Archived decisions

Contact: Keith Willcox, ext 6997 email: [email protected]

1. Summary

1.1 This report sets out proposals for managing saving targets on the 2007/08 and 2008/09 bus subsidy budget. Details of services affected are set out in the attached appendix.

1.2 This decision will enable transport services which give access to employment, education, health, retail and leisure facilities for the widest section of the community, thus enhancing well-being, whilst containing expenditure within the budget available.

2. Recommendation

2.1 That in order to manage the 2007/08 and 2008/09 saving targets on the bus subsidy budget, the following measures be implemented:

3. Introduction and Background

3.1 The need to provide funding for bus services which are socially beneficial but not commercially viable has been recognised in law for over 40 years. Since deregulation of bus services, in 1986, it has been required that local authority support is specifically targeted at particular journeys or services where need is identified, but which cannot be run profitably, rather than meet losses across a network as a whole. Although more sophisticated measures have been developed to evaluate where support should be provided, rising costs, reduced patronage due to demographic and economic changes, and often lack of competition in the supply of services means that costs are rising at a level several times greater than Central Government funding to local authorities.

3.2 Hampshire is a large and diverse county, relatively affluent with pockets of deprivation, and above average car ownership, journey to work length and elderly population. Only 10% of the county is classified as urban yet this is home to 87% of the population. Road traffic is forecast to grow by 40% by 2026. This provides particular challenges for conventional passenger transport.

3.3 The majority of bus services, some 70%, are provided commercially by a range of different operators. People are often unaware that the County Council has no control over the frequency, fares or vehicles used on these services, though the Council does work with operators to develop the busiest routes through the Quality Bus Partnership (QBP) process. The County Council funds the remainder of services to varying degrees and specifies timetables, but generally fares and vehicles are left to the operator. One outcome is that the public are often unaware of the County Council's involvement unless service reduction or withdrawal is proposed. This perception must change.

3.4 Against this background the County Council has achieved a number of successes. Passenger retention year on year is 98.03% compared to 97.2% for England outside London. This is due in large part to the success of QBPs which now cater for 27% of passenger journeys and have led to passenger growth of up to 35% on these routes.

3.5 There are 310 bus services in Hampshire provided by 30 operators using 700 buses which cover 34 million kilometres and carry 27 million passenger journeys a year. They serve 11 bus stations and over 8,500 bus stops. The County Council funded the £1.6 million Havant bus station opened in 2006 and over 100 bus stops were upgraded across the county. The County Council funds some 200 services in whole or in part at a cost of £6 million per year. These account for 28% of mileage and 1 in 6 passenger journeys. Forty-five are rural services with a further 33 serving rural areas as part of interurban routes. This helps combat rural isolation. In addition, there are 12 Cango services and 8 car share schemes. A total of 48% of bus subsidy funding goes to `main-day' services with other funding going on peak-time, off-peak, evening or Sunday services, or bespoke registered local bus services.

3.6 Every day, bus services paid for by the County Council take around:

(i) 7,000 people shopping;

(ii) 4,000 people to social activities or medical appointments;

(iii) 3,000 people to work; and

(iv) 2,000 people to school or college.

4. 2007/08 Budget

4.1 The Revenue Budget for 2007/08, 2008/09 and 2009/10 was considered by the Policy and Resources Policy Review Committee on 1 February 2007 and the Executive Member for Environment on 16 January 2007. The provisional corporate revenue budget guidelines for 2007/08, 2008/09 and 2009/10, approved by the Cabinet in September 2006, included an additional sum of £6 million for Adult Services, reflecting the continuing impact of demographic factors on the cost of providing these services. The majority of this increase is to be met from an unallocated contingency of £4.9 million in the provisional 2007/08 County Council budget, leaving a shortfall of £1.1 million which has been applied across all other service budget guidelines.

4.2 The Environment Service's share of the budget guideline redistribution is £244,000 in 2007/08, rising to £495,000 in 2008/09. Savings of this order would need to be found from reductions in front line services as there is no further immediate capacity to make further savings with staffing and support cost budgets.

4.3 Having reviewed options for reductions against the three main service areas of passenger transport, highways maintenance and discretionary environmental services, it was considered advantageous to manage the impact of the budget guideline redistribution by looking for savings through a review of passenger transport support.

4.4 It is proposed to fund the budget redistribution top-slice by removing support for some bus services in September/October 2007 which would realise savings of around £500,000 (precise figures can only be obtained when matters are concluded). By making one reduction in September/ October 2007 (half-way through the 2007/08 financial year) it will address the budget pressures for both financial years 2007/08 and 2008/09.

