Response to the Committee's Recommendations
Integrated ticketing
1. Ten years after it expressed its commitment
to promoting integrated bus ticketing, the Government has achieved
too little of practical value. It is a nonsense that the everyday
act of changing buses is still made unnecessarily inconvenient
and expensive by poor ticketing arrangements. The Government needs
to pay more attention to resolving these basic problems which
penalise passengers and deter others from using buses at all.
(Paragraph 13)
The Government recognises the importance of having
ticketing arrangements that are simple and flexible, to enable
passengers to make best use of their local bus services. However,
in a deregulated market, commercial bus operators are generally
free to set their own fares and determine their own conditions
on ticket validity. Furthermore, it is normally unlawful for competing
businesses to agree a standard price for a product they both sell,
since this is considered an anti-competitive practice. However,
the Government has offered important flexibilities in this area
to help improve the integration of bus ticketing:
- Block Exemption Order: This exemption, from the
Competition Act 1998, came into force in 2001 (for five years,
renewed for a further five years up to 2011), allowing operators
to take part in multi-operator ticketing schemes. Subject to the
terms of the exemption being met, bus operators are able to issue
and charge a standard price for return tickets accepted by multiple
operators, including travelcards, through tickets and add-on tickets.
- Ticketing schemes under the Transport Act 2000:
This allows local authorities (including Passenger Transport Authorities)
to make their own ticketing schemes. The authority can require
operators to enter into certain ticketing arrangements, such as
joint ticketing (e.g. multi-operator travelcards) or through ticketing.
Such schemes are subject to a less onerous competition test in
the Transport Act 2000. The Act does not give authorities the
power to set the prices in a ticketing scheme, but operators can
determine prices through the Block Exemption Order.
There are many examples of successful initiatives
which encourage through ticketing and modal integration, such
as:
- PLUS BUS tickets provide unlimited bus travel
around town, at the start, finish, or at both ends of a train
journey where there are participating bus operator services (http://www.plusbus.info/).
- The Solent Travelcard gives passengers the freedom
to use all the bus services of all operators in the South Hampshire
region. The operators involved reflect the full range of bus operator
types in the UK, from subsidiaries of FirstGroup, Stagecoach and
Go-Ahead down to small local operators. Every operator with registered
local bus services within the area of validity of the ticket is
a voluntary participant in the scheme.
In the Local Transport Bill, which is currently passing
before Parliament, the Government has announced a major package
of reform which should help to strengthen quality partnerships
between bus operators and local authorities. Currently, local
authorities can enter into bilateral agreements with individual
operators without raising competition issues. The Bill provides
for a revised competition test to facilitate multilateral agreements
between a local authority and more than one operator, which should
open up more opportunities for both the use of block exemption
rules and the discussion of bus ticketing and operational arrangements
(service frequencies, timetables and fares). The Bill also aims
to make quality contracts (bus franchising) a more realistic option
for local authorities. Quality contracts will give local authorities
more control over ticketing and pricing arrangements, allowing
them to introduce schemes tailored to local needs. It is hoped
that these changes in the Bill will improve opportunities for
setting up multi-operator ticketing.
The Government recognises that there are other barriers
to interchange, as well as ticketing arrangements, for example
relating to timetables, the physical environment and information
provision. The Government provides Local Transport Plan capital
investment to support a variety of projects, including those to
improve modal interchange. One example is the Barnsley Interchange,
a new bus station linked to the railway station via a covered
footbridge. This replaces three former bus stations on different
sites. The scheme offers an improved bus/rail interchange, eliminates
pedestrian conflict with buses and diverts traffic away from a
congested area around a nearby level crossing. The Department
for Transport provided £18.3 million of the £22 million
cost, and the facility was opened by then Secretary of State,
Douglas Alexander, on 15th June 2007.
The Government also encourages cross-modal integration
through its Transport Direct service. This service, which currently
gets over 220 000 users a week, provides a comprehensive and impartial
choice of transport modes and routes to enable passengers to make
better transport decisions.
2. We recommend that the Traffic Commissioners
be given powers, in response to a reference by either party, to
arbitrate where bus companies and local transport authorities
are unable to agree terms for multi-operator tickets. (Paragraph
15)
The role of arbitrator between bus companies and
local authorities in reaching agreement on terms for multi-operator
ticketing would need to be empowered by law. In one particular
context, there is provision for this in the Local Transport Bill.
A quality partnership scheme - as the Bill would amend it - may
make requirements as to "maximum fares". "Fare"
is defined in the parent legislation as including the price of
a season ticket so on this basis a quality partnership scheme
could set a maximum on the price of a multi-operator bus ticket.
Moreover, the traffic commissioner would have an arbitration role
if an operator made an objection to a provision of this kind in
a quality partnership scheme put forward by the local transport
authority.
