Memorandum by Transport for LondonLondon
Buses (Bus 02)
THE BUS INDUSTRY
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
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
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. KEY POLICIES
4.1 Performance Managementusing 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 nowand 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 Bonusa 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 Plana 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
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 Contractthis
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. Penaltiesor,
also for the first time, bonus paymentsare 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 issuesincluding
improved crew facilities, raising the status of bus operating
staff and higher BTEC nationally recognised standards of recruitment
4.9 Network Developmentcentral 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 Ticketingalongside
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 2000one day bus passes
on night buses, fares freeze;
May 2001carnet, cheaper bus
passes, less photocard need;
Sept 2001cheaper child passes,
child carnet, night fares brought into line with day fares;
Jan 2002all Travelcards valid
on buses, all day;
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 AccessibilityOver
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
4.15 Information and InfrastructureLondon
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
Modern aluminium bus stops completed
"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 SecurityOne
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
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 ExclusionThe
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. COSTS AND
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
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
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
[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;
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:
servicesservice levels; how
far across the boundary should any link from Greater London operate;
farescash, passes and concessionary
funding available for bus services
running across the boundarycovering those secured by LB
and County (and Unitary) Councils, and also commercial routes
operated under London Local Service Agreements (LLSA) or London
infrastructurewhat is the
current provision on bus stops and shelters, and who should provide
these for LB routes in out-county areas; and
informationthe 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
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
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
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
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
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.
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.