Select Committee on Transport, Local Government and the Regions Minutes of Evidence



Examination of Witnesses (Questions 420-439)

MR JOHN SPELLAR MP, MR ALAN DAVIS AND MS SANDRA WEBBER

TUESDAY 21 MAY 2002

  420. So there may be a difference between what the Department of Transport's view is and the Office of Fair Trading's view?
  (Mr Spellar) What we need to do is test this against real cases and this is the difficulty that we have had up till now with both the operators and the local authorities saying that they have these difficulties and then getting hard cases in order to substantiate a broader argument. It is a very frustrating part of this process.

Chairman

  421. I want to move you on to what Cheshire county said, because they said very specifically there was very little on-the-road competition, and when it existed it caused enormous disruption to the services. We got evidence from Cheshire, who are suffering enormously on this basis. Is this a surprise to you?
  (Mr Spellar) I was not aware of the experience of Cheshire. I will certainly have a look at the evidence.

  422. But it is not one county: it is many shire counties, is it not?
  (Mr Spellar) I do not know.

  423. But evidence must have been given to you because of the standard spending assessment?
  (Mr Spellar) But, on the other hand, for example with Nottingham when I was having these arguments put to me, when I tested them with the Office of Fair Trading I then got a ruling from them that, indeed, the company were not precluded from the actions that they were wanting to—

Mr Stevenson

  424. Very quickly on this issue because it does seem to me to be crucial to our considerations, is not the reality, Minister, of what we are facing in this regard that on-the-road competition has failed? In fact, the evidence is overwhelming that it has been damaging—not just a failure. The Office of Fair Trading has studiously ignored this situation. Even though you would argue that they have not had a referral made to them they have known what the situation is, and should we not now, moving as quickly as we can to competition if that is necessary, be involved in a tendering process for services rather than on-the-road competition?
  (Mr Spellar) That is one option that is, of course, open under the current provisions and local authorities are able to move through the various stages. We can argue about the timescale of those stages as to whether they want to undertake quality partnerships with the bus operators or, indeed, whether they want to apply to introduce quality contracts. Even tendering processes are not without difficulties and you will know, for example, that the Transport and General argue that the tendering process tends to drive down driver's wages although natural market forces are operating in the opposite direction. So there are a number of options open to them at the moment.

Miss McIntosh

  425. Minister, I think you can detect from the Committee that the evidence we took from the Office of Fair Trading was anything but clear. Now, you used the word "collusion" and I put it to you that what you or the Office of Fair Trading might think was collusion was actually a very good thing for passengers, such as co-ordinating timetables and co-ordinating frequencies, so rather than having two buses come on the hour you could have one on the hour and one on the half hour. Are you saying that is collusion?
  (Mr Spellar) No, I was not saying that at all. Indeed, sensible co-ordination in order to provide the most effective and the most frequent service for passengers may well have considerable advantages, and that would be sensible co-operation. In most cases it would probably be helpful if that also had an involvement of the relevant local authority. What I want, therefore, is, where sensible arrangements are being arrived at locally, for those to be run past the Office of Fair Trading and if there is then a pattern of difficulty emerging then I think we need to look at that. At the moment I am unclear, from what the operators, the local authorities and the Office of Fair Trading are saying to me, where the balance of argument lies and where the balance of fact lies in this. I fully understand the Committee's frustration—probably even with my replies. That mirrors my frustration with the very unclear picture, and partly that reflects very varied practice across the country.

  426. Might you amend the Competition Act, if that was necessary?
  (Mr Spellar) I have to look at what testing the system would throw up, and then at possible remedies—

  Chairman: We will give you some very clear recommendations, Minister. That will help!

