Official Report 212KB pdf
Some time ago, the committee agreed to carry out post-legislative scrutiny of the Transport (Scotland) Act 2001, to determine how effective it has been in improving transport systems in Scotland. I welcome to the committee Jamie Ross, the head of transport division 2 in the Scottish Executive, and Tom Macdonald, the head of the bus policy branch of transport division 2. I invite Jamie Ross to make an introductory statement to the committee setting out the Executive's position on implementation of the act, which will be followed by questions.
If you permit, convener, I will make my opening statement brief, so that we can take as many questions as possible.
How does the Scottish Executive prioritise investment in bus services throughout Scotland?
I return to the points that I made a few moments ago. A variety of policy levers has developed over time. The bus service operators grant, which allows bus operators to claim back a considerable amount of fuel duty, has encouraged the viability of services and lowered the threshold at which services become viable. That grant, which has been in place for a while, increases as fuel duty rises. Tendered services are another mechanism that has been in place for some time.
Is no priority given to rural areas, for example, where the bus industry faces obvious challenges? The industry also faces challenges in urban areas, for example in servicing hospital infrastructures. Is no priority for investment given to those areas?
The 2001 act is a lever. We accept that the answers lie at a local level. We are trying to set an overall framework at national level that allows each local authority in its transport role to prioritise where support should go and what sort of bus network it wants.
When we passed the 2001 act, we expected local authorities to enter into quality partnerships with bus operators. It appears that more informal processes have been followed rather than the formal process as provided for in the 2001 act. What is the purpose of passing legislation and creating opportunities to set in place formal arrangements when we end up with local authorities following the route of informal partnerships?
The purpose of passing legislation was to provide the option. If local authorities have chosen to concentrate on voluntary partnerships and have thereby achieved many of the objectives that would have been achieved through statutory partnerships, that is fine. You have probably seen the booklet about voluntary partnerships that the Association of Transport Co-ordinating Officers produced, which shows that there are quite a lot of such partnerships going on. That is not to say that we are not looking to achieve statutory partnerships as well, but the main point is that the 2001 act provides the opportunity for local authorities and Strathclyde Passenger Transport to go ahead with statutory partnerships if that is what they want to do.
Why do you think that local authorities are going down the route of informal partnerships? Are there issues of bureaucracy in relationships with bus operators? Are there difficulties with entering into formal arrangements?
You will probably have to ask local authorities about that but, from our point of view, it is self-evident that statutory partnerships are more bureaucratic and more difficult to achieve. By their nature, statutory partnerships impose obligations on both parties. It might be in some cases that local authorities and bus operators are more comfortable saying, "We'll do this and you'll do that," and that they gain a series of benefits from doing that without going through the full bureaucracy.
A big driver behind the 2001 act was dissatisfaction with the way in which the relationship worked between local authorities, communities and the bus industry. It has been argued that the mechanisms of quality partnerships and quality contracts were intended to improve that situation without moving towards full re-regulation. Does the Executive not express some degree of disappointment that no local authority has yet gone for the statutory partnerships or managed to introduce quality contracts?
We would be disappointed if what is happening out there now gave the impression that no effort had occurred in the past few years. When we introduced the Transport (Scotland) Bill, it was in the expectation that we were increasing the options available to local authorities if they felt that there were problems with the bus market in their area. However, we did not lay out that, within a certain number of years, there would be X number of quality contracts or Y number of quality partnerships. We tried to set a framework at national level and leave local councils and bus companies to agree the best way forward by acting co-operatively. As Tom Macdonald explained, they have done that to quite a good degree in a number of areas, but on a voluntary basis rather than through the statutory route. We are more concerned with the actuality of what is happening out there than with the number of quality partnerships or quality contracts that exist.
I want to develop that point. What is important is the actuality—what is happening out there on the ground. We said that we do not want to intervene and that we want local agreements to develop, but you must accept that the actuality for the passenger is that cherry picking still takes place on a number of routes. The Executive must be frightened by the fact that no quality partnerships have been formed, given that they were introduced to deal with the concerns of passenger groups throughout Scotland.
I take the point that you might think it frightening that a few years after the 2001 act was passed there is no statutory evidence of improvement. However, I am trying to say that the absence of statutory evidence does not mean that nothing has happened and that the backdrop has been the concessionary fares agenda, which has dominated. The funding issues to do with concessionary fares are critical from the point of view of Government and the bus companies, and we have been working in quite a fluid market over the past few years. The priority that has been given to the concessionary fares agenda has meant that there has been less scope to do more on the 2001 act, particularly with the bus industry and local authorities.
You say that concessionary fares are your priority and I welcome that because, obviously, passengers are concerned about concessionary fares, but we also need to improve the service that people receive from bus operators. From a passenger's point of view, I appreciate that you are putting the emphasis on what I believe to be passengers' concerns. However, it is all very well to make concessionary fares your priority, but passengers also want bus operators to operate effective services.
In the first instance, it is for local authorities to fund statutory quality partnerships or quality contracts. A local authority would obviously come to us if the resource implications were very large.
A significant part of the expenditure from the public transport fund—something like half the expenditure—has been on bus-related infrastructure, which has contributed towards what local authorities have spent in preparing their own way for the buses. The bus-related projects feed directly into the local authority end of expenditure on quality partnerships.
Some members have asked me to ask you to speak a little closer to the microphone.
Shout at us—that would work.
The transport white paper says:
As the policy agenda develops, we are moving from a situation in which there have been no statutory quality contracts to the situation that I have just mentioned in which we are discussing the potential for a quality contract with West Lothian Council. We hope to develop what we might call best practice or a role model statutory quality partnership or quality contract that other local authorities will consider.
