I. INTRODUCTION

  National Express Group welcomes the opportunity to comment on the Government's White Paper on Transport—A New Deal for Transport: Better for Everyone, published on 20 July 1998. The document is the most comprehensive statement of transport policy for many years. It provides many opportunities for the industry, local authorities and other agencies to work together to increase the use of public transport services and, as a result, to help reduce congestion and pollution, achieve greater social inclusion and stimulate stronger economic performance.

  The White Paper has been published against a background where for almost 40 years, transport policy has largely focused on investment in roads on a predict and provide basis. It is therefore necessary to acknowledge that it will take a good few years to redress the imbalance that this has caused in relation to public transport infrastructure, particularly that of the railway industry.

  National Express Group responded in detail to the White Paper consultation process during 1997 and is pleased to note that many of its suggestions are reflected in the final document. The Group is also pleased to note:

—  The overall objective to encourage a modal shift from car to public transport and the use of target setting to reduce car use.

—  An approach which combines traffic restraint and congestion charging with measures to improve public transport—the "carrot and stick" approach.

—  The linkage of land use planning with transport provision and environmental target setting.

  The Group particularly welcomes:

—  The creation of a Strategic Rail Authority, and looks forward to its early establishment.

—  The acknowledgement that Quality Partnerships between the public and private sector have been so successful, both in forging stronger, more effective relationships between operators and local authorities and increasing patronage. A good example of this is National Express Group's "Showcase" quality partnership between Travel West Midlands—the Group's core bus operation, Centro—the Passenger Transport Executive, Birmingham City Council and Walsall Council. This has combined modern vehicles and improved journey information with new infrastructure and priority measures. It has delivered faster, more reliable journey times and patronage on the first "Showcase" route has increased 20 per cent. Three further Showcase routes have been implemented in the West Midlands recently.

  While the Group considers that establishing Quality Partnerships on a statutory basis will be beneficial, its own experience demonstrates that these projects can be successfully introduced, extended and made to work without legislation and should be given the fullest support now, in advance of statutory status.

II. NATIONAL EXPRESS GROUP

  National Express Group is one of the UK's largest providers of high quality, value for money public transport services. In 1997, 500 million passengers used its express coach, bus, airport and passenger train operations.

Philosophy

  The Group's business philosophy is to increase passenger numbers on all of its services. In addition to operating to the highest standards of safety, it is dedicated to improve continually the quality and performance of its services, establish more quality partnerships and achieve further integration of its wide range of services.

Investment

  This approach is backed by considerable investment. This includes capital expenditure for new vehicles, rolling stock, routes and other products. It also involves considerable investment in the provision of increased service frequencies across all of its modes. This investment is aimed at directly benefiting existing passengers and at making services more attractive to potential users.

  In the three years to 31 December 1997, the Group had invested £54 million in new buses. It is committed to spend a further £30 million by the end of 1998, when it will have introduced 500 new low floor, "easy access" buses, one of the largest networks of accessible urban transport vehicles in Europe. This investment programme has included a fleet of 14 buses powered by natural gas. Following the Government's decision to increase the fuel duty rebate, the Group also ordered 11 high capacity, two-coach articulated buses which will also be in service by the end of 1998.

  The Group has invested approximately £5 million in new coach stations. In 1994, the UK's first new coach station for 60 years—in Liverpool—became operational. This was followed in 1995 by the second—in Leeds, and during 1998 a new facility was opened in Southampton. The Group is committed to investing a further £3.5 million in a new coach station and leisure complex in Birmingham, which is currently subject to planning consent, and is also discussing opportunities to develop new facilities in the city of Manchester and at Manchester Airport.

  Since 1994, new coach routes, increased service frequencies and a wide range of ticketing products have also encouraged contracted coach operators to invest in new vehicles. As a result, the average age of coaches run today has been halved—to two years.

  The Group has also invested approximately £40 million in passenger, cargo and airline facilities at its airports and in October announced that it entered into an agreement with DHL for the development of a £70 million major new air cargo facility at East Midlands Airport. The new operation is expected to create an additional 300 jobs.

  National Express Group has also placed orders for new rolling stock for its train operating companies, worth over £300 million. One hundred and thirteen new trains are on order—46 more than its franchise commitments—which, following delivery during 1999 and 2000, will provide extra capacity for growth, increase passenger comfort, optimise performance levels and enable the Group to double the frequency of service on a number of routes.

III. SUMMARY

  This paper identifies some of the areas of policy where National Express Group has already made a contribution, where it can further assist, and also highlights a small number of potential barriers to the rapid implementation of the policy.

