INTRODUCTION

  1.  As Head of Transport Services for Lincolnshire County Council, I lead an integrated transport unit responsible for developing and implementing public transport policy and projects, and procuring passenger and fleet transport for the Council as a whole. This includes the procurement of local bus services, home to school transport, special educational needs transport, social services transport, and community transport. The unit was established 10 years ago and was the second of its kind to be introduced in the country.

  2.  In recent years the Council has established itself as one of the leading local authorities in addressing rural social exclusion through its pioneering rural "InterConnect" bus project and other rural transport initiatives.

  3.  In response to the Sub-Committee's invitation to submit evidence for its inquiry into the bus industry, this memorandum addresses the terms of reference from the perspective of a rural authority. The evidence covers the following areas:

—  Contextual background information about Lincolnshire;

—  Trends in bus use, costs and subsidies;

—  Lincolnshire's rural bus initiative "InterConnect", its outcomes and lessons learnt;

—  Quality Bus Partnerships and Quality Bus Contracts;

—  Regulation of the bus industry.

LINCOLNSHIRE CONTEXT

  4.  Lincolnshire has a population of 630,000 with a settlement pattern based predominantly on market towns with each acting as a strong focus for the surrounding deeper rural communities. One-third of the population lives in settlements of less than 3,000 people. The population density is one-quarter of the national average.

  5.  There is a high dependency on private car travel in rural Lincolnshire which is reflected in a high household car ownership of 82 per cent compared to an average for the whole of Lincolnshire of 75 per cent and the national average of 67 per cent (1991 Census). In large parts of the county high car ownership is seen as a necessity and not an indication of affluence.

  6.  Whilst there is a surprisingly large network of bus services across the county, the levels of frequency are low with limited opportunities in terms of timing and destination to meet many of the needs of rural dwellers. Four years ago, the County Council commissioned transport consultants, Steer Davies Gleave, to apply its "Sonata" software package to measure the level and proportion of travel needs which were not being met by the public transport network see (Appendix 1). The analysis showed that overall 19 per cent of travel needs were not being met.

  7.  The Government's Ten Year Plan has set a target for a 30 per cent increase in the proportion of rural households living within a 10 minute walk of an hourly bus service. The map attached as Appendix 2 shows that the pattern of hourly bus and rail routes in Lincolnshire is extremely limited.

  8.  Even so, because of the pattern of settlement along the interurban corridors, currently 49 per cent of households have access to an hourly service. This however leaves swathes of the county where it is unrealistic and difficult to justify such a level of direct provision. Table 1 below shows the breakdown by size of community.

TRENDS IN BUS USE, COSTS AND SUBSIDIES

  9.  DLTR returns from local bus operators in Lincolnshire since 1987/88 (see Figure 1) show that, following a severe drop in bus use in the late 1980s and a relatively stable period during the 1990s, there is evidence of an encouraging increase in ridership in the period since the Government's substantial injection of funding to support additional rural bus services in 1998, to the extent that bus use has now recovered to the position it was 13 years ago.

  10.  There is no doubt this growth is in danger of being jeopardised by the impact of rising transport costs. In Lincolnshire, we are witnessing some major cuts in commercial services as illustrated by the withdrawal and service reductions by Lincolnshire Road Car affecting roundly 40 services in and around Lincoln on 15 April 2002. The cost to the County Council in replacing these with subsidised services is £100,000 per annum. Given that 85-90 per cent of services in the county are run commercially, the impact of a small change in the commercial network can have a proportionally much greater demand on subsidy requirements. Inevitably the ability of the County Council to maintain services in the light of these rising costs will be constrained by budget pressures.

  11.  The level of subsidy paid by the County Council to operators both from its own resources and from Rural Bus Subsidy Grant in recent years is shown in Figure 2. The Council procures a large number of local bus services on which schoolchildren entitled by statute to "free home to school" transport are carried. The cost of carrying these pupils is recovered from the Education Committee budget and therefore the "LCC net subsidy" shown in the figure is the gross cost of contracts less this recharge. The use of net subsidy reflects better the level of subsidy paid to maintain bus services for the community at large. The average subsidy per passenger paid in 2001-02 was £1.02 for LCC supported services and £2.52 for RBG services.

  12.  Although the County Council has increased its expenditure on local bus services by 28 per cent over the past four years, the chart emphasises the importance of Rural Bus Grant in terms of overall scale of subsidy. Increasingly the Council is targeting RBG at its rural bus initiatives rather than providing ad hoc support of individual services. In the last financial year, 44 per cent of RBG was spent in support of the Council's "InterConnect" project, described below, and its market town quality network project. RBG is extremely important in sustaining such rural transport initiatives, many of which were established initially with Rural Bus Challenge funding.

  13.  Increasing pressure is being placed on the subsidy budget because of rising tender prices. The cost of local bus contracts renewed in the 12 months to 30 September 2001 increased by 26 per cent equivalent to £30,000. Additionally £100,000 was spent in the same period to replace commercial services withdrawn by operators.

