Option 24/7 clarified - Bus Services Bill effect
This document is an answer to the various technical questions raised with us in recent weeks in the light of the release of the Bus Services Bill draft in mid May and the second reading of that bill and debate in early June. Things are moving fast and answers are pooled below - you may find some duplication. If there's something we haven't addressed, please get in touch - we don't want to leave any elephants in the room; rather we want to partner in an evaluation of all the various options now open for a positive public transport future in Wiltshire.
This document makes reference to a great deal of other material which may be found via our link page.
Original - 13th June; minor updates 17th June indicated [17/6 update] in text
Original - 13th June; additional answers 21st June indicated [21/6 addition] in text
Q) What is Option 24/7?
A) It's a suggestion for the future of Wiltshire's public transport network, based on a franchising model as offered under the draft Bus Services Bill. In introducting The Bill, Lord Ahmad stated "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.
Baroness Jones for the opposition stated "My Lords, I am grateful to the Minister for introducing the intentions of the Bill so clearly. It is a Bill that we regard as long-promised and eagerly awaited. It recognises what we have been saying for some time: that deregulation of the bus system has proved a failure both for customers and transport planners alike. In England, outside London, since deregulation, bus patronage has steadily declined, fares have shot up faster than wages, and routes and services have been axed. Conversely, since 1986-87, patronage in London has doubled, bus mileage has increased by 74% and fare increases have been lower than in the city regions. So we welcome the Bill’s underlying intention to bring back some order to the system, learn from the successful models, reverse the decline in the number of passenger journeys taken, and drive up quality and reliability."
The option 24/7 team asks Wiltshire Council to take a look at the new options available; the Bill's content was widely floated ahead of its publication, and so the case is already heavily researched and considered. At the request of the lead cabinet member on transport, we have already produced a first draft pilot area for the scheme, which we look forward to developing further in partnership with council officers and passenger and bus industry experts including local operators over coming months. At this stage, it would be unwise to prejudge any outcome, but options on the table appear to be:
1. Support subsidy reduction by 2.6 million pounds as a combination of most of options 1 to 5 of the January to April consultation, resulting in significant bus loss.
2. Support subsidy reduction by 5.1 million pounds as option 6 of the January to April consultation, resulting in more significant bus loss.
3. Support subsidy reduction by a redesign of the public transport network into a more efficient and customer and bus operator friendly system, as per our proposal [here]
Q) What voting mechanism and criteria would be used to establish majority support for an Enhanced Partnership?
A) This is not laid down in the Bill as written, but will be decided by the Secretary of State by regulation at a later date. It is likely to include both the absolute number of commercial bus operators and also their commercial market share.
[17/6 update] The Bill makes provision for voting to be based upon the proportion of operators that disagree with the proposals – i.e. silence is consent. This is to avoid delays or problems with individual operators, for whatever reason, not casting a vote.
Q) How tight would legal responsibility in general on all sides be in terms of Enhanced Partnership or Franchising, and on specifics such as (for example) get-out clauses for operators or a penalty scheme for contractual non-compliance of standards?
A) Once franchised, services will be operated under contract, so the authority can hold operators to account through whatever contractual procedures they establish.
Q) What would the Competition and Markets Authority remit and level of involvement be in the Enhanced Partnership or Franchising situation?
A) The Competition and Markets Authority is only a statutory consultee in the Enhanced Partnership scenario, and there is no requirement to consult them at all in the Franchising scenario. They will have no official remit under either scenario, so WC officer's 6 month delay claim is groundless. Also, Lord Ahmad of the DfT sought to justify this in the Lords by speaking of "the perception of its potential impacts, which has cast a long and unnecessary shadow over bus partnerships"
Q) What would a local authority such as Wiltshire need to do or demonstrate in order to satisfy the DfT on the Franchising criteria of capability, track record and economic geography?
A) Lord Ahmad: "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."
Q) Can you expand on the difference between an Enhanced Partnership and an Advanced Quality Partnership?
A) An Advanced Quality Partnership scheme differs from a Quality Partnership scheme as it allows an LTA to set up a scheme based on bus-improvement measures as well as, or instead of, infrastructure facilities and adds new standards of service that may be included in a scheme. These new standards of service include requirements relating to the marketing and promotion of bus services, ticketing and fares, how passenger information is provided, and operators’ participation in ticketing and smartcard schemes.
The Enhanced Partnership (EP) provisions would encourage partnership working to go further by allowing the LTAs to expand the areas that partnership measures can cover, specifically providing for more joined-up network planning and allowing local implementation and enforcement. The EP will allow LTAs, with the approval of the operators, to deliver some of the outcomes that are only otherwise possible under a franchising model. These potentially include vehicle specification, branding, payment methods, ticketing structure, real time information requirements, frequency of services and timetables.