Do you expect transport Scotland to have a proactive role of drumming up quality contracts and pushing local authorities towards them? Will it positively say, "Here is a contract that has worked. Why don't you try it?" Your evidence does not suggest any proactive push towards quality contracts.
When the 2001 act was passed, we said that it allowed local solutions for local problems and that it provided a toolkit of options for local authorities to use if they so decided, because they had the best knowledge of the bus market in their areas. The agency might adopt a more proactive stance, but that depends on the germ of an idea and on a local authority presenting a proposal.
You have mentioned West Lothian three times in the past five minutes, so I must enter the debate. I knew that West Lothian Council met the Executive recently to discuss proposals to develop a quality contract. Have you any immediate feedback about the council's proposals? Do they provide the germ of a project that could be supportable and workable for the Executive? Quality contracts introduce what is in effect franchising of the bus market. Is the case for that franchising stronger after the emergence of FirstGroup as the preferred bidder for operating rail services, as it would give bus services some protection and deal with some of the Competition Commission's concerns?
We appreciated the stage that West Lothian Council had reached with its proposal. The council accepted that it still had a long way to go and it wanted advice from us. The problem with our giving advice is that we have no other quality contract model to turn to. We asked all the key questions about the evidence in the bus market in West Lothian. Bus markets can be examined in several ways. What evidence suggests that a quality contract is required? What evidence shows that the bus market is so flawed that a quality contract is needed? What evidence shows that a quality contract is required and not a quality partnership or an increase in the amount that is spent on tendered services? The council has thought about the matter over a long period and has started to develop proposals whose consideration we support.
How do you expect West Lothian Council's proposals to be progressed? Are further meetings planned? In what timeframe would progress be made?
West Lothian Council supplied us with an outline proposal that said where it thought that it would go for quality contracts. We have asked the council to do a bit more work and, rather than doing a full quality contract proposal, to give us enough to understand the market and why the council considers that a quality contract is the right approach. We will then continue our discussions with the council. In other words, rather than the council doing the whole thing and coming to us in six months' time, we want it to go through the process stage by stage and work it through, as Jamie Ross said, as a first case, a role model or a pilot.
Government policy favours statutory quality partnerships but if, after three years, no one has taken up the option, is it possible that you have misread the situation?
To be open and honest, I think that it could be viewed in a number of ways. Anyone coming to this fresh would say that we had created an act that presented certain options and that, as the options have never been used, the bus market is perfect—that would be one interpretation. I do not think that anyone believes that the bus market is perfect, so the next interpretation is that yes, there are problems in the bus market, but people are finding different ways of addressing them. Most areas have said that they like the idea of quality partnerships but that they will take out some of the formality and get on and do things immediately. Another interpretation might be that we did get it wrong, but there is not yet any substantive proof that the act was a failure. The act did not say that suddenly, overnight, every part of Scotland would be flooded with quality contracts and quality partnerships. In Scotland, quite a lot of the statistics at a national level—I am not getting away from problems that emerge locally—are extremely positive at the moment.
But the informal arrangements work and the attempt to make them statutory did not. You said that there is no proof that the act is deficient, but nobody is using it. Was your thinking right or did you miss something? Legislation was not needed for authorities to go ahead on an informal basis.
We said that we were providing a toolkit of options and that there should be local solutions for local problems. We have not tried to step in and take over the responsibility of local authorities, which have much more local knowledge. We want progress to be achieved for the end user—the customer—throughout Scotland and we think that a different set of options will be chosen in each case.
They may pick it, or they may continue with their existing system, rather than the one that you put into legislation. Has the Executive looked into why there are no quality contract schemes in Scotland? If so, what do you believe to be the reasons for the lack of such schemes?
We have looked into that and we have debated with various people. We get feedback from local authorities all the time. We get feedback from the bus industry, which is cooler on quality contracts than some local authorities are, perhaps because it cannot see where the objectivity would come in. There is the potential for one council to decide that it wants more control over a bus network, and it will therefore go for a quality contract option, whereas a neighbouring council with a similar bus market may just want the existing market to progress as it is doing. Some in the bus industry are conscious that, depending on the political agenda of certain local councils, quality contracts may or may not be pursued.
The purpose of legislation is to achieve policy objectives. So far, no one has introduced a quality contract scheme. Is it likely that such schemes will ever be introduced and if not, why not? Clearly, the policy objective is to steer people in that direction, but so far no one has gone there.
Quality contracts will be introduced if some of the issues that I have mentioned can be bottomed out. There will be a lot of pain and effort to get across the threshold of the first or second quality contract. As I mentioned earlier, there is a parallel situation south of the border, where people have shown a reluctance to get involved in quality contracts and to take proposals forward. There are no examples to which we can look south of the border and there are no examples that we can develop north of the border. There is a threshold that must be crossed. Depending on how well the first contracts work, other parts of Scotland may adopt the model or use the other tools in the box, which include quality partnerships, more money for tendered services and the bus route development fund.
Before you introduced the legislation, did you believe that it would be successful? What evidence did you have for that belief?
The feedback that we received suggested that in parts of Scotland the bus industry was not working to deliver what local politicians and, more important, local customers wanted. However, local views differ across Scotland. In some parts of Scotland, people may be very pleased with the bus network, but other areas may be at the opposite end of the spectrum. There was a genuine feeling that we were receiving feedback on which we needed to act. However, the aim was not to foist a certain model on each part of Scotland. Rather, it was to say that local authorities would work in partnership with bus companies, which know their market better than anyone else and will come up with the best option.
You referred to examples from elsewhere. Given the apparent success of bus franchising in London, where there was an increase of 25 per cent in the number of bus passengers over a 10-year period, as opposed to a fall of 23 per cent in Scotland over the same period, has the Executive considered introducing a similar scheme in Scotland?
