Thank you for that introduction Giles and thank you also for inviting me along.
I am delighted to have an opportunity take part in one of the keynote events of the transport calendar.
Bus friendly, bus focused
It is said that a myth can be half way around the track before the truth has even got its running shoes on.
Actually, I’ve witnessed that for myself in recent weeks. You see, during this period leading up to the Comprehensive Spending Review (CSR), a myth seems to have gathered pace about the coalition’s commitment to buses.
Now, in some ways that’s perhaps understandable. After all, by its very nature, the weeks between the announcement of a spending review and its final publication provide a vacuum for rumour and speculation.
None-the-less, it can be a touch frustrating when ill-informed guesswork is presented in some quarters as hard facts. Take the Bus Service Operators’ Grant (BSOG).
In response to various stories doing the rounds on BSOG I made a statement in the Commons in June to reiterate my view that ‘the benefits of that grant are clear’. And they are - from helping to keep fares affordable, to attracting more people onto public transport, to incentivising fuel efficiency.
Now of course, in terms of specific details about what we can spend and where we can spend it in the coming years, all of us - ministers, media and industry stakeholders - will have to wait for the unveiling of the CSR’s contents later this month. And I’ll say more about this in a moment.
Bus travel accounts for two thirds of public transport journeys. Buses are an essential public service - especially where rail travel isn’t an option or where people are on low incomes and cannot afford alternatives like car ownership.
So our buses matter - socially, economically, and of course, environmentally. And that’s why you have a minister, a department and a government that is bus friendly and bus focused.
The Status quo is not an option
You may have guessed there’s a ‘but’ coming - and here it is.
But, that doesn’t mean that I view the industry through rose-tinted glasses.
First, last and always I am a bus realist.
And, as a realist I know that, even though these days we live and work in a world where the only constant is change, there is one certainty that the bus industry must face up to - namely, that the status quo is not an option.
If there is any lingering doubt that things can continue as they are without let or hindrance, reform or renewal, then that doubt is surely dispelled by one of the greatest challenges facing all of us - the inherited debt crisis.
Imagine for a moment what would have happened if, on taking office, the coalition government had chosen to ignore the inherited debt crisis - if we’d adopted a sit-on-our hands, turn-a blind-eye approach to the massive hole in Britain’s finances.
Well, on the spending plans bequeathed to us by our predecessors, British taxpayers would be paying out £70 billion in debt interest a year by the end of this parliament - that’s more than we spend on educating our children, defending our country or policing our streets.
That would not just have been unsustainable - it would have been unforgivable. So, instead, we have taken action to get the debt under control and put Britain’s finances back into good order.
I’ve already touched on the next step in our journey to fiscal discipline and economic growth - this month’s spending review.
Now of course, in terms of specific details about what we can spend and where we can spend it in the coming years, all of us - ministers, media and industry stakeholders - will have to wait for the unveiling of the CSR’s contents later this month.
But, whatever the outcome of the CSR, one thing is certain - the inherited debt crisis has radically altered the economic landscape. And that’s as true for the bus industry, as it is for every other aspect of our national existence.
What does that mean as we move forward?
Well, it means that the industry has to recognise that things are going to have to change - quickly, radically and permanently.
So you will have to squeeze every last ounce of value out of your existing assets.
You will also need to get more from less
The government is shining a light into every last nook and cranny of transport expenditure. Everything is being examined and re-examined. Everything is on the table. There are no sacred cows.
Now, before you take fright let me assure you of the central objective of government policy on buses - we want to see more people using buses
Here comes another ‘but’
But we are equally determined that taxpayers and fare-payers should get the best deal and the best value for their money.
And here are three facts which remind of us of just how important this issue is:
Fact one - bus fares increased by 24% above inflation in England outside London between 1997 and 2009
Fact two - bus patronage in England outside London fell by approximately 2% over the same period. Coincidence? I think not
And fact three - public funding of buses has been increasing year on year. £1.5 billion of public money is now spent on buses each year, and that of course, excludes concessionary fares. That’s a lot of money - it’s a serious issue.
Progress but more to do
I recognise that there is much good work going on in the bus industry to improve services.
Welcome progress is being made - but there is still more to do. And that’s because, as I’ve said, the government has a growth agenda, not a cuts agenda, for the buses.
And attracting new customers isn’t simply about purchasing expensive new vehicles, as important as that may be.
- it’s also about improving drivers’ skills leading to safer and more fuel efficient driving
- it’s about providing good accessible information at bus stops, on buses and on-line so that people can easily find out about services
- it’s about making sure the bus turns up at the scheduled time
- and it’s about continuing the good work bus companies are doing to train their drivers to deal with the diverse range of customers who use their services - they’ve been huge improvements in the customer focus of train operators and I’d like to see that best practice spread to our buses too
All this will lead to good quality bus services which offer the best value for money to the customer and the taxpayer, and which driver up patronage too
What’s more, all of these things are achievable, even in these difficult times. But we must all work together to bring them about..
That includes more partnership working between operators and local authorities. Operators tell me they want to work with local authorities and in some parts of the country this has been highly successful, in others area not so.
By working together I am sure we can make the progress that we all want to see.
Just like the inherited debt crisis, there is another challenge that cannot be side-stepped or wished away - climate change.
If left unchecked climate change imperils the future of our planet. And that’s not science fiction, it’s science fact.
