Local Bus Market

Iain Stewart Excerpts

Thursday 10th January 2013 Westminster Hall

[Iain Stewart (Milton Keynes South) (Con)]

It is an honour to serve under your chairmanship, Mr Walker, and it is always a pleasure to follow the Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman). I certainly enjoyed working with her and my Select Committee colleagues on the inquiry.

Bus travel certainly affects many of our constituents, and I am probably not alone in having the issue generate a fair chunk of my e-mail inbox and postbag. It was one of the first issues that I had to deal with after I was elected, and the Minister may recall that he answered an Adjournment debate that I secured within a few weeks of the general election. Before the election, my local bus company had unilaterally decided completely to reorganise its route network and timetable, without holding effective consultations, which created many problems.

I will not trouble hon. Members with the details, but many of the issues have now been satisfactorily resolved with the council, the bus company and a new bus users group. None the less, that underlines the importance of the issue and the need to have effective consultation between all the different players in the industry. There has been a happy outcome; bus usage is up in Milton Keynes. The latest figures show an 8% increase. We even got a name check in the Government’s document, “Green light for better buses”. I hope that some of the lessons that we have learned locally will be of wider benefit to the country.

The main conclusion that I draw from our investigation is that each local market is different. There is no optimal one-size-fits-all system of regulation for local bus services. What works in a large city region might not be applicable to a small cathedral city, which might be different from a new town, which might be different from a semi-rural area with many market towns and villages.

As part of our investigation, we visited Oxford, which had the most impressive transport model. I accept though that it might not be directly applicable in other areas. Good co-ordination between the different bus companies and the local authority on timetabling, routes, the location of bus stops and, crucially, ticketing has led to a welcome increase in bus usage. The model allows the ideal form of competition, without the negative aspect of different companies aggressively competing for customers.

Organised competition enables passengers to choose between different operators and drives up standards. If one operator lets its standards slip—unreliable and dirty buses and unfriendly drivers—passengers can easily switch to its competitor. I very much liked that model and saw that it could be used in other areas. The Government’s better bus area fund will help allow other local authorities to explore similar schemes and to adjust them to suit their own circumstances.

I also welcome the Government’s decision to retain some flexibility for local authorities in the regulatory structure. As I have said, different models will suit different areas, and it is right for local authorities to select the most appropriate one for their area. A successful scheme should not be kept as a secret that no other authority can pick up on. I agree that there is a role for the Department for Transport and for bodies such as the Local Government Association to share best practice and to encourage similar types of authorities to look carefully at certain models.

Furthermore, I suggest to the Government that we explore ways to move beyond just bus regulation systems—although, obviously, that must remain the main focus. There is scope to consider how regulation might be combined with buses and other modes of public transport, such as local rail services or tram services, which are being developed in many English cities.

PLUSBUS is a scheme that allows combinations of rail ticketing and bus ticketing, which is fine as far as it goes, but I suspect that it is not particularly well known or well used, and a lot more work could be done in that area. Indeed, when we looked at the competition element in the inquiry, I asked the Competition Commission whether it was looking at competition in the context of local transport services as a whole rather than just bus against bus, and I was not satisfied that it was. Clearly, better decisions could be made in that area further down the line.

Looking at transport services as a whole will be particularly important as technology evolves and more smart-ticketing options become available. I am talking about not just multi-operator tickets, which passengers can use to pop on and off different buses run by different operators without having to take a new ticket, but multi-mode tickets. The Transport Committee saw such a scheme on our recent visit to the Netherlands, Germany and Switzerland as part of our rail inquiry. One of the lessons that we received, particularly in the Netherlands, was on the development of end-to-end journeys. Dutch state railways provide the equivalent of Boris bikes and bus tickets, tram tickets and railway tickets, and it even hires out electric vehicles in city centres. The technology to allow that to be done seamlessly is developing all the time and will open up different opportunities in the future.

The single key lesson must be that passengers have confidence that when they use their smart tickets, they will be charged the cheapest fares. The system will not work if there is a fear that their accounts will be debited a vast sum of money because they have selected the wrong permutation of journeys. There must always be confidence that the consumer will get the best value ticket. I am not sure whether that requires specific Government regulation, but it is something that needs to be taken on board.

There is an upward pressure on bus fares, as there is on every mode of transport, whether private or public. That is primarily a product of rising fuel energy costs and of councils and the Government having to grapple with the public deficit, and that is not going to go away. However, I take an optimistic view. Potentially, there is a bright future for bus usage and bus fares. It is surely an economic fact that, if we encourage more people to use buses, there will be a downward pressure on fares. The reason for that is simple: if the same fixed costs are covered by a greater number of users, the unit cost will be reduced. That is a basic economic fact.

Many studies have shown that the primary factor valued by both existing and potential bus users is not so much cost but the frequency and reliability of services. If we can instil confidence in people that bus services are reliable and effective, more and more people will be encouraged to use them. There are many good examples of transport systems around the country. I highlight in particular the scheme in Oxford, which has a lot of potential.

I urge the Government to look at our recommendations for sharing best practice and for making sure that local authorities are encouraged to develop these new schemes, and I am sure that that will deliver a healthy increase in bus patronage in the future.