Latest Government figures show that there were 80 million fewer bus passenger journeys last year than the year before, a decrease of 1.8 per cent.
Free bus passes for OAPs and the disabled cost Government and Councils around £1 billion each year, and another £200 million is given to Bus Operators in the form of reimbursement on fuel duty for qualifying bus journeys, even to multinational groups who abandon small communities in order to monopolise profitable city centre routes.
Council-supported bus services in rural areas have reduced by approximately 40 per cent in the last decade, yet tens of millions are being spent on vanity infrastructure projects and “green” transport schemes which do nothing to improve service provision. Reductions tend to fall on evening and weekend services as these were less likely to provide access to jobs, shops, healthcare or schools; but cutting evening services can reduce daytime patronage, and weekend services can have an economic value in providing access to leisure services as well as to jobs in the night time economy.
So how could Government increase bus patronage, encourage Operators to retain marginal services, and protect those services that are commercially unviable but socially necessary?
ABOLISH THE ENCTS SCHEME
The English National Concessionary Travel Scheme (ENCTS, otherwise known as “the free bus pass”) provides pensioners and some disabled people free off peak travel on all local bus services in England at a cost of £797.9 million per year, paid through Local Authorities (LAs) to Bus Operators by reimbursing lost cash revenue on the principle that they would be “no better and no worse off” as a result of the scheme.
In September 2014 Greener Journeys produced a report in which they claimed that, having analysed the costs and benefits of the ENCTS scheme, that for every £1 spent on it “generated at least £2.87 in benefits” to the economy as a whole. It states “half of the benefits accrue directly and immediately to concessionary travellers themselves (enhanced bus service frequencies, smart and integrated ticketing).” Greener Journeys extrapolated Department for Transport assumptions on the elasticity of bus service kilometres to passenger demand to estimate that “the provision of concessionary travel will lead to… a 10 per cent increase in the number of bus kilometres”. The report went on to predict that “the additional patronage generated by the concessionary scheme may mean that operators are able to deliver services which may otherwise be at risk.”
But analysis of official statistics by the BBC Shared Data Unit found the UK bus network has shrunk by 8 per cent in the last decade, which equates to 214,400 fewer bus kilometres. There are a number of reasons why Britain’s bus network is shrinking in size, according to John Disney, a transport researcher and lecturer at Nottingham Business School:
“Operators have definitely, over the last 10 years, become much more risk averse and so they are really concentrating on what they consider to be their core routes and are not really bothered about much else. At the same time many local authorities, which would have stepped up to subsidise unprofitable routes, have reduced this spending.”
The Local Government Association (LGA) is warning that this continued decline could increase traffic congestion and reduce air quality in local communities, that marginal bus services will remain under threat, and that because LAs are spending at least £200 million a year to subsidise the ENCTS, other services such as bin collections and filling potholes are being neglected.
Councillor Martin Tett, LGA Transport spokesman, said:
“It is hugely concerning to see such a steady decrease in bus journeys. Buses provide a vital service for our communities and a lifeline for our most vulnerable residents to go shopping, pick up medication, attend doctor appointments or socialise with friends. Councils know how important buses are for their residents and local economies and are desperate to protect them. It’s nearly impossible for councils to keep subsidising free travel while having to find billions of pounds worth of savings and protect other vital services like caring for the elderly, filling potholes and collecting bins. Faced with significant funding pressures, many across the country are being forced into taking difficult decisions to scale back services and review subsidised routes. The way the concessionary travel scheme is funded by Whitehall has not kept up with growing demand and cost. By… properly funding the free bus pass schemes the Government could help us support and maintain our essential bus services, reduce congestion and protect vital routes.”
Only last month Kent County Council introduced “The Big Conversation”, a public consultation where they invite the public to “explore ideas” to find out if there is a better, more sustainable way of providing transport to rural communities not currently served by Operators. Pointedly they highlight the fact that they have issued over 252,000 ENCTS bus passes, and are now looking to reduce funding for bus services. Derbyshire County Council held a similar consultation two years ago, and many other LAs including Lincolnshire and Northampton have seen supported bus networks decimated.
