ITEM CA15
CABINET – 15 JULY 2008
REVIEW OF BUS STRATEGY (CHAPTER 3)
Report by Head of Transport
Introduction
1. The county council is required, under the Transport Act 1985, to secure “such services as they consider it appropriate to secure” to meet needs for bus services which are not being met by the commercial market, and to publish policies about how this will be done. The Transport Act 2000 required that these policies be included in a Bus Strategy, part of the Local Transport Plan. The current Bus Strategy was adopted in early 2006.
2. As discussed below, circumstances have led to a need to review these bus subsidy policies. They are contained in Chapter 3 of the existing Bus Strategy. There are policies in respect of other aspects of the Council’s involvement in bus services in other chapters. These other chapters will be subject to review in due course; for the time being only Chapter 3 is proposed for revision. The Cabinet is now asked to agree a revised text for this Chapter, for submission to Council on 9 September 2008 for adoption.
Background
3. The policy in the current Bus Strategy is based around regular scheduled reviews of subsidised services, with decisions on which services to fund being made by elected members, taking account of a number of factors, without primacy being given to any one factor. On 20 March 2007 a Best Value Review of Funded Transport Services was approved by Cabinet. Whilst focussing primarily on transport to school, this included a proposal for a more structured approach to bus subsidy, based on cost per journey (cpj). This proposal was contrary to existing policies, which therefore require revision.
Formulation of draft Bus Strategy Chapter 3
4. The Transport Act 2000 requires that there be consultation before revision of the Bus Strategy. Recognising the complexity of issues involved, a two stage consultation process was adopted. The first phase, carried out in late 2007, consisted of stakeholder workshops considering the factors which should be given primacy in bus subsidy decisions. The ideal objective from this phase was a single numerical basis to simplify decision-making.
5. The summary of proceedings and outcomes of these workshops is in the Members Resource Centre. Essentially, stakeholders considered that there were many relevant factors but there was no one which commanded universal support.
6. The outcome of this process was reported to Environment and Economy Scrutiny Committee on 12 December 2007. It agreed to comment that “rather than the suggested formulaic approach the Cabinet Member for Transport should consider each case on its merits”.
7. In the light of the outcome of this first phase, officers, in consultation with the Cabinet Member for Transport, prepared a draft revised Chapter 3 of the Bus Strategy. The principal changes which this embodied, compared to the current Bus Strategy are as follows:
· Reviews of subsidised bus services to be independent of reviews of Home-to-School transport in the same area. · The present structure of two areas reviewed each year, with four-year contracts, to be replaced by one review per year, and longer contracts (the draft proposed 5 year contracts) – with consequent changes, such as only one permitted contract termination date per year, instead of the present two. · Information on usage of services to continue to be collected mainly by County Officers doing on-bus surveys, but instead of a fixed two surveys during each four year contract, the number of surveys to vary from only one (for services found to be very heavily used) up to four or five where services appear very poorly used when first surveyed. · In considering service changes, officers to focus on those which may improve the accessibility measure recently adopted as a Local Area Agreement, but then to give these proposals a “reality check” through local consultation. · Officers also explicitly to take into account other relevant county council work streams in considering possible service changes; again then followed by local consultation. · Subsidy decisions to be strongly guided by the subsidy cost per passenger-journey; those below £2 to be considered (normally) “safe” from reduction, those above £2 to be closely scrutinised, and to be more liable for reduction or withdrawal the higher the figure; those above £5 to require a very strong case if they are to continue. · A more formal structuring of information to the Cabinet Member for Transport on reasons for subsidy. · Replacement of the present very complex “price preference” system for favouring high quality vehicles with one considering only two factors: access for people with disabilities, and emissions of NOX & PM. · Other “tidying up” amendments were also included.
Response to Initial Draft
8. Stakeholders were invited to submit written comments on this draft. Two stakeholder meetings were also held, these being aimed at informing stakeholders’ written responses rather than as response-gathering exercises in their own right. A total of 55 written responses have been received, incorporating 212 separate comments. A schedule detailing these has been placed in the Members Resource Centre, together with officers’ responses; this has been ordered according to paragraph numbers in the consultation draft (in many cases a single respondent’s comments have therefore been split and put in separate parts of the document).
