‘A Smart Road to Devolution’ The Role of the Bus

There have been quite a number of conferences in recent months and all have touched on the apparently linked topics of devolution and re-regulation to various degrees. CPT’s triennial Northern Bus Summit held at the Manchester Conference Centre, took as its title ‘A Smart Road to Devolution’ -The Role of the Bus, and attempted to give all sides a platform to have their say about the role of the bus in the coming years. Inevitably much of the ground covered will have been gone over before in our pages so I will try to cover the main points with the emphasis on any new strands of argument I perceived.

Facilitating the conference was the extremely capable David Guest, BBC North West News Reporter, with former Transport Minister, Norman Baker, now Chair of Bus Users UK, chairing the questions and panel discussions.

The conference introduction was given by Michael Renshaw, Executive Director of Transport for Greater Manchester (TfGM), who spoke of Manchester as a vibrant place with 1.4m people working for 100,000 businesses, 0.3m people working in financial services, a growing creative and digital sector and 100,000 students. He claimed Manchester would grow at a greater rate than any other city outside London, which was ‘consistent with our historic ambitions and very much aligned with our future ambitions.’ This ambition was behind the local authorities getting together to form a Combined Authority in 2011, so that they could work together more efficiently and effectively across the city region and an agenda that included integrated planning and housing, employment, education, training, health, social care and transport. He claimed local politicians of all parties were ‘full square’ behind the strategy, at the heart of which was economic growth to benefit all of the residents of Greater Manchester. Central to this was the public transport system and it was vital that the bus played a full and expanded role. It needed to be part of a truly integrated system in which the roads were not clogged with congestion and the air was not dangerously full of emissions. He said the real challenge was, ‘how precisely can bus fill that role?’ which was the central theme of the day’s debate.

The irony of Dave Guest’s complaint that Michael had ‘nicked’ his glass of water as he walked off will not have been lost on those who bought and have continued to invest heavily in the award winning local bus companies.

You could be forgiven for wondering whether the Transport Minister with responsibility for buses, Andrew Jones, actually exists. I think this is the fourth successive conference I’ve attended at which he was billed to appear but has cried off and we’ve been treated to a video of him instead. I’m sure he has things to do but it gives the impression buses are low on his agenda, neatly avoids him having to answer any questions and more importantly, can’t help him get a feel for what the industry thinks.

His message was that though he noted passenger satisfaction levels of close to 90% and many examples of operators and local authorities working well together to deliver increased patronage, there were some places where more can be done to achieve better passenger outcomes. The Government was committed to devolution. Bus services were ‘inherently local and must take full account of local circumstances and needs.’ It was, he said, ‘right that areas that have ambitious plans to grow and develop should be given the powers they need to achieve their objectives.’ He declined to comment on the process in Tyne & Wear but said that he was keen to learn from it when the Buses Bill was developed ‘and ensure that we develop a more transparent and straightforward process for moving to franchising.’ A number of ‘groundbreaking’ deals had been signed with local authorities which permitted them to franchise their local bus services if they wished ‘and franchising continues to form a core part of ongoing devolution deal conversations. Our plans go beyond the five devolution deals which already include bus franchising powers.’ Franchising wasn’t the only option and some deals included partnership proposals; not all areas would adopt the same solutions.

‘Of course we recognise that the bus industry and many smaller operators will be concerned about the possible effects of franchising… It is important that we hold on to the innovation that the private bus sector operators have brought to the industry. Smaller operators should form part of the mix of bus service providers, regardless of the regulatory model used and I want to ensure that any authority that moves to a franchising model considers how the procurement process can facilitate the involvement of SMEs to ensure they can compete in a franchising environment,’ he said, concluding, ‘I want to see local authorities, LEPs and bus operators working together to provide better bus services that compete with other forms of transport and I want local authorities to be able to implement the model of delivery that will deliver the best service to passengers, be that franchising or partnership. It’s about what works for passengers to make this industry even more successful.’

At the end there was an awkward silence as nobody clapped.

The first of the day’s five sessions was entitled ‘Devolution – Franchising vs Partnership’ and it gave the operating side of the industry the opportunity to set out its stall. This was the third time in a month I’d heard Stagecoach Chief Executive, Martin Griffiths, speak and his stance was robust but positive and certainly not antagonistic. Martin argued, ‘it makes absolute sense to develop local solutions to answer local challenges and priorities’ and that Stagecoach has a very devolved structure where local companies have the freedom to work together with stakeholders.

