National Assembly for Wales

To start with, can you outline your concerns about the affordability of the Bill, both in terms of your own assessment and in light of the Welsh Government's budget constraints and the approach taken in the regulatory impact assessment? 

Thanks, Carolyn. I'll take that first. I think it's worth saying thank you, at the start, for having us to give this evidence today. Bus operators share the same objectives of the Welsh Government in this Bill to run a better bus network that is more frequent, more reliable, with more affordable services.

Our primary concern is that changing the regulatory model alone doesn't guarantee success. Local communities need policies that take buses out of traffic, co-ordinate roadworks and speed up journey times. The Bill does very little to do that. I think the concerns around affordability and deliverability are rooted in the fact that the Bill doesn't actually change the economics of running bus services in Wales. So, many of the challenges that the network faces today the network will still face on the other side of the reregulation.

If you look at other franchised networks in the UK, London has historically had a gap of around £700 million between the cost of running that service and the revenue generated through fares. More recently, we've seen Manchester come on board with franchising, and while lots of elements of what's happened in Manchester have been successful, the gap there is around £0.25 billion.

We think that the Bill exposes the network to some affordability and deliverability challenges in three different ways. The first is we don't think that the value-for-money test within the Bill is sufficient enough. There should be a more clear value-for-money test to ensure that when Transport for Wales, on behalf of Ministers, are working up the network plan, we can look at whether that network is affordable—whether we have the resources to deliver that.

Secondly, we think that the Bill lends itself to only type of franchise—a gross cost franchise. That is the franchise that carries the most risk for taxpayers, because there isn't the opportunity to share risk between operators and to potentially help Government when budgets are constrained through innovation, through cost-cutting measures, et cetera.

The third is—Carolyn, you were asking the question around the regulatory impact assessment—we think the calculation of risk that has led to the development of this Bill has not been sufficient. I'll give you two examples. We highlight this in our written evidence in terms of the regulatory impact assessment. I understand that an RIA is always at a point in time and it's never going to be entirely accurate, but we could find, just through the difference between the salary costs in the RIA and the fact that national insurance cost uplifts aren't included in the RIA, at least £200 million of additional costs over the 30 years of the affordability assessment that aren't factored in.

That feels to me to be a significant question that hangs over the viability of franchising as we develop this. The argument would be that those costs are, of course, part of the alternatives. So, if you were to look at statutory partnerships, other forms of franchising, those costs would still be there. The difference is your ability to share risk in those other models, and not absorb that risk entirely into the public finances.

I think the main issue about the Bill is that we're lacking some clear detail in the Bill and the RIA in that it's difficult to understand cost, and difficult therefore to understand the challenge that's going to come to the Welsh Government in running the whole network, because we don't know what the intentions are around the network. We don't know what the intentions are around funding and investment in the future. If we're trying to do the same with the current funding and adding a whole load of costs into it from TfW for instance, it's simply not going to work, because you can't get more for less. And if you can, please advise me where I could get that.

The whole positioning around this has been that the networks are not sufficient, they're not good enough. Well, we've been running bus services—I have—for 25 years, and we commercially try to do the best we can to make profit. Therefore, if we can't do it in the commercial market, what makes it different from a franchise market? You take all the risk, as Aaron quite clearly said. And the RIA looks at new things that are going to be done that are not new; they're being done currently—smart ticketing, fast boarding, hubs, they're all being done now.

I genuinely can't see where the benefit's going to come to give you the revenue increase that the RIA requires and relies upon to then give you better services or more services. And it talks about patronage increase in the RIA. That's a big, big faux pas, because nothing in this Bill and nothing in the RIA looks at the main cause of patronage increase and modal shift, which is congestion. It's not dealt with at all.

I think we've got a once-in-a-lifetime opportunity here to change this system. And we're not against—. The buses Bill of 1985, let's be clear about that, it's done its time—it's gone. It needs something different. The whole UK has recognised that. But we're not addressing the main problem that we currently face as operators in the RIA or the Bill, and that is congestion.

Just coming back to that, so the barriers, congestion on our roads, we've got cycle routes there now as well. Parking is a big issue. So, you'd like that to be in the Bill. Is this what you're saying? And then also something to increase bus patronage as well. So, that's an issue for you that's not included.

There's nothing in the Bill that gives me confidence of longevity and that they're going to look at how we get modal shift. The RIA requires patronage increase now. It doesn't require it in five years—it requires it now, to give you the revenue support.

We visited Manchester, and I think, going forwards, they're looking to maybe adopt the network as it is now, but perhaps look at more consistency. Because not everywhere has that tap on, tap off and everything that might be offered in the urban areas. So, I think that that's, hopefully, the idea, going forward—that we just get the existing network adopted and then expand in the future. But do you see an issue with doing that—adopting the existing network as it is and doing it viably?

No. I think that that would be a sensible thing to do—to take what you have now and then build over it. But I think that we have to be clear in the Bill that that's what you intend to do, so the public can understand that's what you intend to do—

And operators can understand and they feel more comfortable, and—

Clearly.

Okay.

I think there's also something about expectation management here. It seems to me that the Bill and the lead-up to the Bill have been accompanied by a narrative that bus services are not very good in Wales and this Bill will radically overhaul them and improve them. But, actually, as you've said, Carolyn, the starting point from TfW is we're going to start with a very similar network to what we already have. So, there is a real risk here that we've built up public expectation, in the same way as happened with the railways, and, actually, then delivery doesn't follow, or significant improvement doesn't follow, for a long time. I would contend that, actually, some of the premise for that improvement isn't quite there. I think the RIA presupposes that there is a huge amount of inefficiency in the system, which can be used to cross-subsidise services that don't exist now, or are kind of marginal now. That's not true. And it seems to rely on—

Can I—

Sorry, Carolyn—two points, quickly; two things. It seems to rely on that operators are making significant amounts of profit. Actually, not much of the network in Wales is commercial anymore. A huge amount of that network is supported through contracts. And that operators are inefficient, and they wouldn't exist if that were true.

Can I just come in on that? This has been in the plan for a number of years now. There was duplication maybe on some routes, in those routes where there are lots of passengers, competing buses, where maybe the frequency could have changed. So, I think that was part of it. Do you not think that's the case anymore, where we can shift that transport away to more rural areas?

There is undoubtedly some duplication on the network, but if those buses are running commercially, they are serving a purpose for customers. It's not quite as simple as just pulling one service out, because then you have questions around capacity, around customer demands, and whether they're being met. So, there isn't a huge amount of slack in the system to do that. There are clearly benefits from better co-ordination and better join-up. And I think that the premise of one ticket, one network, one timetable—I always get those three in the wrong order—is broadly a good one. I think it's whether that can be delivered. Operators I speak to are agnostic on the regulatory model. What they want is buses that are run efficiently, that deliver the demands of passengers. And I don't think that what we see in the Bill here radically changes that.

Thank you. What are the implications of the fact that the Bill shifts responsibility for planning and delivery of local bus services to Welsh Ministers, while key areas such as learner travel and bus infrastructure are left with local authorities and are largely outside the framework of the Bill? At the moment, you can operate where you want, commercially, as long as you register. Very often, you work with the local authorities, I guess. What are your views on that, regarding the shift in responsibility for planning?

