ITEM CMDT7E
CABINET MEMBER FOR TRANSPORT– 2 OCTOBER 2008
BUS SERVICE SUBSIDIES
Report by Head of Transport
Introduction
1. This report and associated Annexes deals with the following which now require a decision to be made by the Cabinet Member for Transport:-
(A) The Review of Subsidised Bus Services in the Charlbury and Chipping Norton area, which, if awarded, will be effective from 14 December 2008. (B) Other bus subsidy contracts elsewhere in the County.
2. Background information on items (A) and (B) above are included at Annex 1 together with a summary of the relevant points from the responses received through local consultation. Information relating to the main County Council subsidy contracts is also included at Annex 1 (download as .doc file) for each service, but in some cases there are wider issues affecting particular contracts. These are discussed in the main body of the report. Section A of Annex 1 deals with services under review in the Charlbury and Chipping Norton area, whilst Section B deals with other services elsewhere in the County.
3. Tender prices obtained for contracts specified in paragraph 1 will be contained in a confidential Supplementary Exempt Annex 2, to be circulated later.
Reasons for Exempt Annex
4. This item should be considered in exempt session because its discussion in public might lead to the disclosure to members of the public present of information relating to the financial or business affairs of any particular person (including the authority holding that information) as a result of discussions between Oxfordshire County Council and/or other local authorities and organisations.
5. The costs contained in Annex 2 must be treated as strictly confidential since they relate to the financial and business affairs of the operator. All prices must be treated as strictly confidential until such time as the Decision Meeting decides whether or not to provide financial support for each service. Revealing operators’ prices before then would prejudice the County Council’s position if tenders or propositions had to be sought again for any of the services. Prices remain confidential after the date of this meeting for 10 days (until 13 October) under the objection period specified in the Public Contract Regulations 2006.
Subsidy Prices
6. Tender prices will not be available until shortly before the meeting and will therefore be reported separately in Supplementary Exempt Annex 2 together with my recommendations. Until all tender prices and ‘de minimis’ propositions received have been analysed, I will not know what the overall impact on the Public Transport budget is likely to be. Local Members will be advised in writing of recommendations affecting their Divisions at least one week before the meeting that considers this report and their written comments sought. Any responses received will be included as an appendix to Supplementary Exempt Annex 2.
7. If further support for any contract is not agreed at the meeting on Thursday 2 October 2008 (except where they have been replaced by alternative arrangements or contracts) then the service or journey(s) concerned will cease after operation on Saturday 13 December 2008. The only exception to this may be if a settlement will be left with no other form of public transport. In such cases, I may recommend that existing contract arrangements be extended until June 2009 to allow time for alternative facilities such as voluntary community transport to be explored.
Exemption from Call-in
8. On 10 January 2006 Council agreed an amendment to the Constitution which means that the County Council’s call-in procedure should not apply to any decision on the letting of a contract arising from termination of an existing contract if the time available is such that allowing for call-in would result in service discontinuity, provided that all members of the relevant Scrutiny Committee had been informed of the circumstances of the decision to be made and had had an opportunity to make representations to the decision maker about it. Since existing subsidy contracts will inevitably end on 13 December 2008, the effect of any call-in would be to prevent introduction of any replacement contracts, thus resulting in complete withdrawal of the services concerned and a consequent service discontinuity. The 10 January 2006 amendment therefore applies.
9. With regard to that provision, local members and Environment & Economy Scrutiny Committee Members will be advised of the recommended contract awards (as contained in Supplementary Exempt Annex 2) at least one week before the date of this Meeting which will allow them the opportunity to put their comments in writing or arrange to speak at the meeting.
10. The above arrangements are separate from the provisions of the Public Contracts Regulations 2006 which allow a 10 day ‘cooling-off’ period for contractors who have any grievance with regards to the tender awards or processes. Successful tenderers will be advised of the outcome as soon as is practicable after the meeting, so that they will be in a position to register services with the Traffic Commissioners before the end of the 10 day period if necessary. Because of this it will not be possible to disclose any information to the public in respect of the tender awards until before Monday 13 October 2008 (the tenth day of the ‘cooling-off’ period being the preceding Sunday).
