Decision

Decision for Stagecoach Devon Ltd t/a Stagecoach South West

Published 18 November 2022

0.1 WESTERN TRAFFIC AREA

1. Decision of the Traffic Commissioner

2. Public Inquiry in EXETER on 22 JUNE 2022

3. Continued in BRISTOL on 27 OCTOBER 2022

4. STAGECOACH DEVON LTD t/a Stagecoach South West

5. BACKGROUND AND SCOPE OF THIS DECISION

Stagecoach Devon Ltd (“SDL”) is the holder of a standard national public service vehicle operator’s licence authorising the use of four hundred and seventy-five vehicles. The statutory directors are Bruce Dingwall, Carla Stockton-Jones and Michael Watson. The current transport managers are Anthony James Vincent, appointed May 2020, Katy Wagstaff, appointed August 2021 and Simon Ford, appointed June 2022.

The inquiry was called to deal with two discrete matters. The first matter of concern was an incident which occurred on 5 October 2019 and was dealt with in my decision issued on 3 August 2022.

The second issue is the reliability of registered bus services and associated applications to change service at short notice. The primary evidence for that matter had been the report of DVSA Traffic Examiner Christopher Eggins. On 20 June 2022, that is two days before the hearing, I was written to by Cllr Andrea Davis of Devon County Council who raised fresh concerns in relation to the operator’s service reliability. I immediately sent a copy of that letter to the operator’s solicitor James Backhouse and indicated that I would take no account of it and would not deal with it until I had produced this decision. That was my intention.

On 14 July, during a 28-day period available to the operator to produce further submissions, I received another letter from Cllr Davis. The letters were sent both to the Senior Team Leader in Bristol and to my personal email account. Not recognising the sender’s email address, I opened the email. The second letter alleges that claims of improvement made by the operator’s Managing Director at public inquiry have not been evidenced. The letter made further complaints in relation to the detrimental effect on local services caused by Stagecoach providing drivers for large events. The Council also copied me into a letter to Stagecoach UK Bus making similar complaints. I felt that the contents of the letter which I had seen were such that they needed to be put to the operator for fairness. I reconvened the hearing, this time in Bristol to prevent any delay.

I issued directions – see Annex 1 – and called Devon County Council as a witness.

This decision relates only to the following legislation under which the operator was called to a public inquiry:

Section 26(1)(b) of the Transport Act 1985, that services had not been operated in accordance with the timetable registered with the Traffic Commissioner

The Directions refer to three other matters. The first was the registration of the “Falcon” service from Plymouth to Bristol whereby multiple service registrations appeared to have been used to avoid the need to operate under EU drivers hours rules. The operator had given me assurances that matter had been resolved ahead of the hearing and I need not consider it further although the use of split registrations is something to which operators, enforcers, regulators and policy makers need to turn to in order that there is clarity. The second was a bridge collision involving one of the operator’s double-decker buses. I deal with that as a preliminary matter in my decision having seen and heard evidence within the hearing. I make it clear that the circumstances were not such that I would ordinarily call an operator to a public inquiry as a single-issue matter.

This is the first public inquiry into bus service performance where there has been reference to the Bus Open Data Service whereby operators must register their timetables - and real-time performance against them - with the Department for Transport. I asked DVSA and SDL to work together to try to identify the apparent inconsistencies between the BODS data and real-world performance and I am grateful to them for having tried to do that.

6. THE PUBLIC INQUIRY HEARINGS

Michael Watson, Anthony Vincent, Katy Wagstaff, Simon Ford and Rupert Cox attended both hearings for SDL represented by James Backhouse, solicitor. Traffic Examiner Christopher Eggins attended the June hearing for DVSA and provided an updated report for the later hearing. Damien Jones attended in October as a witness for Devon County Council accompanied by Rachel Phillips and Councillor Andrea Davis.

All parties provided submissions in advance for which I was grateful. The proceedings were recorded and a transcript can be provided if required. In wring this decision, I have reviewed the written documentation, my hearing notes and listened in part to the recordings. This is a case where there is little between the parties in relation to the factual performance of the registered services and so I do not record that evidence here in any detail.

I do not record the evidence chronologically. It is more useful to refer to the issues.

I made a negative comment in my August decision in relation to the cooperation of SDL. That comment related only to the circumstance surrounding the crash. Traffic Examiner Eggins records in his second statement, para 6, pg 40 of my second brief: “I would like to say at the outset that SDL have been open and transparent with me. I do not feel that they have avoided or tried to conceal any matters surrounding the reliability and punctuality of their service routes.” In relation to service reliability, I fully concur with Mr Eggins.