I think that there's a disconnect here between the Bill, how local authorities are seen and will do, going forward, and what the actual network provides you. If you take the network as it is now, the bus network and your home-to-school network, which the LAs will cover, why are they separate? These are inherently combined through the commercial operation just now. If you try and separate them out of our members, the small and medium-sized enterprise marketplace, if you lost a couple of members in the rural areas who do bus services and home-to-school, and they don't get a franchise for their bus services, what happens to the home-to-school? The local authority picks it up. And that's a whole different ball game again. So I don't think that's going to work well.

We've talked about, and we've been told for many years now about, corporate joint committees. Where do they come into all this? It's mentioned briefly in the Bill, but if we come to ask for detail, we're not quite sure what they're picking up and what they're not picking up. So, what do they actually do? Are they the local authorities and, therefore, cut the 22 down to the four? Or are they going to do home to school, or are they not going to do home to school? And the network itself, I still state clearly that networks should be built by local people, giving local demand and local need. You try to regionalise these things, it just won't work. Transport for Greater Manchester, as you mentioned earlier, Carolyn, that's a massive population in a big urban area. Wales is not like that. You've got three big cities in the bottom, one at the top, and in between a whole load of hills and mountains. The rural aspect to this—. And our members, the SME membership, are petrified about this Bill. They're trying very hard to work with the local authorities, as they've done for decades. Now who do they work with? You try to take that and put it into regional, I don't think it's going to work.

It's the same people, really, who are local and regional; the same workforce, but they would have to shift. I think the regional is for the strategic planning of the network that's supposed to be dealt with locally, but it needs clarity, I agree. These questions, we will be asking. We've got representatives coming in from the Welsh Local Government Association later as well.

I think, Carolyn, if I could just add there. On local authorities, Scott is right: bus is inherently a very local service and responds to very local needs. I think we would be missing a trick if local authorities didn't have a bigger role in how we shape the network. There is so much experience, there is so much knowledge within those local authorities, and I think the Bill is very light on the detail. I think they have a really important role in democratic accountability around the network, which I think is lacking in some parts of the Bill, and so I think we should look to strengthen that.

On the specifics of the integration between the school network and the public bus network, I'm coming here and saying, 'I have concerns about deliverability', and it wouldn't be credible to say, 'Let's throw it all into the mix and risk it all', but there are some benefits over time from integration between those two things. We were with, to be fair, two Cabinet Secretaries on Friday at the learner travel summit, talking about some of the challenges with learner travel, and I spoke there about the opportunities of integration. There are some really good examples across the UK. West Nottinghamshire College, Nottingham Trent University, and the work they've done with Trentbarton and Stagecoach is a really good example of where that integration between those two networks can both benefit learners in terms of reduced costs and increased availability and flexibility of travel, but also in driving economic growth as well. Because if you look at that particular service, it drove significant growth in places like Mansfield and Ashfield with increased footfall, so we should be thinking, I suppose, more fully about that, but we're saying that there's some real risk around franchising alone here. So, we need to take those two questions in time, I think, and perhaps that's a longer term ambition.

So, for clarity, you think local authorities are best placed to work with operators to help deliver this, and it should be with school transport as well.

Yes. And I think we need much more clarity on the role of CJCs.

Okay. Right. And clarity on the role of CJCs. Thank you. So, you both expressed concerns about the position of SME operators. Like you said, they rely on the school transport, don't they, and we rely on them so much that we can't really afford to lose them. So, how should these concerns be addressed, both in the Bill and in implementation or transition to the new system? What do you think needs to happen?

I think that the SME market is underestimated in the Bill. We've been given many promises over the past couple of years about the protection of SMEs. And yes, I get that, I understand why: they are essential to local communities. They live in the local communities. They probably know their bus drivers. They know their school fleet. They understand the area they're working in, as far as the network's concerned, and their LAs. But TFGM gave the same guarantees, and the outcome was nothing for SMEs. And these are, in Wales, pretty unique, because there are so many of them. They provide not just a bus service, but a socioeconomic service to that community as well. And the fear that they have is that this Bill doesn't give us enough detail to understand how. We can say, at a higher level, 'This is what we want to do.' Okay, great. But my members are petrified—and 'petrified' is the right word to use—because they don't have—. We keep asking for detail: how are you going to do this? By what method legally are you going to do this? And we've heard about direct award, we've heard about Teckal, but these are just words that are thrown about the ether. But these guys out there who are doing their bus services, day in, day out, are clearly concerned about the whole sustainability of the business.

Can I just push back a little bit? Because we did hear, when we visited Transport for Greater Manchester, that they bent over backwards to try and bring SMEs with them on that journey. Sometimes it takes two to tango, doesn't it, and there has to be a willingness. Are you suggesting that the fear, maybe the age demographic of some of these SMEs, means that they're really not up to coming on that journey? They’d just rather not go there.

I think, partly, because I've had one or two members asking, 'How do I get out?' So, I have to be honest and say, 'Yes, partly.' The majority, no, because the majority, you tend to find, is that they're handed down to children and children's children, and have done so for decades. So, we're back to that, again, local community stuff. And if Mrs Bloggs in the street sees her bus company and service going down and the poor comments that come in, they're not very confident. They understand what they've got just now.

But it goes back to the part we said earlier about, if we do what the status quo is now, and then build further afield and build more investment—. But you're going to do what we have now, and add a whole load of cost to this, regional cost and national cost, so it's going to be a long time before you get back your return on investment on your funding, your investment. But the SME market is very concerned because we don't know the detail, and we've asked for detail on how you're going to do this. I understand why, I understand your intentions, but how? Legally, how are you going to do this? And no-one can tell me.

I think Manchester's interesting as well. I think it's important to understand the context. There had been a lot of consolidation in Manchester before franchising, so there was very little SME participation there. Wales is a much more diverse market and, actually, the risk, I think, therefore, is even bigger, because what Manchester didn't get right—they did do lots of engagement, I think that was genuine and sincere—but what they didn't get right was tackling the costs and the barriers for those SMEs to actually participate in bidding for the franchise. So, from other parts of the UK, we've heard the cost of bidding was in six figures and there were significant regulatory legal barriers before you could even participate in bidding and taking part in that procurement process.

If we're going to do it successfully in Wales, we need to overcome that. So, I think there's a role for Transport for Wales in providing model policies. We've made some suggestions for a passport-style approach, so that actually you sign up wholesale to the requirements of a franchise, and then you are audited on it, rather than every single bus operator in Wales having to go out and get a lawyer to write a modern slavery policy and various other policies on lots of different things. Let's sign up, let's audit, let's make it easy for those operators to participate, and then hold them to account on what they've said they will do, rather than eliminating them at the very opening stage. I think it's practical stuff like that that SMEs require.

And I think Scott's right, we often hear a highfalutin strategic narrative around this, but very little on the detail of what we are going to do. I don't know whether that detail needs to be in the Bill. I'm not sure whether that is a legislative issue. But we're not seeing it alongside the Bill, and we're not seeing those policies forthcoming to really stimulate that part of the market.

