In Sheffield the trial Better Bus Area is already producing results, but doubts still remain amongst some within the industry

It’s a new era for bus subsidy with changes now firmly underway that will change the way industry funding streams are arranged in England, Scotland and Wales. Despite the upheaval, operators, consultants and local authority officers came together at last month’s Better Bus Areas and BSOG Reform Conference in Birmingham to hear first hand how changes to the Bus Service Operators Grant and the introduction of Better Bus Areas will change the dynamic between operators and local authorities.

One area that has some real experience of what this entails is Sheffield, which has become something of a proving ground for the BBA arrangement. On the face of it, the results sound convincing, with the once acrimonious relationship between South Yorkshire PTE and local operators now approaching something that looks like harmony. With talk of Quality Contracts now dispensed in favour of a wide-ranging partnership between the two sides, David Young, the PTE’s director of customer experience, had some good news for delegates – the relationship is paying dividends with long term fare-paying passenger decline now arrested.

The partnership, which was launched last October, brings together the PTE with First South Yorkshire, Stagecoach Sheffield, Sheffield Community Transport and the city council. Young revealed that after a difficult winter as a result of the poor weather, in the last three months adult fare-paying passenger numbers have increased by 2.8% in the Sheffield partnership area. Meanwhile, local independent TM Travel, owned by TrentBarton parent Wellglade, is poised to join the partnership.

Bus user satisfaction has also significantly improved, with the city leaping from bottom of the league table of the four South Yorkshire districts to the top. Bus service punctuality has also improved by 2% and passenger complaints are down 10%. “That’s a big improvement,” added Young.

He said that before the introduction of the partnership, bus services in Sheffield accounted for 51% of all services across the South Yorkshire region, but 58% of all complaints to the PTE. “There was significant local pressure for change,” Young noted. “This is about raising up from the lowest common denominator.”

He added that the partnership had not only tackled the quality and punctuality issues, but “also the environmental issues too by getting newer buses into the city” and the poor perception about the  value for money of tickets from both users and non-users alike.

Young said that dominant local bus operator, First, was largely viewed as expensive, but the introduction of a multi-operator Citywide ticket, priced at £4.30, had been a catalyst for change. “It brought down day ticket costs across the board,” he explained. “First’s day ticket went from £4.60 to £3.40 and other operators, including those not part of the partnership, followed by reducing their prices. There have been real winners.”

However, Young admitted that as the trial Better Bus Area, there were real concerns from operators about the withdrawal of the Bus Service Operators Grant. “They were very concerned about their risks and exposure,” he said. “BSOG does taper off, but we’re using the funding stream to invest in measures that will allow operators to capture that missing revenue through the farebox. We knew we couldn’t just withdraw [BSOG] overnight; the shock to the system would be just too much.”

Young said that operators were broadly supportive of SYPTE’s BSOG plans, with the exception of one smaller independent. “My perception is that the larger the operator, the happier they are as they seem to understand the benefits that the BBA will bring.”

However, one operator speaking at the conference warned that cuts to funding streams such as BSOG could result in increasing fares and diminishing patronage. Robert Montgomery, Stagecoach’s newly appointed managing director of its UK bus division, said that the Perth-based group had experienced passenger growth across the board over the last decade with the exception of a “minor blip” in 2010. “We have now returned to growth, but that could be at risk,” he added.

Montgomery said that growth was down to careful attention to detail, investment, keeping the product offering simple and getting frequency and fares right. “Can we do that any better?” he asked. “How can Better Bus Areas improve what we already have? That’s a very tough challenge.”

Montgomery said that he wasn’t interested in half-hearted attempts at partnership and admitted that he had received some “amusing” BBA partnership proposals from local authorities who had simply dusted off old proposals. “They say ‘we’ve always wanted to do this, so if you give us your BSOG we can do it’,” he said. “But we’re looking for measures that will genuinely lead to passenger growth.”

“We want serious bus priority,” he  continued. “Not the sort of bus priority where we say we’ll have a bus lane here or a set of traffic lights there, but the type of priority where the only reason that the bus will stop will be to pick up or drop off passengers like a train does. We need to look at opportunities for that sort of serious priority.”

Montgomery told delegates that, despite his caution, there were very good reasons to get involved in the Sheffield scheme. “There were three reasons and one caveat,” he said. “We were keen to test the concept and see how it works by spending money in other ways and what that does in generating ridership. In the Sheffield case there is more funding available for a variety of reasons, so that mitigates the risk a little and we can do more radical things. It’s also built on a very strong partnership and it will only work if operators and local authorities trust each other.”

He added that one of the issues for Stagecoach was that it was crucial that there was a suitable governance model in place. Montgomery said that the Sheffield partnership wasn’t static and that it was changing and evolving on an ongoing basis. “The world changes and so too does the world of the local authority and the operator,” he continued. “You need to be able to do that in an atmosphere where you all stay together, so you need to have very good governance, because who knows what will happen? Stuff happens and you need to be able to move the model appropriately.”

For Montgomery’s final point, he asked the big question – would the partnership actually work and deliver? “We hope it does and that’s very much the position that we are in,” he said.  “We’d like it to work, we hope it will work, we’ll do everything we can to make it work, but are we certain that it will work? No we are not. But we are moving from an environment where BSOG in its current form supports what it does. It is the single subsidy to the bus industry which allows it to keep fares down, frequencies up and get more people on buses. That’s what it is. With BBA there are possibilities that if it’s done right with a strong partnership with bold and radical measures it could work, but to cobble something up very quickly that moves cash from the operator to the local authority in order to do things that may not get people on buses is very risky.”

Of course some partnerships between operators and local authorities have managed to deliver without the strict level of governance required by BBAs. Montgomery pointed to the group’s partnership in Oxford that has created a BBA-style arrangement, a theme that was picked up at the conference by Mark Kemp from Oxfordshire County Council. He described the partnership as the lightest touch of agreement, with nothing formal that binds the partnership together. “We’re almost going down the BBA route,” Kemp added. “We obviously don’t have some of the benefits, but there’s a high level of familiarity with the whole BBA concept.”

Kemp said that the scheme had been judged to be a major success by reducing bus movements through the historic centre of Oxford but not at the expense of bus use. Meanwhile, the partnership between Stagecoach and Go Ahead-owned Oxford Bus Company had seen the introduction of a multi-operator ticket, branded as Oxford SmartZone, that was fuelling significant growth. It means that bus users can now purchase a good value multi-operator ticket that was valid across the two dominant local operators’ networks. “Without the additional money of a BBA we’ve managed to keep growth going,” added Kemp. “It has worked. Yes, we’ve reduced bus movements through the city, but the bus still accounts for 50% of the journeys into the city centre. It’s taken a lot of years, but we’ve got there.”

Bringing the Sheffield and Oxford schemes together, Montgomery questioned whether these partnerships would even exist without the legacy of on-the-road competition which has pitched Stagecoach against First in Sheffield in recent years, plus the long lasting competitive activity between Go Ahead and the group in Oxford. “Would we be where we are now?” he asked. “We are only there because we chose to go and compete with the established operator. It changed the dynamics in those markets. Competition continues, in a stable and mature way, but the biggest selling ticket now in Oxford is the multi-operator SmartZone ticket.

“So if you happen to be in an area where there’s a very strong partnership, with some maturity but it needs some funding to make it work, then BBA will be useful. If you aren’t then it’s not going to last,” he added bluntly.

 

This article appears in the latest issue of Passenger Transport.
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