The issue of pricing for multi-operator bus tickets
is, however, a sensitive one. This relates not only to the negotiation
of a price for multi-operator tickets with all the participating
operators, but also competition from single-operator products
which, typically, would be priced significantly lower, though
offering a narrower range of journeys. Attempts by the Bus Partnership
Forum to negotiate a voluntary code of practice, or similar, on
this issue came to nothing, because of the divergent views of
the parties and their failure to find common ground. For this
reason any decision on a wider arbitration role for the Traffic
Commissioner, or any other body, would require careful and informed
consideration. The Government will certainly consider the Committee's
view that the Traffic Commissioners' powers should be extended
to take on this role.
3. Coaches are used by millions of passengers
every year and they often serve locations and routes that are
not easily accessible by rail. The Government seems to have a
blind spot regarding integrating coaches with other modes, despite
the potential to improve linkages with rail and bus services.
The Government should give coaches greater consideration in future
statements of public transport policy. (Paragraph 18)
The Government recognises the importance of coach
services in providing passengers with affordable longer distance
travel opportunities. However, the majority of coach services
in England are operated on a commercial basis by private operators
and, therefore, decisions on matters such as the extent of services,
routes covered and fare levels are a matter for the companies
themselves.
The Government can help to improve coach travel through
working to encourage better arrangements for transport interchanges,
including major coach stations and terminal points. The Government
will also continue to look for ways to give priority to coaches
on the national road network, following the successful introduction
of the dedicated lane on the M4 spur to Heathrow, which has made
journeys quicker and more reliable for bus and coach passengers
to the airport. Another example is the bypass lane for high occupancy
vehicles, including coaches, at the junction of the M606 and M62,
which the Department for Transport opened in March 2008.
Local authorities are also encouraged to bring forward
sustainable and suitable priority measures for buses and coaches
as part of their local transport plans. To date, local authorities
have put in place four high occupancy lanes: in Leeds (1), Birmingham
(1) and Bristol (2).
The Government promotes the integration of coach
travel with other modes through its cross-modal journey information
service, Transport Direct. This enables the planning of integrated
journeys, including coach travel, and transfers chosen itineraries
to retailer websites.
A further example of the Government's commitment
to encouraging coach travel is through its support for concessionary
travel. Concessionary half fares on scheduled coach services have
been available for older and disabled people since May 2003. The
Government provides £15 million per year for this scheme,
which, whilst voluntary, includes National Express services, which
represent 90 % of the scheduled coach network.
4. As the rail industry promotes online ticket
sales and other methods that reduce ticket retailing costs, it
is imperative that the full range of tickets, including multi-modal
options, be available at all main outlets. We recommend that the
Government explores this issue with the Association of Train Operating
Companies and includes requirements for ticket availability in
future passenger licence conditions if necessary. If not, the
Government's commitment to fare structure simplification in its
Rail White Paper will be meaningless. (Paragraph 23)
The Government recognises the importance of flexible
ticketing and the Department for Transport has been in discussion
with operators on the shape of future retailing provisions.
The rail strategy White Paper "Delivering a
Sustainable Railway" promised a simplified fare structure
across the rail network. The Government sees this as a key way
of making the railway easier to use and improving passenger confidence
in the system. Train operators will be introducing the simplified
fare structure this year, which will comprise four types of fare.
Three fare types will be available either in advance or at the
time of travel. These will be 'Anytime' fares, valid on any train
(most expensive), 'Off-peak' fares, valid on any train outside
peak travel times (cheaper), and 'Super off-peak' fares, valid
on any train at less busy times of day (cheaper still). In addition,
there will be 'Advance' fares, valid for a specific train only,
which must be pre-booked up to 6 pm on the evening before travel.
Advance fares will usually be cheaper than the equivalent ticket
bought on the day. Season tickets will continue as before. The
new fare structure will offer a point of reference for rail users.
The Government agrees with the Committee that it
is important that the full range of tickets are widely available.
Rail ticket sales are governed by the Ticketing and Settlement
Agreement, which requires all tickets to be made available from
all outlets, except for temporary promotional fares or multimodal
products. However, even within the exempted categories, improvements
are being taken forward which are welcomed by the Government,
for example the industry is working towards making PLUS BUS and
cycle reservations available on-line. PLUS BUS tickets are also
available at all national rail stations.
Megatrain is an exceptional case with tickets only
available on-line, through the Stagecoach website, and more restrictive
conditions than usual. Normally such products can only exist on
a temporary basis. The Department for Transport is engaging with
train companies through their trade association, the Association
of Train Operating Companies on whether sites such as Megatrain
should continue to exist as niche products or whether they should
be brought into the mainstream of rail ticketing and be listed
on National Rail Enquiries and available from other websites (such
as 'The Trainline' or 'Raileasy'). It is important to remember
that Megatrain fares are bucket seats offered at low prices to
sell capacity that would otherwise run empty. Without such services,
these very low fares might not be available. The Department for
Transport understands that South West Trains will introduce normal
advance purchase rail fares to widen the distribution of low-cost
products alongside its Megatrain offers.