Okay.

If you hand a guy who's got 10 buses a 150-page document for a franchise and say, 'Do you want this? Come back to me in three weeks', they're not going to do it. They're going to sell up. And that's part of the problem with TfGM, which is stages of acceptance, and also they just can't do that. They haven't got the time and, to be fair on them, the ability to look at these franchise documents. It's a specific skill set.

Okay, clear messages there. Thank you.

Yes. So, the Bill does not include any provision for statutory guidance. The Cabinet Secretary has explained that he's taken a view that non-statutory guidance will be sufficient. I think that's for that flexibility. So, do you agree? And are there any areas where guidance, statutory or otherwise, would be welcome? So, you've talked there quite a lot about that, really. I think you need the detail for reassurance, don't you, the industry, I'm thinking.

I don't have a firm view on whether it should be statutory or non-statutory when it comes to guidance, but I think this is essentially an enabling Bill, isn't it, and there is a lot of supporting infrastructure and architecture that's required around it. What concerns me and my members is that we're not seeing that detail at this stage. So, I don’t really have a firm view on whether that needs to be statutory or not, but it needs to be forthcoming, put it that way.

Okay, thank you.

Okay? 

Yes. 

Yes, there we are. Okay. So, Transport for Wales’s written evidence to us has outlined an approach to engagement with bus operators, which they say is centred around the two-monthly structured engagement sessions with the operators that have shown an appetite for franchising opportunities. I’m just wondering how effective, to date, you feel that sort of engagement, more generally, has been from TfW.

I’m known to have been very critical of TfW in the early days when they tried to take bus over. And I still maintain they weren’t ready then. The engagement’s got better over the past 12 to 15 months, but the engagement is still high level, which to understand, and to give this committee a proper understanding of costs, revenue, you need to understand what underpins all that, and the detail of all of that, because that’s what costs the money at the end of the day. And we’re not seeing that detail—what the contract’s going to be, how are you going to franchise, how are you going to protect people. But, on the detail, while it’s not part of the Bill, there’s nothing coming forward to say, ‘This is what we intend to do’, or, ‘What do you think about that? What do you think about this?’ at this stage. The high-level comms have been better, yes.

I would agree it’s improved over the last year or so. I think that our members have felt at times that that detail I talked about earlier isn’t particularly forthcoming. So, when they ask questions on, for example, what the procurement regime will be, we’re not yet at the stage of getting a huge amount of detail. But we are beginning to see better engagement on things like fleet and depot. We had a session recently on what the fleet and depot strategy will be, and we’re beginning to see that emerging. It feels like it’s taken a long time, and I’ve got a bit of sympathy for TfW. They’re waiting for this legislation to pass. This has been in the works for a very long time too. So, I would say it’s getting better.

I think the real test, though, is in the regional engagement that follows. So, we’re seeing in the south-west at the moment the development of that kind of regional engagement plan. We know that TfW have been speaking to local authorities. They’re beginning to have one-to-ones with operators in the south-west at the minute. I think that will be the real test, when they’re actually sitting down in the same room as people, not doing big online engagement sessions, how the operators feel then, and what confidence they have that they will have a role in influencing and shaping the network, and being able to genuinely participate. So, I think it’s probably something that’s worth the committee coming back to in the next couple of months, because I think that is just kicking off now, those conversations in the south-west.

Okay. Thank you. Really useful and clear messages coming through, so we’re grateful to you.

Believe it or not, we’re only still on the general sort of issues, so I think we best get into the Bill properly. The explanatory memorandum says that the Bill sets out the definition of 'local bus services', which is similar to the existing one, isn’t it, really, in the Transport Act 1985. So, do you think that using that is appropriate? Is it not? Or should it be an opportunity to update it somehow? And I’m just thinking, particularly as a representative of a region with large rural areas, that the 15-mile limit on distance between stops is reasonable, when you look at some deep rural areas, really.

I think if you look at what you’re trying to achieve in this massive change, one does wonder whether you want to add more change at the same time. So, my initial thought on this was: status quo to a certain extent, and then, as you adapt and build, change as you go along. Yes, the 15 miles is an issue for rural operators, but it’s all they know. If you change the regulation now, as well as changing the franchising model, you're just going to confuse the—

Yes, fair comment. Do you agree?

Yes, I broadly agree. I think the definition is generally helpful. I think it does remove some confusion that we’ve got. I think what’s important is the interaction between that and the UK legislation on this. So, we’d like to see a bit more clarification on that.

The only other issue we’ve had raised is that a couple of operators have said that it doesn’t take account of a very specific service called ‘hail and ride’, where they are kind of scheduled, so we could do with that being amended. But we’ve had that conversation with Welsh Government, and we think they understand that issue.

Okay. So, that’s a specific, really, isn’t it?

Yes. 

Okay. Well, similarly then, the objectives, of course, that appear in the Bill are there, and—I’m just wondering—there’s a duty as well to report on those. Are those clear and appropriate in your view, or do you feel that something might be missing, or not?

We’ve been engaging with Welsh Government a lot on the Bill and the conception of it. And I take a view that the Bill is a Bill. It’s what Welsh Government want to achieve. It's for the high-level issues, what they want to achieve. I do have concerns around where plan B is. If it doesn't work, how do you get back out of it? Is there an escape plan, because you might find it too costly? But there's nothing in the Bill that allows you to do that, and nothing in the Bill that says what plan B may be, which might be the status quo on the bus network grant, for instance. So, I would like to see some recognition that you've taken a course of action here, gone down the road, and you're not going to veer from it. That's fine, but it's a complex industry and a complex question here, and I just think that a plan B would be more appropriate.

I think that the core duties that are described in the explanatory memorandum, that diagram there, are actually the sort of thing industry was looking for from TfW 12 or 18 months ago, to say, 'What is the process going to be for designing the franchise?' So, it's good to see that on paper. I think it's a really helpful articulation of what the process will be. I've already talked about how I think it lacks a value-for-money test, and Scott's talked about plan B. I think a value-for-money test plus, then, a range of options, should a franchise be determined to be unaffordable in a certain area.

I think it's quite interesting to contrast what's in this legislation with what's being proposed in England, because I think that the Bus Services (No. 2) Bill in England is going to drive local authorities to ask some different questions, and we're not going to see, I think, just two options on the table of a market-led bus network with very little influence and control from Government or the entirely local authority or Government-run network that you have in Manchester or London. I think local authorities are going to begin to ask themselves questions like, 'Should we franchise part of our area, or should we just franchise a town or a city? Are there certain measures that we could share risk with operators on? Should we own fleet and depot?'—those sorts of challenging questions, which will see a range of different franchise options on the table, and it seems to me that that's missing from the core duties. There should be that conversation at a regional or local level so that Ministers, local authorities, CJCs—whoever it is ultimately taking that decision—can assess what is best for those different areas. I think we've already heard—I think Scott articulated it—that Wales is a very, very different market to anywhere that's been franchised elsewhere in the UK, and we should have a range of tools at our disposal to respond to those different circumstances.

