Bus Services Bill [HL]

Lord Ahmad of Wimbledon Excerpts

Wednesday 8th June 2016 Lords Chamber

Moved by

[Lord Ahmad of Wimbledon]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, it is a pleasure to lead the debate on the first Bill to focus on bus services alone. I know that many noble Lords are keen to contribute to this debate, for bus services are of enormous importance to local people and their communities. They help connect people to education, jobs and healthcare, together with boosting our local economies.

Buses have an important role to play in our daily lives. Indeed, if we reflect on recent political history, being the son of a British Pakistani bus driver seems to be a sure sign of success. I was asked a similar question and, while I cannot claim to be the son of a Pakistani bus driver, I can certainly claim to be the nephew of one. For my part, my father started his career on the trains, so there is a certain transport connection across the board.

Bus services in the local community are an important lifeline for many, and in some areas they are working well. The latest bus passenger survey from Transport Focus, published in March 2016, reveals that overall satisfaction ranges across areas from 79% to 93%. However, in others there is much room for improvement. We want to increase bus passenger numbers; to help cities and regions to use better bus services to unlock opportunity and grow their economies; and to improve journeys for bus users. Passengers would like to know more about the services available to them, when buses will arrive and what the fare will be. This kind of information is available in London but varies across the rest of England. The Bill will provide the basis for such a step change. It also provides new tools for local authorities and bus operators to use to improve local services.

The Bus Services Bill is not about mandating any particular approach to the management of bus services. Nor does it impose wholesale reregulation. Instead, it is about enabling new opportunities, and giving local authorities new choices about how they can improve bus services in the interests of their residents.

I shall say a little here about the funding of bus services, as I know that many noble Lords have concerns about it. I recognise the financial pressures facing many local authorities throughout the country, not least to provide bus services, particularly in more isolated areas. That is why we devolved £40 million of the £250 million of annual central government support for bus services to councils outside London last year, so that they can decide for themselves how it is spent. It was a key part of our decision to protect this £250 million of funding in last year’s spending review. When all the central and local government funding for buses is added together, it comes to around £2 billion per year. Some £330 million of this support comes from local authorities to support socially necessary local bus services. In total, some 42% of bus operators’ income comes from public funds.

I am sure that noble Lords from across the House will join me in recognising the importance of reducing the budget deficit. Given our fiscal circumstances, no new additional funding is available for bus services, but the Bill enables local authorities to make better and more efficient use of the funds already available to them. It also allows local councils to influence the commercial bus services provided, which will continue to receive financial support directly from my department.

Before I talk further about the Bill itself, it is worth reflecting on the successes of the bus industry and how it has adapted and innovated in recent years, particularly in relation to ticketing and accessibility. I am pleased that Arriva, FirstGroup, Go-Ahead, National Express and Stagecoach are working to bring contactless payment to every bus outside London by 2022, with many areas benefiting sooner. Smart ticketing, whether on contactless cards, smart cards or mobile phones, can make journeys across transport modes much easier and speed up journey times. It also creates opportunities for new types of fares, which can make the bus a more attractive option for potential passengers. It is good that the bus sector is offering this to customers, and I want to continue to encourage the industry to work with government and local people to introduce products that will make bus travel easier.

I will also take this opportunity to talk about accessibility. The industry has done great things in recent years to provide buses which better meet the needs of disabled passengers, particularly under the Public Service Vehicles Accessibility Regulations. These regulations require facilities such as low-floor boarding devices, visual contrast on step edges, handholds and handrails, priority seats, and provision for passengers in wheelchairs. All full-size single-deck buses used on local and scheduled routes had to be fully accessible from 1 January this year, and all double-decker buses must be fully accessible from 1 January next year.

Our latest statistics show that 89% of buses operating in England already meet these accessibility requirements. This area of concern was raised by several noble Lords at the meeting Peers had with me and my honourable friend Andrew Jones, the Minister responsible for the Bill. Many bus drivers have now undertaken disability awareness training and it remains available to all drivers as part of their certificate of professional competence training. We are developing best-practice guidance on delivering disability awareness training and will work with bus operators to ensure that drivers have the knowledge and skills they need to provide disabled passengers with the assistance they require.

