Rural Bus Services

Sarah Newton Excerpts

Tuesday 11th October 2011 Westminster Hall

[Brandon Lewis]

There is an absolute need for operators to be looking locally and for local authorities to work with local communities and put further pressure on those companies. In Great Yarmouth, we have had examples of routes that have been considered for cancellation and, by working with the local authorities and the bus company, we have been able to restore a usable route that services residents. If a route is simply not economically viable, when money is scarce we need to consider alternative forms of transport that can provide the service that local residents need. That might not necessarily be a bus. We are talking about providing the transport service that is needed in a cost-effective way and that allows people to live their lives productively.

When I recently did an interview on BBC Radio Norfolk, I discussed the possibility raised by bus companies of having a 50p flat rate and an admin charge for getting a concessionary pass in the first place, and whether we should change the age of eligibility to retirement age rather than 60. I was pleasantly surprised because, despite expecting a barrage of criticism, we received some very positive responses. One resident said:

“In regard to the recent news of the deficit we are facing with the bus pass I heard you on Radio Norfolk and thought your opinions echoed mine and I am sure many more. I would be more than happy to pay 50p each trip which would more than cover the debt.”

Cornwall county council, for example, has called for legislative changes to allow pass holders to make a small payment for each journey. It has written to all the county’s MPs to ask them to lobby for such a change.

[Sarah Newton (Truro and Falmouth) (Con)]

I congratulate my hon. Friend, who makes exactly the point that I want to make, on securing the debate. During the summer, in meetings in village halls around my constituency, there was universal support for the idea that some people could contribute a flat fee of 50p or £1. I accept that, for people living in poverty and on mean-tested benefits, that would be too much, but there is strong support for consideration to be given to the introduction of a flat fee. In the spirit of localism, the Minister should enable councils to be pathfinders if they want to do so. In this age of austerity, we are enabling many councils to be pathfinders and to work with residents and stakeholders to find sustainable ways of funding vital public services. What better example and lead could the Government provide than to enable certain local authorities to pilot flat fees where there is overwhelming support from residents?

[Brandon Lewis]

My hon. Friend is right, particularly in relation to overwhelming desire from local residents to see a service continue. We need to be more flexible.

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

I am pleased to be able to speak on rural bus services. The issue is apposite because on 26 September Northumberland county council issued the report of its bus subsidy working group. I endorse the all-party work, led by Councillor Gordon Castle, to bring together a proper and legitimate way forward for the bus services of Northumberland. The problems of Great Yarmouth presented by my hon. Friend the Member for Great Yarmouth (Brandon Lewis) are common to us all and endemic in all our counties and constituencies. We have a common will and desire to change the policies of the past, which have seen a gradual decline in bus services, to the detriment of people in rural areas. I hope and pray that the Minister will take on board and progress the excellent suggestions arising from today’s timely and proper debate.

I represent the second largest constituency in this country, and rural bus services are clearly an important factor. Without question, the Hadrian’s wall bus service provided by the Hadrian’s Wall Heritage company and Northumberland county council provides a great service for tourism. Not only rural bus services are at stake, however, and I do not want us to fall into the trap of being champions solely of those suffering from rural fuel poverty and poor rural bus services, because those matters are also common to the market towns and villages in our constituencies. Those areas are not fundamentally rural, but include 5,000 or 3,000-people towns that are absolutely dependent on bus services. All of us could highlight individual areas of rural bus poverty—if that is the proper expression—that we could describe, note and champion, but the little towns and villages also need support. That is what I particularly want to discuss.

I have the great fortune—I express that passionately—to have three particular bus champions in my constituency who regularly fill my postbag. In Prudhoe, I wish to cite Robert Forsyth and Amanda Carr, who promote the cause of buses and are, quite rightly, on the case of bus companies such as the euphemistically named Go North East, which does not seem to go very far or to continue to go very often—it would be well named, if only it fulfilled its name. They champion the desire of local people to have buses that support them in local villages. The Hexham Courant, my local paper, has supported Mrs Carr. Her mother and mother-in-law try to take the children to and pick them up from school using the local bus service but, if it goes, they will not be able to do so, so continuing to work will be impossible and there will be huge difficulties on the way ahead.

[Sarah Newton]

My hon. Friend is making some good points. People often think that rural bus services are a bit of a luxury—some have cars sitting in their drives but choose to use bus passes because they have them—but they underestimate the poverty and the number of those struggling on low incomes who use the buses to go to work, school or hospital. In Cornwall, we have only one acute hospital for the whole county, which is more than 100 miles long. CAB Cornwall, the citizens advice bureaux, has done some excellent work showing the cost to society of the lack of affordable access to transport. High numbers of people miss doctor or hospital appointments, which is detrimental not only to personal health but to the whole of society because of the costs of them not accessing such vital services.

[Guy Opperman]

As always, my hon. Friend makes a telling point, and I endorse entirely what she said.