Mr O'Brien

  427. Following that and that fact that you made the bus service a flagship in the 10 Year Plan, congestion charging is not working as it was planned in the original stages and obviously the main competition to buses is the car. What is your Department doing to encourage local authorities to take up the congestion charging programme as set out by your department?
  (Mr Spellar) The legislation that enables local authorities to introduce congestion charging, slightly different legislation between London and the rest of the country but let us put the London scheme on one side at the moment, provides an option for local authorities to introduce congestion charging if they believe, after consultation with their businesses and residents, that that is an effective tool for traffic management in their area, and also obviously there is an income generated which could be used towards transport. That is very much for local authorities to examine and very much for them to evaluate their local circumstances and then to put a scheme to the government. Now, they are not necessarily looking in the same way. Bristol, as far as I can recall, is looking at a entry toll coming in on the main highway or highways into the city. On the other hand, Nottingham is looking at a workplace charging scheme of charging for car parking space. There has been a fairly active dialogue, I think it is fair to say, with them and some local industry, including one major employer, three quarters of whose car park is in the city of Nottingham and a quarter of whose car park is in an adjoining borough, and there are differing views between Nottingham and adjoining boroughs on that, and I am awaiting the outcome, at the moment, of those debates.

  428. One of the concerns expressed by local authorities is that, before they could introduce a scheme, they would expect to see improvements in bus services and in the frequency of buses. The bus companies are saying that that would be uneconomic and that they would be running those buses without the benefit of car drivers taking part in that exercise. How do you intend to help local authorities over that difficulty?
  (Mr Spellar) It would be open to them to make a bid on that in their application for local transport plans in order to be able to synchronise rather than have one following another, because I very much take your point that in order to introduce such schemes you cannot have too long a delay between the improvements in public transport that will be necessary in order to carry the numbers of people—

  429. Have there been applications for grants from the Transport Department?
  (Mr Spellar) Not that I am aware of from any of those authorities.
  (Mr Davis) The provision for local transport capital spending has been doubled following the introduction of the 10 Year Plan, and all local authorities have to draw up bus strategies which set out the measures they intend to take to encourage bus use in their areas, and the government would expect a good deal of the funding that has been provided to be used to fund those measures to give priority to buses in a way that does not cause undue interference to car drivers and that sort of thing.

  430. Are we addressing the right point here? What the Minister is referring to with the transport grant is capital funding; what local authorities are looking at is revenue funding so they could help to overcome the void between introducing any congestion charges and the transport charges. I think we are not addressing the right point. Have you any comment to make on the fact that it is a revenue-based problem that is facing local authorities on this issue?
  (Mr Spellar) Local authorities do also shape their bids in a way which can help in moving expenditure from revenue to capital and looking at how they can operate that. Also, with a number of these schemes, in order for them to be effective even within the current regime bus priority measures and expenditure on those are very significant. As you know, this is one of the causes of complaints from the bus operators as to some of the delays in increasing patronage.

  431. Finally, can I put it to you that you said in your opening that quality contracts are a significant factor in introducing bus services or additional bus services. Do you agree that the way out of this impasse would be quality contracts so that commercial operators would co-operate but local authorities would have to become involved, and the only way forward would be quality contracts?
  (Mr Spellar) I think we want to see local authorities pressing further on quality partnerships and, in the event that that route does not work, then to look towards quality contracts. I am not in any way rejecting the quality contracts route but we really do think that the debate and the discussion needs to be taken a bit further at local level. As I said, it is back to this dilemma I have that I think many of these things need to be tested more rigorously before we are clear as to what the next step is.

Mrs Ellman

  432. You said to us at the beginning of this session that you recognised the major form of transport outside the metropolis was by bus.
  (Mr Spellar) Public transport.

