Ticketing and Concessionary Travel on Public Transport - United ...

Ev 22 Transport Committee: Evidence
5 December 2007 Mr Roy Wicks, Mr Neil Scales, Mr David Cook, Mr Adrian Jones <strong>and</strong> Mr Greg Yates
Mr Wicks: It has been an interesting experience
because we have been on that project for four or five
years <strong>and</strong> certainly at the beginning the operators
were concerned for two principal reasons. They
needed to be convinced, first of all, that it would
actually give them productivity benefits in terms of
speeding up the buses. They actually thought some
of the processes might take longer in fare collection.
I think we can demonstrate that is not the case. The
second real issue for them, which is the diVerence
between London <strong>and</strong> outside London, is how the
revenue is allocated because at the moment a bus
operator collects all his money, if you like, on the
day in cash <strong>and</strong> knows he has got it. If you have a
smartcard system you actually have to put in place a
back oYce which allocates the money between
operators, <strong>and</strong> operators were concerned that might
represent a threat to their revenue –
Q173 Chairman: Why would it represent a threat
unless they are not giving you accurate figures now?
Mr Wicks: I think it is probably a threat because
basically they would not get their money straight
away, they would get it through some h<strong>and</strong>ling
system, <strong>and</strong> secondly there might have to be
commission paid to agents who sold the tickets. So
if you went to top up your smartcard somewhere
else, at a pay point or somewhere like that, that
company might charge a commission. What we have
said <strong>and</strong> what we want the pilot to prove is that
whilst there may be risks, they are more than
outweighed by the benefits to the customer <strong>and</strong> the
passenger, <strong>and</strong> it should actually give you two
critical things. The first one is a growth in patronage,
which should be good for the bus operators’
business, <strong>and</strong> secondly they should get a lot more
information about their customers, which is
certainly helpful for them in being able to target
oVers to those customers <strong>and</strong> other things. What I
said at the beginning was that yes, the operators were
sceptical. Recently, it has been quite interesting to
see the sea change <strong>and</strong> now certainly companies like
Stagecoach are very keen to see the products
implemented, as they have seen the Government
encourage, particularly through rail franchises, the
take-up of smartcards <strong>and</strong> as Oyster cards become
more successful. It did take some persuasion to
translate the London lessons outside London, but I
think now they can actually see those benefits for
themselves <strong>and</strong> I think they believe they can capture
the productivity benefits.
Q174 Mrs Ellman: So you think there is a change
now?
Mr Wicks: I think there is a definite change, <strong>and</strong> that
is why I am optimistic about the pilot when it starts
in SheYeld next March.
Q175 Mrs Ellman: You also mentioned problems of
smartcards in a deregulated environment. What
diVerence will the Local Transport Bill make?
Mr Wicks: It will oVer local authorities the option of
moving to a more regulated market, which would
clearly enable two things to happen. First of all,
apart from all the other benefits that might flow from
that, you could have a single operator eVectively
because you will have franchised the services. You
can simplify the fares structures <strong>and</strong> you can
integrate better with the other modes without having
to worry about the issue of preferential pricing for
any one operator. Also, it would have benefits in
terms of the concessionary fares issues my colleagues
were referring to earlier because you would not be
into this complex round of negotiations with
operators about what they might claim for
concessionary fare reimbursement costs, you would
be dealing with the actual costs themselves. So
certainly the Local Transport Bill through the
quality contract route oVers the most eVective way
of achieving both integrated ticketing <strong>and</strong> good
concessionary fare reimbursement.
Mr Scales: The wellbeing powers contained in the
Act will also allow us to oVer concessionary travel to
other market segments such as asylum seekers,
maybe, or diVerent groups of children that are not
captured by the concessionary travel regulations
now, so that would be another benefit we would get
from the Act.
Q176 Mrs Ellman: Are you satisfied the provisions
in the Bill will be adequate to deal with these issues?
Mr Wicks: Provided the quality contract process is
deliverable within the timescales of the political
aspirations of the authorities which want to do it.
Provided we have a speedy process for implementing
the franchising <strong>and</strong> it does not become a drawn-out
bureaucratic process, then I think all of the
provisions in the Bill are very helpful.
Mrs Ellman: Thank you.
Q177 Mr Martlew: Can I concentrate, gentlemen, on
the concessionary fares scheme which is about to
come within the spread. Mr Cook, I think you
initially said there were reservations about this. Can
you exp<strong>and</strong> a little on that?
Mr Cook: I think the issues are in respect of
reimbursement of the costs, so if the scheme goes to
a national scheme there will be additional costs. We
start with the proposition that neither the bus
operators nor the local authorities should be out of
pocket or in pocket as a result of these changes. One
of the very good things is that a specific amount has
been set aside for local government, £212 million, to
ensure that local authorities get reimbursed for
reimbursing the operators for the cost of travel. As
colleagues have said, the smartcard would allow us
to be more accurate about which people are getting
on buses <strong>and</strong> what the price of journeys are, but that
aside I think the first concern might be is £212
million the right amount of money? That question
might be raised because experience in Scotl<strong>and</strong> <strong>and</strong>
Wales has shown that take-up is quite high.
Anecdotal evidence we have from local authorities is
that people have persistently <strong>and</strong> consistently joined
concession travel schemes such as, for example, the
local one which came in in 2006. So take-up does not
step up <strong>and</strong> then plateau, take-up continues to rise,
so £212 million may or may not be the right amount
of money. Secondly, we have a distributional
problem in that the £212 million may not go where