Okay, thank you very much. We're halfway through, and I know we're not halfway through our questions, so maybe we can keep that in mind. Janet.

Thanks. Are the Welsh Ministers' core duties set out in section 5 clear and appropriate?

I think 'yes'. To keep my answer short, yes, I think they are, but we need to see more detail behind all that.

Okay.

Yes, I would agree, and I think just to echo what was said, I think some more flexibility in those core duties to give them different options at different stages would be helpful.

Thank you. And how effective is the approach to preparing, reviewing and revising the Welsh bus network plan set out in sections 6 to 8 of the Bill? In particular, what is your view of the consultation requirements and the circumstances where the Welsh Ministers will be required to amend the plan?

The Bill itself is fairly light on the detail around consultation. I think probably what's more important is the kind of supporting architecture that TfW have put in place around that. And the real test, as I've just noted in terms of that engagement piece, will be what operators think in the south-west now, where that's the first real test of that.

I think operators have been frustrated to this stage that they haven't been engaged more in the network. We think that partially the reliance on the gross cost model means that operators can never be involved as much as we would like them to be, and using things like a minimum subsidy model or partnership model would give more of a role for operators in using some of their commercial expertise and the innovation capacity they have. So, I think that a bit of flexibility around that would be really, really helpful.

I think that, for me, there's also a wider question around engagement with communities, engagement with passengers and those who don't catch the bus already here. It seems to me that a big driver for improving the bus network and for this legislation is to hear where there's unmet demand and to identify routes, and it doesn't seem to me that—. TfW are going to run a public consultation in the south-west now, and let's see how that goes, but for me there's a bigger opportunity to have a conversation about what bus means and what the network should be doing here.

And in the south-west that is, is it?

Yes. So, the consultation in the south-west will, I think, go live fairly shortly—the public consultation on the network there—and that will happen in each of the four regions as they develop the franchise. I think there's a question—. I think if you look at what's been done around the regional transport plans, for example, recently, I think the consultation there has been pretty poor. It has not exactly started a lively conversation about the future of transport in any of those regions, has it? And I think we need to think a little bit differently about how we engage with the public and engage passengers and those who don't catch the bus, because ultimately that's the cohort of people that we really need to get on board.

Absolutely. And then you've suggested that a value-for-money assessment should form part of the process of developing the plan and that Welsh Ministers should be required to test the ability of operators to mobilise services in line with the network plan. How would these assessments actually be done in practice?

So, I think that VFM assessments should consider a full range of things, including—I talked about those other options—whether they offer better value for money, whether we have the financial flexibility at a national and local level to actually deliver the ambition. The mobilisation point is a slightly different one, but I think we should be cautious of what happens when you open up a big procurement exercise, that people bid for contracts that possibly they don't have the resources, capacity to deliver. I think there are some lessons—. I know you've been, as a committee, to Manchester, and there are some lessons in the later tranches in Manchester around that. I don't know exactly what they look like, but we should be working with industry now to identify the key elements that will allow them to mobilise, and that should consider things like depot capacity, their fleet, their people capacity and the resources they have to actually make sure that what they put in procurement they're able to deliver.

Chair, can I just come in?

Yes.

Do you think that the implementation is too fast? So, operators aren't understanding the detail. We're looking at the south-east region first, then north Wales in 2028, I think. So, maybe in five years, different areas. Do you think it's too quick, too fast, the expectation of delivery?

There's no perfect time here. I think that the mobilisation period itself looks about right, providing all of the detail and clarity is there at the starting point. What we can't do is wait until we're halfway through that for operators to find out really important details.

But that incremental approach is one that you welcome.

Yes.

And then, presumably, by the time we get to the end of that introductory period, there'll be retendering for the first one again. So, you're not doing too much at the same time, basically. 

Yes.

If you calculate the end of that first piece, the affordability of that, then you find that you've not got what you thought you were going to have, how do you reverse that? How do you get out of this?

Which comes back to the point that you were making earlier. Yes, okay. Thank you. Janet. 

CPT has suggested that net cost franchises are preferable to the gross cost approach preferred by Welsh Ministers. However, the Bill simply refers to local bus service contracts, it does not specify the type of contract or even require that these are franchise agreements. Are you reassured by the fact that the Bill does leave open the possibility of using net cost franchises?

I think legislatively it does, but the policy direction from TfW and Welsh Government is very clear that their preference is for gross cost contracts, because that gives them control over—. Their argument would be that that gives them control over price, and that's a really important lever in terms of revenue when you're holding the revenue risk. I would argue it's not the only lever, and one of the biggest levers that affects your revenue risk is the shape of the network. And actually that is a lever that you could pull in partnership with operators, which is why we plumped for the net cost as a model that works. I think the legislation leaves it open, but I think that the core duties we referred to earlier should have a much more robust test in place so that we can genuinely work through the range of options available to Ministers when it comes to franchising.

Thank you. And then—

Sorry, so just to reiterate that, then, it's only because the Ministers say that they intend to introduce franchising that we're talking about franchising. There's nothing in the Bill or any associated formal document, at least, that commits to that in a way that guarantees it, really. So, you're comfortable with, maybe, in 12 months' time, another Minister, another Government coming in and saying, 'Actually, we're not going to do it this way at all, we're going to do it this way.'

Well, the Bill effectively makes commercial bus services illegal, so it takes you towards some sorts of franchise. I think what we would like to see articulated far more clearly is the range of options that are available within franchising. Franchising in and of itself isn't a single, homogenous way of running a bus service, so I think what we'd see is an assessment of those options in the Bill, so that with a change of Minister or a change of policy, you do have a clearer sense of direction of where Ministers may go.

And is that counterbalanced by the ability, then, to pivot—coming back to the point—if you need a plan B?

It does, but my concern is the timescales in doing so. If they suddenly realise that the costs are going through the roof, then the Welsh Government will want fairly quick remedial work done. Will the industry be able to adapt at that point in time, if we've not got the SMEs out there that were currently here? If you've got rid of half of them, for whatever reason, how do you unravel that? And I think in the RIA it mentions options like enhanced partnerships, but the RIA is skewed so terribly to one option for the non-operator user, for instance, and, 'Oh, that's the best way to be', but one wonders, are you just tying your hands terribly?

So, section 10(1) and section 12(2) respectively make clear that the terms of local bus service contracts, and many of the conditions to be attached to permits, are to be set out in regulations that 'may' be made by the Welsh Ministers. Do you think that that should be 'must'? And is this discretion appropriate, and are you content that there is sufficient clarity on how both local bus service contracts and permits will operate?

Permits is a big talking point, isn't it? I think that you have to be careful, and again we come back to the same thing—the detail behind it. How exactly will you run that permit? We have currently section 22 and that gives you a dichotomy in the fact that you've got different levels of quality of service. You have to be very careful around this and, yes, I don't really get—. I don't know the detail behind it in order to give a defined answer that says that that's better or not, and that's what gives me more concern. 

