Bus Services (Yorkshire and Humber)

Norman Baker Excerpts

Wednesday 17th April 2013 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I will probably not require 44 minutes to respond to the debate, Mr Howarth. I welcome this topic, and I am grateful to the hon. Member for Leeds North East (Fabian Hamilton) for how he presented it. I am sorry that he is not here, but I fully accept his reasons. He is—not everybody in the House is, although perhaps I will get myself into difficulties—an honourable Member and a man of integrity, so I have no problem with the reason that he gave for not being here for the winding-up speeches. I thank him in his absence for securing time to discuss bus travel for young people in the Yorkshire and Humber region.

As I know from my constituency and from my role as a Minister, and as has been said this afternoon, buses are a lifeline for many people, including young people. They provide access to jobs, schools, health care and social activities. Good bus services contribute to both the Government’s key transport objectives: creating growth and cutting carbon. By providing an attractive alternative to the car, we can reduce not only harmful emissions, but, at the same time, the congestion that can choke off our local economies.

Buses are of particular importance to young people, as Members have indicated. More than half of students are frequent bus users and depend on the bus to get to education or training. Buses are used more frequently by young people, with the average 17 to 20-year-old making twice as many trips as people in other age groups.

In Yorkshire and Humber, two thirds of all bus trips by 11 to 15-year-olds involve travelling to or from school. Among 16 to 19-year-olds, 36% of all bus trips are for the purpose of education. A further 20% are for commuting. Young people in Yorkshire and Humber continue to use the bus when they start working. Some 37% of all bus trips by 20 to 25-year-olds are for the overall purpose of commuting. On average, young people in the Yorkshire and Humber areas make more bus trips per year than the average young person in England, which Members may not realise. Sixteen to 19-year-olds in the region make more than 200 bus trips per year, compared with 186 for England as a whole.

I fully recognise that the cost of young people’s travel can cause difficulty for those seeking employment, education or training. That is why, at last November’s UK bus awards, I urged the bus industry to be more innovative about the fare deals and discounts that it offers young people. I want the industry to build on initiatives such as the Confederation of Passenger Transport’s “BUSFORUS” web portal, which I encouraged the confederation to produce and which was launched last autumn. That interactive travel information website is designed with, and aimed precisely at, young people.

The Government appreciates that bus fares for young people vary a great deal across the country. In many cases, that is the result of operators responding to their local market. However, I am pleased to see that travel discounts are available to young people on many bus services in the Yorkshire and Humber areas, as has been mentioned this afternoon.

We have no immediate plans to legislate to set fares for young people or to introduce a statutory young person’s travel concession, but I think that a simpler fare structure would help, and in some areas bus operators could do more to offer discounted fares to young people. People who have decided to leave education and begin work—for example, as apprentices or in training schemes—may find the cost of bus fares a barrier. I am grateful to the hon. Member for Penistone and Stocksbridge (Angela Smith) for mentioning the offers that are available for some people coming off JSA into employment, particularly young apprentices. That is a good scheme and we are happy to endorse such schemes. Indeed, I have been promoting them through the local sustainable transport fund, as I imagine the hon. Lady knows.

It is worth pointing out, in response to the complaints of the hon. Member for Makerfield (Yvonne Fovargue) about lack of opportunities for young people, that the number of people in apprenticeships has risen by 88% since 2010. More than 1 million people have started apprenticeships since that time, so apprenticeships are a great success story for the coalition Government, and that point should not be neglected. There are of course issues that need to be dealt with sensibly, but some good things are happening and it is not fair to present a view of things as “woe, woe and thrice woe”, as I fear the hon. Lady tried to do.

Cheaper fares could make buses the mode of choice at an early age and lock in patronage for the future and help to reduce car travel. That is why, at the bus partnership forum in January, I asked the bus industry to consider offering travel discounts to all people aged 18 and under, not just those in education. A fares discount based on age seems far easier to administer than one relying on proof of education. I have encouraged the bus industry to do that because it is in its interest to identify people who want to use the bus and lock them in for future use for the rest of their lives. Potentially, they will be bus users for 50 or 60 years beyond their education time.