In Greater Manchester it was an enormous challenge and those who were taking it on were to be applauded. He pointed out that ‘with that responsibility would come accountability’. Transport was fundamental; it was ‘the glue that holds our communities together.’

For Martin, the good news was that, right across the north of England, we were starting with high quality and well used bus networks that were well invested in and provided good value for money. ‘It would be a very different discussion if we were talking about an industry that was in terminal decline,’ he said. In the last month operators had delivered on their promise to introduce multi operator ticketing in Greater Manchester. The industry had been product lead but now had to change to being consumer lead, because it we haven’t really built long term relationships with customers and to go forward we would have to do that.

Referring to the capital, he pointed out that passenger satisfaction was higher outside London and 90% of services outside London were commercial compared with only 75% in London. London was different, he stressed.

‘It wasn’t all perfect, we don’t live in a vacuum and there are challenges’, he said. Local Authority mileage was down 24% over the last four years and we couldn’t be immune from the latest spending cuts. Congestion was getting worse – Manchester’s roads were 40% slower than a year ago – with the result that it was costing Stagecoach Manchester £7m a year to put in extra buses because of it.

He could have talked about the Tyne & Wear Quality Contract Scheme all day long but didn’t – ‘what matters is that we all move on.’ What mattered was that more people used buses and we had the right services, but it had to be affordable and it had to have the right balance between what local authorities and Government do and what operators do. He hoped it would be ‘a time to draw a line in the sand and move on positively and constructively’. If we didn’t there would be no winners, only losers and the biggest losers would be passengers.

Martin thought a new dialogue was needed now. What the Minister said had included a lot of ‘we want and we wish.’ This was Governments did, but it was down to the people in the room to make it happen. ‘We need to be the delivery line. We need to get the right regulatory framework, the right delivery powers, the right approach and the right dialogue to take it forward,’ he said. It needed to involve everybody, to be innovative, to incorporate new technology and it had got to be affordable.

He supported devolution but was clear that if it foisted on local communities, a bus franchising system, or any other inappropriate mode, there would be: ‘declining networks, declining use and worse services, and what that would mean was higher fares and tax rises for local people. We don’t want to go there, we’ve been there before.’

Martin got that, if you were an elected local politician, you needed the bus industry to deliver and perform, but we needed to take the debate away from one of structures and control. We needed to recognise what each party brought to the debate –  operators, local authorities and other stakeholders. ‘This is not the time, when we are facing austerity and challenges around funding, to lose the benefit of what the private sector can bring in terms of innovation, in terms of operating and in our ability to fund and deliver technology solutions, because with all due respect to my public sector colleagues, that is what you need us for. The private sector can be your delivery arm,’ he said, referring to the example of Sheffield with its ‘constructive dialogue’ and done at a cost we could all afford.

‘To some people, franchising is a magic bullet to a whole lot of improvement; trust me it isn’t.’ He kept asking the Manchester authorities where they thought there were gaps in the network. There was an elephant in the room for Martin, ‘because if this is about cross-subsidy, and I think it is for a number of people, you need to be very careful. This was why the industry got into the state it got in back in the late 1970s and 1980s, because you kill the goose that lays the golden egg. The market will drive what the market wants. If we have to look at where there are not commercially viable services we have to have a discussion and use new technology and perhaps alternative modes to make sure we address that. Just to take capacity out would be a huge mistake. We need to look at the shape of what networks should look like and we’re up to discuss that anytime,’ he said, adding, ‘this isn’t about smart or multi operator ticketing, we want to deliver it and we can deliver it, and it needs to go beyond that.’

The industry had come a long way in 30 years and was at a critical stage. One of the things that had come out of the Tyne & Wear experience that really concerned him was that there were those who thought that if franchising didn’t work ‘we can always go back to the deregulated model.’ He was clear, ‘Trust me, we can’t do that. It has taken the industry a long time to get to where we are. He concluded, ‘What we do next is really important. We can either go down a one way street in the wrong direction or we can spread our wings, grasp the devolution agenda with all it means for local people, and take our businesses forward. It would need the right structures and relationships. I know which path I want to go on; I hope we can convince everyone to go in the same direction.’

