Contact: Martin Robertson, ext 6997

1. Summary

1.1 On 10 December 2001 this Committee considered a report on Passenger Transport Best Value outcomes for the future. The Committee resolved that it had concerns that the need to contain the budget in the light of current pressures may be at variance with the corporate aims to tackle social inclusion and promote modal shift.

1.2 In the light of this resolution, two immediate actions were required:

(i) That the County Surveyor report back on the results of a planned approach to District Councils with a view to their providing support for local bus services from April 2002, to assist in services being maintained.

(ii) That a working party be convened to consider these concerns.

1.3 This report informs Members of the current position on these two actions.

2. District Councils

2.1 The County Surveyor has written to the District Councils in Hampshire which do not currently support services, pointing out the background to the current budgetary pressures and seeking a view as to whether they would, in principle, be prepared to consider providing such support from April 2002. A response was requested by 18 January 2002. A copy of the letter is attached as an appendix.

2.2 The position in terms of responses as at 21 January was as follows:

2.3 The overall position, therefore, is that four District Councils are still considering the position or require further dialogue; one has declined to support services and four have yet to make a substantive response.

2.4 In addition, discussions continue with the two District Councils which already support services, Basingstoke and Deane and Eastleigh, to confirm the position with regard to their support for 2002/03.

3. Working Party

3.1 A Working Party comprising Councillors Mrs Devereux, Mrs Dickens and Roberts met on 15 January 2002. The Head of Passenger Transport brought Members up to date on the current budget position and, in particular, on the results of the approach that had been made to District Councils.

3.2 The Working Party felt that progress on the Best Value Improvement Plan for passenger transport in line with the corporate objectives of social inclusion and modal shift was only possible if support for services was maintained.

3.3 It was felt that it was vitally important to get the seriousness of the situation across to District Councils and to work positively with them to reach an agreement on contributions. It was agreed to recommend to this Committee that the Executive Member for Environment be requested that, where the response from any District Council indicated any possibility that funding might be forthcoming, a meeting should be arranged at which the Committee itself should be represented.

Recommendation

That the report be noted and the Committee consider the recommendation from the Working Party with regard to further discussions with District Councils so that it may submit a view to the Executive Member for Environment.

6965/MR

APPENDIX

«Title» «FirstName» «LastName»

«JobTitle»

«Company»

«Address1»

«Address2»

«City» «PostalCode»

Dear «Title» «LastName»

LOCAL BUS SERVICE SUPPORT 2002/03

I write to make you aware of current pressures in the funding of local bus services within Hampshire and to ask your Council to consider the provision of such services from March 2002 in line with the powers provided by the Transport Act of 1985.

The past twelve months has seen unprecedented increases in the cost of supporting

bus services which are needed by the community but which are not provided

commercially by operators. There have been three major factors in this situation.

Firstly, there has been a significant number of commercial service withdrawals across

Hampshire over the period since the start of the financial year, many of which have

required replacement with supported services. This has resulted from increased costs,

particularly in respect of drivers' wages but also with regard to fuel, and it no doubt also reflects a lack of competition in the market. In all cases, the action to replace services has only been taken after consideration of alternative facilities and careful examination of usage.

Secondly, the pressures with regard to increased costs and decreased competition are

also being reflected in increased overall costs when contracts are retendered or revised, despite the careful planning of tenders to ensure that efficiency is achieved and services represent reasonable value for money.

Finally, in March 2001 the Tillingbourne Bus Company went into receivership leading to withdrawal of all services operated by the company which served the Fleet and Farnborough areas, the majority of which were commercially operated. Emergency contracts were put in place within a few days and these were later replaced with substantive arrangements, with a reduced network of services which cut the resources employed by around 25%.

The cumulative effect of these three factors is a full-year increase of approximately

£750,000 on our budget for the support of services of £4.1 million. It should be stressed that with current trends the position is very likely to deteriorate rather than improve during the remainder of the financial year, and the budget pressures experienced in 2001/02 are likely to remain in 2002/03 and thereafter.

In a situation where we have an additional call of about 20% on its budget for this

Service the County Council is currently focusing on action to be taken from April 2002. It is expected that the Council will be able to identify around 50% of this additional funding in 2002/03 and that there will be further funding available as a result of contributions already committed from two District Councils, Basingstoke & Deane and Eastleigh. This will leave a funding shortfall of around £300,000 and in the absence of any additional funding being available, it will be necessary to make some reductions in services from April to contain the budget. My transport officers are currently working to identify where these reductions can be made in a way that will minimise the impact on passengers, but clearly a reduction of this scale will have an impact on service levels across the County.

Against this background, I am writing to ask your Council to consider whether it would be able to contribute to the support of bus services from April. Any such contribution would be ring-fenced against certain services in your area so that it would be transparent as to where your funding was being targeted. Clearly it would also be important to ensure that any contribution received due acknowledgement in the marketing and promotion of the services concerned.

This letter is to formally raise the question of supporting services; clearly if there might be a possibility of contributions being made in principle, then further detailed discussions would be required to establish the details of this and allow a final decision to be made. If you could let me have an indication on the principle by Friday 18^th January at the latest, then arrangements can be made for further dialogue where necessary. A final decision needs to be made on service levels in early February, so there is considerable urgency to this issue.

Yours sincerely,

Martin Robertson

Head of Passenger Transport