It is a pleasure to follow my hon. Friend Mike Kane.
I broadly support the Bill, as do many Members in the House, and I acknowledge that a number of sector bodies, including the respected Urban Transport Group, also support it. However, I say “broadly” because I have concerns that it contains a fundamental deficiency, and I will come to that later in my speech.
The Bill promises what many have been pressing for since bus services were deregulated in the 1980s: the reintroduction, in particular, of local franchising powers. The model before deregulation was by no means perfect, but many, including sector bodies, believe that deregulation has been an unmitigated disaster.
London, of course, did not suffer the same fate—it did not lose its local decision-making and franchising powers. Those remain, and they have arguably supported the vast improvements seen in London under the auspices of TfL and the Mayor of London. Regrettably, areas outside London, including my home city of Bradford, saw bus services subject to intense and increased centralisation.
Local decision making on bus services is common sense. Ensuring local accountability to the travelling public is worth while and valuable. More importantly, decisions are better informed when they are made locally. Why else are we pursuing devolution deals up and down the country?
The case for reasserting local decision making over our local bus services is more compelling than at any time in recent history. That is because our local and regional public transport models are falling desperately short of their desired aims. Public transport is not delivering for our local communities, and that is for a number of reasons.
First, the use of local bus services in metropolitan areas outside London has faced steady and relentless decline. That is despite concerted and strenuous efforts on promotion and education over the years. That decline is compounded by rising private car use across the country. In the largest city regions outside London, the number of bus journeys has fallen by over 51% since 1984. That decline in bus usage, along with rising private car use, has caused widespread and persistent congestion on the roads in my constituency. However, the story of Bradford is not unique. Congestion blights communities, impedes economies and causes frustration for the travelling public.
The need to improve bus services is compelling for another reason: the ongoing cuts to local government budgets. For many years, local authorities across the country have subsidised local bus services. Without those subsidies, many bus routes would be unviable, as low passenger numbers mean that they are uncommercial. As local government budgets are cut further, councils will have less and less capacity to continue to subsidise bus services. The size of these subsidies must not be underestimated. The public sector is responsible for 40% of private bus companies’ income, mainly through fuel subsidies, support for the older person’s pass and support for non-commercial services. Given these challenges, the need to cut congestion is beyond doubt.
The reintroduction of franchising is long overdue. Competition in most areas is limited, and as a result, excess profits are rife. Those excess profits undermine the viability of local bus services, and have done so for many years. Analysis by the Urban Transport Group reveals that profits in city regions are running at double the levels seen among bus operators in the capital. In London, bus operators make 4.1% profit on average, but the figure is 8.1% in city regions. That reduces the amount available to bus services. Dividends to shareholders have taken priority over the bus travelling public for far too long. The reintroduction of franchising across all regions is key; the operation of local bus services in London over recent decades offers strong and undeniable evidence of that.
I turn now to the fundamental deficiency in the Bill: the Government’s decision to restrict franchising to those local authority areas where a devolution deal is in place. My suspicion is that the responsibility for conflating the reintroduction of franchising powers with this Government’s devolution agenda lies at the door of DCLG Ministers. We must recognise that devolution deals involve complex negotiations across many local authorities and take time to finalise. Some are in place and others are imminent, but many others may take months or years. The decision to conflate local bus franchising with devolution is at best tactless and at worst cynical. All local areas, not only those that have agreed local deals, should have access to franchising powers. All local areas have a strong interest in improving local bus services for the communities they serve. Denying the benefits of this Bill to certain areas until devolution deals have been agreed is a cynical ploy. It delays the undoubtable benefits of franchising until local areas relent. I urge the Minister to consider that point. Local bus services are too important to become a bargaining chip in this Government’s devolution negotiations.