Rail transport had conspired against Ian Morgan OBE, CPT Chairman and Deputy Chair of the Wellglade Group, and though he arrived in time for his own presentation he had missed that of Andrew Jones. His approach was more aggressive than that of Martin Griffiths, saying that following the shock announcement of the Greater Manchester devolution deal a year ago the industry saw itself as ‘collateral damage to a whim,’ saying ‘we were expendable in the rush to devolution, we feared for our businesses built up painstakingly over many years, our livelihoods and in many cases our life’s work was under threat.’

Emotions and tempers had run high as ‘we struggled to understand what had gone so badly wrong that a majority Conservative government, the champions of free enterprise, feels it necessary to give local authorities the power to close our businesses down.’ Ian said the industry, ‘accepted that the Government would push ahead with the devolution agenda and also accepted, though we might not agree with it, that the Government will provide powers in the Buses Bill to allow local authorities to introduce a franchise regime where they wish to do so. And here is my worry. I fear that it is inevitable that where a local authority, for whatever reason, does pursue the franchise option, that we will see smaller operators squeezed out. Some will say, well that’s business, and business is always vulnerable to the effects of Government legislation and policy, which is true, but it is extremely disappointing that there does not seem to be any appetite to compensate those operators who, through no fault of their own, lose their businesses. It seems grossly unfair that a family business, built up through hard work and dedication, probably over more than one generation, would be allowed to disappear overnight as a result of Government policy.’ Though time was running tight, he hoped the Government would reconsider on this point and urged operators to lobby their MPs.

Having made these points, Ian said it was time to move on. Devolution should hold no fears for the bus industry because, by their nature, local bus services were just that; local services provided for local people by a bus operator with local knowledge. He firmly believed that delivering high quality friendly bus services that went where passengers wanted to go, at times when they wanted to travel and at a fair price was a shared responsibility. ‘When operators work together with local authorities, real benefits for the passenger are achieved. Partnership working has seen passenger numbers rise, complaints fall and has kept fares affordable. Most importantly of all, it has produced staggeringly high customer satisfaction statistics: what more can we do?’ He asked.

Pointing out that financial restraints on local authorities were behind the majority of services being withdrawn Ian said this was going to get worse as buses had to compete with services such as health and emptying the bins. In many cases operators had stepped in to save services that would otherwise have been lost. It was possible at the moment because, ‘the deregulated regime gives us the freedom to innovate, to be flexible and to respond to demand, all with the aim of keeping passengers satisfied and hopefully exceeding their expectations,’ he said. ‘The Buses Bill must ensure… the industry can continue to serve its customers.’

The more enlightened local authorities already realised that franchising would cost a huge amount when there isn’t a lot of money about.  Ian concluded: ‘We know that more can be done. The industry is not complacent and we are ready to rise to the challenge; working with local authorities to improve still further what we offer to passengers. All this can be, and already is being achieved without the heavy hand of re-regulation.’

A panel session followed in which Martin and Ian were joined on the platform by Kevin O’Conner, MD Arriva UK Bus, Martin Dean, Go-Ahead’s MD of Bus Development, Ben Colson, Chair of ALBUM and John Birtwistle, Projects Director for First. A lively and varied debate raised a lot of points, rather more than there is space to cover here.

With operators having put their side of the argument, it was over to the local authorities for the second session, ‘Devolution – The need for local decision making.’

Tobyn Hughes, MD Transport Operations for the North East Combined Authority (NECA) began by talking about devolution. ‘Despite being the best place in the world, the North East does face a few challenges’, he said. These included high unemployment, low economic productivity, low skills and attainment levels, an aging population and in many parts a shrinking population. ‘We, the people who live and work in the North East, are going to rebuild our economy. We’re going to increase the number of jobs, we’re going to increase economic output and upskill our young people. In terms of economic weight it doesn’t punch its weight but it will do again,’ he said. ‘To do that, we need business support and we need control over inward investment decisions,’ he claimed. ‘We need to decide where funding is spent on developing infrastructure, we need influence over education, health and social care and, of course, transport… How could any plan to build a better society and grow the local economy not have buses right at its heart? That was why bus policy was at the heart of every devolution deal signed so far. A lot of them reference bus franchising, although not all, but the local bus is the lifeblood of our local economies and whichever way you are planning it, if you don’t get that critical piece right you are on a hiding to nothing and you will fail. We need to make sure that buses are part of the plan. We can’t afford to leave it to chance. We can’t just hope that by some act of randomness, or good fortune or even the alignment of the stars, that buses will do what the local area needs. We have to have an active involvement to ensure that economic planning and special planning is aligned to transport planning.’