By giving local authorities a greater role, the Bill will improve the accessibility of local bus services even further. Both bus franchising and partnership schemes will allow new accessibility standards, such as talking buses, to be set locally in response to the needs of local communities. Local authorities implementing these schemes will be subject to the public sector equality duty. This means that they will need to continue to take into account passengers’ accessibility needs as they develop their plans.

On the Bill, as I have already outlined, the bus industry has achieved much in the last 30 years. The Bill is designed to build on that good work and ensure that the industry and local authorities are best placed to work together to continue to deliver for passengers. I will now set out the three key principles which have informed the development of the Bill.

First, I think we all agree that encouraging more people to use buses is a good thing. Buses are vital for the economy and for people, and they are vital in tackling some of the environmental problems experienced in our towns and cities. Last year nearly 42,000 local buses operated across Great Britain, catering for 5.2 billion passenger journeys—over three times as many journeys as were taken on the entire rail network. Of these, 4.65 billion passenger journeys were taken by bus in England alone. Buses provide ways to get to work, healthcare facilities, shops and so much more. For buses to better serve passengers in the future they must be reliable, affordable, accessible and environmentally friendly. Buses are most important to the vulnerable in society: the poorest, the young, the disabled and the elderly. That is why the Government are committed to providing local authorities with more powers over bus provision to ensure that services are designed and planned with local needs in mind.

The second principle is that we need to give local areas the best possible range of tools to use to reverse declines in bus usage. Outside London, bus use in England has decreased since deregulation, but this change has not been uniform. Some areas, such as Brighton and Hove, and Reading, have seen significant growth, while other areas, particular our large cities, have seen significant declines. Where bus usage has bucked this trend there is usually good co-operation between local authorities and bus operators, so the Bill provides new and improved powers to build on these successes. It also provides the ability for a step change in bus provision to encourage more passengers on to buses. We want to see better provision of real-time information, significant reductions in journey times, and partnerships allowing authorities and bus operators to work closely together on ticketing schemes and agreeing set standards for local bus services. Faster journeys and simplified ticketing will make travel easier, more efficient and more attractive in both rural and urban areas, giving businesses and workers access to new markets and opportunities.

That leads me to the third principle: devolution. The Bill supports local areas in their aspirations to make a better, more integrated and connected transport system. Local decision-making is key, and the Government are committed to devolution and the decentralisation of decision-making, as promised in the devolution deals already agreed with the likes of Manchester, Liverpool and Sheffield. These places have told us that they need greater choice over how local transport works.

I stress again that this is very much an enabling Bill. There is no compulsion on local authorities to change their local bus services if the existing working arrangements between operators and local authorities are already achieving good results. The need has never been greater to maintain and expand services and attract new customers. Severely congested roads, poor air quality in some places, rural economies struggling to survive and an ageing population are just a few of the compelling reasons why we need our buses.

Although I recognise that a lot of innovation and hard work is done by councils all over the country, I believe that the Bill will provide the range of powers that authorities need to achieve so much more. So the Bill contains several things, one being provisions on open data. The Bill will address passengers’ need for better information on their local bus services. People want to be able to make informed choices. The Government want to ensure that bus passengers have the same access to journey planning and real-time information as rail passengers and those travelling across London, and the open data provisions will deliver exactly that. All bus operators will be required to make data on routes, fares and the operation of bus services open and accessible. This provision will allow app makers to develop products that passengers can use to plan their journeys and give people the confidence to take the bus instead of using a car.

Secondly, the Bill will introduce new arrangements for local authorities and bus operators to work together in partnership. Current partnerships between bus operators and local authorities appear to be working well in some areas and passengers are happy. However, we know that more could be done to improve services. Passengers stand to get an even better deal under the new partnership agreements, while the Bill allows operators to grow patronage and retain their commercial freedom. The market will remain commercial and deregulated.

The Bill will build on the strengths of existing partnership arrangements, removing the requirement that a quality partnership scheme must always involve new infrastructure. The new enhanced partnerships will allow local authorities and bus operators to agree their own standards for all services in their area—for example, setting emission standards to improve air quality or introducing common branding, marketing and ticketing rules over a wider geographical area.

