Bus Industry

Lord Rosser Excerpts

Thursday 18th October 2012 Lords Chamber

[Lord Rosser]

My Lords, in the light of the comments of the noble Lord, Lord Bradshaw, I am not sure whether I am required as a bus user both in London and outside London to declare an interest in this debate. I also suspect, having listened to the contribution of my noble friend Lord Snape, that there will be little support behind me, at least from those who have spoken, for what I have to say. But, nevertheless, we proceed.

This is neither the best attended debate nor a debate that has attracted a large number of speakers. However, its subject matter is of considerable importance since more people travel by bus than travel by every other form of public transport combined. I am grateful to the Library of the House for the comprehensive and helpful briefing pack it has provided. Before I go any further I would like to thank the noble Lord, Lord Bradshaw, for giving us an opportunity to discuss developments in the bus industry. One development was a Competition Commission report on the industry outside London, which found that what it described as widespread market segregation had occurred as a result of operator behaviour.

However, the bus industry also has much about which it can be pleased. The 2012 bus passenger survey by Passenger Focus, the official passenger watchdog, found that on average 85% of passengers in England, excluding London, were satisfied with their bus journeys. My noble friend Lord Snape, whose advocacy of and support for buses knows no bounds, referred to the survey.

The chairman of Passenger Focus also commented that while overall passenger satisfaction across the surveyed areas was at a consistently high level, bus passengers rated almost all other specific journey factors lower, with wide disparities in ratings of value for money not only between different areas but between different operators and services in the same area.

The Library briefing pack includes a section on the policy of the coalition Government. It points out that the coalition agreement made one mention of bus services when it stated that the Government would,

“encourage joint working between bus operators and local authorities”.

That is a little vague—no doubt because the Conservatives in opposition had proposed regulation and the introduction of quality contracts, whereas the Liberal Democrats stated in their manifesto that they would,

“give councils greater powers to regulate bus services according to community needs, meaning local people get a real say over routes and fares”.

[Lord Snape]

Will my noble friend tell the House how many quality contracts were made during the period of office of the previous Labour Government?

[Lord Rosser]

As I understand it, there were no quality contracts. The legislation was amended in 2008 because the previous legislation has made it an enormous mountain to climb to implement quality contracts. The noble Lord himself made reference to the local transport authorities that are currently seeking to pursue quality contracts in accordance with the legislation.

At Second Reading in the House of Commons of what became the Local Transport Act 2008, the Liberal Democrats said:

“The concept of having partnerships and contracts is right”.—[Official Report, Commons, 26/3/08; col. 220.]

[Lord Bradshaw]

Having twice been baited on the subject, I will say that I agree entirely with the noble Lord, Lord Snape, that quality contracts are quite unnecessary if co-operation between the local authority and the bus operator is good. That is why I started with the business about implementing Part 6 of the Traffic Management Act 2004, which was passed by his Government.

[Lord Rosser]

I note what the noble Lord said, but I am quoting from what his party said in the House of Commons—that the concept of having partnerships and contracts was right. If he is now saying that he does not agree with the statement made by his own party in opposition, of course he is welcome to do so. It is clear that on the issue of contracts, the Conservative Party view has prevailed and the Liberal Democrats have shifted their ground, even though the Minister responsible for the bus industry is a Liberal Democrat.

The bus industry, certainly outside London, is facing a difficult time. The cut in local transport funding of some 28% has led to local authorities cutting back on support for local bus services, and subsidies paid direct to bus companies have also been cut by the Government by one-fifth. In some rural areas, council-supported services make up nearly all the network, yet many of those who use buses have no other means of transport. Cutting a bus route or bus services can cut an opportunity to take up employment or to stay on in education and go to college. That hardly seems consistent with the Government’s declared policy of making it easier to gain skills and take up employment.

We have already set out the significant tranche of cuts to the Department for Transport’s budget that we would have accepted to meet our own commitment to halve the deficit in this Parliament. However, unlike this Government, we would have protected support for local bus services. While the level of financial support from government is very important, it is not the only factor that affects the availability and affordability of local bus services. The ability of local transport authorities to play a role on behalf of passengers, and potential passengers, matters as well.

In government, we legislated to enable transport authorities to, in effect, reregulate buses through the use of quality partnerships, which have led to very successful agreements in some areas, or quality contracts. But the experience of some of the ITAs that have begun to use these powers, particularly in relation to quality contracts, suggests that we did not go far enough. Efforts to introduce quality contracts by integrated transport authorities have been met with specific threats by one of our major national bus companies to close bus depots and sack drivers.

We need measures, which are not currently available, that would provide some protection to enable transport authorities that want to go down the road of quality contracts to do so without facing a long drawn-out and potentially costly process, and even then still face the prospect of being frustrated for no good reason. It should be for the transport authorities, which have a rather wider role and responsibility for the provision of transport within their areas than the bus companies, to decide whether a quality partnership or a quality contract will best deliver their goals and policy objectives on behalf of those whom they represent, and they should not be impeded in achieving either the quality partnership or a quality contract by actions designed to frustrate by either bus companies or indeed government—which I will come on to.

As the recent House of Commons Transport Select Committee report said, in a fairly lengthy but important quote:

“The Quality Contract option is a legitimate one for a local authority to choose. It must also be seen as credible in order to enable the local authorities to apply pressure in cases where competition or partnerships are not working satisfactorily. Local bus operators should not seek to frustrate moves towards a Quality Contract. That no local authority has implemented a Quality Contract more than a decade after the provisions were introduced suggests that there are significant hurdles to overcome, particularly for the first local authority to go down this route. The legislation itself, as amended by the Local Transport Act 2008, seems satisfactory but the process is still lengthy and risky”.

The Select Committee went on to say:

“We recommend that the Government makes the Better Bus Areas funding available, in principle, to support Quality Contracts as well as partnership schemes”.

However, that is precisely what the Government are not doing. The Minister responsible for buses has decided to exclude transport authorities that pursue quality contracts from accessing the Government’s better bus areas fund, to which the Government are implementing the commitment to devolve bus subsidies. The various strands of bus funding should be brought together in a single pot, which could then come under the democratic control of transport authorities.

However, the Government’s decision on access to the better bus areas fund is obviously designed to make it financially difficult, if not impossible, for local transport authorities that wish to go down the road of quality contracts to do so. How can the Government say that they are in favour of devolving powers and yet be prepared to penalise those authorities that decide they wish to pursue tendering, which they are entitled to do under the law? Tendering as an option is not such a radical idea. It is commonplace in much of Europe as well as in London, where a Conservative mayor has not shown any enthusiasm for dismantling the system. In fact, some of the operators opposed to quality contracts in this country are subsidiaries of wider groups that regularly bid for and secure contracts in Europe.

[Lord Snape]

Can my noble friend tell your Lordships’ House whether or not our party is now in favour of the London experience being spread countrywide, and has he cleared such a commitment with the shadow Chancellor?

[Lord Rosser]

I did not say that we are in favour of it being spread countrywide, full stop. What I have said is that it should be up to the transport authorities to decide whether to go down the road of quality partnerships or quality contracts, as they are entitled to under current legislation.

We need to protect the funding for bus services. We also need stronger transport authorities accountable for decisions over fares and services to the communities they serve, and with the confidence to decide freely what kind of relationship they want with bus operators. Unfortunately, the Government have decided to go in exactly the opposite direction.