Financial Position – Current Year (2008-09)
11. The funding available in the County Council’s bus subsidy budget is as follows:
£000’s Bus Subsidy Budget 3,200 Rural Bus Subsidy Grant (RBSG) 1,592
This figure essentially represents a "stand still" budget when the annual inflation cost, to be applied to existing contracts, is taken into account. The Bus Subsidy Budget has now been separated out from the overall Public Transport budget which is now under the control of the Public Transport Policy manager.
Note that this excludes budgets for public transport development, some of which are used for pump-priming bus services. It also excludes over £1 million of income from developer, partnership and service-specific Government grant funding. All of these other sources of funding are dedicated to specific services and are not available for general bus subsidy. The value of any of these other sources of funding is therefore ‘netted out’ in any references to the subsidy cost to the Council of the services concerned.
Financial Position – Chipping Norton and Charlbury Review
12. The current annual net cost to the bus subsidy budget of the contracts under review is £352,000. Officers will not be recommending that the net cost of new contracts to be awarded will exceed this amount.
Contract Numbering
13. Contracts have been given a letter code in the first column of each Annex (and also in any references to the service within this report) and members are recommended to use this code for cross-reference purposes. Existing service and contract numbers are mentioned, for members’ information only, in the service descriptions. Both service and contract numbers may change following award of new contracts.
A. Review of Subsidised Bus Services in the Chipping Norton and Charlbury areas
Background
14. Subsidised bus services in the Chipping Norton and Charlbury area are due for their regular four-yearly review, and tenders have been invited for new contracts to run from 14 December 2008 until 8 December 2012. 11 contracts are currently operating in this area and are included in this review and 1 other contract serving areas outside the review area is also due for consideration. This is dealt with separately in section B of this report.
15. Details of all of the services concerned together with information on the present subsidy cost and patronage data are set out in Annex 1 (Section A). A total of 40 Parish/Town Councils were consulted, along with West Oxfordshire District Council, Cherwell District Council, Oxford City Council, Gloucestershire County Council and Warwickshire County Council. If appointed, the Parish Transport Representative of each parish was notified of the consultation process in addition to the Parish Clerk. Numerous further interested parties were also consulted in the course of this review including Bus Users UK, Transport for All, local health representatives, the Cotswolds and Malverns Transport Partnership and colleagues elsewhere with Environment and Economy and Oxfordshire County Council. Notices were placed on buses operating the routes concerned, and at major bus stops. As a result views were also received from private individuals and other representative bodies. Comments received from the consultees, including any particular requests for new services or variations to existing routes, are also summarised under the respective contract headings at Annex 1.
16. 25 responses were received from Parish, Town and District Councils as a result of the public consultation exercise. Of these, 11 responses were in the form of ‘transport needs surveys’ and were compiled with the assistance of the Rural Transport Adviser at Oxfordshire Rural Community Council. Some made suggestions for additional journeys or variations to services, although it was made clear at the commencement of the consultation process that spare funds for significant improvements were likely not to be available at this time. However, prices have been sought for route diversions or other realistic improvements where suggested. In addition to the above responses, a further 22 responses were received from other consultees.
Services under Review
17. A number of factors have had to be taken into consideration during the course of the review. These include:- (a) Wholly or partial commercial declarations by existing operators, and subsequent ‘de minimis’ prices sought (b) Other ‘de minimis’ prices sought for some contracts (c) Cross-boundary issues relating to operations within the Warwickshire County Council and Gloucestershire County Council administrative areas. (d) Home to School Transport: new review arrangements (e) Requests from Abingdon and Witney College
a – Wholly or partial commercial declarations by existing operators, and subsequent de minimis prices sought
18. Commercial journeys are those which operate without any subsidy. All existing contractors were approached regarding the declaration of any route or section of route, currently supported by the County Council, that could be continued without subsidy (i.e. commercially). A number of positive responses were forthcoming is a result of this enquiry (which was made at an early stage in the review process). One entire contract has been declared wholly commercial, and two partly commercial. These are:-
Wholly Commercial and an exact replacement of the current service A) Contract PT/W58 (Item A) – service 20A (Charlbury-Woodstock-Oxford) The current operator, Stagecoach will run an exact route replacement from Monday 15 December, with no timing changes proposed.
