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

Memorandum by Transport for London—London Buses (Bus 02)



  1.1  This submission aims to support the Transport Sub-Committee inquiry into the bus industry by setting out the recent experience of Transport for London (TfL) in developing London's bus services.

  1.2  There are differing legal frameworks for the provision of local bus services within London and in the rest of the United Kingdom. Within London the Greater London Authority Act 1999 applies, and TfL is responsible for providing or securing the provision of public transport services to, from or within Greater London. The Mayor's Transport Strategy was published in 2001, in accordance with Section 142 of the Act, and sets out the Mayor's plans to achieve a significant improvement in the quantity and quality of services.

  1.3  Elsewhere in the United Kingdom, the Transport Act 1985 applies, which deregulated bus services outside London. Certain aspects have been amended in by the Transport Act 2000, which includes powers for local authorities outside London to improve the quality and delivery of bus services.

  1.4  The submission sets out key policies and initiatives that are considered essential to the successful provision of bus services in London. Specific references are included to the issues of funding, bus priority measures and their enforcement and reducing social exclusion referred to in the invitation to submit memoranda to the Committee.

  1.5  This submission is structured as follows:

    —  Section 2 briefly outlines the scope of London's bus network;

    —  Section 3 sets out the background to the Mayor's Transport Strategy;

    —  Section 4 highlights key policies and initiatives that underpin the current growth and improvement of London's bus network;

    —  Section 5 deals with costs and subsidy;

    —  Section 6 draws conclusions from the above.


  2.1  Buses play a vital role in the provision of public transport for London. They provide access to jobs, schools and town centres, and also act as a vital link to Underground and National Rail services.

  2.2  The London bus network is one of the largest and most comprehensive systems in the world, with over 6,000 buses running on more than 700 different routes and 4.5 million passenger trips made each weekday.

  2.3  Against a background of long term decline, patronage in the capital stabilised during the 1990s and has grown in recent years. Passenger growth during 2001-02 was 6 per cent, representing the fastest rate of growth experienced in London since World War II. This gives the highest number of passengers since 1975.


  3.1  The Greater London Authority Act 1999 re-enacted provisions for control of the bus network and fares, previously set out in the London Regional Transport Act 1984. Under the 1999 Act, these responsibilities transferred from London Transport to the Mayor, Greater London Assembly (GLA) and TfL, a new integrated body. Under these new arrangements. London Buses continues to plan, tender and monitor the bus network, whilst TfL sets the fares.

  3.2  Notwithstanding previous achievements in stabilising demand and reducing costs, the starting point for the Major was the philosophy of cost reduction inherent in the tendering regime dating back to the 1980s and 1990s. Particularly during its latter years, this was leading to unsustainably low wages and poor staffing levels, which in turn was impacting on performance. The contracts in place offered little or no quality incentive, resulting in limited emphasis on numbers and quality of management and supervision.

  3.3  Against this background, bus operators faced significant operational challenges in the form of widespread unpredictable congestion, over-saturated road capacity, widespread infringement of parking regulations and frequent roadworks.

  3.4  Central to the Major's Transport Strategy, which sets out a ten-year programme of improvements, is the overhaul of the bus network. It recognises that demand for bus services will remain high, and that there is scope for expansion to improve the quality and extent of the network as shown in Figure 1.


  4.1  Performance Management—using extensive monitoring data, including that obtained from Automatic Vehicle Location, to draw conclusions, a new Performance Team is taking action to deliver improvements. A key aspect of this is the continuous review and improvement of the worst performing routes. Much resource is being dedicated to scheduling for reliability (journey and recovery time at each end of the route). The significant cost of this has to be recognised both now—and into the future.

  4.2  A further costly investment is being made in securing that appropriate levels of service supervision and management are in place. This involves both ensuring the deployment of resources already paid for and buying more where needed. Alongside this, training standards and programmes are being developed for drivers and supervisors.

  4.3  The Performance Team has also initiated other programmes, including a drive for better cleaning and more reliable radio and communication services. These programmes have further cost implications.

  4.4  TfL Bonus—a second key initiative was introduced in March 2001, whereby drivers and conductors are directly paid by TfL an extra sum per fully completed duty. The aim is to demonstrate clearly to frontline staff a commitment to supporting the vital role that they play in achieving the desired improvements to the bus services. The cost of providing TfL Bonus in 2001-02 was £18 million. Around the time that this Bonus was introduced, many bus companies increased wages substantially under their annual reviews. These increases are reflected in tender costs, the labour element of which has risen steeply in recent years. The combined effects of these increases plus the TfL Bonus are significant factors in bringing about a 50 per cent reduction in the mileage lost due to staff shortage year on year.