Ticket vending machines (TVMs) have sophisticated
software but most do not sell all tickets, such as advance purchase
tickets and PLUS BUS. Experience has shown that it is difficult
to present complex information to passengers at TVMs in a way
that allows passengers to make informed decisions about the tickets
they need to buy. This is why TVMs have traditionally been used
for simple transactions. However, the Department for Transport
is encouraging train operators to look at the way TVMs are used
and to provide more functionality where appropriate.
Passenger Licence Conditions are set by the Office
of Rail Regulation (ORR). The DfT liaises regularly with the ORR
and understands from them that changing licences unilaterally,
while possible, is very difficult and subject to contest by those
holding licences. The Government's normal mechanism for affecting
operators is through new franchises, as with the specification
for smartcards for South West Trains, the Midlands 3 and National
Express East Coast. There are no plans at present to include the
Committee's retailing suggestions in train operator franchises.
The Government's preferred option is working with operators collectively
on the reform of the Ticketing and Settlement Agreement.
The Government has commissioned Passenger Focus,
the independent national rail consumer watchdog, to undertake
research into passengers' expectations and understanding regarding
fares and ticketing. This will include looking at the impact of
the fares simplification and Price Promise, and examining preferences
for price differentials between single and return tickets. It
will also look at which technologies passengers prefer to use
to access travel information and to book tickets. Passenger Focus
will be making recommendations to the Secretary of State for Transport
later this year on how to improve the current system.
Smartcard technologies
5. It is reasonable to charge a modest differential
to encourage uptake of smartcards and to reflect any additional
costs of issuing paper tickets, but those passengers who cannot
or choose not to opt for smartcards should not be heavily or unfairly
penalised. The Government must ensure suitable guidelines on differential
pricing are included in decisions on rail fares, rail franchises
and other fare regulations. (Paragraph 40)
The Government is responsible for regulating rail
fares, and any changes to the current regulatory regime require
approval from the Secretary of State for Transport. At present,
rail operators are not able to use differential pricing according
to whether a ticket is held on a piece of paper or a smartcard.
The Government is, however, in discussions with operators
and Transport for London on the acceptance of Oyster pay-as-you-go
(PAYG) on rail services in the London Travelcard zones and the
acceptance of ITSO smartcards on Oyster equipment. The current
TfL PAYG scheme has a differential between Oyster fares and cash
fares, and the Government is considering whether it may be appropriate
to extend this model to rail. No changes would be granted without
a solid balance between sound commercial practice and the protection
of passenger interests.
Outside London, no franchise has yet proposed a differential
for cash versus smart pricing. However, one of the benefits of
smartcards is that they allow more sophisticated and flexible
fares and schemes to be introduced that can better tailor the
price paid to the passenger's journey patterns. Any impacts of
such schemes on fares regulation and wider network benefits would
need to be carefully considered.
6. Oyster is a proven large-scale system,
used and trusted by millions of passengers. ITSO-compliant smartcards
have shown themselves workable in smaller schemes but have yet
to be tested on a large scale. The Government must not force ITSO
onto the London Oyster system. It is imperative that any introduction
of ITSO on the Oyster system be rigorously piloted to prevent
any loss of operational efficiency or customer confidence in smartcards.
Testing must include arrangements for supporting customers using
ITSO products out-of-area. Given the uncertain level of demand
for ITSO in London, the costs and benefits of the investment should
also be robustly assessed. This must have regard to the need to
avoid financially penalising TfL for having been at the vanguard
of smartcard ticketing in the UK. (Paragraph 49)
Given the importance of London to the national transport
network, it is essential that ITSO smartcards can be used by passengers
using public transport to travel to, from, or through London.
The Oyster system was designed specifically for use in London
and, despite its proven success in that environment, it is not
suitable to be rolled out nationally. We therefore need to make
sure that the national ITSO smartcard standard will work effectively
in London, which we aim to achieve by adding ITSO interoperability
to the Oyster network.
The Government understands the Committee's concerns
regarding ITSO and Oyster compatibility in London but is confident
that Transport for London will have the measures in place to ensure
a successful roll-out. Much work has already been undertaken.
In May 2006, the Department for Transport agreed with TfL that
the London Oyster estate would be made interoperable with the
national ITSO smartcard standard. This agreement was in line with
the 2004 Rail White Paper commitment to rationalise ticketing
technology in London. It will allow the roll-out of Oyster pay-as-you-go
across mainline railway stations in London and represents an important
step in facilitating integrated smart ticketing. Requirements
for ITSO smart ticketing are being included in the latest rail
franchises as they are renewed. The operator Stagecoach South
Western Trains was the first commuter operator to have a requirement
for ITSO written into its franchise agreement.