As regards ticketing, this has been achieved not through ENCTS but BSOG, which provides a partial reimbursement of fuel duty paid by Operators on qualifying journeys (currently around 34 pence per litre), with an additional 8 per cent uplift for Operators who have introduced “smart and integrated ticketing”.
The Greener Journeys report went on to claim that around 20% of the benefits of the ENCTS scheme were enjoyed by other bus passengers and other road users from transport network improvements (modal transfer from car to bus, with associated highway decongestion benefits, environmental improvements and accident savings). But again, modal shift has been in he opposite direction. The BBC analysis attributes the shrinking bus network to “rising car use”. A report produced by the Department for Transport “Road Use Statistics” in 2016 explains that although traffic growth slowed over the last two decades, and levels fell for three consecutive years after the 2008/09 economic downturn, recent trends show a resumption of traffic growth as GDP recovers, and provisional statistics suggest that car traffic has returned to pre-recession levels. This debunks the Greener Journeys claim that the ENCTS scheme creates modal shift from car to bus, as now there is no such shift.
The final benefit claimed by Greener Journeys was that to the wider community (wider economic impacts from increased levels of volunteering, health and wellbeing benefits associated with more active lifestyles greater centralisation of social and health service provision). This last claim is particularly interesting as later in the report Greener Journeys admit that they “have not been able to quantify the impacts of concessionary travel on social inclusion, mental health and wellbeing.” Despite this they went on to predict that the magnitude of these benefits is “potentially substantial”, with the Royal Voluntary Service estimating that the value of older people participating in voluntary work, social care and child care is £10 billion, £34 billion and £3 billion respectively, without actually providing any evidence whatsoever that these figures would reduce if the ENCTS scheme was withdrawn, instead vaguely assuming that modal shift “might occur”.
Martin Griffiths, Stagecoach CEO, claims the government is putting bus services at risk by concealing the cost of free travel for pensioners from the public, according to the boss of Stagecoach, who compared the policy to ordering Tesco to give OAPs free food. He said:
“I won’t provide a service and not get properly paid for it. You would not go to Tesco and say to them – ‘great idea, we’re going to let OAPs have free food’. They cannot stand up there and be dishonest with people and say we’re going to have a scheme but not fund it properly. That punishes people who do pay, whether it’s full-fare paying adults or the children or young adults who I want to be the passengers of the future. Are there some passengers who board our buses who could probably afford to pay? Of course they could. As a voter, I want to know bus services are going to be protected. They have to decide what is the prioritisation. They can’t be dishonest just because these people vote – 8 million of them, they all vote so don’t tamper with the concession scheme. Politicians are being disingenuous with all of us.”
He is correct. Already “passengers of the future” are being exploited to plug the gap left by the loss of revenue as a result of the ENCTS scheme and the reimbursement levels which are leaving Operators worse off, despite promises to the contrary. In Greater Manchester the previously heavily subsidised child fares and risen very significantly since the introduction of ENCTS to cover the funding shortfall for the scheme. And in Derbyshire the b_line scheme, which offered a 50 per cent discount on adult fares to children aged 11 to their sixteenth birthday, was withdrawn, instead relying on Operators to provide any subsidy to child fares. For young persons aged 16 to 19, instead of giving 33 per cent off full adult bus and train fares, the discount was reduced to just 25 per cent.
Operators would be more inclined to offer generous discounts to children (and OAPs if the ENCTS scheme was withdrawn) for commercial reasons if those passengers paid a proportion of the fare (say, half) and were reimbursed the difference in full. OAPs never demanded such a scheme, indeed where bus services have fallen under threat because of reduced funding, they often say they would rather pay something towards the fare.
The main problem with the ENCTS scheme is that Operators are not fully reimbursed for the revenue lost by pass holders no longer paying fares. Calculating reimbursement clearly requires an ability to determine what revenue Operators would have received if the scheme did not exist. As this cannot possibly be known, this has to be estimated, and this is therefore dependent on knowing the number of journeys that would have been made by concessionary travellers (known as “non-generated journeys” – they would have happened anyway). This is also not known. Then a calculation is made to determine how many additional journeys have been made by concessionary travellers (“generated journeys”). This can be calculated by taking the current number of journeys (known) and subtracting from it the number of non-generated journeys (unknown) giving an unknown number of generated journeys. There are also additional small provisions for increased administration and operating costs.