7. The Bridge Strike

The driver did not attend. I was at that time not satisfied that his call-in had been properly served so stated that I did not intend to make a decision in relation to him. The operator had reported to me on 10 June 2022 that one of its double-decked vehicles had been involved in a collision with a railway bridge on 29 April 2022. The circumstances were that the driver had a period of time available during his shift and had been asked to undertake a positioning journey. The vehicle was not in service. It had been correctly routed. It appeared that the driver had encountered traffic and had taken another route. That was a bus-only lane allocated to single-deck vehicles on a park-and-ride service. The railway bridge was controlled by traffic lights which would only go green when triggered to do so by a specific transponder in a single-deck bus and when there was no traffic coming the other way.

It appeared that the driver had stopped at the red light. He had then assumed that there was an error with the transponder and made a radio-call to check that no bus was coming the other way. Having done so, he drove through the red light and hit the bridge. In interview, he had said that he had forgotten he was driving a double-deck vehicle.

Michael Watson told me that SDL was at a very advanced stage of fitting all vehicles with a geo-fencing system. The vehicle in question was due to be fitted in July this year. This is a case where, without prejudice to any decision that may be made in relation to the driver, on the evidence before me I could not find fault with the operator’s approach and no further action is necessary.

I note that the driver has turned 70 years old and I have since been told that he has not sought to renew his PCV entitlement. The matter will lie there unless he makes an application at some future time.

8. Bus Open Data Service (“BODS”)

The “Bus Open Data Service”, or “BODS”, was created by the Bus Services Act 2017 and open data legislation. Its intention is that passengers can find online reliable information on bus services which should then drive increased patronage for operator. All bus operators who run local services in England outside London are now required to publish their timetable, fare and location data to a central system operated by the Department for Transport. DVSA has access to the data as a means of monitoring bus operator service reliability. I was concerned to note in June that the BODS data indicated that around 40% of this operator’s services were not operating at all. Neither the investigating DVSA officer nor the operator considered that figure to be anything like correct.

Traffic Examiner Eggins had visited the company again. Several potential causes of the discrepancy were identified. It appears that some timetable changes had not been uploaded to BODS. This may have arisen from a discontinuity within the wider Stagecoach group. BODS means that operators now have to provide the information to three separate organisations. I was told that the information was now better but still not right. I do not understand how the BODS data can differ from the operator’s own real-time information which both derive from the same source. If an operator with the resources and motivation of this business cannot resolve the inconsistency, it would seem that BODS is some way off being able to be relied upon as a means of monitoring bus service reliability. The second hearing was attended by senior Department for Transport officials who will, I am confident, get to the bottom of the data inconsistency.

9. Bus Service Reliability

So to the crux of the matter. Normally, in a bus service reliability case, I would consider each journey in turn, whether the DVSA evidence was correct and whether there was any mitigation such that the operator had a reasonable excuse. This case is different. There is, give or take a percentage point, no argument about the level of non-compliance and 21 to 22% is accepted. The issues are not journey specific. The accepted root cause is that the operator simply does not have enough drivers to drive its buses. The question for me is whether the operator has taken sufficient action to have enough drivers or, alternatively or in addition, to de-register services to the level that it can support. Many of those who have complained to the operator, to the Council or to me would not like the latter course of action but it is a proper course to take if there is not sufficient resource to operate at pre-existing levels.

I note in the County Council minutes reference to matters having deteriorated since privatisation. Clearly some members have a very long memory. Deregulation of bus services – and then privatisation – derives from the Transport Act 1980 and the Transport Act 1985. I understand that the Devon General Omnibus and Touring Company became part of Western National in 1971. In 1983 it became Devon General Limited and was the first operating company of the National Bus Company to be privatised in 1986. It was later sold to Stagecoach in 1996. All of that is a very long time ago.

The 1985 Act removed an obligation on local authorities to co-ordinate public passenger transport in their area and introduced a power to subsidise services on condition that they went to open tender. The role of Traffic Commissioners was reduced to solely becoming a registration service with powers to take action where an operator did not operate to timetable. The operation of bus services became a commercial matter for operators. Competition legislation constrains an operator’s ability to use more profitable services to subsidise those that may in themselves operate at a loss. Frequently, it is the longer, more rural routes which make the least money. When an operator reduces those services, it is doing what parliament intended to happen forty years ago. I set out the history to provide context to my decision.