Q) Will bus operators need to be reimbursed for loss of business under Franchising, and if so, will local authorities be left to take the risks in this regard?
A) [source], DfT: "Fundamentally, and as I have explained previously, the decision to move to franchising is for a local authority to take - bearing in mind risk etc. It will be the authority's responsibility to deal with any challenge from operators as to the decision to move to franchising - the local authority needs to be content that they have taken a sensible and rational decision."
Lord Ahmad: "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."
Q) What is the procedure for applying for an Enhanced Partnership and for its introduction?
A) WC draws up the EP plan and scheme with operators. Operators then express a view, and WC can carry on if a "majority" agree. They can then proceed to consultation, and if they decide to go ahead with the scheme after that then they formally "make" the scheme. Bus companies then express their view again, and if a "majority" agree again, WC can introduce the scheme.
Q) If the notification period changes to 112 days under franchising, would there still be the facility for short notice changes if they are in the public interest?
A) Once franchising is introduced, there must be 6 months notice of any variations. However, the Franchising Authority will be able to act without delay if they need to replace a service that's ceased, act to maintain an existing service, or secure the provision of services to meet a public transport requirement that has arisen unexpectedly.
Q) At what point in the process will bus companies be required to provide the commercial data that authorities need in order to complete their Franchising assessment?
A) Bus companies will be required to provide the data as soon as the Secretary of State gives formal consent for WC to proceed to the official Franchising assessment stage. This will either come 2 months after the Bill becomes law if it remains as written, or immediately the Bill becomes law if the Secretary of State makes a regulation to that effect.
This is why firstly we want to bring the bus companies into the process voluntarily early on at the Pilot Area stage, and why secondly we want Michelle Donelan to try and get the best deal possible for us in terms of drafting the Bill regulations.
Q) Are the DfT considering making any funding streams or pots available to those implementing or considering implementing Enhanced Partnerships or Franchising?
A) Lord Ahmad: "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."
Q) - "My bus service is in the Pilot Area, but only runs on certain days of the week. It is not included in the list - Does that automatically mean it will be cut?"
A) - No it doesn't.
Our plans include a review into the possibility of community transport providers playing to their strengths by taking on the operation of DAYTIME RURAL SERVICES - INFREQUENT contracts as listed in Appendix 1 of the supported buses consultation report. These services are an ideal fit for Community Transport, as their operation places less pressure on driver coverage. Also, 75-90% of previous consultation questionnaire respondents using them were aged over 65, the total cost of such services is relatively low, and the services are usually very popular with their users, who often travel every week.
However, we recognise that, for a number of reasons, not every such service would be suitable for community transport operation. Therefore, our proposal would see the creation of a Community Bus Pot, provided in addition to existing community transport funding, that would enable such services to continue as scheduled bus services in the conventional sense. According to our initial figures, around £76k per annum would be made available to the Community Bus Pot for this purpose, as part of the £2.5 million remaining supported buses budget.
Service permits would be awarded to these scheduled/conventional bus services, which would allow them to operate alongside franchised bus services if they meet certain conditions, such as the acceptance of franchised service tickets.
Meanwhile, the proposed Bus Services Bill legislation states that both existing community transport services and those that we convert to community transport as proposed above will be treated separately from franchised or permit bus services, and will be allowed to operate separately. This is why we have not included in our Franchise Pilot Area list any bus services that would be subject to this review, and we will not categorise them at all until we know which will be converted to community transport and which will remain scheduled/conventional.
One final point - Although community transport will be given the freedom it needs to thrive, we will seek to coordinate where possible through voluntary agreements. This is an element of the current system that works well and that we would wish to continue, examples include Holt Community Transport's service to Chippenham on Fridays which is included in the 69/ZigZag Corsham-Trowbridge timetable, and the Corsham Town Saturday Community Bus, which is included in the Corsham Town Bus Service 10 timetable.
Q) "I can't find any mention of Chippenham Bus Station in the Pilot Area list. Would it be closed?"
A) - Yes, under our proposals it would be closed, and replaced with an enhanced Bus/Rail interchange at Chippenham Railway Station, along with new modern state of the art bus shelters at stops throughout Chippenham town centre.
The time saved by not serving Chippenham Bus Station and instead having loop in/out routes through the town would enable interurban buses to serve areas of Chippenham such as Monkton Park, Ladyfield Road, Barrow Green and Pipsmore Road, along with areas of Corsham such as Katherine Park, Neston and Potley linking directly to/from MOD, thus providing far wider direct journey opportunities, whilst also allowing regular bus services to be restored to the Pewsham Estate via the faster Avenue La Fleche/Pewsham Way route. These improvements would be complemented by simplified Town Bus Services for both Chippenham and Corsham with fast linkage between the two towns, which Faresaver have also advised would be crucial to maintain coverage for roads such as the one-way section of Lowden Hill under the railway bridge heading into the town centre that would be unsuitable for full-sized buses.