I think allowing a degree of flexibility around the contracts through regulations is sensible because the economics and the market will change, so I think it's right that you know the contract itself isn't legislated for. I would say that it would be very helpful for those contracts to be visible to the whole Senedd, actually, as part of that regulation-making process, because that will dictate what happens in the market. And it feels like—. We talked about the lack of detail and visibility on some issues here—that feels like something that the whole Senedd should be aware of as that plays out.

Great, thanks for that.

Thank you. Section 17 of the Bill allows Welsh Ministers to provide local bus services directly via Transport for Wales, if they are satisfied that doing so would be a more effective way of fulfilling their section 5(1)(c) duty. Do you agree that that provision is required as necessary and as drafted? Is it sufficiently clear how and when they're able to use that?

I think that asking the ex-managing director of a local-authority-owned bus company—. We've said for—. We've been approached—. I've been approached over the years by different local authorities, 'How do we create our own bus companies?' So, I think that, historically, I would say, yes, it's a good thing to have in the toolbox, because, again, what happens if it all collapses? And if you don't have legislation and you have to do something, that's even worse, but whether they can afford to do that is a different kettle of fish.

Yes, sure, but being able to is at least something that they can turn to. Okay.

I think it's important to have a backstop. I think, for me, there's a question of, how do we ensure that all of the steps before that are fulfilled so that we take advantage of the diversity of the market, stimulate interest in the procurement? And what is the threshold in that procurement process for going to the operator of last resort direct provision model? It seems another area where we could be a bit more clear. I have big questions about whether TfW would have the capacity to respond to that, were we to get to that scenario.

Okay, thank you. Just very briefly, then, because we've got about 15 to 20 minutes left. On the cross-border stuff—because we got into a bit of confusion on this with the Cabinet Secretary recently—are the arrangements for cross-border services, which are set out in the Bill in section 19, effective in your view? Because it talks about the 'relevant transport needs' to be considered by Welsh Ministers are those in Wales so that English needs are not considered, and that 'no account' is to be taken of any English services tendered under section 63 of the Transport Act 1985. We struggled with that. Are you clear about the value of what's in the Bill in relation to cross-border services? 

No, I think you've got two main areas of cross-border, the north and the south-east, obviously, and I don't think that there's an understanding of how these services operate properly and how that liaison with English operators—English operators and English LAs and the cross-border stuff—is going to play out. So, again, not having the detail behind that is a challenge in itself.

Okay.

I think I felt confused with the exchange you had with the Cabinet Secretary on it as well. So, I would say we're not sufficiently clear and it could do with more detail. Where there's particular concern is around provision of information, so the Bill, on cross-border services, requires provision of information on the Welsh bit but not the English bit of a route that runs cross-border. I think we need to look at how those two things align. We've got a really porous border in Wales; there are lots of services that cross those borders every single day. Some of those will be into franchised areas, some of those will be into non-franchised areas, and we need a set of regulations or legislation that allows the consistent provision of information to passengers across both parts of the market.

Yes. Okay, fine. Thank you. Obviously, we'll pursue it, but we haven't got time to go to—

[Inaudible.]—if there's time, can they answer the question?

Yes, okay, we'll come back to it if there's time. Okay, Heledd.

Diolch. You've already covered some of the parts in terms of—. You've mentioned in terms of plan B, pivoting and so on, but, on Part 3 of the Bill, CPT, you've argued that the legislation should seek to create some flexibility in case of significant change in circumstances in the future. Can you perhaps outline how the Bill should be changed if you don't think that the options there are sufficient?

Yes. So, I think part of it comes back to some of the stuff I said on core duties, which is making sure that Ministers have a clear process to work through the range of options. I think the restriction on operating commercially, if we are heading towards a franchised market, makes sense in principle, but we need to consider what the wider impact of that might be. So, I think, personnel, for example, we may lose a lot of experienced people from the bus industry in Wales who are motivated by operating in the commercial world, or who feel that their role in network planning, network design, is best spent elsewhere. If we then reach a period where franchising fails for lots of reasons—congestion, cost, et cetera, et cetera—we will have made commercial services illegal and we'll have lost a lot of the people who are able to do that. So, it seems to me that shutting it down entirely creates additional risk that perhaps isn't necessary, and we should consider within the Bill a set of circumstances in which we may wish to pivot back to having that as an option.

So, in terms of section 21(2), the exceptions to the restrictions on providing local bus services, you don't think they're appropriate as they are, then.

If I could come back on the detail of that clause, I'd be happy to share some further thoughts with the committee.

Diolch yn fawr. Thank you. Janet.

[Inaudible.]—question on. Because last week we asked a question on arrangements for local bus service permits, so that is where an application can be initiated by an operator proactively seeking to provide a service not identified in the plan. So, they can step in—or, you know, maybe the local authority. So, if there is a franchise and there's a gap and they see that a need is there for public bus transport, an operator can step in then with a permit.

The position from TfW and Welsh Government on that, though, is that that is going to be in extremely exceptional circumstances, and I think what I'm trying to highlight here is the risk of network collapse should we have a pandemic, which drives a huge commercial risk, should costs spiral, should congestion mean that we're not successfully able to deliver it. We can't just rely on the permit infrastructure, I think, at that point. It would be pushed to breaking point.

No, that's not the intention, but perhaps we could have more clarification on that.

We can follow up on that, yes. Okay, thank you. Janet.

Thank you. Do you believe Part 4 of the Bill will operate effectively, and does it strike an appropriate balance between ensuring the Welsh Ministers and the public have the information they need, whilst ensuring commercial sensitivities are protected and the burden of providing that information is reasonable?

You talk about commercial sensitivity; once franchising comes in, there's no commercial sensitivity, effectively. [Inaudible.]

But at the very start—. I mean, we were told by other witnesses that, because we're talking about the private sector, the thought of competitiveness and commercial sensitivity will play a big part in how you engage with, how the Welsh Government engages with, these companies. You don't think that's the case. I know, if I was running a bus company, I'd be a bit precious, shall we say, about the information I shared.

It's happening now.

Is it? 

It's happening now, because the—. Again, it comes back to lack of detail on what and how they're going to do it, how the franchise will look. They could produce a paper that says, 'Here's the franchise. Here's our franchise, here's what we want to do', a draft paper, then we can see very clearly how they're going to do it and what that means, and that will dictate then what is an issue around commercial sensitivity, because, at the end of the day, if you franchise, you own the information, then. You own the information, you own the data, you own all the problems, the complaints, the whole lot.

Yes, and I have concerns about smaller companies being pushed out by the mere fact that some of these bigger companies will have someone specifically working at it. I've got companies in Aberconwy who are absolutely petrified, because they haven't got the wherewithal to actually put in a good franchise bid.

The issue around that is it comes down to the economies of scale. Our members just can't compete, and they can't compete not just on cost. I've raised that issue numerous times with WG and TfW about, 'Exactly how do you intend to overcome this?', I've been assured again and again and again that, 'We're going to protect the SMEs', but I don't see the detail on it, and, until I see the detail, I can't give you an answer to that.

So, on information and data, you say that, if it's a franchise, it's there. Is the sector comfortable with that, then? That's the question in essence, really: will the sector accept—? You might not have much of a choice, but is that okay with the sector?