And let me be absolutely clear - the focus needed to deal with the debt crisis can be neither reason nor excuse for taking our eye off the climate change ball. Again, the status quo is not an option - either for the government or for the industry
So make no mistake - not only is this government determined to lay the foundations for a stronger economy, we are committed to safeguarding our shared environment.
Underpinning that commitment is a belief that public transport has a key part to play in offering people a cleaner and greener alternative to car travel - an alternative that is both viable and reliable.
That’s precisely why one of the first things I announced after taking up my post was an additional £15 million investment in low carbon buses.
Buses help to ease congestion on our roads, as well as that, low carbon buses emit nearly a third less carbon than their conventional counterparts. That’s a transport win-win as far as I’m concerned.
Yet, as things currently stand, just 0.2% of buses on the road are of the low carbon variety. So I want the bus industry to step up to the plate by doing all that it can to make these green buses the norm on our streets, rather than the exception.
I’m convinced that the £15 million of new funding we’re providing gives the industry a key means of doing this:
- Firstly, because it will stimulate the market for low carbon buses by reducing some of the initial costs for operators
- And secondly, because it will help spread best practice by requiring the winning bidders to share information with others in the industry
Thanks to our decision to stand in the vanguard of the green technology revolution over 150 new low carbon buses will join fleets throughout England - a move that will save around 50,000 tonnes of CO2 (over a 15 year period).
The closing date for bids under the Round 2 of the Green Bus Fund was 5 October. We have received a good response and are currently assessing the bids. We will be announcing the winners soon so watch this space.
It was Ronald Reagan who, as only he could, said - “the status quo is simply Latin for the mess we’re in”.
Well if there was ever a status quo that has caused one almighty mess in this country then it is decades of centralism. Here too the status quo is not an option.
Years of stifling top down bureaucracy and Whitehall diktat are being consigned to the political and constitutional dustbin by a coalition government committed to localism.
For us, localism is the political recognition that the best form of government is the government that lets people govern themselves.
It means that decision-making is devolved and power is dispersed.
And it ensures that problems are more easily defined and solutions more easily developed.
Localism works. It’s also important for the future of our buses. And that’s because it offers a way for local authorities and bus operators to work in a productive partnership - a partnership that helps improve bus services and attract new customers.
Better bus services can never be delivered through a one-size-fits-all approach. Every local community is different.
So, if they are to be efficient and profitable, then bus services must be designed to meet the specific of needs specific local communities. They must be individually tailored, not off the peg.
This is what lies at the core of bus localism. But, as well as offering bespoke services, bus localism also means ensuring value for money.
I’m committed to getting the best deal for bus passengers and for taxpayers. I therefore I welcome the current Competition Commission inquiry into the local bus market. In my view, the commission is best placed to consider the difficult questions about the level of competition between bus operators and whether the current regulatory framework for buses is the right one.
My department has already submitted evidence to the Competition Commission, and will engage fully as the process continues before its final conclusions next year.
Smart and integrated ticketing
Before I conclude I’d like to talk about one final area where the status quo is very definitely not an option - the ‘door to door journey’.
Today’s passengers demand and deserve a public transport system that is properly joined up in a way that reflects the demands of their daily lives.
So whether, as I have, you call it the ‘door to door journey’, or you label it ‘end-to-end travel’ or the ‘whole-journey experience’, it is absolutely vital that we improve the journey from front door to final destination.
And again, the bus industry must play its part.
Innovations such as real time information displays at bus stops, or even something as simple as placing bus stops as close as possible to the main rail station entrance can make a difference.
But I believe that one of the most important steps towards a more joined up transport network is smart and integrated ticketing.
The government wants this new technology to be rolled out more widely across England and so we have provided £20 million of grant funding to the nine biggest English urban areas outside London to support this.
My department has also offered a BSOG incentive of 8% for operators with operational ITSO smart systems on their buses.
Additionally, we are continuing our support of ITSO Ltd as the organisation that can help facilitate the additional roll out of schemes - and I can tell you that we are working with Transport for London and their partners to achieve ITSO compatibility across the London estate.
I’m pleased to say that major bus operators are rolling out ITSO smart ticketing across their fleet - something that is good for integration and, as a result, good for passengers.
I want to congratulate Stagecoach and Go Ahead in particular for announcing their plans to roll-out ITSO smart ticketing across their fleets and I encourage others to follow their example!
Progress is being made on smartcards. But, I’m eager to see much more achieved. Indeed, my personal vision is of a system where we have seamless travel on one smartcard throughout the country:
- a single smartcard that you can use whether you are in Bristol on the bus, on the Tube in London or on the Metro in Newcastle
- a single smartcard that lets you hire a bike or join a car club
- a single smartcard that can be topped up in shops, online or by phone
- a single smartcard that makes travel easier and cheaper
Is realising that vision going to be easy? Well, it’s certainly challenging, and it won’t be achieved overnight. Already, though, officials in my department are investigating how it might be done. Make no mistake - we are firmly set on this direction of travel.
Friends, in speaking to you today I have argued that standing still is not an option for the bus industry. There are reality checks to acknowledge, big challenges to confront and real changes to make.
I realise therefore that these are testing times. But I also know that if anyone can be equal to them, then it’s the bus industry and the people who work in and lead it. And that’s why I look forward to working with you all in the months and years ahead.