Bus Services

Thursday 1st December 2011 Westminster Hall

[Relevant documents: Eighth Report from the Transport Committee, “Bus Services after the Spending Review”, HC 750, and the Government Response, Ninth Special Report, HC 1550.]

15:51

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Buses are the most popular form of public transport in this country. There were 4.6 billion bus passenger journeys in England in 2009-10, compared with 1.3 billion rail journeys, yet buses rarely attract high-profile attention. In part that is because central Government do not take as close an interest in buses as they do in rail travel, but I suspect another reason. Outside London, buses are disproportionately used by older and less well-off people who, regrettably, do not attract the same attention as rail travellers. However, buses are vital, connecting people with town centres, jobs, colleges, shopping, family and friends, and when bus services are cut, people’s lives are badly affected.

Last year’s spending review included three decisions with significant implications for bus services in England; nearly half of bus operating revenue comes from public sources, so any reductions from such sources are highly relevant. First, support for local authorities overall was cut by 28% and funding for local buses was no longer ring-fenced. That affects those services paid for by local authorities for social reasons, or about 20% of services overall, although that figure varies from place to place. The TAS Partnership estimated that that will eventually reduce the subsidies available to bus services by £125 million. By February, local authorities had confirmed an overall reduction of £44 million for 2011-12.

Secondly, changes in the formula for concessionary travel reimbursement have taken about £100 million away from local authorities. Concessionary travel reimbursement is claimed to be provided on a “no better off, no worse off” basis, and the formula changes are intended to iron out teething problems found during the introduction of the scheme under the previous Government.

Thirdly, the Government announced a 20% reduction in the bus service operators grant, a form of fuel duty rebate, to take effect from April 2012. That will affect all bus services, commercial as well as subsidised, and is estimated to remove around £60 million from the industry. I should add that the increased cost of diesel has also put up bus operators’ costs and, inevitably, will have put pressure on services.

The total reduction in revenue for the English bus industry, outside London which has rather different arrangements and which we did not consider in our investigation, is likely to be between £200 million and £300 million per annum. By June 2011, 70% of English local authorities had decided to reduce funding for supported bus services, which affected some urban as well as rural services. Some authorities, such as those of Hartlepool and Cambridgeshire announced that they would cut some of their subsidised services altogether.

Our inquiry took place in the first half of this year, and we published our report in August. We wanted to find out what the effect of the spending review changes was likely to be and to consider how it could be ameliorated. We were particularly keen to hear the views of bus users and took specific measures to find out exactly what was happening to them. Working with the excellent parliamentary outreach service, we distributed leaflets about our inquiry in libraries and citizens advice bureaux in areas that we knew to be most affected by cuts in services. We used parliamentary petitions to identify bus service campaigners in particular areas. We also took oral evidence from a panel of bus users, and that evidence brought home to the Committee and to the public the practical implications of cuts in essential services. We received a great deal of correspondence and evidence about the impact of bus cuts on people’s lives, from all sources, including letters from disabled people and senior citizens, telling us about their experiences and how cuts in services meant that they could no longer socialise with friends and families. We heard from students who had had to leave their college courses because they could no longer get to college on time and, after we had published our report, I met members of the Liverpool Schools’ Parliament who reinforced that point. They spoke about the impact of cuts in local bus services on the accessibility of school and college to them. Time and again, the letters and all the correspondence, petitions and personal representations showed why bus services matter and should not be left to market forces.

Our main conclusion was that the combined impact of the three spending review changes to bus funding posed the greatest financial challenge to the industry for a generation. We were not convinced that the Government had a full understanding of the impact of the funding changes on subsidised and commercial services, and we recommended that they should co-ordinate the collation of information about changes to subsidised services. I am pleased that the Government agreed with that recommendation, and they are now working on it with the Association of Transport Coordinating Officers. Can the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), tell us when that information will be ready, so that we can monitor how the provision of subsidised bus services is changing throughout the country? Has the Minister been in touch with local authorities about their plans for subsidised services in 2012-13? It is not solely about local authorities, however; how is the commercial sector responding? What information has been received about the likelihood of further cuts? Many hon. Members know from their constituency work that local bus services, commercial as well as subsidised, are being reduced.

The Government have stated that they hope that communities, operators and local authorities can work together to improve local bus services. I certainly agree with that aim, but will it actually happen? The Committee recommended that the Government should identify the barriers to co-ordinating different types of transport services. Does the Minister agree that the Department should do so, and report on what progress has been made?

We looked at the possibility of community transport schemes playing a greater role in delivering local bus services. The Government are considering ways of making such services more commercially viable, but it is unclear how that consideration is progressing. I was disappointed that one option for expanding community transport, by allowing people to use their concessionary fare passes on community transport, was rejected. The Government clearly want to see community transport expand, and the Committee welcomed their new fund in support of that, in particular in rural areas, but they do not seem to be resolving what is a mounting problem. Perhaps the Minister could clarify the Government strategy.

I am also worried that the changes to the bus service operators grant, which are due to be introduced next spring, will hit both subsidised and commercial bus services hard. At the time of our inquiry, the Minister’s view was that operators would be able to absorb most of the changes. The bus industry has challenged that view, and I would be interested to hear the Government’s assessment of the impact of reducing BSOG to bus services next year.

[Mr Hugh Bayley in the Chair]

The Government are reviewing BSOG to see whether it can be delivered in a different way—for example, by paying it to local authorities instead of to bus operators. I would be interested to hear the Government’s thinking on that. It is important that the money provided by the Government is earmarked for local bus services. That must be achieved, whatever means are adopted.

One theme that emerged from the public’s evidence was that consultation on changes to bus services is often inadequate. There were examples of good practice, but passengers were sometimes not asked about changes, or were consulted on only one option. That is not good enough, especially when considering how important bus services are to their users. The Committee recommended that Passenger Focus should develop a consultation toolkit for local authorities to use when proposing changes to subsidised services, and the Government agreed. What progress has been made? Is the toolkit ready, and will the Department monitor how it is used, and encourage local authorities to follow best practice?

The need for proper consultation does not rest solely with local authorities and the integrated transport authorities. Private bus operators also have responsibilities, and they should encourage customer feedback about services, and consult on changes before they are registered with the traffic commissioners. Hon. Members will know from their constituency work how worried people become about abrupt changes to service provision, including those from commercial operators. We need better notice, better consultation, and more involvement from bus users. If there are financial difficulties—the public are certainly aware that there are financial difficulties in almost every public service—the users of the service often have ideas for how to make best use of available resources. It would be good to see more consultation with local people before decisions are made.

In their response to our report, the Government seemed to be sympathetic to that argument, but said that they wanted to reflect on the Competition Commission’s proposals before reaching a view. The commission’s role in looking at the future pattern of bus services will be extremely important. It has been examining the competitiveness of the bus market since the beginning of last year. Consequently, we did not examine that issue, or consider in depth how legislation on quality partnerships and contracts has been used. However, we recommended that local authorities and integrated transport authorities should use the provisions in the Local Transport Act 2008 to achieve better partnership working, and I am pleased that the Government agreed.

