Better Bus Area (BBA) Working Group

Meeting 3: Wednesday 18th July 2012, 1.45pm,

Great Minster House

Note of meeting

Present:Anthony Ferguson (Chair)DfT

David BeerPassenger Focus

Steven SalmonCPT

John BirtwistleCPT (First Group)

Martin DeanCPT (Go-Ahead)

Jonathan BrayPTEG

Tracy JessopATCO (Norfolk CC)

Eamon LallyLGA

Geoff Pickford (by tel)ADEPT (Derbyshire CC)

Rishi MandaviaDfT

Sarah Wooller (Facilitator)DfT

Grace Hansford (Secretariat)DfT

Matthew TranterDfT

Richard YatesDfT

Apologies:

Keith HalsteadCTA

Actions arising from the meeting

  1. DfT to explore, with Sheffield City PTE, the possibility of allowing access to information on the progress of their BBA request throughout its development.
  1. DfT to amend a word in the template title from ‘routes’ to ‘operations’.

Minutes and actions from the previous meeting

  1. The minutes of the previous meeting were agreed.
  1. a) DfT accepted the distinction between the services using Section 19 and Section 22 permits, where the latter can be commercially based, andhas reflectedthis in the consultation document.

b) The current approach takenby DfT to Quality Contractand Better Bus Area schemes in the consultation differs from that discussed previously. The approach set out in the consultation will be that Local Authorities which are moving towards a Quality Contract scheme would not receive a BBA top-up.

This position caused considerable disquiet for the PTEG and LGA reps, whilst being welcomed by CPT. DfT sought to assure the group that this represents Ministers’ views before consultation.

  1. DfTcirculated a timeline of anticipated events in relation to BBAs coming into effect, outlining the actions to be taken from the launch of the consultation this summer to the devolvement of BSOG to local authorities in April 2014.
  1. DfT has established that the treatment of community transport operators within BBAs would remain unchanged, but sought the views of the Group on how this has been reflected in the consultation.
  1. DfT and CPT to discuss State aid case implications in terms of local authorities paying BSOG to operators. Following the meeting this action has now been completed. The case law provided was based on an example that included a competitive tender process, which is provided for in the state aid regulations. It does not therefore change our legal view that state aid rules prevent Local Authorities simply administering BSOG. BBA bids will need to reflect this.

Update on Sheffield

  1. Following last month’s meeting, the department was approached by Sheffield city with a request to become an early BBA adopter as part of its City Deal. An agreement has been reached that Sheffield will work with bus operators and the department over the course of the summer to develop a proposal with a view to reaching agreement by October.
  1. If full agreement with operators and DfT is secured, Sheffield would be free to start work at that point on the basis of top-up funding (up to £1.8m depending on the bid) and would , subject to unforeseen circumstances, become a full BBA receiving devolved BSOG in October 2013 once regulations have been brought in.DfT intends to use Sheffield as an early adopter to test out elements of the intended process.
  1. DfT sought the Group’s views on how best Sheffield’s position could be used to inform future BBA proposals, but stressed that Sheffield’s case should not be considered as thedefinitive pilot for BBAs.
  1. ATCOexpressed concern regarding the future position of Section 22 Community Transport operators within the future BBA and asked whether Sheffield had included or considered smaller bus operators in any discussions. DfT said these were among the points it would exploreduring the summer discussions with Sheffield.
  1. ATCO asked what had informed DfT’s decision to raise the top up funding to £1.8 million and whether that could be taken as an indication of what funding might be available for other bids. DfT saidthat, whilst recognising that this might set an expectation of the scale of the top up, the figure should not be considered indicative due to the unique situation in Sheffield in respect of the short notice of the request and the as yet uncertain nature of their proposal.
  1. LGA said that the amount quoted equates to around 30p in the pound, which was lower than expected. DfT said that earlier hopes to provide a more substantial figure had been affected by current Departmental budgetary caution. DfT expressed its continuing commitment to the sustainability of the scheme.
  1. ADEPT said that, as the figure was lower than anticipated, it should be included in the Consultation Document to inform potential bidders.DfT reiterated that the figure quoted in the case of Sheffield should not be considered absolute for other bids.
  1. CPT said that, given the aim of the BBA tranche 2 was to deliver passenger growth, creative thinking was needed to explore the possible uses for the funding. Unless partners could agree a credible plan for that growth their bid would not be submitted, which might lead DfT to the view that the scheme was not worth continuing.
  1. ADEPT expressed concern thatSheffield’s pre-emptive request might undermine the consultation due to the potential date of agreement in mid-October falling during the consultation period. DfT said that there was no conflict, as the process of discussion with Sheffield would itself make the subsequent guidance and bidding process for others more robust.
  1. ATCO asked whether, given that the total number of bids was expected to be around twelve, Sheffield’s case would impact on either the number of total bids accepted or the funding for the remainder of the bids. DfT said the figure for the total should be taken as indicative only, and that it would be premature to speculate on any funding constraints as the funding was not coming out of this year’s budget.
  1. ATCO said Sheffield’s case provided a useful opportunity to learn more about all aspects of the process and asked whether an arrangement could be reached with DfT and Sheffield to provide an open, transparent dissemination of information from the outset, whilst recognisingthe sensitivities surrounding issues of commercial confidentiality. DfT endorsed that view and agreed to raise the issue with those involved.
  1. DfT asked the Group to provide any views or specific questions they would like raised at DfT’s forthcoming meeting with Sheffield. DfT also suggested the possibility of inviting David Brown of Sheffield to address a future Working Group meeting.

