Cost of living crisis – what will the impact be?

In Germany you will be able to buy a pass for all regional and local public transport for nine euros a month for each of June, July and August

Is the cost of living the new Covid in terms of the impact it’s going to have on patronage and travel trends? If it’s too early to say yet what the medium and long term implications of Covid will be, then that’s certainly true of rising energy prices and all the other inflationary pressures. But let’s speculate anyway.

Usually a squeeze on living costs leads to a squeeze on discretionary travel. In other words a squeeze on the very leisure market that has been seen as public transport’s best hope for growth. At the same time the cost of living crisis could lead to a modal shift to public transport – if the public transport price is right. If it isn’t, then electric cars and push bikes could be the main beneficiaries.

Whilst the Department for Transport has focused on encouraging people to make one-off cheap, discretionary long distance rail trips (via its recent sale of discounted advance purchase fares), other countries have gone for something more universal, more bread and butter. In Germany you will be able to buy a pass for all regional and local public transport for nine euros a month for each of June, July and August. Yes you read that right – nine euros on any public transport vehicle (except the very fast ones) for a month. Northern Ireland has frozen public transport fares and the Republic of Ireland has cut fares by 20%.

There could be fares cuts on a more patchwork basis in England too – given that there is Bus Service Improvement Plan revenue funding available for that in some areas. Mayors too are pressing for simpler and cheaper fares. However, it could well be a mixed picture with different modes doing different things at different times – as well as fares rising elsewhere (and often from a high base).

On the other side of the coin the cost of living crisis could also deter measures to raise the cost of motoring as the politics of doing so gets harder still.

Also in the mix are the key post-Covid trends that have still to play out. Concessionary travel remains well below what it was pre-Covid with Covid concerns and changed habits likely factors. The return to the office remains sluggish as the private and public sectors continue to wrestle with where their new hybrid ways of working should land. And as the return to the workplace continues will there be more combining of leisure and work trips as people add on nights out and shopping to the working day? If travel and patronage trends are uncertain then so is the funding. The last tranche of Covid-related funding expires at the end of September – before BSIP and City Region Sustainable Transport Settlement funding kicks in (for those places that get it). It clearly makes no sense to cut bus networks one month and try and build them up again a few months later – so will there be a way of bridging the gap? All in all a messy picture – but that’s the world these days.

 
Return to Planet Freight

Seven years ago I paid a visit to Planet Freight for one of these columns (PT104) off the back of a report we produced called Delivering the Future – new approaches to urban freight. Then I asked if freight is from Mars is public transport from Venus – given the different policy worlds they inhabit. So in seven years what’s changed and what hasn’t?

Seven years ago freight worked on its own terms (stuff got where it needed to be) even if at the same time it didn’t work (lorries kill cyclists and pump out carcinogens). Overall though it worked well enough (and in a commercial and adaptive way) for the downsides to be brushed under the carpet and for government to largely leave it alone. However, last year freight suddenly stopped working so well. The driver shortage meant that stuff didn’t always get where it needed to. This has benefited railfreight which needs rather fewer drivers to move the same tonnage.

Rail freight’s fortunes rise and fall largely with the fortunes of the bulk commodities that it relies on. With King Coal dethroned, aggregates and containers have been taking its place. And yet this still continues to leave many large urban centres and markets devoid of any rail freight whatsoever. For example, Bradford is the seventh biggest city in the country yet it has no active rail freight facilities. This is partly because in the UK railfreight is mainly about a few companies battling it out on cost over who gets to move bulk freight, whereas in countries like Switzerland and Germany they are still investing to ensure that there are more places where you can move smaller amounts of freight by rail. Which in turn helps explain why rail has a much bigger market share for freight in those countries than in the UK.

Over the same period London broke ranks and stopped tolerating the collateral damage from having an ‘efficient’ road haulage sector. Despite the crude ‘lowest common denominator’ opposition of the trade bodies for the sector, London has pressed on with ratcheting up both vehicle standards and enforcement of safety and emissions. The rapid acceleration in the availability of green, safety and logistics technologies is also helping the sector clean up its act (especially for the larger players), however the degree of illegality in the industry remains shocking. In 2018/19 the percentage of Light Goods Vehicles issued with a prohibition on mechanical grounds was 49%, and 70% for overloading. Operating illegally is not only dangerous, it is also unfair competition given the high safety standards that rail adheres to.

Meanwhile, the white van economy continues to grow (further supercharged by the pandemic) – not just for deliveries but also for trade. This in turn has led to several air quality zone plans running into trouble as the costs of making the growing battalions of vans compliant has collided with the politics of not doing so. The rise and rise of the van also has implications for the battle for road capacity and kerb space – something which the bus sector also has an interest in of course.

Driver shortages (people don’t want to spend their nights sleeping in a lorry cab) mean relying on road haulage to the extent we do now looks less practical (and as environmentally unwise as it ever was). This big change in the dynamics of the freight debate makes the case for a more interventionist approach (to freight). Especially given that the kind of nudges we have seen in the last seven years haven’t been enough to move the dial sufficiently towards the less intrusive, greener, skilled and safer sector that is increasingly the norm elsewhere in the economy.