Partly Commercial B) Contract PT/W56/W59 (Item D) – service 69 (Witney-Charlbury-Chipping Norton) RH Transport has declared a two-hourly service commercial on the above route from Monday 15 December, with an additional morning peak journey between Witney and Chipping Norton and all journeys running the entire length of the route (currently some afternoon journeys terminate at Charlbury). Under ‘de minimis’ rules (which permit local authorities to negotiate with a commercial operator to provide additional journeys without going to competitive tender so long as 50% or more of a service is deemed commercial), officers subsequently requested a price for maintaining the current hourly frequency: this is detailed in Supplementary Exempt Annex 2. Following receipt of this commercial declaration, the current operator (Worth’s Coaches) also submitted a commercial declaration, covering around 70% of the existing hourly service and to commence on the same date. Again, using the ‘de minimis’ rules detailed above, officers have also requested a price for continuation of the current frequency: details of this are also included in Supplementary Exempt Annex 2. As bus operators are legally entitled to operate any service commercially without restriction, there is the possibility that both operators may decide to compete on this route, regardless of whether they are in receipt of a subsidy payment to maintain the current frequency. The commercial timetables that RH Transport and Worth’s Coaches have submitted imply that this will largely lead to duplication of journeys, rather than any enhancement to the frequency of the service above the current hourly level.
C) Contract PT/W41 (Item G) – service X8 (Kingham Railbus service) The current operator, RH Transport, has declared just over 50% of the current frequency of service X8 as commercial from Monday 15 December. However, the commercial proposition is not wholly in keeping with the County Council’s aspiration for this service to provide suitable connections at Kingham Station for the benefit of potential users of the Cotswold Line rail service. Some journeys would not wait for trains as they do now, and some would arrive from Chipping Norton significantly earlier than the current schedule permits, meaning significantly longer waiting times for trains at Kingham Station. Additionally, the first draft of the revised Cotswold Line timetable from December 14th implies significant changes to the schedule, and particularly to the off-peak timetable which is likely to alter significantly. RH Transport’s commercial proposition is based upon the current rail schedule, and as such significant changes to the Cotswold Line timetable may result in an incompatibility between the rail and bus service. As the rail timetable may not be confirmed until late in 2008, it seems unlikely that there is any scope for a suitable commercial service in this instance, and tenders have been invited in the usual way for both a ‘stand-alone’ service, and a service via the Wychwoods which may offer the opportunity to significantly improve the service for these villages at relatively low cost. The operator has been advised that tenders will be invited, and the reasons explained.
19. For all of the other contracts not mentioned above (5 in total plus one contribution to a Warwickshire County Council contract, and new contracts to cover sections unserved by the above declarations) officers have as a basic specification sought tenders for the current level of service. However, as usual various alternative options have also been specified for many contracts at either a lower level of service, or for a combination of existing routes in order to achieve savings.
b – Other ‘de minimis’ prices sought
20. Following the consultation exercise conducted earlier in the review process, requests were received from Shipton-under-Wychwood, Milton-under-Wychwood and Ascott-under-Wychwood for a regular service to Chipping Norton. Currently this service is provided by service 34 (contract PT/W39 (Item C)), which operates on Wednesdays only. This service also operates via Fyfield, Idbury, Lyneham and Churchill.
21. Several options have been explored in an attempt to meet the above request: additional days of operation and additional journeys have been tendered as part of the existing contract, and two new contracts have been tendered including options which if awarded would increase the frequency to as much as hourly. However, continuation of the ‘dog-leg’ to Lyneham would mean that the most direct route to Chipping Norton could not be followed. As a result, Lyneham has been omitted from some variants of the contracts made available for tender.
22. In order to attempt to ensure continued provision of a service between Lyneham and Chipping Norton should a re-routed option be awarded, Villager Community Minibus were asked to provide a ‘de minimis’ price for diversion of their service 13, which operates between Burford and Chipping Norton on Fridays via the Milton-under-Wychwood, Shipton-under-Wychwood and Bruern. In anticipation of possible changes to the route and frequency of service 34 (contract PT/W39 (Item C)), parishes served by this route were advised that many have alternative services to Chipping Norton, albeit on different days of the week, and were asked if the service continues to be justified. No response was received from Lyneham Parish Meeting to the consultation, and no response had been received from Villager Community Minibus to the request for a ‘de minimis’ price at the time of writing: details of any price received will be contained in Supplementary Exempt Annex 2.
