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Views – Bus Franchising the right way forward

Monday 6th November 2017

John Mooney RBA Transport Consultancy Director

Last year, there were close to 2.5 billion bus journeys in London. For those who live and work in the capital, integrated public transport with simple fares and ticketing and a recognizable brand, are taken for granted. The Bus Services Act of 2017 will mean nothing to those London users. For just as many bus users outside of London, the Bus Services Act can make a huge difference, as long as the public bodies who look after their transportation interests, are bold and fast.

It is quite staggering to realise there is no UK national bus policy in place. Try googling it! Since the mid-eighties, when de-regulation of buses was introduced, successive Governments have tinkered with bus policy, but have failed to slow down the massive reduction in bus use. It is incontestable that bus deregulation, introduced in 1986, has failed. Statistics from DfT reveal that, last year, all but one region saw a fall in bus passenger journeys. Many regions have clocked up several years of annual decline. The North East has seen bus patronage fall for each of the last seven years, and the East Midlands has seen their bus patronage fall for each of the last six years.

In Greater Manchester, 350 million bus journeys each year in 1986, dropped to 220million by 2000. Sheffield has also seen a dramatic reduction; from 268 million bus journeys in 1986, down to 102 million last year. Before deregulation, South Yorkshire had a reputation for cheap, frequent and comprehensive bus services. Not any more. Bucking the trend, bus patronage in London increased by 31% from 1.8 billion trips in 2004/05 to 2.36 billion in 2014/15.

Reasonably unique in a deregulated area, Reading Buses have been very successful. With targeted investment in alternative fuel buses, a great programme of innovation for customers, and highway priority measures introduced by the council, they have seen an increase in bus journeys of 22%. But this, and a few other examples (Brighton notably) are the exception, not the rule.

Research by INRIX and the Centre for Economics and Business Research predicts the annual cost of congestion in the UK will rise by 63% by 2030 to a staggering £21 billion. They reckon the cumulative cost to 2030 could be in excess of £300 billion. 70% of workers commute by car, and their direct costs and indirect costs are increasing all the time. Sterling work by the Urban Transport Group (representing the PTE areas) calculates that bus trips in PTE areas generates £2.5billion economic benefits, and £1.4 billion bus trips for shopping generates an estimated spend of £27 billion.

So, increased bus use will benefit the economy. But will the existing deregulated model, outside of London, where it is pretty much a free market, with little integration, deliver these benefits?

Currently, local bus services in England are delivered within a complex, deregulated arrangement, involving central government, local government, the Traffic Commissioners and bus operators. In effect, bus operators have almost total freedom as to whether, how, where and when they run their services, providing they meet certain requirements in terms of relevant notice etc. There is no requirement to offer any minimum level of frequency or coverage, integrated ticketing, or connectivity with other modes.
PTE areas have lobbied hard for a number of years now for the opportunity to plan their whole transport networks better, as a means to tackling wider economic and social challenges. Their lobbying has paid off with the introduction of the Bus Services Act early summer 2017. This will give Local Transport Authorities the power to really develop integrated networks. Instead of any number of bus operators providing services for a commercial return, and bidding for subsidised services (generally Sunday, evening and rural services), the whole network will be planned, and then procured as one or a number of franchises. This will allow for:

  • A sensible balancing of resources across the network, with frequencies based on current and future demand
  • A planned bus network that best integrates with trains and trams
  • Consistent standards and a recognizable brand for passengers
  • Simplified fares, multi-modal ticketing with caps, such as in place in London

The biggest single challenge to fully implementing bus franchising is funding. The whole pot of money available in any one area (revenue through bus fares and public money used for concessionary fares, fuel duty rebate and subsidised bus services) may not be enough in the short term to deliver the great network that will encourage car users to switch to bus. This is worrying, because town hall support for bus services is reducing steadily as public sector budgets continue to spiral downwards. CfPT research revealed that £30m was cut from local authority bus funding last year. So, the Transport Authorities will need to dig deep, initially, if they want to realise the wider economic benefits of reduced congestion and increased bus use. It will be worth it in the long run, as the decline in bus use is reversed, and the numbers start to get back to those seen in the mid-eighties.

Rail franchising has been successful. Despite some failings in the UK rail network, mainly around the lack of investment in our Victorian infrastructure (which seriously hinders the ability for supply of seats to meet demand) passenger numbers are at record levels. In most areas of UK, passenger satisfaction levels are up. Train operators are responding more rapidly to technical challenges and passenger expectations, and are all investing heavily in innovation. That investment is enabled by lengthy franchises, and reasonably robust predictions in rises in revenue. DfT has also played its part by requiring operators to set out their innovation plans and levels of investment at competition stage.
So, the natural evolvement of bus franchising, should be public transport network franchising. Let’s get the bus franchising programme moving quickly, but at the same time, be mindful of the future opportunities for integrated transport network franchising. The benefits for passengers, the economy and the environment will be significant. Also, and separately, the concept of total transport is being pursued actively (notably in Northamptonshire) where all of a wider region’s local bus/education/social care/health transport needs are planned and procured through one unit, maximising vehicle utilisation, investing in quality, and realising huge savings to the public purse. If these concepts can be merged with rail and bus franchising, so all forms of transport are planned and procured together, then economic growth, sustainability, connectivity, capacity management and value for money can all really be delivered. But one step at a time, bus franchising first.

Contact us here at RBA if you would like to better understand how bus franchising will impact on our transport networks.

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