However, partnership working may not be the appropriate answer given the specific circumstances of some areas, which may wish to pursue franchising. The Bill will give certain local authorities the choice to use new powers to franchise bus services in their areas. As with the system in London, franchising will provide local authorities with the ability to determine and specify the bus services to be provided in an area, with bus operators bidding to provide the services. This will allow local authorities to specify the services that passengers want and deliver an integrated network of services with co-ordinated timetables, ticketing and branding. This model retains the benefits of competition, moving it from “on the road”, where bus operators compete for passengers at bus stops, to “off the road”, where competition is conducted through a procurement process. These new powers will replace the quality contract scheme legislation introduced in the Transport Act 2000 that has proved both cumbersome and ineffective.

As I outlined earlier, devolution is a key principle which has informed the development of the Bill. But moving to a model of franchising is a big decision that is likely to have implications for passengers, bus operators and local authorities. Strong governance and accountability are key to making franchising a success, together with a strong commitment to improve transport across a coherent and sensible geographical area. Mayoral combined authorities will therefore have automatic access to franchising powers as they provide clear, centralised decision-making for transport across a relatively wide local area. One individual— the directly elected mayor—will take the decision to franchise or not and will be held accountable for it.

We also want to provide the potential for other local authorities to access franchising powers if there is a compelling case for doing so. Therefore, the Bill provides other local authorities with the potential to access franchising powers. This is a two-stage process. First, Parliament will need to be content that it is appropriate for a local authority of that nature to have access to franchising powers. Individual authorities of that nature will then be able to apply to the Secretary of State for consent to start to develop their franchising proposals in detail. We expect such requests to be made through the devolution deal process, with authorities considering how better bus services could contribute to their wider plans for transport and economic development.

In every case where franchising is considered, local authorities will need to work closely with the operators in their area to manage the process in the best interests of passengers. This is an important decision for local areas to make, and therefore must be made on the basis of solid information provided in a timely way. Whatever approach is chosen, we want to ensure that bus operators, large and small, and the wider supply chain have as much notice of change as possible. So the Bill provides safeguards for any movement towards franchising.

The Bus Services Bill is designed to make bus services a more attractive proposition for passengers. It is about potential and creating opportunities. It is about better and brighter futures for local economies and connectivity across England. No single solution will work everywhere, and so we do not foresee a one-size-fits-all approach. Some local authorities may want to introduce newly integrated, uniformly branded networks of services, just as you see in London; others will want to build and improve on what is already there. This Bill is for all parts of England, from rural communities to metropolitan city regions. I am confident that the proposals it contains will improve bus services across the country as local authorities, commercial operators and local communities work together to provide even better services for passengers. I beg to move.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

My Lords, first, I thank all noble Lords who have taken part in today’s Second Reading debate. It has been an interesting one and I thank noble Lords for the general welcome they have shown to the Bill. In particular, I acknowledge the support for the Bill from the Front Benches and the offer to work constructively throughout its passage. I thank the noble Baronesses, Lady Randerson and Lady Jones, and the noble Lord, Lord Kennedy, and look forward to working with them, and indeed all noble Lords, on this important piece of legislation.

I start my closing remarks with two immediate admissions. One is that if I do not get through all the various points that have been raised, I will of course, in the normal manner, write to noble Lords. The other is that my throat may get a bit croaky. We are into the early days of Ramadan, and it is two hours before I can eat or drink, so I seek your Lordships’ indulgence in case my voice suddenly packs up. I hope it will not and I will look for divine intervention if that does happen.

Apart from the open data provisions in this Bill, which I will come on to and which will provide bus users with more accurate and up-to-date information on services available to them, I repeat that it is not the Government’s intention to mandate any particular approach to bus management. However, on the subject of open data, I welcome noble Lords’ support, and share the views expressed by the noble Baronesses, Lady Scott, Lady Grey-Thompson and, of course, Lady Randerson, on the importance of looking at this area. It is a very important part of the Bill and an exciting opportunity to see how open data can be used. Our preferred approach is to develop a central data repository to meet the requirements of registration and journey planning. Those data would be open data, and the expectation is that third-party developers would be able to use data to develop web and app services to provide travel information to all.

