Bus Services

Lord Walney Excerpts

Thursday 1st December 2011 Westminster Hall

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Thank you for calling me to speak, Mr Bayley. It is good to be serving under your chairmanship for the first time.

I congratulate the Transport Committee on securing this hugely important debate and on its excellent report, which shows just how much damage is being done to bus services up and down the country. The Committee’s words have been quoted already, but they are very important. According to the Committee, the current situation is

“the greatest financial challenge for the English bus industry for a generation”

and

“some of the most vulnerable people in society, including the elderly, will be most affected by these changes.”

It is not hard to see why the Committee had to use such strong language. Its Chair, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), set out the key decisions by this Government that have led to half a billion pounds being cut from local transport funding in this year alone. First, the 28% cut in direct funding to councils has removed £95 million from local transport. Secondly, £223 million has been taken from funding for the concessionary fares scheme for pensioners, which threatens services that are viable only because of that subsidy; as a result, many pensioners are finding time restrictions placed on their bus pass. Thirdly, a further £254 million will be taken out of support for buses next January, when support for bus fuel costs is reduced by a fifth.

Unfortunately, in their formal response to the Committee’s warnings about the damage being done to bus services, Ministers have displayed just how out of touch they are about the impact of the cuts to local transport and buses, which are being made too far and too fast. In their response to the Committee’s report—and, let us remember, after half a billion pounds has been cut from bus services funding in this year alone—the Government claimed that the bus industry was

“able to absorb this reduction without raising fares or cutting services”,

even though the Committee report is clear that, as my hon. Friend the Member for Hartlepool (Mr Wright) flagged up, the cuts will lead to

“a disproportionately adverse impact on the provision of local bus services and the level of bus fares”.

The scale of service reduction and fare rises was reinforced by a report from the Passenger Transport Executive Group on the impact of the spending review on bus services, which found that by 2014 bus use will fall by a fifth and fares will rise by 24% in real terms. In addition, the Campaign for Better Transport has found that the cuts have already led to huge reductions in services across the country, with one in five supported services being reduced and three quarters of local transport authorities planning to cut back on their bus services.

Behind those figures lies the real damage that is being done by cutting our bus services so heavily. The cuts are hurting young people, who are already struggling as a result of this Government’s decisions to cut the education maintenance allowance, treble tuition fees and end the future jobs fund. A million young people are out of work, and trying to get to places of education or to start working is made even harder for them when their local bus service is taken away. The cuts are also hurting older people, who find themselves isolated and cut off from family and friends because the bus service on which they rely has been taken away. During the general election, all political parties promised to protect free bus passes, but many older people are now asking what is the point of their free bus pass if there is no bus for them to travel on.

Perhaps the most striking part of the Select Committee’s excellent report is the evidence gathered from bus users around the country about the impact of the Government’s cuts on their quality of life. My hon. Friend the Member for Hartlepool rightly raised the plight of people in his constituency. I will add the case of Mr Turpin, a 65-year-old in Somerset who had a quadruple heart bypass but who now has to cycle every week up a steep and busy A road because his bus service has been withdrawn. These are not statistics that we are discussing; they are real people who are suffering real hardship as a result of this Government’s decisions. Unfortunately, their stories are being repeated in towns and villages up and down England. In my constituency, the No. 60 bus in Ulverston is the latest service to come under threat, after just seven months of running unsubsidised. The hon. Member for Blackpool North and Cleveleys (Paul Maynard) made a good point about the paucity of the so-called consultation processes carried out by the private sector.

Bus services are being cut, communities are being left isolated and where buses remain the fares are soaring well above inflation. If the Minister wants to avoid being labelled the modern-day Beeching of the buses, he must tell us what he proposes to do about the damage that is being done to bus services. Can he say when the consultation toolkit being created by Passenger Focus for local authorities will be completed and rolled out? Has he started work with the Local Government Association to help community transport associations?

Finally, will the Minister accept the recommendation made by the Transport Committee and by my own party’s transport policy review that local communities and the transport authorities that represent them should be given a greater say in how their bus services are funded and provided? My party’s policy review is clear about that. It is not good enough for Ministers simply to devolve the blame for their cuts to local transport funding without giving local transport authorities the power to manage their own transport services. The answer is not simply to enhance the voice that communities have, important though that may be; it is to put them directly in charge of the local decision making on transport. That is what we are calling for the Government to do.

--- Later in debate ---

[Norman Baker]

The hon. Lady will appreciate that I am not responsible for how the Department for Communities and Local Government has distributed its money, and I cannot comment on that in detail. What I would say, having looked at bus patterns across the country, is that it is not the case that southern counties have maintained their bus services while northern ones have not. The picture is much more mixed. The east riding of Yorkshire, for example, has done well on maintaining bus services. A north-south split is not reflected in the way she suggests.

