APPENDIX 1

The context of this Bus Strategy

This Appendix summarises the wider context within which the County Council is seeking to impact and includes the following areas:-

_ Legislation

_ Government policy

_ Corporate strategy

_ Land use and transport planning

_ Public transport Polices

_ The bus market in Hampshire

_ Current pattern of supported services

_ Best Value reviews of passenger transport

(i) Legislation

The County Council has a duty under Section 63 of the Transport Act 1985 to secure

appropriate public transport services to provide for public transport requirements not met by

other services. The reference to 'appropriate' services leaves each County Council with the

responsibility of deciding on the extent of intervention and therefore the level of support to

be given.

The Transport Act 2000 updated the policy framework at a national level. The Act does not

substantially alter the regulation of passenger transport but did give local authorities

additional powers, especially with regard to passenger information and the formation of

quality partnerships with operators. The Act also required the local authority to produce a

Bus Strategy which should set out the Council's approach to improving bus services and

particularly how this work relates to the Council's wider transport priorities.

(ii) Government policy

The Government currently has two main priorities for bus services, one of which is further

developed than the other.

The first priority is to increase the use of bus services as an alternative to the private car.

Local authorities were encouraged to include schemes that assist buses in their five year

LTP submissions in 2000 and this is now being reflected in a range of bus corridor

improvements, normally achieved through Quality Partnerships, which are coming on

stream both in Hampshire and elsewhere. In July 2000 the Government set a

target of achieving a 10% increase in bus usage by 2010. This national target is a little

misleading since the entire increase can be expected to be achieved by growth within

London alone where there has been an increase in service levels together with measures to

assist buses and the recent introduction of congestion charging. In 2002, the target was

revised to call for a 12% increase in usage by 2010, but now also includes passengers on

light-rail services in addition to bus services, several of which will be introduced during the

period covered by the target and all of which are by their nature likely to generate

considerable passenger growth. The overall target, therefore, still appears comfortably

achievable in London and belies the fact that outside London passenger numbers are either

growing very slowly or are still in decline.

The second priority relates to ensuring social inclusion. This priority has gained in

importance since the middle of 2001 with the formation of the Social Exclusion Unit within

the Cabinet Office. In February 3003 the Unit produced a report which makes a clear case for the fact that problems with transport provision can reinforce social exclusion. The report recommends a new framework of `accessibility planning' which will be built into the next round of Local Transport Plans starting in 2006 and which will be led by local transport authorities. At the time of writing, the Government response to the final report is still awaited, however, it is likely that this issue will gather momentum during the period covered by this Strategy and the County Council will need to adapt the actions proposed accordingly. This priority is also reflected in the Government's Rural Bus Service Grant, Rural Bus Challenge and particularly in the new Urban Bus Challenge competition which allocates funding to schemes that specifically target social exclusion.

(iii) Corporate Strategy

The delivery of the Passenger Transport service is directly linked to the County Council's

Corporate Strategy, contributing towards achievement of each of the six aims in the

Strategy (shown in italics)as follows:

Aim 1 - Provision of a high quality, convenient and accessible public transport network is an

important element in maximising life opportunities.

Aim 2 - Encouraging modal shift by ensuring that the public transport network can provide a

credible alternative to private car usage is a factor in ensuring stewardship of the

environment.

Aim 3 - Ensuring that the public transport network allows people to effectively and

efficiently meet their travel needs contributes towards achieving economic prosperity.

Aim 4 - Involving communities and other stakeholders in passenger transport issues and

developing schemes with others assists in building strong and safe communities in

Hampshire.

Aim 5 - The development of the Passenger Transport service in line with an agreed Best

Value Improvement Plan is contributing to the improvement of the Council's performance.

Aim 6 - Attention to staff issues within the Passenger Transport Group and to contractual

relationships with transport operators ensures the provision of high quality services to the

public through well trained, developed and motivated staff, including third parties where the

County Council acts as an enabler.

In addition, the service is in particular linked to the corporate priorities of sustainability and equalities. With regard to sustainability the importance of public transport in offering a greener alternative to car use was recognised during the recent Best Value review. The Improvement Plan arising from this review contains outcomes that will improve the County Council's influence over the quality and quantity of commercial services and improve standards for supported services which, in turn, will improve the public's perception of public transport as a viable alternative to the car.

The service has an important part to play with regard to equalities. In the delivery of services to the public there is already recognition of people with special needs. The County Council has adopted an Accessible Transport Strategy which sets out how best to meet the transport needs of older and disabled people. This followed a study and an extensive consultation process. Implementing the strategy fully is an ongoing process which will take a period of years, requiring adjustments to many aspects of service delivery, including bus services.

(iv) Land use and transport planning

The Hampshire County Structure Plan (Review) covering the period up to 2011 has a vision of a prosperous an attractive county where social and commercial needs and the resulting demands fro travel are met in ways that improve the quality of life both now and in the future. The policies adopted reflect a desire to:-

_ Promote sustainable development

_ Reduce the need to travel

_ Make the best use of the existing transport infrastructure for all modes of travel especially public transport, cycling and walking

_ Promote new transport initiatives which are efficient, reliable, regular, safe, clean, comfortable and affordable and which offer an attractive alternative to car use.

_ Look to existing transport corridors and networks as a basis to guide development patterns especially for housing, business, industry and leisure.

The integration between land use planning and transport policy is essential if Hampshire's development is to realize its economic and environmental potential and County's Local Transport Plan (LTP) developed in 2001 reflected these aims and seeks to establish an efficient and effective transport system. The LTP sets out integrated transport policies each with a five-year implementation programme and is linked to the Road Traffic Reduction Act, which requires highway authorities to address high levels of traffic and traffic growth. The LTP acts as a bid to Government to implement the five-year programmes, currently covering the period 2001 to 2006. An important element of these programmes is developing the role of the bus, particularly through partnership working with operators.

To assist in the implementation of the LTP the County Council a framework of nine area transport strategies covers the whole county. Developed in partnership with the district and city councils and other key stakeholders, including transport operators and user groups, these strategies provide a means of taking forward issues on an area-wide basis, co-coordinating a range of measures to meet local needs. The implementation of the programme of work funded through the LTP in relation to the development of the bus network is a key element of the work of the strategies.

(v) Public Transport Policy Review 2000

Aside from the Section 63 duty referred to above the 1985 Transport Act requires the County Council to produce a statement of its public transport policies, reviewed from time to time in consultation with interested parties. The first statement was produced at the time of bus deregulation in 1986. More recently, the review of policy at national level, which resulted in the Transport Act 2000, highlighted the fact that while many aspects of the policies still applied, others required updating. The County Council's public transport policies also needed to be brought in line with the broader transport policies published in the Local Transport Plan. A revised statement of policies was therefore prepared and consulted upon, being approved by the Planning and Transportation Committee in May 2000. The Statement of Policies contains seven key aims for passenger transport as follows:-

1: To make public transport as widely available as possible.

To reduce overall dependence on the private car by improving the availability of public transport as part of an efficient, safe and sustainable transport system.

2: To maximise use of public transport

To encourage the use of public transport and thus make it more viable by co-coordinating integrating and promoting services. This will safeguard their future and encourage further development.

3: To seek innovative approaches to transport provision

To encourage and support the development of a range of innovative means of meeting public transport needs, particularly where more `conventional' services are not available or are unsuitable.

4: To ensure social inclusion with regard to transport

To enable people to exercise choice and participate fully in society by improving access to jobs, training, education, services, social contacts and recreation.

5: To ensure continuing improvements in quality of service

To deliver services to clear standards by the most effective, economic and

efficient means available. To strengthen accountability to local people, and to provide the basis for on-going review of overall quality.

6: To build successful partnerships

To develop healthy partnerships with other areas of local government, the private and voluntary sectors, in order to improve the sustainability and availability and use of public transport.

7: To ensure effective consultation

To undertake a continuing process of consultation and liaison with all parties who have an interest in public transport, such as local communities, the voluntary sector and transport operators, to ensue that action on public transport issues best meets the needs of the people of Hampshire.

For each of the seven aims there are a number of policy objectives which describe how the County Council will go about putting the aims into practice. These are published in the annual Passenger Transport Report.

(vi) The bus market in Hampshire

The market conditions for buses are very relevant to this Strategy in that for the vast majority of the network we are seeking to improve bus services and infrastructure by acting to influence the activities of commercial companies, some of whom are part of national or multi-national companies.

The bus market in Hampshire has changed significantly in the years since the

deregulation of bus services in October 1986 and subsequent privatisation of the National

Bus Company. In the first few years of the new regime there was a high level of

competition with a combination of former nationalised companies, existing coach

operators diversifying into bus service provision and the new entrants to the market. This

competition was evident both on the road and in bids for the operation of County Council

contracts.

The key features of this market, were as follows:-

- Competition on key commercial routes

- Frequent changes to services

- Driving down of industry costs to ensure competitiveness

- Increases in proportion of the network operated commercially

- High level of competition for County Council tenders

- Reduced prices for County Council contracts

These conditions lasted into the early 1990s, but gradually the national market has evolved with a concentration in the hands of three major groups who operate the vast majority of services, supplemented by a few former municipal operators and local regional companies. At the same time the general economic position has improved, meaning that the market for bus drivers has become less favourable, such employment not being an occupation of first choice, as wages and conditions compare unfavorably with many other types of employment. Bus companies have now reached a point where they have `stripped out' excessive costs inherited from the previous nationalised industry. These factors have produced a trend of increasing fares and contract prices and a reduction in services. Since 1997 this had an adverse affect on costs experienced by the County Council.

The key features of the current market are therefore:-

- Little competition for commercial routes

- Relative stability in service provision

- Industry costs rising due to market conditions

- Reducing proportion of the network operated commercially

- Low level of competition for County Council tenders

- Rising real-term process for County Council contracts

The features outlined above are reflected in real term spending trends in Hampshire since 1986/87. Between 1986/87 and 1993/94 local bus service support by 36% whereas between 1996/97 and 2002/03 spending rose by 13%. Around 80% of Hampshire's services are commercial, so such influence and partnership working are crucial to success. Section (vii) examines the nature of the 20% of services which are supported.

(vii) Current pattern of supported bus services

Spending on bus service support for 2002/03 will total approximately £4.5 million, net of

support from District Councils, the latter totaling around £200,000 received from two

Councils, Basingstoke and Deane and Eastleigh. In addition, the Council receives ring-

fenced funding of £1.3 million from the Government's Rural Bus Subsidy Grant. This

funding is spread over 187 of the 220 bus services running in Hampshire, of which 93 are

totally supported and 94 are partially supported. Of the 33 services that are operated on a

wholly commercial basis, only 11 offer a service during weekday, evenings and on Sundays.

The following types of service are supported:

(i) all-day weekday services (including peak hours);

(ii) early morning or peak time (commuters) services;

(iii) off-peak weekday services;

(iv) evening weekday services;

(v) Sunday services; and

(vi) school services for non-entitled children.

Almost half of spending is on all-day operations, but that these represent the best value in

terms of cost per passenger. Peak hour services provided for commuters are the most

expensive, reflecting the higher costs of operation at these times, whereas off peak services

during weekdays, evening services and those provided on Sundays are less costly, these

have similar rates of performance in terms of cost per passenger.

(viii) Best Value

The 1999 MORI residents survey showed that public transport in general, and local bus services in particular, were of great concern to the residents of Hampshire. The need for an improvement in bus services was the second highest concern to residents, after personal safety. This result was instrumental in a decision that the County Council's support for public transport should be the subject of an early Best Value review, as part of the programme of the examination of the Council's services required by the Local Government Act of 1999.

The Review was conducted between May 2000 and January 2001 and was externally inspected by the Audit Commission who reported in October 2001. An important part of the review was focus group work with both users and non-users of public transport, undertaken by a specialist consultant. This work demonstrated the importance of bus services to Hampshire residents, even amongst the non-users, with the fieldwork suggesting that there is evidence that the County Council has an important role to play with regard to public transport and that in most respects it priorities are broadly in line with the expectations of stakeholders and the community. There is, however, plenty of scope for improving the delivery of the service, both as a Council and in partnership with the private sector. The external inspection concluded that the service was `Good' and `Likely to improve'.

The Council needed to consider the key question of: what the level of spending on the

service should be? This issue was considered as part of a separate and subsequent `cross-

cutting' corporate review of transport since it was seen as a wider corporate issue. It was,

agreed that there needed to be an assessment of transport needs to allow an evaluation to be

made as to whether the Council's current level of activity in relation to this service is

appropriate and whether adjustments to provision should be made.

The consultants Steer Davies Gleave have previously undertaken work to assess travel needs

in Hampshire and the extent to which these are met by public transport. This work was

originally undertaken in 2000 to assess the impact of Rural Bus Grant expenditure but is

useful for the development of this Bus Strategy since it involved the consultants using a

travel needs assessment model to build up a picture for each parish in Hampshire. This used

information on population and age structure, car ownership levels and local facilities to

determine the level of need to travel by public transport. The model was then supplied with

data on the public transport services available and it computed whether there were services

available at the right time to the right location. This produced an analysis of the extent to

which services met identified travel needs.