We have not considered franchising. London has always been placed on a slightly different footing. I am sure that Tom Macdonald can say more about the historical basis for that. I said earlier that considerable additional resources had been allocated to increasing bus use in London. We are aware that there has been a modal shift and that there have been successful results. People from all sorts of socioeconomic groups that did not previously use buses are now using them. However, hundreds of millions of pounds have been invested to achieve that. If we dig into the statistics, we find that in Scotland almost the same mileage is run by bus operators each year as in the whole of London, despite the fact that in London the system carries three times more passengers. From one perspective, we are getting value for money in Scotland, where the amount of mileage run compares well with the figure for London. The amount of commercial mileage run in the bus industry in Scotland is greater than the amount of overall mileage that was run when the bus industry was deregulated almost 20 years ago.
I have a final question about quality contracts. What are the Executive's criteria for judging that there has been market failure? Communities and local authorities throughout Scotland often tell me that they perceive there to be market failure that affects smaller communities and the operation of services out of hours in particular. There is a strong belief that the market works very well in profitable areas and on busy routes, but not on less profitable routes in smaller communities. Many of those communities have much lower levels of car ownership than do larger communities, so the problem of lack of availability of bus services is a higher priority.
In all honesty, one of the most difficult issues in terms of quality contracts is to try to find objective criteria. Because the quality contracts were created by way of legislation, we are duty bound to try to find some guidance—indeed, we provided guidance at the time. If we are to work with authorities such as West Lothian Council, we will have to develop the guidance, because it is not sitting in front of anyone at the moment.
On that point, is it not the case that it is difficult for communities to amplify their concerns about the quality of the services that they receive and the gaps in services, other than through their elected representatives? I appreciate that there are representative fora throughout Scotland, but is there a more effective means for communities to do that? In addition to communities being able to amplify their concerns in that way, I suggest that they should also be able to amplify their concerns to a constituted group. That is the way in which the Executive could be made aware of the concerns and service gaps that were referred to earlier.
I am sorry, but I do not understand the question.
I think that the question is whether there should be a better framework to provide a public voice or a consumer voice about problems in provision of bus services.
Right. Do you mean rather than the current arrangement in which that is done locally? Is the suggestion that that should be done nationally?
In simple terms, the point is that if a group of individuals was concerned about a bus service in a local community, it would raise its concern with its local elected member. I am concerned that the overall picture of those complaints is not being amplified to the Scottish Executive. Perhaps there is a need for a constituted group that would raise those concerns with the Executive.
There are a number of different ways in which complaints or concerns about bus services can be raised. One route is to make the complaint through the local authority and another is to do so through the traffic commissioner—
That is a bureaucratic process.
Absolutely—but the traffic commissioner has significant responsibilities in respect of bus services. We have been talking recently to the traffic commissioner and to the Vehicle and Operator Services Agency, which handles bus compliance. We talked about trying to improve our knowledge base on bus services. We hope to be able to understand more about what is happening on the ground from the work that that agency does.
Tommy Sheridan and Sylvia Jackson have supplementary questions.
I want to talk about concessionary fares.
I want to look from a different angle at the issue that Paul Martin raised. A lot of good work is going on in rural transport. I know of examples in my constituency, including the post bus that operates in the Stirling area. What always worries me about such initiatives is the process of good practice from one area being disseminated to other areas. What sort of organisation would do that? The body in question would have to be a fairly central organisation, similar to that which Paul Martin suggested for complaints. Will transport Scotland perform that sort of role? I also want to ask about initiatives such as the post bus, in which other agencies might be involved. How are you moving forward on that agenda, which involves innovative approaches to increasing bus services?
That is a valid question. I cite the example in the voluntary sector of the rural community transport initiative. There was a partnership agreement commitment to considering how that could be expanded innovatively. The initial consultant's report, which was produced earlier this year, said that the scheme was exceptionally good, although there was a gap in sharing best practice. How can the lessons from one scheme that operates as an exemplar be spread across Scotland? That issue has already been considered and it is fortunate that we have a national steering group and that the Community Transport Association, with its full-time officials, is on board.
The second question was about going ahead with initiatives such as the post bus idea. Are you consulting elsewhere—outwith Scotland—to find out about innovative schemes?
I mentioned the Community Transport Association. Although it works throughout the United Kingdom, it has full-time Scottish officers. It believes that the level of funding that is provided in Scotland and the way in which we operate here are pretty good in comparison with the rest of the UK. The CTA feeds back evidence to us on what is going on elsewhere.
The second part of the question was about whether you are considering examples from elsewhere. Are you studying models in other countries that could be appropriate to Scotland?
Do you mean voluntary sector models?
Yes.
As I said, the CTA's feedback to us was that the range of projects and the way in which projects are developing in Scotland appear to be pretty good compared with the rest of the UK. Although we operate similar funding schemes, some of the eligibility criteria tend to differ. The definition of "rural" that we use in Scotland is slightly different from that which is used south of the border. There are similar schemes and similar models, but they are interpreted and implemented differently. The CTA has told us that what is happening in Scotland is quite impressive.
Have you considered examples from other small countries?
The CTA, which we rely on and fund, is more knowledgeable about that than we are; our debates tend to focus on the UK.
Just before Tommy Sheridan asks about concessionary fares, I want to mention something that the deputy convener asked me to ask about. Does the Executive have any statistics on the number of bus users who have accessed the Bus User Complaints Tribunal since it was set up? It would be helpful if you could provide that information in correspondence.
I will forward it to the clerk.
Could we also get the information on the CTA?