Furthermore, all of the above could be provided with one less vehicle overall than is currently required.
This proposal is consistent with the Chippenham 2020 Observations Document which states the following:
"Chippenham has good rail links and the station is a good example of well considered public space"
"The bus station, as a parking area for buses is an unnecessary use of town centre space, therefore presenting a good development opportunity"
"The site, again is an unnecessary use of space in the town centre. Bus stops can be located through the town, and perhaps the bus station becomes part of the transport interchange"
This type of approach has found favour with community representatives and local bus companies:
Quote from Corsham Community Area Network:
“This gives quick and competitive times from central Corsham into central Chippenham. The sacrifice to achieve this is the run to the bus station, but I believe the Town Bridge stop offers a good central position for the High Street and Market Place, whilst the Rail Station has better facilities than the seedy bus station, and from First's perspective centres bus services to connect with the train. It also connects at the Rail Station with the Calne & Swindon service, and with services to the north of Chippenham operated by independents such as Coachstyle and Andybus. I think it has much to offer Box, Rudloe and Corsham passengers with improved travelling times into Chippenham, whilst retaining the Chippenham local service without any additional resource requirement.”
Quote from [source] Faresaver:
“I agree that the Bus Station is a bit of a red herring insofar that it can often take 10 minutes, 5 minutes in, 5 minutes out, to get there from the Town Bridge and all connections can be made at either the Town Bridge or Railway Station. This is what we found in the past with our Town services as a quarter of each loop was time allocated to going from the Town Bridge to the Bus Station. When we first changed this we did have a lot of comments about people having a long walk to the Library and Post Office but apart from that it was generally well received.”
Chippenham Library/Post Office would continue to be served by frequent buses on the Chippenham-Swindon TransWilts Orange Routes 1 and 2, and also by Orange Routes 3 and 5 towards Devizes. The Library/Post Office stops would also benefit from new modern state of the art bus shelters, while the Library itself would host one of our proposed Integrated Transport Information Points, which would be rolled out at council offices, tourist information centres, libraries etc throughout Wiltshire.
Q) Why are some parts of Wiltshire towns served by interurban routes, rather than bypassing them and potentially gaining improved journey times and reliability/punctuality, and why not instead provide a separate town bus-style service for these areas?
A) Local bus companies have previously provided answers to similar questions. Here are some quotes:
[source] Faresaver: "Regarding point 1. The busiest area of the X31 route is concessionary usage around Chippenham Brook Street/Derriads. As you are no doubt aware we used to operate the direct route via the Hospital into Chippenham and so are able to compare passenger loadings figures for both options. The same applies with Bowerhill, there is a lot of traffic, mainly towards Melksham but also towards Devizes. If you took Brook Street and Bowerhill out of the X31 and X72 respectively there would still be a requirement for buses to serve these areas and you could only do this sensibly into Chippenham and Melksham Town Centre as part of a town service thereby removing the option for those people to travel to Corsham, Bath or Devizes on a direct service. This would cause far greater upset amongst passengers than those who would prefer a more direct service. We are aware of a need for a service between Corsham and Chippenham direct for Corsham residents who may wish to visit Chippenham Hospital and this is something we are looking at.
I think I have answered the second point above. The usage on the X31 around Chippenham especially is in both directions not just Chippenham. If by missing Bowerhill on the X72 and operating directly to Devizes you may save 5/6 minutes but then this would need to be incorporated into a separate town service, services which are currently funded and one would expect may be subject to a reduction in the level of service in the near future already."
First Bus Spokesperson: "I appreciate you may not want to travel around Bowerhill but as you are aware it is often these estate areas which make a bus service sustainable. To cut them out would often take away a large chunk of the customer base."
It is also the case that the re-routing of interurban Service 272 between Bath-Melksham-Bowerhill so that it ran via the Melksham Forest estate was the result of a request by Wiltshire Council, and is a huge success in terms of extra passengers now using the service throughout the entire day, due to the extra journey opportunities provided.
We have taken a balanced approach to these issues in our proposed Pilot Area Service List. In areas where WC officers and others have expressed concerns on reliability/punctuality grounds, we have mixed the provision of appropriate vehicles with retaining simplified, cost-effective town bus services operating alongside new interurban bus links serving town estates that enable a far wider range of direct journey opportunities to where people from those areas want to travel to. This in turn will help to make the wider Wiltshire bus network as a whole sustainable into the future, thus fully utilising the benefits of taking the "whole network" approach that we advocate.
A) JUNE 2016-MARCH 2017 - Test all aspects of Franchising business case in a theoretical Pilot Area, expanding this out to include all of Wiltshire with the aim of collecting the data required to feed into the statutory assessment later on in the process. Share advice, knowledge and resources with Nexus, who will be doing a similar exercise in Tyne and Wear during the same period, which will in turn reduce the need for expensive consultants. Bring bus companies and their data on board voluntarily during this period if possible. Michelle Donelan works in parallel to push Wiltshire's case and shape the Bill to our advantage as it passes through Parliament.
