use has been rising over recent decades. The local scheme is simple and well understood by users. The extension of the scheme next year will provide additional benefits and will be particularly well received by those who need to make cross boundary journeys on a regular basis or who are visiting other parts of the country. 10.2 However, the 2008 scheme presents huge financial risks to authorities that have high visitor numbers such as Greater Manchester. The Concessionary Bus Travel Bill requires the authority in which a travel concession journey begins to reimburse the bus operator. This means that whilst the large number of visitors who travel in to Greater Manchester by bus will have their incoming journey reimbursed by their originating authority, GMPTA will have to pay for the return journey and any journeys that take place within Greater Manchester during the period of that visit. Similarly, large numbers of visitors will continue to travel to Greater Manchester by car or by train and once within the county boundary they will be able to travel by bus. In such circumstances, the journey will have originated within Greater Manchester and it will fall to GMPTA to reimburse the operator. 10.3 There is also a contrast between the national scheme which is available for pensioners and disabled people and the lack of any equivalent scheme for children and other potentially vulnerable groups. In Greater Manchester the recent decision of the Government assessor to accept the arguments of the local bus operators that they should receive additional re imbursement for participating in the national scheme has meant that, in order to balance its budget, the PTA has reluctantly had to increase the child concessionary fare from 50 pence to 70 pence. In addition we, along with other transport authorities, do not have the power to grant concessions to unemployed people or others on low income. It should also be noted that many authorities, including all our neighbours, oVer a significantly less generous scheme for children than Greater Manchester with half fare schemes being commonplace. In Greater Manchester we estimate that a half fare scheme would mean that the average child fare would increase to 85 pence. 10.3 We would argue that there is a case for reviewing the categories of people who are entitled to concessions and also for considering whether available national resources should be more evenly allocated and enabling local transport authorities to balance the needs of diVerent groups in a more even handed way. Given that children and young people are potentially the public transport users of tomorrow concessions which help to develop the public transport habit could be seen to be a good investment. There is therefore a need for greater clarity about the overall objectives of the Government’s strategy in these terms. If modal shift and promotion of public transport is an objective then some degree of support towards the transport costs of children and young people is likely to deliver positive outcomes.

Q11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? 11.1 Greater Manchester has a history of oVering concessions across all modes of public transport. As mentioned above the recently introduced free scheme is available across the bus, rail and tram networks. We recognise however that not all authorities oVer similar schemes and the oVer to concessionaires on local rail and light rail networks is likely to continue to vary signiﬁcantly across diVerent areas after April 2008. The present problems that arise for pensioners and disabled people making cross boundary bus journeys are likely to be alleviated once the national scheme is introduced next year but anomalies are likely to persist for other groups of concessionaires who are not subject to the national scheme. March 2007 Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

Transport Committee: Evidence Ev 79

Memorandum from London TravelWatch (TPT 09)

IntegratedTransport

1. Is ticketing suYciently integrated across diVerent modes of transport and diVerent geographical areas? In London signiﬁcant progress has been made with integration of multi-trip ticketing, notably through the multi-modal Travelcard. More recently prepayment for individual trips by diVerent modes has become available in the form of Oyster Pay-as-you-go. In other areas, the introduction of PlusBus tickets has extended the scope of through ticketing between rail and bus services. However, this is often still limited to tickets which are bought at rail stations for journeys which involve the use of a bus at the end of a train journey. In many cases it would also be desirable from the passengers’ perspective to be able to purchase a combined bus and rail ticket (or one day Travelcard) on the bus to the station. There is also still much that could be done to make the public more aware of the ability to purchase such through tickets, with their associated beneﬁts. London TravelWatch has recently expressed concern about the length of queues at Underground ticket oYces at major National Rail termini in London (Kings Cross, Euston, Paddington, Victoria, Liverpool Street). Much of this problem stems from rail passengers arriving without tickets that would take them onward via the Underground. In many cases this is because they have not been made aware of the availability at their stations of origin of tickets which include a Travelcard. In the case of some journeys from places outside the former Network SouthEast area, no such through ticket exists. For visitors to London staying for more than one day, it would be helpful if the longer distance train operators (Virgin, Midland Main Line, One, GNER, First Great Western) followed the example of Gatwick Express and sold pre-paid Oyster Pay-as-you-go cards on their trains and at booking oYces. It will be particularly important to resolve this matter before the 2012 Olympics.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? If the Government has such a policy, we are not aware of it, as the current situation is highly reliant on the initiative of individual companies and transport authorities. Any involvement from the Department for Transport is largely reactive in nature, except to the extent that participation in the all-operator National Rail ticketing system is an obligation placed upon all franchised train companies. Indeed, it is a licence condition imposed by the OYce of Rail Regulation on unfranchised operators as well. The Government has only very lately chosen to use its inﬂuence as the franchising authority for the railways to promote the take up of smartcards. Outside Greater London the interpretation by the OYce of Fair Trading of competition law has had an inhibiting impact on the development of integrated ticketing systems. It is diYcult—or there is little incentive—in practice to develop these without co-ordinating fares charged, rendering operators open to the risk of accusations of anti-competitive behaviour (conduct presumed by the law to be contrary to the public interest).

TheUse ofSmartcardTechnologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately? Transport for London’s Oystercard is one of the most extensive and versatile contactless smartcard systems in the world. Its development predated any signiﬁcant interest on the part of the Department for Transport and its regulatory oVshoots in such technology, with the result that—for example—National Rail operators have until recently been under no obligation to participate in it. The rate at which smartcard technology is now taken up further in the public transport sector will be determined by the willingness of the DfT to use its power through the franchising system to require rail companies to do so. To date, with a few notable exceptions, British bus and train companies have been very slow to introduce smartcard ticketing. This is despite its obvious beneﬁts both to passengers (in terms of convenience and a wider range of fares options) and to operators (in terms of reduced costs of fare collection and a clearer knowledge of journey patterns).

4. Does the ITSO system cater for the needs of all passengers and travel providers? Very few ITSO compliant systems are yet operational, so it is too early to say with conﬁdence whether ITSO will provide adequately for the needs both of passengers and operators. The development of Oyster preceded the development of the ITSO speciﬁcations, and there are some technical challenges to be overcome in ensuring that the two are compatible (not least in the area of protecting intellectual property rights). Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 80 Transport Committee: Evidence

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? Transport for London had to design a bespoke system in the absence of a fully-developed and commercially available product. The advent of contactless bank cards and the further development of mobile phone technology are pushing back the boundaries of what it may be possible to achieve (for example the use of e-tickets via mobile phones by Chiltern Railways and Stagecoach’s Megatrain). The key to the success of such initiatives will be the ability to add low value cash transactions such as buying newspapers and snacks, and paying parking fees. The development and start-up costs may be prohibitive for small operators unless they are able to participate in joint industry-wide schemes. The high take-up rate in London has been boosted by the substantial fares savings oVered to passengers willing and able to switch to electronic payment technology. But currently these savings are only available to users travelling on services provided by Transport for London, and they could be withdrawn at any time. Currently, there seems little prospect of their being extended to National Rail passengers when Oyster pay- as-you-go becomes more generally available to them too. It has also been necessary to have a high level of reliability in the cards and the card-reading equipment (to maintain user conﬁdence), a wide network of sales outlets, and a easily-accessible “helpline” to answer queries and resolve diYculties. It is unfortunate that in the case of Transport for London the accuracy of information oVered via the helpline, and the speed at which erroneous transactions are corrected, has been less than ideal, at least in the initial period. The fact that the same Oyster branding has been used both for season tickets and for stored value (Pay-as-you-go) cards has undoubtedly made smartcard ticketing more diYcult for users—and prospective users—to understand, and new entrants may wish to consider whether there would be advantages in keeping these two fare products more visibly distinct.

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors appropriate?

7. What appeal mechanisms exist for passengers and are they adequate?

8. Are the rights of passengers and the powers of ticket inspectors well balanced? The legal framework has two distinct parts, though it is likely that many passengers (and some transport operators’ staV) have only limited awareness of the diVerence between them. On the one hand, there are provisions in the Regulation of Railways Act, the railway companies’ byelaws, and the PCV “Conduct” regulations (applying to buses), which make travel without a valid ticket an oVence, punishable with a fine—but only on conviction in a criminal court. On the other hand, railway companies and organisations providing services under the auspices of Transport for London can (but are not obliged to) charge penalty fares. Despite their title, these fares are not fines, but simply a higher charge levied retrospectively for travel made without a ticket having been purchased in advance. An unpaid penalty fare is a civil debt, recoverable by applying for an order in a civil court. Prosecutions are expensive to bring, and not necessarily easy to secure since it is necessary to prove intent to defraud the operator—whereas the in the case of penalty fares, the simple test of “could the passenger produce a valid ticket when challenged?” applies, and the burden of proof is reversed. Certainly, the police (working in conjunction with ticket inspectors) have found the existence of a penalty fares scheme on London buses a useful means of identifying passengers who have not only neglected to pay for their journeys but who may be committing other misdemeanours as well, such as carrying illegal substances. This facility is not generally available to them on buses elsewhere, because other bus companies do not have similar schemes. It is in the interests of all honest passengers that there should be eVective means of preventing fares evasion, not least because the revenue lost by this means may be reflected in higher charges paid by the rest of the travelling public. For this reason, London TravelWatch’s predecessor did not object when—in the 1980s—British Rail and London Transport first sought and obtained powers to levy penalty fares, provided that suYcient safeguards were put in place to minimise the likelihood of innocent users falling foul of the system. In particular, we argued then (and continue to believe) that all reasonably practicable steps must be taken: (a) to publicise the existence of the penalty fares scheme, and the manner in which it works; (b) to ensure that passengers have a convenient opportunity to pay for their travel before—or at the start of—their journey, and are not at risk of being penalised when no such opportunity is provided; (c) to warn passengers of the fact when they are entering a penalty fare area (eg a platform, train or bus); Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

Transport Committee: Evidence Ev 81

(d) to explain to them why they are being issued with a penalty fare when this happens, and of their right of appeal; (e) to provide an objective, impartial and demonstrably independent system for determining appeals; and (f) to operate the scheme in a consistent manner, so that the same actions by diVerent passengers (or by the same passenger on diVerent occasions) have the same consequences. Our caseload suggests that none of these conditions is invariably met, and that much more could be done to educate passengers about the existence and operation of penalty fare schemes, both in general and at the time they are issued with penalty fares. The fact that not all transport operators choose to have such schemes at all, and that even where they do not all ticket inspectors are empowered to issue penalty fares under them, undoubtedly creates confusion—because the same action on the part of a passenger will have a diVerent outcome depending on where and by whom the ticket (if any) is inspected. As with the enforcement of parking controls, we believe that it is often diYcult for staV “on the ground” to be expected (and seen) to exercise discretion in a manner which is demonstrably fair, so we recognise that it may be better for flexibility to be exercised via an appeals system. But we have three main criticisms of the manner in which they currently operate. First, transport operators are perceived to be judges in their own cause. It was only after penalty fares had existed for more than a decade that Transport for London was finally persuaded to set up an independent appeals body (whose members are nominated by London TravelWatch—an arrangement which now works well). But those National Rail operators who have penalty fare schemes use what are eVectively in-house appeals services, since they are operated from railway premises by railway employees, and the guidelines under which they work are not published. Their communications are frequently peremptory and give little or no indication of the grounds on which their rulings are based. The manner in which some of them work (most notably the self-styled “Independent Penalty Fares Appeals Service”) gives rise to frequent criticism in our casework, not least because what is eVectively the same organisation also operates as a debt-collection agency (“Revenue Protection Support Services”) outside the scope of the penalty fares regulations, and thus beyond the supervisory reach of the Department for Transport. Second, the simple test of fact which is used to determine whether a penalty fare is due can sometimes be applied in a heavy-handed and inflexible manner which alienates honest passengers who have innocently fallen foul of the system. This applies, for example, to season ticket holders who have neglected to bring their tickets with them on a particular trip but can prove afterwards that they did hold a ticket which was valid for the journey. It also applies to passengers with Oyster Pay-as-you-go smartcards, which are valid for travel on some National Rail routes in London, who wrongly assume that they are therefore valid on any route. To issue (or uphold) penalty fares in such circumstances—particularly on the first occasion—is manifestly unfair. Third, the distinction between the criminal and civil law is not suYciently clear cut. A passenger cannot be both prosecuted and charged a penalty fare for the same unpaid journey. An unpaid penalty fare is a civil debt. But if a passenger’s appeal against a penalty fare is unsuccessful, the penalty fare may then be deemed to have been the fare due, and failure to pay it can be construed as intention to travel without payment, resulting in a threat of prosecution. London TravelWatch is not opposed to penalty fares in principle. But it does believe that the manner in which they are applied in practice can sometimes raise legitimate concerns about whether the principles of natural justice are being observed. Previous reviews by the former Rail Regulator and Strategic Rail Authority did not, in our view, seek relevant evidence on, or take suYcient account of, these weaknesses. We would welcome a more searching inquiry into the subject.

9. Do operators of public transport take adequate measures to protect fares revenue? We have already argued that it is in the interests of honest passengers that all fares due should be collected. We have welcomed the introduction of automatic ticket gates at stations (including virtually all of those on the Underground), which make it more diYcult to evade payment. Other changes such as ﬂat-fare systems on buses, and free travel for children and concessionary pass holders, have reduced the scope for (and scale of) non- or under-payment for travel. But some other recent developments have had the opposite eVect, such as multi-door boarding on articulated buses. And we are still surprised that it is possible to travel freely on most National Rail trains in London (other than to or from the largest stations) at little or no real risk of being challenged to produce a ticket. We are aware that most passengers are honest, and that the spread of pre-paid tickets (such as bus passes and Travelcards) means that it is increasingly likely that the costs of selling fares for individual journeys will exceed the revenue collected at less-busy times. Nevertheless, the fact that it is perceived to be possible to travel unpaid adds to the belief that operators are uninterested in maintaining the security of their premises and vehicles generally, and thus reinforces widespread public anxiety about the risk of crime and disorder on public transport systems. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 82 Transport Committee: Evidence

ConcessionaryFares—theRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? The scheme proposed by the Government for introduction in 2008 is still very rough at the edges, and we believe that there need to be significant changes if it is fully to meet the needs of those it is intended to benefit. On 16 November 2006 the Chairman of London TravelWatch wrote to Gillian Merron MP, Parliamentary Under Secretary of State, in the following terms: “We have serious concerns about the proposed Bill to implement a concessionary fares scheme giving free travel to people with disabilities and those over 60 on the English local bus network. Whilst we welcome this, we are very concerned that it is too narrowly focused on the bus as a mode of transport, rather than on the travel needs of individual users.” “Currently the proposal would exclude the use of any concessionary bus pass on trams and other forms of transport. Whilst we accept that you propose to give discretion to local authorities to include other modes in their concessionary fares schemes; in practice this will probably only happen in a very piecemeal fashion. This will result in confusion as to where and when such passes may be used, and discrimination against those persons who because of the nature of their location or disability sometimes cannot use buses.” “For example, in our area Croydon Tramlink is regarded as part of the bus network. This is because when it was constructed it replaced a significant number of local bus services which were abandoned, curtailed or reduced in frequency. I realise that you, in conjunction with London Local Authorities, intend to preserve the benefits currently available under the Freedom Pass. However, in the case of many Surrey residents who view Croydon as their local shopping centre, their pass will be valid on the feeder bus to the tram interchange but not on the tram for the major part of their journey. In other cases it may be that community transport or dial-a-ride services are more appropriate, either because local bus services do not exist, or the local bus stop is too far away for them to walk, or the bus is not physically accessible—whereas virtually all tram and light rail systems are fully accessible. Under the new scheme it would be very odd that some people could use the tram free while others who live a few yards down the same road could not.” “Can I urge you to consider revising your proposal, to widen the scope of the concessionary fares scheme to include trams or similar quasi-bus transport, as well as buses themselves? If you would like to meet to discuss this further I would welcome the opportunity.” The Government’s concessionary fares strategy is also deficient in that it only applies to people over 60 and those with disabilities (and to those categories of railcard which have statutory protection). There is no discernable strategy for targeting other potential beneficiaries such as children, students in full time higher education or jobseekers. Any initiatives to assist these groups have been largely left to local decision makers, either in local government or the transport industry itself. The cost of fares for families travelling together by public transport can be very high if child fares are only 75 or 50% of the cost of an adult fare, and will exceed the perceived the costs of car (or even taxi) travel for a similar journey. This is particularly important for low income families. It is noteworthy that in a number of schemes around Britain (such as park and ride in Salisbury and Cambridge, and the Mayor of London’s free travel scheme for accompanied under-11s) significant modal shift has been achieved from car to public transport where accompanied children travel free, as this has reduced the overall cost of travel by public transport for the family group. The availability of free or reduced- cost home to school or college transport also has a significant impact on the ability of children from low income families to access education facilities sited too far from their homes to be within reasonable walking or cycling distance. However, there are a number of lessons to be learnt from the London experience of free travel on buses for under 16s. The availability of such a concession can also have the eVect of attracting children to use public transport for short journeys who had previously walked or cycled, as well as those who had previously been taken by car. Some will take advantage of it to make unnecessarily short hops or, conversely, to travel continuously from end to end of a route. There must be robust procedures in place to ensure that the privilege of free or reduced cost travel is not abused, and can be withdrawn as a penalty for inappropriate behaviour.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? Unlike most other local government services, concessionary fares are really a universal beneﬁt which is unrelated to the locality, as has been recognised in Wales and Scotland. While it may be convenient to use local authorities as agents for issuing passes, it makes little sense for each authority to be negotiating separate settlement arrangements with operators, or devising not-always-consistent criteria governing eligibility on grounds of disability (or entitlement to concessionary travel for escorts). Once all authorities’ schemes are required to be (a) issued free to users, (b) valid for free travel at the point of use countrywide, Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

Transport Committee: Evidence Ev 83

and (c) honoured on all local buses for the same minimum hours, there is little scope for local variation. Where this still exists, eg in terms of additional hours and/or modes of validity, this is likely to cause confusion and argument when one authority’s holders try to use them elsewhere (eg London Freedom Pass users making local rail or metro journeys outside London because they are entitled to do so within it). There are many localities—though not in London—where some public transport links are provided only by rail or ferry, not by bus. And a bus-only pass is of little or no use to passengers whose disabilities prevent them from travelling on mainstream public transport vehicles and who are therefore restricted to door-to- door services such as dial-a-ride or taxis. We would therefore welcome the maximum practicable consistency in the times of operation of concessionary fares schemes and the modes of transport which they cover, provided that this is achieved through levelling-up to the standards of the best and not by depriving existing holders of beneﬁts they currently enjoy. March 2007

Supplementary memorandum from London TravelWatch (TPT 09a)

IntegratedTransport

1. Is ticketing suYciently integrated across diVerent modes of transport and diVerent geographical areas? In our earlier written statement we said that “London TravelWatch has recently expressed concern about the length of queues at Underground ticket oYces at major National Rail termini in London (Kings Cross, Euston, Paddington, Victoria, Liverpool Street). Much of this problem stems from rail passengers arriving without tickets that would take them onward via the Underground. In many cases this is because they have not been made aware of the availability at their stations of origin of tickets which include a Travelcard. In the case of some journeys from places outside the former Network SouthEast area, no such through ticket exists. For visitors to London staying for more than one day, it would be helpful if the longer distance train operators (Virgin, Midland Main Line, One, GNER, First Great Western) followed the example of Gatwick Express and sold pre-paid Oyster Pay-As-You-Go (PAYG) cards on their trains and at booking oYces. It will be particularly important to resolve this matter before the 2012 Olympics”. We would advise the Select Committee that whilst some eVorts have been made to resolve this situation, at Kings Cross St Pancras the problem has got substantially worse since the Eurostar and transfer to St. Pancras International, particularly at London Underground’s western ticket hall.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? Since we submitted our evidence to the committee much of what we said is likely to have been or will be overtaken by events. Firstly, that the government has made mention of ticketing systems within the High Level Output Statement and in the Local Transport Bill there is also a commitment to review a number of competition law applications in relation to the bus network.

TheUse ofSmartcardTechnologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately? Transport for London are now trialling adding Oystercard to mobile phone applications.

4. Does the ITSO system cater for the needs of all passengers and travel providers? No further comment.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? The high take-up rate of Oyster in London has been boosted by the substantial fares savings oVered to passengers willing and able to switch to electronic payment technology. But currently these savings are only available to users travelling on services provided by Transport for London, and they could be withdrawn at any time. Currently, there seems little prospect of their being extended to National Rail passengers when Oyster Pay-As-You-Go becomes more generally available to them too. There have been a number of extensions to Pay-As-You-Go on the National Rail network in recent months. However, Train Operators continue to maintain the position that when Pay-As-You-Go is extended throughout London that they will Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 84 Transport Committee: Evidence

not oVer any discounts over the cash fare. This is likely to lead to confusion and dissatisfaction amongst passengers, especially when some Train Operating Companies are already oVering discounts over cash fares on some of their services. In addition, we still have concerns about the impact of the Governments’ requirement in Train Operators’ franchises to the ITSO smartcard such that within London, operators such as South West Trains, although they are committed to accepting Oyster, are refusing to contemplate selling Oyster at their stations. Again this is likely to lead to confusion and dissatisfaction amongst passengers.

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors appropriate?

7. What appeal mechanisms exist for passengers and are they adequate?

8. Are the rights of passengers and the powers of ticket inspectors well balanced? We continue to press the Department for Transport to review the Penalty Fares appeals criteria and hope for their agreement to do this shortly

9. Do operators of public transport take adequate measures to protect fares revenue? No further comments to add.

ConcessionaryFares—theRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? We continue to have concerns about the Government’s concessionary fares strategy, particularly their reluctance to include other modes of transport such as Trams and Community Transport which provide services equivalent to local bus services.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? No further comments to add. December 2007

Memorandum from Passenger Transport Executive Group (pteg) (TPT 10)

Introduction pteg represents the six English PTEs which plan, provide, procure and promote public transport in six of the largest conurbations outside London. Strathclyde Partnership for Transport and Transport for London are associate members.

IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? Tickets which are available across the modes and across operators are a cornerstone of any truly integrated public transport system. PTEs initiate, administer, promote and provide a range of such tickets. Many of these schemes are successful and make a considerable contribution to encouraging the use of public transport. For example, last year in Greater Manchester, one in 12 bus journeys (19 million) were made using multi-operator and multi-modal integrated tickets, and over 900,000 multi-modal “Metrocard” season tickets were sold in West Yorkshire. Market research undertaken in preparing West Yorkshire PTE’s bus strategy found that ticketing— particularly around simplicity and value for money—were one of four principal areas of concern for bus passengers. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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However, ticketing integration in the PTE areas falls well short of that achieved in London where the Travelcard provides easy access to the bus, tube, light and heavy rail network, and the Oystercard system facilitates easy payment and automatically selects the cheapest way of buying travel for the pay-as-you-go user (although yet to be fully extended to heavy rail). In the PTE areas bus deregulation makes it impossible to replicate what London has achieved on integrated ticketing, and it makes it extremely diYcult to provide the kind of competitive and comprehensive integrated ticketing that the citizens of most other European city regions take for granted. For example only 40% of passengers surveyed in West Yorkshire were confident that they had the right (ie best value) ticket for their bus journey. Confidence in what ticket to buy was much lower amongst non-users. The only group that expressed confidence in having the right ticket was concessionary travellers. 85% of public transport trips in PTE areas are made by bus and bus service provision is largely a free market but with provision characterised by large, near-monopolies operated by combinations of the five biggest UK transport operators punctuated by numerous smaller local operators. With operators free to set their own fares and to change them at will, multi-operator tickets require all those operators to be bought into the scheme. Those tickets can—and are—undercut by operators promoting their own single-operator schemes, creating a very complex and unsatisfactory ticketing structure. For example in West Yorkshire the number of each type of operator only tickets are:

Day 5 day Week Month Term 3 month 6 month Year Total 37 1 19 17 3 2 2 7 88

PTE attempts to develop and promote multi-modal and multi-operator schemes are often frustrated by operators who focus on their own schemes in order to protect their own market share. For example, In May 2004 major bus operators in West Yorkshire gave an undertaking to the PTE that they would progress the introduction of “on bus” sales of the multi-modal, multi-operator, “DayRover” tickets (equivalent to the London one day Travelcard). This has not occurred however, and the operators continue to promote their own tickets which are only valid on their services. Another example can be found in Merseyside. In March 2006 the cost of Merseytravel’s multi-operator Bus Saver travelcard was £13.50 compared with £11 for the First Group adult weekly or £8.50 for the Stagecoach adult weekly.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? Outside London there is no overall strategy for ensuring the integration of public transport ticketing throughout the rest of England. Two initiatives could help in the development of such a strategy. Firstly, greater regulation of bus services and secondly, new technologies—and in particular smartcards (see response to Q3–6). On the former—if the Government’s bus proposals (set out in Putting Passengers First) were to achieve their objective of making the introduction of quality contracts “more realistic” then it would be possible for PTEs and local authorities (where there is no PTE) to specify competitive and comprehensive multi-modal ticketing as part of the franchise contract. This is one of the many advantages of Quality Contracts although not an issue that Putting Passengers First considers, given its near exclusive concentration on performance and reliability issues. Although performance and reliability are of major importance in attracting passengers to the bus—rapid increases in the cost of oV-peak bus travel is a major factor in the continuing decline in the number of fare-paying passengers in PTE areas. We believe that the ability to develop soundly based and aVordable integrated strategies for fares and ticketing are an important beneﬁt to be gained from franchising of local networks.

TheUse ofSmartcardTechnologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately?

4. Does the ITSO system cater for the needs of all passengers and travel providers?

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? Smartcards oVer signiﬁcant beneﬁts. These include: ease and convenience of use for passengers; reduced fraud; better data about public transport use and lower costs. There is also the potential for the public transport smartcard to be the basis for wider “e-purse” add ons—as has been achieved with the Octopus card in Hong Kong, and/or “civic” add ons—for example as a wider concessionary card for particular groups (such as younger or older people). Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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Ensuring that all public transport smartcards are ITSO compliant will help ensure inter-operability and reduce the costs, complexities and limitations of adopting diVerent smartcard standards. The ITSO specification allows schemes to select the necessary equipment and back-oYce from a range of suppliers, rather than being tied to a bespoke system. The ITSO specification also provides a framework and security environment for the development of a wide range of tickets and passes to meet the needs of passengers and travel providers. The experience in London and Scotland on smartcards has so far been positive. In the rest of the county progress has not been as rapid. The reasons for this are that Transport for London had both the resources and control over the Underground and bus system which made the introduction of Oystercard possible. In Scotland the Scottish Executive is fully funding the Scottish Smartcard. In England outside London none of these conditions are replicated. The ‘Yorcard’ experience demonstrates the diYculties involved in implementing a smartcard scheme in England outside London. The Yorcard project aimed to provide a multi-modal, multi-operator ITSO smartcard covering all of South and West Yorkshire—with over a million smartcards in circulation. To make the scheme work in a deregulated environment the scheme required both the active support of operators and a grant from the DfT. The scheme was approved as a Major LTP scheme by the DfT in December 2003. However, since then the major bus operators have constantly disputed the commercial benefits of the scheme to them. Given that the PTEs have no ability to impose the scheme the project has been reduced to a pilot in South Yorkshire. The pilot covers 200 buses, seven rail stations and 30,000 cards and is designed to demonstrate to the operators the benefits of Yorcard. Provisional approval for this pilot was agreed in 2005. Since then operator concerns about the scheme have meant that it has taken a further year to get agreement on the specification of the scheme—with a supplier finally selected in March 2006. PTEs believe that the industry needs to be more flexible in its thinking about the opportunities (including for cash-flow and innovative pricing structures) that smartcard ticketing oVers, as well as the value of customer information through data-mining.

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate?

7. What appeal mechanisms exist for passengers, and are they adequate?

8. Are the rights of passengers and the powers of ticket inspectors well-balanced?

9. Do operators of public transport take adequate measures to protect fares revenue? No response.

ConcessionaryFares—theRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? Free oV-peak concessionary bus travel for older and disabled people is popular and has signiﬁcant social inclusion beneﬁts. Prior to the scheme’s introduction PTEs were already supporting schemes more extensive than the legal minimum, so pteg has welcomed the introduction of the free local scheme and the 2008 free national scheme. However, the way in which the scheme is currently funded and administered by the Government is leading to unintended consequences—which threaten to worsen over time. There is a pressing need for the Government to establish a clearer national framework for the planning, funding and administration of the scheme if these unintended and undesirable consequences are to be mitigated. The key challenges in implementing this policy (which is expected to cost well in excess of £1 billion in England alone by 2008/9) are:

(a) Ensuring the funding follows the passenger Funding for the scheme is distributed by Government on the basis of standard government formulae. This means that a proportion of funding for the English scheme goes to the Scottish Executive (even though their scheme has been running since September 2002 and is fully funded by the Scottish Executive), to the Welsh Assembly and to the Scilly Islands (which has no bus service). The formulae also does not take account of the diVering levels of bus use across English local authority areas—this can leave our areas at a disadvantage (as levels of bus use are higher) and led to Tyne and Wear PTE having to make budget cuts of £3.4 million in 2006–7 to make up for the eVects of under-funding due to the formulae funding allocation. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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The funding allocation problems can be exacerbated in PTE area as the funding for the scheme goes to their constituent local District Councils who are under no obligation to pass on this funding to the PTEs (who have the legal duty to provide and fund the CT scheme). Further problems have been caused by a series of orchestrated appeals by operators against the way in which they are reimbursed for the scheme. Appeals against the PTEs for the current ﬁnancial year (2006–07) will require additional payments by PTEs to operators of more than £10 million. Quality Contracts would dramatically simplify the complexities of funding the CT scheme fairly and eYciently. Under a Quality Contract the requirement for the free concessionary fares scheme would be a condition of the contract and franchise bidders would factor that into their bids. A further simpliﬁcation would be to route funding for the scheme direct to the PTEs rather than via the Districts.

(b) Coping with demand Take-up of the scheme has been in excess of expectations in Scotland and the signs are that in England take-up is also likely to be extensive. For example all PTE areas who previously had flat fare concessionary schemes are reporting 20%–30% increases in use, and this may rise further as pass-holders gain a better understanding of the travel opportunities presented by the bus network. When the scheme goes national from April 2008 the local authority where the concessionary journey is made will have to reimburse the bus operator for that journey. This could leave those areas which are particularly attractive for free travel at a disadvantage. This includes areas which contain seaside resorts, major shopping centres, national parks and other areas of outstanding natural beauty. We doubt whether any formula based on data collected currently will be able to adequately reflect these ‘honey-pot’ characteristics, and believe that specific funding grants based on the costs incurred by individual authorities would be the best way forward.

(c) The perverse incentive to increase fares The concessionary fares scheme has created an incentive for operators to increase oV-peak fares as they are reimbursed for concessionary travel on the basis of a proportion of the oV-peak fare. With fare-paying bus passengers outside London in decline and concessionary use increasing, this incentive becomes greater over time. There is already considerable evidence that oV-peak fares are rising far faster than inﬂation. For example oV-peak fares in PTE areas typically rose by 12% in the year to Summer 2006.

(d) The scope for fraudulent use of passes When the English local scheme becomes an English national scheme, in April 2008, older and disabled people will be able to use bus services anywhere in England. However, given that the national scheme will be administered locally there are currently 320 local authorities issuing over 100 diVerent styles of pass. A few of the pass designs don’t even include a photograph. It is unrealistic to expect bus drivers to be able to recognise and authorise bus travel on the basis of so many diVerent types of pass. There is therefore scope for signiﬁcant fraud—with fake or duplicated permits from one part of the country being used to get free bus travel in another part of the country. Every journey with a false permit would be paid for by the taxpayer via reimbursement to the operators. In the medium term, a family of smartcards could deliver both national entitlement and local enhancements. Scotland is currently introducing such a scheme and London has had a smartcard system in place for more than two years. However, the technical and administrative challenges are such that is not feasible to introduce such a fully operational smartcard system in time for April 2008. An interim solution would be to reissue local cards (with an element of common national design as well as photo id and other security elements) in time for April 2008 with smartcard facilities already included. These could be activated later when the administrative and “back oYce” systems were in place. Given there are about 11 million eligible users, even this interim solution would be a signiﬁcant exercise requiring strong central co-ordination. However, we believe that such an exercise is feasible. PTEs estimate the cost of the interim solution is around £50 million and an early decision is needed soon from the DfT if an interim solution is to be in place by April 2008.

(e) Concessionary travel for non-statutory groups The focus on the provision of improvements in concessions for older and disabled people should not be allowed to obscure the important local beneﬁts oVered in many areas using non-statutory powers, where there is often a sound local case for cheaper fares as part of wider social inclusion policies. PTEs are able to support child fares and those for companions of disabled people unable to travel independently through non-statutory schemes. These powers are widely used, though it is becoming increasingly diYcult to maintain these beneﬁts in the face of spiralling costs for older and disabled people. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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However, PTEs are not allowed to ﬁnancially support concessionary fares for other excluded groups (such as the unemployed). PTEs do not have the “wellbeing” powers that other local authorities have to provide concessionary travel for a wider range of needy groups, such as young people on training schemes and those seeking work. PTEs would welcome the powers to enable such schemes to be used in their areas, where they provide good value for money and are integrated with wider policy objectives.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? Prior to the introduction of the English free local bus scheme some PTEs were already oVering free travel for older and disabled people across all modes (Merseytravel and Centro). With the introduction of the English free local bus scheme other PTEs have extended the scheme to cover light rail (for example on Manchester Metrolink). pteg believes that although there is clearly an argument to be made for the free scheme to be multi-modal throughout the UK—unless the Government is prepared to cover the costs (which appears extremely unlikely) the decision on the extent of the free fare oVer (above and beyond the nationally speciﬁed and funded minimum) should be determined locally. This is because local circumstances vary— including in terms of the nature of their local transport network, their socio-economic make-up and the funding priorities of their locally accountable transport authorities. In an area where there are high concentrations of disadvantaged pensioners and the cost of extending the scheme to the local heavy rail network is aVordable, then this would be (and in our areas often is) a policy which the local PTE or transport authority may decide to adopt. In other areas (such as in the South East) the case for extending the concession to the commuter rail network would be harder to justify. The case for local discretion over the extension of the scheme to other modes is ampliﬁed by the fact that some local transport authorities and PTEs are facing, either now, or in the future—some serious budgetary challenges in funding the existing mandatory bus scheme. If that scheme were to be extended to other modes—without a Government commitment to ensure that scheme was fully funded—then more local transport authorities and PTEs could face a Concessionary Travel funding crisis. And those already in diYculty could be faced with having to make even larger cuts in other programmes and services in order to fund an expanded CT scheme. March 2007

Memorandum from Simon Norton (TPT 11) I am writing to submit evidence into the House of Commons Transport Committee inquiry into ticketing arrangements. I am coordinator of Transport 2000’s local group covering Cambridgeshire, but this evidence is being submitted purely in a personal capacity. This evidence partly overlaps the evidence I gave to the inquiry on fare levels, reﬂecting the substantial overlap between the two issues. However I have tried to restrict the evidence I am giving to the issues described in the terms of reference for the inquiry.

Introduction 1. I welcome the opportunity to submit evidence before this inquiry. In general I support the Government’s stated aims to develop integrated ticketing. I believe, however, that progress towards these aims has been very limited, and I herewith oVer ideas for remedying this. 2. There are several reasons for developing integrated ticketing: 2.1 To avoid penalising passengers who need to change en route. This is because fare levels tend to be tapered, so (say) a two mile bus journey from one’s home to the local station plus a 50 mile train journey would cost significantly more than a 52 mile journey by a single mode. 2.2 To reduce overall time spent in ticket queues at stations and on buses by enabling a single transaction to cover several legs of a journey. 2.3 To minimise the inconvenience to passengers whose routes have been split up or who are making return journeys where each leg involves a diVerent operator. 2.4 To encourage leisure travel in the countryside, which can make a significant contribution to keeping rural public transport going and which typically involves many changes of vehicle en route. 3. However, the practical use of such integrated ticketing as has emerged has been severely restricted for the following reasons: 3.1 Commercial bus operators are actually discouraged from arranging integrated ticketing because of fears, often justified, that they will be seen by the OYce of Fair Trading as being contrary to the interests of competition. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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3.2 While some local authorities have developed integrated tickets covering both supported and commercial bus services in their areas, they are few and far between. Furthermore it is even rarer that they have developed mutual acceptance agreements with their neighbours. 3.3 Publicity about the exact validity of specific integrated tickets is often not available, leaving passengers to just hope that individual bus drivers or train conductors will accept their tickets. 3.4 Quite often bus drivers and rail ticket oYces do not know how to issue certain types of ticket. 3.5 Rarely do rail ticket machines oVer bus add-on options. 4. Here are some examples from my own experience which illustrate the above. 4.1 Shirerider—a Sunday ticket combining train travel with unlimited bus travel in Shropshire, Worcestershire and Herefordshire. I’ve asked for such a ticket five times, and not once have I been given the correct ticket without delay. 4.2 Stagecoach Explorer (issued by Stagecoach in Bedford)—formerly interavailable with Explorers issued by Arriva Shires and Essex, Arriva Fox, and Huntingdon and District, now no longer so. 4.3 Sunday Rover—formerly interavailable between Sunday buses in the whole of the East of England region plus some adjacent counties. Since then, however, many companies have dropped out but no publicity has been issued giving definitive information about which ones still participate—indeed I don’t even know whether the facility still exists. Last time I tried to use it I had diYculty getting the driver to issue one, and several other bus drivers refused to accept it, costing me more than I’d paid for the ticket to start with. I never got a refund. 4.4 Chiltern Railways OV-Peak Saver from Hertford East to Kidderminster—ticket oYce did eventually find out how to issue one, but it took so long that I nearly missed the train after the one I had been aiming for. 4.5 Rail/bus ticket from Finsbury Park via Biggleswade to Potton—ticket oYce denied knowledge of this one and my request for a refund is at the time of writing still pending. 5. The above explains my answers to the first two questions in the terms of reference. I now proceed to answer all those where I wish to oVer evidence. I use the same numbering as in the terms of reference, eg my answer to the question numbered 2 is in paragraph 5.2. 5.1 Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? No 5.2 Does the Government have an adequate strategy for developing the integration of ticketing systems? No 5.3–5 (on smartcards). I have no evidence to oVer on these questions. 5.6 Is the legal framework within which ticket inspectors function appropriate? See answer to 8 below. 5.7 What appeal mechanisms exist for passengers, and are they adequate? Passengers have London Travelwatch, Passenger Focus and the Bus Appeals Body. I have no evidence to oVer on whether they are adequate. 5.8 Are the rights of passengers and the powers of ticket inspectors well balanced? No, passengers need a right not to be penalised when they have diYculty getting the ticket they want or inadvertently breach the conditions of that ticket. The former can apply when 5.8.1 The ticket machine at the relevant station cannot issue the ticket they want (eg when they already have a ticket for part of the journey and need an excess ticket to cover the rest). It might also be the case that passengers are unable to get the ticket they need because it isn’t obvious how to do so (I have no idea whether the machines at Cambridge station will issue Anglia Plus tickets, for example). 5.8.2 The only ticket issuing facilities are separated from their platform by a level crossing which will close when the train they are after is approaching. (This applied in the case a few years ago when a couple of girls were run over by a train at Elsenham station.) 5.8.3 The ticket queue is unexpectedly long. 5.8.4 The bus that brings them to the station is running late or makes a very tight connection with the relevant train. 5.9 Do operators of public transport take adequate measures to protect fares revenue? It should be a commercial decision for them whether the deployment of more revenue protection oYcers is worthwhile. I do not believe that they should be expected to take extreme measures to ensure 100% compliance at the possible expense of inconvenience to passengers. 5.10 Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? The present scheme in England is inadequate because support is only automatically given for travel within one’s home district, which may not cover all one’s essential travel needs. The scheme that will come into force in 2008 will be much better. However I would like to draw attention to one possible problem. Is there a danger that cash strapped local Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 90 Transport Committee: Evidence

authorities, especially in unitary areas, might cut local bus services in order to save on the subsidies they will be providing to concessionary pass holders? This should be considered before the Government makes any decisions on local government reorganisation or finance. The significance of unitary status is that it means that the same tier of government will be supporting concessionary pass holders as will be deciding on service levels for supported bus services. 5.11 Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? I believe that concessionary pass holders living in areas that are very dependent on rail transport should be entitled to free travel on their local lines, but otherwise I accept that it may not be desirable to provide unlimited free travel on trains. The scheme coming into force in 2008 will provide integration across the whole of England outside London; I do not know what provision, if any, will be made for integration between London, the rest of England, Wales, Scotland and Northern Ireland. 6. Let me conclude by making the following recommendations. 6.1 New legislation should be introduced to make it clear that bus operators do have a right to make interavailability agreements provided that these do not exclude any third operator that may provide services which might be covered. 6.2 Local transport authorities should have a duty to extend the validity of bus operators’ integrated tickets to supported services running in the same general area. The same should apply to return tickets where at least one leg is by supported service. 6.3 Local transport authorities should have a duty to include in their timetable publcity full and up to date details of all integrated ticketing schemes covering all or part of their area. Passengers would be able to carry such details with them which would help to avoid disputes with bus drivers and train ticket oYces and conductors. (Note: at present there is not even a duty to provide timetable publicity—I believe there should be, but this is presumably beyond the remit of this inquiry.) 6.4 Rail operators should have a duty to develop integrated ticketing, including interavailability agreements with bus operators who run on parallel routes outside train operating hours or during hours when cheaper tickets are not accepted on trains. 6.5 Rail operators should be given assistance with adapting ticket machines to issue all relevant tickets, as well as with providing for any relevant smartcards. Furthermore, in stations that straddle level crossings, such ticket machines should be available at both sides of the station. 6.6 Penalty fares should not be imposed where the conditions of (e) are not satisfied. Furthermore they should not apply to people who have legitimate reason to access station platforms for purposes other than catching trains. March 2007

Memorandum from Transport Investigations Ltd (TIL) (TPT 12) 1. I am the Managing Director of Transport Investigations Ltd (TIL), a small business providing Revenue Protection support and consultancy services for rail operators. I have over 40 years experience in the rail industry, joining British Rail as a graduate management trainee in 1966, and having held a variety of posts up to privatisation, including responsibility for this activity in the East Midlands and for the former Southern Region and Network SouthEast. Since privatisation in 1996 I have undertaken a variety of consultancy roles, primarily in the fares and ticketing field. This work has included the development of the Oyster smartcard system for use on the national rail network for TfL. TIL’s current main clients are TOCs, DLR and TfL, and we also do work in Ireland. The company has developed unique experience in the revenue protection field, and this covers staV training and supply, support work to combat fare evasion, including debt recovery and prosecution, and the conduct of fraud or ticket-less travel surveys. Although I have expertise across the area the Committee is investigating, I intend to focus my contribution on revenue protection in the rail industry as this is an activity that is often not well understood and where misconceptions can flourish. The purpose of this note is to suggest that the legislative framework is generally adequate for the protection of rail revenue, but that the practices deployed by operators are often less than optimal. In particular there is a fairly widespread failure properly to measure the extent and understand the reasons for fare evasion, and therefore to take appropriate action. There is, on the National Rail network, a common belief in the benefits of closing access at stations and installing automatic ticket gates. Such schemes are costly and often a substitute for more creative strategies that might improve customer service and revenue control. 2. Railways and other public transport modes have traditionally suVered from revenue shrinkage through some failures to collect revenue and fare evasion. The problem is as old as the industry and most approaches to it are not novel. Customers can be described as either motivated to pay or motivated to evade their fares, and then in turn as active or passive in this regard. Someone who is active and motivated to pay will always try to do so, and the ticket sales channels must be optimised to allow that. A passive person will not make that eVort if the purchase of a ticket is made diYcult or the opportunity to pay is not presented. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Likewise a passive person motivated to evade can be deterred by revenue protection measures, but the active fare evader will still persist in most circumstances. Research suggests that 80% of the population believe that travelling without a ticket is a serious oVence and one for which others have to pay indirectly. They therefore fall into the motivated to pay category. For these people the principal need is to oVer eVective ticket purchase facilities and this is the most important feature of any revenue protection policy, with ticket checking resources aimed primarily at engaging with the other 20%. These people tend to believe that fare evasion is a victimless crime. Within this group, those most readily controlled will be the passive fare evaders, and policies need to be directed at them. Identifying and targeting of resources at this group is essential to a cost eVective revenue protection strategy, while customer service beneﬁts, such as ease of access and walk-oV at stations should be preserved for the 80% as far as possible. 3. Fare evasion is nevertheless a potentially increasing problem across the rail network. Recent strong growth in passenger volumes means that the absolute numbers of fare evaders will tend to increase. Although there are few systematic surveys of ticket-less travel available and not many of these are in the public domain, evidence across a variety of systems and operating areas suggest levels of 3—10% of passenger volume could be unpaid at present, varying by location, time of day and journey type. Customer surveys suggest dissatisfaction by fare paying passengers who see evidence of fraudulent and ticket-less travel, sometimes believing it to be a higher than it may be in reality. Die-hard fare evaders are sometimes associated with other anti-social behaviour, which must be discouraged as it often detracts from the quality of the journey for others and may depress genuine travel demand. 4. Fare evasion is the primary form of dishonesty to aVect public transport. The fact that it is widespread is a relevant public interest factor and must take account of the general principles covering prosecution for all oVences of dishonesty. The Law in respect of railway fare evasion means that such oVences involve using a variety of statutory measures that date back to the 1840’s. This legal framework is nevertheless still sound and is based on commonsense values that make it easy to understand and apply. The Regulation of Railways Acts 1840-1873: “railway” extends to all railways constructed under the powers of any Act of Parliament and intended for the conveyance of passengers in or upon carriages drawn or impelled by the power of steam or by any other mechanical power; and the word “company” included the proprietors for the time being of any such railway (Section 21 Railway Regulation Act 1840). References in Sections 54-57 of the British Transport Commission Act 1949 include references to any successor of the British Railways Board.There is often a choice between speciﬁc legislation relating to the form of transport, and proceedings under the Theft Act 1978, or Forgery and Counterfeiting Act 1981. 5. Section 5 of the Regulation of Railways Act 1889 is usually used for oVences of fare evasion on the railways and for travelling/ attempting to travel on a railway without having previously paid the fare and with intent to avoid payment thereof; or having paid the fare for a certain distance, knowingly and wilfully proceeding by train beyond that distance without previously paying the additional fare for the additional distance and with intent to avoid payment thereof; or having failed to pay the fare, giving in reply to a request from an oYcer of a railway company a false name and address. Section 103(a) Railway Clauses Consolidation Act 1845 covers a person refusing to quit a carriage on arrival at the point to which he has paid his fare. Both Section 5 and Section 103(a) are summary only oVences. “Intent to avoid payment” in Section 5 does not mean a dishonest intent, but an intent to avoid payment of the sum actually due. There are provisions in bye-laws which cover fare evasion, but in the vast majority of cases it will be appropriate to use the Section 5 oVence. The Theft Act 1978, especially Sections 2 and 3, can be used where there is evidence of premeditation, or persistence, or repeat oVending, or large loss by the transport authority. Where tickets have been forged, altered or defaced resulting in a charge under the Forgery and Counterfeiting Act 1981, the matter would have to be referred to Crown Prosecution Service or the Rail Company will need to engage appropriate legal representation as these are “either or oVences” for which any person accused may elect to trial by jury. 6. TIL is an Appointed Agency for rail companies to undertake the role of prosecuting oVenders where the allegation is only a summary matter. This practice was started by British Rail and a number of rail companies also undertake this work in their own right, or may employ others as agents on their behalf, and all have the right of audience in the Magistrates Courts. Persons undertaking these activities are obliged to consider the Code for Crown Prosecutors and the right of individuals to bring private prosecutions (with certain exceptions) was included under the Prosecution of OVences Act, which set up the CPS. It will review the case in accordance with the tests contained in the Code for Crown Prosecutors. Should changes be made to the arrangements for the prosecution of summary oVences, it is essential that the powers of railway prosecuting agencies are preserved. The process is eVective and much less costly than taking up the time of police, CPS or other legal staV. Ensuring that it can continue will ease the burden of prosecuting oVences for the CPS at the lower end of the scale and give reassurance to the honest, fare paying public majority that steps are being taken to combat this anti-social activity. Consideration might be given to strengthening legislation as appropriate. 7. Transport legislation includes a series of oVences which will not be prosecuted by the CPS under Section 3(2)(a) Prosecution of OVences Act 1985. These include minor cases of fare evasion under the Public Service Vehicle Regulations and similar Acts and also proceedings under Part II of the Aviation Security Act 1982, all cases of a summary oVence being committed on private property.The principal purposes of transport legislation are to preserve the safety and comfort of passengers and staV; to prevent acts of Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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dishonesty by either passengers or staV. Prosecution for contravention of transport legislation will certainly be in the public interest: where public safety has been placed at risk; where passengers or staV have sustained loss, damage or personal injury; where serious or widespread disruption and inconvenience has been caused to persons using the transport system. A prosecution may not be required where there is a technical breach of the law if:there has been no risk to public safety; and the oVence resulted from a genuine oversight or misunderstanding; and no injury or loss has been sustained by either passengers or staV. A number of such cases, initially reported for prosecution, may in practice be settled out of court with the consequent saving of court time and an individual’s reputation. While existing legislation is suYcient for railway inspectors to be eVective, a significant part of the loss incurred through fare evasion can be attributed to identity theft or personation (usually giving a false name and address). This results in much wasted time and costs coupled with considerable inconvenience and distress to the innocent, which could be avoided if legislation were to permit the photographing of alleged oVenders at the time of detection (beyond what is already available on the widespread CCTV coverage). Legislation does not, understandably, give inspectors many rights to detain people. The ability to check the available databases to confirm identity is also important, and the basic tool here is the Electoral Register. Although there are many not registered to vote, and fare evaders can be uncooperative about proving their identity, as a means of confirming names and addresses this can often be used to protect the innocent. At present transport agencies do not have access to the full register for this purpose, only the edited version oVered for commercial use, despite Government assurances to the contrary. 8. The measurement of the eVectiveness of revenue protection systems is always a diYcult area. As reliable data for most purposes is often scarce to non-existent, much comment on revenue protection is speculative and anecdotal. Reliable evidence available to me comes mainly from urban heavy and light rail networks where there is some systematic study of the problem, but there is little available on rural and intercity networks. Surveys need to be continued on a rolling basis using proper sampling techniques, with results weighted by revenue and fare values, so that a “true” fare evasion rate can be estimated by routes and time periods and trends observed. These should be conducted independently to reflect the revenue protection situation as it is in normal operation, rather than use the in-house staV to measure their own activity, with the inevitable bias and diversion of resource that can result. They can then be used as an ongoing system to prioritise the use of resources and measure the eVectiveness of the system. Monitoring systems can provide new intelligence and some indication of performance at least on a route or area basis. Individual staV performance can be measured by revenue collected and other records of hand-held device use, suitably filtered for actual staV rosters. Feedback to staV on their performance and the results of irregularity reports submitted are seen as essential to encourage motivation. 9. The objective for rail operators is to secure revenue and reduce fare-evasion by all practicable means, up to the point where the overall benefit and/or financial return makes further action inappropriate. The integrity of premium products needs to be protected through eVective on-train ticket inspection. The security and coherence of the rail passenger business can be strengthened through ticket inspection and direct contact with customers. Customers should have the feeling that their honesty and compliance is respected and valued. Season tickets are a particularly important product in the commuter market, as the customer pays money up front and the revenue protection risks of daily payment are much reduced. 10. Present revenue protection methods include: on train inspection by conductors and other on-train staV; automatic ticket gates in use at certain stations; intermittent station controls by revenue protection teams; enforcement action against fraudulent travel by revenue inspectors with follow-up processes; application of Penalty Fares on services in the London and South East area and certain other conurbations and on some (but not all) of the light rail systems. 11. EVective revenue protection processes depend upon: making ticket purchase easy and designing tickets/products which incentivise ticket purchase through the appropriate sales channels; expanding the range of ticket purchase channels beyond the ticket oYce to ticket vending machines and oV-system sales, and especially through the internet; adopting processes which reduce the likelihood of fraudulent activity; recognising the diVering issues associated with short and longer distance journeys; taking actions which discourage ticket-less travel and using enforcement action where necessary to recover revenue and deter those who would commit fraud; monitoring revenue at risk while capturing feedback and system intelligence to continuously improve revenue protection arrangements. Rail operators need to take a more holistic approach to revenue protection, employing a variety of processes, measures and arrangements, tailored to local circumstances and risks, but within a structured framework. 12. DiVering requirements and processes are needed for the control of long and short distance traYc, and thus a need to harmonise and balance systems across stations and trains to protect both customer service standards and revenue. A complete check on all peak short distance flows may not be cost eVective or practicable, and the revenue protection regime needs to reflect that, through the use of suitable deterrents. A Penalty Fares scheme is a suitable deterrent measure in commuter areas where stations are normally staVed or vending machines provided and ticket issue is not oVered on train. Customers are generally familiar with the system and many are committed to some form of long validity term ticket. The purpose of the Penalty is not in fact to penalise but to set out rules and obligations about pre-travel payment and to allow a ticket checking regime based on spot checks. This in turn allows more flexible access arrangements than is possible with conventional closed stations where complete ticket checking is attempted. It further Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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allows Light rail and Commuter services to operate under Driver Only conditions with consequent reliability, cost and performance benefits as there is also no need to resource the train or stations for full ticket checking. As an example of this, surveys conducted in 2002 showed ticket-less travel rates of 15% among local passengers on long distance trains in the Wolverhampton—Coventry corridor compared to 6% on local services. The Centro area Penalty Fares scheme does not apply to longer distance trains, and this tends to make these services more attractive to fare evaders. This evidence suggests that a suitably targeted Penalty Fares regime can halve the fare evasion rate. 13. Proper processes are also required to follow up unpaid fares, via debt collection, or for irregularities to proceed to more serious enforcement such as prosecution under the legislation described. This also requires inspection staV to be trained in PACE and SPOE procedures so that they can collect the proper evidence and it can be suitably presented. Feedback to staV on this is important to improve their performance. All revenue protection back-oYce and debt recovery/prosecution processes and related work can be outsourced with the supplier taking some of the risk, and thus no net additional costs. While there has to be a formal process for appeals on Penalty Fares, derived from the legislation, there is less consistency in the other procedures. There is always a balance to be struck between customer service, deterring genuine fare evasion and maximising revenue. Experience already shows that yield managed train specific tickets generate a large volume of unpaid fares notices when passengers use the wrong train, with potentially adverse customer service consequences. These must also be processed properly. 14. The re-use or re-cycling of open or long-dated tickets is considered to be a significant revenue risk, so the system must ensure they are cancelled. On-train staV must be provided with suitable devices to cancel tickets which carry some information about the individual and date (such equipment is readily available but often not used). Misuse of this kind is otherwise diYcult to detect but some anecdotal evidence for it gathered from informal sources suggests that it may be the most significant risk on longer distance services. Day of travel validity only should apply on tickets for journeys of' c50 miles with exceptions for known shorter distance stay away markets such as airports. This is normal practice on urban systems and throughout the London area. Rail operators can take advantage of the “invisible” security arrangements associated with new ticketing systems, while exploiting new technologies such as Print at Home and Mobile Phone displays with some care. 15. Revenue protection on many longer distance and rural services is left largely to conductors (train managers). Evidence suggests that train conductors may develop their own internal targets or norms for revenue collected and do not breach them. Full ticket checks are often carried out on the first leg of a journey, but can be spasmodic thereafter. Control of the train doors by conductors regularly inhibits serious revenue protection activity, particularly where station stops are frequent, and where such staV are provided on suburban services they do little useful revenue control or customer service work. Situations have also been allowed to develop that are diYcult for on train staV to handle, with heavy flows for short journeys and a lot of revenue between staVed stations is being collected on train. Where ticket oYces and other station- based ticket issue facilities are provided no discounts should be available on train, as this otherwise encourages a “pay-when-challenged” culture. Where Penalty Fares are not in force the rail National Conditions of Carriage address this and standard fares should apply, and the fact they are often not has allowed a situation to develop that can overwhelm on train resources, and lead to lost revenue. 16. One current issue in London is the extension to TOCs of the TfL Oyster Pay-as-you-Go (PAYG) system. One of the primary reasons advanced for their reluctance is a perceived revenue protection risk in an environment with a number of open stations, in contrast to the gated network of the Underground. The problem starts with the TOCs own lack of understanding of their revenue control risks because so little reliable survey work has been undertaken as to the extent and reasons for fare evasion. While there is some evidence from surveys in the inner London area that fare evasion rates can be high, this can be attributed to ticket purchase arrangements and a lax enforcement regime. The reality, as evidence from the existing PAYG operation can confirm, is that the system can improve rather then worsen revenue control because ticket purchase is simplified. While the TOCs have invested in ticket gates at busier stations in the London area this has tended to concentrate resources at those stations and to foster a belief that such equipment is essential to their revenue control strategy. This approach has been encouraged by the DfT in the franchise bidding process, where installation of ticket gates is called for. 17. Some local station controls will assist revenue protection on the national rail network, including the ticket gates at a number of stations, but this will only impact on short distance travel. Ticket gates only protect a minimum fare and can encourage short booking to circumvent them. The technology does not properly address time or specific train restrictions, and does not deal with length of journey, discount entitlement or class of travel. There is a particular need to check discount entitlement, especially Railcards, so supplementary or on train checks are still necessary. Gates do not address the forms of fraud commonly found on longer distance trains such as travel on an incorrect service, railcard misuse, transferred or re-use of tickets, and out-of-class or over-distance travel. Claims that ticket gates improve security and reduce crime and vandalism at stations are unproven. They may displace such activity to outside the paid area or to other stations, and any measured improvement is more likely to be associated with the provision of more visible staV or equipment such as CCTV. Modern ticket styles and time/ train restrictions, not to mention luggage etc, do not fit well with gates, and many tickets remain outside the scope of automatic operation, despite the replacement of on-train issues by the latest mobile machine with magnetic stripe tickets. 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magnetic ticket technology now in use was not designed for national rail revenue control purposes and does not necessarily conduct correct checks on long distance tickets or visually cancel tickets. Manually controlled gates will be much used and come to dominate and undermine the whole control principle. This can already be observed at a number of stations, where the manual gate facility is usually under pressure, is often a cause of poor customer service and provides only a cursory ticket check. 18. As there are no reliable estimates of fare evasion or ticket-less travel, the financial justification for these schemes is not self-evident. Where a proper survey of the level and nature of ticket-less travel has been undertaken, it will be possible better to assess the case for the implementation of any automatic ticket gate schemes, as these represent a substantial investment and have significant ongoing costs. Evidence that such equipment is guaranteed to reduce ticket-less travel is open to debate. It is inappropriate to extrapolate any early trends onto all the station’s revenue to show the assumed benefit from gating. In reality revenue may not in fact change substantially in the longer term, and in a comparison of the revenue trends at gated and un-gated stations it can be diYcult to identify significant diVerences. Much of the revenue generated at these stations is likely to be the mopping up of local fares that are not being adequately controlled on train, and there is no benefit to the longer distance business. Recent surveys in the London area suggest that gates can reduce local ticket-less travel by 50% but do not eliminate it. The near fully gated system on the London Underground still has a residual 3% evasion rate. 19. The successful adaptation of ticket gates to deal eVectively with other ticket media such as mobile phones or paper bar-code recognition is still unproven at this stage, which is a cause of some concern as these are seen as essential developments in distribution that existing and new gating schemes introduced by a number of TOCs may not be equipped to deal with. Alternatively the process of upgrades may prove costly or diYcult to progress. This may inhibit the use of new distribution channels which do not create tickets that conform to current magnetic (or proposed smartcard) standards. Any moves towards more yield management systems that specify which train must be used are not well supported by gate technology or common access control. Some TOCs may be reluctant to handle more customers through manual gates because of ticket medium compatibility problems or the ability of gate software to make correct validity assessments on magnetic tickets. There is likely therefore to be a better case to be made for investment in people on train and improved staV performance than in this sort of equipment. At present there is a tendency among heavy rail operators to invest quite heavily in enforcement through technology that is not necessarily appropriate to their business while neglecting to spend money on staV and their training and development in revenue protection work. This also results in the not unusual spectacle of expensive ticket gates, which cannot be used in unattended or unsupervised mode, left open for lack of staV or inadequately manned by contract personnel. Richard Malins March 2007