Interestingly enough, the legislation that regulates the bus industry, which we inherited in 2010, does not require bus operators to offer any reduced fares to young people. If Government intervened to enforce an age limit for charging an adult fare or legislated to create a national concessionary travel scheme for young people, local authorities would be obliged to reimburse bus operators for any revenue forgone; thus a financial burden would be imposed on local authorities, or, if that were reimbursed to them, there would be a further significant burden on the national taxpayer. In practice, bus fares are set at a commercial level by the operators. In general, despite the fact that there is no requirement to offer anyone below 18 a discount, operators offer free travel to under-fives and a reduced fare to those up to 15 or 16, although that varies considerably around the country.

[Angela Smith]

Does the Minister acknowledge that under the quality contracts introduced in the Local Transport Act 2008 integrated transport authorities could introduce requirements on fares, as well as on routes and frequency?

[Norman Baker]

Indeed they can, and they can get arrangements with bus companies through partnerships, as well. I shall return to quality contracts, because both the hon. Lady and the hon. Member for Leeds North East raised the point.

The Department for Transport carried out a survey of travel concession authorities in 2012. Those that responded said that about 40% of operators in their areas offered commercially discounted fares up to the age of 15 and a further 30% offered discounted fares up to the age of 18. Where operators offered concessions, they were mainly discounts of between a third and half the adult single fare. About a fifth of operators cut a quarter off the adult fare. That shows what an unfair and confusing patchwork of fares is available to young people. For the lucky minority, local bus operators will give a 50% discount to those under 18, but young people with access to a local bus service run by one of the 70% of bus operators who offer no discount to 16 to 19-year-olds are in an entirely different situation.

In a deregulated market, bus operators are in competition with each other, and if they were to agree specific fares for young people, it could be deemed anti-competitive. However, in principle, there seems to be nothing to prevent several operators in an area offering discounts to young people as a percentage of the adult commercial fare, whatever that may be. It will of course vary from service to service. That approach would offer young people a deal that is not universally available. There are areas where such an informal arrangement is already in place. In Norfolk, for example, there is a voluntary agreement between several bus operators to offer a standard discount to young people.

In addition to such informal arrangements, a local authority can decide on a discretionary basis to offer concessions to young people in its area. That is solely a matter for the local authority and such an enhancement would have to be funded locally. In Yorkshire and the Humber, all the local authorities have some form of local travel assistance for young people, and I am pleased about that. The integrated transport authority areas of South Yorkshire and West Yorkshire, as well as the city of York, issue travel cards that give young people discounted bus fares on the services of several local bus operators. The most rural authorities in the region, where there are fewer bus services, subscribe to the Wheels 2 Work scheme, which allows young people to hire a bicycle or a scooter for access to training and employment. In addition, all jobcentres in the country can provide jobseekers with discretionary support for travel costs, such as support for the cost of a bus fare to attend a job interview.

Therefore, while there is some support for 16 to 19-year-olds with transport costs, it is only ever offered on a commercial or discretionary basis, whereas the national scheme for older people gives free travel at off-peak times on any local bus service in England. The “BUSFORUS” web portal created by the industry—an initiative I welcome—has only further highlighted the disparity; a look at the bus operators’ web portal suggests that they have recognised that. We must do better for young people and give them more consistent and affordable bus fares. I am making that my top bus priority between now and the next election. Discussions are being held with the bus industry and colleagues across the Government to find a solution to the mess of patchwork concessions currently available to young people.

I mentioned the bus forum earlier, and hon. Members may know that it is an arrangement for interested parties to meet once every six months, under my chairmanship, for a round table to discuss bus issues. It may be of interest that, at my instigation, there is now a representative from the UK Youth Parliament, who attends regularly. I have engaged with members of the Youth Parliament and responded to a request to give evidence to their Select Committee hearing, and on behalf of the Government, I have responded formally to the recommendations. I assure hon. Members that we engage with young people, both directly in the Department for Transport, and through the UK Youth Parliament. It is important that young people’s voices should be heard, and I am determined that that will happen in our transport discussions.

