Bus Services: Greater Manchester

Jim McMahon Excerpts

Monday 4th March 2019 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I would first like to place on the record an interest, as a family member works for Transport for Greater Manchester, although not in the buses division. I bring to the House an important matter for debate and one that is as old as public transport itself: our bus services. I will speak about the impact of bus service reductions in Greater Manchester, the opportunities that arise through bus franchising and the need to bring about a new settlement for bus users in our city region.

For context, Greater Manchester’s bus services go back nearly 200 years to the original horse-drawn buses, but SELNEC—South East Lancashire North East Cheshire—brought together council transport departments from Manchester and its surrounding districts. In 1974, it became the Greater Manchester Passenger Transport Executive. In 1986, the bus operation was transferred to GM Buses, with its iconic orange and brown livery, which serviced communities across the city region and beyond until its employee buy-out in 1993, when it split services between the north and south of Greater Manchester. That was an important moment for the routes, services, pricing and quality of services we see today.

As a child growing up off Queens Road in Cheetham Hill, in the shadow of the imposing Queens Road bus depot, I would look at it as I walked to school each day, or to the Irish centre across the road, and the orange and brown livery was as powerful to me as the Coca-Cola or Heinz brands are to the whole population. It is a little-known fact—I am not sure that I should be saying this—that as a child playing on my pedal bike, I was so preoccupied with the plastic bottle that I had positioned against a rear wheel of the bike to try to make a motor engine noise that, as I went out on to Queens Road, I did not notice the passing vehicle and was struck by a bus driver. I am forever grateful that he was driving his car to work, and not his bus, at the time. I broke my collarbone and learned an important lesson about road safety. The local museum of transport housed in the depot would provide a staple visit. I made sure that each of my sons made their mandatory visit, whether they liked it or not, to take a photograph in the seat of a bus and a tram.

But it is not the past that occupies my time or my postbag today, but the state of public transport in Greater Manchester. By 1996, GM Buses South had been sold to Stagecoach and GM Buses North had been sold to First Bus, both of which are still operating from the depots that they inherited, basically splitting Greater Manchester in half. Rather than creating active competition, that created two, in my view, private sector monopolies with differential pricing and ticketing, and entirely different approaches to routes. Today, 82% of bus mileage in Greater Manchester is commercially operated and accounts for 90% of passenger journeys. Stagecoach operates the majority of routes in the south and First Bus operates the vast majority in the north, with very little mutual competition.

This was explored by the Competition Commission in a two-year investigation that found that nationally there were high levels of market concentration and a number of barriers to entry for new competitors—not least, the cost of establishing a depot, buying buses and creating routes. Its report found that head-to-head competition was uncommon and that the costs to passengers through the lack of competition was between £115 million and £305 million a year nationally.

The experience of many bus users is that bus services are being run for the benefit of the operators rather than bus users. Let us remember that when we say bus users, we are talking about those who need accessible, affordable and reliable transport to get to work, school or college within a system that is, at the moment, complex, expensive and too often not fit for purpose.

[Liz McInnes (Heywood and Middleton) (Lab)]

My hon. Friend is making an excellent speech. In my constituency, we are extremely reliant on the bus services. We have only two railway stations that serve only a part of the constituency. Complaints about bus services are a constant in my constituency emails. I am very grateful to him for raising these really important issues, which mean a lot to my constituents.

[Jim McMahon]

I thank my hon. Friend for her intervention. I congratulate her on the work that she does in supporting constituents for whom this is a real issue. Middleton and Heywood have First Bus as the main operator as we do in Oldham, with the main depot being based in Oldham for north-east Manchester. It runs the lion’s share of the routes, so there is no competition that would mean that the standard was raised. I appreciate that point being made.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Is my hon. Friend and neighbour concerned, as I am, about the reliability of bus services? That is a constant cause of concern not just in casework but among my staff, one of whom had to wait over an hour for a bus tonight and was yet again late. Is my hon. Friend also concerned about the decrease in the use of bus services? There has been a decrease of 25 million journeys in the space of five years in Greater Manchester.

[Jim McMahon]

Over the past decade, we have seen 32 million fewer bus journeys a year as a result of poor services. I congratulate my hon. Friend and neighbour on the work that she does in fighting for access to rural services, where many people feel isolated. When the bus does not turn up on time when it is needed, particularly in the winter when it is dark, as at the moment, it can be very difficult for local people. She campaigns on that with real effect, and I congratulate her.

