Dai Powell's blog
Dai Powell is HCT Group's Chief executive. Dai has been Chief Executive since 1993, leading the organisation as it has grown from a small Community Transport provider into an award-winning, large-scale social enterprise. His blog explores ideas on social enterprise, transport and related issues. Always forthright, Dai’s views are his own and do not necessarily reflect the position of HCT Group.
The Bus Services Bill doesn’t go far enough to ensure change: Three steps to relevance
The Bus Services Bill could herald a new era for people being able to use public transport in England, enabling the bus to make its true contribution to our economy, our communities and our environment. As the bill stands, it probably won’t. The Bill doesn’t go far enough to ensure change and there are serious risks that it could cement in place the failings of the current system, locking in the pattern of decline outside London.
We believe that by putting passengers and communities at the heart of the Bill and addressing three critical issues, the Government can achieve the transformation that it seeks.
Regulatory burdens: The process to gain consent for franchising is far too onerous and this will discourage authorities from exploring all their options. We would like the Bill to devolve more of the decision-making and reduce its regulatory burden.
Competition: Local monopolies are one of the greatest barriers to progress in the industry. The Bill should include more measures to increase competition – or in the case of Enhanced Partnerships, ensuring that there is any competition at all.
Community: People need to be front and centre of the Bill. For too long bus users and potential bus users have been locked out of the system. There needs to be a statutory role in franchising and partnerships for the passenger voice. In addition, social enterprises and community transport providers can make transport more inclusive. The Bill should contain measures that ensure their participation under the new powers.
The Bus Services Bill must learn from the mistakes of the past. The current Quality Contracts powers set the bar for Authorities so high, with a process so burdened with regulation, that it could not be reasonably achieved. It was, put simply, an illusory power.
The Bill, as currently drafted, risks repeating this issue with regards to franchising. It has created an onerous process for Authorities to franchise their bus services, with challenging hurdles to overcome. Our concern is that this creates an active deterrent to Authorities from considering the full range of powers granted under the Act. We fear that this will lead to Authorities putting franchising into the ‘too hard’ basket, alongside the old Quality Contracts system.
Also, the regulatory burden increases in inverse proportion to the size of the Authority considering franchising – the smaller you are, the greater the number of steps. Smaller Authorities with a clear local reason to franchise may not have the capacity to pursue the DfT’s process, regardless of whether or not they had the capacity to manage a franchise effectively.
Whilst any step towards franchising must be taken with due care, there clearly needs to be a reduction in the regulatory burden for Authorities. We would ask that the DfT looks again at the processes for franchising, with a view to making the process more practical – for all Authorities, but particularly for smaller ones.
The regulatory burden could be reduced in a number of ways, without weakening necessary safeguards. One way would be to embed a presumption of agreement into the Bill for all potential authorities, not just those with elected mayors. Another would be to ask all Authorities to evaluate the new powers under the Bill and consult with their communities on their options, publishing their findings - if they choose franchising, partnerships or the status quo, the public need to understand the decision. The acceptance criteria for franchising could also be refocussed, increasing the weight given to the views of citizens and bus passengers in the evaluations process.
The Bill provides a genuine opportunity to re-ignite competition in the bus industry. Too often, one or two large operators dominate in particular geographies. The franchising powers in the Bill could open up these areas to competition, but this is by no means guaranteed. There is a risk that a franchise process could replace an unresponsive private sector monopoly with a publicly commissioned one. To prevent this, the Bill should empower city regions to set a cap on the total market share for any particular operator of 25%. This ensures that there are always operators in serious contention for contracts, helping a franchising Authority to gain the best value for the public purse.
The area where the Bill is weakest is the role of competition in an Enhanced Partnership. There is currently no mechanism that would allow competitive market entry, no means of challenging incumbents, nor clear criteria for who is ‘in’ and who is ‘out’. In essence, the Bill gives powers for Authorities to recognise and co-ordinate cartels with no market test whatsoever. The Bill, therefore, needs to make clear how competition is supposed to operate in an Enhanced Partnership environment.
Data is vital if effective competition is to take place. The Bill already recognises the importance of open data in terms of fares, punctuality and real-time information. We also argue that open data on current and historic passenger loadings be included. This provides intelligence for Authorities and operators on opportunities – and increases the level of public accountability. This could be achieved straightforwardly through requiring that the Open Book and Transparency Reports provisions of the Government’s new Model Services Contract apply to both franchising and partnerships.
The best bus services are at the heart of their communities, promoting inclusion and accessibility. The Bus Services Bill has the opportunity to embed this through recognising and encouraging the role of Community Transport operators, social enterprises and the third sector. The simplest way to achieve this would be to include reference to the Social Value Act in the Bill’s guidance, ensuring that Authorities are aware that it now covers transport procurement.
The accessibility of bus services should be a litmus test for the success of the Bill. We believe that the Bill should contain a provision to ensure all buses on franchise or partnership-based services are fitted with audio-visual next stop displays.
Too often, consultations exclude people who cannot access public transport, leaving the Community Transport sector to act as a post-hoc remedy. The Bill has the opportunity to address this by including duty to consult with those in this position – and with the Community Transport sector itself in the processes for both franchising and partnerships. In this way, the needs of people who cannot use public transport can be embedded in transport planning effectively.
Communities and legitimate bodies representing passengers need to be involved. Communities can be involved through the democratic process, greater consultation and transparency. Passengers can and should be represented through a statutory role for Passenger Focus or other independent body.
An abridged version of this blog was first published in Local Transport Today