  433. Yes. Yet the targets you have for increased bus usage could all be met by London itself. What are you doing to change those targets?
  (Mr Spellar) While you are absolutely right and there has been a significant increase in bus usage in London and most of that increase, or nearly all of it, has been within London, what we are also looking at is, firstly, arresting the decline in other areas. To some extent that has been part of a natural process as car ownership levels in some areas, the north east springs to mind, has started to come closer to the national average and, therefore, matters have levelled out. But we are not satisfied with that and that is why we are looking at bus priority routes, for example, and I gave a couple of examples but there are others; also guided busways. In Leeds we have seen something like a 50 per cent increase in utilisation; in Bradford we opened back in January, as I recall, so it is too soon to get the figures but I think the early indications are encouraging. We want to be looking right the way across and I think we want to be accelerating that process of looking at where we can usefully get in bus priority measures in order that we are seeing right the way across the country and not just at the peculiar situation in the metropolis with an increase in the population of half a million in the last ten years and a big increase in employment. We have to look at this in a much wider context.

  434. That is rather vague, is it not? When Mr Rickett gave evidence to us on the Ten Year Review he said the government needed to review the bus target and he said the Department was improving its model. What did he mean by that? What you have just said to us is creditable but very vague.
  (Mr Spellar) We have the measures which will enable us to meet the targets but we want to go further than that, and I have to say that looking at the bus operators outside London they are not just saying they can tread water and London will make up the increase and hit the government's targets; I think they are being more ambitious than that. In a number of cases they are trying to grow the market and, indeed, are pressing us as to whether local authorities can speed up the process of bus priority measures. We are also putting money through a whole number of local transport plans into much better interchanges of buses. I opened a 5 million project in West Bromwich a month or so ago, which is partly about making it more convenient for using buses and with information systems, but also about making it more comfortable—that you are in the dry and you have other facilities—and really working to change the image of the bus as well. There is a lot of work still to be done but there has been quite a bit done already.

  435. What about being more precise? The Social Exclusion Unit says we should look at accessibility to key facilities like employment, health care and leisure activities for people who we might regard as socially excluded. Are you going to look at any of those targets?
  (Mr Spellar) I think that is a slightly different area. If we are looking at volume then obviously it is particularly the key showcase routes into the city centres which are handling that, but there is a second issue which is also extremely important which is about the question of peripheral routes in peripheral areas. Part of what I was mentioning with regard to security on buses is enormously important in that regard.

  436. What about the things I have mentioned? Do you accept those objectives? Accessibility of people to get to work, to health care?
  (Mr Spellar) I was coming on to those because with health care, particularly as we have seen consolidation of health facilities both in hospitals and even in primary health care facilities, access to those is important. One of the issues we are pressing with the Department of Health is that access to transport should be a significant consideration in the location of these facilities, so it is not just at our stage about providing these facilities; it is where there are existing routes.

  437. How are you going to measure whether that is achieved?
  (Mr Spellar) I think that is partly, obviously, about numbers but it is also very much about response from local authorities who are particularly concerned about these areas, and this is why I mentioned in my opening statement the number of routes that are cut back each year. We are trying to get to the bottom of that data. I think it is a very mixed picture across the country as to whether some of those routes are no longer viable and whether a bus is the most appropriate mechanism, or whether some form of shared taxi service would be more effective. We need to be clear on that and on whether there should be re-allocation of routes in order, for example, to cater for the fact that health facilities have moved or that one supermarket has closed, or local shops have closed and people need access to a new supermarket.

  438. How are you going to measure whether this is achieved? These are all things we want to see happen but have you got any way of measuring whether they are achieved?
  (Mr Spellar) It is not so much having a global measure of that which I think would be fairly difficult: it is very much the interaction with the local authorities and the representations that they are making through the Local Government Association as to whether the system is working or not. That then goes back to the point that I made earlier on the need to get an agreed database or an agreed information base concerning the situation in the industry, with the bus operators and with the local authorities—

Chairman

  439. Surely your Department has a model which it uses? You are not telling me, Minister, that you do not have an agreed sensible model already on matters like bus usage? After all, you yourself made it very clear that you are increasingly negotiating with local authorities for extra money to provide those services, so you are not telling us you have not really got in the Department a model that gives you some information on which you can take these assessments and then answer Mrs Ellman?
  (Mr Spellar) No, but, on the question of numbers and volume, then you can have a model on that.

 


 
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