  14.  The change in the conditions for use of Rural Bus Grant introduced by Government a year ago now permits local authorities to use a maximum of 20 per cent of the grant to support existing services. In the financial year 2001-02, the County Council used 6 per cent of the grant for this purpose but in order to maintain commercial services being withdrawn by operators, such as those made recently in Lincoln (paragraph 10 refers), it is anticipated that the full allowance will be needed in 2002-03 to avoid a loss of existing services. This will have a consequential impact on the amount of RBG which can be allocated to InterConnect and other initiatives.

  15.  The County Council applies selection criteria to determine whether a service should be subsidised with each service scored in terms of the following:

—  passengers per journey;

—  subsidy per passenger;

—  main purpose of the service with a higher weighting given to work, education and health.

  Those services reaching a specified threshold are supported. All local bus contracts are reviewed from time to time.

"INTERCONNECT" RURAL TRANSPORT STRATEGY

  16.  In 1998 the County Council adopted a strategy aimed at addressing social exclusion in rural areas. The essential planks of this strategy are:

—  To work with bus operators to strengthen and create a strong commercial "primary" interurban network with a minimum hourly service using quality low floor buses (see Appendix 3);

—  To channel demands from the wider rural areas into key points on the primary network where passengers can connect through convenient and managed interchange with the interurban services;

—  To provide quality infrastructure at stops and interchange points to provide a high level of accessibility and security;

—  To provide access to quality information in the home and at stops.

  17.  Success in the first round of Rural Bus Challenge enabled the strategy to be trialled on the Lincoln-Skegness route with additional funding secured from the Countryside Agency and the European Union. Introduced in February 1999 and branded as "InterConnect", the existing commercial service of six journeys daily in each direction using conventional double deckers was increased to hourly, with alternate journeys being operated with low floor single saloons. The service was extended to run in the evenings and on Sundays.

  18.  Twelve new feeder services were introduced with Rural Bus Grant subsidy at three interchange points on the route with passengers able to book through fares between any two points on the network at a 20 per cent discount on the sum of fares charged on the individual legs.

  19.  A contract was let to one operator to manage connections whereby drivers experiencing any delays telephone the "connections manager" who has the authority to act on behalf of all operators to delay a connecting bus or arrange for a taxi to enable a passenger to get home.

  20.  Raised kerbs have been built to ensure each village on the interurban route has at least one pair of accessible stops. New specially designed wooden shelters have been built in villages and architect-designed waiting facilities provided at the interchange points fitted with CCTV and information systems.

  21.  Stops with information of times of services on the whole network together with a network map have been erected at over 100 locations, many of which were not even marked as stops previously. Real time information is provided at key stops on the interurban route.

  22.  The use of the Lincoln-Skegness Connect 6 service has more than doubled since its introduction as shown in Figure 3, equivalent to an additional 165,000 passengers per annum. Whilst during the first two years the enhanced service was heavily subsidised, the core part of the day between 7am and 7pm is now run commercially by Lincolnshire Road Car; the evening and Sunday service is maintained at a cost of £40,000 per annum at a subsidy per passenger of £2.25. Lincolnshire Road Car has since replaced the three low floor saloons with low floor double deckers, and is shortly to replace the three conventional deckers with new floor deckers, demonstrating its commitment to the concept.

  23.  In March 2001 the fixed route feeder services were replaced by demand responsive services pre-booked by telephone:

—  CallConnect semi-fixed route services using 16 seater tail-lift buses linking local service centres;

—  CallConnect Plus fully flexible eight seater buses with ramp serving an area of about six or seven miles around two of the interchange points.

  24.  Ridership on the feeder services grew by 25 per cent in the second year of the project compared to the first year of their operation. Further growth has been experienced since the introduction of the CallConnect Plus services a year ago as shown in Figure 4.

  25.  The introduction of CallConnect Plus has resulted in the level of unmet travel needs in the project area, as measured by Sonata (see paragraph 6) being reduced by 90 per cent. Passenger feedback has been excellent as reflected in the extract from a recent radio broadcast contained in Appendix 4.

  26.  CallConnect Plus services ensure that every person living within their operating areas now has access to an hourly service, albeit by pre-booking and, whilst this does not conform strictly to the definition of the target for rural services contained in the Government's Ten Year Plan, it is a more realistic target for a deeply rural area.

  27.  The lower costs of operating eight-seater buses make this type of operation much more affordable for the level of service provided than conventional services, though the low volume of passengers generated from a deeply rural area means that the subsidy per passenger is always going to be high. The average subsidy per passenger journey on the two CallConnect Plus buses is estimated to be round £5.40. Unlike other local bus services, demand responsive services are not eligible for fuel duty rebate (see paragraph 35 below) but, if they had been eligible, the subsidy per passenger would reduce to £4.40. The relatively high subsidy for this type of service needs to be seen in the context of the project as a whole which has seen bus use doubled and almost all previously unmet travel needs satisfied.