Certain organisations are stepping into the breach, and I would like to support the work of Adapt, which has stepped in to provide an essential public service but has gone further than traditional countryside bus provision. It targets those who need the service by operating a dial-a-ride scheme, picking up local residents from their home. The service has proved extremely successful and invaluable to those with young children and to the elderly, who felt that their access to buses was limited under the old, more traditional provision. I totally endorse the dial-a-ride system as the way forward for traditional rural bus services that are failing to provide.

I want to finish with two particular points, which relate to what the Government can do for us, touching first on integration and secondly on the degree of control that Government and local councils have over bus services. I represent a constituency that is entirely in Northumberland, but Durham is below me—it is good to see my neighbour in the Chamber, the hon. Member for North West Durham (Pat Glass)—Cumbria is to the west, Newcastle is to the east, and the bus services have to integrate. I also have Scotland to the north and, although we do not have an awful lot of bus services to Scotland, there should still be a degree of integration.

The sadness is that there is no integration between individual bus services operating in one county and the next—that must come from the Government giving guidance. We have the bizarre situation of the bus companies literally not talking to each other, let alone planning individual services with each other.

To go further, we rightly have a degree of competition, with bus companies able to provide local bus services, but we can have the bizarre situation of two bus companies competing for the same journey, with the result that neither can make a profit or provide a service and we end up with no bus company in that area. The Government must be able to find some way to enforce a degree of integration when the ultimate contract is awarded to a bus company, so that the parties and partners work together and not against each other.

--- Later in debate ---

[Norman Baker]

I can say to my hon. Friend to be helpful that a number of well-meaning people who are very committed to bus services have raised similar points to the one that he has raised. Those points have been noted and passed both to the Department for Transport and elsewhere in Government. However, we are clear about the commitment that we have made to the free bus pass, and that is not going to change.

I should at this stage pick up a point made by the hon. Member for Great Yarmouth about trying to save money on administration in relation to the bus pass. That is right. We need to consider those types of saving. That is one reason why we were supportive of the idea of moving the administration from districts to counties, which saves considerable costs in the administration of the bus pass.

Only one small change has been made to the entitlement to concessionary fares: the age of eligibility has been increased in line with the changes taking place to the state pension age. That is right, as people are living longer, staying healthy longer and tending to stay in work until later in life. That change started in April 2010, just before the last general election, so local authorities are already making savings as a result. The change will assist with the financial sustainability of the scheme, while reserving the benefits of the bus pass for those with the greater need.

What has not changed at all—this is an important point—is that operators should be reimbursed for concessionary bus travel only on a no better, no worse-off basis. That is in primary legislation introduced by the previous Government. Nothing that this Government have done has changed that at all. Almost a year ago, the Department for Transport published revised guidance to local authorities to support them in determining their arrangements with bus companies, to make sure that they are no better and no worse off. I made that clear in my recent letter to the hon. Member for North West Norfolk (Mr Bellingham) and my hon. Friend the Member for North Norfolk (Norman Lamb), both of whom came to see me to talk about bus services in the county.

In a report published in May, the Competition Commission strongly commended the guidance issued by my Department, since it helps local authorities to take account of the impacts that the concessionary travel scheme can have on commercial pricing policies. The commission says that it hopes that the guidance will be followed to the greatest extent possible. In fact, the majority of local authorities are now using the guidance and should be reaping the financial benefits of taking it on board. I stress, however, that it is entirely a matter for them whether they use the guidance or not. There is no compulsion to do so. The only compulsion is the one that existed in legislation introduced by the previous Government to ensure that bus companies are no better and no worse off from operating the concessionary fares scheme. The guidance can be a useful starting point for negotiation between bus operators and local authorities and, so far this year, more than half of the appeals lodged by operators have been withdrawn—a significant improvement on previous years.

I remind Members that our funding for bus travel does not stop at concessionary travel reimbursement and bus operator subsidy. We have also provided almost £47 million to local transport authorities and bus operators to purchase 542 low-carbon buses across England, through our green bus fund. I would also like to refer to our new £560 million local sustainable transport fund, which this Government have introduced. There have been 39 successful bids in tranche 1, 25 of which have included bus-based elements to help bus travel locally.

Turning to the third element, I recognise that the recent local authority settlement has been challenging. There is no doubt about that. I have heard the argument that the distribution method used at the time does not reflect the particular circumstances facing each local council. That has been brought into sharp relief now that, since April, all funding for the statutory concessionary travel scheme has been provided as part of the settlement from the Department for Communities and Local Government. I should point out, however, that last summer’s consultation by that Department provided an opportunity to influence the final distribution method for the first two years of the spending review period. The overall funding then set was deemed by DCLG to be sufficient to enable local authorities to deliver effective local services, while ensuring that authorities do not set excessive council tax increases. Councils now have another opportunity to make their voices heard. DCLG is consulting on the broad options for a new way of funding local government, based on business rates retention.