On a technical level, the Government is working with
Transport for London and TranSys (TfL's Oyster PFI supplier) to
develop a solution to provide Oyster/ITSO interoperability. This
includes the design and installation of new readers capable of
reading both ITSO and Oyster cards, and appropriate modifications
to the TfL back office. This project would deliver new dual-operable
ITSO and Oyster readers across the TfL Oyster estate and to national
rail stations in London. The specification for the new equipment
was developed with, and contracted by, TfL and reflects their
requirements on performance.
The Department for Transport and TfL are considering
the results of feasibility work carried out by TranSys. Subject
to any decision to proceed, the installation of new equipment
will include extensive testing. ITSO has a defined set of principles
that scheme operators, product owners and card owners are expected
to work within including, explicitly, who should take responsibility
for customer relationships. The Government will work with TfL
and other ITSO operators to ensure that adequate arrangements
are in place for customer support.
7. The Government's strategy of using ITSO
as a way to promote integrated ticketing is a step in the right
direction, but not enough. It is fine in theory but not producing
results in practice. ITSO may be a useful technical specification
but it is designed to facilitate integrated ticketing, rather
than to make it happen. The Government needs also to articulate
a clearer strategy for the development of integrated ticketing
in general and smartcards in particular. The current laissez-faire
approach is inadequate. The Government must listen carefully to
the transport operators and the technology industry. The criticisms
of ITSO need to be addressed and the Government must ensure it
has adequate technical capacity to provide leadership in this
area. (Paragraph 50)
The interface provided by ITSO technology opens up
the potential for interoperability between operators and schemes.
A patchwork of proprietary schemes limits the flexibility, convenience
and usefulness to the end customer and is contrary to the Department's
commitment to development of the "seamless journey".
The Government agrees that ITSO has not been responsible
for making integrated ticketing happen, but recognises the potential
role the specification and services provided by ITSO have in facilitating
secure, national interoperability for smart ticketing.
The use of ITSO is already producing results. The
Government has invested £5.2 million in the development of
the ITSO specification for interoperable smart ticketing. It provided
a further £1.5 million last year to support ITSO Services
Limited (ISL), which was created to enable non-smart local authorities
to be able to issue ITSO smart passes for the new England-wide
bus concession. The Government is continuing to fund ISL and will
provide up to a further £1 million this year. As a direct
result of ITSO's and ISL's involvement, local authorities were
able to issue around 6 million English concessionary bus passes
as ITSO smartcards in addition to the 1 million Scottish ITSO
passes.
The Government will facilitate the introduction of
ITSO smartcards on rail in major cities, allowing facilities such
as "pre-pay" that have proved popular in London. The
Department for Transport has mandated requirements for ITSO-compliant
smart ticketing to be included in five rail franchises. Furthermore,
in London, the interoperability of Oyster with the national smartcard
standard will allow the roll-out of Oyster pay-as-you-go across
mainline railway stations in London. The Government believes these
achievements to be significant steps towards facilitating integrated
ticketing.
The Government is working with stakeholders to consider
a range of strategic issues concerning future ticketing policy,
including interoperability, new technologies, communication and
pricing strategies. The Government accepts the Committee's recommendation
that articulating more clearly a strategy for integrated ticketing
would be useful for both operators and the technology industry,
and will be starting work to take this forward later this year.
In April 2008, the Department for Transport began
working with ITSO and its stakeholders to review the current business
of the organisation. In the initial stages, we are looking at
the current structure and capability of the organisation and working
with ITSO to formulate a Business Plan going forward. The second
stage of the work will involve monitoring the implementation of
the Business Plan and any other changes that are identified during
the review. The work will focus on the commercial, rather than
the technical, aspects of the organisation and will involve key
players both from within the Department and throughout the wider
industry.
Revenue protection and the powers of ticket inspectors
8. Revenue protection does not get the attention
that it warrants: a bigger and more sophisticated effort is needed.
The extent of the problem is poorly understood. It ranges from
passengers willing but unable to pay their fares through to deliberate
fare evasion. Fare-dodging is often associated with other antisocial
behaviour and efforts to curb one are likely to impact positively
on the other. More regular and coordinated research and monitoring
of the problem are required. Leaving it to individual companies
who are likely to be averse to sharing or publishing information
means that no one has a clear picture and revenue protection measures
are likely to be inadequate. (Paragraph 55)
The Government is working with the rail industry
to ensure that passengers are both aware of, and able to buy,
the relevant fare for travel.
The Government and rail industry are embarking on
an ambitious seven-year programme to modernise ticket retailing.
This will embrace new technologies on a consistent network basis
to cut queues and speed up passenger journeys through stations.