The Competition Commission’s findings are due to be published this month, but there has already been a lot of discussion about whether they will make a significant difference to the transport market, and specifically the bus market. Some of the information published about bus companies’ strategies in places such as the north-east does not suggest that competition is working effectively. There seems to be a reluctance to tackle that by using quality contracts, or franchising. I note that Tyne and Wear transport authority is actively considering a quality contract approach. It would be helpful to know whether the Government are taking an interest in that, and examining barriers in authorities that want to agree quality contracts. If there are barriers, they should be addressed, and I hope that the Government are taking an interest in that. The Select Committee will consider the Competition Commission’s report when it is published, and I expect that we will return to this issue in the new year.

I want to finish by referring to the concessionary fare scheme, which enables free local transport throughout the country. It was one of the biggest successes of the previous Government’s transport policy. I congratulate the Minister on ensuring that it was not a victim of the spending review, which was significant. Passenger Focus found that 39% of older bus pass holders made a greater number of local journeys by bus than before they obtained their passes. That resulted in more social inclusion, and enabled them to be more active than would otherwise have been the case. The importance of transport includes health implications, and one area that health authorities have identified is that it is important for older people to maintain an active life for good health. The concessionary free pass is a major factor in achieving that.

When we examined how the concessionary pass scheme was working, we concluded that to inform development of future policy, data are required on how it is working, who uses it most, and who finds it most beneficial. In their response, the Government did not seem to accept that, and perhaps the Minister will reconsider. The scheme is highly valued, and we think there may be scope for smart ticketing to reduce its cost.

Our inquiry shone a light on how the spending review is affecting a crucial but often under-appreciated and under-reported part of our transport network. We engaged with the public in innovative ways to publicise why buses matter, and to ensure that we have the best possible information from people who are dependent on buses. We are worried about the impact of the cuts that have taken place and those to come. The outcome of the Competition Commission’s work, and how the Government respond to it, will be crucial to development of the bus industry—bus services for passengers—over the next few years. The Committee will continue to pay close attention to bus services, and I anticipate questioning the Minister on that in the Committee in the not-too-distant future.

16:07

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bayley. The Committee’s inquiry has been one of the more enlightening and intriguing it has embarked upon since I joined it after the election. It certainly brought home to me the fact that buses should be part of total services, and that many people depend on them. In a relatively deprived constituency such as mine, where many people cannot afford a motor car or are not well enough or active enough to drive one, buses are essential. Extracting a definition of a socially necessary journey from some of the commercial operators who appeared before us was frustrating. They squirmed but could not provide an answer. They won the award for worst witnesses of the year so far.

The inquiry enabled me to mull over the Government’s role in bus services. Is it appropriate to expect a Minister in Whitehall to pull a lever, and to raise the quality of services throughout the country? It is an unavoidable truth that local bus services are best controlled by local councils, or some locally accountable body. Ever since the Committee’s first inquiry on economic growth in transport, we have heard talk of new regional bodies that will allow transport decision making closer to the ground. However, we have yet to see anything beyond potential names emerging from the Department, and I would welcome more guidance from the Government on when there might be progress.

The Government’s other role is to set a good example. As the hon. Member for Liverpool, Riverside (Mrs Ellman) said, we had some truly lamentable examples of consultation, and calling some of them consultation was a joke. It was a case of “We’re removing the service, and if the passengers don’t like it, hard luck because we’re doing it anyway.” That is not consultation; that is “get lost” or “get knotted”. Nevertheless, central Government have a role to play.

I was bored one Sunday afternoon, so I started looking at the Government’s official response to the report. I sat at my computer trying to open complicated Excel spreadsheets of statistical data. I am sure it is a marvellous resource if someone has a spare lifetime to get to grips with it. I was intrigued to note that a review is being conducted of what data are being collected. I hope that most of them do not disappear as part of some review. I was struck by a few statistics. I wondered why 77% of Scottish buses have ITSO card readers, but only 18% of buses in English non-metropolitan areas have them. I thought that that was an interesting difference.

I also noted that English non-metropolitan areas have now seen the third annual decline in a row in the number of overall passengers. For the first time, concessionary fare journeys dipped in English non-metropolitan areas over the past year. I know that statistics are not everything. I noted that in Blackpool, passenger journeys had dropped from 16 million five years ago to just 14.5 million in the past year. I know why: we have had major civil engineering works and it has been impossible to get anywhere in the town centre. Statistics can be a little misleading at times and do not always paint the whole picture, but they struck me as interesting examples of some of the trends in bus ridership.

I raise those statistics, but I do not want the Minister to think I oppose what he is doing. I think that what the Government are doing is fair and balanced and reflects where we are as an economy and as a nation within the global economy. There is a healthy dose of localism in what the Minister proposes. I also recognise the Minister’s own deep, personal commitment to buses and to public transport more generally, and I praise him for it. I echo the comments of the hon. Member for Liverpool, Riverside on the importance of the Competition Commission’s report, which is continually forthcoming. If I believe what I read in my newspapers, I hope it will criticise what seems to be an utterly dysfunctional market in certain parts of the country.

The Minister will not be surprised to learn that I wish to devote the bulk of my remarks to community transport. Rather than re-rehearse my ten-minute rule Bill, which called for the extension of the concessionary fares scheme to community transport, I want to reflect on some of the Government’s responses in the ninth special report. Like the Minister, I share the desire to put community transport on a more sustainable footing, requiring less public subsidy and building on the social enterprise model. In the long-term, that has to be the way ahead.

I welcome the dedicated £10 million fund for community transport. I welcome, too, the efforts of the Department for Environment, Food and Rural Affairs with the rural social enterprise fund. However, we must also acknowledge that community transport is not just a rural phenomenon —it matters greatly in urban areas, too. In some ways, for more vulnerable, marginal groups, it matters more in urban areas.

I certainly take the Minister’s point—I assume it is the Minister’s, because it sounded as though he had drafted it—in response to recommendation 13 and the creative imagination that local authorities must apply to circumstances in which they withdraw supported services. Where that is occurring, it makes immense sense for community transport to step in and fill a hole for a relatively small amount of money. I agree with the Minister that that is a sensible and useful way forward for community transport. None the less, I am concerned at the complexity of some of the legislation, which represents a barrier to many volunteers, who get terribly confused, as I continue to do, over section 19 and section 22 services—over who to pay and what to do. It is a technical and complex minefield. I recognise that the Vehicle and Operator Services Agency and traffic commissioners put a lot of effort into trying to guide providers through that minefield, but it is still deeply complex.

At the Community Transport Association’s conference this morning, I heard the Minister’s comments about why he was reluctant to extend concessionary fares to section 19 services. For those who were not there, I will paraphrase his point: it would cause a policy issue to allow those in what is essentially a private members’ organisation, club or society—whatever we want to call it—to have access to a wider concessionary fares scheme. I thought about that over lunch. It strikes me that that is coming at it from the wrong way. Many of those people have to join a dial-a-ride scheme because they cannot access mainstream public transport in the first place. This is perhaps part of a dialogue rather than a direct challenge, but I wonder whether the problem lies more with the Transport Act 1985 and the higher threshold it sets for accessing section 19 services, rather than the reason given not to extend concessionary fare schemes to section 19 services.

I am intrigued—I think that is the correct word—by the Government’s response to the wider issue of concessionary fares. The Department rightly points out that community transport will usually offer a

“more flexible, personal service”,

which could become

“the mode of choice for concessionary pass holders.”

