Lincs bus market ‘too fragile’ to support Bus Act powers

BUSES

Lincs: Council’s Teckal company operates some CallConnect services

Lincs: Council’s Teckal company operates some CallConnect services

Lincolnshire’s bus market is too fragile to support the new partnership powers in the Bus Services Act 2017, according to the county council.

The legislation contains three  new regulatory models, each giving local authorities progressively more influence: advanced quality partnership schemes (AQPS), enhanced partnerships (EPs), and franchising.

The franchising powers are only automatically available to mayoral combined authorities. But Richard Wills, Lincolnshire’s executive director for environment and economy, told councillors that they were of no interest to Lincolnshire. “No benefit is perceived for Lincolnshire to pursue a franchise model and it is likely to carry an extremely high and unaffordable price tag.” 

On the two partnership options, he said: “The conditions attached to AQPS and EP are unlikely to be attractive to us at the current time particularly as the county’s existing partnership arrangements are, albeit more informal, still delivering results.”

The AQPS powers allow councils to specify matters such as vehicle quality, minimum service frequencies, passenger information, smart ticketing and maximum fares. 

“Some standards can only be implemented, like frequency and maximum fares, if there are no outstanding objections from operators,” noted Wills. “Given the fragility of Lincolnshire’s bus market it is unlikely that all operators would agree to such standards. 

“If it were achieved then the cost of provision would undoubtedly see operators walking away from currently marginal routes and result in much higher contract prices for supported services.” 

Lincolnshire is currently served by one large operator, Stagecoach East Midlands, and a number of medium and smaller operators. 

The council recently set up a council-owned Teckal company, Transport Connect Ltd (TCL), to increase competition in the market and provide a cost-effective way of delivering services where there is no competition.

TCL currently operates contracts in the south of the county covering special educational needs, adult social care, and the  CallConnect service that operates in response to pre-booked requests.

“Whilst not yet in profit, the relatively small loss over the initial 18-month period compared favourably against the Lincolnshire County Council costs avoided over the same period, which were estimated to be in the region of £1m,” said Wills. “Since the introduction of TCL there is also evidence of some operators’ bids being drastically reduced from previous submissions. In scenarios where prices are still considered unaffordable and/or not value for money, the services of the Teckal company can and have been utilised. As a consequence the company has grown much faster than originally anticipated and ideally now needs time to stabilise its operations.”   

TCL currently operates 19 contracts, including some volume contract arrangements under a ‘One School One Provider’ model, from four depots (Barrowby, Boston, Spalding & Ketton) using 78 drivers and 30 escorts.

Wills said the lack of supply in the contract market had been exacerbated by the loss of three  taxi/coach operators in recent months. “There have been no new entrants of note and contract prices continue to increase at a higher level than inflation. To date the average increase in 2018 on like-for-like PS [public service vehicle] bus contracts stands at 8.7 per cent.” 

Lincolnshire has not paid operators of local bus contracts an annual inflationary increase on contract prices since 2013/14. For 2018/19 the council will pay a 1 per cent increase on contracts that have been operating in excess of 12 months.