Supplementary memorandum from Transport Investigations Ltd (TPT 12a)

RevenueProtection on theRailwayNetwork 1. A starting point for any discussion on this topic should be an estimate of the extent and nature of fare evasion on the railway business, to define the problem before deciding on the measures relevant to solving it. 2. The reality is that there is very little accurate evidence on this subject and the estimates brought before the Committee were more speculative than real. It is my belief that most of the quoted figures in the public domain are based on surveys that are statistically flawed, both in the sampling techniques used and in any weighting (or none) applied to the figures. Some are little more than anecdotal or informed guesswork. Extrapolation of numbers from station based activities can be misleading, while others do not adequately take into account diVerences in fare values and revenue weights for diVerent types of journey. It is generally recognised for example that short journeys tend to be more prone to non-payment, but such figures are then applied across the whole business, particularly to longer distance journeys with higher revenue values. 3. The figures being quoted by ATOC and Passenger Focus, of 5–8% of revenue or £400 million, are estimates without qualification as to how much of this is active fare evasion and how much is unpaid travel caused by ticket retailing failures. There is also likely to be some overstatement due to the lack of revenue value weighting by journey type. My personal estimate, based on such information as is available to me, is that although there are places where fare evasion reaches these levels, that figure is not typical of the network as a whole, while the areas of conspicuous retailing failures are on local services where traYc has outgrown the ability of the ticketing systems to cope. These do not actually account for the bulk of railway revenue. 4. The degree of confusion about the extent of fare evasion is evident from statements by First Group, with the Chairman claiming losses on its FCC rail franchise of £40 million, which represents 1 passenger in 6 not paying a fare, while the TOC’s MD told the Committee the loss was around 5% or £15 million. Claims Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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that have been made for the extra revenue earned from measures such as ticket barriers are not based on any objective assessment of the before and after eVects over a longer time period. Short term revenue changes certainly occur but can lead to overstatement of the long term impact. 5. In my business we have developed a statistically sound methodology to support surveys on fare evasion. While this has been applied in a few cases, in general we have found a lack of interest in the proper measurement of this important topic. Managers have tended to rely in simplistic solutions to undefined problems, and have actually spent large amounts of money, usually on ticket barriers, in the belief that they are a proven generator of additional revenue, while not evaluating alternative options, such as the more intelligent deployment of staV. The station gating agenda has advanced to the point where it appears to be accepted policy by the DfT, most TOC owning groups and consumer bodies. Franchise tenders call for them and bid commitments claim such schemes to be a benefit for passengers. 6. It is my contention that this should be challenged on a number of grounds: that it is not necessarily cost eVective, is often customer unfriendly and that many of the benefits claimed for such equipment are overstated or misapplied. 7. That is not state that gates are inappropriate in all circumstances. The barrier types used in Britain were developed for use on urban networks with high volumes of passengers, mostly unencumbered and familiar with the system, such as London Underground where alternative and adequate methods of control are diYcult to envisage. Those used by Eurostar are entirely diVerent, both in their purpose and method of operation, and would not be suitable for revenue control of high volumes of traYc. They are only used for entry checks and are linked to the seat reservation system. 8. It is reasonable to accept that there are parts of the National Rail network where circumstances akin to LUL exist, with such heavy flows of regular users, that gates are an appropriate form of revenue protection. However there are important contrasts between LUL and the NR system in general. LUL achieves a very high degree of gate compatible tickets (over 99%) such that manual intervention is limited, and the high penetration of Oyster cards in London has made the gates easier and faster to use. In Central London the minimum fare is that most commonly due which improves eVectiveness. 9. At the major stations now gated by TOCs very diVerent circumstances apply. There is high degree of manual intervention due to the many ticket types that are incompatible with barriers, or not correctly interpreted by them. Without further checks only the minimum fare at that station is protected. Also they cannot manage train specific checks, or validate discount entitlement or class of travel. Unlike LUL there is also no proper re-use or pass-back protection, and there is no visual cancellation of tickets. It is therefore quite unrealistic to assume that such equipment will eliminate fare evasion. At best it will help to enforce pre-travel ticket purchase (assuming such facilities are adequate), and support the mopping up of arriving revenue, usually from local services where on train or station based ticket selling is inadequate. Many more users are unfamiliar with gates and are encumbered with luggage so the staV providing assistance can be under continuous pressure. This results in degraded standards of customer service and reduced revenue control. 10. Such information as I have been able to gather suggests that ticket gates at suburban stations are eVective to the extent of halving the fare evasion rate. There are still the problems of inconsistent manning (identified in the Passenger Focus evidence), manual intervention and short tickets or multiple passage. There is also some evidence that this eVectiveness declines with length of journey where the other factors in fare evasion come into play that the gates do not address. It is reasonable to assert therefore that for longer journeys (say of an hour or more) they are largely pointless in revenue protection terms as on-train checks are still needed and will be more eVective. 11. Although, in my own evidence, I agreed that most passengers want to see action on fare evasion and to feel their own honesty in purchasing tickets recognised, I do not believe that ticket barriers enjoy widespread acceptance for this reason. Access to and from trains is restricted, often with the closure of secondary entrances and exits, which extends times, congestion is caused and many customers find them intimidating and diYcult to use. Meeters and greeters and those who may wish to use station facilities are deterred from legitimate use. The overall message is negative and unwelcoming, and one has only to observe the operation of barriers at any major station where there are many irregular and encumbered users to come to this conclusion. 12. Another stated benefit is security. Again this may well be true of the suburban station aZicted with idle youth and vandalism, but that may be as much due to visible staV as the actual equipment. Plainly it cannot be true of stations in general since the majority that have acquired secure station status do not have ticket gates. Also closing oV the platforms at major stations does nothing for security in the other public areas of the station where much of the crime risk still exists. Restricting access to facilities within a paid area to ticket holders makes them less frequented, which may not actually enhance security, and aVects the viability and attraction of trading outlets. 13. Any notion that ticket barriers contribute to wider security concerns, such as the threats of terrorism, can be dispelled when it is recalled that the 7/7 bombers entered the system at Luton, with tickets at a gated station. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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14. Penalty Fares, and the fairness of their application, have featured in evidence given to the Committee, and I do not propose to debate the appeals process. What is being overlooked is the reason that Penalty Fares legislation was introduced in the first place. It was to address the inevitable fact that in busy suburban networks it is impossible to mount fully eVective ticket checks on all journeys, either for reasons of cost or practicability. The original aim was to rely on a managed level of spot checks, with the intelligent deployment of staV that is not predictable to the passenger. The concept has parallels in other areas of life, such as Pay-and-Display parking, and requires reliable ticket retailing opportunities. This would have benefits in terms of operating cost and preserve easy access at stations as far as possible. 15. A consequence of barrier schemes has been that ticket checks are now concentrated at major stations, have become predictable to fare evaders and at least in commuter networks the on-train presence has been scaled back due to the need to man the gatelines. They have also tended to demotivate staV as the variety and initiative of the task has been downgraded, while the remaining mobile staV tend to rely on the assumed eVectiveness of gated stations. Overall therefore it is doubtful whether they are as successful in targeting fare evasion as is commonly supposed, while increasing the level of check on those who pay their fares anyway. 16. The impracticability of mounting full and eVective manual checks at reasonable cost at major stations was noted in evidence. The Penalty Fares regime, as originally conceived, was designed to avoid the need for these since checks, whether at stations or on train, were intended to be on a sample not a blanket basis. The heavy level of resources now deployed at some major stations could certainly be deployed to better eVect in other ways. 17. Some of the London termini, such as Euston, King’s Cross and St Pancras, as at present configured for InterCity trains, are fairly optimally laid out. They allow train specific manual entry checks when required, while preserving a walk-oV facility for arriving passengers when a full on board check has taken place. These sensible arrangements are threatened by proposals for “automated” gatelines that have no logic in revenue protection terms and will cause substantial inconvenience. To impose exit checks with barriers at such stations, where passengers can at present walk oV unimpeded, is a serious loss of an important customer amenity. 18. A number of other principal stations have been extensively renovated to an open layout that is easy for passengers to use and attractive in environmental terms. These too are threatened by barrier proposals that can and should be challenged on revenue protection grounds, and will significantly detract from the value of these stations in terms of facilities and access. If there are fare collection problems on the local services at these stations, they need to be quantified and other solutions are possible. Penalty Fares can sometimes assist. 19. The proliferation of ticketing technology like barriers, which requires significant hardware and software integration to be eVective, will inhibit introduction of new ticket formats or media such as smartcards, print-at-home and mobile phones (see Appendix note). 20. Much of the current drift towards “closing” stations (as opposed to maintaining open access) leads to a situation where they cease to be part of the public realm and are a place where people are processed. The message to customers is authoritarian, in that they can only enter on the operators terms and are not trusted. This is potentially damaging to the railway business, losing a marketing advantage against air travel, while bus and coach users can retain easy access in the public street. It should be noted that nowhere in Europe (Eurostar excepted) are Inter City type passengers processed through ticket gates.

AppendixNote onTicketFormats

Visual ticket inspection requires no more than the proper training of staV and the provision of simple equipment to cancel daily tickets. The latter should include a proper coded marking of tickets, such that the date and place of check can be identiﬁed, thus reminding the customer how it has been used, and allowing checks to be made of refund claims etc. Many operators fail to do this, with staV using a hole punch or pens. Gates require tickets in a predeﬁned format and carrying machine readable codes that must carry suYcient information for validity to be accepted or rejected. As most barrier systems control access to a complete station, validity can only be assessed in relation to any possible journey at that station at the time/ date. A number of ticket and pass types exist on the rail network that are not gate readable or compatible, due to their size or the lack of magnetic or other coding. At barriers these have to be inspected manually. The large format tickets are known as ATB style, similar in some respects to airline tickets and those issued by Eurostar and European railways. They were designed as an inclusive travel and reservation ticket, and carry more printed information than is possible, or legible, on the credit card size ticket. A number of rail sales outlets still have the ticket systems designed to issue this format, although there are now machines that can do something similar on credit card size tickets, usually with a separate reservation ticket. Some outlets have switched over from ATB to credit card size because of the incidence of ticket barriers. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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The gates used on the national rail network, being based on those designed for the London Underground, only work on the credit card size ticket, and can only check fairly basic information from the magnetic stripe. The only gate design for ATB format is that used by Eurostar, which have a quite diVerent function and are much slower, being linked to the train reservation system so they are actually checking each train in. TOC gates cannot do that, so there is no prospect of doing a check at stations related to the train used. We now have Oyster cards in London (and the ITSO problem), mobile phones (barcode scanner needed) and print-at-home (like ticketless airline travel bought via the internet) where 2D barcodes are used. Eurostar and European railways for Inter City travel are moving to the latter in place of the current ATB with magnetic stripe (coding is not just for reading by gates but is to protect against fraudulent ticket production). All this means that while ATB may wither away, other ticket types and media will come along that are not gate compatible, or even if they could be, there is a large system development task to get that to happen. With the multiplicity of uncoordinated gate installations on the TOCs over the past ten years, the evidence suggests that the integration of new ticket media, even if they are technically machine readable, will not easily be achieved. January 2008

Memorandum from Mr Kevin Chapman (TPT 13) 1. I write this submission as a public transport user in the West Midlands conurbation, but I am also a supporter of the sustainable transport group Transport 2000. I do not drive and make the vast majority of journeys over a mile by bus and/or rail. It may be helpful for the committee to have comments regarding ticketing, revenue protection and concessionary fares within the West Midlands. 2. Multi-modal ticketing was introduced by the West Midlands Passenger Transport Executive (now Centro) in the 1970’s, with the introduction of “Travelcard”, valid on bus services operated by WMPTE and the National Bus Company and local British Rail services within the West Midlands County. WMPTE was amongst the first transport organisations in the UK to introduced integrated ticketing, and over the years concessionary travel schemes for school children, students, the disabled and senior citizens have been included within the integrated ticketing scheme. 3. Integrated ticketing in the West Midlands County has survived deregulation of bus services in 1986 and privatisation of the bus and rail industry in the 1990s, although a small number of bus operators do not participate in the scheme (although they do participate in the concessionary scheme). The scheme is now marketed by Centro under the “Network West Midlands” banner. The products include an “nNetwork” ticket (valid on bus, rail and “Midland Metro”), “nBus” (valid on buses) “nTrain” (valid on local rail services) and tickets aimed at the leisure market “nDaytripper”, valid at “oV-peak” times and an oV-peak version of the “nNetwork” ticket. 4. The position within the West Midlands County compares favourably with that outside of the county, within the Shire counties where no integrated tickets can be purchased. It is possible to buy an “nNetwork” ticket for an origin station outside of the West Midlands county. This would allow the purchaser to use connecting bus services within the West Midlands County to complete their journey, but not a bus service to their origin station. 5. The major bus operator in the West Midlands County is Travel West Midlands (the successor to the WMPTE bus operation), who operate 95% of the commercial mileage. This is in contrast to the position in other metropolitan areas where the PTE bus operations were split to enable competition (which has only happened on trunk corridors), but which has resulted in fragmentation of a former unified network between two or three operators. Take up of pre-paid tickets has been much greater within the West Midlands; the vast majority of tickets purchased being those designed and marketed by, and only valid on, Travel West Midlands. The proportion of passengers who pay their fare on the bus is much smaller within the West Midlands than in other parts of the country. 6. It is possible to buy some integrated tickets, such as a one day version of the “nNetwork” ticket on bus. As each of the bus operators use diVerent ticketing systems then a “nNetwork” ticket will look diVerent depending on what operators bus it is purchased on—and it will look similar to the operators own one day ticket (valid on their services only). If the driver or inspector is not aware of the design of ticket then its validity could be questioned, even though it may be perfectly valid for use on the service concerned. 7. The West Midlands does participate in the “PlusBus” scheme, as do other areas in the country. From my travels around the country I would comment that promotion and operation of the “PlusBus” scheme is often poor—there is usually a map at the station showing the validity but there will be no sign on participating bus saying that “PlusBus” tickets are accepted. (Indeed not all operators participate in “PlusBus”.) I often book train travel on-line, utilising TheTrainLine.com website. If you book your ticket via TheTrainline then at the time of writing you will not find reference to fares that include a “PlusBus” Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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element, meaning that in order to make use of these fares you have to go to a station and book in person— and may have to pay as a dearer fare. (This is easy for me to do in the Centro area as most stations are staVed from first to last train, but stations outside the region are either open for a limited time or are unstaVed). 8. Revenue protection is vital, to ensure that fares are collected. The current operator of West Midlands local services, Central Trains, is monitored by Centro to ensure that fare evasion is minimised, and CT can be fined under a performance regime. When Penalty Fares were introduced onto the West Midlands local rail network in the mid 1990s ticket barriers were abolished at main stations within Birmingham City Centre. As a consequence fare evasion shot up—the likelihood of being caught by an Inspector was minimal, especially as Revenue Protection Inspectors were thin on the ground at that time. 9. After much local controversy Central Trains re-introduced ticket barriers at Birmingham New Street station. This was only meant to be done on a “temporary” basis; however the operation of the barriers proved to be so successful at collecting revenue that the New Street barrier has become permanent. 10. However local stations around the region do not have a permanent barrier. Detection of fare evasion is therefore dependent on travelling Revenue Protection Inspectors, or on the conductor going through the train to check tickets. There are diVerent powers between these staV; the conductor cannot issue a Penalty Fare (but will only sell the evader a standard single or return ticket) but a Revenue Protection Inspector can. 11. There is a case for the introduction of “automatic” barriers at staVed stations as used by the London Underground and by some operators in the South East. However, these will not stop evasion on their own— it is possible to jump an automatic barrier so it will continue to be necessary to employ mobile Revenue Protection StaV and target them at trains where fare evasion is common (such as those operating in the evening). If automatic barriers were introduced it would be necessary to reconfigure the layout of stations where at present you actually have to go onto the station platform to access the ticket oYce. 12. In terms of buses Inspectors have a number of other responsibilities—not just revenue protection. These include making decisions on the regulation of services, supervision of drivers and monitoring the punctuality of services. Where Inspectors employed by Travel West Midlands have been working on revenue protection duties they have done so as part of a team, as part of what is termed a “Gateway” check. Sometimes the West Midlands Police provide assistance, although their role is not to check tickets but to provide reassurance to passengers, and to deal with anyone who comes to their attention (eg if they are wanted for a criminal oVence). 13. The “Gateway” checks developed as part of a joint initiative between Travel West Midlands and the West Midlands Police called “Operation Safer Travel. More information can be found on the website www.travelwm.co.uk/ost Essentially the Police Safer Travel Team operate on an “Intelligence” led basis, and will only work in support of a team of Inspectors if there is intelligence of particular problems on that route, such as street crime or anti-social behaviour. There have been letters to the local press though complaining that the Police should not be supporting bus Inspectors and that it should be the bus companies responsibility but the facts speak for themselves; people have been apprehended for serious oVences, or for failing to answer bail at the “Gateway “ checks, passengers value the assurance that is oVered, and as buses provide a service to the community then it is only appropriate that there should be a Police presence around the network (much as there is on the railways with the British Transport Police). 14. The initial responsibility for revenue protection lies with the driver. Buses in the West Midlands operate on the principle of “one man operation”—the driver takes fares, inspects passes and drives the bus. Within the West Midlands Travel West Midlands operate an “exact fare system” (inherited from WMPTE)—other operators give change for cash fares. This again can cause confusion amongst the unfamiliar user, especially if they do not have the correct change. (It is a regular sight on TWM buses to see passengers asking other users for change to pay their fare). 15. Drivers often have to deal with people who will not pay their fare, particularly those who attempt to travel on an out of date ticket or pass. On my regular journeys on the network I have seen drivers sworn at, verbally abused, and intimidated by those who wilfully refuse to pay their fare—even in Birmingham City Centre in the evening peak. Travel West Midlands have explained to me previously that the advice for drivers who are dealing with someone who refuses to pay their fare is to turn the engine oV, park the bus, and not move until the “fare dodger” has left the bus. This of course infuriates other passengers. One thing the driver is advised not to do under any circumstance is to get out his cab and confront the person. This is to avoid any risk to the driver, especially if the “fare dodger” is aggressive or violent. (It is worth noting that a number of the people apprehended by the Police at “Gateway” checks have been caught fare dodging.)

16. There19 have been suggestions locally that conductors20 should return to the buses. The Birmingham Mail recently ran a survey of bus users to identify their key concerns. The survey found that safety and security on the network was a major concern, and out of 1,290 respondents, 53.5% cited it as a major problem. 45% suggested that conductors should return.

19 Birmingham Mail, 8 February 2007. 20 Birmingham Mail, 9 February 2007. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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17. However, we now live in a diVerent age to when conductors were commonplace. If conductors were re-introduced, they would be at risk of anti-social or violent behaviour, or indeed having their takings stolen. In addition, the primary role of a conductor is to collect revenue, not to act as a Police OYcer or PCSO. This view is backed up by the union that represents bus drivers, the TGWU; a spokesman was quoted in the Birmingham Mail as saying:

“I can certainly understand why people want to21 see the return of conductors because they are a reassuring presence and it is useful to have someone in uniform on the bus. But they can add to the problem in other ways, such as if someone wants to have a pop at someone in uniform. What we need is more eVective and visible policing.” 18. Conductors have been introduced on the Midland Metro light rail system, but that was only following the discovery that the self-service ticket machines purchased for the stops were faulty. There have been instances on the Midland Metro where conductors have been the target of anti-social behaviour. 19. There would also be implications for the continued running of some services if conductors were re- introduced. Travel West Midlands employs some 3,300 drivers—adding a conductor to each of their services would eVectively require another 3,300 staV. Given that bus operators are required to operate services on a commercial basis under the Transport Act 1985 (except on those which are supported as socially necessary) compelling bus companies to provide conductors would aVect the viability of services, and could lead to their withdrawal. 20. In terms of concessionary fares, the Centro area has one of the best schemes in the country. This includes discounted tickets for children and students issued by Centro, valid not just for journeys in connection with the school or college curriculum but for journeys at other times as well, and an excellent senior citizens pass. The senior citizens pass allows holders to use any bus, rail or Metro service free of charge in the West Midlands County between 09.30 and 23.30 hours on Mondays—Fridays and from the commencement of service until 23.30 hours on Saturdays, Sundays and Bank Holidays. 21. However, senior citizens who live outside of the West Midlands County do not enjoy the concession for local rail services, and what concessionary fare scheme operates is dependant on the district that you live in. For example in22 the district of Warwick senior citizens over 60 enjoy a pass that allows free bus travel for the whole of Warwickshire after 9.00 a.m.—providing the journey starts or finishes within the County of Warwickshire. (Holders of Centro senior citizens passes would not be able to travel by bus to the County of Warwickshire). By contrast, senior citizens of the district of Lichfield in StaVordshire can have a pass allowing free travel (again for a journey starting or finishing within the boundary of the County

StaVordshire or the City of Stoke-on Trent), but the start time of the pass is 9.30 a.m.23 The website also advises passengers that: “The StaVordshire and Stoke-on-Trent concessionary fares scheme partnership reserve the right to remove peak time free travel if vehicle overcrowding becomes a problem.” 22. The concessionary travel scheme available for the disabled within the West Midlands seems to be much more complex, depending on assessments and whether local authorities are willing to pay for “Extra Plus” tickets that allow eligble holders to travel at peak times, and it may be something that the committee may wish to invite organisations representing the disabled to comment on. 23. In terms of “Smart Card” tickets, Centro did experiment with a Smart Card that replaced the senior citizens pass for holders who lived in Coventry. Whilst this trial proved the beneﬁts of Smart Card ticketing, the actual technology used was found not be reliable and the “Smart” senior citizens passes have been replaced by the old-style tickets. I understand that Centro is keen to introduce Smart Cards and is in discussion with bus and rail operators at the present time. 24 24. The speciﬁcation for the new West Midlands rail franchise, which will take over local services within the West Midlands currently operated by Central Trains, includes a requirement that bidders price a Smart Card ticketing system that is ITSO compliant as part of their bid. 25. I conclude this submission with some recommendations, which the committee may wish to explore further: — The Centro area, and operating areas of other Passenger Transport Executives are extended from their 1974 position to cover “Travel to Work” areas as they exist today, and the validity of their inter-modal tickets are extended accordingly (in the Centro area this would mean extending its boundaries to cover the entire West Midlands region, including such places as Hereford, Worcester, Rugby and StaVord). — All bus operators are required by law to participate in a multi-modal/multi-operator ticketing scheme (this would require amendments to some of the provisions regarding these in the Transport Act 2000.

21 Birmingham Mail, 9 February 2007. 22 http://www.warwickdc.gov.uk/WDC/Transport!and!streets/Public!transport/Fares—x2c—!passes!and!permits/ default.htm—6.3.2007 23 http://www.lichﬁelddc.gov.uk/site/scripts/documents—info.php?documentID%531&pageNumber%2—6.3.2007 24 3Stakeholder Brieﬁng Document, West Midlands Franchise, Daft, October 2006, page 8. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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— PlusBus should be promoted a whole lot better than it is now. It should be available when booking tickets on line, and it should be clear to users where and on what services they can use this ticket. — A Penalty Fare scheme is introduced to cover buses with similar terms to that which operates on the rail network, with non-payment resulting in a criminal prosecution. The penalty fare should be set to a level that would act as a deterrent. — Rail operators should be made to take revenue protection more seriously. Perhaps the standards that Centro have used to make Central Trains raise their performance should be applied across the entire National Rail Network. — It is the job of the Police to deal with anti-social behaviour and crime on the public transport network—not operational staV. There should be more resources made available for visible policing on the bus and rail network, to provide reassurance to passengers and staV, deter crime and apprehend oVenders. — The concessionary fares scheme for senior citizens needs standardisation. The pass should be valid on all rail services within the issuing authorities boundaries, as well as bus journeys that start or end in the issuing authorities boundaries. It is nonsensical that a senior citizen who lives in Stratford can travel on a bus all the way to Birmingham free of charge, but a senior citizen who lives in Birmingham will ﬁnd the validity of their Centro pass will end at the West Midlands County boundary. 26. If the committee requires any clariﬁcation on the issues I have raised please do not hesitate to contact me and I will be happy to oblige. March 2007

Memorandum from TransAction Resources Ltd (TPT 14)

1.ExecutiveSummary The ITSO organisation has developed a standard for interoperable transport ticketing that has been recognised through its adoption as the basis for ISO 24014-1, the new international standard for Integrated Fare Management System architecture. However, the time has come to move from development to implementation in a timely fashion, and this raises the question of funding and the business case. It is extremely diYcult to drive the adoption of new technology if the business case is not suYciently robust. Organisations are reluctant to invest precious funds without some projected return that may be quantified. The ITSO standard includes a stored value e-purse that, if activated, has the potential to deliver a future income stream to ITSO and its members. This revenue may be used to strengthen the business case significantly and to oVset the costs of implementation. It is recommended that a policy be adopted which recognises, and allows for, this future potential in a way that does not detract from the delivery of the ENCTS within the required timeframes. As the e-purse is already in the technology platform there should be no apparent conflict. It will also be critical that a suYciently secure ITSO compliant chip is chosen, unlike the Oyster card and the Scottish Entitlement card, to allow the adequate protection of cardholder funds in the future. The cost of these chips has fallen significantly in recent years and they are now much more aVordable.

2.Introduction TransAction Resources is a specialist consultancy, founded in 1994, which operates in the ﬁeld of electronic payments and loyalty. Our client base consists of large retailers and merchants in many countries and also the Victorian and Federal governments in Australia. We have people based in both Australia and the United Kingdom. Of particular relevance to this inquiry, is our experience gained during work for the Transport Ticketing Authority (TTA), a state Government Business Enterprise which has responsibility for implementing the New Ticketing Solution for trams, buses and trains (both rural and metropolitan) across the state of Victoria. A contactless smartcard, branded “myki”, will be piloted during 2007 and will replace an existing paper ticket system. We have been involved in the development and implementation of a Payments Strategy and a Retail Strategy for the TTA which will contribute to minimising their costs, generating some income, and encouraging take-up and usage by the travelling public. As a consequence of this experience, we have been closely studying the UK transport market, with a speciﬁc focus upon ITSO, its present status, and potential opportunities. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Also in the transport sector, we have done some work in relation to the proposed EU implementation of an interoperable road user charging system that would allow heavy goods vehicles, and later motorists, to travel across the EU Member States using a single electronic “tolling” device. Our work related to the payments and clearing requirements of such a system, and how these might best be implemented.

3.ResponsesToQuestions

3. Is the industry taking up modern smartcard technologies adequately and appropriately? The ITSO organisation has done an excellent job to develop and deliver an interoperable technology standard that has the potential to operate across the UK, and possibly internationally as well. To achieve widespread implementation in a timely manner, however, suYcient funding is required. The UK approach has been to encourage local authorities and transport executives to implement local programmes and to establish their own business case for doing so. The initial costs of implementing a smartcard based transit system are high and economies of scale are reduced if a fragmented approach is taken. Funding is often not available for large scale card issuing, on-vehicle and on-station equipment and its installation, plus associated implementation and transition costs. If a means can be found to generate a future income stream from ITSO transit smartcards, then the business case becomes easier to establish and a projected return on investment may be quantiﬁed. The ITSO technology platform includes a secure e-purse, which can store value and can be used to make payments for travel, and potentially to make payments for other non-transit products and services. Merchants accepting electronic forms of payment such as credit and debit cards pay fees for each transaction. This would allow the ITSO organisation, and its members, to generate a future income stream to oVset the cost of implementation. It is clearly understood that the short term priority will be the delivery of the ENCTS and that other projects must not interfere with, or divert resources from, achieving this goal. However the basic platform for a future e-purse already exists in the ITSO standard and therefore, provided a suYciently secure chip is chosen, there is no need for this future potential to impact upon ENCTS delivery in any way. Indeed, if the organisations charged with implementing ENCTS understand that a future income stream is available to them, they may be encouraged to invest in this project much more readily than if that potential is denied them.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? In addition to the Oyster card in London, and the ITSO smartcard in Scotland, it is also worth considering the Octopus programme in Hong Kong. The Octopus transit smartcard is now also used for non-transit payments and is widely held and used by the travelling public. The Oyster card in London has been successful for TfL as a transit card but they failed in their later attempt to exploit the commercial potential of their e-purse. This was largely due to the fact that the Oyster card makes use of a Mifare 4K chip which is not suYciently secure for a general payments instrument. The announced Barclays project to add an Oyster chip to a Visa contactless payment card is the end result of a decision to select a particular technology platform that was suitable for the transit objectives but limited beyond that scope. At the time that TfL and their partners made that selection, they were not even contemplating any future applications beyond transit. It is also the case that the cost of more secure chips has fallen dramatically in the intervening years so they are now much more aVordable. In Scotland, a concession ITSO-compliant smartcard has been issued, but the required equipment to read and process these cards on board vehicles has not been purchased or installed. Consequently the smartcard beneﬁts have largely not been realised and the concession card is being used as a “ﬂash card” to identify passengers entitled to receive a concession. The Scottish card is also a Mifare 4K card and would not be considered secure enough to implement an e-purse in the future.

OtherIssues It is noteworthy that the International Standards Organisation has adopted the ITSO conceptual framework as the basis for its new standard for Integrated Fare Management System architecture (ISO 24014-1). This ensures that the UK transport system and the ENCTS will be compliant with international standards when selecting ITSO as the platform for future interoperable ticketing systems. This may open up the possibility of pan-European interoperable ticketing in the future which would be in line with current European transport policy. The Calypso transit technology used by many European cities is both ITSO and ISO 24014 compliant. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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4.Recommendations — Adopt a policy that will allow for the future potential of an income stream to be generated from the activation of the e-purse on ITSO cards provided that this does not in any way interfere with, or delay, the required delivery of ENCTS. — Ensure that the card technology platform chosen for the implementation of ENCTS is suYciently secure to adequately protect the funds of the cardholder. — Seek to achieve a long term position whereby the ITSO transit technology platform becomes self- funding to some degree. — Undertake a Requirements Study to evaluate and document the issues and preliminary economics of an implementation of the ITSO e-purse. This study must be structured to ensure no impact upon ENCTS delivery. 7 March 2007

Memorandum from TravelWatch SouthWest (TPT 15) The South West Public Transport Users’ Forum (SWPTUF) was established in 2001 to promote the interests of public transport users in the South West of England government region (comprising the counties of Cornwall, Devon, Dorset, Gloucestershire, Somerset and Wiltshire and the unitary authorities of Bath and North East Somerset, Bournemouth, Bristol, North Somerset, Plymouth, Poole, South Gloucestershire, Swindon and Torbay)—the Forum became a Community Interest Company, limited by guarantee, in August 2005. SWPTUF, which is a social enterprise company, acts as an advocate for passengers to lobby for the improvement of public transport in the region and works closely with the South West Regional Assembly—with the dissolution of the former Rail Passengers Committee for Western England in July 2005, SWPTUF is now the sole representative body for public transport users throughout the South West England region. SWPTUF adopted TravelWatch SouthWest as its trading name in June 2006.

Scope ofMemorandum andRecommendedAction 1. Only the concession fares aspect of the inquiry are addressed. Only points 10 & 11 in the Terms of Reference/Call for Evidence are considered. 2. Point 10. Is the Concessionary Bus Travel Bill adequate? Only if Clause 8 in the Bill, that allows Orders to extend to modes other than bus and Clause 10 that has Orders that could create an UK wide scheme, have those Orders activated quickly. Government is to be congratulated for setting up the framework that could create an “adequate” concession fares scheme. 3. Point 11. Are schemes suYciently integrated across modes and geographic areas? No, the same solution as above is needed. 4. Clause 8 Orders should be used to deliver extension to all local tracked modes but in the interim should be used quickly to create a pilot on the 50 Community Railways; cost estimate £3 to £7.2 million. 5. The “practicalities of mutual recognition, including funding” (Explanatory Notes to the Bill—Note 27) should be addressed positively and urgently to allow Clause 10 Orders to be activated.

ExecutiveSummary 6. Current and post-2008 concession fare schemes are largely UK exchequer funded (Paragraphs 11 to 14). A largely UK funded scheme should oVer broadly similar beneﬁts to residents of and visitors to all four “areas” of the UK. From April 2007 UK residents in Northern Ireland will have UK Exchequer funded “out of area” concession travel in the Republic of Ireland. Other UK citizens will not be allowed concession travel in all parts of UK (15 to 19). An UK wide scheme is needed. 7. In many areas local rail oVers the better or only public transport option (20 to 26). Whilst concessions on local rail are allowed for 46% of the population, examples are given of a full fare 36 minute return rail journey with many options of stay length at the destination but where the free bus alternative is 225 minutes return trip for a 36 minute stay. The local authority concerned makes a 50% “proﬁt” on the concession fares element of its RSG but refuse to spend 4% of that on including local rail. Local tracked modes (27 and 28) are part of concession schemes in some areas but the post-2008 situation will still deny their use to visiting pass holders. An UK wide mode integrated scheme is needed. 8. Clause 10 of the Bill could allow an UK wide scheme but resolution of the “practicalities of mutual recognition, including funding” will be exacerbated by the inclusion/exclusion of diVerent modes in diVerent localities (29 to 34). Clause 8 should be activated to avoid this exacerbation. Processed: 28-03-2008 23:49:29 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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9. Abstraction (35) is measured at 46% from local rail to free bus. Community Rail Development Strategy targets are being threatened by abstraction caused by concession fares policy. Government policy needs “joining-up” (36 to 39). Extension to Community Railways (40 to 43) would cost between £3m and £7.2m, about 0.5% of the cost of bus concessions. Extension to all local rail would be far less than the £250 million quoted by DfT (44 to 47). 10. An UK wide bus and local tracked modes scheme for residents and visitors is proposed NOT long distance across UK travel. (Paragraphs 48 and 49).

UK FundedScheme 11. The current patchwork of concession fares schemes is very largely UK funded. In England funding is channelled via Local Authorities but they are 75% funded from central government via Rate Support Grant. Government describe the additions to the basic bus schemes as locally funded but people not enjoying above statutory minimum schemes are likely to feel that they have paid for 75% of the additions enjoyed by others but not themselves. 12. The Scottish and Welsh schemes are funded at aggregate level in those jurisdictions. The two Community Railways soon to oVer concession fares in Wales are being funded by the Welsh Assembly Government not Local Authorities. WAG has no revenue raising powers and uses UK Exchequer money. The same is true of Northern Ireland. NI’s scheme is funded via the Department for Regional Development at province level from UK Exchequer funds. 13. In some areas pensioners see some of their national taxes passed back to their Local Authorities via RSG with an element for spending on concession fares. That element is not always fully spent on concession fares (see paragraph 23) but those pensioners are denied an “adequate” scheme with above minimum entitlement that is available elsewhere. They resent all the more paying 75% of schemes elsewhere that oVer greater beneﬁt for others. 14. A largely UK funded scheme should oVer broadly similar beneﬁts across the UK, to both residents of an area and visitors to that area.

IntegrationAcross differentGeographicAreas

(a) Cross Boundary Travel 15. On the island of Ireland concession cross boundary travel between Northern Ireland and the Republic of Ireland is already allowed to the ﬁrst cross border destination in both countries. This could be a model for the England/Wales and England/Scotland borders. 16. From April 2007 free concession travel anywhere in RoI and NI will be allowed by all pass holders on the island. The DRD Press Release of 16 February 2007 says, “Under the terms of the new Scheme, each government will pay for the free travel within its own borders.” (Reciprocal funding?). As the NI concession scheme is funded from UK Exchequer, the UK Exchequer (one way or another) will be funding the scheme.

(b) “Out of Area” Travel (eg English not allowed concessions in Wales) 17. Whilst “Out of Area” concession travel will be UK funded for NI (but not GB) citizens in RoI, NI citizens won’t enjoy the same in other parts of the UK. Similarly residents of Great Britain will not enjoy “Out of Area” travel in NI. Is it acceptable that UK funding has been found for “Out of Area” concession travel for part of the UK population (NI) for concession travel “abroad” but not for all UK residents to enjoy “Out of Area” travel within UK? 18. The Concessionary Bus Travel Bill in parliament now oVers at Clause 10 a potential way forward. Orders could be made to allow mutual recognition of concession passes across the four “areas” of UK, but only when the “practicalities of mutual recognition, including funding” (Explanatory Notes to the Bill— note 27) have been resolved. The magazine Transit (23 February 2007—page 5) reported hopes that resolution between England and Scotland may be possible. Wales and NI were not mentioned in the report. This would only apply to bus concession travel. 19. An UK wide scheme is required for a largely UK Exchequer funded scheme.

IntegrationAcrossDifferentModes and RSG Funding forConcessionFares 20. In some rural areas the remnant of the railway left after Beeching often survived because the local rail/road/river/bridge geography made bus replacement impractical. If concession travel on such railways is denied, concession eligible passengers are denied equity with people on reasonable bus routes and empty oV peak seats on such trains are wasted. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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21. One such line is the Tamar Valley Line. Appendix 1 demonstrates that for stations on TVL the journey times by bus to Plymouth are between double and six times the train journey time from the diVerent stations. The operating days and hours of the train are also superior. The (singular) AM Peak train can have over 50% standing, being a casualty of the First Great Western capacity fiasco. However, oV peak trains do have empty seats. 22. Appendix 1 shows that Bere Ferres in particular eVectively doesn’t have a same day return bus service to Plymouth (225 minute return bus journey for 36-minute stay in Plymouth). Despite this West Devon Borough Council and Caradon Council (on the Cornish part of TVL) don’t add TVL to their respective concession schemes. 23. The concession fares element in RSG is estimated at Appendix 2 and cross checks with the government’s claim of national spend. Appendix 3 estimates that the distribution of RSG gives WDBC £810,000 pa (in 2006–07) for concession fares. Whilst not ring fenced to concession fares this is the amount that WDBC would lose from RSG if the function (Clause 9 of Bill) moved to County or National level. WDBC estimate the 2006–07 out-turn (appeals by operators were dismissed or withdrawn) at £392,323. The bulk of the “underspend” is largely beyond WDBC’s control. The bus network is sparse and the opportunities for bus travel are limited. However, the outcome is that WDBC make a “profit” of £418k pa on concession fares. WDBC do not agree with the author’s estimate of their £810k from RSG for concession fares. They say, “WDBC is unable to identify any evidence of RSG being received prior to 2006–07 for concession fares”. This is hard to reconcile with the notes to Appendix 2 that detail various government additions to RSG since 1989–1990 for concession fares and what other authorities accept 24. Appendix 6 has the author’s estimate of £34.6k pa for a free concession scheme on TVL (Appendix 7 has split between 2 Councils). The author has tried (but failed) to persuade WDBC that £14.4k pa (less than 4%) of their £418k pa “profit”’ in their RSG for bus concessions should be spent on concessions for TVL. This would allow Bere Peninsula pensioners to enjoy concession travel (not eVectively available by bus) to Plymouth that they are paying for via national taxation. 25. WDBC is not misappropriating this £0.4m as RSG is a general grant and doesn’t have to be spent on concession fares. Clause 9 of the Concessionary Bus Travel Bill allows an order to move the concession fares function (and RSG) from District to County or National level. If this happens WDBC could be £0.4m net worse oV. There is an element of self destruction in WDBC’s refusal to oVer an “adequate” scheme to its residents on the Bere Peninsula but UK Exchequer money intended for concession fares is not being used in that way. An UK-wide bus and local tracked modes scheme is needed. Appendix 4 shows that 46% of the UK population have mode integration but not all Local Authorities can be relied upon to deliver this, despite adequate funding. Appendix 3 compares RSG and Out-Turn budgets for the Devonwide Partnership as well as for WDBC, the 8 authorities between them show a “profit” of £5.7 million in 2006–07. WDBC may not be the only authority denying an “adequate” mode integrated scheme despite having the funding. 26. Appendix 1 looked at relative rail/bus services on a branch line that is Community Rail designated. Many small rail stations on the mainline also oVer the better (only) options to larger towns/cities than bus. Appendix 8 quantifies a few examples. The results are similar to Appendix 1. 27. This “mode equity” issue is not confined to rural areas. Latest government guidance on applying for funding for LRT/Tram schemes says that application should not be made unless integration with the local bus network is planned and deliverable. This makes good sense. When the Tyne & Wear Metro first opened (before bus deregulation) bus services were curtailed to feed the Metro. Presumably the latest entreaty on integration could see a better public transport overall but with some reduction in the level of “competing/ abstracting” bus service. In such circumstances it is not reasonable to say to concession passengers that they are denied concession travel on part of the integrated system (the tram) and have to use a now reduced bus service. 28. Happily (see Appendix 4) all the current light rail and tram systems in UK oVer free concession travel except in one case where a £8 annual card has to be purchased to enjoy free travel. In these areas the local heavy rail system is also seen as part of an integrated whole and broadly the same concession is oVered on local heavy rail in those areas as for light rail/tram. An “adequate” concession scheme would regard each local public transport system as an integrated whole.

Inter-action ofIntegration betweenGeographicAreas andIntegrationAcrossModes 29. Depending on what Orders from the Concessionary Bus Travel Bill are activated there could be inter- action between the issues and problems of diVerent area and diVerent mode coverage of concession fares schemes. With no Orders activated non-residents of a Travel Concession Authority visiting a TCA within their own “area” of UK, will be allowed free bus travel and denied concession travel on local tracked modes, that is available to resident pass holders. This makes it more diYcult to deal with the “practicalities of mutual recognition, including funding”. 30. In a largely UK funded scheme these practicalities must be solved across the UK Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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31. In RoI and NI both schemes allow free bus and tracked mode travel. Hence their “mutual recognition” has been aided by both schemes covering the same modes, thus not producing an inter-action between area and mode. 32. Activating the Orders in Clause 10 of the Bill could produce the UK wide scheme required of a largely UK funded scheme, but can only happen when the “practicalities of mutual recognition, including funding” have been resolved. Resolution is exacerbated by this inter-action between diVerent areas and diVerent modes. Clause 8 in the Bill allows an Order to add other modes to the England wide bus scheme. These Orders must be activated and similar action is needed the other three areas of UK. This needs to be done for local heavy rail, light rail, trams and underground railways (the local tracked modes) to facilitate the activation of Clause 10 Orders. 33. If only (see paragraph 18) England and Scotland achieve “mutual recognition” we would have the unfair, confusing and hard to enforce situation of pass holders from Birmingham and Glasgow allowed free bus travel in the UK capital but its denial to residents of CardiV and Belfast. The residents of Belfast may be doubly confused, as they would be allowed free bus travel in Dublin in RoI. But this is compounded by mode diVerence. The pensioner from Birmingham will enjoy free local rail and tram travel at home but will not be allowed this in London. The person from Glasgow has a ﬂat fare on local rail and underground but will pay full fare on London’s tube and local rail. The Londoner will expect free use Glasgow underground but not get it 34. Together Clauses 8 and 10 oVer the potential framework for an “adequate” mode integrated UK wide scheme that is “ﬁt for purpose” for a largely UK funded scheme.

Abstraction 35. There appears to be no UK wide inclusive research but Report 179 from the Scottish Executive’s Development Department looking at the eVect of the free (previously half) bus fares said: “A signiﬁcant switch from rail to bus was measured by on train surveys on routes in the Lothians and Strathclyde where bus was oVered as a free fare alternative.” They found between 19% and 66% pensioner abstraction on diVerent lines, averaging at 46%. There is no reason to suppose that similar abstraction isn’t happening in England and Wales. Indeed the motivation for the WAG extension of concession fares to the Conwy Valley Community Railway is abstraction, but the author is not aware of any quantiﬁcation.

CommunityRailwayDevelopmentStrategy 36. This is government policy for about 50 lines that include low frequency rural branch lines with less than 150 train-miles on a weekday (measured at publication of CRDS) to lines with 30 times that service level, about 10 of which enjoy the concessions at Appendix 4. Three quantiﬁed targets were set. One seeks to double revenue and another to halve subsidy per passengers. As subsidy is ﬁxed for the term of a franchise, this amounts to doubling passengers. Doubling passengers need not be the same as doubling revenue. Fares could be put up to increase revenue but the introduction of concession fares to CRs would generate passengers that would not be compensated to the TOC (“no better oV-no worse oV” doctrine) and increase passengers without increasing revenue. 37. The abstraction of revenue paying CR passengers who are over 60 years old but attracted to bus when the half fare scheme on buses became free fare (see paragraph 35) will have worked against the revenue target. This may be disguised by other increases in revenue. A concession scheme for TVL would generate concession passengers amounting to about 12.8% of the total passengers on TVL, leading to an 11.3% reduction in subsidy per passenger, against the target of 50% reduction. (see Appendix 7.)

Joined-UpGovernment 38. The government CRDS and policy on concession fares (unless the Order created by Clause 8 is activated for CRs) are working against each other. If this were intended, accusations of “closure by stealth” of CRs would be hard to rebut. If this is an “unintended consequence”, it can be easily rectiﬁed by activating Clause 8 to include CRs in the England wide scheme. 39. This could be a pilot to test implementation before extension to other local heavy railways.

PilotExtension toHeavyRail onCommunityRailways 40. This is happening in Wales already for two CRs (see paragraph 12) and is funded from the UK Exchequer. Appendix 6 has the author’s estimate for extending concession fares to TVL and all 50 CRs. The cost for all 50 CRs would be between £3 million and £7.2 million, about 0.5% of the cost of bus concessions. The usual purpose of a pilot may be negated by the two pilots in Wales and the existence of concession fares on local rail for 46% of the population. The “pilot” suggested here is more by way of a “phased implementation” to all local rail not setting any conditions on that extension. Permanent extension to just Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 106 Transport Committee: Evidence

CRs would not be acceptable. In Devon and Cornwall most branch lines have CR designation but the Paignton/Newton Abbot line with 7 long distance and 21 local services per weekday is denied CR status because of longer distance trains. It is still predominately a local railway and should enjoy concession fares within integrated local transport. Appendix 8 gives examples of where train is much the better or the only eVective public transport option from smaller stations on the mainline served by local trains. These cannot be designated CR but are part of the local public transport network. 41. About 20% of CRs already enjoy concession fares, an “adequate” and equitable UK scheme would not deny application of concession fares to the other 80% of CRs or ignore the fact that 100% of pass holders in NI enjoy free rail travel. 42. There are some empty seats oV peak on CRs and the Secretary of State objected to CRs carrying “fresh air”. In some areas CRs oVer a better public transport option than bus. 43. There are no arguments against extending concession fares to CRs, except cost and that cost is very low.

Extension to allLocalHeavyRailTravel—Cost andDefinition 44. A pilot extension to CR is suggested above but extension to all local heavy rail should happen and need not be expensive. It is realised that this inquiry is not concerned with fare levels. However, there remains a perception that local rail travel is more expensive than bus. 45. This could deter the acceptance of local heavy rail as aVordable in a concession scheme. Appendix 5 dispels that misconception and shows that for oV peak rail journeys less than 27 miles are usually cheaper than bus at national level data. Six examples of branch lines in Devon & Cornwall show savings on an oV peak return journey of between £1.50 and £3 on five of the six branch lines and an extra cost of 80p on one line. 46. For the debate in the Lords DfT estimated extension to local rail at £250 million. Much of this would not be “new public money” as 46% (see Appendix 4) of the population already have this benefit and those areas represent the busier local lines. Also the abstraction to bus will be partially reversed and savings made on bus reimbursement, reducing the net cost of extension to local rail. The author has requested from DfT the detail of their estimate of £250 million but awaits an answer. 47. The authorities in Appendix 4 manage to define local rail. There should be no trouble with definition in areas still to add local rail.