1. Increasing Passenger Numbers

  Action is required by operators to make public transport more attractive to larger numbers of potential users by providing more frequent, more reliable and better value for money services, with good quality vehicles, backed up with better information systems. National Express Group's experience supports the concept of a "virtuous circle" where better services encourage more passengers to use public transport. This, in turn increases profitability and enables further development of services.

  In addition to the Group's work to improve continuously the reliability levels of its services, the paper also provides many examples of integration and increased service frequency initiatives, which are believed to have contributed to passenger growth levels achieved by the Group to date.

2. Integration

  A key element of the policy set out in the White Paper is integration, and National Express Group's strategy is to integrate services within the Group as well as working to provide co-ordinated services with other operators and service providers.

  Integration initiatives include a significant integrated bus/rail ticketing and service initiative in the West Midlands, led by Travel West Midlands and Central Trains, with Centro, the PTE and 60 other local operators. Passengers in the West Midlands now have access to one of the most integrated public transport networks in the UK and similar programmes have been introduced by the Group elsewhere in the UK.

  National Express Group has also worked hard to provide co-ordinated services with other service providers. This can be illustrated by looking at its approach to regional airports which the Group believes should;

—  Act as transport interchanges.

—  Relieve congestion on motorways in the south east.

—  Act as regional economic catalysts.

3. Service Frequency

  National Express Group has improved service frequently to increase the attractiveness of public transport compared with the car. High frequency services are important in achieving this policy objective, as they;

—  increase consumer choice;

—  make the public transport network easier to understand;

—  make interchange and integration easier for the customer; and

—  provide a service more like the car, which is instantly accessible.

Action Points/potential barriers

  1. Creating a level playing field between road-based public transport modes and the car.

—  Traffic restraint measures and congestion charging;

—  Reallocation of road space in favour of more efficient users;

—  Clear guidance for local authorities to enable effective implementation of new powers;

—  Eliminating incentives to use the car, e.g., company car taxation and free workplace parking.

  2. Speeding the planning process to enable schemes to be dealt with promptly and in the spirit of the White Paper's emphasis on promoting integration.

  3. Clearer guidance on competition in relation to integration. Provision of joint services and coordination of fares and schedules in the interests of passengers should not be treated as prima-facie anti-competitive.

IV. ACHIEVING PASSENGER GROWTH—THE VIRTUOUS CIRCLE

  It is estimated that volume growth of between 5-10 per cent is required in order to have a significant impact on modal shift. According to emerging market research, there are three key factors which determine public attitudes to using public transport. These are frequency of service, reliability of service and attractive fares. Action is therefore required by operators to make public transport more attractive to larger numbers of potential users by providing more frequent, reliable and value for money services with good quality vehicles, backed up with better information systems. However, past experience, both in the public sector, and with some operators, is that managers are better skilled in trimming resources to match declining demand and in improving efficiency by downsizing, but are less imaginative in terms of growing the business by attracting new passengers or encouraging repeat trips.

  National Express Group's experience supports the concept of a "virtuous circle" where better services encourage more passengers to use public transport. This in turn increases profitability and enables further development of services. Initiatives to integrate the Group's services/modes and increase service frequency are believed to have contributed to the passenger growth figures achieved by the Group. For the first six months of 1998 for example, the Group's five passenger rail franchises showed growth in the range of 4.5 per cent-15 per cent, while at East Midlands Airport, passenger numbers were up 13 per cent. While express coaches grew at a more modest 3 per cent and buses at 1 per cent, this masks more significant increases on key routes and are against a long term trend of decline in bus patronage.

  This paper identifies many examples where National Express Group has increased the frequency of its services and of the Group's success in improving their performance levels, including its rail operations. The performance indicators issued by OPRAF identify that punctuality and reliability levels by the vast majority of the Group's train services have been better during the last 12 months than in the 12 months prior to acquisition. OPRAF's last quarterly bulletin confirmed this trend, with ScotRail remaining as "league leader" for punctuality—and still improving, and Midland Mainline remaining as the most reliable TOC. Thirteen of its 15 service groups maintained or improved punctuality while 12 service groups maintained or improved reliability.

  The Group has also introduced many innovative fares initiatives. Many of these activities have targeted the leisure and discretionary passenger market, but it is important to note the data issued recently by ATOC which showed that in real terms, rail fares, including peak fares, have not increased during the past two years.

  Operators are therefore incentivised to continue to improve frequency and performance, as they will be rewarded with passenger growth. However, they cannot guarantee continuous improvements to services without additional assistance from Government in creating a more level playing field between all modes of transport. See Action Points.

Integration

  A key element of the policy set out in the White Paper is integration, and National Express Group's strategy is to integrate services within the Group as well as working to provide coordinated services with other operators and service providers.