The noble Baroness, Lady Randerson, asked about cross-border services. I assure her and all noble Lords that provisions will be made to allow cross-border services to continue to operate where franchising or partnership proposals are adopted. In the franchising context, cross-border services will be able to operate under service permits. In a partnership context, all bus operators, including those that run cross-border services, will be invited to participate. I assure the noble Baroness that we have already engaged with the devolved Administrations and, of course, will continue to do so through the passage of the Bill.

I turn to questions raised about delegated powers by the noble Baroness, Lady Jones, and, in his closing remarks, by the noble Lord, Lord Kennedy. First, we believe that the powers in the Bill are appropriate; many of them deal with technical matters that will require some flexibility, so secondary legislation is appropriate for that. There are also considerable precedents in this regard, with previous transport Acts that have used that approach. I assure noble Lords that we will make draft regulations and policy-scoping documents available during Committee to ensure that they are informed of our plans, and we intend to publish the impact assessments ahead of Committee too. I shall seek—and I shall follow up on this with officials—to put forward a summary list of the different things, as they are scheduled. That might help all of us during the passage of the Bill.

The noble Baroness, Lady Jones, also raised the issue of Clause 21 and municipals. We want to ensure in this regard that the bus industry continues to thrive, and the Bill provides a number of new ways in which the industry and local authorities can work together to improve services for local communities. The responsibility for specifying services should be separated from the responsibility for providing those services, and we therefore believe that local authorities should not be able to set up municipal bus companies. Of course, I acknowledge views expressed today, and I am sure that we will return to the issue in Committee.

I turn to a few of the other matters raised in that regard. My noble friend Lord True also raised an issue about municipal bus companies and whether small enterprises would be stopped too. We will certainly look into that, but I reiterate that community transport is exempt from all effects of the Bill.

The point about rural-proofing and impact assessment was raised by the noble Lords, Lord Whitty and Lord Judd, and the noble Baroness, Lady Scott. I assure noble Lords that rural-proofing is included in the impact assessments, which will be published ahead of Committee. That will be included in the summary document.

On the devolution deals, my right honourable friend the Secretary of State worked with others in the Government to determine and agree the details of the Greater Manchester devolution proposition, mentioned particularly by the noble Lord, Lord Bradley. Officials have continued to work closely with colleagues from Greater Manchester during the development of detailed Bill policies. On the further questions from the noble Lord, Lord Bradley, we have already begun to engage with stakeholders on the development of secondary legislation and will continue to engage closely with them over the coming months. I assure him that secondary legislation and guidance required for the authorities to take forward the provisions in the Bill will be prepared in time for the upcoming mayoral elections.

An area which was raised by my noble friends Lord Young, Lord True and Lord Attlee, the noble Baroness, Lady Jones, the noble Lord, Lord Woolmer, and other noble Lords was franchising. There has been some discussion about the availability of franchising and its link to devolution deals. We believe that the powers set out in the Bill provide the potential for local transport authorities other than mayoral combined authorities to access franchising powers if there is a strong case for doing so, but we also recognise the need to provide as much certainty as possible to the bus industry. Authorities have control or oversight of local roads, local transport and parking policies and have planning responsibilities and so will be best placed to implement franchising as they directly control many of the factors that impact on bus patronage. Clear decision-making responsibility and accountability will also be important when determining whether franchising is the best approach for a particular area.

Various questions were asked by noble Lords about franchising powers. The noble Lord, Lord Shipley, asked about combined powers, opting out and Gateshead, and I will write to him about that. Other noble Lords asked about the process for local authorities which are not mayoral authorities. As I said at the all-Peers meeting, an affirmative SI is required to access the category of authority—for example, a unitary authority. Once this is done, the authority will apply for the Secretary of State’s consent. That will be the process.