I wanted to make a similar point. It would be helpful for us to clarify what processes would be followed if passengers had a complaint. I am not sure how complaints and people's satisfaction with services are gauged. There is no method of clarifying what the position is.
I want us to move on to consideration of concessionary fares.
I have a few questions on concessionary fare schemes. The situation that developed earlier this year in Strathclyde meant that the Executive had to provide additional funding to prevent what would, according to Strathclyde Passenger Transport, have been the collapse of the scheme there. Is enough money being provided to ensure that the current limited scheme will not collapse? What is the scheme's overall cost?
Last year, we allocated money and accepted that back-up money was likely to be needed as trends progressed throughout the year because we were in the first full year of the concession's operation.
What is the scheme's overall running total cost?
For 2003-04, the cost was about £110 million for Scotland as a whole.
Does that include Executive resources and resources that local authorities previously committed?
That is the grant-aided expenditure figure. Most of the money for concessionary travel is provided in the local government financial settlement through the allocation process. As Jamie Ross said, that was topped up when we knew that schemes that brought in the new national minimum standard would not have enough resources through GAE.
The total was £110 million. What was the original GAE allotment? Does the fact that it was topped up mean that it was inadequate?
Before free local bus travel was introduced, the GAE was about £40 million. We topped that up with £45 million.
So the figure was £85 million.
The £45 million was to pay for free local off-peak travel. On top of that, we provided £10 million to pay for bringing men aged 60 to 64 into the scheme. Previously, the scheme applied to women aged 60 or over and men aged 65 or over. That makes a total of £95 million. On top of that, we resourced schemes for which GAE was insufficient.
As an assessment of how the concessionary fares scheme has worked, the complaints that I—and, I am sure, other members—receive are about the patchwork quilt of provision throughout Scotland and the scheme's restriction to off-peak travel and to a single mode. Is the Executive examining the introduction of a multimodal non-time-restricted scheme? Has it examined similar schemes, such as that in Wales? What is the estimated cost of such a scheme?
No plan exists to consider a multimodal scheme as part of the commitment to older people and disabled people. The partnership agreement contained three commitments. One was to extend the scheme for older people aged 60 or over to make it a national scheme, one was to assess improved transport concessions for disabled people and another was on young people, especially those who are in full-time training. The existing commitment to a national standard for older people relates to bus travel; no plans exist to make that scheme multimodal.
Was the examination of the Welsh scheme official? Was a report produced and were you involved?
Recently—I cannot remember whether it was earlier this year or the end of last year—we took a party comprising representatives from local government, the bus industry and the Scottish Executive to speak to similar people in Wales about how the scheme there had been set up and how it was performing. An official report was not produced as a result of that meeting, but we have since then set up a reimbursement group comprising officials from various bodies, which will consider the scheme in Wales and other models. That group will consider not only the level of entitlement, but how reimbursement should be carried out. The most important thing is to decide how the bus companies are to be reimbursed for providing concessionary entitlement—more often than not, that is the most complicated issue.
Is the Welsh scheme multimodal and non-time restricted?
The Welsh scheme is not multimodal, but I think that it is not time restricted. It is a local bus scheme. As in Scotland, local authorities in Wales also run concessionary travel schemes in their areas for other modes of transport. However, the national Welsh scheme is for local bus services.
Could you provide us with a report on the operation of the Welsh scheme?
We do not have one at present because no in-depth report was produced following the visit that I mentioned. However, I am sure that we can access a report that Welsh Assembly Government officials could provide.
That would be helpful. Does the Executive have any estimates of the cost of expanding the scheme to make it a truly national scheme for disabled citizens and senior citizens that is uniform and non-time restricted? Has a multimodal scheme been considered, or is that just not on the Executive's radar?
As a supplementary question, if a multimodal scheme has been considered, has it been costed?
I will answer the second question first. There has been no consideration of a multimodal scheme for older people and the disabled. The policy commitment remains the one that is in the partnership agreement, which is to expand to a national scheme for bus travel. The issue of accessibility for disabled people could be addressed in all sorts of ways across the agenda. The scheme for young people could be multimodal, but the level of concession might be lower than that for older people and the disabled.
To clarify, when you say that you have estimates that you do not want to share with us, do you mean estimates of the cost of rolling out a complete national scheme that is not time restricted, or do you mean the cost of a multimodal scheme?
We have done work on the cost of the partnership agreement commitments. For young people, that means a multimodal scheme, although there are issues about the level of concession. We have also worked on the cost of expanding to a national scheme for older people and the disabled, but that will not be a multimodal scheme.
Was the work on a national scheme for bus travel with no time restrictions?
We have considered a variety of issues. The commitment in the partnership agreement is for an off-peak scheme.
When the national minimum standard was introduced, I remember that there were various parliamentary questions about difficulties that were largely to do with people who wanted to travel outwith their areas. One issue that was taken up was about people who were asked to disembark from one bus and board another because they did not have through tickets. The Deputy Minister for Transport and Planning at the time said that a group was considering such matters. How is that group's work progressing and how have those issues been dealt with?
The concessionary fares working group has met a number of times over the past two or three years to resolve particular issues about schemes. The problem of people being invited to leave a bus at the boundary of a scheme related mainly to a particular bus company. The Minister for Transport recently answered a question by saying that that bus operator
Has the working group considered other issues and if so, how have they been resolved?
The working group has considered mainly issues between bus operators and local authorities about how schemes are organised locally, rather than issues for passengers. It has considered technical matters such as administration of schemes and reimbursement. Such matters are vital to schemes, but do not affect passengers.