Calculating BSOG – process

  1. DfTput the following approach to the working group as an example of how BSOG within a BBA might be calculated. DfT’s intention is to:
  • Provide Local Authorities and bus operators with a fair assessment;
  • Ensure a timely response to BBA proposals;
  • Reduce nugatory work;
  • Deliver best value for the Government’s money;
  • Ensure we do not go over budget.
  1. On balance, the group’s view was that:
  • There was broad approval for the proposals set out, however, Sheffield’s developing BBA could also provide a unique opportunity for others to learn more about the process at every stage.
  • LGA said comprehensive feedback would be provided after further consideration.

Estimating BSOG flow within intended area

  1. DfT remained willing to offer some assistance on statistical analysis, using numerous datasets including mapping and franchise data. For example, DfT heldinformation on bus stop numbers and distances and kilometres run which could inform initial calculations on fuel efficiency. Moreover, DfT had the software necessary to synchronise the information and incorporate it into a detailed map of a given area.
  1. However, DfT stressed the need to establish that there was sufficient appetite for assistance before making any firm commitment.
  1. CPT asked how DfT had calculated the rate of BSOG for Sheffield. DfT said that Sheffield hadcarried out the calculations, but that DfT couldperform the statistical analysis then work with Sheffield to establish whether the results matched.
  1. ATCO expressed concern regarding the perception that all local authorities had access to large quantities of data which could sometimes lead to less detailed information being provided by operators, and consequently the need to revisit the data. ATCO suggested that DfT might wish to explore this issue further with operators.

Formal bid provides exact definition of the BBA area

  1. DfT’s working assumption is that a detailed map would be required, together with a descriptor of the bus stop or other reference point at which each road crosses the boundary.The BBA map will need to be very carefully worded to clearly define which services are included or excluded and all parties would need to be clear from such a definition how to estimate the proportion of service to include for inter-urban services.

Making and auditing claims

  1. Given the timeframe of the BBA process,DfT recognises the potential difficulties involved in capturing and submitting accurate BSOG data, particularly the split of a route within and outside of a BBA.
  1. DfT has now created a draft template of a BSOG data capture sheetwhich endeavours to speedthe process by using the data from the last certified claim. The data fields reflect the working group’s support for using actual data rather than indicators. The template was circulated for comment.
  1. There was broad agreement with DfT’s view that, as partners, local authorities and bus operators should be able to discuss and agree figures prior to submitting data for assessment.
  1. The group expressed confidence that using this method, authorities wishing to submit a bid would be able to obtain such an accurate level of information within the timescale of April 2013.
  1. CPT said use of the template might also prevent the need for time-consuming and costly auditing.
  1. CPT requested a change to the title of the template from Commercial routes only to Commercial operations only.’ DfT agreed to amend the wording accordingly.

Remaining commercial bids for BSOG outside the BBA

  1. DfT’sintention is that commercial services will continue to be able to bid for BSOG outwith BBAs as at present.
  1. LAs developing BBA bids should talk to any operators whose bids run through their area, so that they are aware of what will and won’t be eligible. The scope of proposed and designated BBAs will be published and after the transitionary period no commercial services will be eligible within that area.

Appraising BBAs

  1. DfT presented an initial view of how the value for money of BBA proposals would be appraised. A short note was circulated outlining the lessons learned from the assessment of BBA Tranche 1 bids.
  1. One of the main issues for DfT during BBA 1 centred around costs and optimism bias. Due to the tight timescales of BBA 1, DfT had advised bidders that an optimism bias would be applied appropriately across each bid. However, none of the bids clarified whether this had been applied to their scheme costs. DfT will provide clearer guidance on this issue for BBA 2.
  1. ATCO said that the information had not been requested for BBA 1, however should it be required for BBA2, it would be easy to provide.
  1. LGAsaid it was very important that the BBA 2 guidance provide clarity on any impact of the scheme on bus km as it is a key element of the assessment.Not all of the bids included this as it wasn’t included in previous guidance. LGA also stressed the importance of the inclusion of RTI benefits , however others queried the validity of the data.
  1. DfT said that discussions with HMT had steered away from setting specific monitoring requirements for BBA bids, however DfT’s view was that it would be a good thing for local authorities to do.
  1. ATCO asked whether, when applying any weighting, DfT made the distinction between new passengers attracted and improved service to existing passengers. DfT said the assumption was of an across board benefit.
  1. DfT said another issue during BBA 1concerned the calculations around the impact of carbon emissions, where most of the bids resulted in a carbon disbenefit. The new Guidance will encourage a more accurate system of calculation for carbon emission.
  1. ATCO said the useof a carbon tool had been very helpful, however DfT’s understanding was that the tool was quite complex and the results open to interpretation.
  1. ATCO expressed concern at the restrictions placed on bid information by DfT’s limit of twenty pages and argued that DfT may therefore need to be more proactive about what information is required.
  1. LGA said that wider benefits should be included in assessments even if VFM is not top consideration for instance bidders should be able to mention VGA
  1. ADEPTagreed that It was important not to take just a monetary assessment,
  1. PTEG did not offer any comment on the paper as it had not been circulated in advance.
  1. DfT flagged up the need to begin looking at producing a lessons learned paper in the near future in advance of publishing the new guidance.

Next meeting

  1. It was proposed that the4th meeting would take place on Wednesday 13th September at 9.30am.

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