My noble friend Lord Young raised the issue of compensation. The Bill sets out clear processes and consultation requirements that must be followed by authorities to ensure they consider the benefits that franchising could bring for local people and the potential impacts, including on bus operators. As my noble friend will be aware, since the Transport Act 2000 it has been possible for local authorities to exert more control over their local bus markets. Compensation was not provided for in that legislation.

The noble Lords, Lord Woolmer and Lord Berkeley, raised issues relating to Cornwall. Our intention is that franchising powers should be available to other authorities only where the governance, capability and track record of the authority are sufficiently strong and there is an appropriate economic geography. Cornwall Council provides a good example of such an authority. It covers a wide area, it is a unitary authority with the necessary wider powers to improve bus services and it has a good track record of delivering transport projects. It is our intention to publish the objective criteria which will set out the factors that we believe are important when considering whether an authority is well placed to franchise the local bus network.

My noble friend Lord Attlee spoke about sensitive market information, local authorities and franchising. We want to ensure that decisions to move to franchising are made on the basis of robust and accurate information with the interests of passengers in mind. To ensure this is the case, it will be necessary for the franchising authority to have accurate information from local bus operators on aspects such as passenger numbers, fare structures and revenue from local services. I assure my noble friend that we understand that some of the information will be commercially sensitive. It is imperative that authorities treat it with care. Information can be used only in connection with the franchising scheme.

As I said in my opening remarks, franchising may not be appropriate for all. The enhanced partnership proposals in the Bill provide the opportunity for improved co-operation between local authorities and bus operators which will benefit passengers, local businesses and the environment. As my noble friend Lady Redfern highlighted in her contribution, the flexibility within all these models will allow local areas to prioritise service standards appropriate to their areas.

Many noble Lords understandably and rightly expressed their views on the accessibility of buses and, in particular, on the need for accessible on-board information on buses. Various scenarios and incidents have been mentioned. The noble Baroness, Lady Grey-Thompson, talked about people appearing with pushchairs and wheelchairs, and what happens then. She asked who gets left behind; as a father of three children, two of them in pushchairs, I can tell her that it is normally the father. Once I have done so and I am left with an empty pushchair, people nearby think, “He seems to have left something important behind”, but that is another story that I will share with her over a cup of tea. That seems to be the general way forward in discussions on the Bill, which of course I welcome as long as it is post the time when I can eat and drink.

I turn to the more important and serious issues of accessibility. The noble Baronesses, Lady Brinton, Lady Campbell, Lady Jones and Lady Grey-Thompson, the noble Lord, Lord Low, and my noble friend Lord Holmes all talked with great passion and experience, expertise and insight into this area. The noble Baroness, Lady Brinton, cited the case of FirstGroup Plc v Paulley, which is yet to be heard at the Supreme Court. I am sure she will appreciate that I cannot really comment any further on that. However, it is vital that wheelchair users and other disabled people are not prevented from accessing bus services. I will ensure that the question of the use of wheelchair space is given full consideration once the case has concluded.

I assure noble Lords that we are currently developing guidance on providing disability awareness training, informed by existing provision across the transport sector. We will work with the bus industry to promote the adoption of that training ahead of the mandatory training provisions of an EU regulation that comes into force in 2018. I assure noble Lords that the Government are committed to ensuring that all disabled people have the same opportunities to travel as other members of society. Indeed, my noble friend Lord Holmes talked about the need to increase the employment of disabled people, and I am sure we all took note of the statistics that he shared with the House. It is important that the Bill incorporates powers enabling partnership agreements to require, as several noble Lords mentioned, the installation of equipment providing audible and visual next-stop announcements.

With regard to the DVSA and the Public Service Vehicles Accessibility Regulations, the PSVAR have created a step change in accessibility for disabled bus passengers and we will continue to work with the DVSA to ensure that operators understand their duties. As one of my ministerial responsibilities, I have oversight of the agencies including the DVSA, and I will follow that up to see what more can be done. In that regard, I say to the noble Baroness, Lady Campbell, that I would welcome meeting her and her advisers, and indeed any noble Lords, to see how we can further strengthen the provisions of the Bill to ensure that we provide accessibility. It is an important subject and, while improvements have been made, I fully acknowledge that more can be done. I assure noble Lords that there is provision in the Bill for all the equipment that has been talked about today, and for such expertise to be specified as part of the standards of service, as well as in an enhanced partnership if parties agree. In setting up a contract framework for a franchised area, a local authority could also require the provision of specialist equipment for this very purpose.