[Liz McInnes]

It is really important that we remember the role of bus services in addressing social isolation. A constituent came to see me about the cutting of a bus service, which meant she was unable to go out in the afternoons to shop and visit friends and family. She was an elderly lady. I wrote to the Minister for loneliness about it, who wrote back to me and said, “This is a matter for the Department for Transport.” Does my hon. Friend agree that there needs to be more joined-up working between Departments?

--- Later in debate ---

[Jim McMahon]

That is a really important point. By and large, someone living within 5 miles of Manchester city centre on a main road will probably get a reasonable bus service, and there will be quite a lot of competition for it. But for someone who lives off a main road, on an estate, the chances are that their route has been cut or cancelled completely. For many people—particularly those who live on estates on steep gradients—that can mean that they are completely cut off from access to good bus services and do not leave the house. People have experienced that in Royton and parts of Chadderton where bus services have been taken away. I thank my hon. Friend for her intervention.

The current system unfortunately sees Greater Manchester in a clean air crisis, with pollution causing around 1,200 premature deaths a year. That is across all transport, not just buses, but it is important that we try to get people on to sustainable, environmentally-friendly transport, not just to get to work and college but to save lives.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for giving way. As I said to him before the debate, Translink has spent a substantial amount of money on new buses in my constituency. Those buses are environmentally friendly, but they are also disabled-friendly. It is so important that we give the opportunity of rural and urban bus travel to people who are not able to access normal buses. Does he see that as one of the things that the Government should pursue in his constituency?

[Jim McMahon]

Madam Deputy Speaker, I cannot tell you how reassuring it is in these crazy parliamentary times to have an intervention from the hon. Member for Strangford (Jim Shannon); it gives a lot comfort. That is a really important point. Disabled people find it difficult to leave the house, and they have to contend with not only buses but, when they get off the bus, the shops, department stores and supermarkets that are not accessible. What we can do as a public service is ensure that public transport is accessible, to connect them as much as possible with our towns, city centres and villages. I appreciate that intervention.

As I have said before, we cannot address the clean air crisis if we do not address the bus crisis. Over the past 10 years, we have lost 32 million bus journeys every year in Greater Manchester. That is a staggering number of journeys being diverted. I should say, out of balance, that that is partly because there has been significant investment in our tram system, so some people will choose to use the tram rather than the bus network, but that still does not account for the 32 million. We have seen a significant shift, and too many people rely on their private cars to get to work because bus services just are not good enough.

As a result of commercial decisions or because bus subsidies have been cut due to local councils having their budgets cut—of course, subsidised routes are funded by council tax through the transport levy, so if the council budget is cut, transport naturally gets cut, too—many communities have seen routes reduced or cancelled completely, cutting off entire communities. Many older and vulnerable people are now isolated. At the same time, we have seen the cost of travel increase. Ticket fares have increased by over 55% above the rate of inflation in the same period. How can it be right that we are losing 32 million bus journeys a year, but the cost has increased by 55% over the rate of inflation? People are paying from both sides—through increased subsidies to operators and through poor services, and they are then charged on top of that. I pay credit to the Better Buses for Greater Manchester campaign, which provided that data.

Given the north-south divide in Greater Manchester, it is more expensive generally to travel across the city. If someone needs to make a bus journey that requires more than one operator, they have to use what is called a system one ticket, which is a multi-operator bus ticket. That costs £5.80 a day or £19 for a weekly ticket, often for people who are on the minimum wage and struggling to get by. We should compare that to what we pay for bus travel in London. Someone who needs to use multi-modal transport—say, the bus and the tram—will pay £9 a day or £38 a week. If we compare that with the same ticket in London, where someone wants to use a bus and the tube, they will pay £21.20. It is £38 in Greater Manchester, but £21.20 in London, so weekly tickets are more expensive—179% more expensive—in Greater Manchester than in London. Quite literally, passengers in Greater Manchester are being taken for a ride.

[Liz McInnes]

Oh dear.

[Jim McMahon]

Well, I had to say it. Give me some credit, please.

In 2014, the devolution agreement was reached with Greater Manchester leaders. At the time, I was the leader of Oldham Council, and we agreed to bring forward plans to franchise bus services in Greater Manchester. This would allow greater power over routes, frequency, operating hours, fares and standards. There has been a great deal of concern that the big operators, such as Stagecoach and First Bus, would seek any legal challenge to prevent bus franchising from happening, and there is little doubt that that has in part accounted for some of the delay we have seen.

