Memorandum by National Express Group plcTravel
West Midlands (Bus 05)
THE BUS INDUSTRY
National Express (NX) is pleased to submit its
memorandum in response to the Transport Sub-Committee Inquiry
on the bus industry announced on 11 March 2002. We would like
the Committee to reflect on the following points in reading our
NX are supportive of the regulatory
policy framework established by the Transport Act 2000 and believe
that further implementation is required before legislative changes
The acceleration of the delivery
of local transport plans would achieve quick wins;
We believe that Quality Partnerships
are the best way of delivering improved, customer-focused bus
services. These should be jointly funded by Local Authorities/PTEs
The implementation of the planned
bus priority schemes, the enforcement of existing priorities and
the reinvestment of fines in further bus priority schemes will
further improve traffic flow whilst encouraging greater use of
Improved co-ordination of bus priority
and traffic enforcement schemes would deliver service improvements;
Concessionary fares are a subsidy
to the passenger and not the operator. The schemes keep fares
low and are therefore an aid to social inclusion. They are good
news for passengers;
Quality Partnerships and Quality
Contracts are not substitutes for each other. Quality Partnerships
require the implementation of improvements in bus priority measures
and other infrastructure. Quality Contracts are essentially a
Restoration of 100 per cent fuel
duty rebate would bring further investment into the industry,
help keep commercial fares low and enable buses to help meet the
social inclusion agenda;
Traffic congestion remains the main
obstacle to improving bus services.
The UK bus division of the NX Group, Travel
West Midlands ("TWM") primarily provides bus services
in the West Midlands with further services at Travel Dundee, in
Scotland. We are committed to:
Observing high standards of safety;
Meeting the needs of local communities;
Providing reliable, comfortable and
Recruiting and retaining quality
Providing value for money and quality
Investing in public transport.
TWM carries over 330 million passengers a year
on an intense network of nearly 600 routes, with an average fare
of 54p per passenger journey. Over two thirds of mileage operated
is on high frequency routes of 10 minutes or better. The West
Midlands has the second highest level of bus journeys per head
of all the passenger transport executive ("PTE") areas,
134 per year with other PTEs averaging just over 100 journeys
We aim to continually improve service quality
for our passengers through investment and innovation. We are committed
to working in partnership with local authorities and the West
Midlands Passenger Transport Executive (Centro) to deliver the
five year local and 10 year national transport plans.
Since NX acquired TWM in 1995 there have been
a number of significant achievements:
Providing and developing an intense
network of services across the whole of the conurbation;
Making public transport accessible
for all, including the disabled. All 800 buses purchased by TWM
since 1997 are low floor fully accessible;
Developing active and productive
partnerships with the West Midlands local authorities and Centro.
We are playing an integral role in the delivery of the local transport
plan and accompanying bus, ticketing and information strategies;
Playing a major role in all the West
Midlands Showcase routes, each of which have delivered double
digit patronage growth;
multi-modal interchanges for bus, rail, light rail and airport
services have been developed. Specifically we have been involved
in the design and implementation of the Birmingham City centre
Bus Mall that will improve interchange between buses, trains and
ultimately trams. We are also a partner in the Wolverhampton Interchange
(b) ticketing and marketingThe
West Midlands has the most extensive range of integrated tickets
in the UK, including bus/rail/metro tickets that can be bought
on TWM buses. A programmed introduction of Smartcards is underway
with Smartcards scheduled to be introduced on our Coventry area
buses in late 2002.
(c) informationTWM provides
comprehensive printed information on all its routes and fares
distributed through a network of over 1,000 local agents. NX is
also a major funder and supporter of the national Traveline public
transport information service.
Making buses more environmentally
friendly. During 2001 140 new low floor easy access double deck
buses were introduced, all powered by Euro III engines and fitted
with particulate traps ensuring they are the greenest buses in
the UK. A further 140 will be delivered during 2002;
Investing in driver training and
recruitment to tackle the tight local labour market. Over a third
of our staff have achieved an NVQ qualification with a further
20 per cent undertaking the programme currently;
Developing a positive industrial
relations climate. The agreement of a unique five year pay deal
for staff has given employment security and guaranteed wage rate
Forming partnerships with local police
to deter crime and improve security on our buses through "Operation
Safer Travel". The latest digital CCTV technology has been
installed on all new vehicles.
TWM has also committed to invest £30 million
in infrastructure and bus priority measures. We are disappointed
that slow progress with the implementation of agreed schemes by
Local Authorities has resulted in only £1 million being spent
so far, four years after the initial commitment was made.
We make the following comments in relation to
the Committee's terms of reference.
TWM receives negligible subsidy from public
funds. The TWM strategy is to operate in integrated network covering
the whole of the West Midlands conurbation. Over 97 per cent of
mileage operated is commercially registered and the company receives
less than 1 per cent of its income from tendered service payments.
