Agenda item - Bus Reform [KD2024/067]

Report enabling the Combined Authority Board to note the completion of the bus reform consultation process, to note the Westco Bus Reform Consultation Report, to approve the CPCA Bus Reform Consultation Response report and to review its associated documents.

Enabling the Combined Authority Board to make a recommendation to the Mayor on bus franchising and approve the necessary further steps.

It was resolved to:

A Note the completion of the bus reform consultation process, its extent and the responses received including the discussions and feedback from Transport and Infrastructure Committee and Overview & Scrutiny Committee in January 2025.

B Note the Westco Consultation Report at Appendix 2

C Approve the CPCA Consultation Response Report at Appendix 3.

D To recommend to the Mayor that he makes a franchising scheme as set out at Appendix 5, complying with all associated statutory requirements

E When the Mayor has decided whether or not to make a franchising scheme agree:

· to adopt and publish the Combined Authority’s response to the consultation, together with the Mayor’s decision as the report to be published by the Combined Authority under section 123G (1) of the Transport Act 2000 (as amended by the Bus Services Act 2017) (the “Act”);

· in accordance with section 123G(2) of the Act to give notice to the Traffic Commissioner

F If the Mayor decides to make a franchising scheme:

· to publish the scheme set out at Appendix 5 on behalf of the Mayor at the same time as the Westco Consultation Report (Appendix 2) and CPCA Consultation Response Report (Appendix 3) to be published under section 123G(1) of the Act;

· at the same time to publish a transitional notice in the terms set out in Appendix 6 and then within 14 days of the date upon which the transitional notice is published, to give notice to the Traffic Commissioner of its publication on behalf of the Mayor if the Mayor so decides (or alternatively CPCA) as required by the Public Service Vehicles (Registration of Local Services) (Franchising Schemes Transitional Provisions and Amendments) (England) Regulations 2018;

· to agree that, in conducting the procurement process for the provision of local services, the Combined Authority will facilitate the involvement of small and medium sized operators in the provision of local services as set out in the report “Bus Franchising: Facilitating the involvement of small and medium-sized operators” at Appendix 4 to enable compliance with section 123 G (3) of the Act;

· to commence with implementation and mobilisation of franchising, noting section 4.4 of this report (Next Steps in the event of a Mayoral decision to approve franchising).

G If the Mayor decides not to make a franchising scheme:

· to advance the process to implement an Enhanced Partnership in accordance with sections 138A to 138J of the Act, relevant statutory guidance and supporting legislation noting section 4.5 of this report (Next Steps in the event of a Mayoral decision not to make a franchising scheme).

· Approve the repurposing of the existing ‘development of bus franchising’ budget to be used for the initial development work for the Enhanced Partnership.

The Executive Director, Place and Connectivity, introduced the report and highlighted key points to members.

Councillor Anna Smith provided an overview of the Transport and Infrastructure Committee meeting held on 24 January 2025. The committee unanimously voted to recommend bus franchising to the Mayor. Members sought and received confirmation on various aspects, including financial streams, and discussed the risks and benefits of franchising compared to the Enhanced Partnership model. The discussion highlighted the greater control over planning and delivery that franchising would offer. Concerns about connectivity, particularly in rural areas, were addressed by officers. The focus was on the opportunity for a significant change, prioritizing community needs over profit. The extensive work by officers to reach this point was acknowledged.

Members inquired about the mechanisms and implications if a future Mayor decided to reverse the decision, specifically regarding the financial implications in terms of additional work and resources required. The Legal Advisor explained that under section 123(n) of the Transport Act 2000, there are provisions for revoking the scheme. This would involve a review process of how the franchising is operating, meeting three specific conditions for revocation, conducting an assessment to ensure these conditions are met, and undergoing an audit and public consultation. The process is similar to setting up bus franchising and would take a significant amount of time and incur costs comparable to the initial process. If the decision is made to end franchising, there would be a run-off period for existing contracts to allow for replacements to be put in place.

Councillor Anna Bailey acknowledged the significant work done by officers under competing demands. She advocated for better bus services, emphasising the need to set principles without meddling in details. She highlighted the challenges in East Cambridgeshire, such as low population density and long travel distances, and noted that franchising could help address these issues. However, she pointed out that franchising is costlier and riskier, and further work is needed to understand residual risks and uncertainties before making a decision. She also raised concerns about the lack of clarity on what a revised network would look like and the limited additional funding in the business case. She questioned the benefits for rural areas and the assumptions in the model, such as borrowing, car mileage reduction, and doubling bus passengers. She stressed the need for a mass transport system and expressed her reluctance to make a decision twelve weeks before the mayoral election. She emphasised that the decision is far-reaching and should be made after the election, while clarifying that she is not opposed to franchising in the future.

Councillor Chris Boden stated that Fenland District Council recommended an Enhanced Partnership (EP) over franchising, though either scheme could work. While supporting franchising in principle, he highlighted unmitigated risks and the impact of development in South Cambridgeshire on bus usage, advocating for convenient, reliable busways. He expressed discomfort with the current franchising model and emphasised the need for further Board oversight over the next year. He raised concerns about the assumptions of a modal shift to buses, citing a lack of evidence and the general preference for cars due to unreliable bus services. He questioned the consultation process for only comparing one model of franchising against one model of EP, without exploring more detailed options. Officers explained that the assessment and consultation processes complied with legislation, with independent verification from Grant Thornton. The consultation also incorporated learnings from other regions and advice from Mike Bartram, a fellow at the Institute of Consultations. The process provided valuable insights into the network and wider connectivity, which should be utilised moving forward.