Turning to Quality Contracts, he said, ‘It is worth re-emphasising that it is about improving local connectivity. It is about introducing a simple, more integrated public transport system, providing cheaper fares for young people, a stable bus network that would grow with the local economy and a system that is accountable to the very people who pay for its existence.’

He recognised that people in the room didn’t like it, commenting, ‘one industry grandee referred to it as confiscatory’ and ‘nationalisation without compensation’ was how one of the CEOs of a big bus company had described it. ‘There is no question that it is controversial and there is no question that there is a key decision to make about whether it is fair to introduce a system of regulation, franchising, contracts or whatever. There is no question that doing so has a financial impact and probably a detrimental one on the existing bus companies. I have the scars on my back to confirm that it was far from easy developing the Quality Contract Scheme.’

He described the decision of the QCS Board as ‘wholly disproportionate.’ ‘You do know that we don’t agree,’ he said. ‘The QCS Board had a statutory job to do, to assess the evidence in front of it and produce opinion and that it has done; an opinion is what it is and we do not agree with it. You also know that it would be very dangerous for us to disregard that opinion and move ahead regardless. The statutory and legislative process is fraught with risk for authorities that proceed on that basis.’ He didn’t regret having done it for a second claiming, ‘we’ve shown the way.’ ‘New legislation is being developed and that legislation will learn from our trials and tribulations. Along the way we’ve awoken an industry, and I’m sorry that does mean you in this room, that really needs to understand the people it serves.’

His organisation would not be giving up. Its goals for operators ‘remained simple’. ‘Grow public transport patronage in the round, maintain the vital local accessibility that keeps local communities and economy ticking over, get better value for public money (which remains code for “our resources are shrinking so you’ll need to shoulder more of the burden”) and we’ve always said that if we can achieve these by any means then we will be happy… We have tried several times to nail down a partnership that would do it and we’re happy to try again but there can be no excuses, don’t blame the legislation, don’t blame your competitors, don’t blame the Highways Authority…, and don’t blame the CFA for God’s sake they’re there to protect you as a competitive industry and certainly they’re there to protect your customers. So if partnership doesn’t work, then bus franchising remains the default answer.’

‘We are looking at what next to do with the QCS proposal and no decisions have been taken yet,’ he said. ‘We’ll be looking at the new Buses Bill, particularly its franchising provisions, when it is published, to see how we can use them to best effect.’

Michael Renshaw, Executive Director of TfGM, took to the stage again, to say that what the Greater Manchester Combined Authority (GMCA) wanted was ‘the very best outcome for Greater Manchester’. He said the important issue was not that referred to in the conference title, it wasn’t really even about transport, for politicians locally and nationally ‘this is all about sustained economic growth and benefit to all citizens. To support that we need to secure and provide a truly integrated public transport system that stands comparison with the best in the world.’

GMCA had spent a great deal of time and effort, matched by the operators, to try and get the most out of Quality Partnerships, which they first introduced in the late 1990s. He ran through the many successes of these partnerships, among the latest being the A6 Quality Partnership scheme on one of the city’s busiest corridors. Since 2000 it had invested around £0.33bn on supporting bus as a mode.

‘Partnership has delivered, but frankly, from our perspective it has not delivered enough. The real issue is not what happens to bus in the next few years, the real debate is what creates the best platform for us to secure bus as a very valuable and growing component of the public transport network. That’s a matter to look at in the context of outcomes over the next 10, 20 and even 30 years. We would definitely recognise that Quality Partnerships have not failed to deliver through the want of effort on the part of individual operators but we get to the bottom line which is that there are inherent limitations that can’t be overcome. We in Manchester absolutely want to see simple integrated ticketing and we know that that’s what passengers want. As we stand here today we can’t actually come up with an integrated transport network that is planned and is efficient and can be presented to the public in a coherent manner, nor can we actually promote public transport with a single identity across modes and across bus as a mode. That thwarts promoting public transport and bus in particular to users.’

‘Finally we’d say that somewhere like Greater Manchester warrants a process and system that seeks a very focused and clear responsibility by a body of individuals with whom the buck stops. We absolutely want to grow patronage. We welcome the fact that satisfaction is high and it needs to stay at those levels but we are far from complacent. We recognise that there are too many people who do not see the bus as a valid or credible form of transport in the city region and there are some people for whom it is unable to currently satisfy their travel needs. We want to join with operators in our endeavour. We want to work with both incumbents and the industry in general, but our absolute priority is in terms of setting the landscape that ensures both economic growth and financial stability. We want the industry to be in a healthy position and benefit from that growth.’