I would not deny that a sudden, rapid overnight expansion of community transport would undoubtedly cause problems for commercially provided and supported services, but I struggle to understand why the provision of a high quality, excellent service that responds to people’s needs should be seen as a problem. I have never been one to believe in levelling down to the lowest common denominator. That is one reason I find myself on the Conservative Benches. I would like other mainstream providers to be encouraged to raise their game rather than be told, “Don’t worry, we are not going to make it too uncomfortable for you. We are going to make sure the community transport lot stay in their box and do not put you to shame.” That would not be terribly helpful.

I understand the Minister’s point about the possible dangers to supported rural bus services, but we must realise, as the report did, that although more people may have concessionary fare cards, they actually have fewer buses on which to use them. That is my underlying concern.

I am thoroughly pleased that the Government have lived up to the pre-election pledges of both parties to protect the concessionary fares scheme. That is entirely right and proper, but we now have to ensure that vulnerable citizens in my and other Members’ constituencies have the services that they need to ensure that they can get to where they need to go. I am not convinced that the mindset of local councils or local commercial providers is such that they understand that vulnerable people need to get to GP surgeries, hospitals and libraries, and that that is where the bus network should go. At the moment, it is a patchwork quilt of constantly changing routes and services that confuses passengers, providers and even Members of Parliament. I ask the Minister to do one thing: hurry up with his consultation toolkit and make sure that passengers are meaningfully involved when local authorities consult on service changes.

16:18

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bayley. It is always a pleasure to follow the hon. Member for Blackpool North and Cleveleys (Paul Maynard), who, like me, represents a coastal town.

Before I begin my comments, may I pay tribute to Mr Thomas Bunce, who was a resident of Burbank in my constituency? He worked hard to secure adequate bus provision—particularly the 516 service—for the community. Sadly, he died suddenly in September after a journalist had been to see him to discuss bus services. Hartlepool and Burbank are poorer for Mr Bunce’s passing. I hope the House will join me in paying tribute to him and extending our gratitude and sympathy to his family. [Hon. Members: “Hear, hear.”]

I am grateful for this opportunity to debate an important issue that is important to my constituency, and I thank the Chair of the Transport Committee, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), and her Committee for raising this topic, and for encouraging members of the public who are affected by cuts to services to contribute to the inquiry. After seven years in the House, I cannot think of another Select Committee inquiry in which the Chair and members of the Committee actively encouraged members of the public to contribute to its findings. It is a fantastic model that we should use in future in the House.

Hartlepool has one of the worst bus services anywhere in the country—a situation that has worsened as a result of the comprehensive spending review. Due to the worst local government financial settlement for a generation, the local authority has withdrawn all public subsidy to private bus operators. In March, I raised the issue of bus services in Hartlepool on the Floor of the House through a petition of residents, and I encouraged Hartlepool residents to get in touch with the inquiry and express their feelings. Together with the Committee’s active encouragement of public participation, it meant that—as usual—Hartlepudlians did not disappoint. The Committee’s report features heavily the opinions of Hartlepool residents on the loss of their bus services; pages 12 and 13 contain quotes from nine people, five of whom are my constituents. Their views have had a big impact on the Committee and on the shadow spokesman, my hon. Friend the Member for Barrow and Furness (John Woodcock), with whom I have discussed this issue.

Mrs Olly, 80 years old, stated:

“I appreciate that spending reviews were needed and accept a reduced service but to discontinue the service altogether is appalling.”

Mrs Robinson said:

“I am a carer for my 85 year old father who has just undergone an operation for bowel cancer and also has heart problems. I used to get the 516 bus service (this has now been completely withdrawn). It now costs me £11 per day by taxi so am only visiting my father three days a week which is leaving him alone four days in each week.”

Miss Raw declared:

“The bus service from Elwick to Hartlepool has been withdrawn leaving the village completely cut off from Hartlepool. I do not drive and therefore am finding it very difficult to shop for essentials, visit doctors, dentists, opticians, banks, hospital visits etc. Also I no longer visit friends, go to the theatre, or cinema, especially in the evening. In fact we are completely isolated.”

Finally, Mrs Power stated:

“Since the removal of the bus service my daughter now has no way of getting to and from college. Is she surely not entitled to the education she deserves? My daughter works very hard and gets excellent grades and I feel appalled that her future education is being jeopardised in this way!”

On publication of the report, my hon. Friend the Member for Liverpool, Riverside kindly gave an interview to my local paper, the Hartlepool Mail:

“We received a lot of information from people in Hartlepool which demonstrated the problems caused by the withdrawal of local bus services…The information was very dramatic, which showed the impact it had… Hopefully this will make the Government think again about planned cuts… I would like to thank the people of Hartlepool who gave us the information.”

I echo that thanks.

As I said, Hartlepool has a poor bus service. That results from a number of factors, not least, as the hon. Member for Blackpool North and Cleveleys pointed out, that in many areas—and in my area in particular—the market for bus services does not operate effectively. Passengers do not have the choice that a market should provide, and they are forced to endure poor and inadequate provision from a monopolistic provider—Stagecoach. That company’s disdain for passengers was demonstrated a few weeks ago when, with Councillor Allan Barclay, I met about 40 residents from Ryehill Gardens. They are mostly elderly, cannot afford taxis and are effectively isolated as a result of changes to and withdrawals of bus provision. They do not want an extra bus service; they want the number 3 service to be diverted—perhaps just once or twice a day—so that it goes into town and comes back via Ryehill Gardens, allowing them to travel to and from town, get groceries, attend appointments or meet friends. On average, that diversion would add about seven minutes twice a day to the existing bus service. Stagecoach rejected that suggestion and—perhaps even worse—it did not give residents the courtesy of a meeting to explain its decision. Members will agree that that is not good enough, and it demonstrates all too vividly the contempt—that is not too strong a word—shown by Stagecoach, and why people in England need a complete change in the provision and regulation of bus services.

The Committee reported on bus services after the comprehensive spending review, but in the week of the autumn statement perhaps we should bring it forward and talk about future financial arrangements. The report stated:

“The combination of the reduction in local authorities’ revenue expenditure and changes to the Department for Transport’s concessionary fares reimbursement guidance in 2011-12, with the 20% reduction in Bus Service Operators’ Grant (BSOG) due to be implemented in 2012-13, has created the greatest financial challenge for the English bus industry for a generation. The combined impact of these funding changes will, in some parts of the country—”

Hartlepool, for example—

“have a disproportionately adverse impact on the provision of local bus services and the level of bus fares.”

That is one of the report’s central paragraphs.

As my hon. Friend the Member for Liverpool, Riverside said, local government was hit hard in the CSR. Revenue expenditure will be cut by 28% over four years, with central Government assistance going from about £38.5 billion in 2010-11 to £22.9 billion in 2014-15. As a result of this week’s autumn statement, however, it will get a lot worse. This week, the Chancellor confirmed that his deficit reduction targets will not be met in this Parliament, and that he will have to extend them over a further two years. That will mean more pain over a longer period, and it will be concentrated not on capital expenditure but current spending. The autumn statement confirmed that current spending will be cut by an additional £910 million in 2012-13, £1.175 billion in 2013-14, and £1.735 billion in 2014-15. After this Parliament, the figures become unsustainable and economically dangerous—£8 billion and £15 billion in 2015-16 and 2016-17 respectively.

