ITEM CMDT7E
CABINET MEMBER – 8 JANUARY 2009
REVIEW OF FUNDING FOR OCTABUS DIAL-A-RIDE SERVICE FOR DISABLED AND MOBILITY-IMPAIRED PEOPLE
Report by Head of Transport
Introduction
1. This report and its associated Annexes invites the Cabinet Member for Transport to consider future funding for the Octabus dial-a-ride transport service currently funded by the County Council (alongside Oxford City Council, Vale of White Horse District Council, and West Oxfordshire District Council) as part of the Octabus Dial-a-Ride Consortium. Oxfordshire County Council supports a number of dial-a-ride services which provide pre-booked door-to-door transport using fully accessible vehicles for people with mobility impairments who could not easily be able to use conventional public transport. Current County Council funding arrangements come to an end on 31 March 2009.
2. The Dial-a-Ride service currently under consideration serves the areas covered by Oxford City Council, Vale of White Horse District Council and West Oxfordshire District Council. In addition, South Oxfordshire District Council has participated in the review process which has led to this report, with a view to possibly joining the Octabus Consortium.
3. Tender prices obtained for the contract specified in this report will be contained in a confidential Supplementary Exempt Annex 2, to be circulated later.
Exempt Information
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 and 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 the service. Revealing operators’ prices before then would prejudice the County Council’s position if tenders or propositions had to be sought again for the service. Prices remain confidential after the date of this meeting for 10 days (until 18 January) under the objection period specified in the Public Contract Regulations 2006.
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 have been analysed I will not know what the impact on the Public Transport budget is likely to be.
Octabus Dial-a-Ride
7. The Octabus Dial-a-Ride service began in April 2005, replacing services previously provided by Oxfordshire Community & Voluntary Action (OCVA) with funding drawn from a number of sources and agreements. The County Council participates in a formal Consortium with Oxford City Council, Vale of White Horse District Council and West Oxfordshire District Council which lets a unified contract for dial-a-ride services in the Octabus area, paid for by pooling resources from each of the ‘subscribing’ local authorities in agreed proportions.
8. The current contract was let following competitive tendering. The initial service was provided on the basis of three accessible minibuses, one operating in each of the ‘subscribing’ city/district council areas. The service is provided on Mondays to Fridays between the hours of 9am and 5pm.
9. The initial agreed proportions of funding were 52% from the County Council, and 16% from each of the participating city/district councils.
10. From 1 April 2007 Oxford City Council has been paying the full costs of providing a second Octabus minibus service in the City area on Tuesdays to Fridays (the service remaining resourced by one vehicle on Mondays).
11. During the term of the current contract the Octabus Consortium has met regularly with the staff and management of the existing contractor. The Consortium has been pleased with the degree of support and assistance which the current contractor has provided to the Consortium and the extent to which the contractor has been willing to engage with the Consortium, in terms of providing information on patronage and patterns of use, on making the vehicles available for demonstration and publicity purposes, their willingness to discuss and resolve any complaints and comments about the way that the service has been provided and developed in the light of operating experience. The Octabus Consortium members wish to record their appreciation of the dedication and support of the current contractor.
Consultations
12. For this review a joint consultation has been carried out in conjunction with all of the City and District Councils (except Cherwell DC), encompassing all the Parish Councils in each district, the Area Committees of Oxford City Council, relevant County Councillors, local Members of the Youth Parliament, as well as Transport For All, the Oxfordshire Rural Community Council, Bus Users UK and a number of local branches of organisations suggested by member authorities and representing people with disabilities and mobility-impairments. Specific responses are summarised at Annex 1 (download as .doc file). Copies of all consultation responses are available in the Members’ Resource Centre.
13. Replies to the consultation were received from 30 sources in the existing Octabus area (of which 16 were generally positive and 14 more ambivalent or had no comment to make) and 26 sources in the South Oxfordshire district (of which 11 expressed positive opinions, 8 were negative and 7 expressed either no opinion or a balance of arguments).
Service Usage and Publicity
14. Details of usage patterns of Octabus, membership profile and the results of user surveying are all contained in various background documents, available in the Members’ Resource Centre. Some key points are also summarised in Annex 1 to this report. This Annex also summarises the efforts that have been made to publicise the service, particularly in terms of reaching the ‘target market’.