As to the use of buses to get to education, all local authorities have a statutory duty to provide home-to-school travel where they consider it necessary to secure a child’s attendance at school. Legislation does not specify what the mode of transport must be, but it is generally a bus. Where transport is considered necessary, it must be provided free of charge. Transport must be free for those pupils attending their nearest suitable school, where that is beyond the statutory walking distances of two miles for pupils below the age of eight and three miles for those aged eight and above. There is also an additional entitlement to free home-to-school transport for children from low-income families. That provides additional support for attendance to those children who are entitled to free school meals or whose parents receive the maximum working tax credit.

Local authorities must make arrangements for children who are unable to walk to school because of special educational need, disability, or mobility problems, or who cannot reasonably be expected to walk because of an unsafe route. However, there are suggestions that some local authorities have reclassified, as safe, routes that were previously designated unsafe, to save money on providing school transport. Parents can appeal to their local authority about such a decision, but that is not always an independent process. Parents can complain to the local government ombudsman about the handling of such an appeal. However, that can be a lengthy process, and in the meantime, children could be walking potentially unsafe routes to school. I would expect local authorities to use the Department for Education’s guidance, which was published last month, to implement fairer and quicker processes for appeals. That, by the way, is an example of good cross-departmental co-operation between me and the hon. Member for East Worthing and Shoreham (Tim Loughton), when he was a Minister. He took the issue seriously and drove forward that agenda in the Department for Education.

Aside from their statutory obligations, local authorities have discretion to provide transport to all other pupils, for which a charge can be made. The increase in participation age will give more choice to young people who continue with education or training beyond the age of 16. They will have a range of options, including working full time alongside their studies or undertaking an apprenticeship.

Young people in work or on a waged apprenticeship will be able to pay for, or contribute towards, their transport costs. The £180 million bursary fund for 16 to 19-year-olds, which is administered by further education establishments, has the flexibility to meet transport costs for those in genuine need of support.

Local government finance continues to be challenging, but it is still disappointing that in a few areas, local councils have responded by taking the axe to local bus services, and I deplore that. I am naturally concerned when I hear that vulnerable people with few other transport choices have lost their only bus service, or that children have reduced public transport access to the school of their choice.

A few councils have taken an almost slash-and-burn approach, while others, I am happy to say, have been more considerate and careful in the decisions they have made. It is worth noting that 80% of services are commercially run and require no subsidy from local councils, so the services that some councils have cut have been from the 20% that are supported services.

Aside from the funding that Yorkshire and Humber receives through a Department for Communities and Local Government finance settlement, it has recently been awarded £20 million for the new bus rapid transit between Sheffield and Rotherham, almost £53 million for 11 local sustainable transport fund projects and £13 million for three better bus area 2012 bids.

In February, as part of the Sheffield city deal, to which the hon. Member for Penistone and Stocksbridge referred, we announced Sheffield’s designation as the first new better bus area. Sheffield’s deal will see devolution of bus service operators grant in the area to South Yorkshire PTE together with an immediate grant of £530,000 and further annual top-ups of just under £1.6 million a year. Those grants will better target bus subsidy in Sheffield. The package includes enhanced bus frequencies to major employment and education sites and reduced bus fares across bus operators.

The Department has also initially approved just over £173 million funding for the Leeds trolleybus. The outlook for buses in the Yorkshire and Humber area is rather more positive than Opposition Members might have concluded. The funding that my Department has allocated should see a marked improvement in bus services, which will encourage more young people on to the bus.

Let me deal briefly with the points that have been raised. The hon. Member for Leeds North East moaned about deregulation in 1986 and the impact that it has had on fares. I have to say to him gently, although he is no longer in the Chamber, that his Government did of course have 13 years to reverse that deregulation and failed to do so, so I take his enthusiasm now for reversing with some degree of scepticism.

The hon. Gentleman also talked about local authorities applying for quality contracts and being excluded from the BBA top-up. However, if he reads the guidance he will find that it says:

“Where a local authority can demonstrate that it has genuinely tried to engage in partnership working with local bus operators and this has been met with unreasonable resistance, should the local authority then decide to pursue a quality contract scheme, the Department will—upon request—exceptionally consider whether top-up funding could be provided when decisions are taken about the designation of any further tranche of BBAs.”

It is not true to say, therefore, that the two schemes are mutually exclusive.