It's how it happens elsewhere in franchises. So, 'yes', is the answer that question.

Because it is what it is.

It is what it is. When it comes down to the fact of, then, refranchising, it's like retendering now, isn't it? The detail is all given to Government anyway, it's all there, and when you retender for work you can see what's been done. So, the commercial sensitivity of that, just currently, under tendering, is gone. But, again, it's the defined what that contract looks like that gives me confidence or not on that issue.

I think the Bill is pretty clear on data. The Bill is pretty clear on data. There's a bit of cultural pain to get there. I think Scott is right that, in a franchised environment, that is the standard, you will be sharing data, but a lot of operators aren't used to that now, and there are requests coming from Transport for Wales now that are met with hostility, if I'm being completely honest. So, we need really robust procedures and measures in place before the Bill as well to help with that transition. 

Yes. Okay. Thank you.

And section 32 of the Bill simply removes restrictions on local authorities establishing municipal bus companies. Is this likely to be sufficient and effective, or is further clarity required on how municipal operators might be established and provide services?

So, I think there are two issues around municipal operators. The first is that the Bill frees up local authorities to create new municipal bus companies. That has been a policy intent for Welsh Government for a long time. I would question how likely that is to happen, given local authority resources and capacity to respond to those sorts of things. I think the more pressing issue for me on municipals is the position of the existing municipal operators. Welsh Government has, for a long time, said that they want to protect them in a franchise. There is very little detail in the Bill, or in the accompanying literature around the Bill or policy, on how that's going to be done. I think both of those municipal companies, Cardiff and Newport, would say it would feel like those conversations are happening with the council and not with the bus companies. These are questions about the longevity of these businesses, the survival of these businesses. So, I think there's a lot more clarity needed on that.

But what we also need is, if that position is going to be correct and those municipals are going to be protected, real clarity and transparency over how that's going to be done. Cardiff and Newport are quite attractive parts of a franchise market, and there will be other operators looking at it and thinking, 'Is it fair that those municipals are awarded those contracts?' And most will make peace with it if that process is clear and transparent.

It goes back to the point about why there are seven left in the UK, two of which are in Wales. Why are they still here? Because the local authority and the local people want them there. And they want to build again, and one of the things that is happening across the UK now is that ability, potentially, to create more of them. But it comes down to how, and cost and at what stage.

If you take Newport and Cardiff—which I'm formerly the MD of, at Newport—there's a massive amount of investment that went in there. We're the only two bus companies. In Newport, we're pioneers in electric EVs for bus. We've done all that work. Yet, potentially, how do you protect them now from, essentially, giving them to the bigger corporate operators who walk in, take your services, give you a bit of franchise and then walk away? You're just simply giving them an easier option. They've been trying to do it for the past 30-odd years, by buying these companies out. So, we have to be very clear on exactly how Newport and Cardiff create. You're very lucky to have two in the region of the last seven in the UK, and they're there for a reason, and have survived for a reason, because local people want local bus services created by themselves, and that's the way that they've survived.

Okay. And then the Teckal provision in procurement law, are you reassured by the fact that franchise contracts under the Welsh Bill will be awarded by Welsh Ministers rather than local authorities? 

Teckal was a big issue, and I'm not clear on the detail yet on how that will operate. For instance, Teckal requires you to have 80 per cent of that business to then come under Teckal arrangements. Newport doesn't have that; Cardiff may have, but Newport doesn't.

But is the difference not that Welsh Ministers will be contracting through Transport for Wales and not the local authorities themselves? 

It's still Teckal, it's still the Teckal agreement, I believe. So, you're still under that 80 per cent. From what I can—. I've asked the question and nobody can give me the answer yet. So, that gives me concern that the likes of Newport, who have diversified into other streams of work to protect the core business, may now not be able to receive that Teckal agreement. Cardiff may be able to do so, and any new ones that come in can be done so, providing you satisfy that 80 per cent threshold.

Okay. 

Teckal is a complex beast— 

Clearly. 

—and probably does give some opportunity around the existing municipals. Scott is right, there is a huge amount of clarity needed around that. There is a concern with the use of Teckal and new municipals potentially. So, we think that there is a risk that, should a local authority go and purchase a small bus company now, if they feel particularly enterprising, they could then use Teckal, because they own that bus company, it is delivering contracts now, to award essentially the whole franchise to that bus company as a municipal operator.

But it's not the local authority that awards, is it?

So, we think that—. There is a lot of confusion around exactly how Teckal will work in those circumstances. So, there is some work needed around that. It's come up as a significant risk in the bus Bill in England too, and Ministers haven't really had an answer there. So, it's one that's vexing the bus industry across the UK, and we could do with some clarity from Ministers on that.

Let's hope that we can help with that, then; we'll see. Okay. 

Section 34 establishes a local authority power to provide financial assistance in connection with the provision of local bus services. Are you clear on its purpose and effect, given the Bill more generally transfers the planning and funding of bus services to Welsh Ministers?

I think it creates some opportunities. So, we talk about financial constraints, and we are very concerned around the financial constraints that Welsh Government's budget would put on franchising. Local authorities have lots of other financial levers at their disposal. I can see why it's there as a useful mechanism to draw additional funding into the franchise. We haven't had anything from Welsh Government or TfW on exactly what that might look like. And I think the funding model for franchising is something that we're still awaiting further detail on, because, as it stands, there are three, four, different pots of bus funding. Are we going to have a single consolidated pot that funds the franchise network? How is that going to work between now, while we're transitioning to franchising, and the final franchise network? Lots of things—. And one of the questions we have is: where does that local authority funding come into the mix?

Thanks. And then the explanatory memorandum notes the Bill has the potential to bring about significant change for bus operators and for staff. Section 35 makes provision in relation to the Transfer of Undertakings (Protection of Employment) Regulations 1981 and the Pensions Act 2004 around relevant transfers of staff. Are these provisions, as drafted, effective? And are wider issues around the transfer of staff and bus operator assets clear? 

TUPE is—. We've dealt with TUPE under the tender process currently, so, yes, if they follow the same guidelines as currently there. But, again, we come back to the detail. Are you going to change any part of TUPE or are you not going to change any part of TUPE? But, at the end of the day, we've got to make sure that the staff involved in here are given confidence and protected in what they want to do, or else you will lose them.

Yes, exactly. And anything else you'd like to add before—? 

Yes, is there—? I think we've covered most bases. Did you want to come back on something, did you? 

Yes. You said there were three pots of funding. Were you including school transport? Because that comes under education, doesn't it? 

The bus network grant, bus services support grant and the concessionary fares pot. 

Okay. Thank you. 

Thank you. So, I think we've covered the areas that we wish to cover. We've got about two minutes left. I was just wondering: is there anything in particular that we haven't covered that you wish to share with us?

The learner travel issue, that to me is a major problem. And look at the funding currently given, the £209 million for learner travel. You've got to remember that £88 million of that is for special educational needs or additional learning needs transport. It's a different animal altogether. And we've asked that they take the ALN sections out of this and put the normal bus services for home-to-school transport into this Bill, so that we can clearly define which is which, because one's costing a lot of money. The ALN transport is a different animal to solve. And I worry that they're being combined and left and that's what's giving people concerns about not doing it at the same time. And just finally, we've got a once-in-a-lifetime chance here to do this properly; I'm just not confident in the Bill as it stands just now.