MARCH 2017 - Bill becomes law. Ministers introduce Affirmative Statutory Instrument to allow WC access to franchising powers. This goes to both Houses of Parliament and must be dealt with within a specified time of between 28-40 days. It will be debated but convention is to pass such measures, and rejection is virtually unheard of. WC then formally apply for Secretary of State consent to carry out the statutory assessment - granting this consent will be a formality as WC will already have been deemed worthy of access to franchising powers.
MAY 2017 - Two months will have elapsed since the Bill became law, and WC will be able to fully exercise their access to franchising powers. This begins with them carrying out the statutory assessment, the hard work of collecting the data required having already been done months earlier. If the bus companies haven't already come on board voluntarily, then our data will be cross-checked against data that the bus companies will now be required to provide to us. This operator data will include that related to total journeys made, fare structure, revenue received including information broken down in journey and fare detail, distance covered, people employed, along with passenger number and revenue forecasts. Operators are only required to provide data that is up to 5 years old.
[17/6 update] Also, proposed regulations allow for additional information, such as that relating to bus fleets, vehicle age, operation of existing services and costs of operating particular services to also be requested.
JULY 2017 - Statutory assessment is checked by an independent auditor.
AUGUST 2017-Mid OCTOBER 2017 (12 weeks) - Public consultation on WC franchising proposal takes place. WC must publish a consultation document, the statutory assessment, the auditor's report on that assessment, and issue an appropriate notice that describes the scheme and where copies of the relevant documents can be found. The statutory consultees are "standard" local bus operators, local community transport/bus operators, passenger representatives, any other local authority who may be affected, the Traffic Commissioner and the relevant chief police officers.
Mid OCTOBER 2017-Mid DECEMBER 2017 (8 weeks) - Consultation results analysed and report drafted which includes WC's response to the consultation and any modifications they propose to make to the Franchising scheme in the light of consultation responses received.
Mid DECEMBER 2017-Mid JANUARY 2018 (4 weeks) - WC decide whether to proceed with Franchising. The consultation report is then published with the decision included, and if that decision is to proceed, then the Franchising scheme itself must be "made" and published at this point. [17/6 update] From this point onwards, the notice period can be extended to 112 days
Mid JANUARY 2018-Mid JUNE 2018 (21 weeks) - Procurement of local service contracts takes place, with our proposed process being based on Transport for London's procedure. The Invitations To Tender are issued, and a deadline of 6 weeks is set by which bids must be submitted to WC. These bids are then analysed by WC, who announce the tender results during Weeks 17-21. The process as a whole must have due regard to the position of small to medium sized operators.
Mid JUNE 2018-Early DECEMBER 2018 (26 weeks) - Interim/transitional period between announcement of tender results and the beginning of operation of franchised bus services. [17/6 update]
Notice period rises to 112 days.
Early DECEMBER 2018 -Franchised bus services begin to operate, co-coordinated with major rail timetable change.
Q) Have you taken into account the full costs of running a bus service?
Yes - the suggestion that we had not done so was something of a surprise. We have deliberately left out detailed costings from the main Option 24/7 proposal because getting the competitive tender process in terms of bus companies providing buses and drivers right is key to the whole thing, and flagging up in advance the bid levels we would find acceptable would defeat the object of that.
We did however use 2 publically available sets of bus service cost data to inform our technical submissions to the pre-consultation meetings, and these are summarised as follows:
1) First Bus cost data made available as part of their Fairer Fares For All consultation.
2) Unit Cost Rates made available by Nexus as part of their QCS technical work, themselves originally supplied by CPT.
Both of the above are widely recognised as taking all aspects of bus service operation into account, including those mentioned specifically by the CPT.
What we suspect may have led to the assertion that our data was incomplete is that Graham Ellis does from time to time write personal blog pieces that use partial data to look at specific aspects of running public transport services. The owners of Faresaver are self-confessed avid followers of Grahams blog, and it may well be the case that they have misinterpreted this as Option 24/7 only using partial data in general.
Blog articles that point towards what can be learned from partial data (as of the writing of this, Wiltshire Council have only released part of the January to April Consultation data, for example) should only be taken as interim information; please ask if you need clarification.
Q) How accurate is the Tyne and Wear data source?
A) We have made it clear that while we can debate the validity of the overall stance taken by the bus companies in the Tyne & Wear QCS proceedings, we have never questioned the validity of the data that they used to arrive at the position they took.
We do agree to a certain extent with the Confederation of Passenger Transport that there was a certain amount of guesswork involved in the data used by Nexus to arrive at the position they took, but consider this to be understandable in the context of them being the first to utilise QCS legislation - as the QCS Board themselves noted, it is far easier to criticise than it is to create.
