Contact: Andy Berncastle, ext 6921

1. Summary

1.1 The following decisions are sought:

(i) That the action taken in awarding tenders for subsidised local bus services in the New Forest and Havant areas be endorsed.

(ii) That low-floor buses be provided on two Petersfield local services at an additional cost of £21,400 per year.

(iii) That the future arrangements for making decisions on the award of contracts for subsidised local bus services be as follows: the Executive Member for Environment to give approval on an annual basis to the overall budget provision, policies and proposals for tendering that may apply for the coming year. The award of contracts within the scope of the authority given is then a matter for the County Surveyor in the exercise of his existing delegated powers.

2. Reasons

2.1 To record the tender results and their budgetary implications and the action taken under delegated powers.

2.2 To provide better access for passengers, particularly disabled people and those with pushchairs.

3. Other Options Considered and Rejected

3.1 Continuing with high-floor vehicles on the local services in Petersfield.

4. Conflicts of Interest Declared by the Decision Maker or a Member or Officer consulted - Not applicable.

5. Dispensation granted by the Standards Committee - Not applicable.

6. Reason(s) for the Matter being dealt with if Urgent - Not applicable.

Approved by: Date:

Councillor K B Estlin

7. The Tendering Process

7.1 Subsidised bus services in the New Forest and Havant areas have recently been retendered as part of the County Council's rolling programme and in accordance with the provisions of the 1985 Transport Act.

7.2 Funding for these services is provided from the County Council's Local Bus Service Budget, its allocation from Central Government under the Rural Bus Subsidy Grant and, in the Havant area, from developer's contributions under a Section 106 Agreement.

7.3 In both areas the opportunity has been taken to:

(i) explore possible enhancements to meet new demands, in particular where funding was available from the Rural Bus Subsidy Grant or developer's contributions; and

(ii) consider economies on poorly used journeys to ensure good value for money, particularly in the light of pressures on the Local Bus Service Budget.

7.4 A number of journeys have been identified where it is considered that the Education Department's Home to School Transport Budget should bear a greater proportion of the subsidy cost than at present, thereby reducing the contribution from the Local Bus Service Budget.

7.5 Both areas include a number of routes which form part of cross-boundary agreements whereby neighbouring authorities contribute towards the tender costs for journeys which run in their areas. These agreements will be varied as applicable to reflect the new tender prices. In the case of the Havant area, account is also being taken of possible increases in cross- boundary costs incurred by Hampshire as a result of a simultaneous tendering exercise carried out by Portsmouth City Council.

8. Consultation

8.1 Local consultation was carried out with County, Parish and District Council Members and representatives, and their views were taken into account in drafting the tenders. They have subsequently been notified of service changes arising from the tendering process.

9. New Forest Area Tenders

9.1 The New Forest tendering area for subsidised bus services comprises services within the New Forest as well as the towns of Lymington, New Milton and Fordingbridge.

9.2 Invitations to tender for 26 contracts were prepared and distributed to 28 operators, of whom four submitted responses. The results are summarised in Appendix 1. Consistent with other recent tendering exercises in the county, tender prices showed increases higher than the rate of inflation, between 8% and 10%.

9.3 In analysing tenders for those services which met the County Council's value-for-money criteria, the lowest cost that could be achieved was £641,220 per annum. This is made up of one combined tender and one individual tender from the existing contractor Wilts and Dorset Bus Company:

9.4 Contracts have been awarded on this basis for a four year period and commenced on 14 April 2002.

9.5 In January 2002 the previous contract was reduced by £9,848 per annum and this cost transferred to the Education Department's Home to School Transport Budget. This was to reflect more accurately the cost of providing free transport for entitled schoolchildren on one particular route.

9.6 Further costs totalling £21,955 have been transferred in this way following the tendering process resulting in:

(i) a reduction in the combined tender price from £630,600 to £614,340, a difference of £15,960; and

(ii) not replacing an existing de minimis contract valued at £5,995 per annum at April 2002 prices.

9.7 The financial outcome of the retendering exercise and the transfer of certain costs to the Home to School Transport Budget may be summarised as follows:

9.8 The increase in the Rural Bus Subsidy Grant costs reflects the higher tender prices submitted on this occasion, plus two small enhancements. The modest reduction in the Local Bus Subsidy Budget costs has been achieved through economies on poorly used journeys and the transfer of school transport costs, both of which have been applied to counter increased tender prices. Part of the costs shown are borne by neighbouring authorities under cross-boundary agreements.

9.9 Increased tender prices have limited the scope for enhancements to services. However improvements to connections with other services in Fordingbridge have been made to Service 41 which links Cranborne, Alderholt, Fordingbridge, Godshill, Woodgreen and Salisbury. Also, additional journeys on New Milton Town Service 191 have been diverted via Glendene Caravan Park with Rural Bus Subsidy Grant, in response to public requests.

9.10 Overall, only a few changes to services are being made. There is a negligible saving on the Local Bus Service Budget, due to a revised apportionment of costs with the Education Department and minor service reductions. The principal operators sought increases of some 8% on current prices.