[Angela Smith]

If I recall rightly, when the Minister was a member of the Bill Committee for the Local Transport Act 2008, he was much more positive about re-regulation than perhaps he is now. The whole point of quality contracts within the context of the 2008 Act was exactly that integrated transport authorities would be given the freedom to use quality contracts without having to jump over the hurdles that the Government seem to have reintroduced.

[Norman Baker]

I do not accept that. I repeat my earlier point: the hon. Lady’s Government had 13 years to reintroduce whatever it wanted, and did not do so, despite some cajoling from my colleagues and me at the time. However, the fact of the matter is that quality contracts remain on the statute book. The 2008 Act has not been changed in any shape or form. What we have done is to reintroduce further incentives for partnership working, which we think is right. After all, partnership working is the key to success. It is unlikely that we will see more people on buses in a local area if either the local authority or the transport operators are being difficult, so their working together is an essential prerequisite.

It is not true to say, as the hon. Lady claims, that there is a penalty for developing quality contracts. The quality contract regime has not changed at all. What we have is a reward for partnership working, which is an entirely different proposition. It is not true to say, as the hon. Member for Leeds North East has said, that BBAs and quality contracts are mutually exclusive; they are not, and I have just read out the relevant piece of the guidance that demonstrates that to be the case.

The hon. Member for Rotherham (Sarah Champion) talked about cuts in a way that made me feel that Armageddon had arrived. This is the fact of the matter: the overall bus mileage in England fell by just 1% between 2010-11 and 2011-12. I regret any fall in bus mileage, but 1% is not Armageddon. She might also want to know that, in 2011-12, there were 4.7 billion bus journeys in England, which is the highest figure since deregulation in 1986. Therefore, the suggestion that the bus industry is on its knees is perhaps not borne out by the statistics.

The hon. Member for Makerfield complained about the cut in bus service operators grant. I have to say again that, while I regret any cut in support for the bus industry, the fact of the matter is that we ensured that there was a soft landing by giving the bus industry around 18 months’ notice of the 20% cut. At the time—it is on the record—the industry said that it would be able to accommodate that because it had been given sufficient notice. That is in stark contrast to the lack of notice given by the Welsh Assembly Government, run by her party, which gave virtually no notice at all of changes to BSOG for operators in Wales.

The hon. Lady also complained about the profits of bus companies. As we are in a 1980s mood today in many shapes and forms, let me say that I detected a return to 1980s Labour-style theology, where profit is a dirty word and has to be removed from bus companies. That appeared to be the substance of what she was saying.

[Yvonne Fovargue]

In no way did I imply that profit is a dirty word. I merely said that some of the profit should be invested for the good of the passenger, to keep them as passengers in the future.

[Norman Baker]

The point the hon. Lady misses is this: it is in the interests of the bus companies themselves to invest for the future to generate more passenger traffic by having newer buses and a better service. That is indeed what they are doing. For example, the average age of the bus in this country is declining. We are seeing massive new investment in buses, not least of all through the Government’s green bus fund. The way to get more passengers is to provide the service that people want. Everybody in the bus industry understands that and they do it really quite well, as the figures on mileage and the number of bus journeys demonstrate very adequately.

[Angela Smith]

The Minister is being very generous with his time. May I ask him a simple question? In the 1980s, the whole bus system was regulated. London is still regulated. Why is it that what is good enough for London is not right for the rest of the country? Why cannot the rest of the country have the regulated bus service that London enjoys?

[Norman Baker]

The hon. Lady should have asked the Government in 1986 why it took that view and then her own Government why it did not reverse it in the 13 years between 1997 and 2010. However, there are advantages in both systems. Inside London, a plethora of empty buses can be seen, sometimes queuing up one behind another, which is not necessarily an efficient system. The cost of running that system is higher than it should be, so the London benefits are not as clear cut as she would have us believe.

Finally, let me pick up on the careless phrase that the hon. Member for Makerfield used when she talked about the coalition Government making “reckless” cuts to the UK transport system. I have to say to her that we are now seeing more people on the buses—4.7 billion bus journeys, which is higher than at any time since 1986. We have the biggest investment in the rail network since the Victorian era. We have 850 miles of electrification going on in the railway network, compared with 9 miles under her Government in 13 years. There are more people on the trains now than at any time since 1926. People who use public transport can be well pleased with what the Government is doing and I commend it to the House.