Damien Jones read his witness statement to the inquiry. He produced a schedule of complaints received, restricted solely to those relating to services supported by the Council. Complainants concerned with commercial services were referred to the operator. Two hundred and seventeen complaints were exhibited relating to supported services over the past twelve months. Mr Jones was struck by the volume, tone and sincerity of the complaints and told me that, despite service reductions from July 2022, the situation had not improved. Further reductions were planned to take effect at the end of October but the Council remained concerned. The situation had been exacerbated by vehicles and drivers being reallocated to local and national events including the Commonwealth Games.

Mr Jones also told me that SDL had centralised its complaints handling to a single contact centre based in Perth. That team had no local knowledge and frequently gave out wrong information. Calls and emails to the centre were frequently not followed up. The Council had raised this with SDL and been promised that a local resource would be made available but that had not happened. The Council was working on an Enhanced Partnership with all bus service providers but was concerned that may be negated by ongoing poor performance by SDL.

The Council had bid for £34 Million funding from DfT to support its Bus Services Improvement Plan (“BSIP”). It had been allocated £14 Million. Some of that would be used to improve information at bus stops.

Michael Watson adopted the public inquiry report produced by SDL. He told me of the various central government schemes that were put in place to keep buses operating through the pandemic. Many of the changes to those arrangements had been introduced at short notice. Pre-pandemic, 99.6% of service miles were operated and complaints from the local authority largely unheard of. In 2021, drivers started to leave. Pay negotiations were difficult because of the dependency on grant funding. Some central European drivers were no longer available post-Brexit. Many staff who had been furloughed decided that they did not want to return to work or not to shift-working. These were macro-economic forces. The company had started to remove commercial mileage in 2021 and 2022 as a response. Staff turnover remained high. Pay rates had increased significantly and, along with a new contract amending other benefits, had allowed SDL’s advertised rates to move from £10.76 per hour to £11.80.

It had been expected that the changes in late 2021 should have reduced lost mileage from 9% to 3% but that hadn’t materialised. This summer, significant further steps had been taken with another 10% pay rise, 6% in May, 2% from September and a further 2% to come from December. That settled matters in Exeter. At the same time, the training school had been enlarged with forty new drivers being trained at the current time, a marked increase on previous levels.

The company had looked at new areas to recruit. They targeted schools and colleges and had also targeted female drivers. The national average recruitment for bus companies was that 10% were female; at SDL it was 30%. That was achieved through a more friendly and inclusive environment and rosters and shift patterns were also under review. Many staff did not want to work weekends and evenings.

Some sixty drivers had been allocated to the Commonwealth Games for a three-week period. This was a contract signed at Group level a year ago and it was felt that it needed to be honoured. The impact had been mitigated primarily by buying holidays from drivers. The company had supported other events such as at Powderham Castle but those commercial activities were currently not being undertaken. Agency drivers did not fit the business model and were not a quick fix. Exit interviews had identified that the vast majority who left did so due to roster patterns. The management culture had changed over the last year.

Punctuality was not related to driver shortages but down to different travel patterns post-pandemic. Timetables were being amended as travel patterns settled but holiday traffic would always be problematic in the area. There were two parts of the company’s app which provided information. One part referred to timetables but the map was based on live data. Senior managers from Exeter had visited Perth to build relationships and knowledge.

Without having made a decision, I remarked to the operator that this appeared not to be a case where a formal warning would suffice and some form of penalty would be likely. I said that I did not favour straight financial penalties as they did nothing to help those directly affected (money goes to the Consolidated Fund, the government’s general account at the Bank of England). After a break, the operator proposed some form of free services possibly in Exeter over weekends but needed to work out the financial impact and to confirm that no competitor operator would be adversely affected. I also asked that they consider action to improve information to passengers but accepted that IT projects were not always responsive to unexpected cash injections and the relevant project had been scoped within BSIP funding. A written response was received as promised on Wednesday 2 November.

10. CONSIDERATION AND FINDINGS OF FACT

The non-compliance rate is accepted to be twenty-one percent. That puts this case firmly in scope of regulatory action with a starting point of a financial penalty between £400 - £550 per authorised vehicle which equates to between £170,800 and £234,850. There are aggravating features. This is largely not a case of buses running more than one minute early or five minutes late. It is a case of buses not running at all. I was told that between nine and six percent of mileage was lost. The bus industry typically tracks lost mileage rather than lost services and that latter figure is not available, but it will clearly be considerable. The second aggravating feature is the information available to the travelling public at bus stops and through the contact centre in Perth.