10. Havant Area Tenders

10.1 The Havant tendering area for subsidised bus services consists of services within Havant borough and around Petersfield.

10.2 Invitations to tender for 24 contracts were prepared and distributed to the 28 operators who were known to have an interest in operating local bus services in south-east Hampshire. A letter was sent to the remaining 16 operators in the area inviting them to apply for tender specifications; of these, two requested specific documents.

10.3 Of the 30 operators who received tender specifications, six submitted tenders, of which five were incumbent operators. The sixth, Accord Southern, was a new entrant with a good track record elsewhere, and was clearly keen to take on a large proportion of the work.

10.4 In addition, three tenders for taxi-share alternatives were prepared and distributed to 105 taxi operators, of whom only one submitted a response.

10.5 Tenderers were offered various options in the specifications. As the need to constrain costs was known at the time when tenders were prepared, some options were aimed at reducing costs.

10.6 One operator (Stagecoach) had given notice of some commercial deregistrations, so tenders were invited for restoring some or all of the journeys under threat.

10.7 One large operator (First) was able to contain inflationary pressures to a low value by reviewing some journeys to improve efficiency, but another (Stagecoach) came in with prices up to 80% higher than current. One of the smaller operators (Emsworth and District) tendered prices some 17% to 20% higher than current.

10.8 In analysing tenders for those services which met the County Council's value-for-money criteria, the lowest cost that could be achieved was £681,025 per annum. In most cases contracts have been awarded for a four-year period commencing on 2 June 2002.

10.9 The financial outcome of the retendering exercise may be summarised as follows:

10.10 For about one-third of the services it was possible to hold costs at around their current level by accepting minor reductions. For the majority, however, it was necessary to accept a lowest bid for which the cost was considerably higher than current. Considerable cost was incurred as a result of partially rescuing some services that had previously been operated commercially, namely the 37/37A to Clanfield via Catherington, and Horndean School buses.

10.11 For a number of reasons it has been necessary to extend some of the existing contracts until August 2002. In two cases the services are due to be replaced by the Leigh Links operation. In others cases it is because the start date for new contracts has been delayed until September to allow an easier transition from one operator to another.

10.12 The main changes to the network are summarised below:

(i) Services 27, 38/38A, 39A, 45/45A/45B, 138 and 145: minor timetable alterations (journeys and part-journeys which fall below patronage criteria withdrawn, but some enhancements are being secured);

(ii) Service 36: considered unsuccessful in present form, thus a major alteration will be enacted to improve patronage. A taxi-share scheme is envisaged as a replacement service for the Lovedean section of this route;

(iii) Services 30/31 and school buses 136, 605, 611, 627, 629, 634, 638: no changes, but note that all suffer from cost increases;

(iv) Service 42: newly contracted service to replace the commercial deregistration affecting Catherington and Clanfield;

(v) Horndean Community School buses 635, 636 and 637: newly contracted services to replace commercial deregistrations. Discussions are continuing with operators to secure best value for these services; a 'yellow bus' type of operation is also being actively investigated for the longer term;

(vi) Services 94 and 95: placed with the new entrant, Accord Southern, who offers worthwhile enhancements at competitive prices;

(vii) Services 410 and 621: contracts extended and may eventually be replaced by Leigh Links; and

(viii) Services 32/33 and 34: to be withdrawn and partly replaced by shared taxis.

10.13 As mentioned above, a number of service enhancements has been secured after suggestions received during the consultation process. Details are as follows:

(i) Service 36: serves new neighbourhood in Bedhampton as per local request;

(ii) Service 38/38A: extra homeward journey at time requested by Parish Council;

(iii) Service 45B: extended to Queen Elizabeth Country Park in summer months at minimal cost;

(iv) Service 94: frequency increased from hourly to half-hourly at no extra cost;

(v) Service 95: diverts to call at new neighbourhood as requested by Parish Council; and

(vi) Services 94/95: upgrade to low-floor vehicles, if agreed, at an additional cost of £21,400 per year, ie £132,800, instead of £111,400 for high-floor vehicles. This cost (£21,400) is to be found from the £100,000 agreed for new initiatives.

10.14 A table is attached as Appendix 2 showing how the overall network will change in terms of contract numbers, contract costs and operators. The following notes are provided for guidance:

(i) the first three columns show service details, contract reference and annual costs. "Was com" means that the service was operated commercially;

(ii) the central column (headed S/Quo £) shows the quoted price for maintaining an identical service, where known;

(iii) the next two columns show the new contract number and price. Where the contract runs for less than 12 months (from 2 June 2002) a pro-rata price is shown. Where a combination tender price has been accepted, this cost is shown in the first entry only and "0" is shown for subsequent entries; and

(iv) the comments column shows the new operators: COB = Stagecoach Coastline; PRO = First Provincial; ACC = Accord Southern; EMD = Emsworth & District. Unsuccessful bidders were Ray Dunn Coach Travel and AMK Chauffeur Drive.

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