Local government and transport will bear the brunt of many of those changes, and I predict that the cut to BSOG in 2012-13 will be much worse than the 20% predicted. Will the Minister indicate how he intends to combat what the Chancellor laid out in the autumn statement, and say how he expects England to have a functioning bus transport service, given the astonishing budget cuts currently planned that are only going to get worse?

As the Committee pointed out, bus passengers are facing their biggest challenge since the second world war. On behalf of my constituents, I thank the Committee for its work in highlighting the issue and putting pressure on the Government. As the hon. Member for Blackpool North and Cleveleys said, the current model in which monopolistic bus providers are able to cherry-pick services and make excessive profits cannot be sustained, especially at the expense of important social routes, and cuts to Government budgets tip that model over the edge. Communities such as mine would welcome and encourage a co-ordinated and sufficiently funded public transport service, but that can happen only if a strong Transport Minister backs this important issue in Whitehall against the Chancellor, and takes steps to remove power from monopolistic providers, thereby re-regulating bus provision in England.

16:28

[Iain Stewart (Milton Keynes South) (Con)]

It is always a pleasure to serve under your chairmanship, Mr Bayley, and I add my thanks and congratulations to the Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman). She comprehensively set out the evidence taken by the Committee and the conclusions that it reached, and I was proud to be part of that investigation.

I wish to pick up on one or two points in the report, add some experiences from my local area and give one or two international examples that I have researched. I was struck by the variation in the ways that local authorities around the country responded to the admittedly challenging economic circumstances in which we now operate. Some authorities have taken a hatchet to bus services. The hon. Member for Hartlepool (Mr Wright) gave evidence of that from his area. Other authorities have responded innovatively and positively and worked hard to protect local bus services.

I shall give an example from my own local authority in Milton Keynes. It predates the comprehensive spending review. Just after I was elected, in May 2010, the local bus operator, Arriva, completely reorganised its network and timetables. It said that it had had a consultation on that. As my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) said, it was anything but a consultation. Indeed, some people turned up on the first Monday of the new system, expecting their usual bus to turn up, but it was not there. In the first chaotic few weeks of being a new Member of the House, my mailbag and e-mail inbox were flooded with complaints from patients who could not get to their GP surgery, from students who had missed exams and from shoppers who could not get to their local shops. There were all sorts of problems. That was one of the first big local issues that I had to deal with. I was lucky enough to be able to secure an Adjournment debate in the Chamber in the first few weeks after the election. The Minister may recall responding to it.

I am happy to report that many of the problems have now been remedied. The situation is not perfect, but through work with the local council, with Arriva and with the new bus users group that was set up, many of the problems have been solved. I raise that as an example because consultation is vital. Bus services need to be responsive to the needs of the local area, and those needs may change as time goes on. It is important to talk to the users—the bus passengers—but also to the local service providers, such as the GP surgeries, local colleges and schools and retailers, so that a local bus service is provided that people want to use and that generates additional traffic.

Another issue in relation to which good local consultation is vital is concessionary fares. We have talked about the concession card. I am glad that that has been preserved, but of course it applies only to off-peak services, and one problem identified to me locally is that pensioners want to use buses in the peak time. Some still wish to work; we are all being encouraged to work for longer and longer. They also have to get to some services before the 9.30 am cut-off. The shadow Minister, the hon. Member for Barrow and Furness (John Woodcock), indicates from a sedentary position a financial issue. I am happy to report that in Milton Keynes we have come to a deal. This relates to the point about consultation. The local authority and Arriva have worked together to provide not free bus travel for pensioners before 9.30, but a concessionary fare of 50p a journey. During consultation, people who would be using the buses said that they would be happy to pay a fare at that level. That was found out through a very effective form of local consultation.

As other hon. Members have said, it is important to share that good practice throughout the country, because some local authorities clearly have not taken that approach. The evidence from my area is that the local authority has done that. I strongly urge the Minister to take up the recommendations that the Select Committee made about a consultation toolkit and a mechanism for disseminating good practice throughout the country. I have a fairly open mind about what the best forum for that is. It may be the Department itself, the Local Government Association or another forum. Clearly, there are examples of good and bad practice, and we need to ensure that the good practice is rolled out as far as possible.

I want to touch on not just current bus services, but the planning for future bus services. Milton Keynes is a fast-growing area, so what applies to us may not be relevant in other areas, but with house building forecast to grow quite significantly in future years, I think that such planning will be an important issue in many areas. I am talking about planning properly for new bus services. I want to highlight the Oxley Park area of my constituency. That is a new-build housing estate on the western edge of Milton Keynes. The good part was that there was a plan for a new bus route going through it, with stops all the way along so that people could easily get to the centre of Milton Keynes and to other key destinations in the authority area. That was all well and good, and it was financed by some section 106 money and through other agreements with the house builders to put in that facility.

The problem has arisen because the design of the estate had to meet density targets. The houses are crammed in; the main road through the estate is quite narrow; and there is not sufficient car parking space. That means that the bus drivers have to go through a chicane of parked cars. Sometimes they cannot get through at all. There are issues of road safety: there are many young families in the area, and kids naturally want to play outside. There is also a noise problem because the houses have been built right up to the pavement. The buses, with diesel engines, make a noise, and the service runs until quite late, so I have had many complaints from residents saying that they cannot get to sleep because of it. That is providing a disincentive to bus use—people are campaigning for the bus route to be removed.

However, with proper planning—I welcome the provisions of the Localism Act 2011 on better community involvement in designing new housing areas—we should be able to plan new housing areas with bus routes in a way that does not cause problems and in such a way that people want to use them. I hope that the Minister will liaise with his colleagues in the Department for Communities and Local Government and take that suggestion forward.

I have one other point about local consultation, and it relates to finding innovative new ways of delivering services. Milton Keynes is largely an urban area—85% of the population of the local authority area lives in the urban centre of it—but it covers quite a wide rural hinterland as well. There are quite a number of small villages on the outskirts with very small populations. Most of those people drive, but there are a few people for whom a bus service is a lifeline, although it is not commercially viable to provide a regular bus service that one person uses every other day. As far as I am aware, the council has not come to any conclusions, but it is exploring innovative new ways of not having a bus service but helping people to use a local taxi service at no additional cost over what the bus fare would be. I am talking about a more responsive service, which they will want to use, as opposed to a static timetable that may be inconvenient for them. Again, that is where local innovation can come to the fore. There will be plenty of other examples across the country, and those good ideas can be shared.

I want to move on to a more general point about strategic planning in relation to buses. Buses have always been the poor cousin of the transport system. Having to use a bus is almost looked down on, but that need not be the position. I shall give an international example. In the summer recess, I was invited to go to Switzerland by Swiss Federal Railways. That was primarily to look at its railway system, but as part of the visit, we looked at its transport system and planning as a whole. On one of the days, we went to visit the small city of Zug, just south of Zürich. It has put in a new commuter railway line from the city centre to the outskirts. We travelled on that and got to the suburban station. We then watched what happened. A train arrived from the centre of town. Everyone got off and went to the adjacent bus station, where six buses were waiting. Five minutes later, they all dispersed to the housing areas around the station. Fifteen minutes later, they all came back in, and the passengers had five minutes to cross to the railway platform. The next train then went back into the centre of Zurich. The system was integrated, with some public and some private operators, who worked together to provide a reliable and regular service.