[John Woodcock]

What the Minister has said is potentially important and will be listened to by councils throughout the country. Is he actually saying that if any council cuts bus services, it is the council’s fault and not a result of the drastic reductions in local funding imposed on councils by the Government?

[Norman Baker]

What I am saying—I hope that I have said it fairly—is that it is a challenging position for local authorities. They have received reductions in funding, which has meant difficult decisions for them, and I can understand why some of them have looked to their bus services. However, within the framework in which they operate, some have managed to protect their services, and, as in the case of Bedford, even enhance them. Others have made limited cuts. Others have taken an axe to services. Those who live in Hartlepool and elsewhere need to ask their councils why they have taken an axe to services when other councils have not.

--- Later in debate ---

[Norman Baker]

I am grateful to my hon. Friend for rightly putting that point on record.

Several Members raised the importance of consultation. I welcome the Transport Committee’s emphasis on it, and it is right that Members have mentioned it here. It is also right that councils and operators considering changing services consult properly. It is clear from the evidence that the Committee and I have seen that there are some good examples and some pretty ropey ones. The message that I want to give to bus companies and local councils is that they must consult properly and take into account the consequences of any changes that they propose. Actually, if they consult properly, they often get some good and constructive responses and end up with a solution that is better than the one proposed, not just for customers but for the company.

The Chair of the Transport Committee asked when I expect we will know what the Association of Transport Coordinating Officers is doing with its assessment. I mentioned the annual statistics, but the ATCO assessment is happening now, and we expect the results early in the new year. There is no reason why the Department should not share that with the Committee as and when it comes to us, so I will ask my officials to ensure that we are in touch with the Chairman then.

The toolkit has been mentioned by a number of Members. Passenger Focus is gathering evidence from local authorities and bus operators to find examples of good practice. It is receiving good support from the authorities it has contacted and we expect to see a first draft in January, so we and Passenger Focus are making good, swift progress, which is rightly important to Members present.

The only other points that I want to pick up on are two of the issues to which the Chairman of the Committee referred—namely the bus service operator grant and the concessionary fares reimbursement formula. Contrary to the information that has just been provided by the hon. Member for Barrow and Furness, it is a fact that the Confederation of Passenger Transport UK, to which I spoke immediately after the spending review, told me that, in general terms, it felt that the BSOG reduction, given the notice that we had given and the limited amount of reduction, was one that it could in general absorb without fares rising or services being cut. That is what the industry told me. I am happy to give the hon. Gentleman the exact quote if he wants. That is what it said.

[John Woodcock]

I am aware of the quote, but does the Minister accept that, while it is one thing to look at that in isolation, the situation is entirely different if we combine it with the two other substantial cuts faced by the industry, and that it is simply unrealistic to expect things to remain the same?

[Norman Baker]

There is an issue as to the extent to which other elements of what is happening in the wider market, including the price of fuel, what is happening in the world market, the eurozone or any other factors outside our control, affect the operation of bus services. The hon. Gentleman has referred specifically to the BSOG reduction and the industry has given me a specific response. That is what it said and we should stick with it.

On the concessionary fare reimbursement formula, we have not changed, in any shape or form, the legislation that we inherited from the previous Government. It requires councils and transport authorities to deal with operators in a way that reimburses them so that they are no worse off and no better off from handling concessionary fares. That is a legal requirement and it has not changed. All we have done is issue guidance to indicate to local authorities how they should perhaps discharge that function. They are under no obligation to follow that guidance if they do not wish to do so. The remedy for bus companies that are unhappy with that is to go to an independent appeal. Not very many of them have done so and not many appeals have been won. If bus companies are receiving less money from local authorities and are not seeking to appeal, or do not win appeals, that suggests that they were overpaid previously, contrary to the terms of the legislation. That is a simple analysis of the situation. If, on the other hand, they win their appeal, it shows that local authorities have not been sufficiently reimbursing them on a no better, no worse-off basis. The legislation has not changed at all. I think that, to some extent, the argument is something of a diversion.

I am very conscious of the importance of buses in our country. I do not underestimate the difficulties of local councils in particular, and I am concerned about the level of supported services in some parts of the country, as opposed to the commercial services, which I think are, by and large, all right. We need to see the picture across the country. One effect of localism is that some councils are handling this very well while others are handling it very badly. It is not for us to say that a local council must follow a particular procedure, but I think it is the right of people in those areas to ask why there are no buses in their council area while they are running very well indeed across the border. That is a legitimate function for local people to practise.

We have supplied a lot of help to the bus industry in the way I have described—through the green bus fund, the local sustainable transport fund and the money that the Chancellor has given this week—and I hope to make further helpful announcements in the not too distant future.