It will cut the current excessive cost of selling tickets and
free up staff to be out on the concourse or platform, helping
passengers and improving their sense of personal security. A simplified
fare structure across the rail network, promised in the rail strategy
White Paper "Delivering a Sustainable Railway", will
be introduced this year, as discussed in the response to recommendation
4.
In addition, the Government has asked train operators
to develop a Price Promise for passengers, to set out clearly
and simply the commitments that ensure that passengers are sold
the correct fare for their journey, and how to trade in a ticket
if a passenger changes his mind. This is being taken forward by
the Association of Train Operating Companies, which will be submitting
proposals to the Department for Transport shortly.
Further measures taken by train operators, such as
installing modern vending machines and introducing internet retailing
and tickets to mobile phones, are also helping to facilitate the
purchasing of tickets.
As far as deliberate fare evasion is concerned, this
is something which the Government takes seriously. The transport
industry is undertaking a number of initiatives to reduce fare
evasion, for example ticket gating at rail stations and joint
operations between police and revenue protection staff on buses.
The Government acknowledges that there is probably a link between
the perpetrators of fare dodging and anti-social behaviour. The
Department for Transport and the Home Office are jointly working
on a toolkit for practitioners for tackling anti-social behaviour
on buses. There is, of course, a strong commercial incentive within
franchises and on commercial bus services to tackle this.
9. There are moves to install ticket gates
at more rail stations. Yet ticket gates are not a panacea. They
cannot be used by all passengers and staff are still required
to be present. Gates introduce new drawbacks including delays
and obstructions for passengers; they are not in keeping with
historic stations; and they are not always the best method of
protecting rail revenue. The Government, in consultation with
the rail industry and passenger groups, needs to review this one-track
approach and develop a more holistic policy. (Paragraph 60)
The Government believes that effectively deployed
gating, together with the associated staff, can be an effective
solution to the issue of revenue protection. It is understood
that not all passengers have the same needs, which is why the
Department for Transport stipulates that where gating is present,
wide access gating must also be available.
In the rail White Paper "Delivering a Sustainable
Railway", the Government has committed to looking at the
role of gating across the network, together with operators. The
Government will therefore be running a project to examine several
aspects of gating, including revenue protection issues, alternative
control methods and consideration of passenger flow in view of
the predicted increase in passenger numbers over the next 30 years.
10. An integrated ticketing system should
be backed by an integrated revenue protection system. Whilst the
current regulations for rail are generally satisfactory, those
for buses are not. The powers of bus revenue protection staff
should be strengthened. In the longer term, the Government should
move towards a unified system of public transport revenue protection.
The implications of new ticket types and technologies will also
need to be considered. (Paragraph 66)
The Government disagrees with the Committee that
the powers of bus revenue protection staff should be strengthened.
The legislative framework for dealing with fare evasion on buses
is through the Public Service Vehicles (Conduct of Drivers, Inspectors,
Conductors and Passengers) Regulations 1990. This makes it an
offence for a passenger to travel without a valid ticket, or to
travel further than the journey for which they have paid. It also
empowers drivers, inspectors and, where they exist, conductors
to remove passengers who do not have a ticket or have travelled
further than their ticket allows, and to summon the police if
they refuse to co-operate.
Bus operators have a direct incentive to protect
their revenues and, as commercial businesses in a deregulated
market, it is entirely a matter for bus companies to decide how
effectively and how much resource to put into revenue protection.
The Government considers that its role is to ensure that the right
legal framework is in place for transport operators to be able
to deal with fare evasion. It is not the Government's role to
directly protect private operator revenue.
In terms of a unified system of public transport
revenue protection, it would be difficult to establish a system
covering both franchised rail services and deregulated bus services.
At the very least, this would require the willing cooperation
of bus operators, including a readiness on their part to allow
a significant intervention into the running of their businesses.
The Government is not aware of any significant demand from the
industry or others for such a system.
11. The current appeals procedures for bus
and rail are not sufficiently independent. The consequences of
being accused of fare dodging can be serious and it is important
that the procedures are just and rigorous. The current principal
rail appeal panel is associated with the rail industry and this
undermines its credibility as a truly independent arbiter, sitting
equidistant from the passenger and the train operating company.
The bus industry appeals body has no regulatory backing. The Government
should consult on new arrangements. For rail this might involve
giving responsibilities to the Office of Rail Regulation or Passenger
Focus; for bus it might be the Traffic Commissioner or the proposed
Passenger Transport User Committee. (Paragraph 71)
The Government agrees with the Committee that appeals
procedures should be robust and fair. However, it holds the view
that appropriate arrangements are already in place.
For rail, every penalty fares scheme must be approved
by the Department for Transport and include an appeals procedure.
