House of Commons Transport Committee Bus Services after the Spending Review Eighth Report of Session 2010–12 Volume I: Report, together with formal minutes, oral and written evidence Additional written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/transcom Ordered by the House of Commons to be printed 12 July 2011 HC 750 Published on 11 August by authority of the House of Commons London: The Stationery Office Limited £22.00 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 Associate Public Bodies. Current membership Mrs Louise Ellman (Labour/Co-operative, Liverpool Riverside) (Chair) Steve Baker (Conservative, Wycombe) Jim Dobbin (Labour/Co-operative, Heywood and Middleton) Mr Tom Harris (Labour, Glasgow South) Julie Hilling (Labour, Bolton West) Kwasi Kwarteng (Conservative, Spelthorne) Mr John Leech (Liberal Democrat, Manchester Withington) Paul Maynard (Conservative, Blackpool North and Cleveleys) Gavin Shuker (Labour/Co-operative, Luton South) Iain Stewart (Conservative, Milton Keynes South) Julian Sturdy (Conservative, York Outer) The following were also members of the committee during the Parliament. Angie Bray (Conservative, Ealing Central and Acton) Lilian Greenwood (Labour, Nottingham South) Kelvin Hopkins (Labour, Luton North) Angela Smith (Labour, Penistone and Stocksbridge) 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. Publication 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 http://www.parliament.uk/transcom. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are Mark Egan (Clerk), Marek Kubala (Second Clerk), David Davies (Committee Specialist), Tony Catinella (Senior Committee Assistant), Edward Faulkner (Committee Assistant), Stewart McIlvenna (Committee Support Assistant) and Hannah Pearce (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Transport Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6263; the Committee’s email address is [email protected] 1 Contents Report Page Summary 3 1 Introduction 5 2 Bus industry: structure and funding 7 Commercial and subsidised bus services 7 Funding and costs 7 3 Impact of the Spending Review 9 Consultation with local communities 16 4 Alternative public transport provision 19 Community transport 19 ‘Area-based integration’ transport 22 5 Concessionary travel scheme 23 6 Conclusion 26 Conclusions and recommendations 27 Annex: the value of bus services 30 Formal Minutes 32 Witnesses 33 List of printed written evidence 33 List of additional written evidence 34 List of unprinted evidence 37 List of Reports from the Committee during the current Parliament 38 3 Summary Buses are the most available and frequently used mode of public transport in England, carrying two thirds of all passenger journeys, yet they remain a comparatively undervalued mode of transport. The Government’s 2010 Spending Review included three decisions with implications for the funding of the English bus industry: first, a 28% reduction in local authority revenue expenditure, second, changes in the formula for concessionary travel reimbursement, and finally, a 20% reduction in the Bus Service Operators’ Grant (BSOG) from 2012–13. Our inquiry examined the funding of bus services in England (outside London) in the light of the Spending Review. The combination of the reduction in local authorities’ revenue expenditure and changes to the Department for Transport’s concessionary fares reimbursement guidance in 2011–12, with the 20% reduction in BSOG in 2012–13, has created the greatest financial challenge for the English bus industry for a generation. The combined impact of these funding changes will, in some parts of the country, have a disproportionately adverse impact on the provision of local bus services and the level of bus fares. As a result of these budgetary pressures, over 70% of local authorities have already decided to reduce funding for supported bus services. The extent of the reductions varies considerably, although, in general, rural, evening and Sunday bus services will be most affected. In the most extreme cases, some local authorities have decided to withdraw all their subsidised bus services. Some local authorities have withdrawn services with inadequate or no consultation. The evidence we have received from bus users around the country demonstrates the anger and concern that people feel about the impact of these decisions on their everyday lives. Some of the most vulnerable people in society, including the elderly, will be most affected by these changes. We recommend that the Department for Transport, in conjunction with the Local Government Association (LGA), collate information about the decisions taken by local transport authorities in respect of tendered bus services in 2011–12 across England. The Department should seek information about the provision of alternative transport modes, such as community transport, in those areas where local authorities have scaled back tendered services, due to budgetary reductions. The Department should identify examples of best practice of local authorities that have responded innovatively to budgetary pressures to provide a cost-effective, flexible mix of local transport services, which provide an acceptable level of public transport for people who might otherwise be isolated. The LGA should play a key role in disseminating these examples of best practice across local authorities. The evidence is unclear about the impact of the Spending Review on commercial bus services. The facts need to be established for the effect of these policy changes to be accurately measured, and for future decisions to be soundly based. The Department for Transport, in conjunction with the LGA, should compile details from local authorities about the impacts of the Spending Review on commercial bus services in England, outside London, in 2011–12. A similar exercise should be conducted following the implementation of the reduction in BSOG in 2012–13. We welcome the Department of Transport’s 4 commitment to review the arrangements for BSOG more broadly. As part of this review, the Department should consider whether targeting BSOG in a different way, possibly through greater devolution to the local level, would improve the current approach. Bus services are often an integral part of the local community. It is only right, therefore, that local people should have the opportunity to voice their opinion if the local authority or integrated transport authority proposes significant changes to bus services that it supports. Some local authorities have faced very significant reductions in their revenue budgets, but it is important that local people are properly consulted when significant changes are being proposed to their bus services. Local people should have the opportunity to give their views on the relative importance of different bus services and to suggest innovative approaches. We call on the Department to task Passenger Focus to develop a ‘consultation toolkit’ for local authorities within the next six months. This should provide best practice guidance on how local authorities can hold meaningful consultation processes with local communities about bus service proposals. The growth of the community transport sector could mitigate, to a degree, the effects of the loss of subsidised bus services. We welcome the Department for Transport’s decision to allocate £10 million to rural local transport authorities to encourage the growth of community transport in their area. However, the evidence suggests that community transport schemes are unlikely to replace more than a small fraction of withdrawn local authority-subsidised bus services. Community transport operators are themselves often reliant on public funding. If the Government genuinely wants to encourage the growth of the community transport sector, it should legislate to permit the use of the concessionary pass on a wider range of community transport services. There is evidence of some potential for local authorities to reduce costs through better co- ordination, planning and delivery of different types of transport services, including public buses, community transport, education, social care and health. The Government should identify ways to overcome the barriers (including regulatory or legislative barriers) to co- ordination, drawing on good practice around the country. It is also clear that closer partnership working between local authorities, bus operators and community transport operators will be necessary post-Spending Review, in order to better utilise diminished resources. We encourage local authorities and integrated transport authorities to use the provisions within the Local Transport Act as means to achieve better