When the national minimum standard was introduced, it took an enormous amount of time to resolve problems and to work out a scheme for passengers who wanted to travel from Stirling to Edinburgh or Glasgow, for example. Although the scheme was not free at off-peak times, it was fairly generous—I think that the cost is about £1.50. Has the working group been involved in negotiations about schemes?
It has not been involved to my knowledge. I was not involved in the group when it was established, but that has not been an issue over the past 18 months.
I am trying to make a point that arises from the discussion. Members obviously get together to try to resolve difficulties, but it would be useful if more problems could be resolved centrally in the future. Perhaps that will happen as we move towards a national scheme. Let us hope that the same issues will not arise.
The policy objective that the working group was set up to deliver was the development of the national minimum standard of free off-peak local bus travel. Certain local authorities have considered how they might go beyond that—as they are perfectly entitled to do—to develop joint schemes with neighbouring local authorities or arrangements such as Dr Jackson describes.
You said that you considered the system that operates in Wales. Did you also consider how the highly organised and advanced multimodal system that has been in place for decades in the Republic of Ireland was developed?
Do you mean in relation to concessionary fares?
Yes.
We like to think that the consultation will contain fresh ideas and that it will not just represent the vested interests that we would expect to hear. We are open minded about how best to implement a new and improved concessionary travel scheme. We considered Wales because the feedback from local authorities and from the bus industry indicated that the Welsh model was the most useful one to consider at the time. If the feedback from the consultation directs us elsewhere, we will be happy to consider other ideas.
Will you examine international examples? The Irish example that I saw was way ahead of its time and does all the things that have been asked for in this context.
We will consider the Irish example. We consider all sorts of things in relation to concessionary fares; for example, we are examining concessionary fares applications for smart cards. Development work is happening in that regard. As I said, the consultation process will throw up all sorts of ideas from many sources.
You might find that the Irish have an interesting package that covers all the issues that you have mentioned.
Reimbursement is important to the bus industry, because it needs to receive the correct amount of resources to provide the service. Equally, however, it is important that the public sector does not pay more than it should be paying. Is the Executive satisfied that the current system of reimbursement is well enough audited and is accountable enough to ensure that the public purse does not pay over the odds?
For many years, local authorities have had responsibility for running their own concessionary travel schemes. They have officials who are steeped in claims, negotiations and auditing. However, we came along and said that we wanted to introduce a national standard that would cost a lot of money, which we would provide, and we gave a commitment to give local authorities more money if they ran out. Last year, when additional claims came in from Strathclyde and one or two other authorities, consultants were appointed to examine the additional claims and report back. That acted as a sort of additional safety net.
I thank our witnesses for attending.
I will keep my introductory remarks brief. My voice is not strong today as I have a streaming cold.
Thank you very much.
Have the provisions that relate to buses in the Transport (Scotland) Act 2001 been effective?
It would be easy to underestimate the improvements that we feel have happened in bus transport, even though there have been no statutory quality partnerships or quality contracts. Local authorities have not ruled out using those measures. One of the barriers to further progress is the age-old problem of lack of funding. The Scottish Executive's submission to the committee contains a list of the steps—I was going to say "hurdles", but perhaps that is the wrong word—that have to be taken to go into a formal quality partnership or quality contract and the amount of investment that local authorities would have to make. Local authorities are not unwilling to make that investment, but the funding to make it is not necessarily available.
The Association of Transport Co-ordinating Officers report "Quality Partnerships and Quality Contracts: a Review of Current Practices and Future Aspirations" showed that a great deal had been achieved throughout Scotland in the provision of low-floor vehicles, infrastructure improvements, bus priority measures, public transport interchanges, new bus stations, park-and-ride ticketing initiatives and closed-circuit television on vehicles. A wide range of issues has been addressed, but part of our problem is a lack of money, as Alison Magee said.
In simple terms, are you saying that the resources to back up the legislative intent were not put in place?
Yes, that would be a fair comment. One of the other difficulties that can be encountered is that, if we introduce a service or want to improve a service, we have to sustain the service or improvement over a long term.
To resolve that problem, do you advocate that there should be a timeframe within which a service will be judged against the original criteria? Perhaps a decision about long-term funding should be taken at that point, which might be two years into the operation of the service. A further period could then be awarded from the Executive's resources or those resources could be transferred to the core funding of the local authority to support the service.
I do not know whether my colleagues agree, but I think that mainstreaming—with the appropriate scrutiny, as you said—would remove a great deal of the uncertainty.
You mentioned smaller-scale transport projects. Will you elaborate on that and explain what you meant? Also, is there not an issue about the way in which we keep tabs on all the different contributors to transport to ensure that we have an integrated network? I am thinking about the rural fund that was mentioned—a lot of work is going on in my area in relation to that—and the main bus contracts. The question is not as idle as you might think. In one part of my area, two buses run out of town at the same time—one is subsidised and one is not.
On the first part of your question, my understanding is that the integrated transport fund will deal with large projects such as Waverley station and rail access to airports. One of the rationales for setting up transport Scotland, or whatever the agency will be called, is that we should have a national body that can deal with those enormous, multimillion-pound projects. Below that level, we need a fund that can deliver on more localised projects such as bus stations and interchanges.
I can speak only for my own authority, in which we are constantly monitoring the bus services. The difficulty is that bus services can change fairly frequently, and we may find that, where a bus service is operating on a tendered basis and commercial changes introduce a new service, we need time to react by withdrawing or amending the subsidised route so that it still serves parts of the route that might not be served by the commercial service, but so as to avoid any overlap of services on a main corridor. There are issues that have to be addressed, and it is down to local authorities to monitor the situation regularly.
Under the present arrangement, the person who has the bus route can make changes that have a significant impact on subsidised services. Would quality contracts provide a better way of doing things?