  4.5  Bus Contracting Review and 31 Point Action Plan—a full review of the London Bus tendering system, commissioned by the Mayor, reported in early 2001. The review drew a number of key conclusions:

    —  Continuing the tendering process was seen as the best and most pragmatic way forward at this time;

    —  Bus company profitability was not excessive, and the return on capital low;

    —  The way the system has been managed is a bigger issue than the system itself;

    —  Insufficient concentration in the past on quality and too much on cost reduction;

    —  Much to be done in a range of labour market issues.

  4.6  To support the conclusions of the report London Buses developed a 31 point Action Plan, endorsed by the Major. The Action Plan is delivering fundamental improvements to the bus service. A more "hands-on" stance is increasingly being taken with operators, away from the previous arms length relationships and adversarial attitudes with a move to an approach of joint working and common goals.

  4.7  Quality Incentive Contract—this new approach is being under-pinned by a new "Quality Incentive Contract". For the first time operators' performance payments are made on the basis of service reliability as measured by Quality of Service Indicators (QSIs), as well as mileage operated. Penalties—or, also for the first time, bonus payments—are based on the variation between actual QSI performance for a given route and its minimum standard.

  4.8  To address the labour market issues a number of action points involve joint work between London Buses and the operating companies on staffing of bus service issues—including improved crew facilities, raising the status of bus operating staff and higher BTEC nationally recognised standards of recruitment and training.

  4.9  Network Development—central to London Buses' strategy is the continuous development of the bus network itself. The business planning process that supports this is demand driven. The use of all services is continuously monitored through on-bus surveys and extensive customer research. Close liaison is also maintained with the London Boroughs, London Transport Users Committee and others. Service improvements are generally provided in three ways: frequency increases, use of larger buses and the creation of new routes and links. In 2002-03 the cost of such initiatives is forecast at over £25 million.

  4.10  During 2002-03 some 10,000 extra spaces will be provided during the busiest hour on London's buses. In introducing the improved services, priority is being given to those, which directly support the proposed congestion charging scheme. The planned capacity improvements go beyond what is required to complement this scheme, with significant extra enhancements in the peaks and at other times.

  4.11  Fares and Ticketing—alongside the network development programme is a fares and ticketing programme aimed at making it easy to pay, reducing boarding times, reducing fraud and lessening staff risk. The following series of packages of improvements are being rolled-out:

    —  July 2000—one day bus passes on night buses, fares freeze;

    —  May 2001—carnet, cheaper bus passes, less photocard need;

    —  Sept 2001—cheaper child passes, child carnet, night fares brought into line with day fares;

    —  Jan 2002—all Travelcards valid on buses, all day;

    —  2002-03—Smartcards.

  4.12  The outcomes of these changes include the continued reduction of on-bus cash payment (currently down to 15 per cent central area, 25 per cent London wide) and a further contribution to the social inclusion agenda through cheaper simpler fares and bus passes. Many of these initiatives net cost implications, for example, the cost of the fares freeze is estimated at over £15 million in 2002-03. Future simplification will drive these outcomes further and careful consideration is being given to the "cashless bus" concept.

  4.13  Vehicles and Accessibility—Over 60 per cent of London's bus fleet has been replaced in recent years by new low floor, low emission buses. All new buses offer wheelchair access with retrofitting of wheelchair ramps in progress wherever possible. With the exception of Routemasters, all buses will be low floor and wheelchair accessible by 2004-05.

  4.14  During 2001, London Buses won a Bus Industry Environment Award in recognition of London Buses' comprehensive environment policy and UK leading work on moving towards the cleanest possible diesel fleet, as well as investing in new zero and low emission technology.

  4.15  Information and Infrastructure—London traditionally demonstrated high standards in the provision of comprehensive and high quality passenger information. Considerable scope for further improvement exists and is being pursued through the following programmes:

    —  Clearer "spider" maps and stop-specific timetables;

    —  Modern aluminium bus stops completed during 2002;

    —  "Countdown" real-time information at bus stops.

  4.16  In addition to the bus stop renewal programme, a major shelters renewal/expansion programme is also nearing completion with 12,000 out of London's 17,000 bus stops now equipped with modern shelters. London Buses is also responsible for a portfolio of bus stations which it is progressively expanding and rebuilding at an annual cost of approximately £15 million.

  4.17  Priority, Reliability and Security—One of the key opportunities arising from the GLA Act, with its wide ranging responsibilities, including policing, is a comprehensive re-appraisal of the role of previously external agencies in tackling the above issues.