23. In addition, officers have requested a ‘de minimis’ price from Stagecoach in Oxfordshire for an improved Sunday service between Chipping Norton and Oxford on commercial service 20. This is unlikely to be available until discussions have concluded between Stagecoach in Warwickshire and Stagecoach in Oxfordshire regarding the future operation of the service between Stratford, Chipping Norton, Woodstock and Oxford (see section c (‘Cross-boundary services’) below). Details of any ‘de minimis’ prices received from either or both operators will be reported in Supplementary Exempt Annex 2.
c – Cross-boundary services
24. Two Oxfordshire-administered contracts in this review currently operate into Gloucestershire: neither receive a financial contribution from that authority. Of these, one is a contract for operations wholly within Oxfordshire (contract PT/W41 (Item G) – service X8 ‘Kingham Railbus’), but with a commercial extension provided between Kingham Station and Bledington several times a day. The second, PT/W49 (Item E –service 811 Salford-Chipping Norton-Cheltenham Saturdays) is subsidised by Oxfordshire County Council to enable West Oxfordshire residents a weekly opportunity to shop in Cheltenham.
25. In respect of contract (contract PT/W41 (Item G) – service X8 ‘Kingham Railbus’), officers have contacted colleagues at Gloucestershire County Council to inform them that the link between Bledington and Chipping Norton may be lost, due in part to the commercial nature of the extension and poor recorded usage (8 passengers on 21 observed journeys). Officers from Gloucestershire County Council commented on the potential loss of this service by acknowledging the information, but with no indication given of whether they would be prepared to contribute towards its continuation should it be withdrawn.
26. A significant proportion of service 811 (contract PT/W49 (Item E) – service 811 Salford-Chipping Norton-Cheltenham Saturdays) operates in Gloucestershire: however the only significant settlement served is- Bourton-on-the-Water, which has other frequent services to Cheltenham, and additionally presents a potential ‘tourist’ destination for day trips from Oxfordshire. It is unlikely that Gloucestershire County Council would wish to contribute to the service having not done so up to now, and no such contribution has been sought either in past reviews or during the current one.
27. Additionally, Oxfordshire County Council contributes to a Warwickshire County Council contract for a Sunday service between Stratford, Chipping Norton and Oxford (contract PT/W42 (item H) – service 50). Discussions have taken place between Stagecoach in Warwickshire (which operates this service) and Stagecoach in Oxfordshire (which currently operates a commercial Sunday service on service 20 from Woodstock to Oxford) regarding the duplication which occurs on some journeys, some of which operate within three minutes of each other. This may have a bearing on whether a through service continues to operate from Stratford to Oxford, but it is likely that at the very least a service will exist between these places, but possibly with a change necessary at Chipping Norton for journeys beyond this point in either direction. Any effect on the nature of the service between these places and the level of any future contribution required by Oxfordshire County Council to Warwickshire’s contract is detailed in Supplementary Exempt Annex 2.
d - Home-to-School Transport – new review arrangements
28. It has been normal practice for arrangements for Bus Services & Home to School Transport to be reviewed at the same time to identify any opportunities for economies or improvements. In practice the opportunities presented have been minimal. Following a review of procurement arrangements for Home to School transport it was agreed by the Integrated Transport Board the two processes should now be carried out on different timetables.
29. However, it is still possible to explore opportunities to carry entitled schoolchildren on public bus services, and some opportunities for carrying entitled schoolchildren from villages between Charlbury and Chipping Norton were identified: however, the review process for the current contracts for the route linking between these places (Contracts PT/W56/W59 (Item D) – service 69 (Witney-Charlbury-Chipping Norton) has been complicated by the fact that commercial declarations were received by two operators. As a result of the uncertain status of the subsidised and commercial elements of this service (see section a above), and the fact that there are currently two potential commercial operators, it was felt that in this instance it was preferable to maintain student travel arrangements within conventional Home-to-School contracts for the time being.
e – Requests from Abingdon/Witney College
30. As a result of the consultation process, Abingdon-Witney College requested that consideration be given to providing a service to the Common Leys Campus near Hailey by diversion of the existing 69 service (contracts PT/W56 and PT/W59 (Item D): Chipping Norton to Witney. Journeys have been requested to arrive at around 0915 and depart at around 1645 in line with the start and finish times of lectures at the site. Both operators who have submitted commercial declarations on the existing 69 route intend to operate commercial journeys that may be able to serve the Campus site at around the times requested: the eventual commercial operator(s) of the service between Witney and Chipping Norton will therefore be made aware of this potential additional flow of passengers following the award of tenders.