Funding has already been spent by the Greater Manchester combined authority and the Mayor: £6 million to date, with a further £3.5 million to come and followed by another £2.25 million for bus reform towards 2020, totalling £11.25 million. Incidentally, that is dwarfed by the profit Stagecoach made last year alone, when it had a £17.7 million profit margin for the year. That may account for some of the nervousness we have seen: when making that much in profit, it provides a decent fighting fund if it has to take legal action to protect that profit. However, it is a bad deal for taxpayers and bus users.

Greater Manchester must now recognise that with every week, month and year that passes, it is the millions of people in our city region who will be paying the price of delay. That brings me to explore the willingness to do it Greater Manchester’s way. There is a reason why Greater Manchester secured the largest devolution settlement outside London and why Greater Manchester has attracted attention. It took things seriously; it made the evidence-based case; and it built partnerships and long-standing relationships to get things done. It is just not good enough that passengers and decision makers in Greater Manchester seem to be held to ransom by bus operators, which have taken hundreds of millions of pounds from routes, while routes have been lost and, year on year, the taxpayer subsidy is passed on. Unless a more balanced settlement is reached, that just is not a good deal, but it requires energy and determination to form a different vision.

While we wait for franchising to seek powers, we must use this time to secure any possible passenger advantage. It will come as no surprise that First Manchester was heading for difficulties because, after it secured an operating margin of 17.3% or £18 million in 2010, it lost ground with losses in 2016 and 2017 amounting to £11 million. When it became common knowledge that First Manchester was seeking buyers for its four depots in Greater Manchester, including in Oldham, together with its fleet of 500 buses and 2,000 employees, it was a once-in-a-generation opportunity to bring some order and sustainability to bus services covering some of the poorest communities in Greater Manchester. I took the opportunity to raise this in my letter to the Mayor of Greater Manchester on 6 February, and I still urge that action be taken.

A difference seems to arise from the Bus Services Act 2017 in relation to whether the restriction in the Act on setting up a new company means there is also a restriction on buying an existing operation. I am conscious of the time, so I will jump ahead in my speech. I sought the advice of the Library, and I was referred to a companies law specialist. They said that

“it is clear that acquiring an existing company does not constitute the formation of a new company and so, as I would understand it sits outside the restriction in the Bus Services Act”.

They also said:

“It is my considered opinion that buying an existing company does not constitute forming a company.”

Even if conflicting legal advice was received focusing on the letter of the law as outlined in the Companies Act 2016, rather than the implied spirit of the Bus Services Act, there would be other options. We must make sure that we do not miss opportunities. For instance, there is the opportunity to have other municipal bus operators expand into Greater Manchester, such as those in Warrington, Reading, and Nottingham, which are performing well. If that is not considered to be an option, we could look at the formation of mutuals or co-operatives to make sure that passengers are part of the shareholding, or we could look at Manchester airport buying the service as a going concern and holding it ahead of bus franchising. There are plenty of options around. Fortune favours the brave, and it is important that we see determination.

Unfortunately, we have learned that the Queens Road depot, together with its 163 buses, has been sold to Go-Ahead for £11.2 million, separating it from the three remaining depots, including Oldham. While I accept that the new operator will work with other operators through the OneBus partnership it is my belief that carving up the north of Greater Manchester with a range of new operators buying the depots individually will make franchising harder, not easier. It is hugely disappointing, to put it mildly, that we have not capitalised on an opportunity that rarely presents itself.

Greater Manchester has done a great deal to ensure that there is investment in public transport. For instance, it has spent £90 million on bus priority measures and £130 million on bus stations, with an additional £29 million to support clean buses. It is important that operators play the game. I had an unfortunate exchange with Stagecoach Manchester on Twitter, as it was criticising the Mayor and the Greater Manchester combined authority for introducing new powers to reduce air pollution, as though that was not a reasonable thing to do, and it was not taking into account the £29 million clean bus fund invested by Greater Manchester. There was more than just a stick—there was also a significant carrot.