For the discussion that followed, the two speakers were joined by David Young, Interim MD of SYPTE and David Brown, Chief Executive of Transport for the North.

A telling point was when Norman Baker asked Tobyn Hughes ‘Aren’t Quality Contracts dead?’ to which he replied, ‘Possibly’.

Much of the questioning centred on whether local authorities could afford franchising and whether, if they could afford it now whether they would be able to do so in the future?

It’s all about the customers and accordingly the third session was ‘Passengers – What we want from our Bus Service’. The speaker was David Sidebottom, Passenger Director for Transport Focus. It’s a shame to skip over something so positive but much of his presentation has been covered in previous conference reports.

The ensuing discussion saw David joined by Claire Haigh, Chief Executive of Greener Journeys; John Moorhouse of TravelWatch NorthWest; Claire Walters, Chief Executive of Bus Users UK; Adrian Grant of the TAS Partnership; and Ella Beevers, a member of the Youth Parliament. Ella, spoke of extortionate prices and outdated policies for young people and said something needed to change. She wanted to see anyone in school uniform given automatic half fares.

A recent survey suggested that less than half of people in the North knew what the Northern Powerhouse was, and in a short presentation David Brown attempted to enlighten people. ‘We hope to have more clarity of the key priorities in the next two to three months’ he said.

Unlike the Transport Minister, Senior Traffic Commissioner, Beverley Bell, was there in person. Beverley single handedly took on the fourth session entitled, ‘The Changing Role of the Traffic Commissioner in the 21st Century.’ I’m not really quite sure where this fitted with the conference theme but it was interesting. When she had been appointed, 15 years earlier, there had been no objectives for Traffic Commissioners but now there were four, among them that buses run on time (though she could only regulate operators not authorities) and enforcement was concentrated on the seriously non-compliant. A lot was being done to make her organisation more streamlined and efficient and it would have tangible benefits for compliant operators. ‘Please read my annual report’ she said, which is worth the effort.

Rounding off the day was a closing debate that saw no less than 10 people on stage, most of whom had spoken earlier though CPT President, Bill Hiron and Ian Jones of Backhouse Jones were two notable additions.

In one of the most telling and succinct comments of the day, Ian Jones suggested scrapping the HS2 as a vanity project and investing instead in HS3 from Manchester to Leeds. He didn’t care about getting to London 25 minutes quicker; it was the congestion that took him over an hour to get into Manchester that bothered him.

In addition to the Conference there were a number of trade stands in the catering area with Ticketer, Mistral, Lloyd Morgan, CILT, BYD, Parkeon, ADL, Checked Safe, Volvo, React, Hill Dickinson, JR Buzz, and Backhouse Jones, among those represented.

Last word

Conferences always present a conundrum in that if you have a large number of speakers the time for questions becomes limited and if you have a small number of speakers you don’t attract as many delegates. In trying to achieve the laudable aim of covering all sides of the debate there were a lot of presentations, and a panel of ten people for the final session was a tad unwieldy, but there was a lot to be gleaned from the day and everybody contributed, though perhaps they were not pressed as hard to defend their views as some would have liked.

I’ve listened to the representatives of both sides of the argument repeatedly over the last year, and though I now have a clearer idea of what the local authorities want they have not come close to convincing me that what they say they want will deliver the end they look to achieve and furthermore that franchising, or rather contracting which is what it really is, is a better way than partnership of obtaining it. The risks are all the greater when the lack of public money there will be available to support it is taken into account. And, worryingly, when I listen to the likes of Tobyn Hughes and Michael Renshaw and their casual dismissal of the immense efforts and achievements of operators (who are not perfect) I fear that the people they will need to make bus operation thrive or survive (depending on your viewpoint) if franchising is introduced will not find it is an environment in which they feel valued and wish to work.

At the end of the day it will be the passengers that will judge the success or otherwise of whatever path is followed. Yes everyone would like better services and some will travel more if the ticketing options are simpler but they won’t want to pay more and they won’t want worse services than they currently have on their route. Therein lies the risk of a return to cross subsidy, the supposed importance of a network over meeting the market need and all of this relying on the public purse for funding. Because, as was pointed out, if franchising doesn’t work you can’t just go back to what you had before because it will have been destroyed. The thing about gambling, and franchising is a gamble, is never risking more than you can afford to lose.