Railbus Services
31. Two of the contracts currently under review (contract PT/W41 (Item G) – service X8 ‘Kingham Railbus’ and contract PT/W40 (Item F) – service C1 ‘Charlbury Railbus’) are designed to connect villages in the vicinity of Kingham and Charlbury Stations with the Cotswold Line rail service, as well as providing links with the towns of Charlbury and Chipping Norton. The views of the Cotswold and Malverns Transport Partnership and the Cotswold Line Promotion Group were therefore both requested as part of the consultation process: their responses are detailed in Annex 1.
32. Any future contract for each of these services (if awarded) is likely to be complicated by engineering work on the Cotswold Line to restore the section between Finstock and Ascott-under-Wychwood from single to double-track. This will involve significant changes to the rail timetable, and a period of complete closure. Potential tenderers have been advised of the disruption that this may cause, and of the need for close co-operation with officers during the engineering works, which are likely to require frequent changes to the bus schedule as they progress.
33. Both services have been subject to significant publicity during the last four-year contract period: timetable leaflets, a dedicated website and vehicle branding have all been utilised to improve awareness of the services, and the continued use of these forms of publicity is required by the new specifications for each contract.
34. These services operate without any financial assistance from First Great Western as there is no requirement for them to contribute under the conditions of their franchise. However, agreement has been reached with the rail operator for them to improve publicity for these services providing that they continue at broadly the current level of service or better. They have also agreed to assist with enabling the issuing of through rail tickets to the villages and towns served by the bus services.
Identification of Flows of Non-Entitled Schoolchildren
35. The Bus Strategy states that subsidy will not be paid for services provided wholly or mainly for passengers who are (non-entitled) students who pay their own fares, although where a service can be justified on the basis of catering for other users, and can cater for students at no extra cost, then every effort will be made to ensure that this is achieved.
36. Following internal discussions with colleagues in the School Travel Plans team it was decided to write to all schools in the review area to explore whether in their opinion any of the routes under review catered for significant numbers of non-entitled schoolchildren, and whether if through minor adjustments to timings it may be possible to benefit more children than are currently carried. Few responses were received, and those that were gave no indication of any existing flows of non-entitled schoolchildren, nor any suggestions for changes that could be made to increase the numbers of these passengers.
Developer Funding – Section 106 Monies
37. No available Section 106 funding for Public Transport services has been identified in the review area at the time of writing, but should funds become available details will be contained within Supplementary Exempt Annex 2.
Publicity
38. The Public Transport Information Team enforces the terms of the Public Transport Information Strategy which requires bus operators, who are awarded bus service contracts, to publish timetable leaflets and display them in timetable cases at bus stops.
39. Following the award of new contracts Press Releases are sent out to draw attention to the bus service changes, details are published on the County Council website and Parish Councils are sent copies of the new timetables. However from a passengers point of view it is difficult to obtain an overview of the changes to a whole bus network especially where there is more than one operator involved.
40. In order to assist the travelling public it would be possible to publish a publicity leaflet containing all the new bus service timetables covering the Chipping Norton, Charlbury and Wychwoods area together with details of the changes. This could be distributed locally and carried on board the current buses serving this area. This would also help with the challenge of keeping passengers informed of the changes where the contract may transfer from one bus company to another one.
41. It is recommended that the cost of such a publicity leaflet can be paid for by the savings made by the offer to operate some services commercially.
Cost Reductions
42. Apart from the possibility of committing some of the reduction in existing expenditure in this Review on a publicity leaflet, it is intended to explore opportunities to improve the County Council’s accessibility score and provide additional bus services suggested by consultees.
43. Following the award of these new Chipping Norton and Charlbury bus service contracts, the financial impact on the Bus Services budget can be calculated. It is intended that any uncommitted expenditure be used to improve our accessibility score & presented to the Cabinet Member for Transport for approval.