Part of the reason we believe that we have the opportunity to present a more robust case is because we have all the data from the Tyne & Wear QCS example to draw upon. We are in touch with the team involved to help inform us. This process is fully supported by Nexus Managing Director.
Q) What are Cornwall and Greater Manchester doing?
A) Michelle Donelan wrote her letter at a time when the general expectation was that Cornwall would use its newly-acquired powers to introduce franchising. It is not our understanding that they are unhappy to have those powers, more that they prefer to keep them in reserve in case Enhanced Partnership does not work for them in practice.
Right at the very birth of our original proposal, we met with the Bus Partnerships Delivery Manager at Transport for Greater Manchester in May 2015 to ask his advice, which was taken on board to help inform the development of Option 24/7. As the CPT representative confirmed, they will be franchising as soon as possible, and we have an open-ended invitation to call on them for further advice should that be required.
Q) How does Option 24/7 relate to school buses?
As [Wilts Council Officer] has outlined, innovation in how school bus services are provided relative to subsidy available is an area where Wiltshire has actually led the way for a number of years now, and we are confident in Wiltshire's ability to continue to do so under Bus Franchising, given the relevant experience available in the Passenger Transport team. [one of our team] will also be heading up a review of aspects of school operations.
Q) What are the risks of Option 24/7?
We have provided a full explanation of our proposed financial model and explained how its scalability would act to mitigate the financial risk.
In addition, we have agreed that the best way forward would be to test all aspects of Option 24/7 over a pilot area. We propose that this be North and West Wiltshire, partly because it's an area that we know very well through our Community Rail operations which in turn give us access to extensive volunteer infrastructure on the ground, and partly because all the various elements of our proposal can be viably tested there. We would then expand this out to include all of Wiltshire with the aim of collecting the data required to feed into the statutory assessment later on in the process.
Also, following discussions with [source] of the Department for Transport, we would also propose that all aspects of Option 24/7 be tested as to their match to what the DfT would expect from a business case, which essentially breaks down as follows:
• That the intervention is supported by a compelling case for change that provides holistic fit with other parts of the organisation and public sector – the “strategic case”
• That the intervention represents best public value – the “economic case”
• That the proposed Deal is attractive to the market place, can be procured and is commercially viable – the “commercial case”
• That the proposed spend is affordable – the “financial case”
• That what is required from all parties is achievable – the "management case"
The authority or authorities must consider when conducting their assessment, whether:
• the proposed scheme would contribute to the implementation of the authority’s transport policies and wider policies;
• the proposed scheme would contribute to the implementation of the policies of neighbouring authorities;
• the authority has the capability and resources to operate the scheme;
• the authority can afford to operate the scheme;
• the scheme would represent value for money; and
• the proposed scheme can be procured successfully.
We believe that the above preparatory measures, taken together, would go as far as we possibly could to demonstrate our resolve on the risk issue.
Q) What about the impact on bus companies?
A) There have been concerns raised about the potential impact on bus companies of the Option 24/7 proposals. As far as the issues raised by CPT are concerned, these have generally already surfaced and have been discussed at length at the technical meetings that preceded this presentation, as have potential solutions to them.
As to how we at Option 24/7 intend to move forward on this front, our position has been clear from the outset - no-one at our end is out to destroy anyone's business. We want the bus companies to play a full part in helping to design any new system, and with this in mind, we have already been talking with First, Faresaver and Frome Minibuses, and have very recently opened dialogue with Salisbury Reds as well.
We believe that Option 24/7 offers a lot of what the bus companies would want to see. They would retain a good degree of control from being on the group that has the final say on bus service proposals, whilst our proposal for contracts that balance the need for competitive tendering with the need to give all bus companies a realistic chance of winning would provide them with the security of guaranteed income from longer-term contracts.
Any new system should also allow participating bus companies to reap the appropriate financial rewards for helping us to fulfill our financial targets, and our proposed bonus scheme is a viable and practical way of ensuring this.
Opponents of Bus Franchising will invariably present it as a kind of "nightmare scenario". However, since members of the Option 24/7 team formally joined together with Wiltshire Council and the bus companies under the LSTF banner to promote bus services in 2013, it has become clear that we all have a common enemy - a failing "status quo" system in terminal decline characterised by marked decreases in frequency and noticeable rises in fare levels on key corridors, affecting both commercial and subsidised services.