Each local circumstance is different. A local bus service contract may well be able to be changed; it might not be needed or it might be possible to amend it. Competition in itself is possibly not a reason for introducing a quality partnership or contract. It is a question of looking at each circumstance as it arises. It may be the case that, although a bus is running on a route, it is serving some part that the other bus service is not covering. The other bus service might be creaming off the main passengers on a lucrative corridor, whereas the tendered service might be going into housing estates and serving other areas as well as acting on that corridor. Each circumstance is quite different.
Are you saying that there is a difficulty?
Yes.
You have alerted us to the two major problems of resources and sustainability. In your opinion, what sort of funding cycle would maintain sustainability of service?
As we discussed earlier, if someone were introducing a service, it is clear that they would want to monitor how that service was operating. If a service had proved to be successful and was being used by the public, we would like to see the three-yearly tranches of money mainstreamed into local authority GAE.
Does COSLA have any estimate of the present shortfall? I have heard that you want more resources and that it is a question of finance. Can you put a figure or general estimate on that?
We can let you have that information. James Fowlie tells me that we have an estimate, but he cannot give you a figure off the top of his head. One of the issues is that there has not been any general GAE uplift for roads and transportation for a number of years. Through the comprehensive spending review we have been trying to establish a base budget, to get the various one-off announcements that the Scottish Executive has made built into the base budget, and to make a case for additional funding. Public transport is one area for which additional funding is needed; roads maintenance is another. There are several such areas. The aspirations of all local authorities would need to be analysed in order for a ballpark figure to be produced. That would have to be done on a fairly robust basis to avoid ending up with just a wish list.
ATCO surveys that have been conducted on a national basis have looked at the information that has been given by local authorities in Scotland. At the moment, we are seeing a 20 per cent increase in costs for tendered local bus services that are replaced on a like-for-like basis. That is a significant increase and, as Alison Magee said, those issues are not being addressed through the GAE. From a local authority perspective, if there is a finite budget we must start considering service cuts. Concessionary travel is another topic on the committee's agenda today, and increased travel by senior citizens is creating a bigger demand for bus services. We are therefore in conflict when it comes to budget provision.
You said that there has not been a substantial increase in local authority transportation budgets, but I am sure that you will accept that there has been a substantial increase in the Executive's transportation budget. Perhaps the argument is whether more of that money should be devolved to local level as opposed to being administered centrally.
The point was well made when the Scottish Executive witnesses spoke about the amount of expertise on those matters in local authorities. The new agency, transport Scotland, will be set up but it would be a mistake to assume that local authority expertise will be lost as a result; I hope that the two will complement each other.
From the practical point of view of local authorities, do you see any move from local authorities to introduce quality contracts or will they retain the informal partnerships? Is there any real incentive to move from the informal partnerships, or even any need to do so?
Local authorities would prefer to make partnerships work because that is simpler and easier for everybody. I assume that the bus companies would prefer that too. With quality contracts, one must first prove market failure, which was mentioned earlier. If a local authority decides to go for a quality contract, it is always mindful about what it spends its money on. If it thinks that it will end up facing legal challenges when trying to establish market failure, it will think carefully about going ahead.
That is correct. The other matter is that, at the end of the day, one does not know whether one will be able to procure services more cheaply for a quality contract than one can at the moment. Authorities might find that their costs will increase because they are after quality services. That would place a bigger burden on local authorities, which would wonder where the money would come from.
So there will be no stampede for quality contracts, but is it likely that any local authority will introduce them?
The island councils use 100 per cent contracted services so, in effect, they have quality contracts. Lesley Millar will be able to confirm that.
Shetland Islands Council, Orkney Islands Council and the Western Isles Council provide 100 per cent of services on a tendered basis. Dumfries and Galloway Council provides 85 per cent of services in that way and it sees itself as providing a quality contract in all but the terms of the 2001 act. Shetland Islands Council is the only one that has 100 per cent low-floor bus provision, but that comes at a cost. That council now has the power in its hands to deliver something that is like a quality contract. From the operators' perspective, that is the sort of area in which they would like to see a quality contract operating.
The council in Shetland is satisfied with the way in which the arrangement operates.
You will have heard it mentioned when we questioned the Scottish Executive that West Lothian Council has been developing a scheme to introduce a quality contract. From speaking to councillors and officials in West Lothian, I understand that they believe they can demonstrate some degree of market failure in the West Lothian bus market. From anecdotal evidence from other colleagues, I also understand that local authorities in what one might call semi-rural areas in which there are some large towns and a variety of small towns—such as in Midlothian—also experience significant concern. Within COSLA as a whole, to what extent is there concern that the relationship between the local authority and the bus industry is not working as well as the local authorities would wish?
It is patchy. The situation seems to be okay in some areas, but there are clear difficulties in others. It is not COSLA's role to get involved directly with individual councils. We are aware of the situation in West Lothian. People would prefer to go down a consensual, voluntary route than to end up with the situation that you describe. There seem to be pinch points—one or two councils experience the difficulties that you mention, but I would not say that that is generally the case. James, do you have a feel for the situation?
The councils that suffer problems sit on the edge of large cities and have radial routes running through them. Again, Lesley Millar will know the details. Those councils have specific problems and are seeking all possible means of addressing them. Subsidising a number of routes around such areas is costly, so the councils are seeking a better way of doing that and quality contracts are one of the routes that have been taken. The councils that have considered that option so far have examined the costs, the bureaucracy that is involved in achieving quality contracts and the potential for bus operators in the area to challenge them and have decided that, at the moment, it is not worth pursuing quality contracts. If one authority takes a chance and runs with the option, others might follow but we must wait to see whether it is demonstrated that quality contracts will work and, as Lesley Millar said, that they will add value to services. At the moment, we have no indication of whether quality contracts will provide better services at the same or lower costs.