Use of County Council vehicles
44. Officers considered the possible use of County Council-owned vehicles in the context of this review. In the event of tender prices being prohibitive or no tenders being received for contracts, and especially if rural communities may be left with no bus service as a result, officers may have to investigate the potential operation of such contracts by utilising Council vehicles if this can be done with insignificant disruption to their existing commitments and within the restrictions imposed by the complex licensing restrictions for operation of these services.
Contributions towards timetabled Community Transport operations
45. There are no Community Transport operations in this review area which are currently under review.
Consultation During Review
46. Extensive consultation has been carried out during the course of this review and around half of those consulted responded. A brief summary of all the comments received is set out at Annex 1 under their respective contracts.
47. In addition, public meetings were held in Charlbury (afternoon) and Chipping Norton (evening) in June 2008 to which all consultees were invited and at which various proposals were outlined and comments received.
B. Contracts for Subsidised Bus Services Elsewhere
48. Contract PT/S 59 (Item I) – Service 136 Cholsey - Wallingford Following the commercial withdrawal in June this year of the 0815 journey from Cholsey to Wallingford on Saturdays a short term emergency contract was awarded to Thames Travel to maintain this journey. This contract expires on Saturday 13th December and a decision is needed on whether to award a long term contract (until June 2012) to continue operation of this journey.
How the project supports LTP2 Objectives
49. Oxfordshire County Council has adopted the LAA (Local Area Agreement) target to increase the number of people living in rural areas who can easily get to a town centre on foot or by bus. This will be an amended version of the target set in LTP2. Work is continuing on setting the baseline for this target at present, and as a result it has not been possible to include (either in this report or Supplementary Annex 1) information relating to the effects on accessibility generated by the various options and levels of service that have been made available for tender. It is not expected that the methodology will have been fully agreed until after the date of the meeting. However, officers aim to have it sufficiently far advanced to enable a provisional indication to be given in Supplementary Exempt Annex 2 of those service options which, if agreed, would have either a significant positive or negative effect on the accessibility score.
Financial and Staff Implications
50. The financial implications as they relate to bus service subsidies will be dealt with in the Supplementary Exempt Annex 2. There are no staff implications.
SUPPLEMENTARY EXEMPT ANNEX 2
51. This document will be circulated prior to the meeting to all relevant County Council members. In order to clarify the recommendations being made, a revised format has been introduced. Each contract (or group of like contracts) will have a separate sheet in the same order and numbering as at Annex 1. Relevant information on the current service pattern, level and route will be repeated in the heading followed by the officers recommended option and suggested course of action (including the costs of recommended option). This section will also highlight the likely consequences of proceeding with award of this recommended option (parishes unserved or known traffic flows displaced). This is followed by a summary of all the other options/prices sought and the cost /likely effect of awarding these options (and which may be awarded by the Cabinet Member for Transport in lieu of the officers recommended option if he so wishes). It is hoped to further refine this document in future reviews and any comments thereon would be appreciated.
RECOMMENDATIONS
52. The Cabinet Member for Transport is RECOMMENDED to:
(a) consider subsidy for the services described in this report on the basis of the tender prices (and the periods of time) as set out in Supplementary Exempt Annex 2 to be reported subsequently;
(b) note the commercial elements declared in respect of contracts W56, W58 and W59;
(c) record that in the opinion of the Cabinet Member for Transport the decisions made in (a) above are urgent in that any delay likely to be caused by the call in process would result in service discontinuity and in accordance with the requirements of Scrutiny Procedure Rule 17(b) those decisions should not be subject to the call in process;
(d) agree that a single publicity leaflet is published containing bus timetables for all the new services in the Chipping Norton, Charlbury and Wychwoods area dealt with in this review and that if necessary, costs be met from any reductions in expenditure;
(e) agree that following the award of new contracts (at which point the financial effects on the Bus Services budget will be known) the Bus Services Manager should draw up a short list of projects that can be funded by any further uncommitted expenditure remaining in the budget and review and agree the options available with the Cabinet Member for Transport.
STEVE HOWELL Head of Transport Environment & Economy
Background papers: Correspondence with Local Councils, Parish Transport Representatives, Transport operators and other bodies (refer to contact officers).
Contact Officers: Allan Field (Tel: Oxford 815826): Financial information and other services. Tim Darch (Tel: Oxford 815587): Charlbury and Chipping Norton area review
September 2008
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