  The most significant example to date has been integration in the West Midlands. Travel West Midlands and Central Trains, working with the PTE and 60 other bus and train operators, have taken the lead in developing through and multi-modal ticketing and better co-ordinated timetables to provide seamless services throughout the West Midlands. Bus information is provided at all local stations and bus/rail tickets can be purchased on 2000 buses, while rail passengers can buy low cost add-on bus tickets at a growing network of railway stations. This will be extended to the Midland Metro light rail system, which is to be operated by Travel West Midlands, when it opens next year.

  The Group is also promoting green commuter plans jointly with the District Councils and Centro, following proposals originated by Birmingham City Council. Travel West Midlands offers discounted travel including a half price pass for employees who give up a company car parking space, and also provides information on how to get to work by public transport.

  Outside the West Midlands, ScotRail and Travel Dundee have introduced through ticketing, and there is now through ticketing to towns such as Alloa, Grangemouth and Callander which are not on the passenger rail network. Silverlink has introduced through ticketing with bus operator MK Metro at Milton Keynes, while Central trains has introduced interavailable tickets with Trent buses between Derby and Matlock.

  In terms of integration with land use planning, National Express Group is already expanding its networks to serve new developments or changing travel patterns. Seven new stations and three new services over former freight railways have been opened by the Group in the last year. There are plans for 11 further stations and three new lines over the next three years. The Express Coach network links 1,200 destinations and enhancements are made regularly to meet changing patterns of demand, as bus and coach routes are changed to serve new developments

  In environmental terms West Midlands Travel has introduced the first major urban route (between Walsall and Wolverhampton) entirely operated by easy access buses powered by compressed natural gas. On the rail side, the 113 new trains ordered will all be more efficient in environmental terms than those they replace or supplement, with lower emission levels. Many of the trains operated by Central Trains and ScotRail, most of those operated by Silverlink, and all those operated by Gatwick express are electrically powered.

  National Express Group's actions to provide co-ordinated services with other service providers can be illustrated by looking at its approach to regional airports.

  The Group believes that regional airports should;

—  Act as transport interchanges.

—  Relieve congestion on motorways in the south east.

—  Act as regional economic catalysts.

  As a result of this approach, NEG has:

—  Restructured the network of express coaches around Heathrow and Gatwick airports.

—  Introduced and developed Speedlink coach services—high quality shuttles "interlining" between the UK's major airports.

—  Developed "Flightlink" coach services linking regional airports and rail interchanges.

—  Launched a "Hotel Hoppa" shuttle service for customers of the principal hotels around Heathrow Airport.

—  Is a partner in Airport Travelcard Schemes covering Heathrow, Gatwick and Stansted Airports.

—  Ordered a new fleet of trains for Gatwick Express for delivery in August next year.

—  Extended trains from Birmingham and the East Midlands to serve Stansted Airport direct, avoiding the need to travel via London.

—  Introduced a train service to link Crewe and Manchester Airport.

—  Initiated plans for a multi-modal interchange to link Midland Main Line trains, National Express coaches and local buses with East Midlands Airport.

—  In the interim, introduced a bus link from Loughborough station to East Midland Airport operated by Arriva.

—  Extended more Silverlink trains to link Milton Keynes and Northampton with Birmingham International Airport.

—  Introduced Travel West Midlands buses to and from Birmingham International Airport aimed at encouraging airport workers to use public transport.

—  Opened "airside" ticket offices at the two Gatwick terminals to encourage air passengers to continue their journeys by rail.

—  Is looking with Strathclyde PTE at possible rail access to Glasgow airport.

  In addition to these initiatives, National Express Group, as the lead member of the consortium to manage Eurostar, is looking at running direct Eurostar services between Heathrow Airport and Paris. This objective is to establish Heathrow as an integrated transport interchange of international importance, connecting long-haul air services directly to the European high-speed rail network as well as the domestic rail and coach networks.

Service frequency

  National Express Group has pursued a policy of improving service frequency to increase the attractiveness of public transport compared with the car. High frequency services are important in achieving this policy objective, as they:

—  increase consumer choice;

—  make the public transport network easier to understand;

—  make interchange and integration easier for the customer; and

—  provide a service more like the car, which is instantly accessible.

  Some examples of this are:

—  Doubling of train services on Midland Main Line between London and Leicester to four trains an hour from next year, in line with the franchise commitment. The first new train for this service was rolled out at Derby on 3 November.

—  The planned increase in ScotRail services to provide four trains an hour each way between Edinburgh and Glasgow, and a more frequent service from Fife into Edinburgh.