9. Respondents made very many helpful comments of detail, and officers have made many detailed changes to the text of the consultation draft in response. However, the overall balance of responses was supportive of the proposals; of the 55 responses, only 3 were generally critical, 29 were neutral in overall tone, and 23 were generally supportive. The issues which were each raised by several respondents are discussed in Annex 1 (download as .doc file). However (with one exception discussed below) there was nothing on which there was sufficient unanimity amongst respondents to justify a fundamental change in any of the proposed policies.
Proposed Revised Bus Strategy Chapter 3
10. Annex 2 (download as .doc file) sets out a proposed replacement for Chapter 3 of the current Bus Strategy, which takes account of all of the issues discussed above which it is proposed be put forward to Council for adoption.
11. Members will note that there is one significant issue left open in Annex 2; that of subsidy contract length and the consequent frequency with which services are reviewed. The Transport Act 1985 restricts subsidy contracts to a maximum of five years, but the Transport Bill currently passing through Parliament proposes to extend this to eight years. Officers of the Integrated Transport Unit believe that better value for money could be secured from bus operators through longer contracts. The consultation draft suggested a change from four to five years, but during the consultation period officers had already decided that they wished to keep open the option of even longer contracts should they become legal, and further consultation with operators suggest that they are desirable.
12. However, the consultation responses show that many Local Councils and others are opposed even to the extension to five years (somewhat to officers’ surprise, since we had previously been told that users valued service stability). In the light of this, officers feel that unconditional contracts of longer than five years would be inappropriate. However, an alternative has been developed of sticking with a basic contract life of four years or less, but (if it becomes legal) inviting operators also to tender for contracts of twice that length if they can in that way offer major additional benefits to the Council – and subject to “mini-review” half way through the contract to ensure that the benefits are indeed being realised. Officers recommend that this option, together with five year contracts, remain “on the table” for possible future implementation (without further formal policy review) depending on the outcome of further consultation with operators. This policy statement would of course only set the framework within which tenders are invited by officers; the actual decision on length of each contract is taken on a case-by-case basis by the Cabinet Member for Transport at a delegated decisions meeting at the time of the contract being reviewed.
Financial and Staff Implications
13. The revised data collection and reporting procedures will require new data management hardware and software plus payment for a certain amount of research work. This is estimated to cost £50,000 - £60,000 in total. However, the existing hardware and software is over nine years old and life-expired, so much of this expenditure would have been needed in any event. This cost can be met from within the existing Public Transport Policy budget.
14. The original proposal to revise policy was intended to achieve financial savings, as outlined in the Medium Term Plan. Unless there is a major change in bus operating costs officers are confident that the savings are achievable through the policies proposed in Annex 2. Members should therefore note that the funding proposals for public transport in the Medium Term Plan will be achieved through the policies in Annex 2 rather than as described in the Plan.
15. The proposed revised policies can be achieved with existing staff resources.
Other Implications
16. Annex 2 includes a description of how the proposed policies link with other county council policies and priorities; also mentions legal and sustainability implications and certain risks where relevant. Consultees included representatives of disability and other groups. Since the proposed policies are not fundamentally different from those currently applied, they are not considered, overall, to represent any additional risks.
RECOMMENDATION
17. The Cabinet is RECOMMENDED to:
(a) RECOMMEND that Council adopt Annex 2 to replace the existing Chapter 3 in the adopted Bus Strategy; and
(b) ask officers to consult operators on contract length and to authorise the Head of Transport (in consultation with the Cabinet Member for Transport) to adopt the length which would offer best value for money for the county council, subject to (i) compliance with legal requirements; and (ii) there being no contract longer than five years which is not subject to intermediate review.
STEVE HOWELL Head of Transport Environment & Economy
Background papers: Summaries of outcomes of each stage of consultation; in MRC
Contact Officer: Dick Helling, Tel: (01865) 815859 July 2008
|