Reasonable excuse in relation to punctuality would usually be a discussion in relation to roadworks or the lack of bus priority measures. This is a very different case and the reasonable excuse requires that I balance macro-economic and largely external events with the response to them. The impact of the pandemic on the bus industry is, in part, obvious. As people worked from home and a significant proportion continue to do so, patronage, and so income, has dropped. It costs the same to run a bus with forty passengers as it does with fifty. Cost pressures are significant and it is within my own knowledge that bus operators were given limited notice of changes to central government support over the past two and a half years. In addition, access to drivers from central Europe has been impacted by Covid and some bus drivers have transferred to freight where the driver shortages were first in prominence, pay is higher and there isn’t the need to interact with passengers. It is a difficult time to be a bus operator and we are seeing companies go under. In the west, that includes Yellow Buses in Bournemouth and the HCT Group in Bristol.

SDL’s response in 2021 involved changes to pay and reduction of services. The pay increase at Plymouth appears to have been a genuine 18% increase, from £10 per hour to £11.80. Elsewhere, the pay change appears to be more presentational, rising from £10.76 with paid meal breaks to £11.80 with unpaid breaks. The actual increase appears to be around 4.4% which was broadly in line with inflation at that time. The approach had some success but was offset by other factors. It has taken until this summer for a really significant increase to be implemented. I accept that external funding has made budgeting difficult but progress has been unacceptably slow.

Promises of service improvements have been made previously. In a letter dated 28 January 2022 from the operator to Traffic Examiner Eggins, Mr Watson says that Torbay and Plymouth depots are fully staffed and should be able to cover the shortfall in Barnstaple and Exeter. That clearly proved not to be the case and more services were withdrawn, several at short-notice.

The complaints provided by Devon County Council tell of workers being disciplined by their employers for being late for work, rent money being spent on taxis to work and important appointments being missed. There are complaints from parents and teachers about children not being able to get to school or waiting up to two hours for a bus to arrive. Some passengers with medical conditions complain of not being able to travel at all as they cannot trust a bus to arrive and cannot stand for long periods. A lack of information, even on the app, is cited by many.

Along with the further increase of pay to £13 per hour, novel approaches such as targeting female drivers are also now helping. The amount to which that can contribute is limited by roster patterns; it is a fact that women are far more likely than men to have caring responsibilities. That is clearly a difficult conundrum as society wants buses running at unsocial hours. I give this operator credit for taking it on.

I find that the operator has been slower to act than it should have been and that the impact has been worsened by a lack of reliable information even on the app. Twenty-one percent non-compliance is high as is the 6 – 9% of lost mileage. This has been a bad service offering. Against that is the range of Covid and EU-exit pressures described earlier that I know to be causing significant challenges to the bus industry across the country. Having conducted the balancing exercise, a penalty in the order of 50% of the starting point is appropriate.

In his letter to me of 2 November, Mr Watson says that the cost of offering free travel for all customers within the Exeter Plus travel zone for two weekends in December, being 10/11 and 17/18 would be around £120,000. He also offers that the company will employ a dedicated member of staff to maintain the displays and provide assistance at Exeter Bus Station at a cost of £70,000 per year for two years. Taken together, the two measures would exceed the level of financial penalty I find to be appropriate. I will make an order with respect to the free bus travel and will record as a statement of intent the additional member of staff. The company can apply to be released from that statement in due course if the circumstances support it.

For the sake of clarity, I make no adverse finding whatsoever against the operator in relation to the bridge strike or the reliability of the BODS information.

11. DECISION

Having made adverse finding under Sections 155(1)(a), that the operator has failed to operate registered services, I make an order under Section 155(1A)(c) to the value of £120,000 that the operator provide free travel for all passengers within the Exeter Plus travel zone for the weekends of 10/11 and 17/18 December.

I record a statement of intent that the operator will provide, at peak times and for two years, a dedicated member of staff at Exeter Bus Station to maintain displays and to provide advice to passengers, at an estimated cost of £70,000 per year.