—  Introduction of Shuttle "turn up and go" services on core routes in the National Express coach network.

—  Increased frequency of Silverlink trains between London and Northampton, which now has four trains an hour.

—  West Midlands "showcase" bus routes, such as Line 33, where strong growth in passenger numbers and investment by the local authority in additional bus lanes has enabled an already frequent service to run even more buses.

—  More frequent "City Hop" interurban services run by Central Trains, such as Birmingham-Derby-Nottingham, now with two trains an hour.

—  Higher frequencies have been introduced on a wide range of other bus and rail routes.

ACTION POINTS

1. A level playing field

  For public transport services to represent a significantly realistic option for potential passengers they must be reliable, frequent and value for money. Action by operators to make road-based public transport services more reliable and attractive to potential users, needs to be matched by traffic management and public transport priority measures. These are largely a matter for Central and Local Government and action will particularly be required on;

—  Allocating powers to local authorities to introduce traffic restraint measures and congestion charging.

—  Further progress with reallocation of road space in favour of the more efficient users including public transport.

—  Clear guidance for local authorities which ensure that these powers are used effectively and without undue delay.

—  Elimination of the remaining incentives to use the car, such as the existing policies on company car taxation and free workplace parking.

  Whilst it is sometimes suggested that such measures bear unduly on the car driver, they are a key contribution to dealing with the fundamental distortion inherent with a road system which is currently free at the point of use. On public transport, payment relates directly to usage, and such modest changes would allow users to start to make more rational decisions about mode choice. Improvements by operators alone, without such measures, will not achieve the degree of modal shift being sought by Government.

  National Express Group would support target setting by Government, cascaded to local authorities, with grants allocated on the basis of value for money criteria which favour policies offering the best benefit to cost ratio in terms of the limited funds available for public transport.

2. Speeding the planning process

  One area of concern, where there may be obstacles to implementation of the Government's policies is in the lengthy planning process which can be required for the development of public transport projects, including new LRT schemes, interchanges and, in some cases, in providing bus access to city centres. Whilst it is appropriate for schemes such as that proposed for East Midlands Airport to be subject to scrutiny by the local planning authority, it is also important that the issues should be addressed without delay. With a passenger rail franchise length of, typically, seven years, a two year planning period, followed by a year for implementation, leaves a maximum of four years to recover the capital invested, and any delay may deter potential investors. In the case of a modest park and ride scheme at Warwick initiated by Chiltern Railways, but which would also be served by Central Trains, the proposal was called in by the Secretary of State and a local public inquiry has recently been held. It is important that such schemes are dealt with promptly and within the context of the desire to promote integration, without imposing the cost and uncertainty of a major public inquiry on the promoter if such investment in integrated transport is to be encouraged. It might be appropriate to include guidance within a Planning Policy Guidance Note to clarify Government policy here.

3. Competition or Choice?

  One factor which can inhibit faster development of co-ordinated services is reflected in the mixed message sent by Government on competition in relation to integration. The Group's acquisitions of Midland Main Line, Central Trains and ScotRail were all referred to the Monopolies Commission. The Group was pleased to note that the MMC acknowledged the benefits being brought to passengers from the range of integrated travel initiatives which have been introduced by the Group in the West Midlands and Scotland since it had been awarded the rail franchises. Co-ordination of fares and schedules in the interests of passengers should not be treated as prima facie anti-competitive. Guidance is needed from DTI and OFT on joint services or through ticketing, particularly in the context of Quality Partnerships. Block exemption for Quality Partnership proposals might be given through the provisions of the Competition Act, 1998.

V. CONCLUSION

—  The White Paper has sent a positive signal to public transport operators which is already encouraging new investment and the expansion of services.

—  The document proposes a subtle range of practical initiatives which, if applied consistently, is likely to achieve more than a fundamental change of policy direction, and to deliver positive results earlier.

—  There is substantial scope for integration to win new business, as is indicated in the steps taken by NEG in relation to Airports.

—  The principal way forward is through Quality Partnerships, with local authorities in the case of buses, or through the Strategic Rail Authority in the case of rail services, which is the most effective way so far developed of linking social and commercial benefits in the interests of passengers.

—  The timescales and risks attached to the planning process tend to inhibit major investment in new transport infrastructure, particularly given the limited term of many rail franchises.

—  To achieve the growth levels needed to secure a significant shift from car use to public transport will require Government to exercise further restraint on car use in urban areas or sensitive rural locations, as well as the encouragement provided by operators in the form of more attractive services.

—  To achieve the integrated system foreshadowed in the White Paper will require a different regulatory approach, where steps towards integration are sometimes seen by the competition authorities as anti-competitive.

National Express Group
9 November 1998