Another thing that struck me from that example was the sheer range of passengers using the system. There was everyone, from smartly suited business men to students and shoppers. Everyone was using it—it was a good cross-section of the local community. The system was so well regarded that people wanted to use it. No one was thinking of driving into the centre of town, because they knew that they had a reliable system. We in this country have been poor at that. I am not going to make a party political point—I think Governments of all colours have failed to grasp the option of having a much more integrated across-the-zones transport system. I hope we can have more of that.

I will again cite a local example—the welcome announcement in the autumn statement that the east-west railway line will be built from Bedford, through Milton Keynes, to Oxford and further south-west. I campaigned for that in this Chamber two weeks ago—I had secured a Westminster Hall debate to call for it—and I am delighted that it has been delivered within two weeks. I might have to be careful in what I wish for.

In developing that line, which has a strong case in increasing rail use and encouraging people off the roads and on to rail, how much better would it be if, as part of the planning, the services were integrated with the bus systems in Milton Keynes, Oxford and other places along the route? People who live elsewhere in Milton Keynes who want to travel to Oxford will therefore be able to decide that they can get bus x to Bletchley station and then straight on to a train, rather than say, “I am not sure when I will get there if I get a taxi to Bletchley. I will be better off using the car.” With proper planning, the new transport infrastructure projects can be even more successful than they will be.

Such optimism needs to be part of the bus industry. I was slightly perturbed, when we were taking evidence from some bus operators, that they were not seeing the opportunities in the current climate. I cannot predict what fuel prices will be like in the future—I am not a betting man, but if I were, I would suspect that they will remain high for some time. That surely is an incentive and opportunity for bus companies to say to people, “You do not have pay £1.35 for a litre all the time. You would be much better off getting a bus to your destination.” If bus companies think innovatively and work with local authorities and others to provide new services, there is an opportunity to grow the market.

I am optimistic about the future of bus transport in this country, but we must seize the opportunity. The economic circumstances are challenging—I am not going to get into a debate about how we got here and what the future will be. We have to accept the reality that economic circumstances will be challenging. However, there are opportunities to grow the system and the usage of buses. The Select Committee’s recommendations are helpful in nudging that forward, and there are good international examples that we can follow. I hope that our contribution in the report will help persuade the Minister to take those arguments forward.

16:43

[Julie Hilling (Bolton West) (Lab)]

I apologise for having been somewhat remiss at the start of my speech in the first debate, first, in not congratulating my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) on securing the debate and on her work and leadership as Chair of the Select Committee on Transport, and secondly, in not saying that it is a pleasure to serve under your chairmanship, Mr Bayley. I hope that I have put things right and that I will be forgiven.

Bus services are a classic example of the private sector making profit but the taxpayer picking up the tab when things go a bit wrong, particularly when a route is not profitable. Although it is not profitable to enter into a debate here on whether buses should have been deregulated, there is a debate to be had, as my hon. Friend the Member for Hartlepool (Mr Wright) said, on how bus services can best meet the needs of our communities in the future.

There is a huge difference between buses inside and outside London. Buses outside London are predominantly used by the less affluent and are a lifeline for many in our communities. As the hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) said, perhaps because of poverty, disability or age, many cannot drive. We all start too young to be able to drive, and I hope that we all end up too old to be able to drive. Our bus services can be woefully inadequate, particularly if someone wants to go between communities rather than to the centre.

There is a reasonably good service in my constituency if people want to go into Bolton, but please do not try to go between Blackrod and Horwich, or between Westhoughton and Smithills. Someone living in the student area of Manchester has a bus going into the centre of Manchester every minute, right around the clock, but someone living in Hag Fold in my constituency cannot get off the estate on a Sunday morning, and people dare not stay out too late at night, because the buses stop running at a ridiculously early hour.

Perhaps we should ask why everyone sees the bus as a good form of transport in London but not elsewhere. In London, buses are still regulated. Private companies are contracted to run the services, but control is in the hands of Transport for London. The previous Government introduced quality contracts, under which local authorities and integrated transport authorities can commission a bundle of services rather than have bus providers just bid for various routes. Currently, a provider can decide that a route is not commercially viable and leave a local authority the choice of either paying for the service or leaving passengers stranded with no bus service. The consequences of that are enormous—kids not being able to get to school, young people having to give up college because they cannot get there, and people giving up part-time or full-time work because they cannot get to their place of work. My hon. Friend the Member for Hartlepool described the isolation of people who are stuck in their communities and have no way to leave to visit the doctor or friends—they are trapped. It does not seem right that a provider can say, “This route is not profitable,” and ask the local authority to pick up the tab.

Quality contracts mean that profitable and non-profitable routes can be bundled together as a package, with the expectation that a provider will provide services on all those routes until the end of a contract. That seems much fairer. Rather than have the taxpayer pick up the pieces, there can be a balanced approach between the taxpayer and the operator. Unfortunately, operators do not seem keen on quality contracts. What will the Government do to assist local government to get bus services that are fairer to the taxpayer?

I have several concerns about the general cuts to bus services. As we have said, for many people there is no alternative to the bus. Buses are a fundamental part of integrated transport. We do not want people to drive to a station to catch a train; we want them to be able to use buses on part of their journey. Most of us do not live next door to a railway station, and we have to find some way to get there. Buses have to be a fundamental part of the transport system, not just the bit that poor people use. We need to look at greater integration, but services are diminishing as we speak. As the hon. Member for Milton Keynes South (Iain Stewart) was saying, the integration of our services is not improving. I am also deeply concerned about rising prices. The cost of bus journeys outside London can be extremely high. What are the Government going to do to improve the affordability of bus fares? Are they monitoring the effects of cuts to concessionary fares and school transport?

I will finish by saying that, as with so many of the cuts that are happening at the moment, the cuts to public transport are having a disproportionate impact on less affluent and vulnerable people. I hope that the Minister can give us some reassurance that he will take action on the concerns that we have raised.

16:50

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Thank you for calling me to speak, Mr Bayley. It is good to be serving under your chairmanship for the first time.

I congratulate the Transport Committee on securing this hugely important debate and on its excellent report, which shows just how much damage is being done to bus services up and down the country. The Committee’s words have been quoted already, but they are very important. According to the Committee, the current situation is

“the greatest financial challenge for the English bus industry for a generation”

and

“some of the most vulnerable people in society, including the elderly, will be most affected by these changes.”

It is not hard to see why the Committee had to use such strong language. Its Chair, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), set out the key decisions by this Government that have led to half a billion pounds being cut from local transport funding in this year alone. First, the 28% cut in direct funding to councils has removed £95 million from local transport. Secondly, £223 million has been taken from funding for the concessionary fares scheme for pensioners, which threatens services that are viable only because of that subsidy; as a result, many pensioners are finding time restrictions placed on their bus pass. Thirdly, a further £254 million will be taken out of support for buses next January, when support for bus fuel costs is reduced by a fifth.

Unfortunately, in their formal response to the Committee’s warnings about the damage being done to bus services, Ministers have displayed just how out of touch they are about the impact of the cuts to local transport and buses, which are being made too far and too fast. In their response to the Committee’s report—and, let us remember, after half a billion pounds has been cut from bus services funding in this year alone—the Government claimed that the bus industry was

“able to absorb this reduction without raising fares or cutting services”,

even though the Committee report is clear that, as my hon. Friend the Member for Hartlepool (Mr Wright) flagged up, the cuts will lead to

“a disproportionately adverse impact on the provision of local bus services and the level of bus fares”.