There are two accredited appeals bodies and each train operator
may choose which company they wish to use to handle all appeals
on their behalf. Both the Independent Appeals Service and the
Independent Penalty Fares Appeal Service assess appeals strictly
in line with a code of practice approved by DfT. Each body is
paid a specified amount for each appeal, regardless of the outcome.
Around half of appeals are successful and the Government does
not believe that either appeals service is misapplying the criteria.
However, the Department for Transport will look to review and
refresh the Penalty Fares Rules 2002 later this year, in consultation
with industry and passenger representative bodies.
A penalty fare is a case of "strict liability",
i.e. there is no need to prove intention to avoid payment, honesty
or dishonesty; rather, it's a simple question of whether or not
the passenger can show a valid ticket if ticket facilities were
available at their starting station. If the passenger is not able
to show a valid ticket, the fare is £20. However this is
a civil, rather than criminal, matter. The management of debt
collection relating to outstanding passenger unpaid fares notices
is a separate issue. This is a commercial matter for the train
operator to follow up on as he sees fit, either "in house"
or by using the services of the separated debt collection wings
of the companies running the penalty fares appeals services.
Regarding buses, operators hold powers to deal with
fare-dodging, including prosecution thorough the magistrates'
courts. Those that feel they have been treated unjustly can seek
legal advice or contact the Citizens Advice Bureau.
The Committee refers to the Bus Appeals Body. This
is a non-statutory committee which is a joint initiative of the
Confederation of Passenger Transport, the industry's trade association,
and Bus Users UK, which looks after the interests of passengers.
The Bus Appeals Body offers an independent review of complaints
arising from the operation of local bus and scheduled coach services;
however, it has no role in appeals against penalty fares.
The Committee suggests that the proposed Passenger
Transport User Committee may have a role in fare evasion appeals.
The Department for Transport has recently announced that Passenger
Focus will widen its remit to take on the new role of bus passenger
champion. However, Government would not consider it appropriate
for a passenger watchdog to adjudicate on fare evasion appeals.
In any case, London is the only area of England which
has a penalty fares regime for buses, which is provided for under
primary legislation (schedule 17 of the Greater London Authority
Act 1999). There is no legislation to develop a similar penalty
fares scheme outside London, nor have there been any calls to
introduce one to date. Therefore, since appeal mechanisms are
only needed where a penalty fare system operates, the issue of
which body should provide this mechanism does not arise outside
London.
Enforcement of fare evasion in London is handled
by Transport for London. TfL operates a penalty fares scheme,
which has an associated appeals procedure. The appeals process
is a robust three-level system, comprising two internal stages
and an independent panel.
Concessionary travel
12. The ability to travel for free across
the country by bus is a great boon for those who enjoy it and
we welcome it. There is, however, no such thing as a free lunch
and such funds—over £1 billion per annum—must
give value for money. The Department for Transport should commission
an evaluation of the benefits of the national scheme for free
local bus travel. (Paragraph 77)
The Government welcomes the Committee's support for
the new England-wide bus concession. The concession will significantly
improve the mobility and social inclusion of up to 11 million
older and disabled passengers. This extra mobility will, moreover,
bring wider benefits to the economy and boost tourism. The schemes
across the country are run at a local level, which enables individual
authorities to negotiate the best value for their own schemes.
The Department for Transport conducts regular surveys
on concessionary fares policy to collect key information such
as pass take-up and bus patronage. It publishes its findings in
Transport Statistics Bulletins and National Travel Surveys. The
Department for Transport will monitor the new England-wide concession
through these existing surveys. There are, however, no plans to
undertake a fundamental evaluation of the new scheme at this stage.
There would be benefit in delaying any review until the new scheme
has been operational for some time in order to be in a position
to properly evaluate it.
13. The costs of concessionary travel are
set to grow in real terms as bus industry costs and fares are
increasing faster than inflation. Outside London, concessionary
travel support exceeds the amount spent on supporting non-commercial
bus services. (The Mayor of London provides a high level of revenue
support for all bus services.) It is important that national concessionary
travel is properly funded. (Paragraph 81)
The Government agrees with the Committee's view that
national concessionary travel must be properly funded. The Government
is confident that the total funding it provides to local authorities
for the national concession is sufficient to meet the costs involved.
For 2008/09, an additional £212m (rising to £217m and
£223m in the following years) has been allocated to travel
concession authorities in England, paid by means of a special
grant. This is enough to fund around 200 million extra bus journeys
in local authorities across England and is in addition to funding
already provided through formula grant for the existing elements
of the concession . This included an extra £350 million of
formula grant funding in 2006/07 for the last extension to the
concession, an amount which increases annually. From April 2008,
about £1 billion of funding in total will be provided to
cover the cost of the new statutory minimum.