You want to combine the school transport with this public transport and take away ALN.

ALN is a cost. It's a different animal. It's taxis.

It is, yes, and escorts.

Yes. So, if you take it out, it's easier then to bring the rest of home-to-school transport in and have a comprehensive look at transport in local areas.

That makes sense, yes.

We're all aiming for modal shift here; what we want is more people travelling sustainably. Both Scott and I have referred, at different points, to congestion as a major issue, and if we don't unlock that, then this Bill won't deliver the outcomes it desires. So we need much greater focus in Government policy on tackling congestion. That means an enabling set of policies at a national level, but also supporting local political leaders to take bold and brave decisions, because far too often, those decisions to tackle congestion come down to whether people are willing to tolerate a little bit of local pain to make it more difficult for drivers and to make it easier for buses to travel through traffic more efficiently.

Excellent. Can I thank you both for your written evidence, but also the oral evidence that you shared with us today? We appreciate that you are key stakeholders—absolute key stakeholders—in relation to this Bill, and there's a lot riding on this for the sector. So we're very grateful to you for amplifying the voices of those that you represent. So diolch yn fawr iawn. You'll be sent a copy of the draft transcript, just to check for accuracy.

Committee now will break for 10 minutes, or just under. We'll reconvene for an 11:35 start, if that's okay, for our next session. Diolch yn fawr iawn. Thank you very much.

Good morning, everyone. While the CTA's paper raises some specific issues, which we will discuss later, in general, is this a good Bill, do you think, for community transport and has input from the sector during its implementation been taken on board? What are your views on it?

Good question. Do you want me to start? 

Can I say as well before we start that we have around about an hour? Don't feel obliged, all of you, to answer every question, because we'll struggle to get everything into an hour. But if you do want to come in, just indicate and I'll invite you to come in. Gemma, you wanted to kick off.

Lovely—diolch, Chair. Thank you, Carolyn, it's a really good question. I think it's a Bill that has been a long time in coming, and there's been an awful lot of work that the Welsh Government have done in preparing it and trying to ensure representation from voices across the sector, which has been very welcome.

I think what we've seen in the preparation of the Welsh Bill, in comparison with a similar Bill that’s being brought through the UK Government at the moment for England, is that there has been a real focus from Welsh Government officials on ensuring that community transport is part of those conversations, and that's been really welcome. So, it reflects what we saw in 'Llwybr Newydd' when that was published in 2021—that third sector transport is alongside the other, more mainstream forms of transport for the first time here in the country, which is where we would hope and expect to be. 

In terms of the implementation, I think that's a really important question, because there is so much potential for community transport to do more and to be more actively involved in meeting more people's needs, and we hope that this legislation is going to help us in creating a stronger foundation for that to develop from.

Thank you. Would anybody else like to come in on that?

There's consensus. That's good.

Transport for Wales will largely be responsible for delivering the Welsh Ministers' duties. Are you confident that it has the human and financial resources as a body, as well as the governance structures required to deliver and, subsequently, operate the new system effectively?

No. 

We like one-word answers as well.

Do you want to lead on that?

I don't think they've got the capacity. They haven't got the knowledge as to what exactly community transport is able to do and what they can do. I think they need to be careful with that and make sure that they use the knowledge that people have got in their localities, because they're the people on the ground. We're the people on the ground, working with passengers day to day, who've got no other access to any other sort of transport. So, the Ministers, the people at TfW, haven't got those people on the ground.

How do they do that, then? 

Do you operate through local authorities, or is it the passengers that directly contact you? Is it the passengers that know what's needed, is it you that knows what's needed, or is it the local authorities? Where would they get that information from?

That's such an important thing for us, I think, and Caroline's point is really key, because TfW have invested a lot of time and energy in trying to build their capacity around bus. They recognised a number of years ago that they had a huge amount to do on the rail development, and they've started to make real strides on that, and we've seen that coming through in terms of the changes in the network. They were not a multimodal organisation, and they have, I think, gone some way towards getting to where they need to be in order to be that for the future, in order to be an effective delivery partner to the Welsh Government.

I think the thing for us that we're definitely seeing is a disconnect between the communities that want to use the transport, who are not able to use the public transport network at the moment, and the services that are currently being provided and that we think could be provided in the future, and having those voices, that representation, both from the community transport network and the passengers and the communities that they work alongside.

All of our operators are independent organisations. Some of them receive a small amount of core funding from local authorities via the bus services support grant, but not all. That varies from year to year. It's not implemented transparently or consistently across the country, and that is one of our big questions, I think, as we progress further with this Bill and thinking about what the secondary legislation and the guidance is going to come alongside it: how local authorities will have the ability and the capacity to work alongside TfW, and tap into the incredible resource—knowledge and expertise—that our operators have on the ground. That is really, really important.

If we want a network that meets more people's needs, we have to talk to the people that want to use those services, and not just our members, the wider third sector partners that are embedded in these communities that work really closely with people who are disconnected, vulnerable, unable to make those connections with the places and the people that they love. We need those voices to be louder in the development of the network plan and the regional transport plans that are going to directly feed into that, because, otherwise, the bus network is just going to be a copy-and-paste exercise, and we'll end up paying more for something that still doesn't meet our needs.

Are you concerned that CJCs, who are supposed to be delivering the regional transport plans, have not got that expertise and that local connection? 

Yes, very concerned. That's something we've been feeding through in the evidence that we've submitted to each of the CJCs on their consultations.

I think Beverly wants to come in.

I just think, for community transport, we all work differently. No two community transport works the same, no funding's the same, but you work to what's needed in that area that you cover. I think that is a big part of needing to have our say—the fact that you've got to be able to realise that we're not Arriva where there's a bus timetable, they go round, they pick everybody up; we have to work totally different to that. I think funding, for us, is a big part. Because my worry is section 19 isn't going to be—. It says that it's not going to be affected, but how is the funding going to be for us as a whole? Because already we're 25 per cent less than last year.

We'll be coming on to individual sections. Heledd just briefly wants to come in as well, and we'll come back to Carolyn.

Yes, if I may, Chair, because I think we've gone to that section. If I could just go on one point.

Yes, absolutely. I think what we identified in the feedback that we've been supplying to the CJCs—I'm just putting the finishing touches to the Cardiff capital region paper now—is firstly a complete lack of appreciation of the needs of disabled people, and that's a real worry, because disabled people make 38 per cent fewer journeys than non-disabled people, and that statistic hasn't really changed for more than 10 years across the whole of the UK.

Wales has got more than 20 per cent of our population that have a disability or live with some kind of life-limiting condition, and very often community transport is the only accessible and inclusive option for people to make the journeys they need to make if they have additional mobility support needs. So the fact that that is completely missing across the whole of the country makes me worry about what is then going to be fed through from the CJCs to the delivery plan that the Welsh Government have that statutory responsibility to compile. But also the lack of connection with the community transport sector and the communities that they support in putting together those regional transport plans in the first place.