The scale of service reduction and fare rises was reinforced by a report from the Passenger Transport Executive Group on the impact of the spending review on bus services, which found that by 2014 bus use will fall by a fifth and fares will rise by 24% in real terms. In addition, the Campaign for Better Transport has found that the cuts have already led to huge reductions in services across the country, with one in five supported services being reduced and three quarters of local transport authorities planning to cut back on their bus services.

Behind those figures lies the real damage that is being done by cutting our bus services so heavily. The cuts are hurting young people, who are already struggling as a result of this Government’s decisions to cut the education maintenance allowance, treble tuition fees and end the future jobs fund. A million young people are out of work, and trying to get to places of education or to start working is made even harder for them when their local bus service is taken away. The cuts are also hurting older people, who find themselves isolated and cut off from family and friends because the bus service on which they rely has been taken away. During the general election, all political parties promised to protect free bus passes, but many older people are now asking what is the point of their free bus pass if there is no bus for them to travel on.

Perhaps the most striking part of the Select Committee’s excellent report is the evidence gathered from bus users around the country about the impact of the Government’s cuts on their quality of life. My hon. Friend the Member for Hartlepool rightly raised the plight of people in his constituency. I will add the case of Mr Turpin, a 65-year-old in Somerset who had a quadruple heart bypass but who now has to cycle every week up a steep and busy A road because his bus service has been withdrawn. These are not statistics that we are discussing; they are real people who are suffering real hardship as a result of this Government’s decisions. Unfortunately, their stories are being repeated in towns and villages up and down England. In my constituency, the No. 60 bus in Ulverston is the latest service to come under threat, after just seven months of running unsubsidised. The hon. Member for Blackpool North and Cleveleys (Paul Maynard) made a good point about the paucity of the so-called consultation processes carried out by the private sector.

Bus services are being cut, communities are being left isolated and where buses remain the fares are soaring well above inflation. If the Minister wants to avoid being labelled the modern-day Beeching of the buses, he must tell us what he proposes to do about the damage that is being done to bus services. Can he say when the consultation toolkit being created by Passenger Focus for local authorities will be completed and rolled out? Has he started work with the Local Government Association to help community transport associations?

Finally, will the Minister accept the recommendation made by the Transport Committee and by my own party’s transport policy review that local communities and the transport authorities that represent them should be given a greater say in how their bus services are funded and provided? My party’s policy review is clear about that. It is not good enough for Ministers simply to devolve the blame for their cuts to local transport funding without giving local transport authorities the power to manage their own transport services. The answer is not simply to enhance the voice that communities have, important though that may be; it is to put them directly in charge of the local decision making on transport. That is what we are calling for the Government to do.

16:57

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

Thank you, Mr Bayley, for calling me to speak. As always, I will do my best to respond to the various points that have been made.

Let me begin by congratulating and thanking the hon. Member for Liverpool, Riverside (Mrs Ellman), the Chairman of the Transport Committee, both for her Committee’s report into this very important subject and the measured way in which she presented the report’s findings. Buses are the predominant form of public transport and they are used disproportionately highly by those on lower incomes, so it is quite right that the Committee should look at them seriously, as it has, and come forward with its thoughts and recommendations.

As we set out in our response to the Committee’s report, “Bus Services after the Spending Review”, the Government place a great deal of value on local bus services. We recognise the important role they play in people’s lives and in the wider economy. We have put significant funds into ensuring that services can continue to operate across the country, whether that is by retaining the bus service operators’ grant in full for this financial year, or by reiterating and maintaining our commitment to the concessionary travel entitlement for older and disabled people. In addition, the local sustainable transport fund was established, providing more funds for sustainable transport over a four-year period than the previous Government provided. In tranche 1, £155 million was handed out and 35 of the 39 successful bids included bus-related elements.

However, we recognise that more needs to be done, which is why I announced at the UK bus awards on Tuesday a further £25 million of capital funding for buses. The previous two tranches of the green bus fund have been a success story, paying for more than 500 new low-carbon buses. The Government are now committing another £20 million for the third tranche of the green bus fund, to ensure that carbon emissions from buses continue to fall. I am sure that the industry will confirm, as it has to me, that when people are presented with new clean buses they find them more attractive, which means there are more people who want to use them. I announced earlier this week that, with the Mayor of London, we are committing £10 million to reducing emissions from London’s buses and improving air quality in the capital. We continue to support bus manufacturers and operators, to promote jobs across the UK in companies that can supply clean vehicle technology. I was pleased to be able recently to open the new Optare factory, which is a vote of confidence by British bus manufacturers in the future of bus use in this country.

The issue of community transport was raised by the Chairman of the Select Committee and by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), and I shall deal in particular with the point about where it fits in the system. As the hon. Lady will have heard this morning, community transport has a viable role in a number of ways. It helps to provide door-to-door transport for people who would otherwise not have any transport at all, and it helps with moving groups around in a way that commercial services would not be able to deal with—for example, children or young adults who want to go from A to B when there is no bus running, or old people who want to get to the cinema for a day out. It also provides bus services where there is no case for a commercial service, and probably no case for a supported service either. The community transport sector is very important and I want it to prosper and grow, which is one of the reasons why in March I announced £10 million to kick-start growth in the sector. The evidence is that local councils have welcomed the funding and are using it, by and large, productively. I accept that there is more to be done, and I hope to be able to say something even more positive in the next few days.

My hon. Friend the Member for Blackpool North and Cleveleys has put an interesting case, promoting his view of life with section 19 and the concessionary fare arrangements, and the report’s recommendations show that the Committee shares that view. There are three issues about section 19 and about why it would not be right at this point to extend the concessionary fare arrangements. One issue is simply cost. We have protected in its entirety the entitlement element of the concessionary fare arrangements. We have not gone back at all from the previous Government’s legislation. To extend the arrangements further would incur extra cost, at a time of financial difficulties for local government and the Government nationally.

Secondly, I know that my hon. Friend wants to approach the matter from the other end, but there is a point of principle about whether a concessionary fares system should be provided for services that are essentially available only to members of a group, and I am not sure that it should.

The third issue is that there is a consequence for existing bus services, particularly supported ones in rural areas, which are probably among those nearest the mark on viability, even when supported by local councils. If we were to see a significant number of people changing to community transport because of the incentive provided, existing bus services could be fatally undermined and the situation made worse. I am hesitant, therefore, to extend the arrangements as my hon. Friend has suggested, but he has made some fair points to forward his case.

The Committee has asked that we monitor the impacts of any changes made by local authorities or operators. We will do that, in conjunction with our partners in industry and with local government. The Campaign for Better Transport has recently collated figures on reductions in budgets and services, which has been useful. We recognise the importance of monitoring trends over time, and that is why we publish annual bus statistics and run a national travel survey, which will continue. But this has to be done properly. Robust data take time to collate, corroborate, clean up and publish. We continue to receive information, which we use as it comes in, but we want an accurate picture once a year.

The Department for Transport recently published the 2010-11 annual bus statistics, which show that compared with the previous year the number of bus passenger journeys in England rose slightly, bus vehicle mileage increased by a similar amount, and bus fares remained the same in real terms. That is a slightly different picture from the one presented to us this afternoon. Figures for 2011-12 will be available next year, but in the meantime there is no doubt that in some areas of the country a combination of the difficult macro-economic climate, local authority bus cuts, and operator decisions is making life more difficult for people who need to travel by bus. I do not want to shy away from that, but the national picture is more mixed. As my hon. Friend the Member for Milton Keynes South (Iain Stewart) mentioned, in many places local councils are taking positive steps to ensure that better services are provided more cost-effectively and more efficiently, and I would like to give some examples of that.