Councillor Bridget Smith highlighted that residents in her village cannot access apprenticeships in Cambridge due to inadequate transport options, restricting their job opportunities. Stressing that the proposal aims to provide these individuals with more choices, she noted that lack of access to transport is a major driver of poverty and inequality. Providing reliable, affordable transport is a quick solution to this issue. Raising the potential for changes in government commitment to public transport in the future, she questioned how the scheme could be adjusted. Officers confirmed that within the currently proposed model, decisions can be made regarding commercial and procurement aspects, phasing of lots, and depot strategy. While the broad model is set out in the approved assessment, further granular decisions would be necessary.

Thanking the team for their extensive work, Councillor Lucy Nethsingha noted the long process and significant changes in the landscape since the decision-making began under the previous Mayor. She emphasised the need for flexibility and resilience in the system to serve Cambridgeshire and Peterborough effectively, highlighting the increased public funding in the bus network and the importance of democratic accountability.

The Chief Executive acknowledged the need for expertise to deliver the proposed workstreams and suggested changes in the organisation's operations, skillsets, policy, and governance. He confirmed there are ongoing discussions with other regions and the potential need for a separate committee to oversee bus service decisions, ensuring proper implementation and timely decision-making by the Board.

Acknowledging that cars are often the simplest option for those who can afford them, Councillor Sam Wakeford emphasised the importance of making decisions based on current data and the need for democratic accountability. He supported making a timely decision to address market failures and improve decision-making, thanking the team for their efforts.

Councillor Dennis Jones emphasised the importance of providing choice for people. He asserted that franchising is the way forward, as the principle has been established and the public has expressed their support. He urged for the implementation to proceed without further delay.

Praising the team for their efforts, Councillor Anna Smith acknowledged the long and significant work leading to this point. She noted the risks and costs associated with both franchising and Enhanced Partnership (EP) models, emphasising the importance of providing choice for residents. She pointed out that rural and urban areas would benefit from franchising, which offers greater control compared to EP. She stressed that decisions should balance commercial and social values, allowing for better planning and connectivity. She mentioned that residents, businesses, and schools consistently request better bus services, with 63% of residents in favour of franchising. While acknowledging that franchising is not perfect, she urged for immediate action to start the process, as residents expect timely decisions and improvements.

Al Kingsley acknowledged the validity of all perspectives and expressed a slight concern about the risks and benefits related to social equity, access to skills, and training. He emphasised the need to mitigate risks and find evidence of impact, suggesting a stronger commercial perspective to grow and sustain providers. He noted the importance of judging based on current knowledge and successful models in other regions.

John O’Brien emphasised that the primary goal from the Integrated Care Board point of view is to maximise opportunities for health and care services for patients and staff, which depends on greater control and influence. He noted that both models offer advantages. Health providers find franchising attractive but recognise the need to mitigate financial and resource-related risks. The appeal of franchising lies in the greater control it offers.

The discussion addressed the decline in national passenger numbers, noting that the local decline is less severe but significant work is needed to double passenger numbers. Emphasis was placed on focusing on frequency, fare, and safety to attract more bus users. The 30-year business plan is based on current local plans and is considered pessimistic regarding population growth, with an objective to reduce car mileage by 15%. Network design was discussed, with a proposal to present a network paper to the next TIC . The profitability of certain routes and the challenges in rural areas were highlighted, emphasising the need for a depot strategy to support smaller operators and SMEs. It was explained that borrowing would support depot acquisition and that both franchising and EP would impact the precept. The business case was initially based on a £12 precept, which has since increased to £36, making the percentage increase less significant.

The importance of democratic responsibility was emphasised, along with concerns about the Board's political interventions. It was stressed that the Board should establish principles. Once the scheme is operational, it requires oversight. There is a need to justify decisions to each Board Members’ districts and but also a need to understand each other's challenges.

Members discussed the importance of considering safe travel, with officers highlighting lessons learned from Manchester where safety was initially less of a focus. It was noted that there are different aspects of safety, including passenger and operator safety, and the role of traffic commissioners in regulating bus and heavy-duty vehicles. While public transport is generally safe in the UK compared to other modes of transport, the importance of making people feel safe at bus stops and the perception of safety was emphasised. Officers confirmed that while the responsibility lies with operators, the Combined Authority must stress the importance of safety, embedding it into all workstreams and flagging it at appropriate stages, such as procurement.

Officers confirmed that following any decision, officers will begin implementation planning. Key workstreams have been identified, and decisions will need to go through the proper governance of the CPCA for oversight.

Councillor Chris Boden sought advice from the Monitoring Officer whether he should participate in the vote on this item as a trustee of FACT Community Transport. The Monitoring Officer advised that such a decision rests with the individual Member, and whether they feel an impartial observer would view it as a conflict of interest. Councillor Boden made the decision to recuse himself from the vote for recommendations A to F.

A recorded vote was requested by Councillor Anna Smith and was supported by Councillor Lucy Nethsingha and Councillor Sam Wakeford.

On being proposed by Councillor Anna Smith, seconded by Councillor Dennis Jones, it was resolved to: