Contact: Martin Robertson, ext 6997

1. Summary

1.1 This report advises the Policy Review Committee of the draft Bus Strategy which has been prepared for consultation with stakeholders. The report includes information on the background to this document, an overview of the content, the key issues raised and the timescale for consultation and approval. Members are invited to comment on the draft and a number of key issues are highlighted on which views would be particularly valued at this stage.

2. Background

2.1 The production of a Bus Strategy is a requirement of the Transport Act 2000 under Section 110. This requires the County Council to set out its approach to improving bus services, and show how this work relates to the County Council's wider transport priorities as demonstrated in the Local Transport Plan (LTP).

2.2 To meet this requirement, work has been undertaken to bring together all the County Council's work in relation to the bus network, and to relate these to various policy issues and performance standards, at both corporate and departmental level. The draft Strategy, therefore, draws both on the results of the Best Value Review in this service area, which was completed in 2001, and on the County Council's commitments in respect of the LTP and the Public Service Agreement (PSA) on buses. A copy of the draft Bus Strategy is attached as an appendix.

3. An Overview of the Draft Strategy

3.1 The draft Strategy is built around a vision of how the bus network is likely to develop in the period to 2010. This suggests that there will be three distinct sectors in the bus network:

(i) Primary: consisting of highly commercial services carrying the majority of bus passengers, suitable for Quality Partnership (QP) development and/or key in strategic transport terms. Services are strongly marketed and key to meeting modal shift targets. Investment will normally be capital in nature, and be about improving infrastructure and facilities. Revenue support will be minimal, especially where QPs exist.

(ii) Secondary: other regular bus services, often local in nature and either marginally commercial or supported by the County Council. Services make some contribution to modal shift and social inclusion, but are unlikely to justify major investment through a QP. Investment will involve revenue support, although there may be some capital expenditure where schemes justify this, particularly as `spin-offs' from work on primary routes.

(iii) Tertiary: other services, often infrequent, which link into the other two levels, particularly with primary services. They will often serve rural areas, but also some more isolated residential areas in a more urban setting. Services exist primarily to ensure social inclusion, although they may contribute to modal shift by avoiding the need for car ownership. Such services will almost always be supported by the County Council. They will not necessarily be operated by a conventional bus, but by the most efficient form of public transport possible, such as smaller vehicles, including community transport vehicles and taxi-shares, and will be demand-responsive wherever possible.

3.2 The Strategy sets out actions and targets for each of these three sectors.

(i) Primary: action will be focused on getting the most from the relationships with commercial operators through QP development in a strategic network, which is defined. This work will be backed up by direct marketing aimed at potential users of certain QP routes. The key targets here are the PSA commitment to achieve a 4% growth in bus usage against 1999/00 levels by March 2005 and the LTP target to achieve a 10% growth in use by 2010.

(ii) Secondary: the County Council will be seeking to maximise value for money obtained from this sector of this network through integrated planning of services and tendering arrangements which maximise value in an environment where operators have an incentive to perform. Here the target is to ensure social inclusion in a cost-effective way. Criteria will be revised to set minimum and higher level service levels for communities together with financial and usage criteria for service support. Opportunities will be taken to build in features that are likely to add value in terms of modal shift.

(iii) Tertiary: the emphasis will be on innovation and the provision of demand-responsive solutions which aim to meet similar targets as for the secondary sector but in a more flexible and efficient way. An emphasis will be placed on integration with the other tiers of the network.

3.3 The Strategy is supported by the inclusion of contextual information relating to legislation, Government policy, the County Council corporate strategy, land use and transport planning. There is also an explanation of the commercial sector, the current pattern of supported services and the outcomes of the Best Value review.

3.4 Finally, the Strategy includes a series of actions in other areas of passenger transport activity which will have an impact on the performance of the bus market, including South Hampshire Rapid Transit, rail services and infrastructure, community transport, ferry services, concessionary fares and workplace travel planning.

4. Key Issues Within the Strategy

4.1 A number of key issues need to be drawn out from the Bus Strategy as drafted, these being:

(i) The Strategy places emphasis on the achievement of progress towards the dual aims of social inclusion and modal shift, behind which there is underlying tension. The results of the Best Value review led to an Improvement Plan which highlighted the need to achieve social inclusion, but to do so in a way that improves value for money, standards of service and employs innovative ways of providing for transport needs. The review also concluded that modal shift was an important secondary aim, but subsequently the County Council's commitment to the PSA target for buses has strengthened the need to make progress towards this area over and above the targets included in the LTP.