  28.  Success in subsequent rounds of Rural Bus Challenge, with over £4 million gained, has enabled the InterConnect concept to be extended to other corridors in partnership with three different operators each providing the core interurban service commercially. By November a total of seven CallConnect Plus services, all subsidised using Rural Bus Grant will be operating on the four InterConnect corridors. As noted in paragraph 12 above, these services could not be sustained without continuation of Rural Bus Grant.

  29.  Passenger bookings are managed through another Rural Bus Challenge funded project called "Matrix". Using Mobisoft's software, bookings are made and sent in text format direct to the driver's cab in the CallConnect bus. Matrix is also to be used for managing bookings on a rural car club and five dial-a-ride services to be introduced shortly.

  30.  Implementation of the InterConnect project has provided the following lessons:

—  A major sea change in use and attitudes to bus services can be made by addressing within a comprehensive strategy all barriers deterring bus travel;

—  Co-operation with the operators of the interurban services has been vital to ensure that the network functions in an integrated way;

—  Demand responsive services can be highly effective in reducing unmet travel needs and thereby addressing rural social exclusion;

—  Importance of strong branding, marketing and availability of quality information;

—  Stable timetables giving passengers confidence that they can rely on buses;

—  Investment in quality buses and infrastructure;

—  Importance of Rural Bus Grant in sustaining CallConnect services in the longer term.

QUALITY BUS PARTNERSHIPS AND QUALITY CONTRACTS

  31.  Statutory quality bus partnerships have little application in a rural area such as Lincolnshire. The levels of investment by local operators are modest which is not surprising given the operating territory and it is unlikely that a QBP in itself would be sufficient to influence investment over and above that already planned by a company, though it may well influence where such investment is directed.

  32.  From the local authorities' perspective, commitments by an operator to levels of service are equally important because of the risk of subsequent reductions in service after the local authority has made its investment in infrastructure and priority measures.

  33.  The voluntary partnerships in place to deliver InterConnect are more about co-operation between operators to ensure that connections are made and integrated ticketing offered across the network. In all cases, the County Council is required to subsidise evening and Sunday services outside the core daytime operating periods. Quality Bus Contracts would have a part to play if such co-operation was not forthcoming.

REGULATION OF THE BUS INDUSTRY

  34.  The InterConnect project has highlighted a number of regulatory issues which have hindered the implementation of the project relating to:

—  Fuel duty rebate for demand responsive services;

—  Bus service registration process for demand responsive services;

—  Service frequency enhancements to commercial services.

  35.  Demand responsive services are ineligible for fuel duty rebate which, given that the services are subsidised using Rural Bus Grant, means the grant cannot be utilised to the same extent as it could be otherwise. As noted in paragraph 27, the fuel duty rebate foregone on CallConnect Plus services is equivalent to £1 subsidy per passenger.

  36.  The bus registration process does not enable fully flexible demand responsive services such as CallConnect Plus to be registered easily because of the need to define a route and timing points, and the introduction of CallConnect Plus could not have been achieved without the co-operation of the Traffic Commissioner for Eastern England.

  37.  The provisions of the Transport Act 1985 on competitive tendering prohibit a local authority from negotiating with an operator for an enhancement to a service, except up to a prescribed subsidy level. This creates a problem particularly on the primary InterConnect routes and in the market towns where the County Council would wish to see a relaxation in this requirement within the framework of a quality partnership entered into with the incumbent operator.

Tony Cross

Head of Transport Services, Lincolnshire County Council

11 April 2002

  William Wright: It seems that Lincolnshire's bus services are in huge demand at the moment. The County's CallConnect bus system is so popular that some customers are having to book their seats a fortnight in advance. Claire Crooks has put together this report:

  Claire Crooks: InterConnect was introduced three years ago as a way of servicing the wider rural areas, allowing people to access the local facilities in places like Horncastle. It also links up to the main route bus services to the larger towns and cities. Head of Transport Services, Tony Cross:

  Tony Cross: A year ago we introduced what we call CallConnect, CallConnect Plus, and these are fully flexible services which people pre-book in advance by telephone, a bus picks them up in their locality and then brings them into Horncastle. It operates every hour, always meets the bus to Lincoln and Skegness and is proving to be very popular, to the point now where people are having to book further and further ahead and we are giving consideration to introducing another bus into the system.

  Claire Crooks: Customers of the CallConnect bus service are very satisfied and would like to see it advertised better and extended further:

  Customer 1: Oh it's brilliant. I couldn't even get in to shop without it. I don't drive any more and I've got no relatives here to pick me up and take me in, you know. Oh no, it's brilliant.

  Customer 2: It's fantastic, yes. It's very handy.

  Customer 3: We live up the top of Mareham Hill and have difficulty sometimes getting back up the hill.

  Customer 4: Finding out how to use it—it's not advertised very well and people are not aware of what service exists. But once you are aware of it and how you can use it, it works very well.

  Customer 5: My husband went and died suddenly and he took the transport with him you see, so I'm in a bit of a fix, so it's nice to know I can call on you and everybody's so pleasant—that's what's so nice.

  Transcribed by Lincolnshire County Council's Public Relations Unit