Contract Strategy
15. In 2006 the County Council procured for the Octabus Consortium three new wheelchair-accessible Mercedes Sprinter minibuses, at a total cost of £136,148.79, partly paid for with money which had been returned by OCVA from an unused vehicle-replacement fund that had been accrued over a number of years from County Council funds provided to them for that purpose. Three of the previous vehicles used on the service were retained as spares and, to provide capacity for possible future service growth, the oldest of these has since been disposed of.
16. The existing contract was let on the basis that 70% of net income from fares and concessionary fares re-imbursement would be returned by the operator to the Consortium to act as a fund to meet the costs of publicity and other incidental expenses (such as vehicle livery vinyls) but primarily to act as a fund that might enable the fleet to be progressively replaced in time.
17. This fund is calculated to generate approximately £12,000 in each of the first two years of the contract, and approximately £20,000 in each of the final two years. By the time that the amount due for the 2008/09 financial year has been calculated and invoiced, it is expected that the fund at the disposal of the Octabus Consortium (which is held as a ring-fenced fund by the County Council) will have accumulated some £60,000 to £65,000.
18. Whilst this would be sufficient to purchase one further minibus, it is the view of officers that it would now be anomalous to continue with the policy that the County Council should procure vehicles on behalf of the Octabus Consortium.
19. The tender specification for the new contract has been written such as to reduce to 10% the proportion of fares revenue to be returned to the Consortium, allowing the Consortium to meet continuing smaller-scale expenditure. Officers recommend that the accumulated revenue share from the first contract, after deduction of agreed expenditures, be instead utilised to offset the cost of the new contract to all the subscribing councils, in proportions which match the share of contributions each authority makes to the costs of the new contract.
20. Instead of the Council procuring vehicles on behalf of the Consortium, it is the view of officers that the contract for the Octabus dial-a-ride service should move progressively towards a position where it is the contractor which provides the vehicles with which the service will be operated. It is therefore the intention that no new vehicles will be procured for the Octabus contract. One option considered was that the existing Octabus fleet be sold or deployed elsewhere, creating a ‘fresh start’ in terms of vehicle provision for the new contract. However, in recognition of the fact that there are three specifically-designed vehicles in use which are little over two years old, and that such an approach might reduce the likelihood of tenders being received from smaller-scale, possibly community-transport-based potential bidders, it was felt that there should be a longer-term transition to full operator-provision of vehicles.
21. The tender specification for the new contract has accordingly been written on the basis of a ‘mixed economy’, with the existing fleet being provided to the new contractor but on the basis that any vehicle replacement being required during the term of the contract (particularly relevant in the case of the much older former OCVA minibuses) will be the responsibility of the contractor.
Current Funding Arrangements
22. County Council funding for the Octabus dial-a-ride is provided on the basis of an agreement with the various subscribing district councils that they will also contribute financially in agreed proportions. Octabus does not currently operate in South Oxfordshire district, and the County Council does not currently fund a district-wide dial-a-ride service in that area because South Oxfordshire District Council has not contributed towards any such scheme.
23. The other district councils, including South Oxfordshire, will be making their own decisions of future funding for Octabus at around the same time as the County Council. Officers will report orally on any decisions known at the time of the meeting. It is possible however that not all district councils will have reached a decision by the time of the meeting. The Cabinet Member will therefore wish to consider making his decision conditional upon the decisions of the various district councils which have participated in this review and tendering process.
Financial and Staff Implications
24. The total cost of the Octabus scheme currently amounts to £186,226.50 (excluding the cost of the second bus in Oxford City which is currently paid for exclusively by Oxford City Council), of which £96,837.78 is the annual cost to Oxfordshire County Council.
25. Funding is available within the Public Transport budget which could be used to cover the required sum, subject to the scale of the tender prices received.
26. No staff implications have been identified.
RECOMMENDATION
27. The Cabinet Member for Transport is RECOMMENDED to make his decision on subsidy for the service described in this report on the basis of the tender prices as set out in Exempt Annex 2 and the District Council decisions to be reported subsequently.
STEVE HOWELL Head of Transport
Background papers: Octabus annual report Year 1: 1 April 2005 – 31 March 2006 Octabus annual report Year 2: 1 April 2006 – 31 March 2007 Octabus report on usage: 1 January – 31 December 2007 Octabus report on usage: 1 January – 30 June 2008 Octabus Customer Survey report: January 2008 Compilation of spreadsheets and graphs showing patronage, concessionary fares re-imbursement, contract costs-apportionment, cost per passenger journey for each district. (For other background correspondence please refer to contact officer)
Contact Officer: Neil Timberlake. Tel: Oxford 815585
November 2008
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