(ii) This tension will need to be recognised as the Strategy is implemented. To an extent the two aims do support each other. For example action on route improvements, mainly designed for modal shift reasons, will often make the route more accessible and therefore inclusive, and likewise support for services in the secondary and tertiary categories do make some contribution to modal shift. However, there will be a need to balance priorities and budgets over time on the basis of the regular review of progress towards targets. In particular, the PSA target has implications for the Capital Programme which will need to be addressed during 2003/04 and beyond.

(iii) In the short-term considerable emphasis needs to be placed on achievement of the PSA for bus usage. The results so far are disappointing with bus usage being over 2% down in 2002/03 over 1999/00, although the figures to date do not reflect the result of considerable progress on QP schemes over the past year. The situation is made more challenging by the fact, uniquely in terms of PSAs, that the County Council is seeking to have an impact in a service area which is almost entirely provided by commercial operators, either as a business venture or through contract arrangements. This means that effective partnership is absolutely key and that there is a need to `read the market' as well as possible when making decisions in relation to the Strategy implementation. It does mean however that there is risk and uncertainty in meeting targets in this area, and there is no direct link between investment and usage.

(iv) The Strategy refers to the setting of target service levels for communities to allow a more objective assessment for service support, together with more robust financial criteria. There are two aspects to this change that will require particularly careful management during the transition to the new targets over the next few years. The first is the need to be very careful in the setting of the minimum levels to make these useful in meeting communities' needs, but at the same time avoiding excessive new commitment. Secondly, where services fail the new criteria there will probably need to be a transitional period in terms of service provision alongside the investigation and introduction of low-cost alternatives.

(v) The Strategy originally focused on developing criteria for the supported network, largely in rural bus services. Whilst this is still appropriate and work has been completed for the Strategy, the growing emphasis both on social inclusion in urban areas and modal shift has led to the perception of a need to develop targets for urban areas, ie areas outside the parish system. Whilst services here are predominantly commercially operated, there is still a case for developing minimum and aspirational criteria to guide the County Council's QP work and identifying `hot spots' where there is a need to work with incumbent operators and other partners to develop the network. Steer Davies Gleave is devising a methodology for developing criteria based on the accessibility targets suggested by the Social Exclusion Unit and, initially, is applying this to Basingstoke before rolling-out to the rest of the urban areas in the county by July. Such work has to date only been developed in a very few authorities, including Leeds and Greater Manchester, so Hampshire would be taking a lead in shire counties if criteria of this nature were adopted.

(vi) The Strategy outlines plans for the roll-out of the CANGO network and other demand-responsive services. It refers to the need for both pump-priming of new schemes and ongoing costs of revenue support. At present there is great enthusiasm for this approach to rural transport provision - amongst Members, officers, and transport users - and the results for the existing services demonstrate that a step change in rural transport can be achieved. There are, however, significant ongoing costs which will increase for 2004/05 and beyond, only some of which will be met from increased fares revenue and diverted funding. A forecast for rolling-out the approach is being developed at present and will be available for both the 2004/05 budget process and the 2004 Rural Bus Challenge competition.

4.2 Arising from the issues outlined in paragraph 4.1, Members' views on the following questions would be appreciated:

(i) Does the Strategy offer a way forward in terms of pursuing the aims of social inclusion and modal shift in a balanced manner?

(ii) Are the suggested target levels for rural communities appropriate and realistic?

(iii) Should there be transitional arrangements in situations where current services fail the new criteria, and if so for how long?

(iv) Is the suggested approach for developing criteria for urban areas supported?

(v) Should the roll-out of the CANGO demand-responsive approach be continued and, if so, how should the on-going costs of such development be met?

5. Timescales for Consultation and Approval

5.1 The current timescale for the Strategy is as follows:

Draft to Environment Policy 21 July 2003

Review Committee

Draft to Executive Member for 23 July 2003

Environment

Draft despatched to consultees by 29 August 2003

Consultation period ends 31 October 2003

Final draft to Executive Member 23 January 2004

for Environment

Recommendation

That the Policy Review Committee be invited to comment on the draft Bus Strategy, and in particular on the questions raised in paragraph 4.2.

8084/MR