AnUKWideConcessionScheme forLocalBus andLocalTrackedModes ofPublicTransport NOT LongDistanceAcrossUKTravel 48. There is a half fare concession scheme for long distance express coach travel and the £20 seniors railcard for 33% discount on rail travel, that makes economic sense for long distance rail travel, if not local rail travel. The cost of extending free concession travel to long distance coach and rail travel would be high and these are not essential local journeys that pass holders need to make. 49. Extension to tracked modes is only proposed for local journeys, but for both residents and visitors to an area.

APPENDIX 1

COMPARISON OF BUS AND TRAIN JOURNEYS FROM VILLAGES ON TAMAR VALLEY LINE TO PLYMOUTH (See also Appendix 8 for non-branch line examples). Source: All data taken from Traveline on 10 February 2007. Based on departure from village after 0930 (as this is start time for statutory concession scheme) and return from Plymouth after 1200 for Monday 12 February, except where indicated. Times in minutes.

Journey Bus Time Train Time BT/TT Bus Changes Notes From Gunnislake 96/119 45 2.39 1 or 2 A, B, C To Gunnislake 78/93 45 1.90 1 or 2 A, B, C, D From Calstock 104/112 33 3.27 2 or 3 A, B, C To Calstock 88/102 33 2.88 1 or 2 A, B, C, D From Bere Alston 92/98 24 3.96 2 A, B, C Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

Transport Committee: Evidence Ev 107

Journey Bus Time Train Time BT/TT Bus Changes Notes To Bere Alston 87/97 24 3.83 1 or 2 A, B, C, D From Bere Ferres none 19 N/A N/A C, E From Bere Ferres 109 19 5.73 2 B, C, E To Bere Ferres 96 18 5.33 1 C, D, F, G Notes A. Max/Min Bus Times from diVerent options oVered by Traveline B. Where Bus Changes more than 1, the 2nd or 3rd changes may save a little time but are unlikely to be made by passengers. All bus journeys have at least one change in Tavistock or Callington C. All trains are direct, no changes D. Some return journey times by bus depend on 5 minute change at Tavistock or Callington, that, with buses experiencing congestion coming out of Plymouth, may not be robust E. Only AM bus service is 0915, so potentially not qualifying for 0930 statutory start of bus concession scheme. The 0915 bus journey time is shown in the 2nd “From Bere Ferres” row in the table F. The only return by bus that is possible on the same day requires a 5 minute change at Tavistock, which, given note D, may force cautious passengers to leave Plymouth on the bus to Tavistock that runs 20 minutes earlier. If so the journey time becomes 116 minutes and BT/TT 6.44. G. The inbound journey arrives at 1104, the only same day return departure option is at 1200 (or 1140 for the more cautious). Hence the maximum time in Plymouth would be 56 (or 36) minutes

Ratio ofBus toTrainJourneyTime (BT/TT)

The fourth column in the table shows how many times slower the bus (taking the average between the fastest and slowest time) is compared to the train. It ranges from just less than double (1.90) for the journey To Gunnislake from Plymouth to six times (5.73 or 6.44 –see Note F) for the From Bere Ferres journey.

Comparison ofOperatingTimes andDays

Buses from Callington and Tavistock to Plymouth operate seven days per week but buses from Gunnislake, Calstock, Bere Alston and Bere Ferres do not operate on Sundays (but Gunnislake has a summer Sunday service). The train does run on Sundays. The train starts earlier than the local buses but as the statutory concession scheme start is 0930, this is not relevant. However, the train also operates a few hours later than the last local buses.

Comparison of length of stay inPlymouth options fromBereFerres

The 205 (or 225, see Note F) minute return journey by bus from Bere Ferres to Plymouth allows 56 (or 36—see Note G) minutes stay in Plymouth. The return journey time by train of 36 minutes allows many options of length of stay in Plymouth. Using the ﬁrst three trains to Plymouth after 0930 and the ﬁrst three PM return trains allows stays of, 145, 187, 210, 312, 326 or 428 minutes in Plymouth.

APPENDIX 2

CONCESSION FARES ELEMENT IN RSG The element of concession fares grant from central government to local government is contained within RSG but not specifically identified. Local government has complained that the (unidentified) quantum is insuYcient. The validity of that claim would depend on the quantum. An estimate of that quantum is therefore required. Table One below makes this estimate. Concession fares element within RSG was last specifically identified in 1989–1990 at £296.9 million. After that it was subsumed into the EPCS part of RSG. Three specific quantified additions for concession fares have been made since 1989–1990 and are identified in Table One. Bus fares and hence the cost of concession fares to local government has risen since 1989–1990, but the level of increase is not separately quantified within RSG. The key assumption in Table One (Note b) is that the % increase in the concession fares element subsumed within EPCS is the same as the overall per cent increase in EPCS. Table One uses that assumption and the specific additions for concession fares but takes care (Notes c, e, g and i) not to “double count” the eVect of those additions. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 108 Transport Committee: Evidence

Table one

Year 1 2 3 4 1990–91 3891.0(a) 296.9 296.9 2000–01 5700.8 46.5 435.0(b) 435.0 2001–02 5960.7(c) 4.6 454.8 508.8(d) 2002–03 6269.4 4.2(e) 530.3(f) 530.3 2003–04 7015.7(g) 11.9 593.4 643.4(h) 2005–06 7299.7 3.3(I) 664.6(j) 664.6 2006–07 1014.6(k)(l) Years Not all years shown, but they can be provided if required. Columns 1. Control total for EPCS –district level services (£ million). 2. % increase in Column 1from Column 1 in row above. 3. Estimated concession fares content of Column 1 (£ million). 4. Total estimated concession fares in RSG (£ million). Notes (a) Includes £296.9 million for concession fares from GRE in 1989–1990 when last separately identified. (b) Assume that growth in concession fares element same as overall growth, apply Column 2 to Column 3 in row above to estimate this year’s Column 3. (c) Excluding £54 million specifically added to Column 1 for start of half fares scheme, to calculate valid per centage increase in base EPCS to use to derive Column 2. (d) The same £54 million added back to Column 3 to derive Column 4. (e) Based on £6014.7 total for 2001–02 for Column 1. (f) Apply Column 2 in 2002–03 to Column 4 in 2001–02. (g) Excluding £50 million specifically added to Column 1 for men allowed in scheme from 60!, to calculate valid % increase in base EPCS to use to derive Column 2. (h) The same £50 million added back to Column 3 to derive Column 4. (i) Based on £7,065.7 total in 2003–04. (j) Apply Column 2 in 2005–06 to Column 4 in 2003–04. (k) £350 million added specifically for free fares scheme. Author not aware for Column 1 for 2006–07, so £350 million added to Column 4 in 2005–06, so actual value of Column 4 in 2006–07 would be higher. (l) Government claim that they spend £1 billion on concession fares, hence cross checks.

APPENDIX 3

DISTRIBUTION TO DEVON TCAS OF CONCESSION FARES ELEMENT OF RSG AND 2006–07 OUT-TURN BUDGETS Appendix 2 quantiﬁes the element of RSG that is there for concession fares. This Appendix estimates the distribution of that element for concession fares to the Travel Concession Authorities in Devon. This element is within the EPCS FSS fund and is distributed according to the formula used for that part of RSG. This was revised for the addition of the £350 million for free fares. The allocation of the total concession fares money in RSG can be estimated by applying each TCAs % of the £350 million to the £1,014.6 million from Appendix 2. The share of the £350 million for each TCA is taken from Table 2.3 of a September 2005 report to the Devon Concession Partnership supplied to the author by its Chairperson and Corporate Director at WDBC

Share of £350 million Share of Con Fares Extra for free fares element in RSG Authority/Group £m Share as % £m Plymouth 2.03 0.58 5.88 East Devon 0.65 0.19 1.93 Torbay 1.28 0.37 3.75 Exeter 0.70 0.20 2.03 Mid Devon 0.37 0.11 1.12 Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

Transport Committee: Evidence Ev 109

Share of £350 million Share of Con Fares Extra for free fares element in RSG Authority/Group £m Share as % £m North Devon 0.60 0.17 1.72 South Hams 0.44 0.13 1.32 Teignbridge 0.79 0.23 2.33 Torridge 0.40 0.11 1.12 West Devon 0.28 0.08 0.81 Devon Partnership 4.86 1.39 14.10 (1) Devon 7.54 2.15 21.81

(1) Plymouth and East Devon are not part of Devon Partnership. Ring Fenced? The element for concession fares is not ring fenced to concession fares. However, if the non-Unitary Authorities lose the function to County Councils or all of the authorities above lose the function to national level (Clause 9 of Concessionary Bus Travel Bill), they will lose the amounts of RSG shown above.

2006–07 RSG andForecastOut-turnBudgets(Mid-FebruaryForecasts)

Authority/Group RSG Out-Turn “Proﬁt” West Devon Borough Council £0.81 million £0.39 million £0.42 million Devon Partnership £14.10 million £8.41 million £5.69 million

APPENDIX 4

CONCESSION SCHEMES THAT OFFER FREE OR LOW FLAT FARE ON TRACKED MODES OF LOCAL PUBLIC TRANSPORT

Authority Mode Fare England London Local rail, Tube, DLR and Tram Free West Midlands Local rail and Tram Free Greater Manchester Local rail and Tram Free South Yorkshire Local rail and Tram Free Merseyside Local rail Free Tyne & Wear Local rail 50p flat fare Metro Free with £8 “Gold Card” West Yorkshire Local rail 35p flat fare Nottingham City Tram Free Nottinghamshire County Tram Free but half fare 1600–1800 Blackpool Tram Free Milton Keynes Local rail 35p flat fare Isle of Wight Local rail Free Scotland Strathclyde Local rail and Glasgow Tube 40p flat fare Edinburgh Local rail 50p flat fare Northern Ireland Whole of province Local rail Free Wales 110 people living in the Dolwyddelan area can use their bus pass on the Conwy Valley Line, as, until recently, they had no daytime bus service. The Welsh Assembly Government are to trial free concession fares on Conwy Valley Line and Borderlands Line, possibly followed by another three Community Railways. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 110 Transport Committee: Evidence

PopulationCovered byFree orLowFlatFareSchemes England 46%, Scotland 53%, NI 100%, Wales (currently) under 1% and UK 46%.

OtherSchemes Some local authorities oVer 50% discount on local rail; others oVer a discount on the purchase of the £20 Seniors Railcard that oVers 33% discount on local and national rail fares.

NorthernIreland From April 2007 NI pass holders will have free travel on buses, trains and trams in the Republic of Ireland.

CommunityRailways About 10 of the 50 CRs enjoy the concessions above.

APPENDIX 5

BUS AND TRAIN FARES—AUGUST 2006

National data—BarryDoe Barry Doe is a respected independent consultant with a special interest in fares. He writes in Railway Journals under the heading of “Faredealer”. He conducts surveys of bus and rail fares over the years comparing rates per mile for singles, peak returns and oV peak returns. The quote below is from his latest (August 2005) published survey. “The tables here show that for all bar the 27-mile journeys there are always bus operators charging more—sometimes signiﬁcantly more—than rail, especially for oV-peak returns.” Since the concession scheme is oV peak, this quote is particularly relevant.

Devon andCornwallData The author compared bus and train fares on some Devon and Cornwall branch lines. As the statutory concession scheme is oV peak, the appropriate oV peak fares were used. Often on longer bus trips or ones requiring a change of bus, the bus operators oV peak day ticket was cheapest, if so it was used. Prices in £

Journey Cheapest OV Peak Fare DiVerence (% saving on bus fare) Bus Train Bere Alston/Plymouth 6.00 3.50 2.50 (42%) Falmouth/Truro 4.00 2.50 1.50 (38%) Newquay/Par 6.00 3.50 2.50 (42%) Barnstaple/Exeter 6.00 3.00 3.00 (50%) Exmouth/Exeter Central 4.80 3.00 1.80 (38%) Looe/Liskeard 2.20 3.00"0.80 ("36%)

The first five examples have large group operators running the equivalent bus service. The last example is operated by Western Greyhound (Small Operator of the Year Award winner for last two years). The local data confirms the Barry Doe national data. The reimbursement process does not rely solely on published ticket prices but they are a major determinant of the compensation that is paid to operators. It would appear both at national and local level that savings could be made if a concession pass holder travelled by local train rather than bus. The % savings above are significant and the average saving per pass holder switching to CR from bus for the CRs above is £1.75. This figure may seem high compared to average bus fares but the journeys here are the longer, higher fare local journeys.

APPENDIX 6

COST OF CONCESSION FARES ON TVL AND ALL COMMUNITY RAILWAYS Data at aggregate level for CRs is not availble to the author The government’s Community Rail Development Strategy has no data on overall passenger numbers, average fare or % of passengers who are pensioners using CRs. These three items of data are needed to make an estimate of the cost of extending concession fares to CRs. The author has used what data is available to him to make an estimate. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

Transport Committee: Evidence Ev 111

For the Tamar Valley Line the last year of the Wessex franchise produced 111k passengers (single passenger trips), of whom 15.8% were over 60 and yielded £213k in fares revenue. Concession eligible passengers would include some groups other than pensioners and using 16% would yield 17,760 journeys, rounding up to 18K should produce a conservative estimate. The average fare is £1.92, so reimbursement to the TOC if those journeys were free would be £34.6k pa. (£14.4k of which falls on WDBC—see Appendix 7) Grossing this to the 50 CRs should obviously not be done by multiplying the TVL cost by 50 as the CRs vary in length (and therefore average fare) and use level. The train-miles operated on a CR will reflect frequency of the trains, which should crudely reflect use level and the mileage element should reflect journey length/average fare. It is assumed that the % of pensioners in the population across the 50 CRs is not too dissimilar to that of TVL. The only other estimate of the cost of concession fares on CRs known to the author is from TAITH for the Conwy Valley Line and the Welsh section of the Borderline. The CVL figure was £57k. The author deduced the train-miles for each CR at the time of publication of CRDS. To test the idea that the cost of concession fares could be proportional to train-miles the value of CVL/TVL is 2.29 for train- miles and 1.65 for the cost of concession reimbursement. The figures will never be exactly equal as any two CRs will have slightly diVerent % pensioners, diVerent alternative bus services, access to stations etc. but both values being within 0.35 around a value of two lends some support to the hypothesis. Without better data an alternative estimate is not possible but a range can be put on the estimate by using CVL and TVL separately as well as combined. The 50,420 train-miles used are for one day from the Mon/Fri timetable at the time of CRDS publication. TVL Estimate £34.6k x (50420/240)% £7.2 million. CVL Estimate £57.0k x (50420/550)% £5.2 million. Combined Estimate £91.6k x (50420/790)% £5.9m Hence, the central estimate would be taken as £5.9 million but the range should be borne in mind. However, this central estimate is likely to be an over estimate of the total “new public money” needed, for two reasons. 1. If concession fares are oVered on CRs there will be some transfer of concession use from bus to CR. Appendix 5 shows that local rail fares are cheaper than bus in most cases. Thus the total reimbursement to bus and CR operators should show a net reduction 2. About 20% of CRs are located in areas identified in Appendix 4 and already enjoy concession fares. Expenditure here would not be “new public money”. Quantifying the eVect of these two factors is not easy and the result should be viewed with caution. If the use level of the 20% of CRs already having concession fares were that of the average CR, the “new money” central estimate would be closer to £4.8 million. Appendix 5 shows that for Devon & Cornwall CRs the average saving to the concession budgets for each pass holder switching from bus to CR is £1.75. Lack of data makes an estimate of the likely level of bus to CR switching diYcult but a switch of one million journeys pa from bus to the 50 CRs would reduce the “new money” bill to only just over £3 million. Paragraph 35 shows that transfer levels can be high (46%) when measured in the other direction.

APPENDIX 7

SHARE OF TVL CONCESSION COST BETWEEN CARADON AND WDBC AND GENERATION OF PASSENGERS

Share ofCosts The total estimate (Appendix 6) of the cost of free concession fares on TVL of £34.6k pa is based on all 18k concession passengers. If all CRs are included in an UK wide local bus and local tracked mode scheme, all 18k (plus uncompensated generated use) passengers would be eligible for concession travel. If this doesn’t occur quickly and Caradon and WDBC can be persuaded to make a local ’add on’ of TVL, the share of the cost between the two would be of interest. Some of the 18k concession passengers are leisure travellers from Plymouth and beyond but the majority are residents along TVL. A conservative estimate is made by assuming that all 18k concession passengers are from the two council’s areas. The passenger split overall Caradon:WDBC is 55:45 and is assumed the same for concession use. The oV-peak day return fare from Gunnislake and Calstock (in Caradon) are the same at £4.00. Bere Alston and Bere Ferres (in WDBC) have the same oV-peak return at £3.50. Caradon costs should exceed WDBC costs by a factor of (55/45)x(400/350)%1.4 Caradon cost £34.6k x (1.4/2.4)%£20.2k WDBC cost £34.6k x (1.0/2.4)%£14.4k Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 112 Transport Committee: Evidence

Generation ofPassengers TRL publish a document, The demand for public transport: a practical guide that is the “bible” for elasticities. Chapter 6 deals with fare elasticity. It shows that fares elasticity is higher for oV peak and leisure use. There is a long-term eVect that is larger than the “short run” elasticity. Table 6.55 pulls together the ﬁndings from many studies and for “Suburban rail—UK—oV-peak—short run” quotes a mean across studies of –0.79. This means that a 100% fare reduction (free fares) would generate 79% more passengers. Applying this to the 18k concession passengers on TVL means that (0.79x18k) 14.2k extra concession passengers would use TVL. This amounts to (14.2/111) 12.8% extra passengers over the whole passenger base of 111k. The CRDS has a target to reduce subsidy per passenger by 50%, increasing the denominator in that equation by 12.8% will reduce the target by 11.3%, a worthwhile contribution towards the 50% target. This is based on a “short run” elasticity and will produce more eVect in the long term.

APPENDIX 8

COMPARISON OF TRAIN AND BUS JOURNEYS FROM SETTLEMENTS ON RAIL LINES OTHER THAN CRs Source. Traveline for 28 February 2007 post-0930 journeys checked on 27 February. Appendix 1 made the same comparisons from a stations/settlements on a branch line that was designated CR. Small stations on mainlines (that cannot be CR designated) often oVer a vital public transport link to larger towns/cities and some of those are mentioned below. As with TVL the train is often a far better and sometimes the only reasonable alternative. There is a “double whammy” eVect at Whimple and Lostwithiel, where bus services to the destinations mentioned have been requested from the local authority but they have declined to subsidise such services as a train alternative exists.

AvoncliV to Bath Hourly train to Bath taking 15 minutes. Original settlement and railway station in valley bottom. Steep hills and narrow lanes to newer part of settlement. Only upper part of AvoncliV served by bus. Half-mile steep uphill walk from Old Peoples Apartments to bus stop. Bus every two hours and takes 30 minutes to Bath.

Dunbridge (Station now renamed Mottisfont and Dunbridge) to Romsey Trains at 1200 and 1300 taking six minutes to Romsey, with three return options. A bus at 0919 (before 0930), then no bus till 1553 without a same day return.

St Germans to Plymouth and Liskeard Train journey to Plymouth takes 18 minutes. One bus option to Plymouth is possible with a change of bus and takes 75 minutes but there is no same day return bus. In the Liskeard direction the train journey takes 12 minutes. There is one bus option to Liskeard taking 65 minutes with a change of bus but no same day return by bus.

Kemble to Swindon and Gloucester Hourly train to Swindon (16 minutes) and Gloucester (35 minutes). Two changes of bus in both directions to both destinations are needed. The only eVective return bus trip to Swindon would need 284 minutes (32 by rail) for a 79-minute stay. The only eVective return bus trip to Gloucester takes 258 minutes (70 by train) and yields 105 minutes in Gloucester.

Whimple to Axminster and Exeter Train service two-hourly with some additional trains. 22 minutes to Axminster and 16 to Exeter Central. Only eVective return by bus to Axminster takes 269 minutes (44 by train) with one change of bus for a 98- minute stay. To Exeter there are two eVective returns by bus, both with one change each way. They take 198 or 176 minutes (32 by train). Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

Transport Committee: Evidence Ev 113

Lostwithiel to Liskeard

Train takes 18 minutes and National Express 500 service connects the two. There is no bus service.

Other Examples

There will be many other examples. March 2007

Memorandum from North-East Combined Transport Activists’ Roundtable (NECTAR) (TPT 16)

GeneralPoints

The answers to all the sets of questions vary according to: (i) which mode of transport is considered, and (ii) whether the viewpoint is that of the passenger or of the service-provider. Our response tries to consider conditions on buses and on trains from both viewpoints wherever possible.

SpecificQuestions asPosed

IntegratedTicketing

1. Is ticketing suYciently integrated (a) across diVerent modes of transport and (b) between diVerent geographical areas? (a) No, not even in the London area, although it is better there than in most places. Oyster cards are not (yet) valid on several local rail services within the TfL area. In the provinces, the term “integration” is variously defined: some rail companies oVer flat-fare add-ons for bus use at destination, but this does not help those whose rail-journeys are prefaced by a bus ride. PTEs do better on this than towns and cities without PTEs: for instance, Tyne and Wear oVers “TransFares” on bus or metro for those changing modes as part of their journey, and Merseyside has Day Rover tickets for useon buses, trains and ferries. Apart from isolated examples such as these, little is done, particularly in non-PTE areas, to allow passengers using two buses for one journey to take one ticket rather than re-booking on the second bus. Nowhere in continental Europe expects anything like this. In fact, bus tickets as such are flat-fare and valid for a stated period of time, without being confined to one bus journey or (where relevant) one mode of travel. Yet, in principle, integrated ticketing is (in our view, anyway) vital if public transport is to attract more people to use it—and in theory its introduction should cost very little. As public transport providers are hopelessly fragmented, however, aiming to maximise profits rather than to carry more people, ticket integration is diYcult to introduce, especially if operators see it as a potential loss of revenue in the short term. (b) It depends if this means “one and the same ticket may take a passenger through a series of bus/ rail/bus changes over a long distance” or “facilities in one conurbation match/diVer from those oVered in another”. Thus, in the North-East region, through-ticketing allows transfer from “heavy” rail to Tyne and Wear metro, though this does not always receive the publicity that it should: but no such through ticketing exists any-where in Tees-side. There are even cases of buses that run as one route and then regularly change their identity to another route, in central Stockton or Middlesbrough: but no passengers travelling along parts of both these routes, and on the same bus, are ever allowed to book a through ticket when first they board the vehicles. The only circumstances in which any form of consistency between diVerent areas occurs are those of free OAP travel, except that, until 2008, such travel may only be in the pass-holder’s local area. For those not entitled to OAP rates, however, it is notable that fares-levels on bus and train have risen far further than have motoring costs, both perceived and actual. This alone must discourage many from changing from car use to buses and/or trains. [See also answers to Questions 10 and 11] Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 114 Transport Committee: Evidence

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? We know of no Government strategy whatever for developing such integration, though we think that there needs to be one.

Use ofSmartCardTechnologies

3. Is the industry taking up modern smart-card technologies (a) adequately and (b) appropriately? (a) It is virtually impossible for bus or rail users to answer this question in any meaningful sense, apart from pointing out that, as we see it, the answer is “no”. Costs must, inevitably, be borne by the operators, who are often involved in damage-limitation exercises rather than in aggressive marketing of their services. Modest though the extra costs may be, the element of risk seems too often to rule out innovations of this sort, though it is pleasing to note a few forthcoming exceptions in the north Lancashire and Cheshire areas. The diYculties may be more imagined than real, in that smart-card technology eases the task of allocating fare income between operators and modes, but there is always the possibility of machine failure, and, on buses, the ensuing inability of a passenger to pay in cash instead and/or of a driver to decide how much money to take for his/her part of the journey. (b) It follows from the previous answer that this part, too, gets a thumbs-down in most cases. For bus- users forced to wait outside a loading bus for several minutes, often in wind and rain, because tickets must be bought individually and often after a lengthy discussion of the exact destination and the fare payable, improvements are vital, and could include oV-bus sales of booklets of ready- priced tickets (cf the carnet system in Paris and elsewhere), as well as variations on the London Oyster card system. Carnets could also help for local rail journeys. both to avoid waits at busy station booking-oYces and to speed up the checking/selling of these fares and others by train conductors, especially at peak periods when trains are crowded. From the ticket-inspecting angle, however, smart-carding seems to present potential problems, particularly on buses, unless each inspector has very sophisticated and reliable checking machinery. We have recently read of trouble even with some Oyster cards: nothing mechanical is immune from defects, however rarely they occur.

4. Does the ITSO system cater for the needs of all passengers and travel providers? It would be nice to think that it does, but without more inside information we cannot usefully judge. However, we think it well worth pointing out that, for passengers, a “smart card” needs to be easy to use, trustworthy (not recording transactions unknown to its holder, for instance), and of a format that clearly shows the holder and any inspecting staV what has been charged, for what journey, and at what time.

5. What can be learned from the experience of areas such as London and Scotland, where smart-card technology is already in place? That, given a political will, and a willingness to see public transport of all types as a public service, not a profiteering exercise, a smart-card system can bring considerable benefit to all—quicker bus-loading, easier payment-methods, fewer booking-oYce staV in some instances, and smooth transfer between travel modes regardless of the order and the length of each stage of a complex journey. If the use of a smart card is also shown to save the passenger money, compared to the previous method involving paper tickets and frequent recourse to handling cash on starting each stage of a journey, so much the better for all concerned. Yet, in the North-East, even comparatively predictable schools traYc, on buses laid on specifically for it, still has to queue up morning and evening ro pay a single fare—a procedure that must be persuading the next generation to avoid buses like the plague once they have left school.

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket-inspectors function appropriate? It would help all concerned, we think, if the full, up-to-date nature of this legal framework were clariﬁed and publicised to all who use and operate buses, trams and trains. For instance, some of the small print regarding reduced rail fares booked aboard trains is confusing. Those boarding at unstaVed stations can claim every discount that any rail operator oVers; but, if they have boarded at a station that has had a booking-oYce open at the time, their entitlement is much reduced. A passenger has more to think about when catching a train than booking-oYce facilities at his/her starting-station; many train-conductors recognise this and use discretion in issuing reduced-rate tickets from staVed stations. If a rule of this sort Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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were to be ﬁrmly applied, a vital corollary would be that the operator provided adequately-staVed booking- oYces, to avoid more than the very shortest ticket-queues no matter how busy the lines were. Without such a commitment, enforcing limits on what a train-conductor can issue from staVed stations is tantamount to punishing some of the travelling public for the shortcomings of the service-provider, and is to be deplored. By the same token, however, operators of rail and bus services need to see that all who travel pay their due fare. This means than the fare-structures are simple enough to allow passengers to understand them readily, and fare-collectors to sell tickets to all who need them, even when unstaVed stations are close together, and numbers using each one are comparatively high. Similar points apply to bus operations in that ticket-issue methods should minimise the length of a queue outside a vehicle at busy stops, especially those in town centres. Again, a carnet approach is a largely-untried but very simple way to achieve this.

7. (a) What appeals mechanisms exist for passengers? Without better knowledge of what these mechanisms are, it is diYcult to answer this. ”Conditions of Carriage” notices are rarely found on bus-stop poles, or even at some rail stations. The recent demise of regional Rail Users’ Consultative Committees has made it more diYcult for rail travellers to ﬁnd out that such appeals are possible at all, never mind to decide where best to address them.

(b) Are they adequate? A fortiori, no. It in any case depends on the nature of the complaint, and the character and persistence of the person who wishes to make it.

8. Are the rights of passengers and the powers of ticket-inspectors well-balanced? Here again, generalised comment borders on the futile. Conditions of work vary between bus, local train, tram, metro, and longer-distance rail services. There are awkward customers, and there are (some) awkward inspectors, but it is reassuring that, increasingly nowadays, staV training on all modes of travel emphasises how best to handle passengers whose tickets are invalid or mis-issued, to avoid conﬂict and to maintain basic human respect—in both directions. This is easier aspired to than attained; and the eVorts and patience required of inspection staV are considerable, as well as frequently under-estimated by some of the travelling public. On buses, particularly, where a passenger is causing trouble for whatever reason, the steps needed for an inspector to gain oYcial back-up are prohibitively cumbersome and time-consuming. Bus operators do not like their buses being held up for several minutes or more, even for a police reinforcement to arrive. Neither, it must be said, do other passengers, who in such circumstances simply wish to continue their journey to its end, and then to leave the vehicle rapidly.

9. Do operators of public transport take adequate measures to protect fares revenue? This is yet another case where generalisation is virtually impossible. Some operators have at times been guilty of over-kill (eg in central Manchester, at Oxford Road station, then at Piccadilly station, half a mile further on, for those who have to change trains there in a hurry). With better application of discretion and experienced judgement, this has eased oV recently. As stated earlier, there is always the potential conﬂict between seeing, especially at busy times, that all passengers pay their fare, and annoying the majority who have done so by asking them repeatedly to prove this. Mainly, this is a rail problem, since few buses permit non-payers to get far beyond the driver’s cab-side. But cf points made about bus fare-collection in Questions 1, 3, 5 and 6 passim. The apparently-irreconcilable aims of making public transport attractive enough to tempt car-users to change to it, and of seeing that all pay what they are supposed to pay, can become far more attainable, we feel, if there are more carnet facilities on every type of public transport—and we make no apology for repeating this point yet again here.

ConcessionaryFares—theRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? In short, no. The free travel for OAPs and the disabled, welcome though it is to its users, has caused ﬁnancial problems at various points: the bus operators quote a nominal average ’fare’ for each free ticket issued, and a local council, evidently, has to compensate the bus operators accordingly. Not all councils have adequate ﬁnance to do this, evidently, and have to decide, rightly or wrongly, to reduce the levels of “maintained” bus services, particularly in evenings when buses are few and far between anyway. It looks to us as though much greater funding-levels are required than are now made available, and that the problem will get worse in 2008, when the scheme goes nation-wide. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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That this free travel is not oVered on comparable rail services does not help. To attract the elderly out of private cars, especially in these times of enhanced concern over CO emissions and road congestion problems arising from 33 million cars across the country. the whole range of2 public transport must be made far more attractive, and extensive—and that includes ﬁnancially attractive, too. In Tees-side, for instance, local rail services are far quicker, mile for mile, than the corresponding bus services, even those marketed as ”express”. Concessionary fares should be extended to rail as well, and adequate compensation paid, from much higher levels of grant to local authorities and/or transport operators. The present unwritten law that bus competes with train, or even that one bus operator competes with another over the same terrain, needs to be set aside in favour of co-operation among all operators, so that users may use and change between one or the other, as need and preference dictates. (And that applies at all levels, not just that of OAP free travel.)

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? As our answers to other questions will conﬁrm, the answer here, once more, is ”no”. The whole concessionary fare system needs a complete overhaul, to iron out anomalies, and to be fair to all users and operators across the whole public transport spectrum. It must also be simple enough for all to grasp quickly, no matter how rarely they travel. Once that is done, it needs a vigorous and nation-wide re- launch, together with a continuing publicity policy at as many transport outlets as is humanly possible— i.e. every bus stop and every station as a minimum—since even the few quasi-integrated bus/tram schemes now in existence are diYcult to ﬁnd out about, as if they had to comply with the OYcial Secrets Act. Idealistic though these new measures may seem to be, they are the very least needed if public transport ticketing is to become “integrated”. And no oYcial body with responsibility for buses or trains should ever forget that, in today’s conditions, a steady and lasting increase in public transport use, in all its modes, is the only way forward for us all. March 2007

Memorandum from PA Consulting Group (TPT 17)

ExecutiveSummary The key points that we make in this submission are as follows:

IntegratedTicketing — Integrated ticketing is not necessarily a panacea in terms of passenger experience though it does have a signiﬁcant role to play. — The Government does not currently have suYcient control over ticketing on all modes of transport to implement true interoperability. — Ticketing asset replacement and uptake incentives/mandates drive business cases for technology adoption and the case is diYcult to make in isolation and in the short term. — ITSO is capable of meeting the needs of operators and passengers, as are some other systems, though there must be interoperability between solutions if the beneﬁts are to be delivered. — The more control over ticketing that a single entity has, the more manageable integration becomes though the risk on monopolistic supply increases.

RevenueProtection andThePowers ofTicketInspectors — The disincentives to travelling without a ticket are not suYciently strong or consistently applied.

ConcessionaryFares—TheRightStrategy — The precise strategy is not clear. — Integration across modes and geographies will be important to enable easy movement across local authority boundaries and operators and simpler governance of the concessionary fare scheme would enhance its chances of success. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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— Smartcards could provide the basis for a realistic implementation of the national concessionary fares strategy and ITSO would provide a robust and secure technological platform for this implementation and its integration with other schemes.

Introduction toPA 1. PA Consulting Group is extremely well placed to provide evidence and insight for the Transport Select Committee on ticketing on public transport given our history, independence, experience, and subject- matter experts. 2. PA is a leading management, systems and technology consultancy with a unique commitment to the integration of these capabilities. Established 60 years ago, and operating world-wide from around 50 oYces in 20 countries, PA draws on the knowledge and experience of over 3,000 employees, whose skills span the initial generation of ideas and insights all the way through to detailed implementation. 3. PA is independent of all hardware and software suppliers, and is committed to remaining so. Our technical advice to our clients is therefore independent and untainted by any possibility of commercial bias. 4. PA is one of the leading consultancies in ticketing on public transport and specifically smartcards. Our work includes consulting for Government Departments on ITSO; advice to private-sector organisations on business cases; feasibility and operational deployment for smartcard schemes; and the integration of proprietary technology alongside open-specification schemes in transport. 5. Our consultants are subject-matter experts in the ticketing on public transport environment and come from a variety of backgrounds, including government departments and financial institutions through to private sector transport operators and providers of proprietary smartcard technology. Specifically, our response to this has included experts in rail retail, ticketing systems, transport economics and smartcard technology.

Response toSpecificQuestions

Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? 6. There is a diVerence between integration per se and the ability to integrate. Our view is that passengers do not necessarily want or need integrated ticketing in every case (eg, point-to-point or single-operator journeys) and there are some situations where customers benefit from a lack of integration (for example, being able to choose products where using a single operator has some financial benefit over and above an integrated product). 7. The ability to integrate is however sometimes lacking, but this raises the question of why the ability is not there. Technical integration is almost always possible rather it is the commercial will and business benefit that tends to limit the ability to integrate. Commercial blockages will tend to be eliminated when there is a business benefit to all parties. 8. There are good examples of integrated ticketing where it is in the best interests of the operators to integrate (for example, the London Travelcard agreement) but where there is limited business benefit in completing integration it is unlikely to happen. This is compounded when integration involves expensive technology developments.

Does the Government have an adequate strategy for developing the integration of ticketing systems? 9. Ticketing systems themselves (ie, the physical hardware and software) are primarily the responsibility of the transport operator). The way that they interact with each other is often however influenced or specified by larger bodies. The conflict here is that the Government (through its departments) does not have absolute control over very many of the systems. Traditional rail retail systems are specified by Rail Settlement Plan, London ticketing is determined by Transport for London and non-franchised bus operations are largely self- determined (albeit with supply market dynamics at play). 10. The main involvement of the Government directly is via the Department for Transport’s ability to specify non-traditional retail systems in new franchises (eg, ITSO-specification smartcard ticketing). 11. By definition, therefore, any Government strategy for the integration of ticketing systems when it only has direct control over one of the modes will be diYcult to implement and enforce. 12. A more relevant issue is therefore how the Government can be more active in ensuring that deployment of the likes of ITSO compliant systems—in particular across bus operators in a deregulated and competitive marketplace. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 118 Transport Committee: Evidence

Is the industry taking up modern smartcard technologies adequately and appropriately?

13. A commercial entity will take up new systems and product oVerings that are appropriate to its commercial success. There is nothing, in our opinion, to suggest that the industry has not considered the commercial viability of modern smartcard technologies. Speciﬁcally, we have worked on a number of business cases to evaluate precisely this on behalf of parts of the industry.

14. A more relevant issue is perhaps a question as to why there are generally not business cases for the adoption of smartcard technology. In our experience, we have seen that the business case for smartcard technology is generally made on the back of two things—technological refresh and uptake proﬁle.

15. Firstly, when all the ticketing assets of an organisation are being replaced, the marginal cost of including a smartcard ticketing system are small in comparison with the cost of the replacement of the ticketing assets themselves. The problem with this in the transport industry is that ticketing assets tend to last for a long time, sometimes because of integration requirements. Changes to systems to retroﬁt smartcard ticketing are necessarily expensive. In particular, the rail franchising systems makes investment in such systems diYcult outside the franchise renewal process.

16. Secondly, the update proﬁle is an important factor in consideration as this determines how quickly non-smartcard ticketing systems can be removed. Leaving systems in side-by-side without mandating or incentivising a change in customer behaviour leaves the necessity for two systems to run in parallel, thus adding a cost without removing one.

17. Amending these two restrictions would lead to a faster uptake in smartcard ticketing technologies.

Does the ITSO system cater for the needs of all passengers and travel providers?

18. ITSO is, as are other schemes, capable of catering for the needs of all passengers and public service providers.

19. That ITSO speciﬁcation schemes have not been implemented for all passengers and all travel providers suggests that it is not the only alternative to meet the needs of speciﬁc passengers, particularly in a closed geographic environment, and travel operators.

20. This however raises the question as to what needs would be catered for by ITSO speciﬁcation schemes over and above non-ITSO speciﬁcation schemes.

21. The first point is that we have yet to see a significant impact on passengers based on the specification of a scheme. Passengers are most influenced by the ticketing proposition and usability, which should not be aVected by the specification used to build a system.

22. In terms of travel providers, this is not necessarily clear-cut as diVerent scheme types will have diVerent advantages for diVerent reasons. Proprietary schemes can provide benefits to their operators and users, just as open-specification schemes can. The same applies for the disbenefits.

23. An open-speciﬁcation scheme allows more theoretical choice down-stream with components and expandability and discourages monopoly supply but requires separate systems integration eVort whereas a proprietary scheme allows a thinner client function to start with but increases barriers for competitor entry longer-term and can push prices up for system changes. The ability to achieve inter-operability on a large scale without absolute control over all the participating schemes necessitates an open speciﬁcation.

What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place?

24. The main lesson to be learned from these experiences is that where there is a single entity in control of, and responsible for, ticketing technology (whether a public body, or private entity) there is much more likelihood that a system will be implemented. This factor has helped to reduce the commercial blockages referred to in the answer to the first question. One size doesn’t necessarily fit all with smartcard schemes, but if passenger choice & flexibility is a goal then must be within a business, commercial & technological framework that enables interoperability. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Is the legal framework within which ticket inspectors function appropriate?

25. We do not wish to express a view on the legal framework for ticket inspectors.

What appeal mechanisms exist for passengers, and are they adequate?

26. We do not wish to express a view on the appropriateness of appeal mechanisms for passengers.

Are the rights of passengers and the powers of ticket inspectors well-balanced?

27. We do not wish to express a view on the rights of passengers versus the powers of ticket inspectors.

Do operators of public transport take adequate measures to protect fares revenue?

28. A commercial entity will protect its revenue when it is appropriate to its commercial success. There is nothing, in our opinion, to suggest that operators have not considered the commercial viability of revenue protection activity. 29. It is therefore our opinion that operators generally have an appropriate level of cover based upon the risk and benefit. This does not mean that all revenue is necessarily protected, rather, that which is eYcient to protect is protected. The level of eYciency will by definition be distorted where there is shared revenue risk, or in the extreme case where the operator takes no revenue risk, there is not likely to be any protection (nor is there usually any expectation of such). 30. A larger issue is that of the adequacy of the measures than can be taken. Specifically in this area, penalty fares on rail are felt to be inadequate to disincentivise ticketless travel. The disincentive for ticketless travel needs to be considered in terms of both the expected value rather than the actual value (value of the penalty x the probability of being caught). The current expected value of penalty fare does not constitute a suYcient disincentive relative to the likely price of travel. We would therefore recommend a full economic analysis to determine the precise expected value of the penalty fare versus which would better inform this debate.

Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate?

31. It is not immediately apparent what the Government’s strategy is for the deployment of a concessionary fares scheme, however if it is as per the Bill currently before Parliament then our view is that an open specification scheme will assist significantly in the realisation of the benefits likely to arise from the end-position allowed for in the Bill. Our concern is over the degree to which progress will occur if there isn’t a nationwide scheme implemented quickly (as this is likely to embed interim solutions, thus reducing the impetus for improvements).

Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas?

32. As with ticketing integration, concessionary fares do not necessarily need to be integrated in all circumstances. In terms of customer proposition however, integration can help, especially in a bus environment when local authority boundaries can be crossed mid-journey. The Scottish model is a good example of making the proposition simple for the customer. The ITSO specification also oVers a good technological solution for this. The commercial models still need to be refined if funding comes in via local authorities. As per the question above on lessons from Scotland and London, if a single entity was to control the scheme, then the commercial blockages would become much less significant, and integration across modes and boundaries will significantly simplify the customer proposition. March 2007 Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 120 Transport Committee: Evidence

Memorandum from Trainline.com Ltd (TPT 18)

AboutTheTrainline

1. The Trainline is the UK’s leading rail ticket retailer and information provider. We currently sell just over six per cent of the UK’s surface train tickets by number of journeys, through a dedicated website and call centres and an associated fulﬁlment/distribution function. 2. The company was founded in 1997, initially as an online sales mechanism for Virgin Trains, but since 2002 has been independently owned by private investors and has no preferential relationship with any of the UK’s Train Operating Companies (TOCs). 3. In addition to its branded website at www.thetrainline.com, the company works with the majority of Train Operating Companies (TOCs) to provide the IT infrastructure for their online ticketing services, and also provides ticketing direct to a number of large companies, public sector organisations and service providers in the travel sector (eg Barclays, BT, the MoD and Carlson Wagonlit Travel). 4. The Trainline also provides a number of Oyster Cards to our business customers in London and welcomes the recent news that TOCs have agreed to work with Transport for London to roll out Oyster across the London rail networks. 5. We are at the forefront of the market in delivery of new methods of ticketing and are engaged in the development of new technology to improve customer experience and reduce TOC costs in this respect. For example, we are currently developing “airline-style” ticketing in collaboration with Virgin Trains and supports calls for increased simplicity. In addition, we are currently developing innovations along the lines of “smart ticketing”—including use of mobile technology, smartcards and print at home e-tickets. 6. As a specialist ticketing provider, our response to this inquiry focuses on questions 1 to 5 regarding ticketing arrangements.

IntegratedTicketing

Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas?

7. No. The modal ticketing systems in the UK do not generally work well together when compared with those in other European countries. Diverse ticket fulﬁllment methods and the lack of data lie behind poor integration across modes, a situation exacerbated by the optional nature of integrated ticketing between modes in the UK. 8. Universally accepted methods of ticket fulﬁllment, data and a legal requirement to be part of an Integrated Fares Management System are the primary requirements for large-scale adoption of integrated ticketing in the UK.

Does the Government have an adequate strategy for developing the integration of ticketing systems?

9. The Trainline has concerns about the adequacy of the Government’s strategy for improving the degree of integration. Experience around the world indicates that for integrated ticketing to be used extensively by the travelling public, both the tickets and related information must be widely available for the diVerent modes concerned. This requires an open approach to the availability of data, which is a pre-requisite to the wider adoption of integrated ticketing. The take-up of integrated ticketing in the UK could therefore be enhanced if the licensing of public transport services were to go hand in hand with an obligation to make timetable, routing and fares information available directly to the public and indirectly though other carriers and ticket retailers in the transport industry. The provision of timetable and ticketing information should be mandated to be in the standardised formats already agreed by the transport industry according to ISO/ FDIS 24014-1 (international Standard for Public Transport Interoperable Fare Management Systems). 10. Interoperable fare management systems can exist co-operatively together—but a Common Requirement Specification for Interoperability (CRSI) is needed for them to collectively operate in an integrated manner. DfT should tender for and implement such a CRSI (compliant with ISO 24014) and pump-prime an independent cross-transport organisation to have responsibility for this activity which would have the necessary integrated transport vision. Combining this organisation with ITSO (Integrated Transport Smartcard Organisation) would have the added benefits of being able to manage the security necessary for smartcard fulfillment, which is likely to be the universally accepted fulfillment method for transport tickets across multiple modes. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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TheUse ofSmartcardTechnologies

Is the industry taking up modern smartcard technologies adequately and appropriately? 11. The adoption of the Integrated Transport Smartcard Organisation (ITSO) specification by the DfT for public transport operators in the UK is very much to be welcomed, since it is an internationally recognised open specification which allows the implementation of Integrated Fares Management systems and the common acceptance of smartcard fulfilment across multiple modes. 12. It is also appropriate that the DfT is seeking to implement convergence with the earlier Oyster system and conversion of other proprietary systems in English cities. These actions considerably increase the likelihood of successful integrated transport provision in the UK in the next decade and encourage retailers and product owners to participate in multi-mode integrated ticketing. Our view is that, from a technical implementation perspective, two years represents a realistic time frame for ITSO convergence with the London Oyster scheme, and that both organisations should be encouraged by Government to deliver this desirable objective. 13. In the rail industry, a relatively rapid adoption of season tickets on smartcards could have a significant impact on ticket oYce and self-service transactions at stations, which has to be balanced against the benefit to customers. The introduction of multi-journey and other new products will also have an impact on station transaction volumes. It is likely that the use of smartcards will also be encouraged by the use of loyalty-type features oVered to cardholders. 14. The consequences of the reductions in transaction volumes by up to 60% at stations should be addressed in policy terms by the DfT in order not to delay smartcard adoption by existing rail franchisees. The DfT should also consider the eVect of current regulations and agreements on the take-up of innovative customer-service options so that regulatory concerns do not slow smartcard adoption. For example, customers will be less likely to purchase tickets at stations, even though station queuing times often represent franchise commitments. Related franchise terms may therefore need to be altered to take this into account.

Does the ITSO system cater for the needs of all passengers and travel providers? 15. Yes. It is our opinion that, with the notable exception of Oyster within the Transport for London area (examined above) the ITSO speciﬁcation covers all existing UK transport tickets and also allows the creation of new, innovative products. It is, however, essential that ITSO remains independent of product owners and transport operators.

What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? 16. Oyster “Pay as you go”, together with zonal pricing, are attractive to passengers in London and the desire from passengers to extend these features to London rail services and beyond would indicate that similar products using ITSO Stored Travel Rights and Charge To Account will be equally popular. This in itself could lead to a major simplification of rail ticketing products over a relatively short period of time following the introduction of smartcards. 17. A growth in demand-managed fare products is likely to happen hand in hand with product simplification. Adequate measures to protect passengers from unintentionally large changes in fares through the combined eVects of product simplification and demand-management should be considered by DfT. 18. It is also clear from both the London scheme and the Scottish scheme that the infrastructure cost and project complexity for implementing smartcard readers is a significant concern for transport operators and is a one-time expenditure which does not fit easily into current franchise and carrier contractual arrangements. DfT should provide a lead in establishing a financing mechanism for this capital investment that allows it to be managed away from the balance sheets of the transport operators through a facility independent of both government and operator. 19. The changes to distribution strategy brought about by the introduction of smartcards elsewhere has generally resulted in improved customer perception of the transport network and increased patronage. It is recommended that DfT undertake further studies on the likelihood and consequences of a relatively rapid step-change in passenger volumes.

Conclusions 20. We believe that improving ticketing arrangements across all modes of public transport in the UK plays a vital role in encouraging take up of public transport, particularly multi modal use—as well as making the best use of the capacity available. These are important goals and objectives if the UK is to reduce its dependency on road use and motoring. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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21. To ensure that a more joined up ticketing system is rolled out in the UK, the Government needs to have a much clearer strategy in place—and then ensure that it maximises opportunities such as franchise negotiations to challenge transport operators to improve and upgrade ticketing arrangements and systems. 22. The Government also needs to review its approach to the availability of data. This is a key issue and we suggest that the licensing of public transport services should also include obligations that make timetable, routing and fares information directly available to the public and indirectly available though other carriers and ticket retailers in the transport industry. 23. We would be happy to explain our views in more detail should the committee wish. March 2007

Further memorandum from the Trainline.com Ltd (TPT 18a)

Inquiry intoTicketing onPublicTransport As you may be aware, the Trainline.com is one of the key outlets for online ticket sales, both through our own website www.thetrainline.com and the “white label” sites we provide for many of the major TOCs. We submitted the attached evidence to the committee in respect of your inquiry into ticketing on public transport and have been following the evidence sessions with interest. Since we submitted our evidence, there have been two significant developments at the Trainline in relation to smartcard technology which we are now in a position to share and hope will be of interest as you reflect on the recent evidence given to the Transport Select Committee. These were briefly flagged by your colleague Clive EVord MP at the session on 12 December and I have set them out in further detail below so you have the full picture. Firstly, we are confident that our innovative smartcard software, developed from one of our oYces based in Scotland, would allow us to operate the full compliant ITSO system on the same physical smartcard as the full London Oyster system without making any amendments at all to the existing gates and systems. Clearly to take this forward in practice would require the agreement of TfL and Transys, but we believe this approach could not only deliver substantial financial savings to Government and the rail industry, but also oVer the UK rail customer the opportunity to have both functionalities on one card without risk that they are going to technically conflict. This project is moving very quickly so I would welcome the opportunity to meet with you in the New Year and provide a further update on our proposals. The second point I wanted to highlight relates to the availability of online fare to the public. You may recall that Clive EVord MP highlighted the little-known derogation within the existing rail legislation and its implementation through the Ticketing and Settlement Agreement which allows Train Operators to only oVer certain tickets through restricted channels, for example their own websites. This derogation has the eVect of distorting the market as far as the customer is concerned, because in order to be able to buy the cheapest tickets, the customer would have to visit every website or call multiple call centres, contrary to the widely available access and fare simplicity intended in the Rail White Paper—we are implementing the indsutry fare-simplification changes from May 2008. For example, take the journey from York to Portsmouth. It is possible to buy tickets at several prices online for this journey, but for a discounted NXEC-only ticket for York to London, the customer can only buy from NXEC’s website because it uses the DfT derogation to ensure that it cannot be sold elsewhere. Similarly, for a “Megatrain” ticket on the service from London to Portsmouth, the customer can only buy this from the Stagecoach SouthWest website. This situation will get significantly worse as smart ticketing is introduced because, in our view, TOCs will use this derogation over a wider range of tickets. In our view, an impartial national retailer (such as Trainline) should have access to all train operating companies fares, providing a one-stop shop for a customer to simply and easily purchase the cheapest ticket for their entire journey from their favourite retailer. We are of course also in the process of briefing the Department for Transport on our plans, and given that your committee will also be considering the Rail White Paper in the New Year, I would very much welcome the opportunity to meet with you and brief you further. To this end I will if I may, get in touch with your oYce in the New Year to see if it is possible to arrange a meeting with you in January. Jeremy Acklam The Trainline 21 December 2007 Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Memorandum from Transaction Systems Ltd, (TranSys) (TPT 19)

ExecutiveSummary — Transaction Systems Limited, (TranSys) is the consortium that designed, developed, maintains and operates the Oyster smartcard transport ticketing system in London under the terms of the 17 year PFI PRESTIGE services contract that was signed in 1998. — PRESTIGE has been an undisputed success. 7.6 million journeys every working day are made using Oyster. — From the passenger perspective, smartcards can deliver increased convenience and ﬂexibility. — For the operator, smartcards can reduce costs of ticket selling, improve security through reduced cash-handling and provide better usage information. — The experience of London shows that smartcard technology works and can help to reduce passenger congestion and fraud. Savings from reduced fraud are extremely diYcult to estimate accurately and depend upon the extent to which the operator wishes to operate a closed system. However, the experience with gating on London Underground shows that revenue growth immediately following introduction of the gates averaged about 10%. — With the right policy direction from Government, TranSys believes an economically-viable integrated smartcard ticketing system across Transport for London (TfL), National Rail and other transport modes is achievable. — For the bulk of passenger mass transit journeys in the UK, a smartcard ticketing system is the best way forward for enabling operator integration and delivering beneﬁts to the passenger.

Introduction The TranSys consortium provides, maintains and operates the Oyster smartcard transport ticketing system in London under the terms of the 17-year PFI PRESTIGE services contract that was signed in 1998. The principal partners of the TranSys consortium are Cubic Transportation Systems (CTS) and Electronic Data Systems (EDS) who are responsible, respectively, for asset provision and operational services. Fujitsu and WS Atkins are also minor shareholders in the consortium. The PRESTIGE-Oyster system is designed to be multi-modal and smartcards work across London’s Tube, Docklands Light Railway (DLR), tram, and bus network, as well as on speciﬁed national rail services. Users with travelcards (daily, weekly or monthly) can also travel on rail services within the Greater London area in all the zones for which they have validity on their card. The National Audit OYce report on Achieving Innovation in Central Government Organisations published in July 2006 stated “The project was developed to time and to budget and has won several awards, such as the New Statesman “Modernising Government” award (2004), the MCA award for technology innovation and the PFI best Transport Award”. The Oyster smartcard has been an unqualiﬁed success since its launch in 2002, and the Oyster card is used by more passengers each day than any other smartcard system in Europe. TranSys will be working closely with TfL over the coming months and years to achieve the shared vision of integrated smartcard-based ticketing within the Greater London Authority (GLA) area. TranSys’ responses to the Transport Select Committee’s questions are set out below, following the same numbering as set out in the Committee’s terms of reference.

IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? 1.1 No. However, the arrangements in London show that integration is possible across modes (Underground, tram, buses, light rail, and speciﬁed national rail services) when there is a will to achieve it. 1.2 At present, the extent of ticketing integration varies within diVerent geographical areas, between diVerent geographical areas, and across diVerent modes of transport. National rail tickets are integrated between overground/mainline stations and through magnetic stripe tickets with London Underground. 1.3 However, outside of the London Oysterised area there is little integration with local bus services in diVerent geographical areas, or with other forms of transport (light rail, metro). Customers are baZed and irritated at the disjointedness of ticketing policy and possibly discouraged from using public transport by the need to queue and purchase more than one ticket on multi modal journeys. If the government wishes to encourage the use of public transport, whether it be bus or rail, to reduce car usage and meet energy and emissions targets it needs to enable public transport with “a convenience factor”—get in and go—and then provide the service and capacity necessary. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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1.4 The term “integrated ticketing” needs to be commonly understood by and from a passenger’s perspective. TranSys’ experience in London tells us that passengers want: (a) Convenience—one ticket covers all modes of travel—easily purchased without queuing from a wide range of retail and other channels that suit the passengers’ preference. (b) Value—the ticketing system will succeed if it provides best value, i.e. discounts, capping or loyalty benefits without the passenger having to be an expert in ticketing and fare rules. These benefits are most eVectively delivered by a smartcard system with “pay-as-you-go” capability that “caps” a passenger’s fare to be equivalent to a best value fare. (c) Security—the ticketing system and the supporting infrastructure must be trusted by the passenger, particularly so where the passengers “stored value money” of a “pay-as-you-go” capability is concerned. (d) Non-intrusive—anonymous if the passenger so chooses. (e) Equipment that works—reliable and user-friendly. 1.5 The term “integrated ticketing” also needs to be understood from a policy maker’s perspective. Issues to be addressed include: what is the scope in terms of the modes of travel? Which operators are to be included from day one and what might be added at a later date? Who will have control during implementation to ensure that resolution of emerging issues and who will manage change over time? 1.6 At present, data on National Rail travel usage is derived from manually conducted twice annual passenger count surveys which are used basically for revenue allocation. These are inaccurate, ineYcient, partial and expensive. An integrated smartcard ticketing system would transform this for policy makers and oVer real benefits: — real and accurate data on usage and time of usage, assisting with demand management planning and the planning of service frequency; and — data on origin and destination of journeys, which can be very useful in optimising capacity planning and thereby reducing energy and carbon emissions.

Integration inLondon 1.7 Within London, ticketing has become highly integrated (a single ticket for Underground, bus, DLR, and tram services). The present gap in London is for those passengers travelling to London on national rail tickets, especially from south London and from the wider South East region. Although the system is not fully integrated, the introduction of national rail zoned fares within London and the outline agreement in January 2007 of TOCs operating in London to accept Oyster PAYG will integrate the London transport system even further. It has not yet been determined by transport operators and transport specifiers (PTEs, Department for Transport) how far this ticketing integration will extend beyond Greater London Authority (GLA) boundaries. The Department for Transport is due to approve shortly the extent to which the Mayor of London will be granted powers to specify rail services and potentially fares in areas beyond the Greater London boundary. 1.8 The transport pressures in London are unique. About 70 per cent of all rail journeys in Britain either start or finish in London. The PRESTIGE contract was designed to ensure that London has a ticketing system that enables it to cope with heavy peak traYc loads. The Oyster smartcard system is an example of an integrated ticketing system that can handle thousands of passengers every minute and millions of passengers each day, and which allows Londoners to travel around the Capital on diVerent modes with greater ease. 25 1.9 Transport for London’s T2025 document anticipates that the predicted employment and population growth in London will result in a 30% increase in public transport passenger km travelled in the morning peak by 2025. The speed of the Oyster smartcard allows 40 people a minute to pass through a ticket barrier, which is critical at times of peak passenger flow through busy stations. 1.10 An integrated ticketing system would need to recognise the particular conditions in London if it was to be compatible with London’s system and not cause delays and blockages at mainline terminals and major interchanges throughout London. It must be able to safely, speedily and faultlessly handle thousands of passengers arriving at a station within a short time (eg due to simultaneous peak hour train arrivals on several platforms, which may unload several thousand people in a couple of minutes). 1.11 The further roll-out of Oyster Pay-As-You-Go (PAYG) to national rail services in London raises the proposition of how far integration should extend out of London to a commuter’s journey starting point—for example, onto local bus services in the Home Counties. This is a matter for transport policy and delivery authorities to consider.

25 Transport 2025: Transport Challenges for a growing city, Transport for London, June 2006. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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IntegrationNationally 1.12 Nationally, there are significant structural, legal and commercial barriers to ticketing integration. 1.13 Barriers on the rail network include: (a) The fact that the TOCs carry the revenue risk within the franchise agreement and therefore any change to ticketing or fares policy (whosoever makes it) is seen as a potential risk to their business. (b) An integrated ticketing system requires a level of cooperation and sharing that is culturally diYcult for a competition-based industry focused on short to medium term profit maximising, particularly if it requires any significant capital investment with a longer payback period than the duration of the franchise. (c) As a consequence of the value of the franchise agreements they are caught by the European mergers and competition rules. Since the TOC owning groups are mostly also major UK bus operators, they can be reluctant to integrate fully national rail and local bus services in order to avoid the possibility of being regarded as having exploited a dominant position. (d) The diVering characteristics of each TOC (traditionally characterised as London and South East (LSE), Intercity, and Regional) is a barrier to integration. There is a strong and positive business case for those franchisees for LSE TOCs, where there is heavy usage and where overcrowding is an issue. But “pay-as-you-go” from a stored value on the card has little benefit from a passenger’s perspective for Intercity services where the average fare value is over £20. Passengers will not want to tie up cash to pay Intercity fare levels from a stored value. Conversely, in regional TOCs the fare paid by the passenger is only c25% of the real cost of providing the service (eg Arriva Trains Wales or Northern franchise) and in these cases the value of an integrated system is a function of the importance of an integrated system with local bus services. (e) Who is, or will be, the customer with the vision to drive it forward? 1.14 On the bus network, the barriers to integration include: (a) the de-regulation of bus services outside of London and the multiplicity of small operators mean it is diYcult to deliver a national integrated system unless it is mandated at the outset as part of an operators’ licence—this may be possible through the intervention of PTEs; and (b) Nationally integrated ticketing will be low on the agenda for the multitude of small local bus operators because they will be reluctant to pay for the infrastructure cost associated with a National system.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? 2.1 No, TranSys does not believe that the current strategies being pursued will result in a National integrated ticketing system in the short to mid term that truly benefit both regular mass transit passengers and operators. 2.2 The current strategies are: — to mandate ITSO compliant cards on national rail in franchise agreements and require bidders to submit bids for smartcard schemes; — TranSys is not aware of any policy on buses other than to mandate ITSO cards; and — integration of London into a national scheme will be by requiring TfL to accept ITSO cards. 2.3 TranSys believes this will not deliver an integrated ticketing system because: — A national integrated ticketing system is an achievable but very complex system—the ticket medium (smartcard) or ITSO specification used on the card is only a small element in that system. Other key features of a successful integrated system are base data, ticket logic and fares tables, revenue allocation protocols, inter-device and device-to-communications processing communications protocols, security protocols, comprehensive business rules and operational rules, data outputs and formats, system and equipment redundancy, disaster recovery arrangements, maintenance and service levels and device availability. — The ITSO specification is “permissive” (allowing diVering solutions and options) rather than “definitive” (providing a measurable and defined envelope of parameters or performance). It is therefore capable of being met by a number of diVerent interpretations. — By allowing multiple operators to develop smartcard solutions within franchises there is the danger that they develop ITSO compliant solutions that meet their franchise obligation but do not consider a national perspective as part of the delivery and are therefore unlikely to be an integrated solution. The worst outcome would be a passenger taking a journey from (for example) Brighton to Birmingham that requires 3 separate smartcards. — Following the franchise replacement route will mean that a totally integrated ticketing system will not be available until late in the next decade. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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— Multiple operators with their own solutions will require multiple back oYce environments all with potentially diVerent security arrangements and information protocols. Management of all of these facilities and ensuring that they all access and use the same fares information and revenue allocation rules will be an operational nightmare. 2.4 For success, our experience in London shows that you must have: — a robust and knowledgeable client with vision, empowerment and clear objectives; — a contract that provides incentives to meet the project objectives; — a single systems integrator; and — a chosen supplier with proven experience of similar applications which minimises the risks in the project. 2.5 The chance of delivering an integrated system without a systems integrator is virtually non existent. 2.6 Given that the ITSO speciﬁcation is subject to interpretation and may be met in diVerent ways it is vital that there is a single customer with the power to make decisions on security arrangements, interpretation of the speciﬁcation, communications protocols and so forth. This customer must have an intelligent vision of what is required and a full understanding of all of the implications of any changes from an end user and an operator’s perspective. This customer must have the respect of all of the operators. 2.7 TranSys believes that the Rail Settlement Plan (RSP) should serve as the “customer” for a national integrated ticketing system. They have the respect of the rail operators, they have managed ticketing integration across the national rail network through magnetic tickets, and they have a full understanding of all the operational issues.

TheUse ofSmartcardTechnologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately? 3.1 There has so far been limited take up of smartcard technologies outside of London. Take-up has been patchy and has been on a small scale eg for bus services in Chester, bus services in Cumbria, bus services in Southampton, and concessionary bus fares in Cornwall and in Mid SuVolk. In some places, smartcards have been taken up, but these have been for local non-transport services such as libraries and leisure facilities (eg SheYeld, Cambridgeshire, Bolton, and Bracknell Forest). Southampton has taken up smartcards for bus services, proof of age, and for NHS organ donor registrations. At present, smartcard technologies have not been taken up or delivered successfully in big UK cities or in the Home Counties on a scale anywhere near that of PRESTIGE. 3.2 The experience of London has shown that some train operating companies (TOCs) have been slow to take-up these cards (although the TOCs have recently agreed to accept an oVer from Transport for London to install Oyster PAYG equipment). The TOCs have had concerns about revenue sharing and allocation, and about the capital cost of system-wide installation. The barriers to the take-up are set out in paragraphs 1.13 and 1.14. 3.3 The PRESTIGE-Oyster system in London is the largest commercial based ticketing system in the UK. The system handles 36 million passengers a week. It is a system that is durable, eYcient, fast, and has equipped TfL with unprecedented levels of relevant and reliable data on journey and sales trends which they can use to plan accurately future services. 3.4 The Scottish Executive is commissioning the ﬁrst large scale implementation of an ITSO compliant smartcard. The scheme is for concessionary travel on Scotland’s public transport for elderly and disabled citizens across Scotland. It is currently undergoing a live test in the Shetland Islands.

4. Does the ITSO system cater for the needs of all passengers and travel providers? 4.1 The Government has for some time mandated the use of the ITSO standard for smartcard ticketing when specifying contractual arrangements. ITSO was created to facilitate smartcard transport ticketing inter-operability “from Land’s End to John O’Groats”. 4.2 The ITSO speciﬁcation covers: — Cards; — Points-of-sale/service; — Back oYce systems; — Data formats and transfer protocols; and — End-to-end security architecture. The ITSO speciﬁcation does not cover: — Paper, magnetic or bar code ticketing; — Business logic and rules; and Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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— Back oYce systems such as fraud analysis, financial reconciliation and settlement, although some of these issues are now being addressed under the association of ITSO licensed operators. 4.3 TranSys supports the objectives of ITSO, which oVer the prospect of greater convenience for passengers. TranSys has contributed to the development of the ITSO system and London’s Oyster card equipment can be made to be compatible with the ITSO system, although this will be at a significant financial cost. 4.4 However, there is no fully functional intermodal (rail) ITSO card system in place yet and the system is somewhat unproven, particularly in a rail environment. In our view the most important objective is to enable interoperability for as many travellers who require it as possible at the lowest cost. A high proportion of all UK rail journeys are either wholly within or start or end in London. In addition, a very high proportion of the heavy rail journeys that start or end in London involve a journey segment on Transport for London’s bus or Underground services. Therefore the biggest issue to be addressed is interoperability between National Rail and Transport for London (ie Oyster). 4.5 Passengers and transport operators in London will be keen that an ITSO card is suitable for use in the high density high performance London transport environment. This is important not only because 70% of all rail journeys start or finish in London, but also because of the need to keep London moving. 4.6 Beyond London, the next strongest candidates for integrated ticketing are (1) travel in and around the major UK cities and large towns, and (2) some extension of Oyster into the Home Counties. This is based on the relative volumes of passenger transport use in dense urban areas, and the ability to enlarge the Oyster catchment. Our comments in para 2.4 apply, to ensure delivery of such initiatives.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? 5.1 TranSys can only provide an answer in relation to London. 5.2 The experience in London shows that smartcard technologies work and are popular with customers. 7.6 million journeys a day are made using Oyster, allowing passengers to use five diVerent modes of transport on a single ticket. 80% of all journeys on London’s Underground and buses are paid by Oyster card. This is by far the largest smartcard scheme fully operational in the UK and is one of the largest in the world. 5.3 Smartcard transaction performance times are extremely important—the shorter the transaction time, the higher the first time read reliability will be and the higher the validation throughput will be. Fast, reliable Oyster transactions have helped increase passenger flows through Underground ticket gates and helped to reduce Bus boarding time, which in turn, has helped to reduce congestion and helped to deliver timetable eYciencies. 5.4 The key lessons from London are: — That smartcard technology works. It works reliably when the system is well specified, designed and maintained by a competent, experienced, system integrator and hardware provider. It is low risk. — Agree a specification and don’t change it. — Set clear business goals. — PFI contracts can work eYciently between Government, Operators and Contractors with appropriate risk sharing. — A phased roll-out ensured the system was suYciently tested (from both a technical and a customer perspective), facilitating the introduction of the smartcard in a way that did not inconvenience or disadvantage the customer. — Passengers like it. Almost 10 million cards have been issued since 2002. 5.5 Passengers like it because: — Cards can be issued and renewed more conveniently, not only from ticket oYces but also at retail outlets, by phone, over the internet or by auto-load i.e. once issued with a card passengers never need to visit a ticket oYce again. — The system provides peace of mind that it will always charge the equivalent of a “best fare” for the journey taken i.e. end-to-end journey discounts, daily, weekly and monthly capping options. — No need to carry money or have the correct change. — No need to understand complex fare tables. — The card can be kept in a purse or wallet and does not need to be inserted in a slot to be read. — The system can provide security against loss or theft, if the card is personalised and registered with the operator. 5.6 Transport Operators like it, because: — It provides more comprehensive data on revenue and usage by time of day, origin and destination, class of travel etc. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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— It facilitates better service planning and optimisation. — It reduces operating costs in certain circumstances. — Stolen or fraudulent cards can be hot-listed and prevented from use. — It enables accurate apportionment of revenue between diVerent operators and modes of transport. — The smartcard increases passenger ﬂows through gated stations and on buses. — It enables Local Authorities to provide concessionary travel to students and pensioners etc and to obtain accurate usage information as a basis for reimbursing transport operators. — Reducing cash transactions and increasing electronic payment methods can achieve signiﬁcant savings. (Cash handling is costly and more open to fraud). Reduced cash handling also provides better security, particularly for bus operators. — Businesses can be incentivised to provide employee passes for business use, and receive monthly, itemised billing. — Smartcards provide opportunities for non-transport related, secondary revenue generation e.g. combined travel and theatre / sports admission tickets, parking, congestion charging payment, etc. 5.7 It has taken political leadership from Transport for London (with the oVer to fund the installation of Oyster PAYG equipment) to get the TOCs operating in London to accept Oyster PAYG on their services. This shows the importance of having a centralising, co-ordinating integrator.

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate?

7. What appeal mechanisms exist for passengers, and are they adequate?

8. Are the rights of passengers and the powers of ticket inspectors well-balanced? TranSys is not qualiﬁed to respond to these questions.

9. Do operators of public transport take adequate measures to protect fares revenue? The extent of fare evasion is extremely diYcult to quantify and the incremental business case for gating additional stations cannot always be made within the duration of a franchise. A national integrated ticketing system would perhaps enable better revenue capture overall by the extension of gating to more stations as a result of a longer term holistic view being taken rather than an incremental business case for each station. Clearly on trams and buses it is not cost eVective or it is physically impossible to provide suitable automatic entry and exit gates and in these circumstances revenue protection personnel need to be employed, but there are limitations as to their capabilities to restrict fare evasion during the morning and evening peaks.

ConcessionaryFares—theRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate?

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? TranSys is not qualiﬁed to respond to these questions. March 2007

Supplementary memorandum from TranSys (TPT 19a)

ITSO andOyster—TechnicalImplementation andIssues

Introduction The PRESTIGE Project contract was signed on 14 August 1998 after years of investigatory trials and negotiations. ITSO was formed in December 1998 to develop a specification for an interoperable smartcard. ITSO comprises authorities and operators of each public transport sector, as well as system and equipment suppliers and is supported by the Department of Transport (DfT). Its primary objectives are to: — Develop a specification for an interoperable public transport smartcard across the UK. — Encourage implementation of the specification. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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— Ensure the conﬁdentiality of data for each party. — Provide open standards to parties wishing to conform to the speciﬁcation.

ITSO andOysterDifferences ITSO is designed to meet the needs of all UK transport operators and Public Transport Executives (PTEs) without particular emphasis of any one aspect. Oyster is designed explicitly to meet the needs of TfL with performance optimised around the associated business operations. DiVerent methods are employed by ITSO and Oyster in how ticketing functions are delivered: — ITSO joins multiple discrete schemes (Scotland, Cheshire etc) via centralised security management whereas Oyster operates as a single overall scheme. — ITSO is decentralised with multiple card and product issuers and service operators with the associated databases. Oyster operates a single, consolidated scheme database. — ITSO Ltd mandates the security scheme to be applied by ITSO scheme operators, including the supply of the security service and secure modules (but does not take any financial liability). TranSys bears the card security fraud risk for Oyster and uses TranSys designed solutions. — ITSO supports multiple smart card technologies. Oyster cards are currently only issued using a single technology, although the installed readers are capable of being upgraded to read more. — ITSO supports a wide range of ticketing products, including singles, returns, reserved seats, travelcards, loyalty products and a stored value purse. Oyster currently supports zonal travelcards (including the Freedom Pass concession) and the Pay As You Go “ePurse” product. — In ITSO responsibility for managing the operating software and scheme updates is devolved to the schemes who may have to bear the costs for other schemes/PTEs to accommodate any changes required. Oyster scheme updates are controlled through TranSys, who are responsible for managing the system including the end devices. — ITSO was created explicitly to be an open standard. Oyster is not designed as an open standard, due to the fraud liabilities represented by the TranSys PFI model. Information has been restricted to partners integrating Oyster in conjunction with TranSys. — ITSO modifications are processed through a Technical Committee of respective experts (drawn from the ITSO membership) prior to agreement by the wider membership, then DfT and finally ITSO Management Board. Oyster updates are designed and managed by TranSys, in conjunction with TfL. — Settlement and Clearing is outside of the ITSO specification. Oyster supports Settlement and Clearing as part of the scheme design. As a consequence of these diVerences, there are a number of significant challenges presented by the integration of ITSO on Prestige: — ITSO card processing takes significantly longer than for Oyster cards, due to the additional data stored (for full accountability) and security module use. — The prevention of transaction loss requires end-to-end acknowledgement of data transfers. — Larger ITSO transaction sizes (for full accountability) and additional operating data required to support the ITSO functions require greater communication bandwidth and storage capacity within the system. — Additional data transfer will aVect operational processes (eg bus driver sign-on times). — TranSys is unable to underwrite performance across all ITSO card types as it cannot control the performance characteristics of cards that are ITSO certified. It is only reasonably possible for TranSys to underwrite performance for an agreed subset of ITSO card types issued on an agreed retailing basis. — The ITSO Specification is continually evolving, creating a constantly moving baseline that needs to be managed and assessed.

ITSO on PRESTIGE The objective of the ITSO on PRESTIGE (IOP) Project is the “acceptance of ITSO-compliant smartcards with a limited range of products by PRESTIGE Validation Devices to make them able to accept ITSO cards”. A Variation Notice to the existing Ticketing Services Contract (TSC) was issued by TfL to TranSys. It speciﬁes the need for a Design Study that would enable TTL and the Department for Transport (DfT) to authorise the implementation of the IOP Project. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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The Design Study comprises three stages: 26 — Stage One—Scoping Study (completed). — Stage Two—Requirements Analysis (completed ). — Stage Three—Programme Deﬁnition and Firm Fixed Price Proposal (work-in-progress).

KeyRequirement The overarching statement of requirements is that, “Operationally, there must be no degradation to the current Oyster service as a result of the implementation of ITSO on PRESTIGE”: — Operations include passenger gate throughput transaction times, bus driver sign-on times, fares revisions, and the provision of (management) reports, as speciﬁed in the TSC. — Degradation refers to all performance measures cited in the TSC (no relief will be given to the terms of the current TSC), the ability of TfL to deliver the Oyster service, and the availability of the Oyster service. — Oyster Service refers to current provision under the TSC or any addenda thereto made by previous variations to the PRESTIGE contract; there will be no adverse aVect on the TSC. — Implementation relates to any and all interfaces between ITSO and Oyster on PRESTIGE. The following key requirements in addition to the above from the Variation Notice were derived. The system must: — deliver a passenger experience similar to that of Oyster, where possible; — be fully ITSO certiﬁed; — support all ITSO card types and relevant product types; — provide ITSO card read / validation performance of less than 750 milliseconds; — operationally support ITSO Hotlists and Action Lists; — fully implement TfL’s existing magnetic ticket business rules applied to ITSO cards; and — provide support for revenue control activities, including passback protection. IOP will provide an ITSO Operating service in that it will accept ITSO products presented on a smartcard, without providing product retailing functionality to TfL.

ImplementationSolution The End Stage Two Report included various options to meet the requirements. Option 2 was selected for the Stage Three activities. This option is full replacement of the PRESTIGE readers and the functional capability to support ITSO Hot Lists and Action Lists as well as facilitating staV Customer Service assistance and providing Passengers access to information on their ITSO cards. The following technical solutions will be required to implement ITSO on PRESTIGE: — Provision of TfL ITSO back oYce (purchase and integration) and associated ITSO infrastructure enhancements. — Upgrade the card readers (hardware and software) to provide the required card performance and to include the ITSO Security Access Module (ISAM). — Upgrade Ticket OYce Machines (software) to read and display ITSO card contents to enable ticket oYce personnel to determine whether or not passengers have the correct products with which to travel in “Oysterland”. — Upgrade Patron Operated Machines (software) to read and display ITSO card contents to enable passengers to determine whether they have the correct products on their ITSO cards with which to travel in “Oysterland”. — Provide the functionality (hardware and software) for ITSO data to be retrieved from the memory of a failed card reader to ensure no transaction data is lost. November 2007

26 The results of the requirements analyses are presented in the ITSO on PRESTIGE Project—Design Study: End Stage Two Report. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Memorandum from Association of Train Operating Companies (ATOC) (TPT 20)

A.IntegratedTicketing

What train operators are doing today Integrated Ticketing. Comprehensive through ticketing is already provided between passenger train operators on the National Rail network as well as integrated ticketing with metro and light rail systems, buses, ferries and visitor attractions. Train Operators are obliged as a condition of their Passenger Licences, to participate in through ticketing arrangements covering most station to station journeys in the country. Integrated ticketing is delivered through the Rail Settlement Plan, run by ATOC, which produces fares, timetable data and other sales information for train operators, and handles the allocation of rail revenue between them. RSP is responsible overall for the annual allocation of £4.8bn of rail revenue. Ticketing Systems. The cost to train operators and agencies of providing information and ticketing services to passengers nationally is £400 million pa, and the approach has been to develop systems that provide better facilities for passengers but also that reduce the costs of the railway through lower transaction costs. Train operators have invested heavily in new ticketing systems and the last of the older BR machines are being withdrawn this month. The new systems are PC based, with capacity for handling integrated ticketing using magnetic encoding, while some are also capable of writing to Oyster cards as well. The machines have taken advantage of latest developments in the retail sector, so costs have been contained and the machines are both reliable and flexible in terms of future ticketing developments. There has been a significant shift away from sales at stations to on-line and call centre bookings, with tickets delivered by post or collected through Ticket on Departure machines at stations, just like the systems used by airlines. Ticket on Departure sales are now responsible for £300 million of revenue, compared with zero five years ago and form a significant method of distribution for a number of long distance train operators. Passengers’ Views. The National Passenger Survey (NPS) sample showed 18% of passengers travelling on season tickets, 35% booking in advance and 31% buying their tickets on the day of travel at the ticket oYce. 12% use a ticket machine, or pay on the train. More than 50% of passengers are already using tickets purchased before travelling, and this is expected to increase with a rapid switch to on-line or telephone bookings. The National Passenger Survey also shows that 65% of passengers were satisfied or very satisfied with ticketing facilities at stations, while 19% were dissatisfied (16% were neither). Similar results apply to advance bookings by phone, with 59% satisfied or very satisfied, and 18% thinking the service was poor or very poor. The percentage of satisfied long distance passengers however, was much higher, at 79%, with only 9% dissatisfied. These figures demonstrate the need for improvement which is being actively tackled by train operators with investment in new equipment, systems and training, as described below.

FutureDevelopments Drivers of Change. Rail ticketing is changing rapidly for six principal reasons: — Passengers’ expectations are rising in line with their experience with other service providers such as airlines. — The technical development of ticket machines, smartcards, on-line ticketing and mobile phone technology. — The need to reduce the cost of selling rail travel. — The commercial beneﬁts of increasing sales. — Growth in passenger numbers and the limitations of facilities at stations. — Government e-commerce initiatives. The result is a virtuous circle in which ATOC can both make ticketing easier for passengers and cheaper for operators, so helping to hold down the costs of the railway and improve service for the customer. Increasingly, passengers are looking to be able to serve themselves through on-line travel purchases or mobile phones, rather than queueing at stations. Paper ticketing will decline, as will the demand for ticket purchase at stations or on trains. The pace of change is going to accelerate rapidly over the next ﬁve years, and in particular, more people will be turning to smartcard ticketing linked to mobile phones, so that additional travel can be purchased on line, or by text, or through paypoint outlets such as convenience stores or banks. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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Range of Requirements. Smartcards will have the greatest benefit in urban areas, where the need for integrated ticketing is highest. Electronic ticketing and ticketing via mobile phone is a passenger requirement for longer distance or less frequent journeys. It also means that a better service can be provided for passengers using smaller stations that are unstaVed, without needing equipment that is expensive and prone to vandalism. The issues for the future are the pace of change, the costs involved and the best way of continuing to provide a good standard of service at a cost that is aVordable, for the reducing number of passengers that will be buying paper tickets at stations. ATOC’s Commitment. ATOC is committed to developing more flexible, consumer-led ticketing, making use of new technology which allows both improvements for passengers and a reduction in the unit costs of its provision. To support this, train operators have formed an Integrated Ticketing Group and produce a regular good practice guide for onward travel. The driving force is the commercial benefits of making information and access to the railway easier for potential customers. It is about providing what the majority of passengers want, rather than just the development of integrated ticketing.

B.GeneralQuestionsRaised by theCommittee

1. Changes in statutory provisions over the past decade have enabled local authorities and other transport providers to create integrated ticketing schemes. But is it working?

ATOC has developed integrated ticketing further and faster than any other transport operator. RSP operates by far the largest UK Interoperable Fare Management System—ISO 24014-1—and has done so over more than 10 years. Through tickets from National Rail stations are issued to: — Plusbus to local bus destinations in 195 towns and cities throughout Great Britain, from 270 National Rail stations. — Other bus/tram links: 410 links, including light rail systems. — Airports: Through ticketing is in place to 29 airports using including bus or metro connections where necessary. — London Underground: Tickets priced on a zonal basis within Greater London, for rail/tube journeys. Add-on tube/DLR tickets are available from National Rail stations to Underground stations. — Leisure attractions: 48 destinations such as Alton Towers and London Sightseeing tours, as well as eight heritage railways. — Shipping Links to: Isle of Wight, Isle of Man, Channel Islands, Scottish Islands, Northern Ireland, Ireland, and France and the Netherlands (by sea). — Rail Rovers: National, regional and line rover or ranger tickets. Some of these include bus and heritage rail services. (eg North York Moors Moorslink train/bus network). PTEs: Train operators also work with PTEs to provide multi-mode tickets within their areas. European Railways: International tickets are no longer handled at National Rail stations, but, as with airlines, can be booked at agencies or on line. Plusbus and other bus/rail through ticketing already allows multi mode journeys to be made with a single transaction. Example: Oxford (Banbury Road) to Brighton (Saltdean) can be made with a ticket covering the bus to Oxford station, train to Paddington, Underground to Victoria, train to Brighton and bus from Brighton station to Saltdean. Such tickets are not only accepted by all the operators concerned, but are encoded to operate the barriers at main line stations and on the Underground. Plusbus is run by Journey Solutions, a partnership between bus and rail operators, including ATOC and the Confederation of Passenger Transport. It will be extended to a further 21 towns and cities in May, increasing the total to 216. 85% of rail journeys are made on one train, and 15% involve a change of train at some stage during the journey. (In Scotland, only 11% of journeys involve a change of train). Plusbus ticket sales are running at a level 45% higher than a year ago, although the total number sold since April 2006 is relatively low at 60,000 tickets. Given this growth rate, advertising and extension of the number of destinations covered, further substantial growth is expected. Frequent and short notice changes in bus timetables are a practical constraint in providing supporting travel information to passengers although they do not normally aVect integrated ticketing. A process more aligned to railway timetable change dates (which are set by European timetabling considerations) may help to improve the reliability of information to passengers. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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2. The use of smart-card technologies for ticketing on public transport is closely linked to the creation of integrated ticketing strategies, and the Government supports ITSO. Is progress happening quickly enough, and are the best possible systems being put in place?

ITSO. We do not believe that progress has been rapid enough to keep pace with technological change. Whilst good work has been done by ITSO in setting standards, the organization is small and has been slow to deﬁne standards. Whilst ITSO has addressed the question of technical standards, it has not proved to be an eVective forum for managing the delivery of integrated ticketing, dealing with its commercial implications or for sustaining the systems against the background of rapidly changing technology. ATOC (Rail Settlement Plan) has taken the lead in delivering ITSO obligations on the National Rail network and is ready to provide central “back oYce” functions to reduce the costs of its roll-out. As a result of this, ATOC would be well placed to be the customer for a properly resourced national integrated ticketing system. Once ITSO compliance has been established, we would expect the spread of smartcard ticketing to be very rapid, primarily in metropolitan areas. Oyster. Train operators already accept travelcards on Oyster on National Rail services. 70 of the 330 stations within Greater London already have gates capable of reading Oyster. Additional ticket issuing machines have been procured to support the sale of Oyster. 15% of National Rail journeys within London are already on Oyster. Train operators are committed to making Oyster Pay as you Go tickets available to their customers as well, and ATOC has accepted the Mayor’s oVer to fund the capital cost of ticket validators at stations. In preparation for accepting Pay as you Go on the rail network, TOCs introduced zonalised rail fares in January. Oyster Pay as you Go will be extended to Silverlink Metro services from November this year, to Chiltern and c2c services as soon as possible, and to First Capital Connect and South West Trains from 2009. Moving beyond that to accepting Oyster Pay as you Go tickets throughout Greater London requires heavy investment in additional equipment and measures to deal with ticketless travel on a network that operates more stations in London than the Underground. National Rail covers a wide variety of services, interurban, commuter and local, and customers’ ticketing needs are diVerent. Many are single-mode journeys and many would not beneﬁt from smartcard ticketing. Separating the transaction and the ticket will allow passengers to chose the combination that suits them best. They may chose to buy the ticket on line, via telesales, or by text, and then print their own ticket, use a Ticket on Delivery machine or a smartcard top-up, for example.

3. The Committee will look at the commitment of transport providers to collect due revenue, and will also examine the balance between the rights of passengers and the duties of ticket inspection teams

No data is collected nationally on loss of revenue, but it is assessed as representing some £400 million, or about 8% of revenue, of which about 60% represents ticketless travel (the rest representing travel with a ticket that is not valid for the train or class of travel). Revenue protection is relatively straightforward and generally well managed on long distance services. On local and commuter services, revenue collection is aVected by three key factors: — The time between frequent stops which may restrict the Conductor’s ability to collect fares. — The cost of ticket inspection and fare collection. — The risk of assaults on staV engaged in revenue protection, which has led to the deployment of Rail Enforcement OYcers at stations and on trains. The move towards e-ticketing and smartcard will clearly help to overcome the first two of these issues. The level of revenue protection is variable on local and commuter services but the revenue risk of adequate fare collection is with train operators, in whose commercial interest it is to collect the money. 100% checks are not attainable so the deterrent value of penalty fares and the risk of prosecution are important incentives to ticket purchase. There sometimes appears to be a reluctance to prosecute for ticket fraud, and where prosecutions are made, it sometimes appears that sentences given reflect a view that ticket fraud is not a serious crime. Guidelines could be given on both prosecution and on sentencing which better reflected the serious nature of the oVence. 7,397 ticket fraud oVences were recorded by British Transport Police in 2005/06, of which 4,415 (60%) were detected. The number of oVences recorded represents less than 1% of the 1.075bn journeys made on the National Rail network. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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C.SpecificQuestionsRaised by theCommittee

Integrated ticketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? A high level of integration has been established by train operators, as set out above. Integration is particularly needed in urban areas, and requires proper contractual relationships and a sound legal basis, consolidating the block exemption by the OYce of Fair Trading which underpins bus/rail ticketing. Continuing referrals of train operators to the Competition Commission where short-listed bidders also operate buses in the area do not help to build conﬁdence.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? Government has been the driving force behind Transport Direct, the key to providing information about integrated journeys, and has supported ITSO, but the strategy on integrated ticketing has so far been led by train operators through ATOC, and in the case of Plusbus, in partnership with bus operators through Journey Solutions. The railway has been criticized over the complexity of its fares structure and is working hard to simplify it. From the beginning of March, the National Rail Enquiry Service web journey planner has simpliﬁed displays to give passengers much better information on the cheapest tickets available for the journey they want to make. However, integrated ticketing adds to that complexity, and this is being addressed through simple add-on fares such as Plusbus and the use of smartcard technology.

The use of smartcard technologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately? Yes. Commercial pressures are driving a rapid take-up of new ticketing technologies. Train operators have devoted substantial resources to accepting Oyster travelcards in London (and are now moving to accept Pay as you Go as well). TOCs have been in the forefront of the development of e-ticketing and permission to travel by mobile phone. ATOC has been part of ITSO from the outset.

4. Does the ITSO system cater for the needs of all passengers and travel providers? Yes, ITSO is comprehensive, but in practice is likely to be more widely used for frequently made local journeys than for long distance travel or infrequent trips.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? The lessons learned from London are that of the need for a national standard, and that when speciﬁed it should be capable of use by all operators involved, rather than requiring the retroﬁtting a system designed for a diVerent purpose. The second lesson is that smartcards require simple fare structures.

Revenue protection and the powers of ticket inspectors

6. Is the legal framework within which ticket inspectors function appropriate? Yes. They work within the Penalty Fares Rules 2002, established by the Department for Transport under the Penalty Fares Regulations, 1994 and s.130 of the Railways Act, 1993. They are applied to: — Southeastern (inner suburban area only). — Southern (inner suburban area only). — South West Trains (inner suburban area only). — First Capital Connect (Bedford to Redhill only). — One (most routes other than paytrain lines). — c2c Ltd (all routes). — First Great Western (West Drayton to Paddington and branches only). — Central Trains (Birmingham area only). — Chiltern Railways (all routes). — Northern (Leeds area only). Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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7. What appeal mechanisms exist for passengers, and are they adequate? Appeals against penalty fares notices can be made to the Independent Penalty Fares Advisory Service. Further appeals are possible to Passenger Focus or London Travelwatch and the Department for Transport which approves and regulates penalty fares schemes.

8. Are the rights of passengers and the powers of ticket inspectors well-balanced? They are strictly controlled through the Penalty Fares Rules with appeals to IPFAS as described above.

9. Do operators of public transport take adequate measures to protect fares revenue? In general, yes, but there is room for improvement. (See 3 above).

Concessionary fares—the right strategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? It looks only at one mode and does not consider rail services. However, we have no evidence that concessionary bus fares have had any eVect on the rising demand for rail services.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? No. Bus and rail concessions are not considered together by central or local Government. Most rail concessionary fares schemes are “commercial” and designed to improve net revenue by segmenting the market and encouraging travel at oV peak times. Most local authority concessionary schemes are based on social need, but are provided on bus only, and the minimum standard under the Transport Act, 2000 does not apply to rail. If extended to rail services, a national concessionary or free fare scheme would need careful thought, as it would erode or replace the current commercial schemes, and this would aVect the costs of introduction. March 2007

Joint memorandum from Stockport College and Stockport Primary Care Trust (TPT 21) 1. This evidence is compiled by Dr Peter Hayward, Travel Plan Adviser, Stockport College, and Mary Brooks, Health Promotion Adviser—Transport and Greenspace, Stockport Primary Care Trust, and is submitted on behalf of our respective organisations. 2. Stockport College is a major provider of further, higher and work-based education and services operating from two campuses in Stockport. There are currently some 9000 enrolled students and 600 staV, drawn from Greater Manchester, Cheshire and Derbyshire. 3. Stockport PCT is responsible for primary care services and a wide range of community services within its designated area. Around 1,200 staV, most of whom are part-time, are directly employed. The administrative headquarters is located in central Stockport but services are delivered through a number of local health centres. Local research has indicated that travel and access problems can be a deterrent for some sections of the community. 4. Collectively, the two organisations generate signiﬁcant travel demand both locally and regionally, and the comments which follow reﬂect feedback from users and illustrate real problems encountered by staV, students, patients, support workers and visitors. 5. Our evidence for the most part follows the framework of questions set out in the Call for Evidence.

IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? There is no doubt that cross-border travellers are often at a signiﬁcant disadvantage, especially when a change of mode—or even same mode transfer (eg bus-bus)—is required. Through tickets are often not available and operator and/or local authority discounts for concessionary travellers are restricted. In some areas, services are provided by more than one operator dependent on time of day: for those working shifts or unsocial hours, even a simple return ticket may not be valid for both legs of the journey. Rules applicable to diVerent products can vary and often have diVerent time or boundary restrictions. Representing a large Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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number of students, a particular problem is the lack of validity of young-persons railcards for local journeys before 09.30. Overall, the net result is a high level of confusion which is a deterrent to choice of public transport.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? For the average traveller, there is little evidence to suggest that the Government has any strategy at all, and certainly in the Stockport area, there has been no visible progress. There is nothing inherently wrong with having a number of operators, but without a comprehensive integrated approach to service planning, routes, frequencies and ticketing, passenger numbers will continue to decline. Locally, this might logically be addressed through the SEMMMS strategy (Southeast Manchester Multi-Modal Study) but real progress seems painfully slow and largely road-orientated. Until the Government requires local action in addition to ﬁne words, we fear that nothing will actually happen.

TheUse ofSmartcardTechnologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately? Smart card technology has been available and in use for many years but transport operators for the most part seem to be very slow in taking this—literally—on-board. One particular issue which aVects many of our students and staV is the total lack of flexible tickets suitable for part-timers. Operators seem reluctant to even consider some form of carnet system (eg valid for 10 journeys within a month) claiming to be waiting for smart-card introduction. But progress locally seems to be non-existent. The same principle is relevant to encourage flexibility in choice of mode. Car drivers may not actually require use of a car every day, but there is no real incentive to encourage use of public transport on, say, one or two days per week. Similarly, in good weather, some staV and students may choose to walk or cycle, but would value the opportunity for flexible use of public transport when needed.

4. Does the ITSO system cater for the needs of all passengers and travel providers? The objectives of the ITSO project are laudable but at this stage it is not clear whether restrictions will still apply—for example in respect of advance purchase discount tickets. It must also cater fully for the needs of part-timers and to promote modal choice and needs to be suYciently ﬂexible to cater for pay-when-you- travel needs.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? “Oyster” appears to be working well in the London area, but its success is in part a reflection of the integrated approach to public transport as a whole and in particular the widespread availability and validity of zonal tickets for all modes. The obvious first extension is to promote, or preferably require, a similar approach in PTE areas by extending the powers of PTEs. Zones should reflect natural catchment areas and not be artificially restricted by arbitrary administrative boundaries.

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate? We do not feel qualiﬁed to comment on this issue.

7. What appeal mechanisms exist for passengers, and are they adequate? Again, we do not feel able to comment in any detail, but as a matter of principle, operating companies should be more willing to accept full responsibility when they are at fault and not hide behind the small print. There should also be an obligation for a company to make reasonable arrangements to assist stranded passengers, which should include making arrangements with an alternative operator. There also needs to be a clear and consistent mechanism for redress when the failure of one company aVects onward travel by another—eg missed connections. A major consequence of the current system of semi-independent operators is the endemic culture of blaming someone else: it is always the customer who suVers. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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8. Are the rights of passengers and the powers of ticket inspectors well-balanced? We do not feel able to comment.

9. Do operators of public transport take adequate measures to protect fares revenue? No! There is widespread evidence of fares evasion, especially on the rail network. Sometimes this is deliberate but at other times unavoidable. On occasion I have travelled half-way across the country having boarded a train at an unstaVed station and not had my fare collected. On short journeys, loss of revenue must be huge. See for example survey results at www.dronﬁeldstation.org.uk All major stations and all stations on busy routes should be protected by automatic ticket gates backed up by station staV both to assist passengers and to protect revenue. One problem in this regard is the diVering priorities of those responsible for station management and the needs of all the operators. For example, a station managed by a long-distance operator may not see a need for ticket gates but they could be crucial for a local operator sharing facilities.

ConcessionaryFares—theRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? Existing arrangements suVer from the same cross-boundary problems as highlighted above: diVerent rules, diVerent times, artiﬁcial boundaries. Extension of the 60! fares scheme for buses nationally next year should go some way towards reducing anomalies but examples of diVerent validity times also need to be addressed. Extension to local train services should also be considered, especially in rural areas where rail may be the only practicable mode of public transport.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? This issue is covered in the comments above. Again, the simple answer is “No”.

AdditionalComments 1. We very much welcome the Transport Committee’s intention to address the issue of Ticketing which raises many day-to-day practical problems for our respective organisations and for those wishing to benefit from our services. Outside London, public transport usage, especially of buses has declined consistently in the last 20 years and has been matched by a general decline in services and travel opportunities. The overall result has been the huge rise in private car usage leading to the familiar problems of congestion, urban pollution and delay. Inflexibility of ticketing is an important contributory factor. 2. We believe that much more could be done within organisations to promote and facilitate public transport use, for example, taking advantage of salary sacrifice schemes and the discounts sometimes oVered by operators for in-house ticket sales. The Government should be both setting an example and increasing incentives for both employers and employees to participate in such schemes. However, as commented above, flexibility is at present a crucial missing element, especially for part-timers. With many employers also considering the opportunities for flexi-time, home-working or tele-working, this is likely to be much more important in the future. 3. Thank you for the opportunity to submit evidence to the Committee. We would be happy to expand on any of the points above if more information were required. March 2007

Memorandum from Help the Aged (TPT 22)

Introduction andSummary

Summary — Free national bus travel for older people will help us take an important step forward in making public transport accessible to older people. — Whilst we have welcomed the plans for free national bus provision, Help the Aged believes that there is a need for ﬂexibility in provision of concessionary fares by local authorities. — Help the Aged want local authorities to oVer alternative concessions (eg tokens for taxis) for those who cannot use, or do not have access to, bus services. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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— The Department for Transport should be providing guidance for local authorities on how to oVer a ﬂexible system of concessionary fares. — Help the Aged would like to see provision made in the Government’s Bill for concessionary passes to be used for community transport in areas where the bus service is inadequate and for those who are unable to use public transport due to disabilities.

Introduction Transport has a fundamental impact on older people’s lives and access to safe, accessible, reliable and aVordable transport for older people is a key concern for Help the Aged. Public transport is vital to older people. It is a lifeline to friends and family but it also helps people to stay active and independent. If it was free to travel more people would enjoy a richer old age. “Everyone in the country should have a free bus pass. We are very lucky to have such a good scheme in London” Male, Aylesbury Estate, London. “I have to go shopping nearly every day—I just can’t carry it all for the week” Female, London. “Let’s face it, you wouldn’t go out, you’d just stay in if you didn’t have one (Freedom pass)”. Female, Tulse Hill. One in five older people live in poverty, and those on low incomes depend on cheaper public transport. Yet older people face indirect discrimination in its design and delivery, as well as financial and cultural barriers to access. Help the Aged recently published “Bus Travel and Transport Concessions” (2006, HTA) which sets out how public transport and travel concessions are perceived by older people, particularly those with mobility problems and those who rely solely on public transport. The report highlights how older respondents welcome proposals for a nationwide scheme for travel concessions to be introduced in 2008, but they also strongly favour choices being oVered, by way of tokens for use on taxis, community transport and other alternatives to bus travel, to meet their diVering needs. For many, even free bus services are of little use because they find it diYcult, if not impossible, to use public transport. Yet the survey reaYrms what previous surveys have stated; that there are some key perceived barriers to greater use of public transport by older actual and potential passengers. Punctuality and reliability are vital but so are a range of other factors such as drivers’ attitudes, information, comfort and safety.

Demography In 2002, there were 9.5 million people aged 65 and over in the UK. The number of older people in our population has increased over the past few decades and is projected to continue to grow in the future. During the 50 years from 1971 to 2021, the number of people in the UK aged 65 and over is expected to have increased nearly 70%, from 7.3 million to 12.2 million. The section of the older population which has increased most rapidly, both in actual size and in relation to the total population, is that of people over 75. The proportion of people in this age-group is projected to increase from 4.5% in 1971 to 9% in 2021.

AboutHelp theAged andOurWork onTransport Help the Aged is a charity ﬁghting to free disadvantaged older people in the UK and overseas from poverty, isolation and neglect. It campaigns to raise public awareness of the issues aVecting older people and to bring about policy change. The Charity delivers a range of services: information and advice, home support and community living, including international development work. These are supported by its fundraising activities and paid for services. Help the Aged also funds vital research into the health issues and experiences of older people to improve the quality of later life. In preparing this response, Help the Aged has drawn on our extensive research and experience of working with and talking to older people. We have published widely in relation to transport and older people including: — Local Bus Services and Travel Concessions. Key ﬁndings of a survey into the experiences and views of older people (2007). — Travel, Access and Older People (2006). — In the Right Place, Accessibility, Local Services and Older People (2005). — Fair Fares, Calling for freedom of travel for older people in the UK (2003). — Help the Aged Transport Council: SARA (Safe, Accessible, Reliable and AVordable) (1988). We have also supported older people’s forums to do their own research on transport and in 2004, the Eastleigh Southern Parishes Older People’s forum published “Sic transit . . ..” Hamble to Hospital. The Hospital Travel Needs of Older People in Hamble le Rice. (2004). Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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ConcessionaryFares—theRightStrategy?

Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? — 12% of older people (1.2 million) feel trapped in their own home; — 13% of older people (1.26 million) don’t go out more than once a week; — 3% of older people never go out; — 17% of older people have less than weekly contact with family, friends and neighbours; — 11% have less than monthly contact; and — 1.2 million pensioners have no other source of income than the state beneﬁts (GB). Free national bus travel for older people will help us take an important step forward in making public transport accessible to older people. The Bill currently going through Parliament will extend the current legislation and enable the implementation of a statutory minimum concession of free oV-peak travel for pensioners and disabled people on local buses anywhere in England. Under the current system older people and other qualifying groups are entitled to free bus travel only in their local area. Help the Aged has warmly welcomed the Bill, which will allow older people to use local bus services nationwide. However, we have a number of concerns:

Takeup of concessionary fares Help the Aged’s “Fair Fares” (2003) made the case for a national system of concessionary fares and we are delighted that the Government have taken this on. However, the report also highlights the need to improve, as a matter of urgency, the levels of take-up of senior citizen travel concessions, with particular attention to disadvantaged and ethnic minority groups. The fact that there remains a low take-up of concessions in some areas and for particular groups is a major problem. Despite energetic take-up work by some local councils, there is still a long way to go. Central Government and Local Government should work together to ensure all older people use and beneﬁt from concessionary fares. A national scheme may well help facilitate national promotion which could help in this area.

Concessions are important but only part of the solution Of course the solution isn’t just about free travel—if the Government’s strategy is to succeed we need a transport system for older people which is Safe, Accessible, Reliable and AVordable. Early on in Help the Aged’s transport campaigning, a report (SARA 1998) was published which highlighted the four fundamental elements of older people’s transport needs: Safe, Accessible, Reliable and AVordable (SARA), and how failures in these four areas combine to create barriers to transport use for older people. Whilst there has been some progress, older people continue to complain that local transport services fail to meet their needs. A survey to be published in Spring 2007 shows that of those respondents who agreed that their life is not as full as they would like it to be, one in ﬁve said that better public transport would help them be more active.

And communities and services within them must be better “planned” to meet the needs of an ageing population Help the Aged’s In the Right Place (2005) details a series of recommendations and key issues to be considered by local authorities as they develop their local transport accessibility plans. If we want older people to be active citizens within thriving communities we need to ensure that the communities themselves are delivering the right services in the right places. Our follow-up report (Travel Access and Older People 2006) examined a representative selection of local transport plans in order to ﬁnd out how well the recommendations of the initial report have been implemented and to what extent the needs of older people are being met. We found that although much has been done, there is still much to do. While key services such as healthcare centres and food shops are being factored into local transport planning, equally critical destinations such as post oYces and banks are being largely ignored. The report revealed that of 31 local councils surveyed, only 10 actually made any eVorts to speak to older people or their representatives when designing a local transport plan. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 140 Transport Committee: Evidence

Restriction to OV Peak Travel The Bill going through Parliament only provides for a mandatory free local oV peak bus pass. Restricting concessions to oV-peak times prevents older people from travelling to an early medical appointment, morning adult education courses, or leisure activities with an early start time. Whilst the Government’s Bill will remove the barrier for older people travelling to a hospital appointment on the “other” side of a county/ district boundary, the failure to remove the peak time restriction for all means that older people who need to be at hospital for early appointments may still be forced to pay.

Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? No. Whilst we have welcomed the free national bus provision, Help the Aged believes that there is a need for flexibility in provision of concessionary fares by local authorities. Help the Aged are extremely concerned that the Government’s Bill restricts itself to providing free travel on buses alone. Bus passes are of no use in areas there are no or poor bus services. Help the Aged would like to see provision made in the Bill for passes to be used for community transport in areas where the bus service is inadequate and for those who are unable to use public transport due to disabilities. Bus passes are also of limited use for the significant proportion of older people, who, due to disability or mobility problems (or because the services are not accessible enough) cannot use bus services. Many older people face barriers that prevent them from using bus services. A recent survey carried out by Help the Aged in Portsmouth identified the following reasons for older people avoiding bus use: — diYculty in carrying shopping on and oV the bus; — diYculty getting to and waiting at bus stops in bad weather; — buses unreliable; — diYculty in getting to/from bus stops to home or destination; — anxiety over anti-social behaviour; — diYculty in getting to a seat before the bus moves oV; — buses run at inconvenient or infrequent times; and — timetables diYcult to read. For some people who may not be registered disabled, and therefore not have access to the mobility components of benefit packages that those who become disabled before the age of 65 are entitled to, but nonetheless experience mobility diYculties, buses can be impractical and impossible to use. Disability Living Allowance (DLA) is a non-means-tested benefit for disabled people with care or mobility needs. People who become disabled and claim DLA before their 65th birthday can continue to receive it after the age of 65. However, people whose disability arises at or after the age of 65 (or who don’t claim help until after 65) can only claim the much more limited Attendance Allowance (AA). There is no mobility component to AA, meaning those aged 65 and over cannot receive help with mobility costs. For these people, a free bus pass is of no use whatsoever. There is a risk that insisting in statute on free bus passes will impact on the flexible provision provided by local authorities. In many local authorities, concessionary fares are available in a more flexible form, with the extra cost borne by local taxation. This Bill will not do anything to remove this postcode lottery and provide the same high standard flexible concessions for all. In 2006, the Social Exclusion Unit report A Sure Start to Later Life reinforced the need for flexibility in the provision of transport services for older people. It found that “older people have told us clearly that they value flexible, individualised transport services which can allow them to retain their independence within their local community.” In the report, problems accessing transport came out as an underpinning factor that contributed to every type of isolation of older people. At present any “enhancements” to the basic free oV peak local bus schemes, such as oVering tokens which can be used on taxis, trains or community transport schemes, have to be paid for by local councils. Evidence from a study that Help the Aged undertook in Portsmouth suggests that for a large minority of older people, such a scheme better meets their needs that a simple bus pass. Help the Aged want local authorities to oVer alternative concessions (eg tokens for taxis) for those who cannot use or don’t have access to buses. At the least, the DFT should be providing guidance for local authorities on how to oVer a flexible system of concessionary fares. March 2007 Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

Transport Committee: Evidence Ev 141

Memorandum from FirstGroup plc (TPT 23)

Introduction First is a UK based international transport group with bus and rail operations spanning the UK and North America. In the UK we are the largest rail operator. We operate the First Great Western, First ScotRail, First Capital Connect and the First Trans Pennine Express franchises and the UK’s only open access train service, Hull Trains. We carry more than 250 million passengers every year. We are also the largest bus operator in the UK. We operate approximately 9,000 buses operating across 40 towns and cities across the UK. We carry 2.8 million passengers every day.

IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas?