5. Approach

5.1 Reducing a £6 million revenue budget by £500,000 is a challenging exercise. The approach undertaken was to consider all areas of the bus subsidy budget. This included:

(i) Sunday services;

(ii) weekday evenings;

(iii) weekday day-times;

(iv) ferry support (Hythe ferry and Hayling ferry);

(v) Cango services; and

(vi) bespoke registered local bus services which can be used for any member of the public, but are specifically designed for non-entitled schoolchildren.

5.2 Following an internal review and taking account of the overall value for money, accessibility to services and need, it was considered that three areas of the existing budget, Sunday services, weekday evenings and weekday day-time services, represented the most appropriate areas to focus on.

5.3 The support to ferries (£45,000 per annum) along with funds from Southampton City Council and Portsmouth City Council generally represent cost effective support and is important in assisting with reducing traffic congestion, by allowing shorter and more direct transport provision by water. Cango services account for £276,000 per annum from the bus subsidy budget, out of a total of £582,000 (which includes home to school transport funds and contributions from other local authorities). These services provide flexible transport provision in rural areas and in many instances provide for social lifelines to the elderly population. Reductions in ferry support and Cango were not considered as the most viable services for rationalisation and were discounted for review.

5.4 Finally, the bespoke registered local bus services (as in 5.1(vi) above): over £600,000 per annum is spent on these across the county. The vast majority of these services are very cost effective and play a key part in the operational timetabling of bus company commercial services. Whilst being initially considered, it was necessary to balance against the implication of the new Education and Inspections Act 2006 which provides for more choice of schools for parents in receipt of Working Tax Credit or free school meals and it was therefore decided to retain all these services.

5.5 Withdrawal of Sunday, weekday evening and those weekday day-time services where rationalisation is possible is least likely to affect people's essential journeys to education, shopping, work or healthcare, and will therefore least affect the County Council's accessibility scores using the Department of Transport's accession model.

Sunday Services

5.6 On Sundays the need for travel is generally reduced due to the limited number of facilities being open/available. This reflects the lower patronage figures generally on Sundays. However, due to the success of QBP routes across the county, it is considered that the better Sunday day-time services that operate with subsidy on QBP routes should be retained. The less well-performing Sunday services, in terms of value for money, are proposed for deletion, together with all Sunday evening services. This equates to a value of £107,108; the attached appendix lists the services.

Weekday Evening Services

5.7 Similarly, the need for travel to such facilities as work, education, retail and health is generally reduced than compared to 8 am-6 pm day-time activity. The proposal here is for the less well-performing services, to the value of £280,632, to be deleted. The appendix lists the services. Again, the services which will remain require a lower subsidy per passenger.

Weekday Day-time Services

5.8 These services generally carry more passengers and meet basic needs for travel to work, shopping, education and healthcare. However, close review of the contracts concerned reveals a small number of routes where rationalisation is possible whilst maintaining facilities for the majority of passengers, either at alternative times on those services or on an alternative route. Most of the affected passengers will still be able to make their journey. For example, an off-peak shopping journey can be made an hour earlier or later than at present, or passengers may have less choice of return buses. The point is that whilst day-time services meet more journey purposes than evening or Sunday buses, under these proposals there is an alternative for the affected communities. The proposals are listed in the appendix and would realise savings of some £121,563 per year; details of the alternative services are listed alongside these.

5.9 Travel patterns and levels of use change over time and as some routes become more popular, others become less well used. The reductions in weekday day-time services are prudent housekeeping measures in response to this trend. To enable the transport network as a whole to adapt to changing travel needs, the County Council has introduced the passenger transport area review process. Each area review has engaged widely with the local community and considered access to services and community profile, and whether regular or flexible transport could best match the changing needs of residents, whilst at the same time ensuring that where funding is needed this is affordable within the context of available budget provision.

6. Impact Assessments

6.1 It is considered that the actions outlined above should not have any detrimental impact on equalities or race discrimination.

6.2 The review showed that, for a given level of funding, travel needs for different groups at different times of day could be best met by concentrating expenditure on the main day-time services, when most users, of all ages, with or without disabilities, travel for the majority of journey purposes.

6.3 The County Council is specifically required to have regard to the needs of elderly and disabled passengers. Such people tend to travel less in the evenings. It is considered that the mix of services proposed for withdrawal safeguards their interests as far as practicable within the available budget.

7. Conclusion

7.1 By implementing the measures outlined above, the 2007/08 and 2008/09 budget will be balanced.

1390Rpt/KAW

APPENDIX

Services Proposed for Withdrawal

Sunday Services

Weekday Evenings

Weekday Day-times