The Government recognises that fare increases will
have an impact on the required funding for reimbursement. However,
bus fares are only one part of the cost of reimbursement. For
those journeys made solely as a result of the new concession,
bus operators should only receive money to cover their marginal
additional costs rather than a full fare. It is important that
local authorities correctly calculate the level of reimbursement
taking these factors into account. The Department for Transport
has assisted both authorities and operators by issuing guidance,
offering training and providing a spreadsheet tool for determining
reimbursement. Furthermore, the Department has provided a grant
of £31 million to local authorities towards the cost of issuing
new smartcard passes.
14. The anomalies within, and disputes over,
the distribution of concessionary travel grant to local authorities
look set to continue, despite the 'generous' funding provided
by the Government and the new funding formula. We find it is unhelpful
that the transport authority and the travel concession authority
are often not the same body and may inadvertently work against
each other. These problems could be considerably reduced if the
Government exercised its powers under section 9 of the Concessionary
Bus Travel Act 2007 to transfer the travel concession functions
from district councils to county councils. This would have the
additional benefit of making the transport authority the travel
concession authority in these areas. We recommend that the Government
proceeds with this as soon as possible. (Paragraph 86)
The Government recognises the benefits that might
flow from moving the administration of concessionary travel from
district councils to counties which is why the powers to achieve
this were included in the Concessionary Bus Travel Act 2007. However,
this move would raise some challenging practical issues, particularly
around funding, and the impacts of such a significant change would
need to be carefully considered. The Government plans to consult
on these issues later this year.
15. The current "no better, no worse
off" mechanism for reimbursing operators is unsatisfactory.
It is arcane, time consuming and a recipe for disputes. It does
nothing to promote good partnership working between travel concession
authorities and bus operators. It is also questionable whether
it provides a viable long-term funding model for the industry.
A new, more transparent mechanism is required that compensates
operators and avoids the waste and rancour generated by the current
system. The Government should investigate this as part of its
review of Bus Service Operators Grant. Some people argue for a
national reimbursement mechanism as in Scotland. Whilst this appears
attractive we do not support it at this stage. England is much
larger, with greater variation, and we fear this would simply
increase costs as the Government would be unlikely to scrutinise
claims as closely as local government. A rapid roll-out of ITSO
equipment on buses would help improve the accuracy of ridership
data. Fewer travel concession authorities would also help. (Paragraph
93)
Bus operators are entitled to fair reimbursement
for carrying concessionary travellers. This covers both fare revenue
foregone and any additional costs that may result (for example
where additional services need to be operated). Reimbursement
by way of a "no better, no worse" basis was chosen as
a suitable mechanism to ensure that operators would neither gain
nor lose money as a result of carrying concessionary travellers.
This approach was approved by Parliament. The Government shares
the view of the Committee that the single national reimbursement
rate model used in Scotland would not be appropriate for England
and would be likely to lead to significant cost increases. We
also agree that there are regional and sub-regional variations
across England which need to be taken into account in order to
leave bus companies no better and no worse off.
The Government accepts that reimbursement calculations
can be complicated, and that as the generosity of the concession
on offer has increased, so have the sums at stake. This has been
evident in the number of appeals received in recent years, and
underlines the need for authorities to gather the evidence needed
to inform development of their schemes and successfully mount
any defence. It is also why the Department for Transport provides
support to local authorities and bus operators in the form of
guidance, toolkits and training.
The Government continues to look for ways to deliver
further improvements, whilst recognising that, given the complexities
to be addressed, simplification of the system is not straightforward.
However, the Government has already begun to commission research
on the reimbursement arrangements. This will also be informed
by responses to the consultation on the reform of local bus service
support, launched in March 2008, which asked for views on the
longer term possibility of linking concessionary fares reimbursement
to the Bus Services Operators Grant.
The Government agrees with the Committee that smartcard
technology is a valuable means of helping to improve the accuracy
of ridership data. It is for this reason that the Department for
Transport decided to specify smart passes for the new national
concession. Although most buses do not currently have smartcard
readers, the Government is keeping under review the issue of how
best to encourage industry to introduce such readers onto their
fleets. This includes the proposal in the Department for Transport's
current Bus Service Operator's Grant consultation on incentivising
technological developments such as smartcard readers.
16. We continue to believe that local enhancements
to the national concessionary travel scheme can offer important
benefits. We agree with the Passenger Transport Executive Group
and others that these enhancements are best determined locally.
Extending concessionary travel to rail services would be costly
and it is doubtful if rail services currently have adequate capacity.
There may be scope and a good value-for-money case for extending
the national concession to include lightly-used rail services,
such as community rail partnerships, as in Wales. The Government
should also consider in greater depth than it has so far the costs
and implications of providing greater support for community transport,
particularly in areas where bus services are sparse. Where local
authorities are currently profiting from concessionary travel
funding, perhaps as a result of a sparse local bus network, they
should be encouraged to enhance local concessionary travel arrangements.