  4.18  The Major has funded the setting up of a transport Operational Command Unit (OCU). The unit will have specific responsibility for policing agreed corridors on the London bus network and enforcement of the law relating to taxi and private hire licensing. The annual budget of the OCU is £25 million. The following objectives have been set for the OCU:

    —  The efficient movement of buses on agreed bus corridors;

    —  Making the public and staff feel safer using bus services, policing the local waiting/alighting environment and the roads on agreed corridors;

    —  The enforcement of the law relating to taxi and private hire licensing.

  4.19  Compliance (enforcement) of parking and traffic regulations is being significantly stepped up by the introduction of on-bus cameras and Street Management (a TfL division)/Borough enforcement plans (SLAs). Decriminalisation of such offences, to enable enforcement by Borough personnel, has recently been pursued but is recognised as second-best to adequate traffic policing. Successful enforcement combined with high levels of bus priority will deliver significant running time and reliability benefits.

  4.20  London Buses is taking over the client role for all bus priorities in London. Detailed planning and implementation of schemes will remain the responsibility of the relevant highway authority (these are either individual boroughs or TfL Street Management).

  4.21  As part of the new arrangements, London Buses will determine priorities for allocating resources and is setting up a Bus Priority Steering Group which will involve representatives of Street Management, the boroughs and bus operators to discuss and disseminate these decisions and monitor the delivery of bus priority measures. It will also act as a forum for discussion of wider issues related to bus priorities.

  4.22  Reducing Social Exclusion—The Mayor's Transport Strategy highlights the importance of transort in promoting social inclusion and identifies groups of Londoners who may be excluded from fully benefiting from transport services. These include, for different reasons, women, young people, older people, people on low incomes, disabled people and black, Asian and other minority ethnic people.

  4.23  TfL is developing a social inclusion programme to overcome these barriers to usage and London Buses. Many of the policies and initiatives described above are consistent with this programme, for example simpler fares and information, accessible vehicles and improved network penetration through the introduction of new routes to bring more people closer to the bus network and the expansion of the night bus network.


  5.1  The development of the London Bus Network as set out in Mayor's Transport Strategy represents a comprehensive and ambitious series of improvement programmes and service expansion. These programmes are being implemented within a concentrated timescale, in the wake of a sustained period of cost reduction. The net spend for 2002-03 is forecast at £314 million (total cost of operations £990 million), rising to £453 million in 2003-04 and £512 million in 2004-05 (total cost of operations £1,160 million and £1,230 million respectively). These figures contrast with the position briefly reached in 1997-98 when the network was run at zero subsidy.


  6.1  London's Bus Network will fulfil on its own the Government's current 10 year growth target for buses, given current performance. It will also substantially help achieve the vehicle age profile target for the UK as a result of substained high standards.

  6.2  The level of subsidy is modest compared with other world cities. The improvements in the bus service obtained by the rising subsidy have been delivered in months rather than years, and compensate for the lack of progress in increasing Underground capacity. They will also enable Congestion Charging to be introduced.

  6.3  Public money applied to an urban bus network on this scale must require a sophisticated regime to ensure good value for money. This is not necessarily incompatible with commercial operators making profit, or with reasonable pay and conditions for bus staff. A contractual regime, however, put in place at a time of above-inflation pay and conditions, and requiring new accessible vehicles and high levels of services for social inclusion, yet lacking the revenue support needed to pay for these items, will not succeed.

  6.4  Such revenue support needs to be available throughout the life of the contracts, and also be sufficient to pay for the overheads of the network planning, tendering and performance regime necessary for its management. If therefore a contract regime were to be instituted outside London, it will fail unless there is sufficient long term revenue support available to pay for the quality and volume of services desired from its introduction.

P G Hendy

Managing Director of Surface Transport

15 April 2002

TfL's Review of cross boundary local bus services


  The Terms of Reference of the TfL review were:

    "To review the provision of local bus services which cross the GLA area boundary to ensure that bus passengers using these services are treated with equity, taking into account the statutory responsibilities of TfL and also the neighbouring local authorities."

  [Note: TfL's main submission to the Transport Sub-Committee, paragraphs 1.2 and 1.3 sets out the differing legal frameworks within London and the rest of the United Kingdom, and are not repeated here.]


  Views were sought from:

    —  the adjoining County and Unitary Councils, and District Councils;

    —  the adjoining London Boroughs and the Association of London Government;

    —  the London Transport Users Committee (LTUC) and other user groups;

    —  bus operators;

    —  Members of the Greater London Assembly and Members of Parliament who represent areas adjacent to the Greater London boundary; and

    —  others interested on this issue, through the issue of a Press Notice inviting comments.