I turn to rural services. I said at the beginning of our debate that I fully recognise the extra pressures placed on local authorities throughout the country to provide bus services, particularly to more isolated areas. We have heard many comparisons between the provision in cities, particularly London, and elsewhere. However, it is primarily for local authorities to prioritise their spending from the considerable amounts of public money that they receive to support transport services. I reiterate that no extra money will be made available to local authorities specifically for the provisions of the Bill. However, its proposals will help to ensure that every penny they have is put to best use.

I turn to community transport, and I hope I may provide some reassurance to the noble Baroness, Lady Grey-Thompson. Community transport provides vital services, especially where commercial services are not available, and we have shown a continued commitment to the sector through the community transport minibus fund, providing over 300 organisations with new minibuses, and through ensuring that community transport providers are exempt from the provisions of the Bill.

The noble Lord, Lord Judd, talked about the national park authorities. I assure him that, as I am sure he is aware, all public bodies have a statutory duty to take account of national park authority purposes when taking any decisions that may affect them. I assure him we will ensure that that duty is made clear in the consultation guidance that will be produced for the measures contained in the Bill.

[Lord Judd]

I am grateful to the Minister for taking up my point. I hope that on reflection he will realise that a reference in the consultation process is not good enough. If we are sincere and genuine about the commitment which has been there, commendably, on both sides of the House, and which has been outspoken on the part of the Government, it is important to have this in the Bill.

[Lord Ahmad of Wimbledon]

As with other provisions, I am sure that we will return to this in Committee. However, I will take back and review the noble Lord’s contribution on this as well. I emphasise again that the Government take this responsibility seriously and will look at this issue as part of the guidance, but I am sure that the noble Lord will continue to make his case during the passage of the Bill.

In the closing moments I will pick up a few other questions that arose on competition law, for example, raised by the noble Lord, Lord Bradshaw, and the noble Baroness, Lady Scott. I assure noble Lords that the application of competition law to the bus sector is important to protect the interests of bus passengers, which is why the Bus Services Bill makes the Competition and Markets Authority a statutory consultee for any advance quality partnership scheme as well as the enhanced partnership scheme. I assure the noble Baroness that I agreed with her when she said that the perception of its potential impacts, which has cast a long and unnecessary shadow over bus partnerships, is important here. In developing the Bill, we have sought to address the concerns that have been raised.

The noble Lord, Lord Shipley, rightly talked about the importance of scrutiny and audit. In developing the Bill, we have been acutely aware of the importance of effective scrutiny, particularly of the franchising schemes. As the noble Lord identified, the Bill includes audit, independent of the franchising authority, of the use of data and information on whether statutory guidance has been followed. I am sure that the overview and scrutiny committees of the combined authorities will also wish to look closely at the proposals for franchising when they are brought forward. Ultimately, we think it is right that the decision on whether they do so should be a local one.

The noble Lord raised the issue of Gateshead, which I touched on briefly. As far as I understand the complexities of local governance arrangements, discussions on that issue are already going on. However, I will write to him. I add, however, that the Bill allows for mayoral combined authorities to franchise services within their areas, although of course we understand that mayoral combined authorities do not exist in isolation, and the service permit provisions in the Bill will enable services to operate across boundaries into areas which have not moved into that franchising model.

We have covered various areas and some important issues. There has rightly been a key focus on issues of accessibility and the franchising powers, which I am sure we will return to in Committee. I know that collectively we share an ambition to improve bus services and increase passenger numbers and journeys for all sectors of the community without discrimination. Even if our views about how to get there differ around the edges, once again I thank all noble Lords for their general warm welcome for the Bill. I look forward to working with them both in and outside the Chamber in ensuring that we strengthen the provisions of the Bill as it makes its passage through the House.

Bill read a second time and committed to a Committee of the Whole House.