The principle of reimbursement supposedly ensures that Operators are “no better or no worse off”; no better to ensure that EU State Aid regulations are not broken, and no worse to ensure – in theory – that Operators do are not punished. EU Regulation Number 1370/2007 states that an allowance for ‘reasonable profit’ must be made in the reimbursement of bus operators. There is an implicit allowance for Operator profit within the revenue forgone element of reimbursement through the average fare forgone. It goes on to recommend that a profit allowance be made, in the form of rate on return on capital employed for additional peak vehicle requirements. The total reimbursement usually works out such that Operators are paid between 30 and 50 per cent of the average adult fare. However, research conducted by the University of Hull suggested that journeys undertaken by concessionary passengers since the introduction of the scheme have increased by 34 per cent. This means that if, for example, 100 passengers were previously paying £1 each per journey before the scheme (total £100), and then 134 passengers (100 passengers plus 34 per cent) paid nothing, at best Operators would receive £67 based on a 50 per cent reimbursement of the £1 fare, a loss of a third (£33) of the expected revenue.
Perhaps the most disappointing aspect of the Greener Journeys report was that, in all of its 31 pages, mention of Operator reimbursement was limited to a brushing away of any interest: “We have assumed that this principle [that Operators should be ‘no better and no worse off’ as a result of carrying concessionary passengers] holds and that the net impact of concessionary travel on Operator profitability is zero. We note however that Operator reimbursement is technically complex and contended.”
The LGA is calling on the Government to increase funding for the ENCTS scheme. They say Government funding for the statutory scheme has fallen by 39 per cent since 2010 and councils are having to use their own funds to fill the gap. “Unless the Government commits to fully funding concessionary fares, elderly and disabled people will be left stranded with a free bus pass in one hand but no local buses to travel on.”
By abolishing the ENCTS scheme altogether, Operators would be free to charge a reduced commercial rate for OAPs and the disabled, as National Express already successfully does. The funding provided for the scheme, around £1 billion from central and local Governments, could be devolved to LAs to reinstate withdrawn socially necessary services, evening and Sunday services and other unviable or marginal services, particularly in rural areas. Although the overall number of journeys made under the ENCTS scheme would undoubtedly reduce, these would almost entirely be socially unnecessary and repeated leisure journeys, and this number would be largely offset by more worthwhile journeys in areas which currently have a very poor or even no bus service but would see their services improved.
ABOLISH THE BUS SERVICE OPERATORS GRANT
Around 80 per cent of bus services nationally are commercially viable. These services are primarily funded by passenger fares, with no direct funding from councils. However, Operators receive a Bus Service Operators’ Grant (BSOG) which is a fuel duty rebate paid directly to Operators by Government at a cost to the Exchequer of £199.5m per year..
The fact that the BSOG is tied directly to fuel duty means that its benefits accrue to Operators irrespective of the wider social and economic benefits of a service and is paid even when a service would be profitable without it. Large Operators can enjoy many millions of pounds of BSOG funding despite concentrating their operations on hugely lucrative town and city centre services, while at the same time abandoning marginal and unprofitable services in rural areas, leaving them to be picked up by small, family run concerns subsidised by LAs. It is these very services that are at risk of being cut, meaning that effectively the BSOG scheme makes the rich Operators richer and poor ones poorer.
The Campaign for Better Transport recently detailed how council funding had been cut by £182 million – 45 per cent – since 2010, including £20.5m last year for same period the UK Bus operations of First between them received £39,609,689.20 of BSOG funding, DOUBLE the total amount cut from spending on bus services by LAs, and representing 12.5 per cent of their operating profit. This meant 199 routes were altered or completely withdrawn last year, 3,347 since 2010. Steve Chambers, the group’s public transport campaigner, said:
“Our latest report confirms that the slow death of the supported bus continues, with local authority bus budgets suffering yet another cut this year. The resulting cuts to services mean many people no longer have access to public transport, with rural areas hit especially hard. The cuts would have an adverse effect on the local economy, with people prevented from getting to shops and businesses, affecting people’s mental and physical health too.”