Ticketing Across Modes

1.1 Our bus and rail operations work extensively with each other and other industry partners to deliver integrated transport. 1.2 The most signiﬁcant development in recent years has been the introduction of PlusBus, allowing customers to purchase one day’s travel on a local bus network as an add-on to their rail ticket in a single transaction. This initiative is very much a creation of the bus and rail industry and has recently achieved national coverage across all major UK towns and cities (195 locations). 1.3 The add-on cost is usually priced attractively to incentivise take-up. Unlimited bus travel for the day in Manchester for example is available for a £1.70 add-on and Norwich for £1. Recent development of the scheme has included the introduction of PlusBus season tickets. These are currently available to 103 destinations with more due to be added. 1.4 PlusBus is underpinned by the highly sophisticated rail revenue allocation system which gives every destination a unique code and ensures each operator is automatically allocated the correct amount of money for the ticket purchased. 1.5 Otherwise many of our bus and rail companies are active participants in multi-modal ticketing schemes in large conurbations, typically oVering unlimited bus and rail travel for various zonal combinations. Examples include Metrocard in West Yorkshire and Zone Travel Master in South Yorkshire. 1.6 Where demand exists it is not unusual to see other modal combinations in integrated ticketing. In our First ScotRail franchise for example, shipping services to the Western Isles are supported by the ability to buy through tickets from the rail network.

TicketingBetweenDifferentGeographicalAreas

1.7 Within the rail industry ticketing integration across geographical boundaries is possible by means of the Ticketing and Settlement Agreement (TSA) in which all Train Operating Companies (TOCs) providing franchised train services are required to participate. This agreement allows through tickets for rail journeys throughout the UK to be booked with one transaction, with booking oYces oVering an impartial retailing service to customers, regardless of which TOC is selling tickets. This means it is simple to buy a ticket from York to Penzance. 1.8 Bus travel is inevitably more localised and the issue here is ensuring ticketing complies with natural travel to work, business or leisure trip patterns rather than administrative or bus company boundaries. In West Yorkshire we have a number of companies: Halifax/Huddersﬁeld, Leeds and Bradford. Rather than a separate day ticket for each company a combined day ticket is available for £3.30 which recognises the interdependence between the four locations. 1.9 Concessionary fare areas, particularly where there is no countywide scheme, and therefore rely on discounts only for limited district council boundaries, are an obvious problem in this respect but any remaining diYculties will be solved in April 2008 with the introduction of the nationwide English scheme to match those in Scotland and Wales. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 142 Transport Committee: Evidence

2. Does the Government have an adequate strategy for developing the integration of ticketing systems?

2.1 In many ways, the rail and bus sectors, often prompted by common ownership, have shown leadership on integrated transport such that a prescriptive Government strategy has not been required. The aforementioned PlusBus initiative is a case in point and numerous other local initiatives are in place; the Holmﬁrth Connection, Heathrow Reading Railair and Bristol Flyer airport link illustrate just a few FirstGroup bus/rail schemes, many of which are long standing. 2.2 However, Government does have an important role in setting the tone and in providing the right conditions in which integrated transport can ﬂourish and we believe the Government has delivered in this respect. Some examples are discussed below. 2.3 Government has used its powers to exert leverage through franchise agreements by, for example, requiring train operators to participate in existing multi-modal products and many new franchise agreements include a requirement to provide an Integration Manager which provides a good focus for developing and improving integrated ticketing. The requirement that all TOCs operating franchised rail services are part of the TSA cannot be underestimated in terms of the maintenance of a fully integrated fares and ticketing system for National Rail. 2.4 With projects such as ITSO, Government has taken a lead in ensuring an “open access” platform for smartcard technology. This will not only enable interoperability between schemes across the country but importantly will facilitate the cost-eVective supply of smartcard technology to operators. In addition, through its underwriting the costs of the Yorcard pilot in South and West Yorkshire it is actively helping the passenger transport industry to understand the role of smartcards as an aVordable and reliable multi- modal ticketing channel of the future. 2.5 There is a mechanism within the Transport Act 2000 which enables local authorities to implement ticketing schemes where it is considered commercial provision is insuYcient to meet customer needs. However, most schemes remain operator led, testament to the industry taking a lead in the area but also assisted by the OFT working with the DfT to publish the Ticketing Schemes Block Exemption. Published in 2001 (and revised in 2006) this exempts bus and train operators from the 1998 Competition Act where there is a public interest and certain protection processes are put in place. This has led to the introduction of many new schemes. 2.6 Hence, in our view, there can be described to be a Government strategy in place for integrated ticketing but it is largely market forces through customer demand and operator initiative which is driving implementation.

TheUseOfSmartcardTechnologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately?

3.1 FirstGroup was a leader in the introduction of smartcards with the ﬁrst commercial scheme in the UK implemented in our Bradford bus operation in 1999. Since then FirstGroup bus and rail operators have worked with local authorities on the Yorcard project and in bus we have worked on local authority initiated projects in York, Cheshire and Southampton and in Scotland. First Great Western and First Capital Connect are working closely with Transport for London in relation to the acceptance of Oyster Pay As You Go on their services. At all our National Rail stations in the Greater London area, we already accept Oyster Travelcards.

3.2 Smartcard technology will naturally be implemented fastest where the customer and business beneﬁts are greatest. This is likely to be in metropolitan areas where the convenience that smartcards oVer will drive passenger uptake, which will in itself create business beneﬁts such as redeployment of ticket issuing staV to enhanced customer service roles, less cash handling and reduction of other time consuming back oYce tasks.

3.3 In circumstances where the commercial rationale is less strong, such as where there is a cost eYcient fares and ticketing system already in place, and in the absence of any other business imperative, such as a franchise obligation, it may be less appropriate to implement smartcard technology and consideration may need to be given as to what assistance can be provided if introduction is desirable to meet Government policy objectives. For example in Scotland, to support the roll out of a national concessionary fares smartcard, Transport Scotland has provided the necessary investment to ﬁt smartcard readers on buses.

3.4 In relation to the smartcard back-oYce infrastructure (processing transactions etc) consideration should be given to maximising economies of scale and scope through shared industry resources. Within this context we encourage the current discussions between the DfT and the Association of Train Operating Companies (ATOC) as regards establishing a back-oYce system for the rail industry. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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4. Does the ITSO System cater for the needs of all passengers and transport providers? 4.1 For the customer, the ability to purchase a variety of travel modes through a single smartcard in a number of diVerent locations creates a truly integrated oVering. For transport providers, it also gives a similar re-assurance that they are investing in hardware and software that has universal application. 4.2 Although the ITSO platform can accommodate all existing travel products, we do not necessarily see other payment channels being eliminated by ITSO. Smartcards are most likely to have application for frequent users probably making local journeys. The extent to which smartcards may have applicability to less frequent users such as foreign tourists or very occasional public transport users depends on the ability to store value over long periods of time and to create a simple, cheap and easy to understand registration process. 4.3 In the longer term other developments in the banking and retail sectors will determine the continuing role of ITSO. For example the concept of stored value integrated onto existing debit cards for occasional low value cash transactions is coming soon and the implications of this need to be borne in mind.

5. What can be learned from the experiences of areas such as London and Scotland where Smartcard technology is already in place?

London 5.1 Oystercard was introduced en masse in London in October 2003 and FirstGroup has been close to the product as an operator of contracted bus services in London and franchised train services where Oyster Travelcards have been valid from the start. 5.2 TfL is best placed to observe on successes and failures but from our point of view the key issue is that the absence of ITSO compatibility of Oyster will cause diYculty as ITSO rolls-out on other parts of the National Rail network and other modes of transport. In addition to the costs incurred in retro-ﬁtting ITSO technology such an approach is likely to create a certain level of customer confusion. This illustrates the need for a national standard like ITSO.

Scotland 5.3 Scotland is yet to go live but some interesting lessons have emerged from the process so far: — Technical complexity has led implementation timescales to being a lot longer than originally anticipated. — The procurement of a replacement ﬂeet of smartcard enabled ticket machines for all of Scotland’s local bus services has led to production eYciencies and therefore capital cost savings. — The procurement and manufacture of the smartcards through one agency (Transport Scotland) has given them the same look and feel which is good for bus driver recognition and has eliminated the risk of manufacturing inconsistencies between diVerent suppliers.

RevenueProtectionAndThePowersOfTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate? 6.1 Railway revenue protection staV work within the framework of the Railway Byelaws and the Regulation of the Railways Act 1889. Under these byelaws they may require a person refusing to pay the appropriate fare to give their name and address. StaV will often use appropriate agencies to verify the name and address given. After that rail companies will follow normal debt collection approaches, starting by writing to request payment. 6.2 Bus operators have powers to inspect tickets but there is a diVerence in the sanction that can be imposed. Under the Railways Act 1993 and Penalty Fares Regulations 1994 rail companies in England and Wales (and buses inside Greater London) have the power to impose on the spot Penalty Fares. The current penalty fare is £20. (The fare is a set maximum for all TOCs and is approved by the Secretary of State.) Bus companies have no powers of arrest or sanction of penalty fares. Some of our companies overcome this where a standard fare of £20 is advertised but only applied if the ticket holder does not have the appropriate ticket for the journey being made. 6.3 The power of bus companies is therefore severely curtailed compared to rail and the ability to secure a conviction for fare evasion relies on police intervention. Understandably interest tends to be low because individual journey oVences tend to be low value and this means the deterrent of a criminal oVence rarely occurs. We do therefore consider the legal framework in buses to be inappropriate. 6.4 The railway penalty fare of £20 was last increased in January 2005 (up from £10) The issue here is getting a balance between the level being set at a rate which is a suYcient deterrent against one which is so punitive (perhaps £50) that the chances of an inspector extracting this are lessened particularly without the potential of conﬂict. Overall though we consider the legal framework to be appropriate. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 144 Transport Committee: Evidence

7. What appeal mechanisms exist for passengers and are they adequate? 7.1 For railways, it is a requirement of any penalty fares scheme that an independent appealsprocess is instituted. All railway penalty fares schemes currently use the Independent Penalty Fares Appeal Service (IPFAS) which operates under a DfT approved code of practice to assess issues such as whether appropriate discretion was used, was there appropriate warning of the scheme posted at stations and whether the scheme was applied consistently Most operators set a 21-day limit for appeals to be made. 7.2 We consider this to be adequate. As noted, the code of practice has strict criteria for considering cases and it is not unusual for appeals to be successful if these have not been met. 7.3 For buses the appeal process is not regulated or set down in statute but in FirstGroup would typically involve a senior manager in the company conducting an investigation where all the evidence is considered including the interviewing of witnesses. This is rare but when it happens most disputes are usually settled amicably. 7.4 If an individual is not satisﬁed with a company response then a further appeal is possible to the Bus Appeals Body (BAB). This is a non-statutory body set up by the Confederation of Passenger Transport and Bus Users UK to deal with appeals arising from UK Bus and Coach operations which are not covered by any other statutory body. We consider this to be suYcient because although the ﬁndings of the BAB are not binding failure to abide with them can be taken into account when the relevant TraYc Commissioner is deciding whether an operator is of “good repute” for registration and licensing purposes.

8. Are the rights of passengers and the powers of ticket inspectors well-balanced? 8.1 In the case of rail where revenue protection inspectors have a considerable array of powers but passengers are protected by a strong code of practice backed-up by statute, the answer to this is probably yes. For the bus industry the diYculty in levying on the spot ﬁnes is an issue and, as noted, the courts process is a diYcult route. Attracting the interest of the police to bring a prosecution is the ﬁrst hurdle but the whole process can be extremely cumbersome and expensive for what often amount to low value amounts.

9. Do operators of public transport take adequate measures to protect fares revenue? 9.1 Given that virtually all UK FirstGroup bus and rail operators take revenue risk, we have every incentive to maximise revenue collected and minimise fare evasion. Levels of evasion are typically less than 3% and much oV this quantum will be due to ﬁnding a level beyond which the costs of collecting an extra percent of revenue is uneconomic. 9.2 Revenue collection measures are generally welcomed by customers, providing adequate facilities are provided for purchasing tickets. Honest customers do become annoyed when they see others travelling without paying especially because advances in technology in terms of self service and staV operated ticket machines as well as the internet have greatly improved the ease of buying the correct ticket for the journey. 9.3 As an illustration of our commitment to revenue protection, on taking over the WAGN and Thameslink franchises in April 2006 we are investing over £5 million in revenue protection measures including installing additional Automatic Ticket Gates and the employment of additional revenue protection inspectors. 9.4 In our UK Bus Division we still employ around 100 inspectors on ticket checking duties despite the fact that virtually all our ﬂeet is One Person Operated and customers have to pass the driver through a single door on entrance or exit. These mainly look for fraudulent use of period passes or evidence of counterfeiting.

ConcessionaryFares—TheRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? 10.1 From a customer perspective, the introduction of a truly national bus concession for the over 60s is a major step forward although the discretion to continue local enhancements has the potential to cause ongoing confusion. 10.2 The next step would be to mandate other modes particularly to encourage journeys that are more logically made by a combination of bus-rail or bus-tram rather than all bus. In addition, the diVering nature of discretionary rail schemes across the country often causes confusion for concessionary card holders, who are sometimes unclear about how far their card takes them and what level of discount it oVers. 10.3 From an operator perspective, the principle of “no better, no worse oV” cannot be disputed, but its application has been problematic with scope for disagreement between operators and local authorities. It might be appropriate to see the administration of concessionary fares handled at a national or regional level rather than by the plethora of local district councils that currently fund the schemes. The current mechanism causes much duplication of eVort and hinders the introduction of standard or consistent parameters for Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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reimbursement. Replacement of this with a single tier or regional concessionary authority would largely eliminate these issues. Having said that, the priority at the moment is for all to focus on successful implementation of the 2008 national scheme under the existing framework.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? 11.1 Historically the beneﬁts oVered by concessionary fare schemes have varied by area according to what each Travel Concession Authority (TCA) wishes to oVer its citizens. Integration across geographic areas will cease to be a problem from April 2008 when the new national bus scheme applies in England. Scotland and Wales already have their own national schemes so the only remaining issues will be travel between the countries. Even this is being tackled in the legislation passing through Parliament at present and will therefore be resolved. 11.2 Rail concession schemes are discretionary for TCAs and therefore there is little geographic integration across rail and modal integration between bus and rail is patchy. A greater degree of consistency would beneﬁt both customers and transport providers—and, as noted in 10.2, may result in more logical journey opportunities. However, this has to be achieved in a sustainable way. As demand for rail travel continues to grow, and expansion in capacity remains constrained, operators increasingly have a responsibility to balance supply and demand. It seems inevitable that any widespread expansion to rail of concessionary travel would have to avoid the morning and evening peak. March 2007

Joint memorandum from the Joint Committee for the Mobility of Blind and Partially Sighted People; The Joint Committee for the Mobility of Disabled People; The Guide Dogs for the Blind Association; RADAR; National Autistic Society; Disabled Parents Network; Royal National Institute of the Blind (RNIB); Arthritis Care; Mind; Restricted Growth Association; Parkinson’s Disease Society; Community Transport Association and Spinal Injuries Association (TPT 24)

Introduction Our organisations welcome the decision of the Transport Select Committee to look into the issue of concessionary fares. The Government’s Concessionary Bus Travel Bill will ensure that from April 2008 free travel will be extended to local oV-peak bus travel across local authority boundaries providing the bus stops at least every 15 miles. We welcome these improvements but we believe that there is considerably more that the Government needs to do to ensure that the mobility needs of disabled people are addressed in concessionary travel. This could be achieved by introducing: — A requirement for free travel anytime. — A requirement to provide free travel on other modes of transport. — A requirement for concessions to apply to community transport services such as “dial-a-ride”. — A requirement to provide free travel for a companion where the person’s impairment means that they can not access transport on their own. — A deﬁnition of disability which includes people with mental health diYculties. We set out our reasons for these suggestions below. As our coalition has come together to lobby on the Concessionary Bus Travel Bill (the Bill) this submission only addresses questions 10 and 11 under the heading of “Concessionary fares-the right strategy?”.

TheNeed forConcessionaryFares We believe that the free travel provided by the Bill is necessary for disabled people for several reasons: — It is often necessary, even on short routes, for disabled people to use public transport either because their mobility is restricted, the pedestrian environment is inaccessible to them, or because they are concerned about personal security. Travel costs can restrict that mobility. — Blind, deafblind and partially sighted people and people with movement-related conditions such as Parkinson’s disease are likely to have diYculty ﬁnding the correct change. For deaf and hard of hearing people, free travel avoids the diYculty of communicating with the driver or conductor. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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— Where ticket machines are used, many disabled people may have diYculties. For example, wheelchair users may have diYculty because of the physical design and people with learning disabilities may ﬁnd such machines confusing. Free travel also makes operational sense: it contributes to reduced dwell times at stops with disabled people simply showing their concessionary pass as they board.

Transport andAccess toEmployment Disabled people typically have lower incomes due to their lack of employment opportunities and are more likely to be socially excluded. According to the Government’s “Disability in Great Britain” report the incomes of disabled adults are 20 to 30% lower than those of non-disabled people (these ﬁgures included income from disability beneﬁts). The ninth annual report of indicators of poverty and social exclusion, Monitoring Poverty and Social Exclusion in the UK 2006, issued in December 2006 by the New Policy Institute (funded by Joseph Rowntree) reported that disabled people are twice as likely to be unemployed as non-disabled people. According to the report 30% of disabled adults of working age live on 60% of average income levels.

FreeTravelAtAnyTime The restriction of concessionary travel during morning peak periods has a severely detrimental eVect on disabled people travelling to work or looking for work. Research by RNIB suggests that only 27% of blind and partially sighted people of working age are in employment and where people are employed they are more likely to be in lower paid jobs. Employment levels for many other impairment groups are similar if not worse. Restricting concessions to oV-peak times also aVects disabled people travelling to early medical appointments, beneﬁt and other appointments, or to education and leisure activities with an early start time. Many disabled people prefer to travel to shops and town centres early in the day when they are quieter and so more accessible. As the Government has improved the minimum concessionary fare scheme for older and disabled people, some local authorities have cut back on local schemes that previously oVered more than the statutory minimum. For example, there has been pressure on a number of schemes that provided free morning peak travel to blind people but not to other older and disabled people. When this issue came up in London, the Association of London Government (ALG, now renamed London Councils) suggested levelling down but following a major campaign by disabled people free travel was extended to all disabled people in the morning peak hours. Our organisations would support the national adoption of the London approach, ie. free morning peak travel for all disabled people.. The scheme operating in Scotland already oVers this level of provision. The Bill would also restrict free travel at the other end of the day by limiting it to travel up to 11.00 pm. That limit is likely to eVect the mobility of younger disabled people in particular who want to go out for the evening with their peers.

Other Support for Extra Transport Costs It is widely believed that disabled people in employment are able to obtain assistance with the costs of travelling to and from work through the Department for Work and Pensions Access to Work Scheme. In fact, the Scheme is only available to those disabled people unable to use existing public transport that operates between their home and their place of work, who would therefore incur additional costs travel costs, for example, in using taxis. The Scheme takes no account of the cost of public transport. While we are pleased that the Bill would not prevent local authorities from continuing to oVer more generous concessions than the statutory minimum, we are concerned that exercise of this discretion would eVectively create a postcode lottery for disabled people. Such lotteries are already evident, for example to resolve a budget crisis Christchurch District Council has removed the right for blind people to travel for free in the morning peak despite the fact that the Dorset-wide County scheme oVers free morning peak-time travel to blind people. Guide Dogs, RNIB and Warwickshire Association for the Blind worked without success to try to reverse a decision by Stratford-on-Avon District Council to remove free perk-time travel for visually impaired people in the morning peak hours following the introduction of free oV-peak travel for all disabled people in April 2006. For the Government to include morning peak-time travel in the statutory minimum would be consistent with its commitment to get more disabled people into work: a policy they are currently promoting through their reform of Incapacity Beneﬁt. Indeed the New Policy Institute report cited above pointed to the lack of access to paid work as the main reason for poverty amongst disabled people. There are no time restrictions on the schemes which have been introduced in Wales and Scotland. Similarly there are no time restrictions on using the Freedom pass in the morning peak hours in London on buses, Underground and the DLR and this has not caused diYculties despite the huge pressure on public transport in the morning peak hours and late in the evening in the capital city. However, if local authorities Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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are to be able to go on providing more than the statutory minimum the Government must make sure that they are fully funded for the increases in the statutory minimum concessionary fare schemes that are proposed in the Bill. The Government said in Grand Committee that they were unable to support amendments to this eVect because it would cost £100 million. We appreciate the resources that the Government is already committing to implementing the Bill. However, we also note that when the ALG (now London Councils) first began to consider the cost of allowing travel in the morning peak for disabled people they also said that “It was so expensive as to not be worth quantifying”. However, after further investigation and discussion with TfL the cost turned out to be a lot less than originally thought and free travel has been available in London 24 hours a day since April 2003. The Government might also find that the cost of this particular extension to the scheme would be less than they originally thought. Extending the Concessionary Fares scheme to provide for free travel 24 hours a day would help disabled people find and retain work and turn them from benefit claimants into taxpayers. This would go some way to raising the £100 million which the Government suggest that this measure would cost.

Applying theConcessions toOtherModes ofTransport In some areas concessionary fare passes can be used in taxis, on community transport and other door-to- door transport. This is particularly important in rural areas where bus services may be infrequent or absent. Disabled people will not benefit from having the concession if they have few or no bus services on which to use it. In Scotland many ferry journeys are also covered by the concessionary fares scheme in recognition of the local transport services that ferries provide between the Scottish Islands and the mainland. We would encourage the same approach to be adopted for other services throughout the UK. In urban areas concessions are also often available to be used on local rail and light rail services. This is particularly important where train and tram services are used as an alternative to the bus for local journeys. Certain groups of disabled people would also benefit greatly from the application of the concessions to a wider range of transport modes. People with autism, for example, prefer to use door-to-door services because they often have diYculty in judging road safety and can experience anxiety on scheduled public transport services, especially where routes and timetables frequently change. The restrictions on the eligibility for the higher mobility rate of Disability Living Allowance means that for some disabled people door to door transport is currently not an option for them because of the additional costs associated with its use. Our organisations would encourage the extension of the statutory minimum concessionary fare scheme to provide for its application to a wider range of transport services. Our organisations appreciate that the Government are sympathetic to the sentiment of our proposed amendment in this area but are unable to accept it because they believe that it would cost £300 million. We are, however, encouraging the Government to consider the cost-benefits of these changes in terms of giving disabled people greater independence and allowing more disabled people to work. Once these benefits are taken into account to we believe that the economic case is much stronger.

Use onDoor-to-DoorTransport forThoseUnable toAccessMainstreamPublicTransport An increasing number of services are operated by accessible buses but it will be some time before all buses are fully accessible. Having a concession for a service that you cannot use is of no beneﬁt to disabled people in areas where fully accessible services are not yet available. Even where more accessible vehicles are in use, they will never be a viable option for some disabled people, even with assistance. Others may need door-to- door transport to get to the nearest bus stop because of the distances involved or the inaccessibility of the pedestrian environment. For these reasons we believe that concessionary fares should be made available on community transport and door-to-door services. Local authorities have discretion as to whether to reimburse those providing community transport for accepting concessions but a survey by the Community Transport Association found that only a minority did so and of those most only reimbursed half, rather than the full fare. We believe that this discriminates against disabled people who rely on such services and is potentially challengeable under the Disability Discrimination Act or the Human Rights Act. As with the more generous schemes, reimbursement for community transport schemes is a postcode lottery. In Wiltshire, for example, the County Council, West Wiltshire District Council and Kennet District Council reimburse community minibus groups for taking free passes on the eligible services they operate but North Wiltshire District Council and Salisbury District Council do not. Swindon Borough Council only provide disabled people with £60 of free journeys per annum on community minibuses before they have to pay for using the services. Salisbury District Council have informed the Community Transport Association that their concessionary fares settlement from central government was insuYcient to meet the costs of reimbursing registered bus operators let alone community transport operators. This aVects two Salisbury-based community minibus Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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groups in particular -groups currently run services for isolated people in Salisbury mainly to help them access local shops, and both have to charge their concessionary pass holding passengers for journeys which they would otherwise get free if there was a registered bus route which served them. At Grand Committee Stage cost was also cited by the Government as the reason for rejecting an amendment to extend the scheme to community transport. The Government also pointed out that local authorities would continue to have the discretion to provide concessionary fares on door to door transport and that the legislation would allow for an extension in this area at a latter date by Regulations. At Report a further argument was oVered that such an amendment would eVectively provide for buses to be replaced by community transport in rural areas. We do not believe that would be the eVect. The purpose is to ensure that those disabled people who because of their impairment could not access local bus services, or who live in areas that are not served by bus services, would be able to enjoy free travel on community transport services in their area. As a safeguard the Secretary of State could be required to issue guidance which could also address the Government’s concerns about the deﬁnition of community transport for the purposes of concessionary fares legislation

TravellingWith aCompanion Some disabled people need a companion to travel with them on public transport. We would argue that concessions should be available to allow a companion to travel free of charge, where this is necessary to enable the disabled people to access the service. This provision already applies under both the Welsh scheme and the Dorset scheme. Whilst we appreciate the Government’s estimate that this extension would cost £10 million we would point out that as the proposed additional concession would only apply to those who cannot access public transport without the support of a companion, the number of people that would be brought into the scheme is likely to be relatively small. The Government has also pointed out that the term “companion” could be open to abuse but we would be happy for an alternative term to be used such as “personal assistant.”

AddingPeople withMentalHealthDifficulties toThoseEligible forConcessionaryFares The issue of the eligibility of people with mental health diYculties remains a problem. Currently, people with mental health issues who qualify for concessionary fares do so by virtue of the fact that they would, if they applied, be refused a driving licence under Part 3 of the Road TraYc Act 1988 pursuant to section 92 of the Act. Section 92 of the 1988 Act refers to five categories of people who would be refused a driving licence. The second of these are people with a “severe mental disorder”. Eligibility for concessionary fares is one of the major factors in determining an individual’s chance of recovery and re-integration into society. Severe mental ill health often leads to social and physical isolation, discrimination and an inability to play a full part in economic and community life. Access to community centres, drop-in therapeutic communities, counselling or self-help groups can be essential to recovery. To access those services many people rely on public transport. Research in the Report Focus on Mental Health, An Uphill Struggle: Poverty and Mental Health (London, Mental Health Foundation 2001) suggests that some people have not been able to get help from mental health services because of their inability to pay for transport. Even where they still hold a driving licence, poverty and a fluctuating health condition may make driving impossible. The ability to travel to education centres, to take up job opportunities and to access community health and social care facilities is vital. The inability to access these can lead to serious consequences for the individual. These quotes from experiences reported to Mind show the diYculties: A service user writes from the Midlands: “Initially I came up against a lot of aggravation when I applied for concessionary fares. Now I hold a bus pass and come up against hostility with a few bus drivers questioning my right to hold a pass”. One city Patient Council representative from the West of England writes that “even where there is no current problem in claiming in the city there are constant problem(s) on buses of drivers’ prejudice, eg ‘Why have you got a pass, you don’t look ill?’” The evidence suggests that the definition is causing a problem and for that reason we believe the Government should act now to introduce a new definition to cover explicitly people with mental health issues. Our suggested definition is based on the definition used for the Scottish Concessionary fares scheme. In addition, a new definition could cover people with a social and communication disability—such as those with Asperger syndrome. Since most people with Asperger syndrome do not have a learning disability, they may be excluded by a strict interpretation of the definition in the Transport Act 2000. While people with Asperger syndrome are not generally refused a driving licence, they must notify DVLA of their condition and cases are assessed on an individual basis; this may make car insurance unaVordable, especially for young people. The diYculties experienced by some people with Asperger syndrome in anticipating the actions of other road users mean that some individuals choose not to drive. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Our organisations have welcomed the Government’s commitment to look at this issue and consult with its Concessionary Fares Stakeholder Group. We believe that the consultation could also usefully cover the issues of stigma faced by people with mental health problems receiving concessionary fares (eg being questioned because they do not “look disabled”) and how to maximise take up of concessionary fares amongst those people with mental health diYculties who are entitled to them. The recommendation of the Social Exclusion Unit’s Report, Mental Health and Social Exclusion was to consider the case for revisions to the statutory guidance on giving concessionary fares to people with mental health diYculties by the end of 2004. How has the 2004 recommendation been taken forward? We look forward to the early completion of the new review which the Government have announced. March 2007

Memorandum from TravelWatch Northwest (TPT 25)

IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? Within Passenger Transport Executive (PTE) areas integrated ticketing is well established and relatively easy to use. When the ticket is of a standard design produced by the PTE it is easily recognised and accepted by staV of all operators. If a similar multi-modal and multi-operator ticket requires the issue of a ticket from a company machine which will bear the issuing company’s logo, passengers often have problems convincing other operators staV that the ticket is valid on their services. Whilst PTEs have usually managed to persuade operator consortia to take part in multi modal ticketing schemes this has often been at the cost of them being more expensive than operator’s own multi journey tickets. Outside PTE areas, integrated ticketing is virtually unknown with just a few isolated examples such as Derbyshire County Council’s “Derbyshire Wayfarer” product. Integrated tickets are usually only available within a restricted area and do not extend into adjoining areas. There is also a lack of integration within bus travel let alone across modes. In many instances it is not possible to turn up and buy a ticket for a through journey when it involves a change of bus. For example a journey from Milnthorpe in Cumbria to Morecambe in Lancashire (about 12 miles) requires change of bus at some point and two fares have to be purchased. This does not encourage the car to be left at home. 27 TravelWatch NorthWest’s predecessor the North West Public Transport Users Forum (NWPTUF) produced a report in December 2005 on Multi Modal Ticketing which highlighted shortcomings with integrated ticketing as well as highlighting best practice. This is attached. Pricing should also be considered. Outside metropolitan areas the perception of public transport is as an expensive mode compared to the car. In some areas a 10 minute return bus journey can be around £5. Contrast this with the cost of a journey across the breadth of Greater Manchester for about half the price. Until some national consistency on fares can be achieved and promoted bus travel will be unattractive to future generations in many rural areas where the convenience of the car will remain unchallenged.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? Government policy is ineVective and will continue to be so until the role of the OYce of Fair Trading is revised to allow operators to discuss integration without the fear of prosecution. Such co-operation is vital and there can be no meaningful integration whilst this interference continues. There is a need to look more acutely at the future. The whole marketplace for travel and consumerism will change in the next 10 years as the “baby boomers” (those born between 1945 and 1960) form the majority of the retired population. Post war attitudes to life that include the many conveniences enjoyed by this generation in contrast to the previous generation will bring a very diVerent set of demands and standards. Unless public transport gets its act together, particularly for short distance travel, to meet the new expectations and demands, it will be in danger of dying of neglect and underuse.

3. Is the industry taking up modern smartcard technologies adequately and appropriately? With the exception of London and Scotland, smartcards are only being developed and used on very local schemes and are only introduced after long trials of the technology even though the technology has been used in other places for years.

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4. Does the ITSO system cater for the needs of all passengers and travel provider? ITSO is overcomplex and delaying the progress of smartcard implementation. The trials of this system are over-long and the ﬁrst large scale scheme is only just being rolled out in Lancashire. The Lancashire scheme is only dealing with the NoW (North West) card used by the over 60’s for their concessionary journeys. It appears that other needs are still being “trialled”.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? Both schemes are now well established, but the London “Oyster” system (not ITSO compatible) shows the way forward for integrated ticketing throughout the UK. Of course, the London ticket has the advantage of being operated in a regulated bus system, also an area where all forms of transport work well with each other and without the interference of the OFT.

RevenueProtection and thePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate? For buses there appears to be no national system to back the work of inspectors and many do not know the extent of their powers under the law. On rail there are National Conditions of Carriage which are appropriate although a review of their passenger friendliness may be desirable.

7. What appeals mechanisms exist for passengers, and are they adequate? The current mechanisms for dealing with bus passengers problems are: — London—London Travelwatch. — Scotland—Bus Users Complaint Tribunal. — Northern Ireland—The General Consumer Council for Northern Ireland. — England and Wales—The Bus Appeals Body. In London, Scotland and Northern Ireland these are statutory bodies with eVective powers to deal with the complaints. In England and Wales, the Bus Appeals Body (BAB) is a non-statutory organisation run by Bus Users UK with funding from within the bus industry. There is no statutory power given to BAB and their decisions are not binding on any party allowing the operators to ignore there deliberations. TravelWatch considers that there should be a statutory appeals body for bus users in England and Wales. Unlike the bus industry, Passenger Focus does have statutory powers to deal with complaints about rail services. Complaints handling is centralised and it has been commented that the organisation has lost the wealth of local knowledge that the former regional Rail Passenger Committees possessed.

8. Are the rights of passengers and ticket inspectors well-balanced? There is often a conﬂict between the perceived rights of inspectors and the actual legal framework applicable. Ignorance of the rights of both parties is often to blame and more should be done to publicise these rights.

9. Do operators of public transport take adequate measures to protect fares revenue? With bus services outside London, the fare is paid to the driver who also checks the validity of pre-paid tickets. Within London, the same applies in most cases, but when multi entrance vehicles are used, there is an increasing tendency to fares avoidance which is diYcult to deal with. On the continent it is common for passengers to be expected to cancel their own ticket before travel in machinery provided either at the station or on the train/tram/bus. It works there and would here. So why is it not in practice as it could assist revenue protection where human intervention is diYcult. The rail industry has a great loss of revenue by its’ inability to collect the fares due from passengers. The open station principle and unstaVed stations mean that the onus is on the train staV to collect fares but this is frequently not happening. This is due to a variety of reasons ranging from inability to access the train when it is over-crowded to neglect of duty by the on-train staV. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? The concessionary bus schemes are diVerent for each country and there is no truly national scheme in operation or proposed. This leaves many passengers disadvantaged especially in border areas. The provision of bus concessions is only of use to those who have bus services available and does not consider the growing number of people in rural areas with no access to any form of public transport. 28 Free rail concessions are available in PTE areas, but not in the Shire Counties and for long distance services. A Railcard is available from the rail industry at a price, but is subject to many restrictions. Attached is TravelWatch NorthWest’s comments on the current Concessionary Bus Travel Bill.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? With the exception of PTE areas, there is no integration across modes. The current scheme in England is fragmented and does not allow cross-boundary traYc in many areas. The new proposals will improve this, but may not allow full freedom throughout the UK. March 2007

Memorandum from Dr John Disney, Senior Lecturer, Nottingham Business School, Nottingham Trent University (TPT 26) I address the 11 questions as posed by the Committee in order. 1. Integrated ticketing across modes is rare; where it does exist it is badly publicised and often ridiculously diYcult to use with numerous restrictions. “PlusBus”, as indicated in my letter to RAIL published in August 2006, is a great concept but extraordinarily diYcult to administer, market and use and consequently has very low market penetration. It is not available from on-line ticket retailers (who shun all integrated tickets even when they oVer by far the best deal for passengers); requires the date of the return journey to be stated even when purchased with an open unrestricted rail ticket and needs to be purchased in advance if bus travel is required at the start of the journey. Fare levels are inconsistent and are often higher than the cost of a simple connecting bus journey from the rail station to specific destination or an operator’s own day ticket. The only exceptions to this bleak picture are London, most of the PTE’s, North Wales and Derbyshire. The latter’s “Derbyshire Wayfarer” integrated bus and train ticket is the ideal benchmark to which other shire counties should aspire. Visitors to and residents of Cumbria appear to have a choice between a “Stagecoach Explorer” or “Cumbria Goldrider” 7 day ticket costing £26.50 or £21 respectively. Timetable leaflets fail to clarify any diVerences in availability except the fact that the cheaper ticket is only available from Tourist Information Centres. All the above mentioned schemes have defined boundaries and it is frustrating that the tickets are normally unavailable outside these areas and cannot be purchased on trains (even if the station is unmanned) or on many buses. However, even in Derbyshire there are deficiencies and anomalies on specific services. For example, there are three diVerent bus services between Ilkeston and Derby with diVerent fare structures and ticketing schemes with a bewildering array of conditions surrounding their interavailability. The limited evening tendered bus service between Ashbourne and Derby is operated by Arriva and accepts return tickets issued on TrentBarton’s daytime commercial service but not TrentBarton’s discount day ticket. A third operator, TM Travel, operated the Sunday service under Derbyshire County Council (DCC) contract with yet more diVerent ticketing arrangements. Bus and train tickets between Derby and Matlock were interchangeable for three years up to August 2006 when the arrangement was withdrawn. This is despite many bus services being extended to Derby Rail Station from October 2005 using DfT Kickstart funding and new bus stop flags being installed to indicate the proximity of rail stations en route. Even bus companies with common ownership do not accept each other’s tickets. Trent Barton and Notts ! Derby are both owned by Wellglade and occasionally interchange vehicles, but tickets are not interchangeable on overlapping services in Nottinghamshire and Derbyshire. TransDev subsidiaries Keighley & District and Harrogate & District provide abutting services on West and North Yorkshire but there is no interavailability of tickets unless using a pre-paid WYPTE Metro ticket. Some SYPTE bus/rail tickets are accepted on trains departing SheYeld Station but cannot be purchased there. Potential customers are directed to the Bus Station Travel Shop 200yards away which is closed on Bank Holidays.

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2. The Government appears to have no strategy for the development of integrated ticketing. 3. Outside London, and to a lesser extent Scotland, the industry is proving very reluctant to adopt Smartcard ticketing. Many smaller operators do not even possess or use ticket machines. In North StaVordshire and rural Northumberland return tickets are handwritten and no ticket is issued for single journeys. Derbyshire County Council has attempted to overcome this by leasing modern ticket machines to smaller operators in order to apportion concessionary fares revenue and monitor use of tendered services. TrentBarton are trialling a new Smartcard based ticketing system this summer but this does not appear to be compatible with the Smartcards issued by Nottingham City transport for season tickets although many routes overlap. Furthermore concessionary fare holders in Nottinghamshire have a separate Smartcard to permit free oV-peak travel but have to pay for peak journeys by cash. 4. I believe that this issue is open to debate and do not feel able to comment upon it at present. 5. Smartcards work very eYciently on gated systems such as Tube/Rail stations with automatic barriers and on buses as season tickets or with a flat fare provided there is just one entry point to the bus with a Smartcard reader monitored by the driver. However they are cumbersome to read with hand held machines on multiple entrance vehicles such as articulated buses in London and trams in Nottingham. This leads to a substantial (and unquantifiable) revenue loss especially at peak times. 6. Discretion needs to be exercised as appropriate to avoid genuine honest passengers being deterred from using public transport for a fear of being penalised for inadvertently using the wrong ticket or service. 7. The need for, and frequency of, appeals should be at an absolute minimum. 8. Yes, provided that discretion is exercised by ticket inspectors when appropriate. 9. Many rail operators fail to ensure that on-train staV make regular ticket checks whilst few bus companies now employ ticket inspectors and drivers have neither the time nor power to check tickets after the passenger has boarded to prevent “over-riding”. 10. The Government’s concessionary fares policy is an unaVordable disaster. It is a subsidy to both bus operators and those over 60’s and disabled persons fortunate enough to both live close to a bus route taking them where and when they want to travel and be in suYcient good health to travel by bus. It leads to overcrowding between 0930 and 1030 which deters other potential paying customers and it will result in single fares increasing at a greater than expected rate whilstever reimbursement to operators is based upon an agreed proportion of the single fare. It will do nothing to encourage operators to oVer integrated ticketing as it removes up to 50% of the oV- peak market and therefore makes the administration of such schemes even less commercially attractive. It will also lead to a deterioration in service quality as customers travelling free are less likely to complain about the service oVered and will exhibit less brand loyalty to a particular operator. EVectively free travellers will catch the first available bus and it is likely that the viability of “all day” routes will be undermined by low quality operators targeting free oV-peak passengers possibly between school journeys. 11. There is a danger that free bus travel will reduce oV peak use of parallel rail services, especially for medium distance inter-urban journeys where journey time is of less importance. The proposed England-wide free bus travel has significant cost implications for tourist areas where “outsiders” will seasonally outnumber “locals” yet it appears that the local authority will be expected to foot the bill. It is to be hoped that this will not lead to cuts in supported bus services which local residents rely upon to reach essential services such as health and shopping, whilst “over 60” leisure travellers and holidaymakers enjoy free travel. I must stress however that the solution to this problem is not to oVer free “local” rail travel but to withdraw the exorbitantly expensive free bus travel scheme and replace it with a UK concessionary half fare scheme available on all modes at all times using Smartcard technology. Operators should be oVered a flat rate administration fee per passenger carried (paid by Central Government) and savings should be diverted to installing compatible Smartcard readers on all buses and at all rail stations with all concessionary passes being Smartcard based. This would reduce boarding times and provide a robust, reliable means of tracking the use of concessionary travel passes. It would also restore an element of competitiveness in the market and allow the continued use of well established elasticity theory; free concessionary travel invalidates such theory and will inevitably lead to some fares increasing at a higher rate. March 2007

Memorandum from Scheidt & Bachmann (TPT 27) Scheidt and Bachmann GmbH is a global provider of intergrated and automated fares systems for public transport services. In the United Kingdom the company is a major provider to the National Rail Passenger Franchise operators and is currently delivering the DfT funded Yorkshire multi modal smartcard ticketing programme Yorcard to the ITSO Standard. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Scheidt and Bachmann would wish to submit the following response to the questions outlined by the Committee and would welcome the opportunity to provide further information based on both its UK and international experience. For convenience, the Scheidt and Bachmann response to the Call for Evidence has been summarised using the section and paragraph headings and numbering that was used in the Call. The response provided has been limited in order to meet the request for six pages or less. Scheidt and Bachmann GmbH accept that the information may be published and at this stage have no contributions that it would consider conﬁdential.

Section 1—IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? In Scheidt and Bachmann’s opinion whilst there are areas where ticketing is well integrated, notably in the major cities where a PTE body manages the processes, integration between modes is limited and the geographic integration is generally restricted to deﬁned areas with less “cross boundary” integration than is ideal.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? Scheidt and Bachmann welcomes the Government’s clear interest in this very important topic and would express the view that whilst the Government has a very clear vision of the requirements and beneﬁts that integrated ticketing systems oVer to the citizen the strategy remains to be completely deﬁned. An example of this would be the current call for Expressions of Interest in the English Concession Card provision which will take a very important step forward, especially if it exploits the ITSO smartcard technology but is silent on multi modal travel.

TheUse ofSmartcardTechnologies

3. Is the industry taking up midern smartcard technologies adequately and appropriately? Scheidt and Bachmann’s view would be that whilst some areas, such as Scotland and Wales, have either implemented or are proceeding to implement smartcard technology in a limited way, only London, beneﬁting from its revenue risk and management regime has demonstrated fully the beneﬁts of the technology. The area of most concern, especially in a national context, is the passenger rail services which have only recently started to consider how to implement the technology and that is because the Department for Transport has mandated its use in new franchises.

4. Does the ITSO system cater for the needs of all passengers and travel providers?

Scheidt and Bachmann believe that the ITSO approach has the capacity to cater for all the needs of all passengers and travel providers and that over a period of time it can become the basis of providing best value ticketing across all modes for both citizens and transport service providers.

5. What can be learned from the experience of areas such as London and Scotland where smartcard technology is already in place? It is Scheidt and Bachmann’s view that the main lesson that can be learnt from both of these schemes is that successful implementation of integrated fares systems that use new technologies requires clear and focused leadership from a single body. In each case that has been identified, a single body, the Scottish Executive or Transport for London has defined the requirements clearly and contracted for them on behalf of the transport service providers. This has meant the funding of the programmes to ensure speedy and common adoption with the benefits being derived in the longer term, and approach that public bodies can take more easily than the private sector. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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RevenueProtection andThePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate? Scheidt and Bachmann view this as an operational issue and would not wish to comment on it.

7. What appeal mechanisms exist for passengers, and are they adequate? Scheidt and Bachmann view this as an operational issue and would not wish to comment on it.

8. Are the rights of passengers and the powers of ticket inspectors well-balanced? Scheidt and Bachmann view this as an operational issue and would not wish to comment on it.

9. Do operators of public transport take adequate measures to protect fares revenue? Whilst Scheidt and Bachmann view this as an operational issue and would not wish to comment on it directly it should be noted that all of the transport service providers in all modes make every eVort to deliver a fair and open revenue protection approach. A common requirement when speciﬁcation of integrated fares systems are being planned is for the use of the technology to assist in the delivery of revenue protection, both by providing ticket inspectors with the appropriate tools to do the job and by providing the passenger with every opportunity to pay for travel through manned, self service and remote access sales points such as the web.

ConcessionaryFares—TheRightStrategy

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? It is Scheidt and Bachmann’s view that the vision that is shown in the current Expression of Interest notice for the English Concessionary Fares scheme clearly reﬂects the importance that the Government places on the manner. Scheidt and Bachmann feel that the approach is the correct one, especially given the complex nature of the relationships that must be accounted for but that the proposed strategy currently lacks suYcient detail in the public domain for a comment on its adequacy to be made. Scheidt and Bachmann do believe that the strategy implied in both the EoI and in the Transport Committee’s enquiry indicate that with sound and clear leadership from Government and the exploitation of the ITSO technology and approach will deliver a more that adequate strategy.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? At this point in time it is Scheidt and Bachmann’s view that whilst the intention is there to deliver integration across modes and geographical areas the strategy remains to be implemented to deliver this.

AdditionalComment

12. Integration of systems Scheidt and Bachmann believe that there are three areas which the Government should consider and provide leadership on. The ﬁrst is to recognise that the implementation of anew, full integrated multi modal and geographically broad public transport ticketing solution will probably be delivered over a period of time. In order to achieve this a key planning eVort that Government can provide guidance on will be the intregration in the short term of existing legacy system into a new solution that uses modern technology. This will ensure continuity of services whilst the new technology is fully deployed and will help to drive down the cost of implementation by reducing the risks associated with a “big bang” approach. The second area where guidance can be given is in the planning of new technology implementation. ITSO smartcards represent a very major step forward in achieving a national integrated ticketing solution which will provide passengers with a common interfact and allow Authorities and transport providers to beneﬁt from an open and competitive supplier base. Whilst encouraging the development and piloting of new technologies such a Near Field Communication and Mobile solutions, the guidance should ensure that the introduction of the new concepts does not delay the implementation of the current smartcard technology. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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The third area where Government can provide support and encouragement is in driving forward the implementation of the programme that has already been funded to bring London into the ITSO technological solution, thus ensuring that by 2010 the UK beneﬁts from the single, open technology standard that Government and private sector have co-operated on to deliver. Manfred Feiter Director Project and Application 6 March 2007

Memorandum from Merseytravel (TPT 28)

AboutMerseytravel

Merseytravel is a public body comprising the Merseyside Passenger Transport Authority and the Merseyside Passenger Transport Executive, acting together with the overall aim of providing a single integrated public transport network for Merseyside which is accessible to all. While there are seven PTAs and PTEs in the UK, Merseytravel is unique in that it was the ﬁrst PTA and PTE to be fused together and is now a mature operating organisation. If it would assist Members’ deliberations further, Merseytravel would be delighted to give oral evidence to the Committee.

IntegratedTicketing

Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas?

Generally, ticketing is not suYciently integrated either across diVerent modes of transport or between diVerent geographical areas. Merseytravel believes that the future of transport ticketing cannot proceed without a fully integrated smartcard ticketing system and that it is this approach that is needed to deliver a fair transport system that oVers suYcient flexibility and information for the passenger. The success of this approach is subject to suitable smartcard readers being implemented across all modes of transport with operators recognising a diverse but specific range of smartcards as an appropriate ticketing medium, regardless of region or transport mode. Merseytravel is responsible for ensuring that ticketing systems make public transport easy to use, aVordable, and contribute to attracting and retaining passengers to the network and on this basis, they have implemented a multi-mode smartcard travel card for Merseyside. This smartcard has been developed to ITSO standards, ensuring interoperability with smart-based travel systems outside the Merseyside region. In addition, Merseytravel oVers multi-operator and multi-modal integrated tickets “Trio” and “Trioplus”. (NB ITSO is the Integrated Transport Smartcard Organisation dedicated to producing a specification and operating environment for interoperable smartcards).

Does the Government have an adequate strategy for developing the integration of ticketing systems?

Merseytravel believes that it is smartcard ticketing, developed to the ITSO standard that will provide a platform and structure for developing the integration of ticketing systems—a concept fully supported by the Government. During the Third Reading of the Concessionary Bus Travel Bill in the House of Lords, Lord Davies oVered the Government’s “ﬁrm commitment” to smart ticketing in compliance with the ITSO standard and gave support to ensure “the faster and wider spread of smart ticketing”. He further stated that the Government is committed to the use of smartcards in the transport area and is committed to the ITSO standard which they see as “vital to ensure the interoperability of smartcards across the country”. Merseytravel believes that the only way to guarantee interoperability, is to use this key feature of the Bill to ensure that smartcard ticketing is ITSO compliant.

The DfT has supported ITSO by giving it Crown Copyright status, making it available to all and providing a framework for enabling interoperability and interchange ability of cards, readers, ticketing equipment and back oYce equipment. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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TheUse ofSmartcardTechnologies

Is the industry taking up modern smartcard technologies adequately and appropriately? Although the rollout of the schemes could be happening faster, the industry is now taking up smartcards. Merseytravel believes that take-up would be quicker were the scheme funded in a similar way to the Scottish transport card, which is fully funded by the Scottish Executive. The industry is now embracing smartcards, mainly due to the publication of the ITSO speciﬁcation. Many of the business cases need some pump priming, consequently, adding to the delay in implementing the initial scheme. If the right choices are made for the English National Concessionary Travel Scheme (ENCTS) then this will open massive opportunities for smartcard ticketing. The diagram below demonstrates the possible enhancement path which could follow an ITSO compliant roll out of Smartcards.

Vision – becoming reality

Environment Transport Entitlement Launch Pad Partners Concessions Tickets Standard s Vision Education Tourism Access

Plethora of Attainments Welfare Virtual/ Physical delivery channels Evolving applications that mirror the requirements of the smartcard holder.

In establishing ENCTS, it is important that the DfT does not specify the actual type of smartcard to be used as to do so would stiﬂe the market response. Instead they should specify their requirements in brief for the functionality of the card, for example: — Must be ITSO compliant. — Must support other applications both within and alongside ITSO. — Must be secure enough to support applications such as E purse on a national basis. In adopting this approach the DfT will enable (by eVectively a pump priming mechanism) the vision of smartcards into the future and their potential role as citizen or entitlement cards. This approach will require a smartcard which is at the higher end of the technology range and therefore will come at a higher price. This additional cost is however marginal within the entirety of ENCTS and will be far outweighed by the future beneﬁts. Indeed it may be possible to recoup that cost (and more) by “renting out the card real estate” to, say, a national E-purse. The DfT should allow, even encourage, the market to be creative in this respect.

Does the ITSO system cater for the needs of all passengers and travel providers?

Merseytravel believes that the ITSO system is a living document and as such is versatile, valuable, cost eYcient and user friendly. ITSO does not discriminate between suppliers, is not manufacturer speciﬁc and does not restrict travel to the conceptual boundaries put in place by local administration or the structure of ownership and operation of transport modes. The ITSO speciﬁcation allows smartcards to be issued across a range of partners, using any form of co-branding while at the same time oVering certainty about the interoperability of the card in other areas. ITSO oVers a highly secure ticketing system. The Department for Transport commissioned a report into the relative security levels of TfL’s Oyster card system and ITSO that showed that, while Oyster was suYciently secure in a closed environment, only ITSO provided the security levels needed for national interoperable activities. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Merseytravel continues to remain active in a number of UK working groups on the development of national standards for smartcards. This important development work will ensure that smartcard technology is not limited to speciﬁc geographical areas and transport operators. ITSO oVers a unique opportunity to help create the necessary standards to allow smartcards to become the main ticketing medium in the UK, so that a smartcard issued in Liverpool could be read in London and elsewhere. Looking to the future, Merseytravel believes that the ITSO concept could be taken a stage further with excellent opportunities to follow the principles, the organisation and to some extent the technology that ITSO uses to begin addressing interoperability of Road User Charging schemes across the country. ITSO was designed by all the players in the Transport industry (Operators, Manufacturers, Transport Authorities etc) and whilst in the design stage this was a weakness (design by consensus) it is now a strength in that ITSO has become the Industry Standard, this is illustrated by: — The number of suppliers who are submitting cards, point of service or back oYce equipment for ITSO certiﬁcation. — The number of schemes implementing ITSO including 6 of 21 of the rail franchises. — The indication that London will move towards ITSO ticketing. — The international interest and adoption of ITSO. ITSO provides for interoperability—indeed this was the driver for ITSO along with interchangeability. ITSO allows the scheme provider a choice of smartcards from throw away single journey tickets to sophisticated life style or entitlement cards. ITSO provides whatever data elements are required to allow complex ticketing between operators or on a geographical basis by capturing the on card data and secure data transfer to the back oYces. This same wealth of data on who travelled where, on what etc will allow the DfT to monitor ENCTS and to tune or revamp the scheme, in essence it will futureproof ENCTS. The need for smartcard ticketing and the security it brings has again been demonstrated in recent days by the press articles on alleged fraud.

What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? The Scottish transport card has public sector investment, being fully funded by the Scottish Executive and because of this take-up of the system happened at a faster rate than can be expected across the English system. ITSO and Oyster are now compatible however, as this was not the case when it was initially set up the costs of doing this “after the event” were greater. Merseytravel believes that smartcards systems should be ITSO compliant in the ﬁrst place to save the expense of making them compatible later on. Smartcards are very acceptable to customers because of the convenience and beneﬁts normally associated with them. This is particularly so where the “entitlement” card approach has been taken. Whilst existing schemes are still in their infancy it would appear that the drivers behind ITSO are achievable: — Better Data (Customer habits, Reimbursement). — Automated Validation (More sophisticated ticket types). — Fraud Prevention (Forgery, Pass back). — E money (Reduced theft & operational costs, Attractive customer facility). — Faster Processing (Customer convenience, Operational savings). — Standards (Interoperability, Interchangeability).

RevenueProtection andThePowers ofTicketInspectors

Is the legal framework within which ticket inspectors function appropriate? Yes. Ticket inspectors on both bus and rail services need adequate powers to fulﬁl their primary role of revenue protection; identifying the minority of passengers who deliberately seek to evade paying their fare or fraudulently use travel permits.