An interventionist approach that would move that dial would have two main elements. Firstly, investment in the capacity of rail freight and inland waterways (including in terminal and distribution sites). Secondly, making road haulage pay its way in terms of its wider safety, road maintenance and environmental costs would help make it safer and greener but also make rail freight more competitive on price. It could also help further accelerate the booming cycle logistics sector. And it could also make economic what currently isn’t – which is more urban freight consolidation centres to reduce the volume and impacts of deliveries by road in urban centres. Perhaps the biggest difference in seven years is that the debate about freight and logistics has opened up more. It is no longer an afterthought at the end of wider transport strategies. But there’s still a big gulf between passenger transport and freight – big interventionist policies on the former are the norm – but not yet on the latter.

Jonathan Bray is Director of the Urban Transport Group

The article first appeared in Passenger Transport magazine.

Bus safety shouldn’t be an afterthought

The National Bus Strategy for England has an opinion about everything; from bus shelters to bus numbers – it knows best. However, there’s one topic where it is curiously quiet. And that’s bus safety. Or perhaps I should say dangerously quiet, given the yawning gulf that now exists between the approach taken in London and Northern Ireland on bus safety and the approach taken elsewhere in the UK. Or indeed, more widely, the approach taken to rail, maritime and aviation safety in the UK compared with bus in Great Britain outside London. In these places, and for these modes, there is a clear across the board structure for safety leadership and a transparent data driven approach to analysis, action and targets for reducing risk and accidents.

For some time we’ve made the case to the Department for Transport for reform to bring the safety regime for buses up to scratch – and that the starting point should be a review of current arrangements to benchmark them against best practice. We got nowhere on this so we’ve sought to fill a gap (that it shouldn’t be up to us to fill) by commissioning such a review ourselves – from Loughborough University’s Transport Safety Research Centre.

The report makes for concerning reading but it boils down to the fact at a national level, we don’t have the data and analysis to drive safety policy on bus, and even if we did there’s no single body to act on the analysis in a coherent and proactive way at the national level. As one of those interviewed for the report said: “It just doesn’t feel joined up.” All of this adds up to a safety regime which is fragmented and reactive rather than coherent and proactive. That’s not to say there isn’t good practice and sharing on bus safety in England, but the under-resourced sum is less than the parts. In my professional lifetime, the DfT has done not much more than tinker with the bus safety regime leaving it to do the best it can with minimal resources.

In effect Transport for London has been left to fill the vacuum on leadership and standard setting on bus safety with its Vision Zero target of no one to be killed or seriously injured on or by a London bus by 2030 and its comprehensive and transparent approach to analysis of risks followed up by programmes to tackle them, from its ground breaking bus vehicle safety standards to its data-led approach to reducing passenger injuries due to slips, trips and falls. And from advanced emergency braking to its in-depth work on the sounds that electric buses can make, it’s TfL that has become both the defacto national research and development centre and leader on bus safety.

Meanwhile, it seems that if there is to be any significant change in the safety regime for buses in GB outside London then it will be a by-product of other forces at play. The government’s enthusiasm for creating a framework by which autonomous vehicles can operate (alongside the stalling in road casualty reductions more widely) has led to a consultation on establishing a road collision accident investigation body to bring roads more into line with the body that exists for rail.

This is welcome. But for the investigation branch to work we also need something similar to the other safety bodies that rail has – so while the Rail Accident Investigation Branch investigates crashes, the Office of Rail and Road is the health and safety regulator and enforcement authority for the railway. Meanwhile the Rail Safety and Standards Board (RSSB) enables and informs safety leadership. Part of its job is to gather data to understand better how the industry is performing and enable it to identify emerging issues as early as possible, so action can be taken. The work of the RSSB allows the rail industry to work together as a single system to reduce risk as much as possible, and enables better safety decisions to be made, and means that safety investment can be targeted to where it is needed most. It’s the proactive, looking ahead function that RSSB provides for the rail industry that is missing for bus in particular.

If there were to be an overarching safety body covering bus then there are pros and cons around whether this could be wrapped up within a national transport safety body, or whether there could be a roads or bus specific body. But the Loughborough report found support for such a body in principle. If such a body had the capacity to receive a much wider range of accident, risk and incident data than the Driver and Vehicle Standards Agency currently does – and was able to analyse it and act on it – the safety regime for bus would start to look more like good practice.

The National Bus Strategy has dragged many elements of poor practice, and areas of bus provision which need to improve, into the spotlight but left the bus safety regime to stagnate in the margins. But shouldn’t any responsible strategy for any industry have improving safety as a core objective rather than barely an afterthought?