(Paragraph 98)
The Government agrees with the Committee that local
enhancements to the national concessionary travel scheme, beyond
the minimum statutory concession, can be very valuable to local
residents. Many local authorities already offer enhancements of
some kind, taking into account local circumstances. The Concessionary
Bus Travel Act 2007 does not change this.
The Government is minded to wait to see the full
impact of the new England-wide bus concession before giving any
consideration as to extending the scheme to other modes of transport.
Both the costs and administrative arrangements of any extension
would need to be carefully taken into account.
The Government agrees with the Committee's comment
that it would be costly to extend the statutory concessionary
travel scheme to rail services. Older and disabled people already
qualify for a third off most rail journeys as the Government requires
train operators to participate in the Senior Railcard and Disabled
Person Railcard schemes.
Regarding community transport, some sectors (those
operating under section 22 permits which are sufficiently accessible
to the public) are already considered eligible local bus services
for the purposes of statutory concessionary travel. The Government
believes there are a number of issues that would need to be properly
considered before concessionary travel on all community transport
services could be made statutory. The cost of extending the concession
to community transport services is not the only concern. There
would need to be fair and robust definitions for eligibility,
consideration of demand, and whether community transport, which
is largely a voluntary sector, would be able to cope with the
extra burdens. Local authorities continue to have the freedom
to offer concessions on community transport services if they choose
to do so, where they feel there are local needs, and subject to
their overall financial priorities.
We recognise the important role that community transport
can play in operating services that cannot be provided by conventional
bus services, particularly some services in rural areas. That
is why we have included provisions in the Local Transport Bill
to support the further development of the community transport
sector by removing unnecessary restrictions in the regulatory
regime. This will give operators greater choice over what size
vehicles they can use, and allow drivers of certain services to
be paid. The community transport sector has welcomed these changes.
17. The current situation whereby 11 million
concessionary travel smartcards have been issued but most buses
are not equipped to read them is daft. The Government needs to
agree a programme with bus operators for installation of ITSO
smartcard equipment on buses. (Paragraph 99)
The Government agrees with the Committee that there
are substantial advantages to bus operators and local authorities
in going 'smart'. This includes reduced fraud and much better
data on how many concessionary journeys are being made, which
will help with concessionary travel reimbursement arrangements.
Whilst the Government has no current plans to agree
a programme of installation, or to compel bus operators to install
smartcard readers on buses, the Department for Transport's current
consultation on possible changes to Bus Service Operators' Grant
outlines proposals to incentivise technological improvements such
as the use of smartcards.
In respect of the new England-wide concession and
the need for all eligible people to be issued with a new pass,
the Government recognised that this was a golden opportunity to
help promote the roll-out of ITSO and smart ticketing. This move
will provide an added encouragement to bus operators and local
authorities to introduce smart ticketing regimes in more areas
throughout England. It would not have been feasible to have enabled
all buses to be fitted with smartcard readers in time for implementation
of the national scheme, nor should the Government necessarily
fund technology which provides significant commercial benefits
for bus operators. In this context, the question was whether to
opt for ITSO smartcards or to settle for a 'dumb' solution. It
was felt that the benefits of future-proofing the scheme, and
helping the wider use of smartcards and smartcard systems, more
than justified the small marginal extra cost of specifying smart
passes versus 'dumb' passes.
Whilst it might appear to some to be "daft"
to require all passes to be ITSO smartcards when most buses are
not yet equipped to read them, it must be remembered that these
passes can now be used anywhere throughout England. Some areas
already have a significant number of buses with ITSO readers.
In these areas, it would have been a retrograde step to allow
other travel concession authorities to issue non-ITSO passes which
could not be read on their buses.
The Government is also aware that, with the successful
roll-out of the new concessionary passes, a number of authorities
in England are now actively investigating the full implementation
of smart ticketing in their areas (e.g. CENTRO and South Yorkshire
Passenger Transport Executives).
18. If the Government is minded at any stage
to extend the English national concessionary travel scheme, young
people and others identified by the Commission for Integrated
Transport should receive priority consideration for concessionary
travel. (Paragraph 100)
At present, the Government has no plans to make concessionary
travel a statutory entitlement for young people.
Many bus operators already provide concessions to
young people at their commercial discretion. In addition, local
authorities can use their powers to promote the economic, social
or environmental well being of their areas to offer concessionary
travel to young people. Local authorities are best placed to know
about local needs and circumstances and can offer generous schemes.
London provides a good example. In London, children's fares are
set by Transport for London. Since September 2005, all children
under 16 have been eligible for free travel on London buses. Since
September 2006, this concession has also been available to those
in full time education or on unwaged training courses, up to their
18th birthday. From April 2006, free off-peak travel has been
offered on the Tube and Docklands Light Railway to children under
11, when accompanied by an adult.
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