We have yet to meet anyone, from any side of the argument, that believes that the only real alternative on the table to Option 24/7 - ie adopting a combination of Wiltshire Council's Options 1-6 - would do anything other than accelerate this decline. Currently 5 bus operators have each been awarded subsidised Wiltshire Council contracts worth between £250,000 - £500,000 per annum, a further 3 operators each have contracts worth between £500,000 and £1 million per annum, whilst 1 more has contracts in excess of £1 million per annum. All of these contracts are under threat to some extent if the questionnaire options are taken forward, whilst they would all disappear entirely if Option 6 went ahead. Staff cutbacks would inevitably follow, and there would be a very real risk of one or more bus operators collapsing entirely, with passengers also suffering further through Wiltshire Council being unable to afford to replace any bus services needing to be covered as a result.
By contrast, we believe that Option 24/7 offers a genuine opportunity to stabilise the entire network in the short to medium term, whilst laying the foundations for expansion in the longer-term better times ahead.
Q) Is Wiltshire Council “capable”?
A) The Council's own officers questioned their own capability at a recent meeting. Our response - Wiltshire are capable, and may have been too modest. They have a team of officers specifically employed to deal with bus contracts, one for each area of the county. They also have an officer employed specifically to deal with tenders in general.
Q) How about trying enhanced partnership, (which might work where a quality partnership arrangement didn’t because it would have teeth), and then franchising should an enhanced partnership failed?
Existing Quality Bus Partnership in Salisbury/South Wiltshire has not protected bus routes from consideration under Options 1-6. It does not give WC any meaningful specification powers, and the bus companies keep all the revenue, thus in turn ruling out a network-wide approach and cross-subsidisation, both of which are essential to retain a comprehensive network that can also withstand the required removal of £2.5 million in WC subsidy. The CPT also conceded that Bus Franchising could work in Salisbury/South Wiltshire, so why not move to that model instead and create such a network as a result?
The CPT mooted Bus Bill "Enhanced Partnership" concept as an alternative. Our proposal allows for consideration of this, but we have 2 clear "red lines", which are that Wiltshire Council and the bus companies jointly specify the network, thus allowing a network-wide approach to be taken, and that enough of the revenue goes to Wiltshire Council in order to facilitate cross-subsidisation, both of which are essential to retain a comprehensive network that can also withstand the required removal of £2.5 million in council subsidy.
It should be noted that there is no such Partnership proposal on the table from the bus companies, which leaves the following as the current potential choices moving forward:
1) Implement a combination of Options 1-6 (which we do not recommend for reasons given in our proposal)
2) Implement Option 24/7 (which we do recommend for reasons given in our proposal)
3) Retain the status quo (which is unfeasible because it would require retaining the current level of subsidy in full)
With 3) effectively ruled out, I believe it is not acceptable to simply put up a general concept as an alternative to the Option 1-6 and Option 24/7 proposals, both of which have involved a great deal of work on part of their respective authors to get them to the stage they are now. Therefore, a Partnership proposal would need to be at least at the same level of development and detail in order to have it considered alongside. This is not feasible within the current timescales if started from scratch now - for example, protracted negotiations would very likely be needed to get to the stage that such a proposal would even command a majority (qualified or otherwise) of bus companies prepared to sign up to it voluntarily. This would not be the case with either Option 1-6 or Option 24/7, both of which would require bus companies to adhere to their terms whether or not a majority agreed.
Q) Should we wait until the Bus Bill become law before we consider the options it offers?
A) At our first meeting, Philip Whitehead gave a clear instruction (minuted and witnessed by all present, which included fellow Cabinet members and Senior Councillors), that the next stage was to design a Pilot Area to test all the aspects of the proposal out in. At the second meeting, we were specifically asked whether we had drawn up such an area, as it was important that we show progress with implementing Whitehead's instruction, and we made it clear that we were looking at a Pilot Area based around North/West Wiltshire. We also included it in our presentation to senior Wiltshire figures.
It would be illogical to ignore upcoming law changes in planning ahead, knowing that the new law will probably be in place by the time the plans come to fruition, and that the newly offered options may provide the best long term future. Should a decision to cut bus support, resulting in significant loss of service, be made prior to the evaluation of the new options there is every likelyhood that the services will have been lost for good in spite of the option which the government tells us is designed to economically halt bus decline.
We commend the cabinet members' and senior councillor's direction to officers to explore the Bus Services Bill alternative offered by Option 24/7, and request that they ensure this direction is followed at all council officer levels. The option 24/7 team has produced the requested pilot area study (passed to council officers on 31st May) and we look forward to overview presenting this to them in coming weeks.
Q) Is the Competition and Markets Authority going to get involved under Enhanced Partnership and / or franchising?
A) The Competition and Markets Authority is only a statutory consultee in the Enhanced Partnership scenario, and there is no requirement to consult them at all in the Franchising scenario. They will have no official remit under either scenario, so the 6 month delay claim is groundless. Also, Lord Ahmad of the DfT sought to justify this in the Lords by speaking of "the perception of its potential impacts, which has cast a long and unnecessary shadow over bus partnerships"
Regarding registration appeals, how that works depends on what system is put on place, as detailed below:
ENHANCED PARTNERSHIPS - If the local authority has taken the decision, then Operators will have the right to appeal to the Traffic Commissioner, and then to appeal the Traffic Commissioner's decision to the Upper Tribunal.
