• KPMG and Department for Transport Local Bus Market Study

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    • by James Coe
      Policy and Public Affairs Executive

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    KPMG and Department for Transport Local Bus Market Study

    Last week the Department for Transport in conjunction with KPMG released a study into local bus markets in England outside of London.  The wide-ranging report looks principally at the scope for government intervention into the bus market and the levers which local and national government can act on to influence the bus market. This is important with the Buses Bill imminent as this will introduce powers to enable local transport authorities to have a greater say over the shape of their local bus market. Although community transport is not always seen as part of the bus market, if local transport is going to be genuinely integrated from the ground up then we have an obvious role to play.

    The report also looks at current the current condition of the bus market in conjunction with stakeholder objectives for the bus market as a whole, which included interviews with these stakeholders. The Community Transport Association hopes to be involved next time; so the research can talk to, and not just about, community transport.

    The full report can be accessed here: https://home.kpmg.com/uk/en/home/insights/2015/12/local-bus-market-study.html

    What they’re saying

    Since 1985 to the mid-2000s passenger demand for bus services has continually fallen in England outside of London.  Since then, overall passenger demand has remained relatively stable.  This is in spite of increasing fares above inflation across the majority of services.  KPMG suggest that part of this increase is due to increasing diesel prices and tax.

    The report highlights a number of mechanisms available to the government in intervening in local bus markets. Part of the justification for government intervention in local bus markets is that; individual profit motivations discourage service integration, lack of ability for new entrants into the bus market, and an inability for private bus operators to capitalise on the broader economic, social and environmental benefits of their services.

    KPMG suggest that national policy levers available to the government include; taxes and subsidies, statutory concessionary travel, licensing and quality regulation, competition law and best practice guidance. Local policy levels include; the proliferation of supported services, discretionary concessionary travel, targeted capital funding, planning infrastructure and traffic management and highway demand management.

    Community transport is explored where the interviewees were asked to give their thoughts on how remote and marginal services could be better provided and the consensus was towards acknowledgement of the role community transport could play. Some responses did demonstrate a lack of a shared understanding of where community transport fits in, which means the value of our contribution and potential to contribute more in future is not being fully appreciated.

    Finally, while KPMG point to the mechanisms that are available to national government and local authorities in smoothing out market inefficiencies they also suggest that the delicate interplay between other local authority services and bus providers means that market intervention should be carefully considered and carried out in a manner tailored to the specific needs of the local area.

    What we’re saying

    Our vision is of a more integrated transport network built from the ground up. As we have argued elsewhere on our blog that bus deregulation has in part led to disparate services which fail to provide for the full range of needs within local communities and leads to poor economic and social outcomes for some of our most vulnerable people and communities.

    We want to use the new impetus for greater integration arising from the Buses Bill to lead to the community having a greater say over what their local transport is like and, where they can, design their own transport solutions with accessibility and inclusivity built into them from the beginning.

    This means ensuring the community and community-led provision has a place at the table in a meaningful way in any local governance arrangements for partnerships or other integrated models and recognition of social value in any commissioning or frameworks for providers.

    We believe that a concern around the lack of ability for new providers to enter the bus market is important but is part of a wider challenge of integrating community transport providers with other operators. There should be some scope for imaginative and innovative approaches to be designed or offered in an area through franchising– for example, consortium bids and joint franchising between sectors. Starting this summer, the CTA will be working with KPMG to run a series of events looking at how innovation can build from the best ideas about accessibility and inclusiveness.

    Finally, we believe that in spite of pressures on local authority budgets bus travel remains an indispensable service that must be properly funded. There are clear economic and social benefits to bus travel, not just for the passengers themselves, and we hope that research such as this will reinforce that fact.

    Anything else?

    Throughout this month we are running our #lovetransport campaign where we are encouraging our members and supports to share stories of why they love transport.  If you have a story you would like to share you can email James at James@ctauk.org.

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