Kevin Rooney

Traffic Commissioner for the West of England

7 November 2022

12. ANNEX 1

13. WESTERN TRAFFIC AREA

13.1 PH1020951

14. STAGECOACH DEVON LTD (SDL)

15. RECONVENED PUBLIC INQUIRY, 27 OCTOBER 2022, BRISTOL

16. DIRECTIONS OF THE TRAFFIC COMMISSIONER

17. Background

The operator attended public inquiry on 22 June 2022. I reserved my decision and allowed 28 days for further submissions from the operator. That inquiry was called to deal with two discrete matters. The first matter of concern is an incident which occurred on 5 October 2019

The second issue was the reliability of registered bus services and associated applications to change services at short notice. The primary evidence for that matter was the report of DVSA Traffic Examiner Christopher Eggins. On 20 June 2022, that is two days before the hearing, I was written to by Cllr Andrea Davis of Devon County Council who raised fresh concerns in relation to the operator’s service reliability. I immediately sent a copy of that letter to the operator’s solicitor James Backhouse and indicated that I would take no account of it and would not deal with it until I had produced that decision. That was my intention.

On 14 July, during a 28-day period available to the operator to produce further submissions, I received another letter from Cllr Davis. The letters were sent both to the Senior Team Leader in Bristol and to my personal email account. Not recognising the sender’s email address, I opened the email. The second letter alleged that claims of improvement made by the operator’s Managing Director at public inquiry have not been evidenced. The letter makes further complaints in relation to the detrimental effect on local services caused by Stagecoach providing drivers for large events. The Council also copied me into a letter to Stagecoach UK Bus making similar complaints. The allegations are such that the operator deserves a right of reply.

I have also been made aware of a Stagecoach bus colliding with a railway bridge in Exeter and of a further service reliability complaint from a member of the public.

In addition, it arises from the operator’s bundle of evidence that it is running a “Falcon” coach service from Bristol to Plymouth using the device of multiple registrations to avoid the need for tachographs. I have requested that DVSA investigate as a matter of urgency.

18. Directions

19. Devon County Council

Pursuant to Section 27A(2) of the Transport Act 1985, and noting that increasing bus patronage is a means of increasing network efficiency, Devon County Council shall, by 6 October 2022:

1. Provide to the Office of the Traffic Commissioner in Bristol a schedule of all complaints received by the Council in relation to registered bus services within the Exeter area;

2. Provide to the Office of the Traffic Commissioner in Bristol a witness statement covering the following:

3. An indication of the action taken in relation to those complaints

4. Any relevant Council minutes

5. Notes of any meetings with SDL to address these concerns

6. Anything else that the Council wishes to raise at the inquiry

The Council shall also provide a witness to attend the public inquiry to speak to the statement which may include cross-examination from the operator’s solicitor and questions from the Traffic Commissioner

20. DVSA

DVSA is to provide, by 30 September 2022, a statement from the national bus compliance coordinator setting out in summary:

• The number of complaints received against services operated by Stagecoach Devon Ltd each month since 1 October 2022

• The nature of each complaint, in summary form

• The action taken

• The total number of such complaints received annually

I do not intend to call the national bus compliance coordinator unless SDL or Devon County Council require his attendance. Given his base in Dover, attendance would be via video link.

Traffic Examiner Christopher Eggins to supply, by 6 October 2022, a statement relating to the BODS data matter raised at the initial hearing and followed-up thereafter. I will state at this point that the procedural issues accepted by SDL are not a matter that will lead to any adverse outcome for them. As far as I am aware, this is the first inquiry where BODS matters have arisen and I wish to take the opportunity for all parties to learn from it. I have asked that members of the DfT Bus Open Data team be made aware of the hearing.

By 6 October 2022, to produce a statement of the nature in which the Falcon service from Plymouth to Bristol is operated in relation to drivers hours.

21. SDL

To provide any statement, report or supporting evidence in hard copy to OTC Bristol by 20 October 2022

To provide witnesses for the inquiry who can deal effectively with the matters of concern

22. OTC

To produce a fresh call-in dealing with the following matters:

• The bridge strike of 29 April 2022

• Bus service reliability – including the reference to the report of TE Eggins previously considered at the June hearing

• The volume and nature of complaints received by DVSA in relation to SDL operations

• The compliance of the Falcon service with the relevant drivers hours rules with reference to the DfT letter of 2008 in relation to split registrations

• The report of TE Eggins in relation to BODS compliance (noting that no adverse outcome for the operator will arise from this point)

• The complaints from Devon County Council

On receipt of the DVSA report at paragraph 11, make recommendation to me on whether to call in relation to their good repute as transport managers, Katy Wagstaff and Michael Watson

To call to a conjoined driver conduct hearing at 10.30, 27 October 2022, driver Lawrence Harris

To provide to SDL a copy of the Devon County Council letter of 14 July 2022.

Kevin Rooney

Traffic Commissioner

10 August 2022