The LGA would prefer this money to be devolved to local authorities who could target the subsidy at the most socially necessary but otherwise unprofitable services. This approach has been trialled in Better Bus Areas (BBA) with encouraging initial results; for example patronage has grown in Merseyside since devolution of the BSOG and the formation of their BBA.
The BBA principle is sound enough, but the almost £200 million spent on the BSOG scheme should be pooled with the £1 billion spent on the ENCTS scheme to effectively turn the whole country into a BBA. The only caveat would be that some of the money spent in BBAs is diverted to “green and sustainable” aspects of bus service provision, which does absolutely nothing for service provision.
ABOLISH LOW EMISSION BUS SCHEMES
In March 2018 the Government announced £48 million for “cleaner, greener buses” as part of a “New Ultra-Low Emission Bus Scheme” aimed at cutting emissions and ensuring cleaner and greener journeys. The programme will see LAs and Operators bid for a share of the fund, which they can use to buy hundreds of new ultra-low emission buses as well as the infrastructure to support them. Buses Minister Nusrat Ghani said:
“We are doing more than ever before to reduce greenhouse gas pollution across all modes of transport and we are committed to ensuring nearly all cars and vans are emissions-free at their tailpipes by 2050. In order to achieve this ambitious target, the transport sector is going to have to change dramatically over the next couple of decades – and buses are no exception. We are confident this scheme will encourage councils and operators to invest in these ultra-low emission vehicles – speeding up the full transition to a low emission bus fleet in England and Wales.”
Claire Haigh, Chief Executive of Greener Journeys, said:
“[The] announcement is a fantastic step in the UK’s fight against air pollution and we’re delighted that the government has recognised the important and vital role that buses play in helping reducing harmful emissions. The cleanest diesel buses emit fewer emissions overall than the cleanest diesel cars, despite being able to carry 20 times more passengers. Buses are also the lifeblood of our communities, connecting families and getting people to work. [The] announcement sends a positive message that the government is serious about connecting the communities it serves and committed to putting the bus at the heart of the clean air solution.”
The current funding comes as part of a wider £100 million scheme announced in November 2016, including £30 million last year to support low-emission buses. £2.25 million was awarded to The Harrogate Bus Company will transform journeys for thousands of passengers in the North Yorkshire town. The Harrogate Bus Company is a subsidiary of Transdev,
The Harrogate Bus Company have recently introduced eight 100 per cent electric powered new buses, and install charging points at key locations to keep them on the move, although they admit that buses will have to stand “a little longer” at bus stations to recharge, and timetables have had to be adjusted to accommodate this. Transdev CEO Alex Hornby said:
“I’m delighted and immensely proud that we’re one of only 13 organisations to secure funding this year under the Government’s Low Emission Bus Scheme. The aim of our innovative bid was to attract funding that will take electric buses to the next level in the UK, and the contribution will allow us to introduce the next generation of electric buses to Britain and our home town of Harrogate. It’s a further sign of our determination to set new standards for bus travel and is great news for our passengers.”
Transport Minister and Harrogate and Knaresborough MP Andrew Jones said:
“This is positive news for our area and for the quality of life of local people. Harrogate is set to become a low emission bus town. Transdev have shown huge ambition: the technology for this is a first for the UK. Improving air quality and cutting carbon emissions are transport priorities for the Government. But they are more than that. They are a priority for local people who want our air to be clean and our environment improved. That is why this news is so significant, because it will deliver those goals for local people. There were many bids from large organisations for this cash. It is a testament to the powerful case put forward by Transdev, and supported by Harrogate Borough Council, that we have won £2.25 million of that cash. The Harrogate bid was a winner competing with those big cities, such as Sheffield, Leeds, Milton Keynes and Birmingham.”
The new buses for The Harrogate Bus Company will operate on an already profitable route, and will feature free superfast 4G Wi-Fi, USB power points, plush leather coach seats, personal tables with quilted leather seating and a chill-out area on the lower deck. Which is all very good, but does nothing for those areas of North Yorkshire who have had their services cut or withdrawn altogether. Public transport campaigner for the Campaign for Better Transport (CBT), Lianna Elkins, said:
“Buses across Yorkshire have been hit hard by funding cuts. These cuts come on top of cuts to school transport and the underfunding of free pensioner travel; together these threaten the viability of whole bus networks and will lead to ‘transport deserts’ in some rural and suburban areas where there is no public transport at all.”
