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.

Party conferences and a crunch point

It felt like the fallow Covid period has reinvigorated party conferences as institutions that before felt like they were in a slow decline. But as the equivalent of Glastonbury for the party faithful they were far busier and buzzier than I was expecting.

The Conservative party conference was a sign of how far the Government has moved right into local transport’s territory with ‘levelling up’ the buzz phrase that nobody could resist saying as many times as possible as at many fringe meetings at possible. Levelling up is still a very baggy concept onto which all sorts of asks, ideas and wishes can be projected. However we are told that more definition will come when the spending review is published. In the meantime Levelling Up Minister, Neil O’Brien defined it on twitter (and on the fringes) as:

  • Empowering local leaders and communities
  • Growing the private sector and boosting living standards, particularly where they’re lower
  • Spreading opportunity and improving public services, particularly where they’re lacking
  • Restoring local pride

All of which is a good fit with the need to invest in and support public transport and active travel – and devolve more decisions over its future. With climate the other big theme of the Conservative party conference there is a big opportunity to ensure central Government funding decisions reflect these priorities. There is now a whiff of the 1970s Heath era for Economic policy – with regional development and industrial policies to the fore. Privatisation and deregulation is no longer an aim in itself (as we have now seen on both recent rail and bus policy). Again a helpful context for the goal of putting public transport networks back together as well as the ideal of a longer term approach to local transport funding.

If you look at the big radical changes (that were unforced by events) on local transport in recent times – none of them originated from DfT and all of them came from a big hitter in another more influential part of Government. So, the last big round of devolution and effective bus franchising powers came from Osborne when he was at HMT and the radical recent bus and active travel strategies came from Number Ten. Michael Gove’s new brief (which covers local government, levelling up and inter-departmental working is therefore very interesting) – as if he wanted to he could do something similarly significant. Although we will have to wait and see as he kept his powder dry at the party conference.

Another notable feature of this years’ conferences was the influence exerted over them by Mayors. Different Mayors have defined themselves in different high profile and characteristic ways as they have taken on the mantle (those that don’t tend not to last). They do this in different ways from Ben Houchen in Tees Valley focussed on delivering some big regionally significant projects (like the transformation of the former Redcar steelworks site and the turnaround of the local airport) to Andy Burnham setting out a timetable for when a fully integrated local public transport can be delivered. But overall there’s a sense now that the Mayoralties have found their feet, and as they roamed around the party conferences they also exerted a magnetic pull on the headlines and discourse that took place there.

The next big events for public transport are the spending review and the COP. The spending review will be a big test of whether there is going to be a significant recalibration of what the DfT does to align itself with the pressing need for both rapid decarbonisation and in realising the ambitious goals of the bus strategy. Or whether inter-city will continue to triumph over intra-city – with a significant share of capital funding still hoovered up by the monstrosity which is the £27bn national roads programme. The other big question is to what extent the Spending Review will enable existing public transport networks to be maintained (through continuing to fill the funding gap left by depleted patronage due to COVID) as a base on which to build the aspirations of the bus strategy. It certainly feels very tight at the moment (particularly for those with responsibilities for light rail systems where HMT are saying there is no possibility of more money post April). Meanwhile our world is also being rocked by two additional phenomena. Firstly cracks are showing in the just-in-time global supply chain and the shaky illusion that we could always get what we needed at declining cost whenever we needed. Stranded containers, empty shelves and soaring energy prices are prime indicators of this. Secondly, aging workforces and workforces who can get jobs they either prefer or can get more money doing (or both) is leading to higher wages and driver shortages. All exacerbated by the persistent inability of DVSA to get its act together. These two trends could both increase the cost of standing still in terms of levels of public transport provision – and further eat into available funding for improvements.

Everything is also made more complex by the fact that we don’t know yet what the new baseline is for public transport demand and whether the trends we are seeing now are transient or permanent. The danger for us all in this situation that we are locked into a debate about whether we want more or less than we had before in terms of public transport provision – rather than taking a fresh look at just what kind of public transport system we need post-COVID but decarbonising world. And therefore what are the main objectives for that public transport system. For example should we shift from an office rush hour driven network to networks that provide a more consistent service across more hours given leisure appears to be where new markets are to be had? Should urban public transport be seen as a universal low fare utility to provide access for all to support levelling up goals? Or should it focus on providing a premium product to attract cash rich, time poor motorists with an alternative they are prepared to use? In the mixer too now is the pressing need to ensure that the organisations that provide public transport should better reflect the diversity of the areas they serve both in the decisions they take and the people they employ. The easy bit is keeping up with the cycle of awareness days on twitter with suitable corporate tweets and vynling up buses and trains. More challenging is to take a long hard look at the data we collect, the way we consult, the planning tools we use to determine the service we provide and thus who it serves and who it doesn’t. Something that has been sharply exposed by two recent events that we have got behind: the Gender on the Agenda events that Landor are running and that we are sponsoring – and the last Urban Transport Next event that we ran on child friendly decision making on transport. Fairness, climate and responding to post-COVID changes in where people want to be when, are the three factors that should be shaping some new thinking about what urban public transport is for. If we don’t get hemmed in by dealing with one short term funding challenge after another – and with local government now in the budget setting process for 22/23 we have already arrived at another crunch point.

Jonathan Bray

A pdf of this article can be downloaded here.

Five things I learned from the party conference circuit…

1.The Government has moved right into local transport’s territory with ‘levelling up’ one of the key themes (and devolution a sub theme) of the Conservative party conference. It’s still a very baggy concept onto which all sorts of asks, ideas and wishes can be projected onto but we are told that more definition will come when the spending review is published. In the meantime Levelling Up Minister, Neil O’Brien defined it on twitter (and on the fringes) as:

  • Empowering local leaders and communities
  • Growing the private sector and boosting living standards, particularly where they’re lower
  • Spreading opportunity and improving public services, particularly where they’re lacking
  • Restoring local pride

All of which is a good fit with the need to invest in and support public transport and active travel – and devolve more decisions over its future. With climate the other big theme of the Conservative party conference there is a big opportunity now to ensure central Government funding decisions reflect these priorities. At the same time there is now a whiff of the 1970s Heath era for Economic policy – with regional development and industrial policies to the fore. Privatisation and deregulation is no longer an aim in itself (as we have now seen on both rail and bus). Again a helpful context for the goal of putting public transport networks back together as well as the ideal of a longer term approach to local transport funding.

2. If you look at the big changes on local transport in recent times – none of them originated from DfT and all of them came from a big hitter in another more influential part of Government. So, the last big round of devolution and effective bus franchising powers came from Osborne when he was at HMT and the radical recent bus and active travel strategies came from Number Ten. Michael Gove’s new brief which covers local government, levelling up and inter-departmental working is therefore very interesting – as if he wanted to he could do something similarly significant. Although we will have to wait and see as he kept his powder dry at the party conference.

3. Different Mayors have defined themselves in different high profile and characteristic ways as they have taken on the mantle (those that don’t tend not to last). They do this in different ways from Ben Houchen in Tees Valley focussed on delivering some big regionally significant projects (like the transformation of the former Redcar steelworks site and the turnaround of the local airport) to Andy Burnham setting out a timetable for when a fully integrated local public transport can be delivered. But overall there’s a sense now that the Mayoralties have found their feet, and as they roamed around the party conferences they also exerted a magnetic pull on the headlines and discourse that took place there.

4. It feels like the fallow Covid period has reinvigorated party conferences as institutions (they were far busier and buzzier than I was expecting) that previously felt like they were in decline.

5. Next up – the outcomes of the spending review and the imperative that the COP talks in Glasgow will give for transport decarbonisation policy and implementation.

Jonathan Bray