The comprehensive TWM network reduces the need for high levels
of subsidised services. The cost per mile of subsidised services,
paid for by Centro, has fallen by 49 per cent since industry de-regulation
1.1 Concessionary Fare Reimbursement
We believe that there is a role for concessionary
fares in the provision of bus services. Such fares enable groups
of passengers to travel on a reduced or no cost basis. These concessions
are subsidies to the passenger and not the operator.
The West Midlands Senior Citizen Concessionary
Fare Scheme allows free travel for senior citizens after 0930
Monday to Friday and all day Saturday, Sunday and Bank Holidays.
This is one of the UK's most passenger-friendly concession schemes
and is more generous to the passenger than the statutory minimum.
However, the reimbursement arrangements mean that we do not receive
full fare payment for all these passengers. For example, for every
100 senior citizens carried we receive full fare reimbursement
for only 61.
1.2 Fuel Duty Rebate
TWM, in line with the rest of the bus industry,
currently receives 80 per cent rebate of the full fuel duty, leaving
it to pay 20 per cent of the duty at a cost of £5m per annum.
Raising the FDR to 100 per cent, in line with other transportation,
would restore the industry to the position pre 1994 and enable
further investment. FDR helps to keep fares low and assists buses
to meet the social inclusion agenda.
We believe there is merit in reforming the payment
mechanism for FDR into, at least in part, a per passenger payment.
This would give an additional incentive for operators to carry
more passengers. However, the potential impact on lesser used
routes, even in the conurbations, needs to be assessed as this
may reduce services in some "socially excluded" areas.
TWM currently has no experience of either urban
or rural bus challenge initiatives. Within the West Midlands the
focus for these initiatives has been largely towards demand responsive
2. THE RELATIVE
Quality Partnerships and Quality Contracts are
not substitutes for each other. Quality Partnerships require the
implementation of improvements in bus priority measures and other
infrastructure. Quality Contracts are essentially a tendering
We believe that the key to improving bus services
Reduce the ever worsening effects
of traffic congestion on bus punctuality;
Improve road allocation schemes for
public transport including more bus priorities;
Better enforcement of bus lanes;
Reinvest funds from bus priority
enforcement fines in local transport;
Jointly funded investment in infrastructure.
Experience confirms that improved reliability
of public transport encourages more people to choose public transport
as their first choice mode of travel, assisting the Government's
In line with the Transport Act 2000, we believe
that Quality Partnerships are the best delivery mechanism for
improving bus services and improved customer information.
Quality Partnerships will result in:
Improvements in bus reliability/punctuality;
Network plans being based on customer
needsthere is evidence that current subsidised services
do not improve social inclusion;
An incentive for operators to carry
more passengers and improve quality;
Minimised administrative costs for
Greater certainty for the industry,
resulting in higher investment levels.
We believe Quality Partnerships need a chance
to succeed and any change in the existing balance of control would
be detrimental to the industry. TWM has been successful in developing
a number of high profile Quality Partnership routes over the past
five years. Double digit passenger growth has been achieved on
We believe strongly that Quality Contracts would
be detrimental to the growth of bus travel and should not be introduced
on urban bus travel. They would simply provide a compulsory competitive
tendering mechanism which would effectually re-regulate the industry.
Quality Contracts do not contain any requirement on the Local
Authorities to provide bus priority measures and their implementation
will merely further delay delivery of the local transport plan
bus priority targets.
Through Quality Partnerships local authorities,
PTEs and operators can each commit to improve the quality of the
service provided through investment in bus priority measures,
infrastructure, new vehicles and customer care. This would tackle
traffic congestionthe primary reason why bus services are
To date no statutory Quality Partnerships have
been signed anywhere in England. Within the West Midlands little
progress has been made in incorporating the existing "Showcase"
schemes into the statutory framework. Centro has yet to provide
its draft template for statutory Bus Quality Partnerships. In
general it does appear that the existing powers in the Transport
Act 2000 are not fully appreciated by the PTEs/LAs.
Quality Contracts are irrelevant to the real
issue of providing a reliable service to the passenger in worsening
3. THE IMPORTANCE
Congestion is the biggest challenge faced by
bus operators, restricting patronage and industry growth. Improving
reliability and punctuality is the top priority for existing and
potential bus users. These problems can be overcome by more bus
priority schemes, such as bus lanes, bus priority at traffic junctions
and better management of the highway; including control of road
works and illegal parking.
As traffic congestion worsens operators have
to use more buses to provide the same level of frequency with
no increase in patronage. This limits the opportunities for network
development and could be seen as concentration on the key corridors,
as these are the routes that require extra vehicles simply to
maintain the existing timetable. The situation is currently being
exacerbated as operators build extra time and inefficiency into
schedules to ensure that rigid and unrealistic national reliability
standards can be met if unpredictable congestion does occur. We
believe that targets for bus punctuality should be agreed locally
by operators, Local Authorities and Traffic Commissioners. Increasing
average bus speeds would allow improved frequencies and more services,
with the same numbers of vehicles and drivers and thus generate
patronage growth to allow further investment.
