Archived decisions

Contact: Martin Robertson, ext 6997

1. Summary

1.1 On 10 December 2001 this Committee considered the outcomes of the Best Value review of passenger transport. The resolution included referring to the Executive Member for Environment the Committee's concerns that containing the budget might be at variance with corporate aims to tackle social inclusion and promote modal shift.

1.2 This report considers the current budget position for 2002/03 and outlines plans for review of the funding situation this autumn ahead of the 2003/04 budget process.

2. Position for 2002/03

2.1 At the start of the financial year it was forecast that the local bus service budget for 2002/03 would be heavily over-committed, with an initial pressure of £774,000 which could be expected to grow by a further approximately £140,000, based on current experience of tender price rises and commercial service deregistrations. That forecast has, so far, proved reasonably accurate and action has been taken by the County Council to address this issue for 2002/03 in a number of ways:

(i) An approach has been made to district councils with a view to their providing support for local bus services from April 2002. This approach has been only moderately successful in that although Basingstoke and Deane Borough Council has confirmed an increased contribution of £95,000 and Eastleigh Borough Council has continued its long-standing £47,200 this year, no further district councils have provided funding. There is, however, a willingness on the part of some to work more closely on passenger transport issues, particularly where innovative approaches are being progressed, and this is being pursued.

(ii) A series of `good-housekeeping' service reductions within the current policy framework were introduced early in the financial year, making a saving of £184,500 in 2002/03, when taken with the full year effect of economies introduced towards the end of 2001/02.

(iii) The County Council has taken full advantage of the ability to fund 20% of existing bus services from the Rural Bus Service Grant, representing £261,500.

(iv) A separate budget of £100,000 was set aside during the 2002/03 budget process to trial innovative approaches to public transport provision. This funding has been utilised on a series of schemes and will be fully committed by the end of the financial year.

2.2 At the time of writing, the position is that there is a forecast over-commitment of £301,000 on bus service support, which it is intended to meet from County Council balances, for this year only.

3. Position for 2003/04 and Beyond

3.1 The market situation is unlikely to change in the short-term; indeed the cost pressures may deepen. This is a national trend, with the South East being a particular `hot spot'. The Department for Transport has just completed an independent study which shows that tender prices have risen by 20% in real terms in the past two to three years. There has also been an increasing trend of deregistration of commercial services and concentration on core routes. Current estimates for bus service support in 2003/04 show a potential over-commitment of over £600,000 before the results of the regular retendering of contracts, due next year in Eastleigh and Blackwater Valley.

4. Addressing the Principle of Funding Bus Services

4.1 The Best Value Action Plan includes a commitment to examine the level of support and criteria for supporting local bus services. Clearly, with a potential over-commitment of over 10% for 2003/04 and an ongoing trend, there is an urgent need to address the questions of what level of support should be provided, what the criteria for support should be and what other actions should be taken to minimise the impact of market trends. There is a determination to do this ahead of the 2003/04 budget process, and therefore this Committee will consider this subject as its main item on 16 October, following which it will be possible to advise the Executive Member for Environment on this aspect of a proposed bus strategy for the County Council.

4.2 It is intended that the meeting will focus clearly on the key issue of revenue support. The Passenger Transport service within the County Surveyor's Department has only recently been the focus of a wide-ranging Best Value review which was the subject of an external inspection report in October 2001. The outcome of the inspection was that the Audit Commission judged the service to be `good' and `likely to improve'. The Improvement Plan, which was the key outcome of the review, is currently being implemented. A presentation on the key themes of the review was made to Members at the December meeting and an extract from those slides is attached as an appendix. The need to determine the level of support for bus services was a recommendation in the inspection report and has also been highlighted for action during the separate corporate cross-cutting review of transport.

4.3 It is proposed that the meeting on 16 October will be provided with the following:

(i) A report and accompanying presentations which will cover:

(a) legislative requirements;

(b) current Government priorities;

(c) Hampshire corporate policies;

(d) Hampshire County Council public transport policies;

(e) outcomes from County Council opinion surveys;

(f) Best Value outcomes relevant to bus service support;

(g) trends in bus service support over the past five years, both in Hampshire and nationally;

(h) criteria for bus service support - comparative information from other authorities in the South East;

(i) profile of services currently supported and passengers carried;

(j) Hampshire initiatives to address revenue support levels;

(k) a proposed bus strategy for Hampshire, including suggestions on criteria for support for services; and

(ii) evidence sessions from:

(a) representatives of two Hampshire bus operators, one being a national bus group with a Hampshire subsidiary, the other a local `independent' operator;

(b) representatives of another County Council in the South East which undertakes a different approach to service support than that taken in Hampshire;

(c) a representative of the National Federation of Bus Users;

(d) a representative of the Transport Advisory Service to give an independent view of support levels, potential criteria and bus strategy approaches elsewhere in the UK.

5. Preparation for Meeting

5.1 It is suggested that, to make best use of the time available on 16 October, it would be useful if Members could have as much background material as possible in advance. It is therefore proposed that Members will be forwarded the following documents in good time for perusal ahead of the meeting:

(i) Passenger Transport Report 2002 - which includes a statement of current public transport policies;

(ii) Best Value Review of Passenger Transport - Action Plan;

(iii) Best Value Review of Passenger Transport - Inspection Report Executive Summary;

(iv) Cross-Cutting Review of Transport - Action Plan; and

(v) Association of Transport Coordinating Officers - Price and Expenditure Survey 2001.

6. Conclusion

6.1 The Committee is asked to comment on and agree the suggested arrangements for 16 October 2002.

Recommendation

That the suggested arrangements for the meeting on 16 October 2002 be agreed.

7329/MR