The Executive has aspirations to alleviate congestion, especially around our major cities and across the congested central belt. Railways will be part of the solution to that problem, but enhancing the quality and availability of bus services must also be part of it. Delivering such improvements may cost the public purse more money, but if we do not enhance the bus network in some way the Executive's aspirations to alleviate congestion will not be realised.
You are quite right. We need to make a judgment about how best to enhance the bus network. As has been said, we have a range of options. James Fowlie is probably right. Local authorities may see that in order to set up quality contracts they must get over considerable hurdles and barriers, but if one council does so and the contracts work, the option may be considered in other places where there are problems.
I may be wrong, but I suggest that the routes to which you refer and which are reducing congestion are the very routes that are commercially viable for operators, who will operate those routes in any case. They are not necessarily the routes that one would consider for quality contracts. Councils are trying to tackle problems in parts of their local authority area that do not have bus services that run to other parts of the area.
I accept that the problem tends to lie in linking smaller communities to the radial routes to which you refer. That is the issue that West Lothian Council is trying to address.
I have four questions on concessionary fares. In your written submission, you identify difficulties with the Strathclyde Passenger Transport system. What was the reason for those difficulties? Are you satisfied that the situation will not arise again under the present system? Tommy Sheridan mentioned that there is variation around Scotland in what is provided. What are your views on standardising the various schemes that exist? Should those schemes be extended to create a national scheme?
I will answer the last question first. COSLA would welcome a national scheme, but would like there to be local delivery and administration. All councils are developing smart cards to enable people to have admission to facilities such as libraries and swimming pools. It makes sense for transport to be included on smart cards when people are eligible for concessionary fares. One would not necessarily want to have a stand-alone concessionary card—one might prefer to have something that was linked to the modernising government agenda that councils are trying to implement. As has been said, there is a great deal of local knowledge about and expertise in delivering concessionary schemes, which ensures local accountability. However, we strongly support the introduction of a national scheme.
Those are all our questions for the time being. I thank Councillor Alison Magee, Lesley Millar and James Fowlie for giving evidence.
Thank you for giving us the opportunity to give evidence. Let me depart from my script a bit. Having sat in the committee room since 2 o'clock this afternoon, I will not say that it was nice to see my colleagues in the Executive getting a grilling, but from a local authority perspective it was unusual—it certainly makes a change.
Thank you for those introductory remarks. David Mundell will kick off with the questions and we will see whether you, too, get a grilling.
Thank you for your frankness, Iain. Perhaps you will be equally frank in responding to my questions. Have the provisions of the Transport (Scotland) Act 2001 relating to buses been effective?
In their true execution, and by their omission, you might say that the answer to that would be no. However, without their existence, would the voluntary partnerships have progressed to the level that they have reached?
Right, so the answer is—
Yes and no.
Well, that was a politician's answer. You heard the Executive's evidence. Do you think that we are moving forward and seeing quality partnerships emerge, or are we going to carry on as we are at the moment?
I am honestly convinced that the partnerships will develop if the emphasis is on the fact that they are not based on an on-going, lifetime subsidy. We should be making the transport environment more commercially viable. Underpinning that would have to be an open-book agreement on reasonable returns for the commercial sector. I make no bones about the fact that the purpose of the public purse is not to make shareholders into multimillionaires, but to make a reasonable return on the capital that is invested.
You will have heard my question to the Executive. Where do you see the future balance between your organisation within the local authorities and the proposed agency, transport Scotland, which we are told will develop best practice?
You are talking about the centres of excellence, but the element that you did not mention is the regional partnerships. There are voluntary partnerships at the moment, but the bus industry is asking why the commercial sector is expected to use formalised partnerships when the guidance from the Executive and local authorities is that voluntary partnerships are a reasonable way forward. The white paper and the possibility of formalised regional bodies will enable greater engagement. I mean no offence, but I should point out that transport does not recognise political boundaries; it recognises travel-to-work areas. That is the way forward in relation to formalised regional partnerships. Engagement with the regional partnerships and the commercial sector would then be easier.
I do not think that we are in danger of experiencing role reversal, but I take your point about talking about the negatives rather than the positives. The committee is well aware of innovations and improvements, especially in Angus.
I stay in Glamis, so I echo that.
Why do you think that local authorities have chosen to establish informal rather than statutory quality partnership schemes?
That has a lot to do with custom and practice, as well as fear of the unknown. Nobody wants to be at the forefront of confusion and it is always nice to have a model to follow. Wearing my Dundee City Council hat, I can tell you that we have got close to achieving a formal partnership. We are engaged to the bus companies, but are not yet married to them, in as much as we have signed up to a concordat, which I have included in my submission as appendix A and which will form the basis of a formal partnership as we progress. That is perhaps relatively easy to achieve in our urban setting, in that we are dealing with fairly major bus operators. I sympathise with local authorities in some of the more rural areas, where councils have to deal with owner-drivers and so on, which is more difficult. In Dundee, getting Stagecoach, Strathtay Scottish and Travel Dundee together in the one room to sign one document was a major success.
There is a problem on your own doorstep with concessionary schemes. You seem to be looking back to the previous Tayside regional scheme, which worked well. With the change in local government, the problem seemed to be that Angus and Perth wished to continue the old Tayside scheme, but Dundee did not. Do you see any moves towards co-operation to get a concessionary scheme that applies more widely than just in individual council areas?