The first comes from Dorset, which I have mentioned in previous debates. Dorset is one of England’s most rural counties, so commercial services are limited to the main towns, and for non-commercial services contract prices have been rising. A further problem the council faced was that there were more than 700 different contracts for passenger transport services with, including taxi firms, about 300 operators. The contracts covered the full range of council services, from adult social care to school transport. By combining budgets and staff in a single integrated transport unit, and by working in partnership with local operators, the county council has managed to make significant savings while introducing new, longer-term contracts that offer stability for operators, and secure patronage and revenue information for the council. There were some teething problems, and people who pay attention to such matters will have seen mention of them in the local transport press, but the council has saved large amounts of money and managed significantly to minimise cuts. There are lessons to be learned from Dorset. The council has made annual savings of up to £1 million on contracts for school and tendered bus services, and it has opened up the local bus market to new operators, which has the potential to kick-start competition for commercial services.

The second example comes from Bedford. Despite financial constraints, Bedford borough council has been able to improve bus service provision in rural areas. This has included new and restored routes, increased frequencies and free travel for under-16s at weekends and during school holidays. This was made possible simply by negotiating closely with local bus operators and consulting extensively with local communities, the sort of measures that my hon. Friend the Member for Milton Keynes South advocated in his contribution. In both these examples, new approaches to procuring bus service contracts have resulted in new entrants into local bus markets, which the Competition Commission identified in its provisional findings as vital to making the markets more competitive and providing a better deal for passengers and local taxpayers.

A third example comes from the Isle of Wight. In September, Isle of Wight council and the local bus operator, Southern Vectis, developed an innovative community transport scheme. Local groups provide volunteer drivers to operate rural routes that feed into the main bus network on the island. The drivers are fully trained by the operator, which also provides the vehicles and fulfils the regulatory and maintenance requirements. This partnership has brought community transport and the resources of a private sector bus company together for the first time. It is a very interesting model. I am greatly encouraged that councils, operators and residents can come together when budgets are tight to develop a rural bus network that suits their local needs. It is exactly the sort of scheme that the community transport fund I announced in March is designed to encourage.

[Paul Maynard]

Will the Minister confirm that it is interesting to note that the National Union of Rail, Maritime and Transport Workers was fully behind the scheme in the Isle of Wight?

[Norman Baker]

It is important to note that. That is a very relevant point and it leads me on, perhaps, to the points made by the hon. Member for Hartlepool (Mr Wright). I am sorry that, unlike the Chairman of the Committee, who presented matters fairly and equitably, albeit in a challenging way, he sought to present matters as something of a party political rant. He was keen to say that this was the Government’s fault, but the Government have not cut bus services in Hartlepool—his local council has. Councils up and down the country have not been cutting bus services, and if all the services in Hartlepool have disappeared he needs to take the matter up with his local operator and council.

The picture varies enormously across the country. I am not pretending that it is easy for local councils; it is perfectly true that there are challenges as a consequence of the local government settlement. Cuts have been made across the country in local bus services, particularly in supported ones. The Opposition spokesman, the hon. Member for Barrow and Furness (John Woodcock) said, I think, that the Campaign for Better Transport had found that three quarters of local authorities were cutting back on buses. That is unwelcome, but the fact remains that a quarter are not cutting back at all. Perhaps we should look at them for lessons on how they have managed to maintain their bus services rather than cutting everything in sight, which appears to have happened in Hartlepool.

[Julie Hilling]

Perhaps one of the things that should be considered is the level of cuts made to those local authorities. We know that the same cuts have not been made everywhere, and that some local authorities, particularly those in the north-west, north-east and other areas, have had far greater cuts than some authorities in the south, which have had much less stringent budgetary cuts.

[Norman Baker]

The hon. Lady will appreciate that I am not responsible for how the Department for Communities and Local Government has distributed its money, and I cannot comment on that in detail. What I would say, having looked at bus patterns across the country, is that it is not the case that southern counties have maintained their bus services while northern ones have not. The picture is much more mixed. The east riding of Yorkshire, for example, has done well on maintaining bus services. A north-south split is not reflected in the way she suggests.

[John Woodcock]

What the Minister has said is potentially important and will be listened to by councils throughout the country. Is he actually saying that if any council cuts bus services, it is the council’s fault and not a result of the drastic reductions in local funding imposed on councils by the Government?

[Norman Baker]

What I am saying—I hope that I have said it fairly—is that it is a challenging position for local authorities. They have received reductions in funding, which has meant difficult decisions for them, and I can understand why some of them have looked to their bus services. However, within the framework in which they operate, some have managed to protect their services, and, as in the case of Bedford, even enhance them. Others have made limited cuts. Others have taken an axe to services. Those who live in Hartlepool and elsewhere need to ask their councils why they have taken an axe to services when other councils have not.

[Mr Wright]

If the Minister will let me continue with my rant, that Pontius Pilate approach to decision making will not wash if he wants to be a champion of local bus services. Will he comment on the second part of my remarks, which concerned future financial arrangements and possible cuts to bus services as a result of the announcements in the autumn statement?

[Norman Baker]

I will. I always try to respond to all points made by hon. Members, as those who have heard me respond to debates will know. I will deal with those points, but first I will deal with the points that the hon. Gentleman made during his speech. He said—I think that I am quoting him accurately—that we need a complete change in how buses are regulated. I point out that at the moment, the regulation of buses is a consequence not just of deregulation in 1996 but of 13 years of his Government between 1997 and 2010. The record will show that when the Local Transport Bill was before the Commons and I was on the Committee considering it, I wanted to go much further in the direction that he is now advocating than did the party of which he is a member in 2008.

[Mr Wright]

Will the Minister give way on that point?

[Norman Baker]

I will, but I need to make progress.

[Mr Wright]

The Minister has had 18 months in office. He has just set out his approach. When will he enact it?

[Norman Baker]

I will not give way again, as I am trying to answer the hon. Gentleman’s points, and he is anticipating me all the time. The fact is that we now have a regulatory framework that his Government put in place in the Local Transport Act, and the record will show that it would have gone more in the direction that the hon. Member for Barrow and Furness wanted if his Government had accepted the amendments that I tabled at the time.

Our position has been set out clearly. The Government await the results of the Competition Commission’s inquiry. It would be premature to make judgments about the landscape of the bus market until it has reported. We will read the Competition Commission report carefully, consider the arrangements for the bus service operators grant at the same time and in parallel and make it clear where we are going as soon as we have had a chance to digest the final report. That is the responsible course of action, given where the Competition Commission is at present.

[Julie Hilling]

Will the Minister give way?

[Norman Baker]

Yes, but for the last time, as I need to make some progress.

[Julie Hilling]

I thank the Minister for giving way; he is being generous with his time. My question is simple: have we any idea when the commission is likely to report?

[Norman Baker]

Yes. We will have clarity from the commission, and clarity from the Government on BSOG, in the early part of next year. We will then be able to answer questions in more detail based on what the commission has said.