What appeal mechanisms exist for passengers, and are they adequate? Appeal rights are important but, first and foremost, revenue protection measures must be applied fairly and consistently so that unfair penalisation and other incidents giving rise to appeals are kept to a minimum. Any appeals mechanism must deal with cases fairly and consistently against specified criteria and passengers need to have confidence in the process, which must be seen to be independent of the commercial interests of operators and funded on a basis which is unaVected by the outcome of appeals. In respect of rail penalty fares, passengers have access to the Independent Penalty Fares Appeals Service (IPFAS) which meets those criteria. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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Are the rights of passengers and the powers of ticket inspectors well-balanced? Yes, for example, rail passengers can only be charged a penalty fare if ticket facilities were unavailable where they joined the train. However, it is important that passengers rights are protected by ensuring that, for example, if a passenger says that they could not buy a ticket an inspector is able to verify whether that is the case. Inspectors need real time information on whether ticket oYces are open or machines are working properly so that they can exercise discretion in appropriate cases.

Do operators of public transport take adequate measures to protect fares revenue? The extent to which operators take steps to protect fare revenues is likely to vary according to their dependence upon “fare box” revenue. Where operators have accepted little or no revenue risk, there is disincentive to ensure that the correct fares paid or that tickets or passes are valid.

ConcessionaryFares—TheRightStrategy?

Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? Merseytravel welcomes the introduction of an England-wide scheme for free oV-peak bus travel, applicable to disabled people and those over 60 and is keen to work with the Government to ensure its successful implementation. Merseytravel believes the Government’s mechanism for allocating funding for the concessionary fares scheme presents significant challenges, particularly in England’s metropolitan areas. Government funding, although reflective of the actual cost of the scheme, will be allocated as part of the Revenue Support Grant (RSG) process meaning that allocations are not reflective of local passenger numbers or need. Channelling funds through the RSG is particularly detrimental to metropolitan areas where passenger numbers are naturally higher, making the cost of implementation higher. This problem is not reflected in the RSG and can only be resolved by Transport Authorities cutting services or quality. In Metropolitan areas, funding allocated for the scheme does not go directly to PTEs. It goes to Metropolitan District Councils as part of the RSG process, who are under no obligation to pass on the additional funding to the PTEs. Another funding issue arises because the scheme follows Barnett principles, meaning a proportion of the funding for the English scheme will go to Scotland and Wales—even though those schemes are fully funded already via their respective Assembly and Executive. One significant area of concern is the impact of the recent round of Appeals by bus operators against PTA Participation Notices. All the PTAs aVected have had to make provision in their budgets for the potential outcomes. This means that there is uncertainty in the budget, but also that budget plans could be seriously aVected by the outcome of the Appeals process, eg PTAs have faced increased payments to bus operators in the region of £1.5 million to £5.0 million per annum. Decisions by the Secretary of State are potentially undermining the sovereignty of PTAs to determine their own budgets. However, the reality is that the DfT funding to the PTAs and Concessionary Travel Authorities is fixed: so there is one rule for the DfT and another for reimbursing Authorities! ITSO provides a flexible and interoperable scheme basis which allows many of the current issues to be resolved: — Recognising a valid card. — As much data as you want. — Whose scheme is it? — Issuing the cards at where? — Local add ons. — Commercial add ons. — Cross Border. — Future proofing.

Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? — For the Concessionary Fares scheme to be applied on a national scale, it is essential that eligible passengers are able to travel with ease, Local Transport Authorities (LTAs) are able to gather reliable data about passenger numbers and travelling trends, and fraud can be minimised. Merseytravel recognises the opportunity to ensure that technology supports inter-operator Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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ticketing not only across types of transport but also over areas and regions. Schemes using ITSO- compliant smartcard technology ensure complete interoperability and eYcient management of the movement of people and, if applied nationally, would ensure a “seamless journey” for the traveller regardless of mode or LTA boundary. March 2007

Memorandum from Transport for London (TPT 29)

1.Summary 1.1 The Oyster smartcard has provided substantial beneﬁts to passengers on all TfL modes since it was introduced in 2002. Passengers can move faster around the city. TfL’s losses from fraud have been reduced. And it has been the foundation for a transformation in TfL’s relationship with its regular customers. But it is important to recognise that Oyster may no longer represent a state-of-the-art smartcard system, as developments in related industries open up attractive alternative models. 1.2 TfL actively tackles fare evasion through the provision of dedicated revenue protection teams and believes that these teams generate net revenue. But it is still not satisﬁed with the rigour applied to revenue protection especially on buses. Further steps can be taken to make the law in this area more relevant to modern technologies.

2.Introduction 2.1 TfL welcomes the opportunity to respond to the Committee’s inquiry into Ticketing on Public Transport. With four year’s worth of experience in running the Oyster smartcard system alongside its older paper ticket system, TfL feels it has useful perspectives to oVer on the subjects of smartcard technologies and revenue protection. TfL has also contributed to a separate submission by the Mayor of London that focuses on integrated ticketing and concessionary travel. 2.2 Overall, TfL considers that the introduction of the Oyster smartcard has been unambiguously positive. It has improved the customer experience in many ways. Certainly customers can proceed through TfL stations and board TfL buses much more quickly than used to be the case, and they are unanimously positive about this. But that is only the start. Customers now have a wider choice of travel products including the Oyster Pay As You Go stored value product which was impossible to deliver using paper tickets. They can also register their possession of a given Oyster card with TfL and thereby access an improved range of customer services and beneﬁts. There is no interest within TfL in returning to paper tickets. 29 2.3 The Transport Policing & Enforcement Directorate’s (TPED’s) Bus Enforcement section is responsible for operational and procedural bus enforcement, including managing TfL’s approximately 295 Revenue Protection Inspectors (RPIs), ticketing and policy input on revenue, and investigation and prosecution delivery for Surface Transport. Public transport providers have a duty to ensure that public and private monies are protected and paying customers are supported through eVective revenue protection and prosecution activities. 2.4 The pattern and methods of fare evasion have changed to adapt to new technology and ticketing requirements, particularly in the last two years. Fare evasion has also increased on the bus network over the same period. This has been driven by operational and ticketing changes which reinforce the need for appropriate legislation and eVective sanctions delivery. Fare evaders are often involved in other forms of crime. EVective fare evasion detection provides judicial access to these oVenders.

3.TheUse ofSmartcardTechnologies 3.1 The Oyster contactless smartcard was launched by TfL in 2002 and since then has grown to be the largest transport smartcard scheme in the United Kingdom. To date, more than 11 million cards have been issued to TfL customers, and they use their cards for almost 7 million journeys on TfL and train operating company services every day. 82% of journeys on TfL services are now made using Oyster. But such a scheme does not come cheap: TfL pays its PFI contractor substantial service charges to provide and operate the Oyster system. There are broadly three lessons from London’s experience with Oyster. 3.2 First, Oyster has allowed passengers to move signiﬁcantly faster around the city by reducing queues both for ticket purchase at ticket oYces and retail outlets and for London Underground gate-lines and bus entrances (maximum throughput for gates was increased from 15 passengers per minute to 40 on the

29 — Detect and minimise fare evasion on the London bus network. — Develop and eVectively use technology to ensure eVective resource targeting and data analysis. The— main Provide aims ofa visible, RPIs are uniformed to: presence to deter fare evasion and other criminal behaviour. — Provide staV and passenger safety and security reassurance and to assist and guide as needed. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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introduction of Oyster). In addition, at certain highly-congested Underground stations such as Bank, the reduction in congestion achieved with Oyster has meant that passenger volume growth has been accommodated without the need for sizable capital investment in expanding ticket halls. Oyster has also delivered real financial benefits by preventing and eliminating several types of fraud, such as the re-sale of discarded one-day tickets by touts which so blighted the environment of so many Underground stations in the 1990s and also the use of forged paper tickets. Other operators elsewhere in the UK may well be able to replicate the benefits from fraud reduction, but the non-financial passenger benefits and capital investment avoidance benefits may be harder to replicate except for operators in those urban centres where peak passenger flows result in queuing and over-crowding at levels similar to London. 3.3 The second main lesson has been that smartcards can be the foundation for the transformation of transport operators’ relationships with their customers. More than 1m Oyster card users have chosen to register their card details with TfL and constantly re-use a single registered Oyster card for their travel. Where the necessary customer consent has been given, TfL can proactively warn these customers by email or text message several days beforehand that the service that they normally use will not be available and suggest alternatives. Another benefit is the free replacement of products if a card is lost: where a customer has registered a card number with TfL, its number can be “hot-listed” if lost so that the card cannot be reused on the system. A new card with duplicate products is issued to the customer. 3.4 The final lesson concerns the implementation challenge of a smartcard ticketing scheme. Oyster is a huge, complex system. To put it into context, where MasterCard processes about 40m payments every day worldwide, the Oyster system processes more than 10 million individual “taps” each day—it is at a comparable scale. Building, testing and commissioning such a system is detailed, demanding work and must be tackled in a step-by-step fashion with each incremental development to the scheme released one at a time after thorough testing and assurance. This is not just a consequence of the project complexity: account also needs to be taken of the pace at which customers can assimilate changes to the ticketing system. Smartcards change the fundamentals of ticketing systems and time must be allowed for customers to digest these changes and adapt to them. 3.5 It rather misrepresents the situation to refer in the Committee’s terms of reference for this inquiry to “the ITSO system”. There is no single ITSO system. There is a technical specification, a number of suppliers of equipment that comply with this specification, and a number of distinct smartcard schemes that use this equipment. It is not entirely clear that this set of entities makes up a system in the fullest sense of the word. 3.6 Because the PFI contract for the Oyster system was made in 1998, it pre-dates the establishment of the Integrated Transport Smartcard Organisation (ITSO) and the publication of the various parts of the ITSO specification. As a consequence, TfL has never formally analysed the ITSO specification nor compared it against Oyster. At no stage in the first nine years of the PFI contract could the benefits of ITSO conceivably have oVset the financial penalties of terminating the contract early. 3.7 At the DfT’s request, an exercise is underway in which the PFI contractor is assessing what would be required to transform the Oyster smartcard system so that the various smartcard readers within it could also read and write to cards compliant with the ITSO specification. TfL believes that investment in such an upgrade project would be rather wasteful. The vast majority of TfL’s customers are residents or regular commuters who already have an Oyster card. Visitors can get one from TfL in person or by post at any address in the UK or through Visit Britain’s arrangements overseas. The beneficiaries of such an investment programme would be people travelling to or through London on an ITSO-compliant smartcard carrying travel products valid within London but purchased outside London. At present, there is no transport smartcard scheme in the UK that has these characteristics (although South West Trains has obligations to provide such a system from 2009). It is not clear what problem is to be solved through the investment of tens of millions of pounds in an upgrade that will benefit a small number of travellers who already have straightforward access to the benefits of smartcard ticketing in London with Oyster. 3.8 This is proving to be a fertile period in the history of the smartcard technology industry. The past 12 months have seen a noticeable acceleration of technology trends in the industry that make assumptions made even as recently as 2004 seem dated. Prior to that date, the requirements of the public transportation industry were too demanding for the mainstream smartcard industry to meet. That industry focused on providing smartcards to the banking payments and mobile phone industries in the form of very secure cryptographic products for consumers using contact interfaces—the Chip & PIN cards in peoples’ wallets or purses and the SIM card in their mobile phone handsets. The demands of the public transportation industry were very diVerent. The very fast transaction speeds that they demanded to achieve high passenger throughputs made the use of contact smartcards infeasible, so the main producers ignored the transport sub- market and allowed a set of niche transport smartcard providers to appear. These providers thrived to varying degrees and their successes prompted some further entrants to compete, such as ITSO. For transport operators the market seemed relatively under-served and competition was diYcult to create. 3.9 That situation has recently changed dramatically. Some banks, notably in the United States, have decided to oVer contactless payment functionality on their bank cards in the hope that in certain contexts customers will prefer to make a “tap and go” card purchase—without the need for a PIN—than to fumble with cash and change. This has been made possible by the steady improvement in the speed and power of the microprocessors embedded in the industry’s standard smartcards which allows the whole interaction between card and reader to be compressed into less than a second. Already some transport operators have Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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adopted this technology for their operations, albeit on a pilot basis, in Taiwan and New York City where on certain routes passengers can tap their bank cards to board buses or to pass through the subway gates. There is also a lot of activity in the mobile phone industry around a technology called Near Field Communications (NFC) which allows a suitably-adapted mobile phone handset to emulate a contactless smartcard. In Tokyo, Japan Rail East launched a commercial product of this type last year called Mobile Suica that allows customers to buy travel tickets using their mobile phone that are delivered in electronic form “over the air”, and then use the handset as a smartcard to tap-in and tap-out of the transport system. 3.10 What conclusions can be drawn from all this activity? Broadly, it seems as though the mainstream smartcard industry is close to reaching the point at which its standard payments and mobile telephony products can for the ﬁrst time meet the needs of transport operators. Bank cards and mobile phone handsets that use open or widely-adopted industry standards and that can interact suYciently fast with contactless smartcard readers will be available in only a handful of years time. Prices for contactless cards, readers and associated services are likely to fall. For transport operators, these changes should open up real opportunities to weave contactless smartcard technologies into their ticketing systems at prices that were unattainable even 3–4 years ago. Doing so may require them to learn to partner with large organisations in industries that are currently unfamiliar to them.

4.RevenueProtection andThePowers ofTicketInspectors 4.1 Current legislation needs updating to take technological developments into account. It also needs a degree of flexibility to ensure relevance to future developments. The legislation governing the modes and their application varies greatly across the country. London Underground prosecute under Section 5 of the Regulation of Railways Act 1889 and also under byelaws made pursuant to section 67 of the Transport Act 1962 or schedule 11 of that Act. Bus Operators primarily prosecute under section 25 of the Public Passenger Vehicles Act 1981 and the related the Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990. In London penalty fares can be imposed instead of prosecutions under Schedule 17 to the Greater London Authority Act (1999) for both bus and rail modes. Bus operators apply the current legislation diVerently, varying from a standard fare being charged for fare evasion through to penalty fares and prosecutions. The current legal framework does not have set transport-industry wide criteria for proving fare evasion. On London’s bus network, not having a valid travel product represents adequate proof of fare evasion as PSV legislation does not require the burden of intent to be proven. London Underground, however, does have to prove a passenger intended to evade their fare in order to successfully prosecute. These anomalies allow fare evaders to abuse the ticketing requirements and can lead to genuine customer confusion. Amendments to Schedule 17 of the Greater London Authority Act contained in the Transport for London Bill are currently progressing through Parliament to ensure its ongoing relevance to current operations and improve deterrence. Amendments to the Public Service Vehicle Regulations have been suggested to the Department for Transport. 4.2 A three-stage penalty fare appeal process is in place within TfL for the Underground and buses. The first stage is administered by the issuing mode; second stages are heard by TfL Bus Enforcement’s Investigation and Prosecution Section and the third stage is heard by the Independent Penalty Fare Appeals Panel. This panel was established in 2005 and consists of members nominated by London TravelWatch and agreed by TfL. It meets every six to eight weeks to consider appeals which have passed through the first and second stages of the appeals process. TfL currently believes that the appeal mechanisms in place (which have been agreed with London TravelWatch) are wholly adequate and robust. The appeals process also incorporates appeals against the withdrawal of youth and full time education concessionary travel. 4.3 Current legislation places restrictions on revenue protection personnel. For example, personnel are required to interact with the alleged fare evader only on the vehicle on which the alleged oVence has occurred, thereby potentially disrupting the bus service. They are also unable to charge an alleged fare evader with obstruction where they fail to provide correct details. As part of the name and address verification process, the right to obtain additional information, such as a date of birth, would reduce the significant number of evaders who manipulate the system and persistently evade payment. This hopefully will shortly be subject to change with the powers proposed within the TfL Bill. Passengers rights are maintained through, for example, the right to view oYcial’s photographic and authority identification, the Data Protection Act (1998), appeal rights and the Police and Criminal Evidence Act (1984). 4.4 There is nationwide scope for improvement in the measures used by the public transport industry to protect fares revenue. The costs of revenue protection can, however, appear commercially prohibitive. In London, appearances are deceptive: TfL business case evaluation indicates a positive 2:1 cost benefit ratio ie the costs of providing a revenue protection function is outweighed by the benefits of prevented revenue loss. Revenue protection measures adopted in London include the complete gating of all London Underground stations and the provision of full-time revenue protection teams on the Underground and buses. But on buses drivers are the main point of control in protecting fares revenue. Current levels of driver ticket checking in London are unacceptably low. Increasingly, fares are paid via pre-purchased ticketing products which require accurate driver checking of ticket and pass validity rather than on-bus cash transactions. Operators need to be supported by the judicial processes which adequately consider financial impact assessments. This is enacted in London through the use of five regional courts resulting in the successful prosecution of around 3000 bus network fare evasion cases a month. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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5.Conclusion 5.1 TfL’s experience of Oyster suggests that contactless smartcards are the best way to handle ticketing in highly-congested urban centres like London. And encouragingly, the smartcard industry will soon be able to oVer transport operators a range of contactless technologies derived from the payments and mobile phone industries that will be much cheaper than the transport-specific technologies that have been available to date. 5.2 TfL is firmly of the view that proactive revenue protection is a value-creating activity, but is concerned that it has yet to achieve the levels of performance in this area to which it aspires. TfL requires support in its work to control the revenue lost to bus network fare evasion and fraud annually. Further legal rights would allow RPIs to better tackle to this issue to allow significantly increased revenue for reinvestment in London’s public transport network. There are some characteristics of the legislation surrounding revenue protection that require updating and which currently mitigate against the most eVective revenue protection at present. TfL would encourage the Committee to consider how these might be re-visited and made wholly relevant to both recent technological developments and varied operational requirements. Public transport service providers have a duty to ensure that public and private monies are protected and paying customers supported through eVective revenue protection and prosecution activities. A consistent approach to the detection and deterrence of fare evasion and fraud by national operators together with a consistent approach by the judicial services is needed to adequately address these errant behaviours. March 2007

Supplementary memorandum from Transport for London (TPT 29a)

1.Introduction 1.1 Our response to the request for additional information that was made by the Committee during our oral evidence session regarding the English National Concessionary Travel Scheme, the Freedom Pass and Revenue Protection OYcers is set out below. We have also included information about London Underground’s Ticketing Strategy which was raised later during that session.

2.TheImpact of theEnglishNationalConcessionaryTravelScheme onDemand forLondon BusServices 2.1 Reliable information on current London bus usage by non-London concession holders is diYcult to obtain. We have agreed an estimate with the Boroughs on which to base provisional payments in 2008–09 until actual data comes through from the on-bus surveys. The Boroughs will pay us £25 million on the basis there are currently 25 million paid for journeys, which will rise to about 40 million as a result of free travel (ie generation of about 15 million journeys, or about 0.75% increase in total bus traYc of 2200 million). The payment will be retrospectively adjusted once actual usage ﬁgures come through. A further factor here is that the government formula for distributing the additional grant for the out-of-area travel (£212 million for England) looks likely to give the Boroughs £60 million!, compared with our £25 million cost estimate. This occurs mainly because the London scheme has always included out-of-Borough travel—so the Boroughs would argue is simply putting right many years of injustice, not handing them a windfall.

3.LondonBoroughs andPayment for theFreedomPass 3.1 London Councils is responsible for managing the Freedom Pass and would be able to provide further information about how the scheme is funded.

4.RevenueProtectionOfficers 4.1 In 2006–07 there were 21 recorded major staV assaults on revenue protection oYcers on the bus network, ie those assaults leading to over 3 days sick leave and 115 minor assaults. Up to the end of period 9 this year (8 December 2007), there have been 17 major assaults and 72 minor assaults. This is in the context of additional revenue staV operating on the network and, currently, there is no year-on-year increase in assaults per hours of ticket checking on buses.

5.LondonUnderground’sTicketingStrategy 5.1 Oyster currently represents nearly 70% of all London Underground (LU) ticket sales. Its success has provided an opportunity for LU to look at the best ways of deploying its staV to the beneﬁt of all passengers, especially in the context of the huge rise in numbers currently being experienced. By moving some staV from positions in ticket oYces to more customer-facing positions, LU believes that its service will be improved. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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5.2 As a consequence of the growth in the use of Oyster, there has been a dramatic decline in ticket oYce transactions at many of LU’s smaller ticket oYces. At stations where there has been the biggest decline in ticket oYce sales, LU will move staV from ticket oYces to more visible positions across the network, where they are needed most. On average at the stations where changes are proposed, ticket oYce sales have dropped by 42% over the past two years—in some cases this ﬁgure is as high as 80%. Most of the ticket oYces that will close are currently open for only a few hours each day and sell fewer than 100 tickets daily. 5.3 Additional Oyster-enabled machines (more than 300) will be installed across the LU network which equates to at least one at every station. LU is also planning comprehensive customer information and education programme at each of the relevant stations to ensure any questions are resolved before any changes are made. A new marketing campaign around automatic top-up for Oyster was launched in December. 5.4 These changes do not mean that LU is reducing staV at stations and it remains committed to staYng all of its stations at all times. At some of the busiest stations, such as Victoria and King’s Cross, where people are less likely to have Oyster and may be less familiar with the network, LU proposes to increase the number of ticket oYce staV. 5.5 LU has decided to put back the implementation date for the ticket oYce changes to autumn 2008. It will review the results of the consultation and allow time for the full beneﬁts of new ticket machines and the Ticket Stop network, which is to be expanded in 2008 to 4,000 outlets, to be realised. December 2007

Memorandum from Greater Manchester Centre for Voluntary Organisation –Transport Resource Unit (GMCVO) (TPT 30)

30 Background The voluntary sector has an important role to play in local transport, whether as users of transport, contributors to policy development, representatives of community groups or in delivering community and public transport schemes. The Transport Resource Unit (TRU) is part of the Greater Manchester Centre for Voluntary Organisation (GMCVO) with the speciﬁc remit of focusing on transport issues as experienced by the voluntary sector. The TRU vision is for an integrated transport system for Greater Manchester that is socially inclusive, sustainable, and accessible to all communities Integration can only work to an optimum level, however, if fares and ticketing are simple and economical for the users, with the minimum of complication. It is from this perspective that that the TRU oVers comments on the questions posed in the Committee’s Inquiry.

IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? A ticketing scheme currently exists in Greater Manchester, under the powers of the Greater Manchester Passenger Transport Authority under Sections 135 to 138 of the Transport Act 2000. The scheme has been developed in the Local Transport Plan context in which a key objective is to increase public transport’s share of travel across Greater Manchester. Under the ticketing scheme, GMPTA has powers to require integrated ticketing but not set ticket prices. This is due to the deregulated commercial nature of the public transport market. As such, fares diVer across modes and operators, providing a barrier to integration. The scheme provides for a range of inter-operator and inter-modal tickets that are called “System 1”, as well as a multitude of operator speciﬁc tickets. The System 1 integrated tickets are priced at a premium to one mode or operator speciﬁc tickets. In consultation with voluntary sector groups, I obtained evidence that many people use single routes and operators, and avoid making trips on other modes or with other operators, because their ticket relates to a particular operator. The added cost of a trip outside that ticket’s validity presents a barrier to extending travel horizons.

30 including voluntary, community and faith groups and organisations, social enterprise, co-operatives and other not-for-proﬁt organisations with a social purpose. The term “voluntary sector” is used throughout this document. It should be understood to include the whole “third sector” Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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Overall, the current system is overly complex and expensive and does not suYciently integrate across bus, train, and tram modes, and across county boundaries. This last point is especially relevant to local trains where there is a big diVerence in ticket prices on travel from Greenﬁeld to Manchester (£3.45 standard day single) and Marsden to Manchester (£6.50). Marsden is only one station further on from Greenﬁeld but because it’s outside the GMPTA boundary, the price is much more. This leads to people driving to the closer station and occurs at other GMPTA boundary stations across the conurbation. There is evidence of similar occurrences in other PTA areas.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? There does not seem to be a strategy for developing the integration of ticketing systems at Government level. It appears that, outside London, PTAs and operators are left to develop their own strategies. As mentioned previously, the commercial nature of public transport means that operators are less inclined to work towards better integration. A Government strategy would be extremely useful and could perhaps feed into the Road Transport Bill, where bus regulation is being considered.

3. Is the industry taking up modern smartcard technologies adequately and appropriately? GMPTA/E have been in process of developing smart card ticketing for some years. It seems that a system, similar to TFL’s Oystercards, could go some way towards solving the integration issue. The cost of developing these technologies to the correct ITSO standards is expected to be met by authorities and operators and this is causing delays in the take up.

4. Does the ITSO system cater for the needs of all passengers and travel providers? From my limited understanding, the principles of ITSO are to allow for integrated ticketing across modes with multiple use and purpose. In this way, it could cater for the needs of all passengers and providers.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? It is most important to consult with users prior to implementing smartcards. It’s also important to have a clear legislative and policy platform.

RevenueProtection andThePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors’ function appropriate? I am not suYciently informed on this topic to comment.

7. What appeal mechanisms exist for passengers and are they adequate? I am not suYciently informed on this topic to comment.

8. Are the rights of passengers and the powers of ticket inspectors well-balanced? I am not suYciently informed on this topic to comment speciﬁcally however we believe that the law supports the common sense position that if you would be forced to go to unreasonable lengths to purchase a ticket, or are denied an opportunity to purchase a ticket, you should not be ﬁned. Reasonable steps and reasonable opportunity for purchasing tickets need to be included in the relevant legislation. Examples of circumstances where we believe it may be reasonable for passengers to travel without a valid ticket include: — Where ticket machines are not working at the start of your journey and you are denied an opportunity to purchase a ticket during or after your journey. — Where ticket machines are in exact fare mode and you do not have exact change. — Where a bus driver does not have the correct ticket available (eg a cover for a mega rider). — Where a bus driver does not have change available for reasonable denominations presented (eg weekly ticket is £11.50–£20 is presented and the bus driver does not have change). — Where an inspector approaches you while you are queuing to use a ticket machine. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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9. Do operators of public transport take adequate measures to protect fares revenue? Tram operators employ inspectors to regularly check tickets whilst rail operators have conductors. These measures appear adequate for protecting fare revenue. Buses do not appear to have the same consistency of measures. Bus drivers are expected to provide tickets, inspect tickets, and question passengers if they have asked for the incorrect ticket. This puts added unnecessary pressure on drivers. Employment of more bus inspectors for protecting fare revenue would assist.

ConcessionaryFares—TheRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? Service users of the local concessionary scheme are very supportive. Bus travel has increased across Greater Manchester since April 2006. Rail and tram services have also been incorporated into the local scheme by the authority, providing opportunities for greater integration of travel. This has all been welcomed by the users. The extension of the scheme, expected in April 2008, will provide added benefits of cross boundary travel, local travel in other areas of England, and should increase travel horizons and social inclusion. Whilst the strategy has been an overwhelming success for users, it has had some negative impacts on Local Authorities and PTAs (Travel Concession Authorities or TCAs), other public transport users, commercial operators and community transport operators. Under the current guidelines and operations, funding is not ring fenced, meaning that TCAs need to agree funding amounts from authorities. TCAs are obliged to ensure that operators are ‘no better or no worse oV’. This concept has led to appeals by over 60 operators and led to financial risks to TCAs. Under current arrangements operators are reimbursed for only those journeys that are expected to have been made in the absence of the concessionary scheme. Operators receive nothing for trips that are deemed to have been generated by the scheme, though they can make claims for additional costs to be covered as a result of the rise in demand Community Transport is another area where concessionary fare schemes need to be considered. Given that community transport services are not commercial and frequently already operate at capacity, they are not in a position to benefit from the rise in passengers generated by free concessionary fare scheme. The concessions allowed for passengers travelling on community transport should therefore be reimbursed in full. The cost of training people to use their concessionary entitlement (such as people with learning disabilities) should also be covered by the scheme. The logical way forward would be to simplify schemes so that operators received a reimbursement on the basis of the agreed average adult fare for every concessionary passenger carried. The reimbursement would be lower than the average adult fare to prevent operators making super profits and to take account of the economies of scale that operators would receive by carrying more passengers. The method for managing schemes needs to be considered in the concessionary fares bill for the national scheme. Other public transport users, particularly children, are disadvantaged by the current scheme. The conclusion of the recent appeals by bus operators, led to concessionary fares in Greater Manchester being raised from 50p to 70p. The impact of this will be felt most by children, the very people that we are trying to encourage to use public transport and become lifetime public transport users. The Government needs to consider its strategy and consider the costs and benefits of incorporating children into the free scheme.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? Greater Manchester has already incorporated rail and tram into the local scheme, at a cost to GMPTA. Not all authorities have incorporated all modes, leading to anomalies and lack of an integrated approach. In order to provide integration across modes, consideration needs to be given to a multimodal national scheme after April 2008. The issue of diVerent geographical areas should be resolved after April 20008, however the cost of implementing schemes in popular areas, needs consideration to ensure equity for PTAs and TCAs. March 2007 Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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Memorandum from Transport 2000: Herefordshire and Worcestershire local group (TPT 31) The local group representing the national environmental transport campaign in the two counties

Inquiry intoTicketing onPublicTransport 1. This short memorandum for the above Inquiry is submitted by way of illustration of how the present systems operate in a smallish (c 95,000 residents) shire district on the edge of one of the conurbations with a passenger transport authority [PTA] and executive [PTE]. The shire district is Bromsgrove, in Worcestershire, and the whole of the boundary between Worcestershire and the West Midlands county (which forms the PTA/PTE area) is also the Bromsgrove/West Midlands boundary. 2. It is not intended to cover all the issues raised in the Press Notice, but to highlight specific problems in relation to ticketing in a particular area which may be hindrances or deterrents to the use of public transport, either wholly or within the district. 3. Until deregulation of bus services in 1985 or 1986, almost all the stage carriage bus services in the district were provided by a single National Bus Company subsidiary, Midland Red West [MR]. A small number of PTE services crossed the county boundary for a short distance to reach their terminus, but they remained essentially services within the metropolitan county. 4. MR sold single bus tickets for each journey. If a traveller required to use more than one bus service to complete their journey, separate tickets had to be bought for each leg of the journey, unless the traveller bought a “runabout” or “rover” ticket, which allowed the holder to travel on any of MR’s services that day. The cost was disproportionate for shorter journeys involving two or more legs on MR bus services. 5. MR became part of what is now First Group (as, according to the First website, First Wyvern, though that name does not appear on the buses as far as I have noted). The “runabout” or “rover” ticket is now the “First Wyvern” ticket, which is available in day, week, month and term versions. The FirstDay Wyvern ticket in turn is available in adult (£5), child (£3.50) or family (£10) versions. That is relatively good value for many occasional return journeys longer than 10–15 miles each way (depending on the particular service, as fares are not calculated on a standard distance basis). or for shorter trips where a change of service is required. In addition, a range of local tickets, available on any of the company’s services within a specified area, is on oVer. 6. The benefits of that approach have however been limited by another eVect of the deregulation. Whereas in 1986 all the bus services in Bromsgrove town (whether town services or inter-urban) were provided by MR, that is no longer the case. It appears that nowhere which had a bus service in 1986 has lost it, and indeed there are one or two new services which run as a result of local authority (or in the past health authority) support. However, several services have been cut back, and instead of MR running along nine radial inter-urban routes from the town, as was the case in 1986, First now runs only on five. In addition, they have given up operating the town services (serving four local destinations). 7. On both the routes which MR or its successor no longer operates and on some of those run now by First, other operators now provide services, in some cases commercially, but in all but two under contract to the county council. Currently, six companies (including First) operate on the inter-urban routes, while four companies provide the town services, two of which are entirely contracted, while there are limited Sunday tendered services on one route. At one point, along one corridor (Bromsgrove-Redditch), the service was provided by four diVerent companies, with some interavailability of tickets, since First was the only commercial operator. 8. The eVect is now that First Wyvern tickets are available only on three of the inter-urban routes operated by First. The company runs on two other tendered routes which are excluded from its Wyvern tickets—these include areas where the bus will divert from its route to a pre-arranged pick up or set down. 9. The eVect of all this is that it is no longer possible to make a bus journey requiring the use of a local service and an inter-urban one on one ticket. I live on one of the local routes which was served by First until six months ago. A return journey by bus from the nearby stop to Birmingham and back would then have cost me £5 (at current fares). It would now cost me £6.40 as a direct result of First’s withdrawing from the route. 10. Though (according to Worcestershire County Council’s Second Local Transport Plan) the use of Bromsgrove railway station has increased fivefold in the 10 years from 1994–95 to 2004–05, the ticketing system there also oVers several quirks and obstacles to the intending traveller, the eVect of which is to raise the cost of travelling by train unreasonably. The quirks include regional journeys via Birmingham often being cheaper if the traveller rebooks there—the combination of day tickets between Bromsgrove and Birmingham, and between Birmingham and Shrewsbury costs £14.40. The cost of a through day ticket for the same journey is £19.50. For some journeys where there is a service there is no “any permitted route” ticket. For journeys to and from London, the traveller has to buy a ticket via Birmingham or via Evesham/ Stroud. In some cases, these idiosyncracies appear to arise from the privatisation process: there was were “any reasonable route” tickets between Bromsgrove and London before the 1993 Act. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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11. The PlusBus scheme in theory includes Bromsgrove, but there is no co-ordination of services, and the bus and railway stations are over a mile from each other, with the railway station perhaps 250m from the bus stops serving it. Information about the bus services is displayed at the station (which, despite serving perhaps 60,000 people and being on one of the principal cross country routes, is unstaVed), but the bus services themselves do not operate in the evenings. March 2007

Memorandum from Journey Solutions (TPT 33) The Department for Transport states that “integrated ticketing is a key component of integration between services and between public transport modes”. Changes in statuary provisions over the past decade have enabled local authorities and other transport providers to create integrated ticketing schemes. But is it working? Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas?

1.Introduction There is a nation-wide integrated ticketing scheme for train and bus travel that’s available to 195 towns and cities across Britain. It has been introduced over the last five years by a non-profit making partnership established and funded by the six main PLC bus and train operating Groups in Britain (along with their respective trade associations). On 16 January this year, Tom Harris MP (Under Secretary of State for Transport) congratulated Britain’s bus and train operators for the Journey Solutions initiative that has introduced PLUSBUS integrated ticketing across England, Wales and Scotland, without the need for financial support from central Government.

2.JourneySolutions Journey Solutions was created in 1999 to enable the public transport industry to deliver on its commitment of improving transport integration—in particular making combined train and bus travel easier, more convenient and better value for customers. All Journey Solutions work aims to support Government policies on improving and integrating public transport in local communities, across regions and throughout the whole of Britain. 3. Journey Solutions is funded entirely by Arriva, Blazeﬁeld/Transdev; First; Go-Ahead; National Express and Stagecoach, the Association of Train Operating Companies and the Confederation of Passenger Transport. Essentially Journey Solutions is an operator-led initiative to improve modal integration. 4. Journey Solutions is managed by Jonathan Radley, the full-time Commercial Director, who is supported by Giles Fearnley, the Chairman. Both have many years experience of management in both the bus and train operating companies. Each of the supporting organisations has a director or senior representative who sits on the Journey Solutions Board. It is this Board that decides strategic direction for the initiative, taking advice, leadership and sharing best-practice from each of the supporting organisations. Journey Solutions uses a number of respected public transport consultancies to deliver its programme. 5. Journey Solutions also has an Advisory Panel, which includes representatives from a wide range of stakeholders. These include: Central Government agencies: Department for Transport, Transport Direct, Transport Scotland, Welsh Assembly Government, Commission for Integrated Transport, and the Countryside Agency. Local Government representatives: Association of Transport Co-ordinating OYcers, Local Government Association and the Passenger Transport Executive Group. Consumer groups: Association of Community Rail Partnerships, Bus Users UK, London Travelwatch, Passenger Focus and Transport 2000. Professional bodies: County Surveyors’ Society and the Institute of Logistics and Transport. It is important to Journey Solutions that these organisations are able to contribute to our agenda and the feedback received is most welcome. 6. Journey Solutions looks at improving the customers’ whole journey experience, including: — travel information before the integrated journey begins and during the journey; — integrated ticketing for the whole journey; and — easy interchange between diVerent methods of public transport during the journey. 7. Journey Solutions has two guiding principles underlying its work. These are to: — create an environment which makes it easier for travellers to use public transport for their entire journey; and Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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— develop integrated products that encourage people to use public transport. 8. Speciﬁcally Journey Solutions has: — managed the successful development and implementation of a standard template for nation-wide integrated train and bus ticketing schemes; — worked with public transport operators and their trade bodies to identify opportunities for better integration; — encouraged and supported operators in sharing integration “best practice” and introducing new integration initiatives; and — promoted the integration of bus and train services, including with other modes (eg metro/light rail and tram networks). 9. Journey Solutions believes that maximising the use of public transport will help to reduce road congestion and contribute to better air quality in our towns and cities. Encouraging more public transport use can also play its part in reducing the damaging eVects of global warming.

10. PLUSBUS PLUSBUS is the brand name of a nationally available train ticket add-on for bus travel. It is available to 195 towns and cities across Britain. A further 21 new destinations will be available with PLUSBUS from 20 May 2007. It has always been the aspiration of Journey Solutions that every rail-served town and city with a population over 80,000 together with other strategic centres, would have PLUSBUS available. We are now very close to meeting that target. 11. PLUSBUS is a bus ticket that the customer buys at the same time as their train ticket. PLUSBUS oVers train travellers unlimited bus travel around the urban area of a town or city, at the start, the finish, or both ends of the train journey. With a valid PLUSBUS ticket the customer can make as many bus journeys as they like on all participating bus operators services, at any time of day within one easily defined zone, covering the whole urban area of the town or city. 12. The minimum standard is that the zone covers what the public would reasonably expect to be the urban area of the named town or city. In many cases this zone is actually larger and covers nearby settlements, villages, or small towns. In most PTE areas, the zone encompasses the whole region. Zone maps for all PLUSBUS served towns and cities are available on the website: www.plusbus.info. 13. Journey Solutions encourages all local bus service operators in each town to participate in the PLUSBUS scheme and accept the ticket for travel (bus operators remain free to choose to participate). A number of light rail/tram/metro schemes also accept PLUSBUS tickets (eg Midland Metro and SheYeld Supertram). PLUSBUS has been established in line with the Transport Ticketing Block Exemption Orders (2001 and 2005). Schemes function as both a Multi-Operator Travelcard (MTC) and a Through-Journey ticket scheme. 14. PLUSBUS can be added to most types of train ticket: — single journey tickets; — day return tickets; and — period return tickets. The customer specifies the date of their return journey in order to have PLUSBUS. Typically a customer would buy two PLUSBUS tickets, one for your outward journey and a second for the return journey. — season tickets. These are currently available to 103 towns and cities across Britain, for specific periods, to match the most popular train season tickets: 7-consecutive days, 1-calendar month, 3-months and a year. Ten more towns will have PLUSBUS season tickets available from 20 May 2007.

15.How does PLUSBUSWork? Customers ask for PLUSBUS when buying their train ticket and are then issued with one or more ticket(s) for both their train and bus travel in one convenient transaction. The whole transaction can be paid for using cash, credit or debit card. A PLUSBUS valid rail ticket has either the origin or destination of the ticket marked with “!BUS”. 16. For customers PLUSBUS is easy to use and easy to explain, as it is based on existing ticket types that customers are familiar with. From an industry point of view, the advantage of PLUSBUS, is that it makes best use of existing rail ticketing technology and revenue apportionment systems (particularly the Rail Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Settlement Plan managed by ATOC). Therefore, it’s development and expansion has not involved considerable capital investment, or protracted development lead times which using new ticketing technology would have inevitably required. 17. Now that PLUSBUS is embedded into the National Rail fares and ticketing system, conversion of the ticket aspect of the product to any future Smartcard application should be possible.

18.WhatDoes PLUSBUSCost? PLUSBUS tickets are designed to be great value and can save customers money (compared with the cost of buying multiple separate tickets for several journeys). A PLUSBUS ticket costs a specific headline price for each complete day’s unlimited bus travel, in addition to the cost of the train fare. At present, 70% of PLUSBUS day tickets cost £2, or less. In virtually all cases the PLUSBUS fare is less than the equivalent cost of buying a similar unlimited bus travel day or season ticket from the bus operator(s) themselves. This added discount is considered an important customer benefit of PLUSBUS, in order to entice rail users to try the product (and hopefully switch from using another less sustainable mode of transport to/from the train station). 19. Prices start from as little as £1 day. Below is a list of destinations currently available with PLUSBUS for just £1 a day: Aberystwyth, Bangor, Bletchley, Bury St Edmunds, Colwyn Bay, Dovercourt, Exeter, Flint, Great Yarmouth, Harwich, Ipswich, Kings Lynn, Llandudno, Lowestoft, Milton Keynes, Norwich, Prestatyn, Rhyl, Ruabon, Stanford-le-Hope, Witham, Wivenhoe, Wolverton, and Wrexham. 20. PLUSBUS is currently available to over 50 towns and cities across Britain, for less than £2 a day, including, for example: Birmingham £1.50, Bishops Stortford £1.60, Blackburn & Darwen £1.50, Burnley £1.50, Chester £1.50, Coventry £1.50, Durham £1.50, Elstree & Borehamwood £1.60, Harpenden £1.60, Luton £1.80, Manchester £1.70, Potters Bar £1.60, Rochdale £1.70, Sunderland £1.90, Wolverhampton £1.50. 21. The following towns oVer PLUSBUS for just £2 a day: Aberdeen, Basingstoke, Blackpool, Bracknell, Brighton & Hove, Carlisle, Chesterfield, Chorley, Colchester, Darlington, Derby, Droitwich Spa, Edinburgh, Falkirk, Glasgow, Harrogate, Hereford, Inverness, Kidderminster, Lancaster, Leicester, Lincoln, Maidenhead, Newport, Newton Abbott, Northampton, Oxford, Paignton, Penzance, Preston, Reading, Southampton, Southend, Stirling, Swindon, Telford, Torquay, Truro, Weymouth, Windsor. 22. A small number of PLUSBUS tickets cost between £2.10 and £3.50 a day, for example: Bristol £3.00, Leeds £2.50, Watford £2.50. The highest ticket price is £5.50 which oVers unlimited bus travel on participating operators around the whole of Pembrokeshire (a higher cost reflecting the extensive area of validity).

23.RailcardSavings PLUSBUS is the only nation-wide integrated ticketing product for train and bus travel that oVers all Railcard holders (Disabled Persons, Family, Network Card, Senior, Young Persons) standard rail discounts on their bus travel. Railcard holders save one-third oV the price of a day, or period return PLUSBUS ticket. Children (aged 5 to 15 years) pay half-fare for a PLUSBUS day or period return ticket and in some cases can also obtain half-fare on PLUSBUS season ticket prices.

24.Where toBuy PLUSBUS can be bought at: — all staVed train station ticket oYces in Britain; — by telephone through selected train company telesales teams (Arriva Trains Wales, First Great Western, First ScotRail, GNER and ONE Railway); — appointed travel agents of National Rail; and — self-service ticket machines (at selected stations only). A new generation of self-service ticket machine is gradually being installed across the rail network, which are able to be programmed to sell PLUSBUS tickets. For bus travel at the start of the journey, customers are advised to buy their PLUSBUS ticket in advance from either a station, or by telephone (through the TOC Telesales units). 25. We are also working with National Rail and the Association of Train Operating Companies (ATOC) to oVer online sales of PLUSBUS during the later part of 2007. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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26.JourneyInformation Pre-journey information is important, it reassures the passenger that they can make their entire journey by train and bus with conﬁdence. In order to help travellers understand the PLUSBUS product and become familiar with where the ticket can be used and on what bus operators services tickets are valid, the PLUSBUS website (www.plusbus.info) provides all this information, as well as all ticket prices, in an easy to view format. Detailed colour zone maps for all 195 PLUSBUS served towns and cities are available on our website as downloadable PDF’s. These show the boundary of each zone, list all the main places/suburbs within each town served by participating bus services and also show locations of Hospitals, University/ college campuses and main leisure/tourist attractions. In order to assist customers arriving at an unfamiliar station, we produce detailed “Continuing your journey around town with PLUSBUS” information posters (speciﬁc to each town) for display on the concourse of 60 main stations across Britain. These posters show customers the zone map within which their PLUSBUS ticket is valid, provide a journey gazetteer of bus routes and places served. The poster also lists all bus companies that accept PLUSBUS in that town and give “traveline” details (telephone 0871 200 22 33 or www.traveline.info), should customers want to check bus times. (In several PTE areas eg West Midlands, Greater Manchester, the relevant authority produces similar onward travel posters).

27.Achievement PLUSBUS is the first major product developed and introduced by the Journey Solutions partnership. PLUSBUS is a nationally available integrated train and bus travel ticket on sale across the whole of Britain. Journey Solutions has established customer focused minimum standards, which can be exceeded by a scheme. In eVect PLUSBUS provides a national template, which can be tailored to accommodate some local/regional variation to make the product relevant to local market conditions. 28. Before PLUSBUS there existed a myriad of individual agreements between train operators and local bus companies, which oVered the traveller a wide and confusing range of through-journey tickets. Each of these was a diVerent oVer to the passenger. Through partnership and negotiation, Journey Solutions and the Association of Train Operating Companies (ATOC) has introduced a set of national standards for PLUSBUS ticketing that oVers the customer a consistent and reliable product they can trust. This has made it much easier for retail staV at stations to sell integrated ticketing. For operators it has also brought about the simplification of integrated ticketing and a significant reduction in the amount of administration and the cost of establishing and maintaining such products. By providing a national template for integrated ticketing, it is also possible to have a nation-wide marketing campaign for integrated ticketing. 29. In January this year, the first-ever national marketing campaign for PLUSBUS was launched. 750,000 promotional leaflets have been printed and are racked at nearly 1,000 train stations across Britain. Over 500 promotional posters have been put on display at train stations and the website (www.plusbus.info) has been re-designed. Train Operators are encouraged to have more information about the product included in their own publicity literature (such as timetables and customer service guides) and also on their websites. In partnership with Train Operators we are also working to raise the PR profile of the product, by arranging regional events and launches. (Printed colour samples of literature referred to in this paragraph have been provided separately to the Committee as evidence). 30. Journey Solutions would like to thank the Association of Train Operating Companies for their significant ongoing contribution to the management and development of PLUSBUS ticketing. As well as oVering use of their Rail Settlement Plan (revenue allocation system) ATOC also oVers a forum, the Integrated Transport Working Group, where all TOC’s are able to share best-practice in the field of modal integration and integrated ticketing, which has proven very valuable to Journey Solutions in the on-going development of PLUSBUS. The fact that several more recently awarded TOC’s now have Integration Managers focusing on improving modal integration has been extremely helpful in achieving results. 31. Last Summer we celebrated our 100,000th PLUSBUS ticket issued. A total of 68,300 PLUSBUS tickets have been sold during the last 12 months (year to January 2007). At present sales of PLUSBUS tickets are 45% higher than for the same period last year.

32.DevelopmentObjectives By the end of 2007, PLUSBUS should be available to over 230 rail-served towns and cities across Britain, including all those with a population of 80,000 and over (as well as many with smaller populations). The next logical step for the development of the initiative is to develop a nation-wide product that covers through-ticketing between the National Rail network and non-rail served towns, where a bus/coach service completes the link between interchange rail station and the non-rail served town. The key to success with this product very much mirrors what has been achieved with PLUSBUS, ie to work in partnership with TOC’s, bus operators and local authorities/PTE’s on the development of a set of minimum national standards for such a product, which can then rolled-out across the country as part of a coordinated campaign. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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The list (below) gives an indication of the current development objectives for integrated ticketing that Journey Solutions has: — Complete national coverage of PLUSBUS (ie all rail-served towns with a population of 80,000 or more), by introducing schemes in the following towns: Bedford, Eastbourne, Gravesend, Hartlepool, Medway Towns (Chatham, Gillingham & Rochester), Maidstone, Middlesbrough, Peterborough, Stockton. — Introduce season tickets for many more destinations across Britain. — Undertake a series of TOC-based regional media events to launch further new schemes and the introduction of season tickets for existing towns. — Run an on-going national marketing campaign to raise awareness of PLUSBUS amongst: — train company retail amd marketing teams (regular newsletters, retail training tools and marketing template material); — bus company driver and supervisory teams (bus driver notices and brieﬁngs); — rail users (using a variety of commuter communications channels); and — politicians & other important stakeholders (through regular meetings and newsletters). — Continue to improve the PLUSBUS website. — Update and re-issue (at least once a year) bus information posters for 60 main stations. — Introduce online sale of PLUSBUS tickets and work with TOC’s to programme self-service machines to sell PLUSBUS. — Imbed greater commercial focus/sales targets in all areas of activity. — Work with ATOC, train operators and bus operators to introduce a nation-wide set of standards and public brand for “RailLink” through-journey/line-of-route tickets between local rail stations and non-rail served towns/villages (eg Minehead). — Continue to demonstrate that privatised bus and rail Groups are successfully working in partnership (along with Local Authorities/PTE’s) to improve modal integration and deliver a key Government transport objective. March 2007

Memorandum from the Department for Transport (TPT 34)

Introduction 1. The Government recognises the crucial role an integrated public transport service plays. In the 2004 White Paper, The Future of Transport, the Department for Transport underlined the importance of “seamless” public transport networks, with buses and other services being well integrated. Developing an integrated transport information booking and ticketing system has been seen as a priority for smoother journeys, especially when moving from one type of transport to another. 2. In the context of integrated transport information, we want to see travellers given a comprehensive and impartial choice of transport modes to enable them to make better transport decisions. Transport Direct was developed to cover a gap in the market for national, integrated, multi-modal transport information. Since its launch it has provided 12 million user sessions and currently gets over 175,000 users a week. 3. Our vision for ticketing has been clear. Working closely with Passenger Transport Executives and Local Authorities, bus and train operators and the wider industry we have embraced new and emerging technologies to enable convenient and versatile ticketing systems to be delivered. 4. To help achieve this, the Department for Transport has supported the development of national standards for smartcards which can simplify ticketing, allowing passengers to use one smartcard on diVerent buses, trams and trains. Passengers will be able to use the same smart card to store tickets for travel on any mode and in any area. The standards open the way for national stored value style and account based tickets and ease the way for greater ﬂexibility of season tickets, for example a ticket used any three days in seven. These standards are now a reality. We are now: — introducing smartcards which meet the ITSO standard into all new rail franchises; — working with Transport for London (TfL) to make the Oyster estate interoperable with ITSO into London while, at the same time, supporting TfL in rolling out Oyster pay-as-you-go across the London rail network; — supporting the migration and development of smartcard schemes operating in a number of Local Authority areas; and Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 172 Transport Committee: Evidence

— considering ITSO smartcards as part of the introduction of the national bus travel concession in England in April 2008. The national concession is provided for in the Concessionary Bus Travel Bill currently going through Parliament. 5. In the context of bus services the Government published “Putting Passengers First” in December 2006 which introduces proposals to transform the landscape and ensure that bus services are better designed around the needs and requirements of the public. This should provide the opportunity to embrace the developments in ticketing standards and information services ensuring bus services form part of a better integrated transport provision. 6. Looking to the future, our research programme is investigating related technologies and the use of innovative ticketing products, and is exploring the ability to interface with mobile operators and the banks by sharing the infrastructure and card space.

IntegratedTicketing

Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? 7. The Government supports a range of measures which ensures integrated ticketing between operators and modes across geographical areas. These measures include a Block Exemption Order, powers in the Transport Act 2000 and specific rail obligations on franchise holders to ensure the ongoing delivery of an integrated rail network. 31 8. The bus industry outside London is deregulated, and the majority of bus services are provided on a commercial basis. Bus companies are subject to general competition law but the Block Exemption Order referred to in the Committee’s Press Notice forms an important exception to the general rule that undertakings may not form collective agreements to set a price for a product. The eVect of the block exemption is that transport operators can market various forms of ticket or travelcard which are valid on the services of more than one operator, provided certain conditions (specified in the Order) are observed. 9. The Order relates to public transport generally (including rail and ferries) but is particularly relevant for deregulated bus and coach services. An example is the Solent Travelcard scheme, launched in March 2004. Travelcards are valid on all bus services over a wide area around the Solent and Hampshire as far north as Winchester, with participating operators including subsidiaries of First, Stagecoach and Go-Ahead as well as small local firms. 10. The Transport Act 2000 also makes provisions for local authorities to improve local transport services, primarily buses, by making ticketing schemes. They have not, to date, been widely used. 11. The Government maintains integrated ticketing across the rail network by requiring train operators through their passenger licence and franchise agreement to participate in, and comply with, through- ticketing arrangements between operators. Any changes to these arrangements have to be approved by the Secretary of State. The Ticketing & Settlement Agreement (TSA) delivers through ticketing and ticket interavailability throughout the UK rail network. It also ensures that tickets for any operator for a whole range of journeys can be bought at any ticket oYce. 12. In addition the Government requires the train operators, through the franchise agreements, to participate in the three London ticketing agreements: the LRT Agreement, the Travelcard Agreement and the Through Ticketing Non-Travelcard Agreement. These deliver through ticketing between rail and London buses, Underground, Docklands Light Railway and Croydon Tramlink, including multi-modal Travelcard fares. Individual franchise agreements include references to any local ticketing agreements which relevant Passenger Transport Executive’s or Local Authorities have introduced which have a bearing on the rail services in their area. 13. We have actively encouraged further integration by the private sector, the “PlusBus” initiative allows rail tickets to be issued with a bus add-on at one or both ends of the journey in almost 200 UK towns and cities. PlusBus has been developed by Journey Solutions, an independent company funded by train and bus operators. PlusBus terms and conditions are standard across the country, and information has been well- publicised to ticket oYce staV. 14. Government also supports the train operators’ eVorts to integrate other services with many bus and ferry operators around the country, and with attractions such as Leeds Castle or Alton Towers. Through tickets can be issued from any British station to the Isle of Wight, the Channel Islands, any station in the Republic of Ireland, any station in Northern Ireland, and (via Harwich-Hoek van Holland) any Dutch station. 15. For passengers making international journeys by Eurostar which start in the UK, Saver fares are available from almost any British station to a destination called “London International CIV”, intended for use in conjunction with Eurostar tickets to the continent. Tickets to London International CIV include the Underground across London to Waterloo, unlike conventional Saver fares they have few or no time

31 The Competition Act 1998 (Public Transport Ticketing Schemes Block Exemption) (Amendment) Order 2005 (SI 2005/3347). The Competition Act 1998 (Public Transport Ticketing Schemes Block Exemption) Order 2001 (SI 2001/319), amended by Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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restrictions, and passengers are covered by the international conditions of carriage (Convention Internationale pour le transport des Voyageurs or CIV) throughout their journey, providing protection in the event of any delay or missed connection.