The first West Midlands LTP Annual Progress
Report states that the 2006 targets for improved bus speeds will
not be met. TWM suggests a dedicated "task force" to
speed up the design of programmed schemes. This "task force"
could be a nationally provided resource, working on a project
by project basis, funded directly through the DTLR, using the
LTP funds. TWM would like to see the West Midlands "Outer
Circle" Route project as the first "challenge"
for the "task force". We are keen to play our part in
the project and bring the benefits of the latest new low floor
vehicles to the 15 million passengers who use the route every
Vehicle congestion charging, with income "ring-fenced"
for public transport improvements, may have a role to play in
improving bus reliability and punctuality and we await with interest
the impact of central London schemes.
We support the regulatory policy framework established
by the Transport Act 2000 and the Transport (Scotland) Act 2001.
We believe that the current regulatory framework for the bus industry
is appropriate, providing a stable environment in which to operate
and having the potential to deliver benefits for both Government
and the customer. Stability underpins investment with investment
underpinning growth. However, we believe there needs to be an
acceleration of deliverables from the five year plan and that
the current framework has not been tested sufficiently.
We believe formal working arrangements should
be created linking the Traffic Commissioners and Highway Authorities
thereby identifying sections of the highway where traffic management
and bus priority measures are needed to allow bus operators to
provide reliable services. Clear standards for achievable road
speeds, which highway authorities could adopt as local transport
plan targets, would greatly assist bus operation.
5. THE CONTRIBUTION
Buses are the main form of local public transport,
accounting for three quarters of all public transport journeys
under 10 miles. Nationally, 87 per cent of people live within
six minutes walk of a bus stop. In addition over 150,000 staff,
including 116,000 as drivers and conductors, work for coach and
bus operators. Bus usage is highest amongst the socially excluded
with the poorest fifth of households using buses twice as much
as the richer fifths. Households without cars use buses three
times more than households with cars. However, whilst economic
factors are important in determining bus usage, even in affluent
areas there are significant numbers of elderly people and under
17s who may not have access to a car but are equally reliant on
the bus for their day-to-day mobility needs.
The current West Midlands Local Authority/PTE
Bus Strategy sets a target that by 2006 92 per cent of the metropolitan
area should be within 250m of a bus stop with weekday daytime
service. By 2000-1 a figure of 89 per cent had already been achieved.
TWM operates a comprehensive network of services
on, where practicable, an 18 hour/7 day a week basis. Over 25
million passengers a year are carried on TWM buses after 7pm in
the evening. The company has a large number of high frequency
corridors passing through many of the most deprived areas in the
countryeg Handsworth, Sparkhill, Small Heath. These routes
also serve areas which could be defined as "socially excluded".
Druids Heath (route 50), Castle Vale (route 67), Willenhall and
Wood End in Coventry (route 21). Through experience TWM has learnt
that to encourage users it is important to provide direct services
along major routes rather than extended journeys through lower
density areas. Such extended services can increase social exclusion
by depriving people who have an absolute need for quick bus services
eg people going to work.
The TWM route strategy is supported by its approach
to network ticketing. Within the West Midlands less than 40 per
cent of passengers buy single journey tickets. The company's extensive
and highly popular range of network day, week and monthly tickets
allow passengers to make use of the whole TWM network without
any "rebooking" fare penalty. TWM is also an active
promoter of the Government's "New Deal" providing over
10,000 half fare Travelcards to New Deal clients a year.
During the preparation of the West Midlands
Bus Strategy TWM expressed concern about the proposed "Network
West Midlands" as we believe that this strategy may result
in less popular routes suffering from a lack of public investment.
Whilst we understand the rationale for focused investment eg improved
shelters, real time information etc on core "network"
routes, we believe there is value in providing investment on non
core routes where service frequencies are lower and investment
is really needed and of benefit to the passenger.
We also recognise that whilst scheduled bus
services are the best way of serving busy corridors, in many lower
populated areas Demand Responsive Transport (DRT) ie taxi/minibuses
may be more cost effective. DRT and scheduled local bus services
can complement each other in many cases, with DRT connecting people
to the core bus network. TWM is keen to carry out a pilot exercise
integrating its low floor buses with the Ring and Ride service.
Finally, at the more strategic level it is generally
recognised that planning policies and development patterns have
significantly increased actual and perceived social exclusion.
The growth of large out of town supermarkets designed for car
users and the decline in local shops directly impacts on the non
car owning/driving groups. Equally, motorway based business parks
discriminate against potential employees from these groups. Such
facilities are very difficult to serve both economically and practically
irrespective of the legislative framework.