I think that it is unfair to paint the autumn statement in the negative way the hon. Member for Hartlepool did. He said that things would get worse. I do not want to have a debate about the finances, as this is not the place to do it, but I will give one statistic. The day after the general election, our interest rates were higher than Italy’s. They are now lower than Germany’s, which suggests that the Government are handling the economic position rather better than he gives us credit for.

In addition to the money for green buses announced this week and for retrofitting existing buses, the Chancellor gave transport authorities another £50 million this week in his statement. I hardly think that this has been a bad week for transport, or for local authorities as far as transport is concerned. It seems to be a good week in terms of what has been handed out.

I mentioned that the Competition Commission’s report would be published shortly. The Department has submitted its formal written response to the provisional remedies, which is available to view on the Competition Commission’s website. In the response, I broadly welcomed the provisional remedies. I believe that they have potential to improve multi-operator bus ticketing in particular, and I welcome the commission’s focus on that issue in its recent inquiry into the bus market. There is no question but that better integrated ticketing can help by enabling passengers to make more seamless journeys. Smart ticketing can also play an important role. That is why I have committed to delivering, with operators and public sector bodies, the infrastructure to enable most public transport journeys to be undertaken using smart ticketing by December 2014, to answer the point raised by my hon. Friend the Member for Blackpool North and Cleveleys.

I mentioned the Local Transport Act 2008. There has been some concern that the provisional remedies have been ambiguous in terms of the tools in the Act that can enable authorities to increase the quality of services, so let me be clear. Statutory quality partnership schemes, quality contract schemes and voluntary and qualifying agreements remain useful tools for local transport authorities to deliver their public transport policies. That is the present position. The Government have taken no action to undermine quality partnerships or quality contracts. We will consider where we are after the Competition Commission has reported. In the meantime, it is perfectly open to local authorities to use the terms of the 2008 Act. It is available on the statute book for them to use if they decide that that is what they want to do.

The hon. Member for Bolton West (Julie Hilling) discussed the general price of bus fares. She is absolutely right to express concerns about that. Over the past 30 years, the trend has been that the average cost of travelling by bus has increased more than the average cost of travelling by train or car. We recognise that buses are used disproportionately by poorer people. I want to ensure that we consider that issue in our response to the Competition Commission’s inquiry into the bus market. It is not for us in Government to start telling people how much they should charge for buses in Kettering or anywhere else, but we must ensure that the system and the market work properly, which is what we are trying to achieve as part of our consideration of the Competition Commission responses.

I was interested in the point made by my hon. Friend the Member for Milton Keynes South about the deal reached between the council and Arriva to provide a 50p rate before 9.30. It is an exceedingly interesting idea that a bus company and a council can come together to create a new, innovative arrangement that meets the needs of local people and, presumably, the bus company as well. We need more arrangements such as that, and I hope that we will see what we can do to encourage such innovation across the country.

[Iain Stewart]

I would like to place it on record that a key body instrumental in brokering that deal was the Milton Keynes Pensioners Association. It required good work on all sides, but the association had an instrumental role in helping that deal be struck.

[Norman Baker]

I am grateful to my hon. Friend for rightly putting that point on record.

Several Members raised the importance of consultation. I welcome the Transport Committee’s emphasis on it, and it is right that Members have mentioned it here. It is also right that councils and operators considering changing services consult properly. It is clear from the evidence that the Committee and I have seen that there are some good examples and some pretty ropey ones. The message that I want to give to bus companies and local councils is that they must consult properly and take into account the consequences of any changes that they propose. Actually, if they consult properly, they often get some good and constructive responses and end up with a solution that is better than the one proposed, not just for customers but for the company.

The Chair of the Transport Committee asked when I expect we will know what the Association of Transport Coordinating Officers is doing with its assessment. I mentioned the annual statistics, but the ATCO assessment is happening now, and we expect the results early in the new year. There is no reason why the Department should not share that with the Committee as and when it comes to us, so I will ask my officials to ensure that we are in touch with the Chairman then.

The toolkit has been mentioned by a number of Members. Passenger Focus is gathering evidence from local authorities and bus operators to find examples of good practice. It is receiving good support from the authorities it has contacted and we expect to see a first draft in January, so we and Passenger Focus are making good, swift progress, which is rightly important to Members present.

The only other points that I want to pick up on are two of the issues to which the Chairman of the Committee referred—namely the bus service operator grant and the concessionary fares reimbursement formula. Contrary to the information that has just been provided by the hon. Member for Barrow and Furness, it is a fact that the Confederation of Passenger Transport UK, to which I spoke immediately after the spending review, told me that, in general terms, it felt that the BSOG reduction, given the notice that we had given and the limited amount of reduction, was one that it could in general absorb without fares rising or services being cut. That is what the industry told me. I am happy to give the hon. Gentleman the exact quote if he wants. That is what it said.

[John Woodcock]

I am aware of the quote, but does the Minister accept that, while it is one thing to look at that in isolation, the situation is entirely different if we combine it with the two other substantial cuts faced by the industry, and that it is simply unrealistic to expect things to remain the same?

[Norman Baker]

There is an issue as to the extent to which other elements of what is happening in the wider market, including the price of fuel, what is happening in the world market, the eurozone or any other factors outside our control, affect the operation of bus services. The hon. Gentleman has referred specifically to the BSOG reduction and the industry has given me a specific response. That is what it said and we should stick with it.

On the concessionary fare reimbursement formula, we have not changed, in any shape or form, the legislation that we inherited from the previous Government. It requires councils and transport authorities to deal with operators in a way that reimburses them so that they are no worse off and no better off from handling concessionary fares. That is a legal requirement and it has not changed. All we have done is issue guidance to indicate to local authorities how they should perhaps discharge that function. They are under no obligation to follow that guidance if they do not wish to do so. The remedy for bus companies that are unhappy with that is to go to an independent appeal. Not very many of them have done so and not many appeals have been won. If bus companies are receiving less money from local authorities and are not seeking to appeal, or do not win appeals, that suggests that they were overpaid previously, contrary to the terms of the legislation. That is a simple analysis of the situation. If, on the other hand, they win their appeal, it shows that local authorities have not been sufficiently reimbursing them on a no better, no worse-off basis. The legislation has not changed at all. I think that, to some extent, the argument is something of a diversion.

I am very conscious of the importance of buses in our country. I do not underestimate the difficulties of local councils in particular, and I am concerned about the level of supported services in some parts of the country, as opposed to the commercial services, which I think are, by and large, all right. We need to see the picture across the country. One effect of localism is that some councils are handling this very well while others are handling it very badly. It is not for us to say that a local council must follow a particular procedure, but I think it is the right of people in those areas to ask why there are no buses in their council area while they are running very well indeed across the border. That is a legitimate function for local people to practise.

We have supplied a lot of help to the bus industry in the way I have described—through the green bus fund, the local sustainable transport fund and the money that the Chancellor has given this week—and I hope to make further helpful announcements in the not too distant future.

17:23

[Mrs Ellman]

I thank Members for their constructive contributions, which I hope will help us to improve bus services. I also thank the members of my Committee, who today displayed the enthusiasm, commitment and knowledge that has helped to make this report effective. It will be even more effective if it changes the situation, as I hope it will. Buses matter and my Committee intends to continue to attach to them the importance that they deserve.

Question put and agreed to.

17:24

Sitting adjourned.