Public transport is key to giving people across Greater Manchester access to jobs, including constituents such as mine in Chadderton, Oldham and Royton who seek employment at key employment sites such as Trafford Park and Manchester airport, but who are denied that option because buses simply do not run to meet shift patterns, or are unaffordable and complicated, which disadvantages people trying to hold down more than one job, or who have with caring responsibilities and for whom time is precious.

This matters—all public transport users across Greater Manchester care about it, as 76% of all journeys using public transport are by bus. We must grasp this opportunity. Two and a half million people in Greater Manchester deserve better, but it requires courage. Remember, faint heart never won fair maiden, and it certainly does not get the buses to run on time either.

[The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)]

I thank the hon. Member for Oldham West and Royton (Jim McMahon) for bringing this important issue to the House, and I welcome the opportunity to debate it and to collaborate on how we can continue to support and promote buses. I was particularly touched by the throwback images and his first impression of a bus. We all had those back in the day.

Buses play a hugely important role in our transport system. As we heard, they connect our communities to the workplace and to vital public services. They support our economy, they help to tackle congestion and they have an important contribution to make in reducing emissions—I hope to come on to that. I share the hon. Gentleman’s concerns about bus passenger numbers, which vary across the country, but we must not forget that there are over 4.4 billion bus journeys a year and buses remain the most popular form of public transport.

It is interesting to know—this is why we are all here and championing buses—that passenger satisfaction remains consistently high, with 88% of passengers satisfied overall with their bus journey. I cannot think of any other public service that rates so highly. We should take a moment to thank bus drivers, who are key to good journeys, and good bus companies that operate a good service. The benefits of a reliable and innovative bus service are clear: greater productivity and communities that are connected, rather than apart. That is why the Government remain committed to improving bus services and expenditure on buses.

Each year, my Department provides about £250 million in direct revenue support for bus services in England via the BSOG—the bus service operators grant—scheme. Of that, about £43 million is paid directly to councils outside London to support buses that are not commercially viable but considered socially necessary. The rest goes to commercial bus operators. Without that support, fares would increase and marginal services would disappear. Government funding supports the approximately £1 billion spent by local authorities on concessionary bus passes every year. The Government have committed to protecting the national bus travel concession, so that about 10 million people get the support that they need to travel off-peak anywhere in England.

The hon. Gentleman raised the issue of younger travellers. The Government recognise that young people’s travel and the level of fares is a complex area. There is no statutory obligation to provide a discounted travel price to young people, but many commercial and publicly funded reductions are available. I was particularly pleased to see Transport for Greater Manchester introduce its Opportunity Pass, giving all 16 to 18-year-olds free bus travel. Since 2010, the Government have invested over £450 million in bus-related local authority transport schemes, including £32.5 million in the Manchester Cross City bus scheme, to deliver a range of bus infrastructure and congestion management measures. That was no doubt welcome in the hon. Gentleman’s constituency.

To support buses today and to help them into the future, the Government delivered the Bus Services Act 2017, which contains a range of options for how to improve local bus services in England. In addition to franchising, there are new and improved options to allow local transport authorities to enter into partnership with their local bus operators to improve services for passengers. Partnership working between local authorities and their bus operators achieves the best results. It is not always about funding. Bus passenger numbers are up 50% in Bristol, 36% in South Gloucestershire and 31% in Reading. In York, the city council and operators launched a customer charter setting out the standard of service passengers can expect, and have committed to a range of measures to encourage bus use. Those are just a few examples of how effective partnerships can work.

Partnerships may not be the best solution in all areas. The 2017 Act also gives local authorities the potential to use new powers to franchise bus services in their areas. Like the system in London, franchising will enable authorities to specify the services that passengers want and deliver an integrated network of services. Mayoral combined authorities such as Greater Manchester are provided with automatic access to franchising powers, reflecting the clear, centralised decision-making responsibility for transport they hold. All the powers needed for Greater Manchester to franchise its bus network are already in place. However, the Greater Manchester Mayor felt he needed additional powers to fully consider bus franchising for Greater Manchester. Buses fall under many Departments, so the order that will be debated in the House tomorrow to give the Mayor the additional powers he has requested is being managed by the Ministry of Housing, Communities and Local Government.

[Jim McMahon]

Just for the record, the additional powers the Mayor of Greater Manchester will receive through the statutory instrument tomorrow relate to precepting powers to pass the charge on. The Government have not provided the funding required to deliver bus franchising in Greater Manchester, so it now has to go on the council tax payers of Greater Manchester.