I will go back to your first point. On disaggregation in the days of Tayside region, each local authority was individually responsible for overspends and we were not able to agree with our neighbouring authorities the formula for what would happen if we overspent on our joint concessionary fares budget. That is a good example of how local government reorganisation did not take into account the needs of people travelling in from Glamis to Dundee for social, recreational, health and employment opportunities. We would welcome the opportunity to go with a national scheme. For my sins, I am part of the Scottish citizens account smart card consortium, which will be able to play a major part in facilitating a national scheme once it comes in. We are not isolationist in Dundee and we are not looking for a unilateral declaration of independence or anything.
I would never accuse you of that.
I want to take you back to the issue of the quality contracts. You said that there was a fear of entering into the unknown. In your paper, you suggest that there is an issue about the availability of qualified professionals to develop partnership schemes. Do you believe that the statutory regional partnerships will be able, when they are established, to employ experienced transport personnel to develop such schemes? What discussions have you had with colleagues in some of the areas that we discussed earlier who have been exploring the issue of quality contracts and what feedback have you had from their discussions?
In the formation of regional partnerships, there might have to be secondments or transfer of staff. It is inevitable that people will have to wear many hats at that time. That will have to happen nationally, in a United Kingdom sense. I have spent more than £9,000 on national advertising to recruit someone to the senior post of transportation officer, but I have not been able to recruit anybody who fits the profile—and that is not because we are being exclusive.
Do you feel that the position in the cities, which have a lot of commercially viable routes, is substantially different from the position in local authority areas that have a high level of non-commercially viable services?
The issue of commercial viability is always difficult from the point of view of talking to operators. That is where trust comes into the equation. Operators should think in terms of networks not routes. It is easy for operators to say that they are not making a 17.5 per cent return on a route, in terms of the gross margin, but it might be that they are getting huge returns on their capital from another route.
You could be straying into extremely dangerous territory with Mr Welsh, who might not approve of what could appear to be an expansionist policy on the part of Dundee.
I was speaking purely in terms of transportation.
Have you thought about how the regional partnerships might operate in terms of geographical areas, such as the central belt?
There is no one-size-fits-all solution. Of the voluntary partnerships that have been established, the south-east Scotland transport partnership, which stretches up as far as Perth and, by default, Pitlochry, is a good example. The regional partnerships have to evolve around the travel-to-work areas and, overlaying that, the nodes that education and health services consolidate into. The transport partnerships cannot be made up exclusively of a load of professional transportation anoraks; they have to include representatives of the health authorities, the enterprise companies and so on. There has to be a true mix to deliver what the policy is about, which is enabling people to do what they have to do without having to have a car or facing the barrier of there being no bus service.
Many people have argued that transport lost out when council services were disaggregated. Might smaller councils work more closely together as a result of the regional partnerships?
There is no doubt that transport lost out, although Lesley Millar will probably throw something at me for saying so. People go on about how the budget of the former Tayside Regional Council was disaggregated into the budgets of the new constituent authorities, but I make no apologies for that. At the time, everybody had to operate on the basis that they should fight to get as much of the cake as possible to pay their wages. This time, we know the limited size of the cake that is to be distributed among our clients. It should not matter whether someone is a resident of Glamis or a resident of Glamis Drive in Dundee, because their travel needs will be the same. I mean no offence, but such needs do not respect political boundaries.
Integration of transport is important so that, for example, the journey to the local hospital is not broken. That is a particular problem in Dundee. It is important that there is throughput so that things are made as easy as possible for the commuter.
We perhaps need to consider the different funding streams that your good selves provide—honestly, local authorities are skint. For example, there might be synergies to be gained with the health service. I would not like to be quoted on this, but anecdotal evidence suggests that about 15 to 18 per cent of hospital out-patient appointments are missed and, although there might be other reasons for that, a fairly high percentage could be down to unsuitable transport. It is frustrating when things run late. Often, it is difficult for people to make the journey. Equally, a poor transport system results in high patient transfer costs and high costs for voluntary car schemes. Integration is not just about having a single ticket for all modes of transport. It may sound like a panacea or utopia, but integration should mean that all modes feed in so that journeys can be completed.
I do not want to tread on the convener's toes, but I know that it is quite difficult to reach St John's hospital in Livingston by public transport.
It depends where people are coming from.
Absolutely. Some of us have to come from quite a distance.
Yes. Wearing my corporate hat, I believe that the introduction of the free scheme has hit operators and is rebounding on local authorities. That has happened on two distinct levels. First, the scheme has raised aspirations and increased demand for access to transport. Secondly, the scheme is having an impact on the ability of operators to maintain frequencies on routes because of capacity issues. There is no doubt that the free travel scheme has greatly increased demand at certain times of the day. Shorter journeys are also being made, with the result that buses have to stop more often. That means that, in urban areas, there is an issue about capitalisation and whether additional buses need to be put into the loop. In rural areas, because there is little point in having a free scheme that is paid for by the Executive if it means that no buses run until after 9.30 am—Lesley Millar can confirm whether that is the watershed—the rural authorities were forced into allowing free travel prior to that point. Technically, that money would not have been reimbursed by the Executive.
What might be some of the issues with the national scheme?
We could spend hundreds upon hundreds of thousands of pounds on consultants, which I would loathe and hate because we would start talking about arc elasticity of demand at different times of day and so on. Bus companies sell moving seats—that is their business. I take a pragmatic view and, from talking to the Confederation of Passenger Transport UK, I know that most of its members share that view. Auditors may get upset about this, but we have to negotiate and horse trade. We will have to say to the bus companies how much money is available to deliver a free, national travel concession scheme. We need a safety net, but we must sit down and negotiate with the companies. As I said in my paper, concessionary fares and bus revenue support are inextricably linked.
That brings us to the end of our questions. I thank Iain Sherriff for his evidence.
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