Buses are coming home

Wales (population 3.2 million) wants all its buses franchised. Greater Manchester (2.8 million) and Liverpool City Region (1.5 million) are well down the road. West Yorkshire (2.3 million) and South Yorkshire (1.4 million) have triggered the process. London (8.9 million) and Northern Ireland’s (1.9 million) buses are already under public control. That’s nearly 22 million people in areas of the UK where bus services are under public control or somewhere on the road to it. Meanwhile, Stagecoach has thrown in the towel on trying to block bus franchising in Greater Manchester and the secretary of state for transport, Grant Shapps, has said how delighted he is that franchising in Greater Manchester is going ahead and that it’s the way forward.

After facing years of disdain for vigorously making the case that this key public service should be run in the public interest I look forward to the next stage with everyone saying they were never really against it in the first place. Though reading the Stagecoach (of ‘we would rather drink poison’ fame) press release on their failed legal challenge it looks like this phase has started already. As they say – everything comes to he who waits.

I’m an Edinburgh fan myself

Having spent a few days in Edinburgh I’m an even bigger fan of Lothian buses than I was before. Every single bus feels like it’s brand new. I’ve never ever been on a grubby one. I love the municipal dignity of the fleet – both the interiors and the exteriors. Maroon for urban, green for rural. And now you can tap and go that’s the last remaining layer of hassle removed. It’s the only city I can think of, other than London, where the bus feels like a mass transit system (especially with those tri-axle double decker giants) used by all sections of society. Get the basics consistently right and you have an urban bus network that people will respond to.

Jonathan Bray is Director of the Urban Transport Group

This piece originally appeared in Passenger Transport Magazine

An unhappy new year for public transport?

It’s been a shaky start to the new year for public transport and it could get a lot rougher yet.

Let me count the ways…

  1. The ‘work from home where you can’ advice has hit public transport’s core commuting market hard. Meanwhile the pre-Christmas binge on shopping and socialising which kept public transport patronage afloat looks like it has been followed by a hard January comedown
  2. Pre-Omicron, driver shortages were a serious problem for bus services with operators taking different approaches to managing them (in terms of whether the service reductions are short term or long term and whether they are focused on frequent routes or less frequent routes). Operators were also taking different approaches to how much effort and resource they were putting into recruiting staff. 

    Also, and unlike for road haulage, where the DfT has a proactive strategy for addressing multiple aspects of the driver shortage affecting the industry, there was no equivalent strategy from DfT for the driver shortage crisis on the buses. This has now been exacerbated by Omicron and associated self-isolation. Industrial action is also on the rise.
  3. Additional COVID funding support for urban public transport for public transport outside London runs out by the end of March and it’s not clear whether that funding will be sufficient given Government won’t share with us the patronage projections on which it’s based (which may prove to be optimistic).
  4. HMT standard practice is to take any decisions on additional funding right to the wire, however local tansport authorities have to set budgets well before the end of March and plan any service changes that may be required.

All of which points to operators moving to rebase commercial networks at a significantly lower level than they were pre-pandemic (and some are now starting to break cover on this). The onus then passes to local transport authorities to step in and pay private operators to keep services running. But local transport authorities themselves have limited resources to do so and the prices that private bus companies are quoting for keeping those services running have soared (price increases of 50% are not uncommon). This reflects both rising costs and operators taking advantage of low levels of competition for tenders in order to name their price.

The funding challenge for transport authorities with large light rail systems is particularly acute given that most of the costs of light rail systems are fixed so significant cost reductions are difficult to achieve (short of closing them down). They also have legal and fiscal responsibilities for their light rail systems which they do not have for bus services. So, if light rail funding isn’t extended beyond March 2022, then transport authorities may be forced to make savings from spending on bus in order to keep their light rail systems operational.  

It wasn’t meant to be this way. The national bus strategy (‘Bus Back Better’) launched in March 2021 envisaged a new dawn for buses with more, cheaper and greener bus services everywhere. It was predicated on £3 billion of additional ‘transformational’ funding and on the tacit assumption that the pandemic would soon be over. However, the pandemic is still here and in the November 2021 Spending Review the Treasury didn’t countersign the £3bn cheque that Number Ten wrote. We still don’t know how the bus money that the Treasury did agree to will be divided up. If more of it isn’t purloined for additional COVID revenue support, then this additional investment will be a shot in the arm for bus services in the areas that benefit – including through more bus priority schemes.

But the danger is that this may be too little too late as the first half of 2022 sees another lurch downwards in the scale and extent of bus networks – following on from years of pre-COVID decline and the hammer blow of the pandemic itself. There’s still time (but not much) to avert this. It could be done through devolving adequate funding to transport authorities to support networks in a planned, integrated and cost efficient way (rather than allowing the DfT to continue to take the path of least resistance and route hundreds of millions of pounds of COVID funding to private operators so that they can manage the decline of bus services in a way that serves their own commercial and corporate interests). It would also require a national strategy for tackling driver shortages as well as pressing the fast forward button on allocating the funding promised in the spending review to improve bus services so transport authorities can crack on without further clawback and second guessing from Whitehall.

Time is running out though.

Jonathan Bray is Director of the Urban Transport Group

Read more about the threat to public transport in our city regions in our briefing.