In Yorkshire, the total budget for supported bus services has been slashed by £2.7 million from £32.6 million to £29.8 million, a figure of nine per cent in the past financial year. The biggest cuts were in North Yorkshire County Council (NYCC) budgets, with a 51 per cent fall in funding of £1.4 million. Yet a grant of £2.25 million has been given to an Operator which has a turnover of £8.9 million and just a few years ago imposed huge cuts to bus services across Harrogate (Harrogate Advertiser, July 17, 2009). Changing from diesel to electric buses and installing multi million pound infrastructure than can only be used by a handful of buses does absolutely nothing to improve service provision. It doesn’t reinstate services to the isolated communities of rural North Yorkshire, doesn’t enhance frequencies on poorly served routes, and doesn’t actually do anything to reduce air pollution, as the carbon dioxide not produced by electric buses (though nobody has thought about how the electricity is generated) is more than offset by the cars now replacing withdrawn bus services. Surely this money would have been better spend preserving socially necessary but commercially unviable bus services?
Rachael Maskell, MP for York Central:
“If we are to address these [air pollution] problems then we really need to have effective services. We already know there’s narrowing of services on a Sunday and into the evening. That results in people using private transport which adds to the problems. We need to encourage as many people as possible to use public transport in order to improve the air quality. We want to encourage more public transport, it’s there for everybody and it increases mobility. Every time bus services are cut back it does have a real impact on the wider community.”
It’s not just in North Yorkshire that the backslapping is going on to celebrate unproductive vanity projects. Down south, Oxford City Council have secured £1.7 million of Government funding under the same scheme earlier to upgrade 78 buses to be ultra-low emission over the next 18 months – and convert five of Oxford’s sightseeing buses to become the city’s first fully electric double decker buses. Which is marvellous. Except at the same time Oxfordshire County Council have cut their public transport budget, including the Sunday X47 service from Ardington to Wantage, Ashbury, and Swindon, peak time Abingdon town services 41, 42 and 44, and service 65 from Faringdon to Swindon bus.
BUSES FOR EVERYONE
Three Government schemes, setup with the best of intentions, are targeting the wrong areas. They are providing greater benefits where they are not needed at the expense of those who often have no alternative. The ENCTS scheme provides what is effectively a blank cheque to OAPs and the disabled regardless of their means, or whether their journeys are necessary, and yet children, the very people the Government should be encouraging to use public transport, are being penalised to make up the shortfall in ENCTS reimbursement. Children in rural areas are just as isolated as the elderly, need the same access to services, to learn and to play.
The BSOG scheme simply enhances the profits of already affluent Operators, while having little effect on the demise of rural services. Indeed, recent changes to the scheme has meant that BSOG cannot be claimed for services supported by LAs; these services are often the ones most at risk of withdrawal.
And the Low Emission Bus Schemes simply subsidise capital investment for large, multinational groups with a hollow promise of cleaner air, forgetting of course that while the generously remunerated Directors gaze out of their office windows at their shiny new buses, the rural pensioner stares wistfully in the distance, hoping for any kind of bus at all.
Better, then, to pool all of this money, around ONE AND A QUARTER BILLION POUNDS each year, and give it to LAs to support those services which the larger Operators feel they cannot run. The marginal, the commercially unviable services. The rural, evening and Sunday services. Get communities moving again, get people back on the buses. That’s how to reduce air pollution. That’s how to reduce isolation. Supporting local families, including OAPs and the disabled in getting out and about. Supporting local, family owned bus Operators who specialise in providing such services. Scrap the disproportionately unfair subsidised fares, the profit enhancing grants, the vanity projects and all the administration that goes with them. Scrap the interference from “quality partnerships”, devolved regions, Mayors, and egos sitting on PTE boards. Scrap the lot. Let Bus Operators run buses on a level playing field. Let buses get communities moving.