The Government are clear that any changes must protect the interests of local taxpayers and the vulnerable, be fair for all councils and encourage growth. Councils that are more deprived—I accept the point that has been made about the definition of deprivation—will continue to receive central Government support. We recognise, however, that it may be possible to improve the way local council spending on concessionary travel reimbursement is treated in allocating local government resources. That is why, following my meeting in April with the hon. Member for Great Yarmouth, my hon. Friend the Member for North Norfolk, the hon. Member for Broadland (Mr Simpson), my hon. Friend the Member for Norwich South (Simon Wright), and the hon. Members for South West Norfolk (Elizabeth Truss) and for Mid Norfolk (George Freeman), I wrote to the Minister for Housing and Local Government on 20 July about the way formula grant is calculated, the relative needs formula for concessionary travel, the so-called floor-damping mechanism, and the local government resource review. That is why the consultation considers whether to review the relative needs formulae for concessionary travel when establishing the baseline for local government funding from 2013-14 onwards.

[Sarah Newton]

I welcome the review of local government funding formulae. One area of reimbursement that the Minister has not mentioned, and on which I hope he will give an assurance, relates to parts of the country that welcome lots of tourists but are not, at the moment, reimbursed for the cost of honouring concessionary fares. Can he assure us that the review will consider that?

[Norman Baker]

I can give an assurance only that, first, that point was made to me in a meeting with Norfolk MPs, and secondly, that it has been reflected in comments that I have passed on to DCLG. I am happy to share the reply that I received from the Minister for Housing and Local Government. He confirmed that he had received the letter and that, in his view, the new business rate retention system is likely to address Norfolk’s concerns. That was the official response from DCLG and the Minister thinks that that is part of the answer. There is recognition, at least, from DCLG that Members in Norfolk have a legitimate concern about the matter, and it is therefore being factored, I think, into the Department’s thinking.

Let me now turn to reductions in tendered bus services, which in England comprise about 22% of bus services, while the rest are commercially provided. As I have said, the recent local government finance settlement has been challenging, but I am still disappointed that in some areas local councils have responded by taking the axe to local bus services in a rather unimaginative way. This hits particularly hard in rural areas where supported services make up a higher share of the total than in metropolitan areas. 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. It would seem that there is also an impact on people’s love lives and on cats, but perhaps I should keep away from cats.

Some councils, such as Cambridgeshire, have unfortunately taken an almost slash-and-burn approach to bus services, while others, such as East Riding, where the percentage cuts are in single figures, have been much more considerate and careful in their decisions. There is therefore a big difference—this is part of localism—between the responses of individual councils. People are now empowered to ask why their council has made cuts in their area when similar cuts have not been made across the border. I hope that people will start picking up on these differences and challenge their councillors accordingly. That is part of the answer to the point that the hon. Member for Skipton and Ripon (Julian Smith) made about North Yorkshire, because the position in North Yorkshire is very different from that in, for example, East Riding.

I was encouraged to read in a recent press release by Norfolk council that it has been able to make significant savings this year with

“very little disruption to bus services.”

Another example is Dorset, which I understand is making savings of up to £1 million this year through an innovative procurement model. That is something that I am examining to see whether there are lessons that can be rolled out to other councils throughout the country.

I am interested in the point made by the hon. Member for South Derbyshire (Heather Wheeler) about feeder services in Shropshire. Section 22 community transport services can qualify for concessionary travel, so it is possible for them to be included in a proper arrangement for a planned bus network.

I am also keen that local authorities make the most efficient use of their resources, whether that means combining adult social care transport with patient and school transport, or providing more flexible forms of public transport in areas where commercial services are not available. In Cheltenham, for example, Gloucestershire county council has replaced a costly subsidised bus service with a route operated by a community transport group, which integrates school transport in the mornings and afternoons with a scheduled timetable open to the public in between. I think that that is the sort of initiative that the hon. Member for Great Yarmouth was suggesting might be applied more widely.

On community transport eligibility, as I have mentioned, section 22 services qualify. Section 19 services do not, because the Department has long held the view that, because they are on-demand services and available only to specific groups of people, it would not be fair to extend concessionary fare eligibility to them. It could also undermine existing tendered or commercial services. They qualify, however, for bus service operators grants, so there is support.

I am conscious of the time, but let me pick up one or two of the points that have been raised. The hon. Member for Hexham (Guy Opperman) made a point about integration across counties. Local authorities have powers to work together with operators of commercial services across boundaries to integrate timetables. That is done in some areas, such as Oxford and Sheffield, so the powers are there and were, in fact, reinforced in the Local Transport Act 2008. It is up to local authorities to use the powers that they have. There are no quality contracts in place at the moment. The legislation exists to allow them to be formed. There are statutory quality partnerships, which is perhaps what the hon. Member for Barrow and Furness was discussing. If local authorities want to avail themselves of the powers in the 2008 Act, they can do so. Some of the legislation is slightly complicated. In fact, when I was in opposition, I wanted to go further, in line with some of the comments made by Government Members during today’s debate, but that did not find favour with the previous Government.

The Competition Commission has produced this week its provisional remedies for the bus market. The Department for Transport may need to look at those carefully. Perhaps some solutions will help to address some of the issues that have been raised today. The hon. Member for Hexham talked about more council control, which is what the Competition Commission is suggesting, particularly in terms of multi-operator ticketing.

The hon. Member for South West Norfolk raised the issue of rail-bus integration.