Does the Government have an adequate strategy for developing the integration of ticketing systems? 16. The Government has an active policy supporting the development of integrated ticketing systems which embrace new opportunities for innovative ticketing. Close partnership with the private sector, local authorities, transport operators and others has been seen as key to bringing this about. This work builds on the range of measures described in the previous answer. 17. In December 2006, the Department of Transport published a policy document, “Putting Passengers First”, setting out proposals for a modernised national framework for bus services. The Government intends to publish a draft Road Transport Bill during the Spring, which would include legislative provisions needed to implement these proposals. The draft Bill would also facilitate reform of local transport governance arrangements in the major cities outside London, to enable a more coherent, coordinated approach to local transport. It is hoped that the new framework would encourage all local transport authorities to promote inter-operability of tickets and travelcards, in conjunction with other measures to improve bus services. 18. Over the past 10 years there has been a significant shift towards an integrated approach to technological development; two outputs being Transport Direct and the ITSO specifications. 19. Users of Transport Direct, having requested and received a suitable journey plan and ticket information can then seamlessly access a range of rail and coach retailers, with their desired itinerary being transferred with them. This interface is a standard, published interface and could support a wide variety of retailers and modes of transport. 20. Transport Direct also has a search capability that enables users to first select a ticket price and type and then to access information regarding the services on which this is valid and currently available. Currently this functionality is only supported by the rail industry but is mode neutral and could be used for other modes where the retail and reservation system is capable of interfacing with Transport Direct. 21. The publication of the Integrated Transport White Paper in 1998 led to the Passenger Transport Executives, with support from London Underground, other authorities and transport operators to form the Integrated Transport Smartcard Organisation (ITSO). To ensure the emergence of local bespoke smartcard schemes did not result in the loss of existing integrated ticketing solutions, the Department for Transport sponsored a research programme, through ITSO, to deliver interoperable ticketing specifications across all modes of transport. In March 2004 the specifications and licence agreements, known collectively as the ITSO Specifications were published. These are Crown Copyright and available free of charge, ensuring the freedom of the supply industry to compete against one common framework in the delivery of ticketing systems. 22. The Department for Transport and ITSO have jointly supported the emergence of European and International standards in this area. The framework standard, which describes all the actors involved in providing a smartcard ticketing scheme became an International Standard in February 2007. This work has been fundamental to future proofing UK technological development with other developments across Europe and beyond. 23. The Department for Transport has followed an active policy supporting smartcard implementations. We have encouraged the convergence to the ITSO standard through a series of migration projects in London, Cheshire, Nottinghamshire and Southampton; the introduction of ITSO on national rail through the new franchise negotiations;32 and support for the introduction of smartcard ticketing in Yorkshire, Cumbria and Lancashire. This will enable passengers to use the same smartcard for tickets in any of these, or any other areas with ITSO schemes. Research conducted using Oyster cards demonstrated the technical ability to place a limited use ITSO ticket on an existing Oyster card. 24. In May 2006 the Secretary of State for Transport and the Mayor of London agreed that TfL would roll out Oyster Pay as you go to mainline rail in London and would also make the existing Oyster estate compliant with basic ITSO smartcard products. On 31 January all London Train Operating Companies (TOCs) agreed to continue to work with TfL towards achieving Pay as you go, although some remained concerned about the cost of Oyster. This extension of Pay as you go will benefit passengers within London. The introduction of ITSO interoperability into London ensures smartcards from anywhere in the country will work in London, which is particularly important for rail travel where journeys begin or end outside London. ITSO interoperability and Pay as you go is expected to be in place by 2009. 25. The Government is considering using smartcards for the English national bus travel concession being introduced in April 2008. A national identifier will be needed so that concessionary passes issued by any local authority can be recognised across England. Under such an arrangement local authorities could be required to issue concessionary permits in the form of smartcards, compatible with the ITSO standard.

32 speciﬁcations provide a range of ticketing products which could be stored in the space. Examples of the sort of ticket which could use this space include singles, returns and carnet. It may also be possible to extend the ticket range to include concessions. The space on existing Oyster cards limits the ability to store additional complex tickets on the same card. The ITSO Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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Where bus-based readers have not been installed smartcards could simply be shown to the driver like ordinary “ﬂash-passes”. But as full smart ticketing is rolled out it would provide much more detailed information about concessionary travel. This would also help in the on-going reform of the existing system to address, for example, disagreements over reimbursement.

TheUse ofSmartCardTechnologies

Is the industry taking up modern smartcard technologies adequately and appropriately? 26. Early smartcard implementations were bespoke systems, the largest of which was London’s Oystercard. Others include Local Authority concessionary schemes, Nottinghamshire, Hertfordshire and a few commercial operations and trials, for example First Bradford and the Cheshire County Council stored value scheme. These developments raised the awareness of the potential that smartcard based technologies could oVer public transport ticketing but highlighted the need to work together to deliver an integrated ticketing system. 27. The development of the harmonised ITSO smartcard standard enables the potential for a wider deployment of the technology with greater competition of supply and interoperability of equipment, smartcards and services to passengers. However, in the short term, the process may have delayed potential scheme promoters who wished to avoid bespoke solutions. 28. The first implementations of ITSO have been by local authorities, with support from the Department for Transport. The NoWcard scheme in Cumbria and Lancashire began live ITSO roll-out in September last year. Cheshire, the first of the three “legacy” schemes migrating to ITSO began incremental live ITSO rollout last November. Nottinghamshire and Southampton will follow. The Yorcard pilot in South Yorkshire, which is expected to start by the end of the year, will include the main bus operators in the area along with train services between Doncaster and SheYeld. The project will also investigate the issues surrounding new innovative ticketing products and citizens’ cards. 29. All new rail franchises include a requirement to introduce ITSO smartcard technologies and the Department for Transport is discussing with the rail industry through ATOC and RSP the optimal approach to achieving smart card ticketing across the entire rail network. 30. Wales and Scotland are both developing national ITSO schemes, initially for concessionary travel. In Scotland, 1.4 million cards have been issued and a network of 7,000 buses and 50 ferries will be equipped within the coming months. The first part of the full scheme went live in Shetland in November 2006. In Wales the four Welsh Transport Consortia are at varying stages of development. Procurement for a Welsh back oYce is currently underway with implementation and testing expected during 2007. 31. In contrast to the situation a few years ago, the development of open standards has opened the market to greater competition. New bus ticketing equipment suppliers are entering the UK market, reinvigorating the competition for bus equipment. In the smartcard back oYce and retail services sector, new players are bidding for a share of the new smartcard schemes.

Does the ITSO system cater for the needs of all passengers and travel providers? 32. The ITSO standard opens the way to simple through ticketing and seamless travel for the individual and far more flexible and wide-ranging products for suppliers. The standard covers cards, back oYce communications and a framework licence between operators to ensure that passengers can travel seamlessly between neighbouring schemes and competing operators. 33. ITSO worked with the transport industry to understand the existing and likely future needs for ticketing in public transport and beyond. This formed the first phase of the ITSO development to gather objective data on the functional and business requirements of the industry. The resultant ITSO specifications include details of products ranging from simple single or return tickets, concessionary products, complex flexible season tickets and demand management products. These sophisticated ticketing products oVer the opportunity to introduce pay-as-you-go style tickets with daily, weekly or longer capping, account based products akin to mobile phone contract services, loyalty schemes and links to parking or road pricing. The ITSO system also encourages the introduction of new retailing portals of tickets, enabling greater use of web and potentially phone based sales. 34. Today the ITSO organisation supports live operational ticketing schemes by maintaining the specifications; managing the registration of schemes and ticketing products to ensure consistency across the country; managing a comprehensive security management service delivering a trusted system to the operators and authorities; and providing a certification service ensuring the competitive supply of smartcards, card readers and back oYce services. 35. The ITSO Specifications also cater for European standards which specify user requirements. Examples here include enabling gate lines to remain open for longer if a passenger requires more time to pass through; changing the language, font or background colour on electronic ticket machines to suit personal requirements or special needs; and encouraging consistency of the passenger experience when confronted by the smartcard reader. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? 36. Experience from existing smartcard schemes has shown that smartcards can be both popular with the travelling public and eYcient in transport terms. The Department for Transport is currently conducting research reviewing existing schemes to understand what has been achieved, and to provide advice for future implementations. 37. London’s Oystercard, which predates ITSO, is the largest smartcard system in the UK which now has 10 million cards. TfL’s strategy in winning public acceptance for Oyster has been to link its convenience as a product with diVerential fares between paper and smart tickets. It is also widely available from both transport and non transport outlets. TfL have exploited many eYciencies of the technology, reducing demand on ticket oYce staV and crowding pressure in ticket halls, freeing up ticketing staV to help passengers out in the station. 38. One of the reasons for Oyster’s rapid success is that it was developed for a limited geographical area under the control of a single Authority. It was developed for the Underground but now covers the TfL network. Experience has shown how important it is to interoperate with mainline rail ticketing. London is central to the transport network, so any integrated ticketing solution should continue to embrace rail because of the high proportion of journeys which begin, end or pass through London. 39. Scotland has opted for ITSO standard technology, preferring an open system (where there is a choice of suppliers) to bespoke systems. Choices and interoperability are seen as very important issues moving forward. The implementation is being done entirely at the Scottish Executive’s expense. The Scottish free concession scheme generates about 160 million journeys per annum, with a budget for 2006–07 of £159 million, and smartcards are seen as a key tool in helping to prevent fraud. 40. The Department for Transport has worked closely with scheme promoters to learn best practise for smartcard deployment. The NoWcard scheme has been very successful in developing a partnership between a series of District Councils and Local Authorities which benefit from economies of scale and agreed phasing of rollout across the bus fleet. Experience in Scotland also showed we must plan a phased rollout of equipment on the bus fleet, allow time to iron out bugs and gain support from bus operators. We supported academic research through the University of Newcastle and the University of Westminster which separately considered the use of smartcard data to assess travel behaviour and the implications for transport planning. A separate study, carried out by Newcastle University for DfT, produced a good practice guide for demand responsive transport services using telematics which considered the potential to link smartcard technologies with demand responsive transport services, helping to integrate them into the wider transport provision. 41. We need to be careful to learn from existing schemes but not to fall into the trap of assuming what works in one situation will work else where. Early schemes were designed to be fit for purpose for the job in hand but may not be scaleable.

RevenueProtection andThePowers ofTicketInspectors

Is the legal framework within which ticket inspectors function appropriate? 42. We are not aware of any serious limitations in the powers within which ticket inspectors function. The Railway Byelaws (which came into operation on 7 July 2005) have existed in a broadly similar form for many years, and the Government believes that these byelaws are both reasonable and fit for purpose. The byelaws include amongst other things a requirement for passengers to buy a ticket before they travel wherever ticket facilities exist, and to give their name and address if asked by an authorised person (which might include a ticket inspector), if reasonably suspected of breaching any of the byelaws. The byelaws require a person reasonably believed to be in breach of any byelaw to leave railway premises if asked by an authorised person. If the person fails to desist or leave the premises, they may be removed using reasonable force. Many inspectors have been trained on the Police and Criminal Evidence Act, and where intent to avoid payment of their fare can be proven, passengers can be prosecuted under the bylaws or under section 5 of the Regulation of Railways Act 1889. The National Rail Conditions of Carriage forms the basis of the contract between a passenger and the train operators, and these have been approved by the Secretary of State. 43. Section 130 of the Railways Act 1993 (as amended) allows the Secretary of State to make regulations regarding the charging of financial penalties (“Penalty Fares”) to passengers unable to show a valid ticket when asked. The Railways (Penalty Fares) Regulations 1994 (SI 1994/576, as amended), made under the Act, in turn allowed the Rail Regulator to make Penalty Fares Rules. The function of making Rules was transferred first to the Strategic Rail Authority (SRA) by the Transport Act 2000 and then back to the Secretary of State by the Railways Act 2005. The Secretary of State has inherited the SRA’s Penalty Fares Rules 2002 and Penalty Fares Policy document. 44. All train operators wishing to charge penalty fares must submit a penalty fares scheme to the Secretary of State for approval. Approval will be given if the scheme meets the standards set out in the policy document. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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45. The legal framework within which bus ticket inspectors function is sections 24 and 25 of the Public Passenger Vehicles Act 1981 and the regulations made under those sections which include the Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990 (SI 1990/1020). The Regulations contain provisions requiring passengers to have valid tickets (prepaid, paid on entering the vehicle, or paid on demand by a conductor or inspector) and a power for the driver, conductor or inspector to charge them an additional fare if they stay on the bus beyond the validity of their original ticket, or if they do not have a ticket. Passengers who contravene the regulations can be removed from the vehicle (by a crew member or, if necessary, the police), and/or prosecuted for an oVence under section 25 of the 1981 Act, with a maximum ﬁne at level 3 on the standard scale (currently £1,000). 46. For buses outside London, the question of how many inspectors the company employs, how they are used, and how eVectively they stop fares evasion, is left to the operator to decide. In London, TfL’s subsidiaries employ Revenue Protection OYcers to combat fare evasion on buses, DLR and London Underground.

What appeal mechanisms exist for passengers, and are they adequate? 47. Appeal mechanisms only operate where there is a penalty fare system. For buses, this requires special local legislation and only applies in London. Penalty fares for London’s essential bus network (which is provided by TfL), DLR and Underground are covered by schedule 17 of the Greater London Authority Act 1999. This schedule is also applied to Tramlink (under the Croydon Tramlink (Penalty Fares) Order 2003). 48. All railway penalty fares schemes must provide for a system of handling appeals, in line with a code of practice approved by the Secretary of State. Some operators use the Independent Penalty Fares Appeals Service (IPFAS), based in Portsmouth, others use the Independent Appeals Service, based in Haslemere. Both appeals services operate to the same approved code of practice, and both are paid the same amount per appeal by the train operators who use them, regardless of whether an appeal is accepted or declined. 49. Outside penalty fares areas, passengers may complain to the train operator’s customer services department. Each train operator’s passenger licence obliges them to have a Complaints Handling Procedure (CHP) approved by the Secretary of State. Written guidance has been published for train operators devising a CHP, setting out the features which the Secretary of State considers such a procedure should have.

Are the rights of passengers and the powers of ticket collectors well balanced? 50. We believe that the railways byelaws and the regulations applying on public service vehicles provide a reasonable balance between the rights of passengers and the powers of ticket inspectors.

Do operators of public transport take adequate measures to protect fares revenue? 51. Operators have a direct incentive to protect their revenue, to the extent that it is economic to do so. The competitive process of bidding for rail franchises will favour those operators prepared to address revenue protection issues eVectively, both by appropriate management and by investment in automatic ticket gates and other revenue protection aids. 52. There is undoubtedly more that rail operators can and should do to protect their revenue, and in recent years there has been a modest extension of penalty fares schemes, and a significant increase in the number of stations fitted with automatic ticket gates. Ticket gates have proved extremely eVective at safeguarding revenue, and as an added benefit, reducing crime and vandalism on the network. Most London termini are now gated, and we have ensured that the new South West Trains franchise contains a requirement to fit gates to Waterloo, which is the one remaining major London station without gates. 53. Outside London bus operators also have a direct incentive to protect their revenues but as commercial businesses in a deregulated market, it is entirely a matter for the company concerned to decide how much resource to put into revenue protection. In London, the revenue risk on buses, light rail and London Underground is taken by Transport for London.

ConcessionaryFares—TheRightStrategy

Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? 54. Concessionary travel is a devolved issue. In Scotland and Wales, the devolved administrations have used their powers to establish nationwide concessionary travel schemes. In Northern Ireland there is a province-wide scheme and from April 2007 an all Ireland scheme is due to be introduced. 55. In England, the Government has a clear strategy in place to implement an increasingly generous national bus concession, whilst simultaneously addressing many of the problems of current arrangements through new technology, new legislation, new guidance, and agreement with operators and local authorities. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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56. Since 2000, the Government has consistently acted to enhance access to concessionary travel. We have moved from a situation where, before 1999, there was no statutory minimum entitlement to one where, from April 2008, all older and disabled people in England will get free oV-peak bus travel anywhere in England. At the moment, concessionaires are only guaranteed oV peak bus travel within their local authority area. The proposed change underlines the importance we attach to older and disabled people being able to access public transport, and shows we recognise the role access to transport plays in tackling social exclusion and maintaining well-being. 57. Around 11 million older and disabled people are expected to benefit from the enhanced concession in 2008 and the Chancellor, in the 2006 Budget, committed up to £250 million a year of additional funding for it. From April 2008 the Government’s annual funding for concessionary bus travel will total around £1 billion. 58. The Government is aware that there are concerns over the levels of funding provided to some local authorities to pay for concessionary travel. We remain confident that the funding is suYcient in aggregate, but we are working to ensure that it is targeted as accurately as possible. In so doing we need to be consistent with the wider approach on funding that local government seeks from central government, namely freedom and flexibility. Along with CLG, HMT, local government and other key stakeholders, we are actively considering how best to distribute the additional funding being made available for the new national concession. We have established liaison groups with representatives from all levels of local authorities, bus operators, and other key stakeholders to work on the important issues of procurement and delivery of passes and operator reimbursement which are also key aspects of implementation of the concession. 59. The Government’s approach has been to put in place a flexible framework for concessionary travel to be able to respond to changing circumstances in the future, so as to maximise the benefit to users. Powers in the Concessionary Bus Travel Bill would allow flexibility for Ministers to decide, following consultation, to change mechanisms of reimbursement of bus operators in the future. We are committed to consulting those with an interest, including local authorities and bus operators, on funding and reimbursement mechanisms. It is in all our interests to ensure that local authorities are adequately funded for the national concession. 60. The Government recognises the desirability of concessionaires resident anywhere in the UK being able to travel on eligible local bus services anywhere in the UK. Powers in the Bill would allow, via regulations in the future, for changes to English and Welsh legislation to enable mutual recognition of bus passes across the UK, subject to discussions and agreement with the devolved administrations. 61. The Bill also retains the Secretary of State’s ability to increase the scope of the statutory concession in the future, for example to extend it to other categories of people or other modes such as trams, and to provide the concession at diVerent times. The Government has no plans at present to extend the concession to other forms of public transport. Any decision to do this would have to be fully funded and the impacts on transport operators fully considered.

Reimbursement and appeals

62. The Government is working with operators and local authorities to put in place revised arrangements for the new 2008 concession. The fundamental principle that bus operators should be left “no better and no worse oV” by involvement in concessionary fares schemes is however sound. Bus operators should continue to be able to appeal to the Secretary of State if they feel that reimbursement arrangements put in place by local authorities are unfair. To date, the Secretary of State has appointed an external independent decision maker to determine the appeals on his behalf. 63. While appeals can create some uncertainty for local authorities and bus operators, the system is a key component in the system of “checks and balances” which ensures that bus operators are properly reimbursed while at the same time securing value for money for the taxpayer. The aim is to determine appeals as quickly as possible, but proper consideration is of fundamental importance, and this sometimes takes time.

Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas?

64. The Government has already taken signiﬁcant steps to make concessionary travel available on other modes of transport, in order to allow integrated concessionary travel. The Government provides £15 million per year for concessionary half-fares on scheduled coach services (ie those that are not local bus services) for older and disabled people. Train operators are required to participate in the Senior Persons Railcard which oVers a third oV most rail journeys. The Disabled Persons Rail Card has similar terms and conditions, and a companion of the disabled person is also entitled to a discount on the same journey. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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65. Local authorities already have the discretion to oVer enhancements or an alternative to the statutory minimum concession under section 93 of the Transport Act 1985. This includes the ability to oVer concessions on other modes. Such enhancements depend on local authorities’ assessment of local need and their overall financial priorities. The Department’s survey of travel concession authorities (TCAs) in 2006 showed that: — the majority of TCAs oVered some form of enhancement and/or alternative to the statutory scheme; — in all the major urban areas, the Passenger Transport Executives (PTEs) funded schemes which extended oV-peak concessionary travel to local rail and/or to light rail services; — over 40 TCAs stated that they oVered taxi tokens or taxi vouchers as an alternative to a bus pass. Many of these were rural districts where there were fewer scheduled local bus services; and — some 60 TCAs oVered schemes which provided demand responsive public transport services such as “dial-a-ride” buses. Around 40 of those TCAs included demand responsive services within their local enhancements as part of their bus concessionary travel scheme. 66. Integration of concessionary travel across modes is clearly desirable, but aside from the significant cost involved, there is a risk that extending the national concession to some other modes could have unintended consequences. For example, there have been suggestions that, community transport services could be included in the new national concession. But it is not clear that the community transport sector could meet the extra demand generated from such a change, certainly in the short term. Some operators are concerned about the extra administrative, accounting and auditing requirements that would result from inclusion, which may discourage volunteers from donating their time to help run these valuable services. 67. For the geographical integration of concessionary travel, the national bus travel concession is a major step forward—improving social inclusion benefits for older and disabled people in allowing them greater freedom to travel, for free, by local bus in England. March 2007

Memorandum from Community Transport Association (CTA) (TPT 35)

Inquiry intoTicketing onPublicTransport In response to the Transport Committee’s call for evidence into the above inquiry, the CTA would like to comment on two of the key questions raised by the Committee in its call for evidence, namely: — Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? — Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? The CTA believes that the Government’s current concessionary fares strategy is inadequate to address the needs of all eligible concessionary fares travellers. The strategy does not suYciently address the needs of those eligible older and disabled travellers who cannot physically access mainstream bus services or who are so geographically remote from such bus services as to render the services useless. Such passengers are required to pay for transport on community and other services. Integrated ticketing solutions have the potential to create a further barrier to ending this discrimination if the needs of community transport operators are not considered in implementing such solutions. The CTA is of the opinion that concessionary fares schemes are not suYciently integrated across modes of transport and diVerent geographical areas. Concessionary travel, including the extensions proposed in the Concessionary Bus Travel Bill currently going through Parliament, suVer from the inherent discrimination mentioned above. Local administering authorities have the discretion to reimburse community transport operators for the provision of concessionary travel, but in practice few choose to do so. There is, therefore, significant variation in the concessionary travel strategies of diVerent administering authorities across the country. As the national extension comes into force under the Concessionary Bus Travel Bill in April 2008, this means that travellers will be subject to diVerent policies in diVerent areas. It is entirely likely in some cases that travellers will be subject to such variations in policy on diVerent sections of the same journey. Again, this represents a barrier to the development of accessible and responsive concessionary travel schemes. It is, therefore imperative that integrated ticketing solutions are developed which can be easily and cost eVectively implemented by small scale local community operators as well the large commercial operators. Such solutions and the extension of concessionary travel reimbursement to community transport operators would combine to have the added benefit of facilitating the establishment of local community run feeder services to link with inter-urban mainstream services. It has been estimated that the cost of extending the concessionary travel provision to enable beneficiaries to use community transport across England is about £25 million. This equates to an additional 4% on the government’s overall budget for concessionary travel or less than the cost of a mile of motorway (£30 million). The CTA believes this is a relatively small cost to end the current postcode lottery and ensure equal access to services for all eligible travellers. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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I am including in our submission a copy of our policy statement on concessionary travel, which provides more background and detail to my comments above. The CTA would be happy to provide oral evidence to the Transport Committee in support of this submission. March 2007

Memorandum from Passenger Focus (TPT 36)

34 Introduction 1.1 Passenger Focus , the independent national rail consumer watchdog, welcomes the opportunity to respond to the Committee’s investigation into aspects of ticketing, many of which have long been a source of concern to us and our predecessor organisations. Given our remit, we have largely restricted our response to rail matters, though this has been exceeded in certain cases of readily available through ticketing between rail and other modes. 1.2 We recognise the beneﬁts which integrated ticketing can provide for passengers and want such through-fare and inter-modal options enhanced and extended. Their eYcacy in the conurbations is proven and the same ﬂexibility should not be denied to passengers elsewhere. 1.3 Responses to many questions have been amalgamated where there is a cross-over between question themes and to avoid repetition in the response.

IntegratedTicketing

Q1: Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas?

Q2: Does the Government have an adequate strategy for developing the integration of ticketing systems? 2.1 Several types of integrated ticketing already apply: — “Travelcard” and similar schemes which allow an unlimited number of journeys by all modes and operators covered by the scheme within a certain area or zone(s); — interavailable and through ticketing, as stipulated in franchise agreements and required of open- access operators, between any two rail stations by any number of train operators on “permitted routes”; — PlusBus—add-on to rail tickets allowing a day’s unlimited bus travel at origin or destination; and — through ticketing involving other operators; eg for the sea element to the Isle of Wight;where the through fare, however, undercuts each individual element if purchased independently. 2.2 These schemes illustrate that such integration is possible. However, “travelcard”-type deals are usually available only in metropolitan areas and are usually negotiated by35 or purchased by the local authority rather than stemming from an initiative of the transport undertakings involved. They are usually subsidised by the local authorities and a cliV-face fares increase can occur at the boundary stations of such schemes—even where two Passenger Transport Executive (PTE) areas abut. 2.3 The provision of products such as multi-modal and/or multi-operator travelcards, however, is dependent upon block exemptions to avoid infringement of competition law. (The range of names for such tickets, which largely fulfil the same function, is in itself a source for confusion: eg Travelcard in London; MetroCard in West Yorkshire; Travelmaster in South Yorkshire; Trio in Merseyside; System One in Manchester; Zone Card in Strathclyde.) 2.4 As a result, large areas of the country—even where rail or bus, or choice of bus companies, are viable options for some journeys—are without such a scheme. Many passengers may thus have to pay considerably more to enjoy the flexibility which urban users take for granted. In any case, co-operation between operators may well be deemed anti-competitive collusion. Despite a clear passenger benefit in being able to use the same ticket on the service of any operator or mode, according to choice and convenience, especially on the homeward leg of return tickets or if one mode is disrupted or delayed, such activity is interpreted as anti- competitive and against the public interest.

33 34 35 Item not printed. station Marsden) PTEs. The standard single from Greenfield to central Manchester (12² miles) is £3.45, whereas from PassengerMarsden (19 Focus miles) is the it costs operating £6.50. name Marsden of the toHuddersfield Rail Passengers (7 miles) Council. costs £1.45; from Greenfield, over the boundary, it costs Consider£6.30 for the13 situation miles. The of the single adjoining between Greater Marsden Manchester and Greenfield (boundary (6 miles) station is £4.10. Greenfield) and West Yorkshire (boundary Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

Ev 180 Transport Committee: Evidence

2.5 PlusBus, despite more imaginative marketing of late, is still relatively unknown to passengers and even to some members of staV. A much more aggressive campaign is required to increase patronage of the scheme. We welcome stations’ improved and expanded displays of connecting bus and/or tram information and signage to the stops and trust that this will be built upon to further publicise the service.36 2.6 Many rail and bus interchanges are poor or non-existent, and many rail stations are poorly served by bus services. We have made recommendations to improve this situation in our report aimed at oVering practical advice on deliverable rail strategies to those local transport authorities then in the process of preparing their second local transport plans, supplementing the Department for Transport’s guidance but emphasising the rail element. 37 2.7 Integrated ticketing requires integrated planning and transport provision to enable passengers to plan and execute a seamless journey. We welcome the fact that although through tickets can38 be booked from rail stations to destinations such as those on the Nexus metro system , no connecting train information is available through the National Rail Enquiries website. Neither does the website yet oVer PlusBus options, as this add-on has to be specifically sought out by those in the know. Transport Direct is a step in the right direction, but at times the system is unhelpful. TOCs still fail to fully promote their own wares to best advantage, and therefore a major change in approach is needed to encompass integrated ticketing. Integrated information and purpose-built interchanges are crucial to popularise intermodal travel. The Government needs to play a role in joining services up. 2.8 While with PlusBus, the add-on cost is available at the time of purchase and previous enquiry, it is diYcult to discover bus fares for one-oV journeys in much of the country through existing media—it can prove awkward to discover which company operates which route, especially in an area with which the enquirer is unfamiliar. The disparate fare levels, doubtless reflecting presence or absence of local subsidy, further add to confusion and further impede inter-modal ticketing outside the metropoli. 39 2.9 The size of the United Kingdom militates against the likelihood of the introduction of a zonal-based national ticketing structure such as operates in the Netherlands. There travel by any mode (rail, urban bus or tram, local train or metro) can be prepaid by purchasing any one of a range of “strip tickets”. The absence of a common fare structure (not only on rail but also on other modes) in Britain makes such a scheme virtually impossible to implement at an attractive fare. The Swiss transport system is generally held to be the most integrated with through fares and ticketing and easy-to-find information across all modes: long-distance, local and regional rail; trams; local and longer-distance buses; boats; cable-cars and funiculars—with virtually all transport undertakings willing to participate in the scheme. 2.10 At present, government’s strategy towards integrated ticketing is not immediately apparent, save for the move toward smartcard technology in recent franchises. There appears to be no drive towards40 the creation of additional PTE-type arrangements. 2.11 Until such time as all the relevant journey validity details can be contained on the ticket , in its various likely formats, there is no real hope of fully integrated ticketing. No amount of through fares/ ticketing will succeed without adequate publicity of what is on oVer. 2.12 Payment by all common methods needs to be available: no buses accept credit/debit cards, despite the often high fares for longer journeys. No buses can issue the outward PlusBus deals, which have to be booked at stations or aboard the train. 2.13 Despite all the improvements in integration in London and the South East culminating in the recent introduction of National Rail zonal fares, it is still not possible to buy a through ticket from an Underground station to a destination outside London; eg for a journey from Tooting Broadway to Dartford, the passenger will need to rebook en route to avoid being charged a penalty fare.

TheUse ofSmartcardTechnologies

Q3: Is the industry taking up smartcard technologies adequately and appropriately? 3.1 This strategy is barely in its infancy. We welcome the extension of the beneﬁts of smartcard technology to National Rail passengers in the South East, but regret the failure to install Oyster readers at National Rail stations in Greater London to coincide with deployment by London Underground. If the franchising process is expected to deliver smartcard technology across the entire National Rail network, it could take decades to achieve nationwide coverage.

36 37 operated by the Passenger Transport Executive. 38 Strategy to Reality—using local transport plans to deliver on rail, Rail Passengers Council (February 2005). 39 Formerly Tyne & Wear Metro—light rail services, largely on erstwhile British Rail track beds, on Tyneside and Wearside relevant number of zones through which they intend to travel when they embark on the ﬁrst leg of the journey, which can be Amade nationwide by any transport web-based mode, route in planning any combination service for within rail,the coach, zones. air In (within the absence Scotland of overall only) and validity car journeys. limit on the overall ticket Theremaining Strippenkaart units can isbe a pre-paid used atany ticket time. for any journey wholly within the Netherlands. Passengers deduct from their ticket the 40 home tickets with bar codes etc. By “ticket” we mean not only traditional electronic-strip card tickets, but Smartcards, mobile telephone ticketing, print-at- Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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3.2 Stored value cards are best suited for payment for urban short-distance “low-value” journeys; their applicability for longer journeys is open to some question, though we welcome the decision to extend the scheme to South West Trains. We have some concerns that the level of fares for long-distance travel by National Rail will far exceed the level which passengers are likely to want to load up in advance. London zonal fares are all below¨ 10 and can be checked in advance—though the TfL website cannot at present calculate fares from Underground stations to National Rail destinations, even within the six zones. Is it probable that passengers would be willing to load the level of credit necessary to ﬁnance a journey such as London to Derby, where the fare may not be known? The propensity for touching in and out on such long- distance journeys must be more limited than on urban local journeys. 3.3 Beyond smartcard, other media may well take the place of traditional paper-based tickets. Ticketing by SMS message is already a reality and more sophisticated use of this medium is in course of trial. We welcome the harnessing of technology to simplify travel arrangements for passengers who are comfortable and conversant with such methods - and provided that passengers without access to the required gadgetry are not disadvantaged.

Q4: Does the ITSO system cater for the needs of all passengers and travel providers?

Q5: What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? 3.4. ITSO is not in itself a ticket-recognition system, but is rather the philosophy underlying interoperability and prepayment. Few such systems are yet in operation. The most vital element is to ensure that when operators install systems, where these are not uniform, that they are mutually compatible. Open-access operators need also to be brought into the fold to ensure that interavailable and through ticketing is not jeopardised. 3.5 Concern has been expressed that Oyster is a monopoly supplier. While many Oyster cards have been issued (each with a deposit of several pounds), many of them are used only occasionally. The present policy of increasing cash fares well in excess of prepaid fares will ensure a long-term future for smartcard technology though this might equally well be borne by travel chips in credit cards or mobile phone messages inter alia. Credit/debit cards (as Barclays are doing with Oyster) can add a separate travel chip. Subscribers to the scheme provider can beneﬁt from this additional travel feature without the need for an additional card; we see this as a useful means of smartcard payment for longer-distance fares. 3.6 Although there have been losers as a result of zoning National Rail fares in London, this is a vital precursor to smartcard ticketing availability for journeys on both National Rail and London Underground. 3.7 Despite enquiries, we have been unable to locate any smartcard schemes in Scotland applicable to rail services.

RevenueProtection andThePowers ofTicketInspectors

Q6: Is the legal framework within which the ticket inspectors function appropriate?

Q7: What appeal mechanisms exist for passengers and are they adequate?

Q8: Are the rights of passengers and the powers of ticket inspectors well-balanced?

Q9: Do operators of public transport take adequate measure to protect fares revenue? 4.1 Passenger Focus and its predecessor organisations have long called for measures to ensure that all monies due as fare revenue are collected and have welcomed in principle the various penalty fares schemes to that end to protect the interests of fare-payers. We are particularly anxious, however, at the variance between schemes, particularly at stations where two or more companies’ trains call. 4.2 Passengers need clarity about when and where penalty fares apply and the likely result if they wilfully disregard the provisions. Absence of consistency is a major cause for concern. It is unfair and illogical that on some services (as happens, for instance, on SWT’s Basingstoke-Waterloo route) on-train staV will sell fares at booking-oYce prices whereas on other days the full rigour of the Penalty Fare provisions will be brought down on the same individuals.41 We remain vigilant to the length of ticket-oYce queues as a reason for passengers failing to buy tickets before boarding. We are becoming increasingly perturbed as to whether suYcient ﬂexibility is accorded in cases of queue length exceeding maximum queueing times. We expect passengers to allow a reasonable time to obtain a ticket; after that time, we believe that the industry has failed to provide the necessary facilities and that penalty fares should be suspended until such time as ticket issue can conform to the prescribed timescales.

41 that passengers should be served within ﬁve minutes at peak times and three minutes at other times. We concur that these limits are reasonable and that they should be adhered to. The Ticketing and Settlement Agreement, operated by ATOC Rail Settlement Plan, to which all operators are party, states Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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4.3 Adequate publicity of the existence of penalty fares at speciﬁc stations and on speciﬁc routes is vital (and is a requirement of each penalty fare scheme) and robust safeguards must be in place to avoid innocent passengers who have inadvertently infringed the rules being issued with a penalty fare notice. Revenue protection inspectors have discretion as to whether to issue a Penalty fare, in addition to the appeals mechanism. The appeal mechanisms are, in our view, clear, though they are arguably not well publicised. All aspects of penalty fare schemes must be transparent; our principal areas of concern regarding Penalty fares remain: (a) ticket oYce queueing times preventing passengers from pre-purchasing a ticket without missing the train; (b) inconsistency of approach—as mentioned above; and (c) the perceived impartiality of the system. We have concerns over the perceived fairness of the appeals system where the industry (its appointed penalty fares inspectors and, of greater worry, the appeals processing staV) are judge and jury in the same case. Even as statutory passenger representatives we have no right to challenge upheld appeals— except to investigate whether they were conducted in accordance with the (unpublished) guidelines and (publicised) penalty fares procedures.

4.4 The provisions of the Bye-laws and National Rail Conditions of Carriage, which ultimately set out the rights and duties of both passengers and carriers, are almost wholly unknown to most passengers. Despite major improvements in the Conditions as a result of revisions in recent years, there is still much to do to enhance passenger beneﬁts.

4.5 It is clearly evident that too frequently rail operators do not protect farebox revenue suYciently robustly—for instance, through failure to police ticketless travel on board trains and at stations. Another failing is the frequent absence of facilities for those passengers who intend to pay but can ﬁnd no means of doing so because either the station is unstaVed or because on-train staV fail to sell them a ticket. In either 42 case, valuable income is lost which results in higher fares overall for those who do pay.

4.6 Interim details of research undertaken by Passenger Focus late in 2006 show an unacceptably high level of uncollected fares on one set of rural/semi-urban43 routes from unstaVed stations. Passengers were unable to pay their fare in advance and also unable to pay aboard the train due to non-appearance of on- train staV. Either this means that the railway is losing revenue or the passenger is inconvenienced by having to queue at his destination to pay the fare. In our survey researchers alighted at unstaVed stations so that revenue was lost.

4.7 There is an urgent and growing need for wider implementation of automatic ticket gates at stations with the highest footfall; it is equally vital to ensure that gates are staVed while ever trains are running. Installing gates results in a major increase in revenue to the extent that such facilities have paid for themselves within a year or so. Greater vigilance is also required to reduce the level of under-payment, such as adults travelling on Child fare tickets or with Railcard reductions to which they have no entitlement, alongside non-payment.

4.8 Too often the gates are left unattended and open after mid-evening, with the result that late-night trains carry a number of non-paying passengers, who probably feel that they can travel without being challenged to show a valid ticket. As gates permit holders of all valid tickets to pass through, there is a need for on-train ticket examination to prevent over-riding and also, ultimately, for gates at lesser-used stations to ensure that passengers pay the correct fare for their journey. A ticket to the next station will work the entry gates perfectly adequately; a fraudulent passenger getting oV at an ungated destination ten or more stations down the line need only pay the fare to the ﬁrst station to access the system.

4.9 It is virtually impossible for staV to check tickets accurately at non-automated ticket barriers at busy times under normal circumstances.

4.10 “Blitzing” ungated stations with ticket inspectors and, where necessary, the British Transport Police, is necessary to prevent as far as possible, fraudulent travel to and from such locations. Such action is also beneﬁcial at major interchange points and at terminals, especially those without automatic gates.

4.11 On-train inspection is also important on longer-distance routes to ensure that passengers have a valid ticket for the entire journey—not merely a short section at either end; in any case, regular and frequent appearance of on-train staV provides an enhanced level of customer service beyond revenue protection duties: enhanced sense of personal security; a deterrent against vandalism; and assistance for those passengers in need, which in themselves may persuade more passengers to make further rail journeys and increase farebox revenue.

42 ticket machines), telesales, websites and aboard trains. Details will be forwarded to the Transport Committee. 43 Theintolerable—more research, due for so where publication onward mid services to late are March infrequent. 2007, covers purchase facilities for tickets at stations (booking oYces/ Not only does this unduly and unnecessarily delay passengers, it can contribute to them missing connections. This is Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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ConcessionaryFares—TheRightStrategy?

Q10: Is the government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate?

Q11: Are concessionary fare schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? 5.1 We welcome the regulation of the Senior, Disabled Persons and Young Persons Railcard. We would urge other operators to emulate Virgin’s more relaxed policy on the use of Railcard-reduced fares at peak times for leisure journeys. 5.2 We are disappointed that full-time pupils aged 16 to 18 in secondary education are still expected to pay full adult fares when travelling between their home and place of education, save for some instances where local authorities intervene with reduced-rate travel schemes. 5.3 The question of concessionary bus fares falls outwith our remit and we therefore make no comment except for those cases where no practicable bus service is provided (eg central Wales or the far north of Scotland) but where rail services do operate. We understand both the distress of those holders of unusable travel concessions and train companies who operate non-remunerative services in such areas and trust that local authorities can resolve such44 anomalies. 5.4 Conversely, free bus travel for pass-holders aged over 60 has reduced patronage on some rail services. 5.5 Recent correspondence in the trade press suggests that the cost to extend free local rail travel to Community Rail projects would prove a negligible; (eg £32,000 on the Tamar Valley line in Cornwall). Long-distance free rail travel would have a major cost implication (perhaps £250 million per annum) and as such is unlikely to be entertained. March 2007

Memorandum from the National Union of Rail, Maritime and Transport Workers (RMT) (TPT 37) The National Union of Rail, Maritime and Transport Workers (RMT) welcomes the opportunity to contribute to the Transport Committee inquiry: Ticketing on Public Transport. The RMT organises approximately 75,000 members in all sectors of the transport industry. With over 44,000 members employed on the railway network we are the largest of the rail unions. Additionally RMT organises members on the London Underground, the Tyne & Wear Metro and in the bus and coach industry who as part of their duties issue and inspect tickets issued to the travelling public.

IntegratedTicketing The RMT supports integrated ticketing both within and across public transport modes. Making through ticketing available to passengers encourages public transport use and, if reasonably priced, can play a part in promoting social inclusion and the integration of isolated communities and geographical regions. Regrettably, due to the fragmented nature of the privatised rail network and the de-regulated bus sector outside of London, cross-modal integrated ticketing arrangements within and across public transport modes and geographical areas remains, with some notable exceptions, inadequate.

NationalRailCard The 2004 Warwick Agreement included a commitment to introduce a national rail card. RMT fully supports the introduction of a national railcard and would want to see the Government45 move quickly to deliver on their commitment. We further welcome the commitment made by Transport Scotland at the conclusion of the Scottish National Transport Strategy consultation process to conduct a review of fares policy in order to “seek to develop a new policy which encourages a modal shift to rail”. RMT will continue to seek a similar commitment from the Westminster Government. Clearly any such review should have as a core principle the need to create a fully integrated and accessible ticketing regime. Research commissioned in 2003 by Transport 2000 and the Rail Passengers Council found that up to 3million people would make use of a national rail card, costing £20, if it oVered a reduction of one-third on oV-peak fares. The research concluded that introduction of the card could result in the generation of an extra £55million in fare box revenue. Indeed, the record of national discounted rail cards in Europe is on the whole a positive one. The experience on Deutsche Bahn helps to illustrate the point.

44 45

Local Transport Today, issue 462 (15 to 28 February 2007). Scotland’s Railways—Transport Scotland 5 December 2006. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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To support integration and encourage network use, DB operates three versions of the BahnCard which are valid for one year and can be used across national DB services (except for Autozug). Use of the cards is limited on regional services, where other cross-modal regional discounts can apply and the card cannot be used in conjunction with other discount oVers: — BahnCard 25—A 2nd class card costs £39 to purchase and oVers 25% oV standard fares. 1.55 million were sold in 2004. — BahnCard 50—A 2nd class card costs £153 and oVers 50% oV standard fares. The card is available at half price for citizens aged over 60, students under the age of 25, children and people with disabilities. 1.65million were sold in 2004. — BahnCard 100—A 2nd class card costs £2,448 and oVers free travel on all national DB routes. An accompanied child under 15 travels free and the partner of a BahnCard 100 holder receives a complimentary BahnCard 25. 16,000 were sold in 2004.

PassengerTransportExecutives/Authorities Since being established by the provisions of the Transport Act 1968, Passenger Transport Executives and Authorities have created many examples of good practice with regard to multi-modal, integrated ticketing on public transport. The experience in the West of Scotland is indicative of some of the steps that have been taken to integrate fares and encourage public transport use.

StrathclydePassengerTransport The Zone Card (previously called the Transcard) has been in available since the 1980s and is valid on First ScotRail, Glasgow subway and around 80 bus company services. Other multi-modal travel options are available via the Day Tripper, Roundabout and Rural Daycard tickets which can be used on bus, rail and ferry services that are ﬁnancially supported by SPT. Similarly in London, Transport for London has implemented a number of public transport friendly steps leading to a signiﬁcant increase in bus patronage since the election of the Mayor of London in 2000.

RevenueProtection andThePowers ofTicketInspectors RMT organises across the grades employed on the national rail network, the London Underground and the Tyne & Wear Metro, who have as their core duties the sale, issue and inspection of tickets. Our bus members also issue and inspect tickets and Travelcards. RMT continues to raise concerns with regard to the safe issuing of penalty fares by railway staV. All too often staV have to issue penalty fares to passengers who have started their journey at stations where the ticket oYce is shut and the Ticket Vending Machine is out of use due to vandalism. This places the RPI in the invidious position of penalising a passenger who has been unable to lawfully purchase a ticket. The result can be a verbal or even physical assault on the member of staV by the disgruntled traveller. To avoid these wholly unnecessary confrontations RMT is ﬁrmly of the view that stations should be staVed throughout the time of traYc thereby enabling passengers to buy the necessary ticket. Recent steps by the Southeastern Railways franchise to reduce ticket oYce opening times has raised fears amongst RMT members about precisely this issue and brings into question the commitment of the ToC towards revenue collection and protection. The Committee will no doubt remember that in 2005, the then operator South Eastern Trains, brought forward a package of measures that would have led to dozens of posts being displaced from ticket oYces in South London, Kent and East Sussex. This led to a huge public outcry and a determined campaign by passenger groups, trades unions, local and county councillors and MPs which led to the company withdrawing their plans. In late 2006, the new operator, Southeastern, has again brought forward a package which will, under Schedule 17 of the Ticketing and Settlement Agreement, see “major” changes to ticket oYce opening hours at 29 stations and “minor” changes at around a further 70 locations. We are of the view that these changes will lead to a depreciation of service provided to the travelling public by making it more diYcult to purchase a ticket, worsen the already inadequate staYng levels at many stations and in speciﬁc regard to the Committee’s current inquiry threaten revenue collection and protection.

Smartcards RMT supports the introduction of smartcard technology and supports attempts by Transport for London and the DFT to make all national rail stations in the London area Oystercard compatible. However, we are ﬁrmly of the view that the introduction of new ticketing technology should not be used by train operators as an excuse to reduce ticket oYce opening times and/or to cut booking oYce and station staV numbers. The Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Committee will be aware that in 2006 the proposed introduction of smart ticketing on GNER services saw the company seeking to reduce booking oYce staV numbers by up to 50%; a move resisted by the rail trade unions.

ConcessionaryFares RMT representatives employed in bus companies in the South West of England have reported signiﬁcant increases in bus use amongst pensioners and other passengers who qualify for concessionary fares. The Concessionary Bus Travel Bill, which will from April 2008 extend the bus concessionary fare scheme from purely local use across the whole of England, is expected to result in a welcome and signiﬁcant increase in bus use. RMT supports the extension and believes that Government should be seeking to extend the scheme to students, young people and the unemployed. 46 RMT is aware of operational and policy problems relating to the existing concessionary scheme. In February 2007 your Committee pointed out that “Disputes have ensued between local authorities and bus operators over the costs of reimbursing the bus operators for the concessionary fares”. Indeed in the North East of England problems associated with implementation of the scheme has resulted in reduced fares for students being cut, some services being phased out and fares for children being raised. We are somewhat concerned that Government has yet to take adequate measures to resolve these problems and fear that that the £250 million set aside to pay for the nationwide extension of the scheme will prove to be insuYcient. RMT believes that the TfL Scheme for under 16’s, recently extended to 16 and 17 years olds in full time education, is an example which could be followed to encourage use of public transport.

Conclusion RMT welcomes the opportunity to contribute to the current inquiry into Ticketing on Public Transport. We have for many years supported integration both within and across transport modes and believe that Government should move rapidly to fulﬁl their commitment to introduce a National Rail Card. Regrettably privatisation and deregulation of both rail and bus services have created huge obstacles to providing the travelling public with the level of integration that is required to promote public transport use and encourage people out of the private car. It is only where a measure of public sector regulation exists, in the form of the PTEs/PTAs and Transport for London, that good practice has been brought forward; often against the stiV opposition of the private sector transport providers. Finally, recent moves to reduce ticket oYce opening hours at the Southeastern franchise hinder attempts to integrate ticketing structures. Ticket Vending Machines are inadequate replacements for trained staV who are best placed to oVer a full range of advice on ticketing and travel options within and across modes. There is also a wealth of evidence indicating that the absence of staV acts as a disincentive to travel; a view held particularly strongly by women passengers. This has obvious negative knock on eVects in relation to revenue generation. March 2007

Memorandum from CTC (TPT 38) The CTC has since 1878 provided a voice for cyclists in shaping transport policy and provision, and today represents some 70,000 members and aYliates mostly based in the UK. The use of the bicycle as transport, and its value as a complementary mode to public transport are key areas in which CTC and its members press for recognition and implementation of policy and projects. The nature of cycling as a self-propelled mode of transport, means that for longer distances it is regularly combined with public transport to provide a ﬂexible personal transport solution, delivering a door-to-door journey by ﬁlling the “gaps” between stopping points of public transport services to unite a coherent and complete trip with minimal time lost waiting for onward travel. We wish to provide evidence relating to the Committee’s questions 1 and 2—Integrated ticketing:

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas?

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? Journeys integrating cycling with rail, bus, coach, ferry, and air travel have a variety of purposes. Some take place daily as part of a regular commuting trip, and others to take passengers with their cycles to a location for a cycling holiday. All such travellers seek a guarantee that the journey they planned to make will be delivered, and in many cases penalties of missed connections to onward travel, late arrival for

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appointments, or even simply a tiresome wait without a certainty of the service on which they will travel will place a value to the cyclist of making a reservation for a place for their cycle, in exactly the same way that they would reserve a seat, or a sleeper berth. Thus for many the ability to get a reservation and ticket for their cycle, which guarantees the journey as planned is a vital part of booking a ticket. When passengers with cycles often top 10% of the total passenger count on a train, and 50% of the passengers on a rural bus service, the need to accommodate them in the ticketing system—if only to garner knowledge of the actual use, is an important way to understand and support the delivery of eVective intermodal integration. As highlighted to the Committee Inquiry on Access to Transport for Disabled Persons, there is a further aspect to cycle use—that of being a mobility aid. Cycles can provide independent personal mobility to those who are prevented from holding a driving licence for various reasons, and it can also deliver pain-free mobility for those who cannot walk a great distance with a greater range and ﬂexibility than a wheelchair, noting that some wheelchair users also use specialist tricycles which can be used over longer distances and rougher terrain, but obviously are bespoke to their users, and not appropriate for inter-urban travel, where use of trains and buses may be appropriate.

Air

Much of the feedback on this will be duplicated by the response to the Committee’s Inquiry into Passengers’ Experience of Air Travel. SuYcient possibly to note here that there is immense variation in the information provided and service delivered for passengers wishing to travel with a cycle. Many of the budget airlines have charges greater than the passenger fare for carrying a cycle, but will not guarantee which flight they will carry the cycle on. One group wishing to travel with Flybe from Southampton to Shannon were to be charged £12 per bike per flight but advised that they might have to wait from the first flight of the day until the last with no guarantee of all getting taken on to the same flight—they decided to spend their money on a ferry trip to France and support local hotels & restaurants in Brittany rather than Galway. The ability to book online with a guarantee that your appearance with a cycle is expected is a feature of the easyJet website which gets praised widely by both individuals and tour organisers, but few others will oVer a proper reservation.

Coach

Many parts of the UK cannot be reached by rail and thus for all but the most dogged and fit cyclists who will cycle where they cannot get to by train, there are alternatives in using other forms of public transport or increasing the volume of private car traYc, The latter especially ironic where this is to scenic destinations. The coach can provide a suitable means for travelling over long distances and roads, where traYc conditions may be unpleasant or potentially hazardous, and in some cases this may be the only direct route available. National Express provide what for most potential passengers is the sole source of long distance coach travel, in England and Wales, and Scottish Citylink mirrors this in Scotland. CTC has worked with both companies and a number of the less well known independent operators, and major groups providing less well known services (eg Oxford-Cambridge, Exeter-Okehampton-Bude) often filling in where former rail lines have been severed. National Express conditions are generally accepted as a base-line where cycles which are folded or packed down and contained in a purpose-made bag or case will be carried “if space is available” This is clearly an unsatisfactory position, as the passenger’s ticket is normally booked to travel on a specified service, and the assurance that their cycle is carried depends entirely on the judgement of the driver. We have seen one regular user denied his holiday of a lifetime when the packed bike was refused from the coach conveying him to the airport, and another suVering DVT and almost dying (in the same month as another passenger actually died after her trip) through a very unsatisfactory performance in accepting his bike on a journey from CardiV to London. Tourism, and access to parts of the UK not served by rail, for those not able to simply drive themselves and their bikes to the area, and to this end the provision of ticketing guarantees to carry the bicycle, with provision that it is if necessary prepared to be loaded as luggage are something we believe will make it possible for many to avoid the need to use cars to get around with their cycles. Regional Express coach services tend to be more flexible, with less use of underfloor hold space, and we understand that some services are carrying as many as 8 bikes to popular areas, and not require the cycles to be packed—appropriate given the shorter duration of the journey. Ticketing which assures the user and makes the carrier aware of the traYc are needed. National Express, like Virgin Trainline have a small inertia surcharge—travel insurance for 99p (£1) on the fares being deducted—the purchaser has to be aware of this to avoid paying a cumulative charge on their tickets (charge for each ticket sold). Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Ferry The big problems reported for this mode of travel in ticketing are generally related to a discriminatory regime for on-line booking of tickets. Several operators fail to show a category for booking cycles—Stena especially fails to have this for their UK services, whilst the same on-line booking template has a category for cycles on their Scandinavian routes. The irony is compounded by the fact that the main service which fails to have a cycle category for on-line booking is Harwich to Hoek van Holland which is an important sea-bridge on the North Sea Cycle Route. Even with the online facility, many operators set the bicycle up as a vehicle, and this category can only be booked as one unit per booking, making it necessary to make separate online bookings for each member of a family or small group, making it very diYcult to secure a cabin for the party to travel together. Several operators do not make it clear that passengers with cycles attract a higher fare than foot passengers, or alternatively that cyclists SHOULD book as foot passengers, and then notify the operator that they will be bringing bikes. One such failing lost P&O around £800-worth of business and disappointed a group who had been taking the annual autumn fares oVer for the previous 8 years. Whilst the Committee has stated that they will not be considering fares we feel that here, more than for air travel, the disparity of paying as much as the passenger fare—occasionally more—to carry a bike onto a ferry where it is often not aVorded any special or space consuming accommodation, and has no weight penalty (as it may do on an aircraft) is a point to be recorded.