  Views were sought in particular on:

    —  services—service levels; how far across the boundary should any link from Greater London operate;

    —  fares—cash, passes and concessionary fares;

    —  funding available for bus services running across the boundary—covering those secured by LB and County (and Unitary) Councils, and also commercial routes operated under London Local Service Agreements (LLSA) or London Service Permits;

    —  infrastructure—what is the current provision on bus stops and shelters, and who should provide these for LB routes in out-county areas; and

    —  information—the level and quality of information provided to passengers.

  Over 50 consultation responses were received, of which 40 were substantive. The review also took into account two other reports, the first of a House of Commons Adjournment Debate in November 2001 on "Bus Services (Outer London)", and the second in January 2002 to the GLA Transport Operations Scrutiny Committee on "Cross Border Bus Routes London-Surrey".


Service patterns and coverage

  Responses relating to how far across the boundary should routes operate were mixed with some favouring the nearest town centre while others preferred further afield. Some considered that each service should be looked at on its own merits. The general view was that there were not big gaps in cross boundary service provision. User Groups commented that there had been many improvements recently, particularly where LB had tendered routes due to commercial operations ceasing.


  Discrepancies in the fares regime between London and the home counties attracted much comment.

  Views had been sought in particular on how far across the boundary should TfL fares apply and views varied by respondent groups:

    —  many felt low fares a substantial benefit to passengers, particularly those on lower incomes. This also encouraged switch from car to public transport. Some others favoured commercial fares outside Greater London, with concern raised about the impact of cheap TfL fares were having on the viability of commercial routes that ran in parallel with LB services;

    —  some respondents wanted TfL fares only to the boundary while others to the nearest town/local centre, and throughout the length of LB tendered routes; and

    —  a key concern was the need to ensure consistency of pass/ticket acceptance as there were several instances where this differed (especially Freedom passes) on parallel routes.

  Information was sought about integrated fares/passes, and respondents commented that guidelines given by the Office of Fair Trading had made it very difficult for commercial operators to implement common fares structures and co-ordinate pass acceptance, as this could be considered anti-competitive. However, the Transport Act 2000 contained new powers which offered the out-county local authorities the opportunity to improve ticketing co-ordination.

  There were requests for an increase in the number of agents in out-county areas selling TfL passes.

County and Unitary authority funding for subsidising bus services

  The county and unitary authorities generally said they had limited budgets and struggled to meet their priorities. This had become even more difficult as in many cases the large operators had deregistered routes that did not meet their profit targets, and placed a further financial burden on the Counties who had to consider whether to replace the services with tendered services. It was difficult to meet the increased costs when routes were retendered, and even more so where LB wanted to enhance the level of service on LB tendered routes in their areas. This is, therefore, a key problem area.

County and Unitary authority Concessionary Fares Schemes

  In general the minimum half fare scheme applies, although some District Councils offer a higher level of concession, which in a few cases gave free travel within the District area. No County offered free travel on a scale comparable to that in London.

Vehicle specifications

  County and unitary authorities minimum specifications for the bus services they tendered vary, with some authorities having no specific requirements, other than meeting the statutory minimum. Others had more stringent requirements in terms of maximum age and accessibility standards for their busiest routes. None set target dates for fully accessible buses on all local services.


  Views were sought on the current provision on bus stops and shelters, and who should be responsible for provision of these for LB routes in out-county areas. In general the respondents considered that the quality of bus stops and information provided by LB were much higher than in the counties, and that quality in the counties was variable, although in certain areas improvements had recently been made.

  There was a much lower proportion of stops with shelters than within Greater London. In some cases, improvements were planned, sometimes though contracts with Adshel.

  It was suggested that the out-county local authorities should adopt a common standard relating to infrastructure provision, preferably based on the LB standard.

Passenger information

  On the level and quality of information provided to passengers, the County Councils produce various publicity, including some roadside information, maps, area timetables. The general view was that the provision of timetable information at bus stops in out county areas was variable, and often not to the standard at LB stops within Greater London. All the county areas were part of the national Traveline, which provided information over the telephone about local services.


  London Buses is nearing completion of its consideration of the issues raised in the review, and will be producing a report which will set out its future plans for these cross boundary services. Further consultation will then be undertaken with the key stakeholders. One of the fundamental issues that is under consideration, given TfL's duty relating to travel to and from and within Greater London, is greater consistency for cross boundary journeys. The degree to which this can be achieved will depend on the amount of funding available to TfL and to the County and Unitary authorities.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 12 September 2002