ENHANCED PARTNERSHIPS - If the Traffic Commissioner has taken the decision, then Operators will have the right to appeal to the Upper Tribunal.
When the Enhanced Partnership is set up, a decision will be made as to whether the local authority or Traffic Commissioner has responsibility for registrations, (this is dependent on whether the scheme includes route requirements) and one or other (NOT both) of the appeals processes detailed above will apply accordingly.
FRANCHISING - Operators will be able to appeal to a Traffic Commissioner against a decision by the franchising authority not to grant them a service permit, and then to appeal the Traffic Commissioner's decision to the Upper Tribunal.
The good news is that both the Enhanced Partnership and Franchised Networks can continue to run perfectly unhindered while these appeals take place, which means that fears over "another year's delay" are unfounded.
Q) Will the bus operators stop investing once they know the council is considering franchising?
A) We first answer ... with a question. Have the bus operators already stopped investing knowing that the council are seriously considering options 1 through 5, or 6?
Reductions of £2.5 million or £5.1 million in bus company subsidy income, with further income loss through reduced BSOG and ENCTS payments for services no longer running, on council offered options will surely be leading operators to be looking prudently ahead already, and having option 24/7 also on the table as a serious contender would discourage such an investment reduction as it would expose their company through a reduced bidding capability. It's peverse to suggest that option 24/7 would lead to a greater reduction in investment in the short term than if the council was only offering it's own reduction options, and it would be vexacious (with potential serious business damage) of a bus operator or official to fail to co-operate with the detailed analysis.
From our discussions with bus operators, we note a certain caution which is only natural until we get further into the process. But we have also noted a very great care to ensure that doors to working together are not closed.
Our more positive approach involves doing what we always said we would and saying to the bus companies "we want you to join with us at the beginning and help us shape Option 24/7 into something that works for all of us moving forward. You will have to give us the data we need in the end. Don't wait until then - get involved from the start and let's shape an exciting future for bus together"
Q) Will the bus operators invest if they are reliant of Wiltshire Council contracts?
Consider, if you will, some of the key Wiltshire new bus investment decisions of recent years:
2005 - Stagecoach spend £1.3 million on new low-floor buses and marketing in response to a successful £319k WC bid for Government kickstart funding to increase the frequency of the 55/55A Swindon-Chippenham service, and £280k in direct WC funding for bus stop improvements including 60 new shelters, plus ongoing annual direct WC service subsidy, currently around £141k per annum.
2014 - Coachstyle order a fleet of seven new Optare Solo SER buses after it won new contracts to provide scheduled WC-contracted routes from Malmesbury to Cirencester, Swindon, Yate and Chippenham, which receive an ongoing direct WC bus service subsidy currently standing at £369k per annum. Coachstyle also bought an additional used Solo bus with belts, to be used in support of this new fleet.
2015 - Salisbury Reds order two new ADL Enviro200s and four Optare Solos for WC-contracted bus services 25, 26 and 27 which currently receive an ongoing direct WC bus service subsidy of around £271k per annum.
2015 - Salisbury Reds invest almost £1million in six new Alexander Dennis Enviro200 buses for park and ride services that received around £491k in WC subsidy in 2015/2016.
Salisbury Reds have also made a significant investment in their overall network in 2014/2015, not least a further £1.5 million into eight new double decker buses. In my view, it is no coincidence that Salisbury Reds receive over £1 million in direct WC bus service subsidy per annum, far in excess of the next-most heavily WC-subsidised bus company (Frome Minibuses at around £565k per annum)
What all of the above investment decisions have in common is that they were taken with in tandem with the security of a WC contract and/or WC investment to underpin them. This leads us to the logical conclusion that there is actually a far bigger threat to bus company investment through implementing deep subsidy cuts with no mitigation under Option 1-6, than there would be by implementing clearly-defined, properly incentivised, longer-term contracts under Option 24/7 that would provide the stability and certainty that facilitates investment in the real business world.
In short, Franchising is likely to grow investment, rather than see it decimated.
By contrast, bus investment decisions that are not underpinned by WC contracts or investment are comparatively hard to find. One could argue that Faresaver, one of the least WC-subsidised operators, have brought in used double deckers on their X31 and X34 routes. However, this was not part of an actual investment strategy, instead it was a reaction to First withdrawing their parallel 231 and 234 routes. Had First not pulled out then Faresaver would not have conducted the associated capacity assessments, and the double deckers would not have been brought in.
It is also worth noting that the new legislation will require due consideration of the position of small to medium sized operators such as Faresaver, which will probably see their business protected to a large extent, particularly in their core areas. Therefore it would be folly in the extreme to just assume they will blindly oppose franchising before they have had a proper look at both the benefits and pitfalls.