Bus A vast potential to place almost every household in the UK within easy reach of an hourly daytime bus service exists by exploiting the option of getting the passenger to the bus rather than the costly exercise of getting the bus to the passenger with an attractive frequency of service and direct, fast journeys. There are a few bike carrying service bus routes, but almost no measures to monitor the take-up of cycle carriage— or to guarantee journeys. For frequent services, and with the typical length of a local bus route there is less need to travel on a speciﬁc journey, but for longer rural routes with arduous gradients etc an assured journey perhaps with pre-booking will be more important. The position with buses has yet to mature and develop in the respects considered. One detail of bus ticket purchase is that no longer is the fare stages matrix and tariV on display when you board a bus, and unlike a shop of restaurant you are frequently unable to see a display of the fare being charged This makes the idea of a bike fare a high fraud risk as passengers might not spot their passenger ticket being rung in as a bike.

Rail Possibly the main area from which we get feedback from the cycling community, and primarily because there is serious discrimination against passengers who want tio take a bike on a train, and avail themselves of the full range of ticketing services. Up to September 2004, the Trainline provided the facility to book a cycle reservation when you booked your seat and travel ticket. This was—with great protest withdrawn and we were promised a return of the facility in December 2004. The total collapse of the booking system had a major impact on the ability to reliably travel with a cycle, with delegates to an international conference in Dublin unable to make bookings just days before they were due to travel. We note with a degree of ire that the disappearance of cycle reservation facilities online was accompanied by the appearance of online car hire and hotel booking facilities on the rail ticket booking service. GNER working with CTC has restored a booking service online, albeit a big fiddle—you book the tickets on-line, 24 hours in advance, and their booking service calls you back to discuss and confirm the reservations being made. Because of the diYculties in making bookings CTC is very upset that some operators try to enforce a compulsory bookings service, although for Virgin & GNER it would appear that you can normally make a booking immediately prior to the arrival of the train you want to board, and communications with the train managers is good enough to ensure you are expected and doors are opened (see later). We have had ridiculous suggestions by call centre staV obviously totally ignorant of UK geography. A passenger north of Inverness was advised that he had to go to Dunbar, Berwick, Edinburgh or Glasgow to collect tickets for a cycle reservation for his trip—to Stirling. Passengers boarding a train at Tenby, heading back to London, were told thay should have gone to Swansea to make a reservation for their bikes in order to board the train. Fortunately train staV have an ethos set in running the railway rather than observing such crazy arrangements. CTC believes that cycle reservations should be treated like seat and berth reservations. If the space is available when the train arrives then you can book it, and with on train staV now easily linked to online facilities, booking with a phone call shortly before a train arrives will ensure that you are expected, told where to stand on the platform and doors are unlocked if required. I did witness one particularly unsavoury incident when a passenger with a printed oV confirmation of his booking, was unable to collect his tickets (the booking oYce hours had changed, and the fast ticket machine was not working). The overnight train was initially delayed when the conductor refused to sell the tickets Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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the man had evidence of booking, and he agreed to stump up considerably more on his credit card. The conductor was very sloppy in filling out the counterfoil, and the passenger, who worked for a bank, demanded that it was correctly filled out. The police were called again at Motherwell and eventually the passenger was escorted oV the train and dumped in the centre of a place he did not know at 1.00 am. The incident was witnessed by several people in the seated coach including the son of Hounslow’s MP! As a result of this totally unwarranted abuse of a passenger we were an hour late at Carstairs, delaying the start of engineering work, and leaving all passengers very displeased with the staV behaviour. Only a threat to safety of those on or around the train, or serious disturbance/damage will occur, should the train not run to timetable. Poor protocol on such issues has famously backfired on the operator—in an example of cyclists being refused access on to trains after the London to Brighton ride in 2004, by hired in “heavies” leading to a near riot at Brighton when passengers with valid tickets were refused access to catch the trains to Southampton and the West, and the initiative of around 30 cyclists in boarding at Preston Park , safely on a near empty train, but with the train crew refusing to move it , blocked all services for 90 minutes— a pig headed management attitude eliciting the passenger behaviour it deserved as a result.

Rail—Overcharging byInertia On the Virgin Trainline and some other models of this template some selections appear highlighted by a yellow bar—reading the small print reveals that you have to opt out of paying a ﬁrst class upgrade rather than opting in—and only checking the total payment being taken on a credit or debit card. This is an undesirable side of this website, and the fare initially “rung up” has to be the basic fare, and any optional fare supplements such as ﬁrst class upgrades and travel insurance should—for all web-based selling, be oVered purchases as opt-in rather than opt-out. The web based booking system also fails to have a show every fare option, as noted elsewhere.

Need forShowing ofRealTimetables—NotExtractsSelected by theSystem A journey frequently undertaken is that from Glasgow to the East Midlands and options to alight at Rugby, Coventry, Nuneaton or even changing trains at Birmingham or Crewe, mean that selecting a train is not a crude A to B choice but an area generic one, in much the same way that A Glasgow to South Yorkshire trip could use trains to Leeds, Doncaster or SheYeld and arrange collection or taxi as appropriate to check the options without access to Table 26 requires repeated enquiries with detail changes. This was pointed out to the team interviewing about the NRS upgrade. Similar problems also occur with the ﬂow chart design for the voice recognition system. If it misunderstands a station name it became ﬁxated on that name for the rest of the call, and only by terminating the call can you try to get the system to let you correct it. Nowhere does the voice activated system designers seem to have thought their system is fallible, and added in the option of saying “stop”, “back” or “operator” to get out of a loop or one stage back in the menu.

Fish norFowl—TheBreakBetweenBookingYourTicket andBookingYourBike Dr Bogus Zaba, a regular user of Virgin services, always books his bike from Warrington B Q as he changes trains en route, and in so doing beneﬁts form being a regular customer with staV used to carrying out the transaction, although he reports that recently the booking process has been less smooth. His experience on train was also soured by an incident at Preston where staV refused to open the door and let him board with his cycle, even with a reservation The experience of call centres—especially National Rail—is of staV with a geographic, and horairial illiteracy dependent solely on what they read on screen—I have had reports of the denial that trains run to Wick, or a service runs from Fort William to London the latter to staV who were due to work on the train, who strongly advised otherwise. The inaptitude extends to being unable to book cycles, one Chesterﬁeld traveller booking to get to the ferry at Harwich had no success with National Rail, Midland Main Line, and Virgin, until fortunate enough to land with ONE’s call centre in Norwich. Gareth GriYth’s experience in Solihull where he has to travel to only two stations capable of making cycle reservations (where is the commitment to selling any ticket from any ticket oYce?) Birmingham New Street, and Birmingham International, parallels a TV producer living in rural Warwickshire who used to spend around £3,000/year travelling with their bike down to Euston and enjoying a ride of under 15 minutes to the London studios instead of a miserable and long ride on public transport. With on-line booking he simply went to the ticket machine and collected the full set of tickets for a fully predictable journey sequence (like Dr Zaba knowing he can make his reservation in the connection time at Warrington). However at New Street, the uncertainty of queuing time to get served nudge the balance and now £3,000 worth of business has gone to driving down the M40. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Chris Juden, CTC Technical OYcer—possibly typical of those who used to enjoy optional use of oV-peak trains—has had, after half a century, to finally buy a car, and reckons this is linked to the withdrawal of around £1,000/year per rider of optional ticket sales from an increasing population of fit, retired riders who have the flexibility to catch oV-peak trains, if only the system would accommodate them by guaranteeing their journey itinerary. The system also generates a huge pile of tickets—sometimes of all shapes & sizes, one member sent in details of the 16 tickets required for a journey the length of the UK.

Rail—Failure toOffer allRelevantFares andRoutes

The template for National Rail has options for cheapest fare and general but NOT all fares available. As examples of how the poor algorithms and lack of easy access to timetables as published in the printed all stations timetable (book—and well secreted on-line pdf down-loadable pages on Network Rail website) there are often routes and fares revealed only when the purchaser knows how to force the system to sell them. Example Glasgow to Leeds—absolute cheapest fare—Virgin Value Glasgow to Carlisle and then second fare Carlisle to Leeds via Edinburgh (7 hours!) other fares oVered (saver at approximately £70) but the low cost fare (approximately £37) via Appleby on shortest route with shortest journey times (but poor connections) only appears when you force a via Appleby option. Example Glasgow to Gatwick—Use of the now to be dropped Cross Country services to Gatwick and Brighton avoiding London would probably have been higher if the service had actually been oVered to enquirers—even trying simple nudges like travel via Reading failed to break the lock-out (route suggested was back to Paddington and cross to Victoria, despite direct trains from Reading Plats 1–4a. For the journey—passing through London on a weekday between 16.00 hours and 17.00 hours with two 5-year old children, a pensioner and luggage for a 4-week holiday was something to avoid, with a lot of testing and trying to fool the system it eventually coughed up the journey wanted and allowed the tickets to be booked with the seat reservations. The algorithms are also apt to oVer ridiculous solutions. A couple returning from Wick to Wilmslow contacted CTC over the 37 hour suggested trip with several changes of train and long waits, when the journey could be done with just three trains in around 12 hours, and one long wait, and train could be cut out by cycling from Crewe to Wilmslow when the overnight train from Inverness arrived, another couple were not advised to use the “rival” South Western main line from Exeter when the bad route oVered from Penzance to Bournemouth—via Bristol! was disrupted and they were left to hire a car to get home, when a shorter journey option was to either catch trains to get to Southampton via Salisbury or Basingstoke, or to use their cycle to ride between stations at Yeovil, or Yeovil Junction to Dorchester South—after all they had just ridden over 800 miles to Penzance, and would surely be up to such a short connecting ride. The disappearance of the All Stations printed timetable will reduce the ability to ﬁnd these options, and we really need to have access to the ability to construct our own travel itineraries, either by having this timetable fully downloadable, or available for on-line access.

AWayForward—Make theLocalStationPart ofCallCentreNetwork andExtendOpening Hours

One cycling holiday organiser, now sadly dead, used to book all his tickets with Fort William Station, and in doing so, a) boosted income for the station b) employed staV during idle periods between trains— helping to keep the booking oYce open and pay for staYng. He in turn got excellent service, from staV well versed in railway geography and best fares available. With the ability to run a single call centre desk at any location, it would make a highly sensible move to use the highly experienced staV at many stations who work just a half-shift, selling tickets and providing information at a small local station. They would be switched in to the call centre when the demand for immediate service on the station itself had abated, and then take call centre enquiries and ticket sales, with local counter activity taking the next place in the call queue. There are many wins here—call centre staV with accurate and close-up railway knowledge, local stations with staV presence to sell tickets and provide a facility than no CCTV system can. This might be introduced as a pilot scheme with a couple of operators on a couple of lines that have a large number of limited hours opening stations, or a high community rail input, the system could than be ﬁne tuned and tested to establish the stations where the idea works to best eVect. March 2007 Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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Memorandum from UNISON (TPT 39) UNISON members work for a wide range of transport organisations, particularly Passenger Transport Executives, bus companies, British Waterways and regional airports. Their jobs include professional, managerial, administrative, clerical, manual and engineering roles. In addition to negotiating pay, terms and conditions, UNISON works on diVerent priority issues for each group of members, and contributes to relevant policy debates and consultations. We welcome the opportunity to submit this short response to the Transport Select Committee enquiry into ticketing. In terms of our overall position, we should state at the outset that we do strongly support smart card technology. However, we do believe that the beneﬁts of such schemes can be diminished as a consequence of: — insuYcient funding of such schemes. Our members report that equipment can be prohibitively expensive and that planned projects appear to suVer from what seem like “permanent” delays; and — inadequate ticketing information, which we believe to be almost inevitable in the context of our fragmented public transport system. We also wish to state at the outset that we do welcome the government’s commitment to concessionary travel, and believe that this should be expanded across modes of transport, adequately funded from central government and administered at a local level.

Responses toSpecificQuestions

1. Is ticketing suYciently integrated across diVerent models of transport and between diVerent geographical areas?

We do not believe that ticketing is suYciently integrated between modes of transport and or geographical areas. There are some good schemes provided for travel within certain local authorities and PTEs, eg Derbyshire, Nottingham, West Midlands and Greater Manchester. However, even where there is a degree of integration, as with the above, we ﬁnd that some schemes are only available as day tickets and some are only available after the morning peak. Many local authorities do not oVer any multi-operator/modal tickets, eg StaVordshire, Leicestershire and Nottinghamshire. Bus operators tend to oVer day tickets for unlimited travel, but they are only valid on their networks and not accepted by other operators. Rail operators oVer network tickets, but these tend not to be well promoted. In certain areas PlusBus tickets are available, but only as add-ons to rail tickets. Integrated bus/train ticketing will not succeed until there are more services in the early morning and during the evening to enable passengers to get to and from the rail station. We believe that if we are to meet the challenges set out in the Eddington Report, or address the Stern agenda, the Government needs to do more to support integrated ticketing. We note that Putting Passengers First concluded that one of the key reasons leading to the decline in bus services has been lack of seamless journeys caused by network deﬁciencies and lack of through ticketing. The planning process, particularly where this relates to new housing growth areas, should ensure that integrated transport is a fundamental part of planning gain supplement funded infrastructure in order to support sustainable communities.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems?

A lot depends on the deﬁnition of integration. Is it expecting fares to be available from anywhere to everywhere? This would be diYcult to implement because of the amount of memory required by the ticket machines. Also, who would set the fares? While rail fares are controlled centrally (with some controlled by the operators), bus fares are controlled by the bus operators, with local authorities responsible for tendered routes (which can lead to diVerent fares for the same journey). How would operators be reimbursed, bearing in mind the complex variety of fares available? If it means the extension of the Oyster card, which would be easier for passengers to use, the passenger could have no idea how much the journey costs. Again, can it cope with complex fare structures? Overall we do not get a sense that the government has a strategy for developing integrated ticket systems and addressing the questions set out above. We note that this issue was not covered at all in Putting Passengers First. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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3. Is the industry taking up modern smartcard technologies adequately and appropriately? Our members get a sense that the industry is taking up smartcard systems in an ad-hoc way, largely as a consequence of the costs involved. Where operators are embracing the technology, they are developing systems tailored to their individual needs, rather than with a view to developing an integrated system.

4. Do operators of public transport take adequate measures to protect fares revenue? In the provinces, yes. Electronic ticket machines mean that passengers pay the correct fare for the journey undertaken. Problems arise with smartcards, which rely on the passenger’s honesty to swipe their cards. Problems also exist on articulated buses, where there is more than one entrance. There are problems on trains, where tickets are not checked. Train operators ﬁnd installing ticket barriers at stations cheaper than employing guards, which is unfortunate, given the important role that guards play in ensuring safety and security on board the trains.

5. Is the government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? As stated in the introduction, we do welcome the government’s commitment to concessionary travel, but should be free to the over 60s at all times, integrated with other modes and available throughout the nations of the UK. This should be fully funded by the Government and administered at a local level. Our members report that some authorities are being forced to cut bus services to pay for concessionary fares, which is clearly self-defeating.

6. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? Concessionary fares should be free across all modes of transport at all times. There is still a postcode lottery, where neighbouring local authorities oVer diVerent schemes. The majority of shire counties oVer one scheme, but in some, like Leicestershire, the district councils have diVerent schemes. Problems can arise in unitary authorities eg between Nottingham and Nottinghamshire. It would be more eYcient and reduce bureaucracy if the funding for concessionary fares was paid direct to county councils and PTEs. Free concessionary travel should also be available where taxi operators take over the provision of public transport in rural areas. March 2007

Memorandum from Cheshire County Council (TPT 40)

Introduction The attached paper addresses the issues outlined in the 8 February Press Notice, from the point of view of Cheshire County Council. There is a strong emphasis in the paper on the County Council’s unique success in utilising relevant powers to develop and operate a commercially interoperable smartcard-based bus ticketing scheme, on the pioneering application of the ITSO standard to that scheme, and on the impact of Government strategy on the statutory concessionary fares scheme. The Cheshire concessionary scheme also covers Halton and Warrington Unitary Councils.

IntegratedTicketing

1. Is ticketing suYciently integrated across diVerent modes of transport and between diVerent geographical areas? 1.1 No. There are only a few journeys where passengers can use diVerent modes by buying a single ticket. These include the national “PlusBus” rail add-on product (in Cheshire currently only available in Chester), and two “Ranger” services entering Cheshire from Derbyshire and the Peak District. 1.2 On bus services, outside the Chester area a small number of oVers are made which allow a single ticket to be used on a number of operators’ services, such as the “Sunday Adventurer”. Where the County Council has tendered services, there are a number of successfully negotiated arrangements for the contractor to accept the tickets of the main operator on the route. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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1.3 In the Chester area, the County Council’s Chester Travelcard scheme has been operational since July 2002 and provides a unique, commercially interoperable smartcard-based bus ticketing scheme. This allows passengers access to the services of four main participating operators through a range of zone-based pass products, in addition to a stored value purse. The scheme was derived in response to a heavily sectorised bus network which disadvantaged cross-city trips implying more than one operator, and was established under Transport Act 2000 powers, utilising the Public Transport Ticketing Schemes Block Exemption Order 2001 in its reconciliation basis. As it oVers a stored value purse, the scheme also holds a small e-money issuer certiﬁcate under Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

2. Does the Government have an adequate strategy for developing the integration of ticketing systems? 2.1 The technology basis for the integration of ticketing systems, including between modes via the ITSO standard, is clearly comprehensive and capable of accommodating not only statutory (concessionary travel) functionality, but the addition of commercial ticketing products and related functionality (such as the co- hosting of other transport (eg charging or tolling) and non-transport (e.g. tourism) functions. 2.2 The available statutory basis for the integration of ticketing systems has been shown by the Chester Travelcard scheme to be suYcient for the purpose, and capable of satisfying the participation requirements of major national bus operating groups. However, in the general case outside the established scheme, the competition implications of multi-operator ticketing—and the penalties for non-compliance—have on occasion been shown to reduce operator willingness to enter into “collaborative” schemes. 2.3 Outside the concessionary case, the strategy for developing the integration of ticketing systems suVers from an inability of local authorities to enforce participation. Currently, participation is voluntary and relies on a perceived commercial benefit on the part of the participant. For this reason, in the absence of significant grant assistance towards equipment, software and systems, business cases are perceived as being extremely weak and participation is conditioned accordingly. It should also be noted that in the case of local authorities, the necessary knowledge and resource to develop such schemes may be lacking, or may not be justified against the potential outcomes. In Cheshire, the justification is in pursuit of broad Local Transport Plan policies relating to accessibility and ease of use of public transport. 2.4 The County Council’s concessionary travel scheme is under-developed compared with large conurbations such as Greater Manchester and Merseyside. Any Government strategy needs to take into consideration the needs of travellers from and within rural areas.

TheUse ofSmartcardTechnologies

3. Is the industry taking up modern smartcard technologies adequately and appropriately? 3.1 If “The industry” is defined in its broadest sense (ie the entire operator, regulatory and local authority spectrum), then it is true that modern smartcard technology is being taken up, although at diVerent rates in diVerent areas. 3.2 Cheshire County Council’s Travelcard scheme was selected and part-funded by DfT (with Southampton City Council’s university travel scheme and Nottinghamshire County Council’s concessionary scheme) as a successful existing scheme for development to the ITSO standard. To date, these three “Legacy” schemes have undertaken extensive pioneering work into the application of the Standard, dealing with the problems encountered in establishing systems and practices, and the benefits of this are now available to other local authorities. Cheshire has had its first live end-to-end ITSO implementation phase in operation since December 2006, in Crewe. 3.3 In addition, Cheshire is contracted to DfT to host a research investigation into “low-cost” transport smartcards, which is expected to provide evidence of additional applications and distribution opportunities that would act to promote the take-up of transport smartcards. 3.4 As well as enhanced travel and product flexibility, the benefits of modern smartcard technologies to all concerned in the accumulation of reliable transaction data and the prevention of fraud (particularly in cases where travel entitlement is given) are readily appreciated. Although there are precedents for proprietary operator smartcard-based schemes, we understand that general take-up by operators may present a perceived weak business case due to the significant capital investment required.

4. Does the ITSO system cater for the needs of all passengers and travel providers? 4.1 Yes. Our experience with the ITSO standard demonstrates that it provides a comprehensive basis for the establishment of integrated ticketing solutions, which can be multi-modal. It provides an open platform and certification system for access by a range of suppliers, and retains a structure enabling it to maintain the potential to evolve with the addition of ticketing scheme equipment and systems, and card media. 4.2 Significantly, the ITSO standard presents the broader potential and flexibility for satisfactorily accommodating not only statutory (concessionary travel) functionality, but of expansion into commercial ticketing products and related functionality (such as the co-hosting of other transport (eg charging or Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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tolling) and non-transport (eg tourism) functions. These areas aVect the majority of public transport users (ie not only concession holders) and open the possibility of oVering products that are clearly complementary to the underlying travel basis. For example, the ability to provide visitor entitlements, including associated travel and admission entitlement, in an integrated and fully reconcilable framework, oVers the ability to contribute constructively to a variety of policy objectives, in areas such as economic development, tourism and accessibility. 4.3 It is signiﬁcant that the established statutory basis for the Chester Travelcard scheme has been demonstrated to possess the ﬂexibility for geographic and functional expansion, and to continue to provide a sound basis for the existing scheme as well as its ITSO development.

5. What can be learned from the experiences of areas such as London and Scotland where smartcard technology is already in place? 5.1 In London, growth of the successful Oyster scheme demonstrates clearly the potential for such schemes, when promoted within a stable, regulated environment. Outside the London regulatory framework, the volatility in particular of the commercial bus network represents a material disincentive to the development of integrated ticketing schemes and the ability to ensure operator participation in them. 5.2 Oyster also clearly demonstrates the technological capability and robustness of the requisite equipment and card media, although it does not demonstrate the application of the ITSO standard. 5.3 In Scotland, there is a single pilot scheme in Shetland, and although a procurement framework exists, smartcard technology is not yet generally in place. However, the introduction process for the national concessionary travel card demonstrates the potential for beginning with card procurement and subsequently building the host scheme. The ability of local authorities to act in unison under a national aegis provides evidence of the eVectiveness of joint procurement routes and the accommodation of individual identities, and of the consequent eVect on the market for suppliers of items of ticketing systems and equipment.

RevenueProtection andThePowers ofTicketInspectors

6. Is the legal framework within which ticket inspectors function appropriate? 6.1 The County Council’s inspectors do not exercise any powers to penalise passengers. They are instructed to report any issues of this nature to the company. Bus companies in Cheshire engage their own inspectors. 6.2 Under the Cheshire Districts Concessionary Fares Scheme, County Council inspectors monitor the scheme. Any issues discovered here are reported to the operator. 6.3 The legal framework appears to us to be adequate to carry out our due diligence requirements.

7. What appeal mechanisms exist for passengers, and are they adequate? 7.1 This is primarily an issue for the bus operators.

8. Are the rights of passengers and the powers of ticket inspectors well-balanced? 8.1 We cannot comment on this.

9. Do operators of public transport take adequate measures to protect fares revenue? 9.1 We cannot comment on this.

ConcessionaryFares—TheRightStrategy?

10. Is the Government’s concessionary fares strategy, including the proposed scheme for concessionary bus travel, adequate? 10.1 In introducing the current Cheshire scheme there have been a number of issues which raise questions about the strategy for the introduction of the scheme:

Need for support from the Department for Transport 10.2 As administrators and brokers of the scheme, the County Council experienced a number of major obstacles in negotiating an agreement between the bus operators and District Councils. The target of April 2006 was challenging but achievable. While the target was achieved in Cheshire, it would have been helped by more support from the DfT. For example guidance to operate the scheme did not come out until December 2005. The published guidance gave local authorities a methodology for working out the Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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reimbursement which was a source of debate rather than a point of reference to resolve disputes in negotiation. Even after authorities have received judgements on appeals by the bus operators they still did not know how much to pay their operators. 10.3 Because the situation has been fast moving, DfT have not been able to answer questions in a consistent and unambiguous way. For example one of the basic concepts of the legislation is that it should be an objective for the operators to be in a position where they are “no better and no worse oV”. This can be interpreted in a number of ways and some operators may have exploited the lack of guidance. 10.4 It would have been helpful to have support from central Government to enable local authorities to develop a coherent negotiating position. For example in the run up to the new scheme local authorities could have been oVered funding to employ their own technical and legal experts to help them in the negotiations and administration of the schemes. Some kind of information channel could then have been opened up to enable local authorities to compare notes on the negotiating position they are adopting. Instead the local authorities have had to resort to phoning round, informal networks etc. Again all this adds to the administrative overload. For the simple issue of reimbursement there is an alarming variety of reimbursement formulae. For example: — Fixed fee schemes such as Nottinghamshire and Derbyshire. — Mileage based schemes such as Surrey. — Capped schemes such as Essex (now declared illegal). — Uncapped journey based schemes at a variety of diVerent rates (such as ours, Torbay and StaVs). — “Pooled” schemes such as Merseyside. — Uncapped in-district schemes with a diVerent reimbursement formula for out of district concessions. In some cases this confusion has been to the advantage of the bus operators but in most it has served the interests of neither side. 10.5 On the other hand the bus operators have, after an initial hiatus, through the CPT developed a well- oiled machine with the legal and technical resources to ﬁght appeals and to dictate the agenda over the beneﬁts of the scheme as outlined below.

Distribution of funds

10.6 The Cheshire Scheme could have given the operators an adequate settlement had all the money been allocated to the county tier of Government. There were legislative obstacles to this. The DfT did not have a mechanism to distribute the funding and gave the responsibility to the erstwhile ODPM, now the Department of Communities and Local Government. The formula that was then arrived at was based largely on variables such as population which only have an indirect link to bus use and therefore the levels of reimbursement required. As a result in most two tier areas that we are aware of at least one district has been overprovided for and one underprovided for. In Cheshire’s case for the 2006-07 settlement: — Chester City Council received £775,000 but need £1.5 million to meet their share of the costs. Even with the revenue they had allocated in previous years they only had a “kitty” of £1.25 million, £250,000 short. — Congleton Borough Council received £444,000 but only need £344,000 to meet their share. They therefore have a £100,000 surplus and keep the £100,000 they contributed in previous years. 10.7 This problem is compounded by the fact that the revenue is not ring fenced and, in spite of it being suggested numerous times, there is no willingness by the districts to pool the cash. 10.8 In addition the subtleties of concessionary fares financial issues are outside the experience of many District Treasurers. Due to the relatively small size of District Council budgets, the variance and uncertainty on the concessionary scheme may represent a very high proportional variance. Because of the findings of the independent arbitrator, their preferred option of capping the risk by oVering a fixed reimbursement has been disallowed. The fact is that there is considerable financial risk as the level of reimbursement required is subject to changes in the level of demand and that there is no way of capping these. In the first years of the operation of a new scheme, this is subject to considerable volatility, which is a challenge to District Councils which are on fixed budgets. The scheme has of course been so successful that bills are tending to rise. In Cheshire this is a marked contrast to previous experience when costs of the half fare scheme have risen only gradually over the 20 years the scheme has operated. 10.9 For 2007–08, the money to pay for concessionary fares (with the addition of 5% for inflation) is no longer itemised separately in the FSG settlement. This follows the pattern of the Government revenue funding for the previous half fare scheme where the purpose of the funding is not transparent. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Confusion over what local authorities are expected to deliver 10.10 One of the points the bus operators make is that there is suYcient money in the pot to deliver what the Chancellor promised in March 2005: free in-district oV-peak travel. There seems to be a move on their part to impose this and appeal against schemes which oVer enhanced benefits. In Cheshire if the new scheme had delivered just this, concessionaires would have a scheme which was worse than the previous half fare scheme. They would lose all cross boundary and cross border travel and any peak time concessions. For the scheme to deliver something eVective, cross boundary travel is required where for a significant minority the nearest market town, hospital or other facility is in the next District. A hybrid of free up to the district boundary and half fare thereafter would have left everyone involved with an administrative nightmare. Even from the bus operators’ point of view their drivers would be faced with confusion over what concessions to oVer passengers for each journey. Our estimate is that non-statutory concessionary travel accounts for only 16.5% of the total. If only statutory concessionary fares were available there would also be some transfer as passengers chose the free alternative. 10.11 The DfT has described these additional benefits as enhancements which should be funded locally. This shifts the problem on to local authorities and has added to the burden of administering and negotiating the scheme. 10.12 The introduction of the national scheme goes some way towards ameliorating this problem but local authorities will still have to consider maintaining any existing concessions at peak times.

Suggested requirements for the new scheme 10.13 We are less than one year away from the second major change in the scheme in two years. Again it looks as though the burden for shaping the future scheme will rest with local authorities and the support and guidance which needs to be there may again be lacking, late or confusing. We suggest that the following ought to be considered for the 2008-09 scheme: 10.13.1 Transferring the responsibility and funding (including the funding for the half fare scheme) to the higher tier of local government in two tier areas. We understand that the Department for communities and Local Government has already begun preliminary discussions for the national scheme based on the current formula. A change in the responsible level of local government is allowed for in the current Bill but urgent decisions have to be taken if it is to happen by 2008–09. 10.13.2 Adequate funding to be made available in this ﬁnancial year to fund pass re-issue and the development of new systems to manage the national scheme. 10.13.3 The Government to take over the responsibility for reimbursement at a national level. 10.13.4 An agreed national rate of reimbursement to operators to be negotiated. 10.13.5 The Government to reimburse local authorities against veriﬁed operator claims and legitimate costs for setting up the new scheme. 10.13.6 Discussion with local authority representatives how part of the Government funding can go to giving them eVective legal and technical support and much better information.

11. Are concessionary fares schemes suYciently integrated across diVerent modes of transport and diVerent geographical areas? 11.1 The maintenance of a Cheshire-wide concessionary fares scheme for over 20 years has assisted integration on bus travel for the people of Cheshire. The current scheme allows for concessions for all journeys beginning or ending in the County. 11.2 However there are a number of signiﬁcant cross border and multi-modal issues: 11.2.1 The County has a long border with Wales. The Welsh scheme is more generous than other schemes in that it oVers free travel at all times. The reimbursement formula is also more generous than English schemes in that a higher “generation factor” is paid and compensation is based on single fares rather than taking into account the eVects of returns and day tickets. 11.2.2 There is considerable cross border travel with Merseyside using both rail and bus. In the initial transition from the half fare to the full scheme, there was some confusion about passengers’ entitlements but this has been resolved. However post April 2008, diVerent reimbursement formulas could have an impact on the smooth running of the scheme. This goes beyond the Welsh issue where the rates are diVerent but the basis for calculation is the same. Merseyside pay a ﬁxed amount for all operators and divide up the “pot” based on survey information. The problems are exacerbated by the extent of cross border operations by the larger operators. 11.2.3 Cross border links with other areas outside Cheshire are more limited although there are some issues centring on entitlements to travel. For example the StaVordshire scheme entitles passengers to free journeys at all times. This can lead to confusion as passengers think that their entitlement extends beyond their County boundaries. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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11.2.4 The principal multi-modal issue is bus-rail. Cheshire has 47 stations but local journeys are dominated by bus. Most Cheshire districts oVer discounted over-60s railcards and rail vouchers for disabled people but this is the limit of concessionary fares activity. March 2007

Memorandum from Eric Martlew MP (TPT 42)

Copy ofLetter sent toEricMartlewMPRegardingConcessionaryFares from theTownClerk& ChiefExecutive,CarlisleCityCouncil Dear Ms XXXX Re Concessionary Fares Options for distributing specific grant for 2008 free “National Concessionary Fares Scheme” I refer to your request for comments on the four options being considered for the distribution of specific grant and would comment as follows: The basis of the grant distribution should take account of: — The prospective eligible take-up by persons qualifying for the scheme, which will be more in urban areas. — Factors that might encourage bus patronage such as shopping centres, attractions increasing tourist travel to and from the area etc. — The level of bus services provided and their destinations, which will influence take up. Of the four options available I believe option 1 and option 4 best meet these criteria ie Option 1 includes: — Day visitors, although the information to be used is very old (1991). This is an existing factor in RSG calculations and may be replaced by an “Attractiveness of an Area to Day Visitors” factor in the RSG calculation in future years. — Incapacity Benefit and Severe Disablement Allowance. Again an existing factor in RSG calculations. — Net In-Commuters, reflecting bus patronage. — Density Area Up-lift to reflect the number of potential destinations available, useful for tourist related travel, although it is doubtful how relevant it is for local travel. Option 4 includes: — Eligible population, obviously helpful to assess the scale of the potential take-up of the revised scheme. — Passenger journeys on buses. This is the only indicator within the two options based on locally provided data and is provided by the County Council. — Overnight visitors—to reflect the potential for travel in tourist areas. — Retail floor space—to reflect the potential demand for travel to out of town and principal shopping centres. Presumably as the major centre within the area this would benefit Carlisle with in flow from outside the area and cost Carlisle for return journeys. Unfortunately when the attributes contained in the four options are given values/calculated (based on your definitions) and are presented in cost terms the resulting grant distributed at second tier level is at odds with the actual pensioner ridership/remuneration to operators. This is due to the fact that information on ‘say’ passenger ridership is obtained from the Transport Authority and then pro-rata based on population rather than actual district ridership trends. Cumbria ridership statistics compared with potential grant distribution illustrates the inequitable nature of using transport authority data and then pro rataing it down to district (second tier) level.

Ridership Option 1 Option 2 Option 3 Option 4 2007–08 * £000 £000 £000 £000 Allerdale 632,843 195 127 187 465 Barrow 1,145,796 253 212 219 222 Carlisle 2,132,664 397 289 395 403 Copeland 492,869 222 153 211 203 Eden 68,346 93 118 98 325 S Lakeland 507,822 231 176 216 766 *Based on April to October 2007 trends. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Urban Authorities (Carlisle in above table) with up to 30 times the passenger ridership levels due to well developed bus networks get similar levels of grant (or less grant) as small rural authorities (Eden and South Lakeland) with very few buses and therefore insigniﬁcant concessionary ridership.

The only way to redress this major ﬂaw, (which is the reason why urban authorities (in two tier Authority areas) are in such ﬁnancial diYculties in meeting the net cost (after grant) of the 2006 free scheme.) is to distribute the grant to the Transport Authority rather than individual districts.

Broadly there is likely to be enough speciﬁc grant to fund the 2008 enhanced Concessionary Fares scheme but unless distributed to the Transport Authority (based on options under consideration) there will be very big winners (small rural authorities) and big losers (urban authorities). Due to the ﬂaw in the calculation the problems being experienced by urban authorities in funding the 2006 Scheme (£0.5 million overspend or 8.3% of net budget requirement by Carlisle) will become even more of a problem from 1 April 2008.

Finally if the Department for Transport have come to the view that funding the cost of the enhanced Concessionary Fares scheme by speciﬁc grant is the way forward, surely this should also be the view for grant funding for the 2006 scheme currently funded via RSG.

I trust the above comments will inﬂuence you in deciding on the most equitable way to distribute speciﬁc grant to help fund the 2008 Free “National” Concessionary Fares Scheme. November 2007

Supplementary memorandum from the Transport Salaried StaVs Association (TSSA) (TPT 43)

1. When TSSA Assistant General Secretary, Manuel Cortes, gave oral evidence to the Committee on 5 December 2007, he undertook to try to provide some information on the high profile, multi-agency approach to fighting crime on public transport in Greater London (Operation Lockstock). Set out below is information subsequently provided by the British Transport Police: Operation Lockstock ran from 6 November 2006 to 5 January 2007 targeting assaults on staV within the London Boroughs. The Operation was organised in partnership with the London Criminal Justice Board and Crown Prosecution Service and was underpinned by a Memo of Understanding between the CPS and BTP to ensure that assaults on staV are appropriately dealt with. Although the Operation has finished the BTP/CPS protocol continues to ensure appropriate action is taken in staV assault cases. The table below summarises performance during the two month period. Recorded crime increased by 40% and detections increased by 3.7% on the same period last year.

RECORDED STAFF ASSAULTS AND SANCTIONED DETECTIONS 06/11/06 TO 05/01/07 WITHIN METROPOLITAN BOROUGHS

Sanction %age Sanction Crimes Detections Detections London North 43 27 62.8 London South 78 31 39.7 London Underground 178 71 39.9 Total 2006–07 299 129 43.1 2005–06 total 213 84 39.4 Increase on 2005–06 86 45 3.7

It is believed that the increase in recorded crime may be due to increased conﬁdence of staV after extensive publicity for the operation. BTP rolled out the use of conditional cautions as an additional disposal for cases of common assault against rail staV in London. The BTP will complete a full roll-out of conditional cautions in London at the same time as the MPS, and nationally it will be rolled out, piecemeal’ in line with the local police force. During the operation, nine oVences were dealt with by conditional caution. All oVenders were required to write a letter of apology to the victim and were required to pay compensation (eight cases were required to pay £50 and one case £75). There has been 100% compliance with the conditions to date. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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2. It is our understanding that the increase in clear-up rates were better for more serious crimes than the overall all ﬁgure of 3.7% and TSSA particularly welcomes this improvement. 3. A similar operation has recently concluded (5 January 2008) and information should be available shortly. January 2008

Supplementary memorandum from Merseytravel (TPT 28A) As promised, I am responding to various questions raised by the Committee on 5 December 2007, it was asked what the percentage of TCAs is who already have smartcards.

Question 32

All TCAs will be issuing new concessionary passes in the form of ITSO compliant smartcards, (this excludes the London Boroughs who have been given an exemption by the Department of Transport until 2010). There are a number of TCA areas where smartcards have already been implemented. Some of the Smart card schemes are, what has been described as legacy schemes, that is those that are now compliant with and therefore cannot work with the new concession passes. These have been considered as though they are not smart in this response, as the new passes will have to be used as flash passes. ITSO Services Limited has been set up to look after those TCAs who do not have an ITSO compliant back oYce. The number of TCAs who are expected to or have signed up to this service, and who are therefore considered to be non-ITSO-smart is 253. The remaining TCAs are or will be soon ITSO compliant and are therefore in process of rolling out ITSO compliant equipment to their busses. On a percentage basis this probably accounts for between 5% and 10% of the bus population of England (depending on what defining you use for buses and for the total bus market); around 4,500 buses, expected to be equipped by, say, end 2008. Further take up will depend on how well Government “encourages” TCAs, and their bus operators, to equip their buses with ITSO compliant smart card equipment. With the right encouragement it would be possible to have all of the country so equipped within five to seven years, without causing any major skewing of the equipment market.

Question 53

The Chairman asked for a guide to smartcard types: There are basically two types of contactless smartcard. These are “memory” cards and “micro- processor” cards. Memory cards do not contain a processor and are therefore only able to store “data” on them. All of the intelligence (and security) is put into the [contactless] smartcard reader. These smartcards come in various sizes. ITSO has severalR memory cards in its portfolio of useable card types. Most, but not all of these, are based on Mifare, technology. They range is size from about 250 bytes (or characters), of data up to 4 Kilobytes (around 4,000 characters of data). They are usually lower cost than micro-processor cards because they only contain “memory” and do not have any processing capability. Micro-processor cards are, as their name implies, equipped with a small processor on them. They can therefore run “applets” (micro-processor speak for programs) that enable them to do more than the basic memory cards can. They can contain more than one application that can be invoked by the card reader calling the application via an application identifier. They can be much bigger than memory cards, but typically in contactless smartcard and transport applications they tend to be around 4 Kilobytes in size. Some of the older types of micro-processor cards can be quite slow. ITSO can work with either or the above types of contactless smart cards. (There are eight defined types of contactless smartcard media available in the ITSO Specification.) This is one of the selling points of the ITSO Specification in that implementers can mix and match card types according to the needs of the scheme and of the customer. This includes pretty much every smartcard that is manufactured to the ISO 144443 contactless smartcard standard. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Question 68 Timings of Oyster and ITSO. This is actually in my view a red herring! 1. In the first place it is my understanding that not all transactions within Oyster are done in 200 milliseconds or less. (Apocryphal evidence suggests that some take nearly a second). 2. Secondly Oyster is a closed system with a closed security system. ITSO is interoperable and has therefore to have a peer reviewed security that is capable of much wider use. This will inevitably have a small impact on transaction times. 3. Thirdly ITSO has a range of smart cards (see above) in its stables and some of these are indeed slower than Oyster, but some are the same platform as Oyster and would therefore be expected to be of similar speed to Oyster. 4. Fourthly, the Department for Transport’s own research has suggested that a transaction time of anything up to one second is quite acceptable as users of smartcards tend, when they touch their smartcards to the reader, to leave the smart card in the field for anything up to 1 second. This also is quicker than the time taken for a magnetic ticket to pass through the magnetic ticket transport (and much more reliable). 5. Fifthly users, so long as they are provided with a visual or aural “go”, signal will actually modify their behaviour (within reason) so that the pass works. (It is much less hassle for it to work than to have to “seek assistance”.) This is eminently shown in London where some individual transactions take much longer than others. ITSO therefore believes that majoring on transaction times is obfuscation, when all of the available evidence suggests that so long as a transaction is properly completed within less than one second (and ITSO’s benchmark is less than 600 milliseconds). Certainly in London, replacing magnetic tickets with smartcards would give transaction throughput benefits for everyone. It would be win-win for both users and for TfL.

Related to Q84

(The Encyclopaedia Britannica of Buses) The question relates to fraud. Experience has shown that when a new type of equipment is installed for the ﬁrst time in an area revenue tends to increase, with no other changes, by between 10% and 15%. This then tends to fall away as time goes on. One possible explanation that has been given is that this is because a new ticket machine makes everyone “more honest” until the new machine (and its quirks) become known. This therefore suggests that underlying general losses to unknown events (such as customers not paying or overriding etc) is to the order of 10% to 15%. As was inferred in the written evidence in many cases the re-imbursement of concessionary fares does not relate directly to individual journeys but is related to the results of surveys. In relation to the previous section (Q83) there is no requirement for personal data to be written into the card. This data can all be held securely in the back oYce, as currently. The Department for Transport has provided guidance to TCAs on this in its bulletins. I trust that this is of assistance to the Committee, please let me know if you need anything else. January 2008

Memorandum from P G Rayner (TPT 44) The Position as at Early March 2008. A Personal View: P G Rayner. Having been actively involved now for over 10 years I am mindful that in some senses “I know too much” and have as a consequence tried to restrict this comment to essentials. Firstly as the recent history is important if one is to understand the development of concessionary travel it should be noted for more than 20 years some communities have provided free or reduced rate travel for their older citizens and for those with mobility diYculties. However it was not until the Transport Act 2000 that the half price bus fares were made mandatory and some of the funding was provided centrally. This was received with mixed feelings and immediately one could see that only those authorities who believed in the value of such schemes implemented the system without political back biting and resistance. This has its roots in party politics but the pattern has never revealed that to be too much of an inﬂuence for many places out of sympathy with national government of the day have good and generous schemes. So the Transport Act 2000 made some money available but because that was a long time ago and the money was, and is, mingled in with the general grants and not ring fenced it exists but is frequently forgotten when the debates rage on how much money this or that authority gets. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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Next in 2002 the EU ruled that men should not be discriminated against and be eligible aged 60 same as women and money was also provided in the general grant and again not ring fenced for that purpose. That equalising of gender had some disbenefits for a considerable number of men were still at work and used the pass to go to and fro, quite legally but it brought forward the statement that the pass was essentially for leisure and pleasure, provided for persons on a pensionable income. That was the start of the “Perk” rather than “Freedom Pass” as an essential right debate which I shall come back to later. In his Budget speech of 2005 the then Chancellor announced free bus travel for pensioners to commence in April 2006 which is the scheme in operation as I sit here on a sunny Sunday morning boring you all with this. Whilst it was well intentioned and it would be churlish to complain the scheme did cause considerable confusion. The key words “Bus Only” and “Local” meant that diVerent authorities interpreted it in diVerent ways. Some improved on that minimum, others restricted existing schemes of value to pensioners to pay for the mandatory bus free pass which they were obliged to provide. I have over 50 examples of anomalies with regard to application covering many aspects of the scheme but to list them would be of little value. £212 million was the figure Central Government put towards this and on funding again many arguments took place about how fair or unfair the allocation was. Again I could quote many examples, over 20 at least. SuYcient to say the money was not ring fenced and it was used in diVerent ways. These problems are still ongoing but as it will change yet again in a few weeks time I will move to the 2008 position. In doing so may I remind you that NPC in the Pensioner Charter says: “Free nationwide travel on ALL public and local Transport”. Again in his Budget speech of 2006 the then Chancellor announced free travel nationwide from April 2008. This fundamental change required an Act of Parliament. We therefore examined the Bill as it passed through both Houses of Parliament and proposed for The Bus Concessionary Travel Bill (England) several amendments to improve what we saw as shortcomings. One needs to note the words “Bus” and “England” in the title. We essentially wished to broaden the definition from Bus to Public Service Vehicle but our eVorts were in vain. We had a number of other amendments and concerns but again space prevents my listing them. When it was clear we would get no change to the Act I along with our President Frank Cooper was able to see the Minister Rosie Winterton MP and leave with her and her advisers a detailed document. Part of that document is given below so you should see that we have tried to cover everything we can reasonably cover without appearing too unappreciative of the intention. There will still be no equality across the country, and even across England. The exclusion of train, tram, Metro and Underground means confusion and uncertainty when people with the new Nationwide Bus Pass travel within large conurbations. The potential exclusion of Dial-a-Ride/Taxi Card from the concession remains a genuine concern, not withstanding Clause 8 which suggests a future Secretary of State could add entitlements and modes of transport. Many older and disabled people are unable to use the buses for obvious reasons. It is also unclear how the Government can agree with another EU State (Republic of Ireland) on the issue of cross border bus, train and tram travel for older persons, when the arrangements with Wales and Scotland are unclear for bus only. Likewise, the anomaly that enables a Northern Ireland pensioner to cross into southern Ireland, but prevents them from travelling within the rest of the UK, also needs to be addressed. Local authorities in tourist areas have claimed they will receive insuYcient additional funding for the new scheme, because it ignores the extra demand that will be generated by older tourists visiting the area. Teignmouth for example claim they will receive £1.1 million, but need double. Is this genuine concern part of the overall funding formula? NPC believes local businesses in such resorts benefit from the influx of Pensioners and this cross benefit should be recognised. The NPC continues to have diYculty in reconciling the claims of the former Secretary of State during debate that free travel would be allowed, “. . . for example from Cornwall to Cambridgeshire or from Durham to Dorset” with the fact that coaches will only be obliged to provide the National Concession where their routes have stops less than 15 miles apart. It is also unclear whether Park and Ride or Tour Buses are included in the concession. The financial formula is clearly complicated and open to diVerent interpretations; which has lead to many councils already using the pensioner travel issue as a reason for possible Council Tax rises. However, evidence from Wales suggests that there has been a 10% increase in paid for travel since the introduction of free travel. Such cross benefits must therefore be used more often to challenge costs. The NPC also notes that pensioner free travel on trains on the Heart of Wales’s line and on the Conwy Valley has doubled the passengers using the routes and some trains have had to be increased in length. The Heart of Wales Forum stated: “We are seeing over a 1,000 extra journeys a week and by encouraging people to use Public Transport we achieve a number of benefits. Firstly we provide mobility to the many that do not have access to a car, and secondly we are bringing business to the many small communities along the line who depend on tourism and doing this without adding to road congestion”. (Source: Western Mail). The NPC is therefore concerned that more prominence should be given to these multi modal benefits. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [O] PPSysB Job: 376402 Unit: PAG4

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Travel to get to early GP and hospital appointments (before 9.30 am) do need separate funding and separate finance. Since the health of the nation’s older people would improve with the inclusion that free travel allows, then the health services must either give later appointments or separately fund the travel. There are a number of key issues upon which the Act is unclear. For example Bus travel where there is more than 15 miles between fare stage stops are not local travel. The position on Dial a Ride and Taxi Card is unclear. Wales Scotland and Ireland are excluded and yet enjoy themselves other benefits. So from 1April 2008, three weeks time there will still be some areas of uncertainty. What is clear however is that the Act states Nationwide (England) Bus only and after 9.30 am. In essence that is what the government is funding and all the Act guarantees. Another £250 million pounds is being allocated for this extra pensioner movement outside their home localities. I know of course that we all get something diVerent, many of us because there is no peak travel have no time restrictions, and others get Train, Tram and Underground. Everywhere we look it is diVerent. What to me is the easiest way to describe the position from April 2008 is to say that what you get in your home location you are not entitled to when you travel away. Your local Bus pass when you get say to London or Birmingham or Manchester will still only get you on the buses and after 9.30 am. Likewise the large conurbation pensioner when leaving London etc will only get Bus only and after 9.30 am away from home. Let’s consider the funding since it is such a contentious issue and the background to all the bad press and misunderstandings. Remember the 2000 Act money is still in there somewhere and along with the extra built into the grants for the 2002 “men equality of age eligibility” is also still there somewhere. Add to that the £212 million for the existing concessions and the £250 million extra for this April, some ring fenced but not entirely and you have a right old muddle allowing any politician, however straight and fair, to pray in aid shortages. It is a melange of formulae and they do not know in my view where they are. In addition there has always been some local money for most council’s value to some degree the older people in the community. So that enables Government to say over a £1 billion is put towards pensioner travel. By querying and questions in an attempt to get clarification we are in danger of being seen as ungrateful. It is clear to me that there will be many places where older people will be unsure of their entitlements at home and away on 1 April. NPC will issue a clarification document and this paper is a first attempt to get the factors down in one document. Next the Bus Companies themselves are causing a great deal of the problem. The Act intends that they should break even and it says they should be “No Better No Worse” as a consequence. But by the very way they calculate their fares, by the diVerent ways they issue their tickets and by the way they have been able to alter routes and manipulate the market under the deregulated structure that exists has meant they are making money, and at the same time complaining they are not getting enough. Almost impossible for us to prove our many examples are valid for scrutiny. Bus Companies have Public AVairs Managers and Press oYcers and they can and do brief journalists, who will happily run with scare stories. “Granny get your Coat” etc etc. Our attempts to engage national press has been not very successful and in any case it is mostly the local papers that do the damage. Councils who mistrust or dislike national government and who either do not understand the detail of the finance, or do not want to, also brief the press against us. So it is a problem. It is best tackled locally so where it comes to notice in your local area of buses altering services, claiming for longer journeys than actual travel. Bring it to the notice of your council and importantly the press, write letters, get petitions but be sure of your facts. Where NPC can help we will back you up with quotes. Let me list a few of the sensation seeking items that the press has used. Public Toilets to shut to fund pensioner travel. Pensioners joyride means people cannot get to work as the buses are full. Council Tax to go up, other groups in receipt of concessionary fares will lose their entitlement. Many and varied are the stories. Seaside towns, and other tourist centres despite spending millions on advertising their facilities to get people to visit, have the cheek to say the funding for visitors is insuYcient. So we are up against it. It’s a dog’s breakfast and no other large organisation is fighting. Help the Aged and Age Concern and others are all relatively non critical. Some even encourage taking £37 of Tokens rather than the Pass, which may suit some very restricted people but is of far less value if one travels away from home. How therefore do we proceed? My stance is not that we have a “Right to Free Travel” because we are old, but that we contribute to society and we therefore have a “Case for Free Travel” to make. We need to be able to list those benefits so that our travel cannot be dismissed as a perk. It is easy to see Pensions, Health, Carers, Carer’s Allowances as rights. But free travel can be less easily justified. A sample list of advantages to society to make our case are: — Transport has a major part to play in enabling older people to continue to live in their own homes and participate fully in the life of their local community. — The presence of pensioners in the town centres is good for local business. — Older people travelling out of peak times can improve the marginal costs of services and thus retain services to the good of the community as a whole. Processed: 28-03-2008 23:49:30 Page Layout: COENEW [E] PPSysB Job: 376402 Unit: PAG4

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— The need for transport increases with age. The use of cars for short journeys is a high pollution factor and an accessible free transport system would solve both problems. — There is a proven link between improved health and the ability to be included in the community rather than isolated at home. — The administrative cost of the many diVerent schemes, which takes up several hundreds of administrators and revenue protection people issuing tickets and tokens, could for the most part be saved by a central scheme. — Older people could provide unpaid, well informed persons to contribute to committees on services, mobility and other older peoples’ issues. By this we do not mean more attendance at “Stakeholder Groups”, but real inclusion, involvement and participation. — In Wales it has been proved that “paid for” travel has increased by as much as 10%. — Marginal costs on some routes can be improved and the service retained for all. We should stress we do not believe we are asking for an uneconomic alternative. Older people do not want charity and something for nothing. Older people for the most part have contributed to society and in their retirement if they are “included” will feel they are still able to contribute by that inclusion. Apart from the contribution to the debate on travel arrangements, ie access to vehicles and premises, vehicle design, staV training, location of pick up points etc, there are many other subjects on which Older Persons and Disabled people could contribute. To my personal knowledge there are many older people on voluntary work—Samaritans being one such example, or another case where an older person is passing on his skills by teaching woodwork to blind people. There is a vast untapped resource out there and if the Government recognised the cross departmental beneﬁts that accrue from the Freedom Pass—to health, to increased economic activity, to voluntary work and had the political will to achieve those desirable things—Mobility is the key. Best of luck in your local campaigns. Sorry for the length of this document but it is produced so we can get out a brief and Press Release for the 1 April 2008 launch. March 2008

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