We are aware of the cyclic nature of investment within a franchise (our team does a lot of work with rail where franchising is well established) and would be looking to take steps to mitigate any negative results and boost positive results of such cycles.
Q) Has Wiltshire achieved anything like this before?
A) The way WC officers frame their concerns about how their track record will be viewed is another example of fatalistic negativity. There are a number of examples of successful bids for external funding that have resulted in improved bus services over the years including 1998 Rural Bus Challenge (Wigglybus, later Connect2Wiltshire) 2005 Kickstart (55/55A Service improvements) and 2012 Better Bus Area (Salisbury and South Wiltshire Partnership based improvements) being just some of the more prominent, and an excellent basis for a positive presentation of the overall WC track record, with Michelle Donelan happy to promote this to the "right people"
Q) Hasn't the franchising approach failed outside London?
A) "Issues with Nexus" were largely due to them not having the access to the data they required, a problem we won't have. They not only have the correct data now, but they also have more warts and all experience of the franchising scenario than anyone else, and have offered to give us any info we require. This means we only need consultants for those elements of the case that are specific to Wiltshire, and I [Lee in this section] recall that hiring Mouchel for TransWilts Rail wasn't a major issue. We don't even need consultants for every aspect of the local stuff - I have experience in some of it through my previous LTSF role, and would be happy to offer my services. Other team members and associates have relevant experience that can be utilised too.
- Currently 5 bus operators have each been awarded subsidised Wiltshire Council contracts worth between £250,000 - £500,000 per annum, a further 3 operators each have contracts worth between £500,000 and £1 million per annum, whilst 1 more has contracts in excess of £1 million per annum. This means that they all have a greater or lesser mountain to climb before the question of reimbursing them for loss of business even becomes an issue.
Q) Could franchising be tried out for a while?
A) Whilst there would certainly be scope to franchise areas of Wiltshire in a phased manner, the DfT are clear that franchising itself should be a permanent decision, and not one to be rolled back when local authorities see fit. What this means is that, although Wiltshire could in theory use the Franchising provisions of the Bill to create a live trial or pilot area and then disband it if they are unhappy with the results, in practice the DfT would be unlikely to allow WC access to franchising powers for this purpose. Therefore, the concept of a trial or pilot area should only be seen as a means to theoretically test all the aspects of a franchise case before full live implementation, and Wiltshire should see that full live implementation as a golden opportunity to stabilise the network in the short/medium term, and to grow/expand in the long term, with the real risk being the certainty of negative consequences under Option 1-6, and evidence from countless other areas of the difficulty of reversing the trend once the cuts course has been chosen.
However, there are limited circumstances in which WC could revoke the franchising scheme. These are if there would be better local bus services if franchising were not in effect, if continuing to operate the scheme would cause financial difficulties for the authority, or if the burdens of the scheme are likely to outweigh its benefits. WC must give 6 months notice of revocation.
Q) What about other operators deciding to compete via a use of permits?
A) Service permits would only be granted to operators if the proposed service would benefit passengers and not adversely affect franchised services.
Q) Isn't 112 days notice of changes in the run up to franchising too long?
A) The notification period isn't automatically changing to 112 days in the run up to franchising. The legislation would merely give local authorities the power to extend from 56 days if they choose.
As far as the passenger is concerned, less changes and changes with more notice, co-ordinated across the public transport network, make for a better customer satisfaction. People accept that change is sometimes necessary, but want good notice and a planned system of changes which can be carefully checked ahead of time rather than being rushed into when another operator serves 56 days notice or ceases to operate. Emergency fixing will still be possible.
[21/6 addition] Q) Regarding Enhanced Partnerships, what would be the ideal boundary for services and how is this decided, and would travel mapping be used when determining the boundaries?
A) Enhanced Partnership service boundaries and how they would be determined will be a matter for the local authorities and bus companies drawing up the scheme.
[21/6 addition] Q) There is a requirement for the Franchising proposals to be independently audited – who does this and at what cost?
A) In this situation, “auditor” means a person or body with a recognised professional qualification. As a guideline, Franchising authorities should set the requirements as to who may be an auditor for these purposes to reflect what they would look for in appointing the local auditor of the accounts of a local authority.
In terms of costs, the budget should take into account the following required elements of the audit:
- That both the information relied upon by the Franchising authority in the assessment, and the analysis of that information is of sufficient quality.
- That the Franchising authority has had due regard to any guidance issued by the Secretary of State.
Q) Does Wiltshire Council want to be a pioneer?
A) You could equally ask "Does Wiltshire Council want to confirm every negative stereotypical view people have of the authority?" Our experience is clear - TransWilts Rail shows the huge benefits from taking the former approach, with the massive bonus of essentially the same team to help guide the scheme to similar success.