There was so little public engagement, and what public engagement there was was basically inaccessible. Unless you are a policy professional that has hours and hours available to you, it was an impossible task to wade through all four of those documents and find the things that you needed to feed back on, and we haven't had a meaningful opportunity to feed into them. That worries me, because the Welsh Government is going to have to rely on those plans in order to draw up their network plan.

They do work very closely with local authorities. I think they were calling them sprints for a while; I don't know if they're still calling them the same thing. Scrums, sorry—the scrum groups at the regional local authority meetings. I was involved in a lot of those when they first came into place, but because it's much more operational, I'm not in those meetings anymore, and community transport therefore is not represented, because our operators don't have the capacity or the ability to get involved with meetings at that level. It's a real concern.

I think also when we talk about older people, issues of loneliness and isolation are really strong, especially when we look at rural communities across Wales. I think there is a real worry, and we've had this conversation with the older people's commissioner. I know they're coming for an evidence session later through this process. I think their evidence is going to be really key in ensuring that we have a network that meets our needs at every life stage. This legislation has got enormous potential to create a more equitable network for us across the nation, and it's making sure, I suppose, that we have that effective holding the feet to the fire. Is it going to be as good as it needs to be? Is it going to set that framework for us then to guide the CJCs and the local authorities in how they implement it in partnership with TfW?

Thank you. Back to you, Carolyn.

In each region do you have an umbrella representative or organisation to represent? No. Okay. And you're all individual. And do you all rely on volunteer drivers? No. Okay. You get paid as well. And are you able to expand, should it be necessary going forward, to fill some of the gaps, do you think? Or do you think it would be difficult?

With the funding that we get at the minute it wouldn't be—

And you said you'd had a cut in funding of how much, sorry?

Twenty-five per cent this year. We've actually had less this year than what we got last year.

And is that through the local authority, who deliver the bus services support grant?

Through the BSSG, yes.

It's the same for us in VEST. We're the only community transport in Cardiff and we still haven't been given our budget yet.

And our BSSG is all just based on kilometre, so it's 0.07 or something per live kilometre. So you don't get anything for your dead kilometres, even though you've had to go out from base to the first passenger pickup. 

Thank you. The Bill does not include any provision for statutory guidance. The Cabinet Secretary has explained that he has taken the view that non-statutory guidance will be sufficient. Do you agree, and are there any areas where guidance, statutory or otherwise, would be welcome? 

I think it's going to be really important that we have clear guidance, whether it's statutory or not, around how CJCs and local authorities and TfW implement this legislation, and I think we will have a huge risk to the sector as a whole, not just community transport. I think the whole public transport sector will be opened up to risk if there isn't clear and transparent guidance, and about that consistency of approach across the whole of Wales. 

I think, particularly for us, the issue that comes up that members contact me about more often than not is the funding, and having that clarity and transparency about what funding is going to be available. I would imagine we're going to talk a little bit later on in the session about some of the specific provisions in the Bill, and I think there are some questions there around how how that cuts across to us and our core issue of funding.

I think the big thing for me is with with regard to the expectations about consultation as we look at implementation of the delivery plan. One of the things that I highlighted in my evidence was the lack of expectation that the Welsh Government and TfW will be expected to consult with people who are not using the bus network at the moment. It was really positive to see—and that was something that we pushed really hard for—that there would be a line in there about engaging with passengers, and that's really positive that that's been included, as well as people who have the potential to use the bus network. There are a lot of people who don't use the bus network at the moment and don't see it as something that is available to them. So, we think there needs to be guidance in place that there is an expectation that consultation—. Personally, I would like to go a long way beyond consultation and think about co-producing that network plan in partnership with the people who are going to use the services, because that is in line with the Well-being of Future Generations (Wales) Act 2015—this expectation of developing things in partnership with the community that's going to use them so it works now and it works in the future as well. 

Who would be best placed to do that? 

In terms of the co-production, I think third sector partners would be best placed to do that, especially when we're thinking about those smaller, local, rural demand-responsive services, which is where our members excel. Around this table, we've got decades of experience, and as organisations—sorry, I don't mean that critically—we have organisations that have been part of delivering effective transport services for 20, 30 years at a time. There are not many commercial organisations that can say the same, and they've been doing it with a non-profit motivation. They receive very little—. Out of the £25 million annual bus service support grant allocation that the Welsh Government gives to local authorities, less than 5 per cent of that goes to the community transport sector. That is the only core funding that comes to community transport organisations, and it's not done transparently or consistently across the country; every region does it differently.

So, all of those organisations that have been delivering effective services and meeting people's needs for 10, 20, 30 years at a time have been doing that at the same time as finding money from somewhere constantly, whether it's crowdfunding in local campaigns, putting out donation campaigns on Facebook, raising money via other funding streams, going to the UK Government or the Welsh Government to say 'Is there any chance you've got some underspend?', because it's constantly reaching down the back of the sofa to try and find money to keep these vital services going, while at the same time we've had these big commercial companies running services that just drive past a disabled person because it's too much hassle to stop and put the ramp down. So, we need that consistency, we need that engagement, and the organisations that are most embedded in communities dealing with and supporting vulnerable people are third sector organisations—so, the Welsh Council for Voluntary Action, the county voluntary councils network, and so on.

Thank you. 

What percentage are medical transports?

The last research that we did, and I'll leave these guys to talk about—

Yes, we need to focus on the Bill as well. 

Okay. Sorry, Chair. I'll stop going off on tangents. 

It's so interesting. 

As interesting as it is, yes, absolutely. 

The last research we did across Wales, which was in 2023-24, more than 60 per cent of our members reported their journeys were health transport.

That's interesting. 

So, how effective do you think the Bill will be in supporting rural services?

That's a good question. So, rural operators—what were your thoughts on this? 

Well, I can't see—. Where I live—I operate mainly in Pembrokeshire and south Ceredigion—I can't see much changing from what's there presently, which, quite honestly, is diabolical. The journeys that we offer to people, those are desperately needed every day of the week, otherwise those people won't be able to go and get their shopping, get to their medical appointments or anything like that, and I can't see the public bus services actually increasing.

We recently had a phone call off a gentleman whose mum, for her local bus, it would be half-a-mile walk from her house to the bus stop, and it's twice a day, nine o'clock in the morning and four o'clock in the afternoon. She couldn't go out for that length of time, and she couldn't get there. She couldn't get to the bus stop. She wouldn't be able to get to the bus stop in the morning, but she definitely wouldn't be able to get from the bus stop home with any shopping that she had. So, I don't see it being—.

I think, for me, the difference with having this Bill in comparison with the deregulated framework that we're in operating in at the moment is that the Welsh Government will be able to respond to this kind of feedback in a way that they're not able to at the moment. So, genuinely, I feel quite hopeful about this legislation and what it potentially could create for us. I think the the bit that we're concerned about is more about the implementation, as we get down the line. But I think, for me, the structure of the legislation is sound. It's about putting more control in the hands of the people who are going to use the services, the Welsh Government hearing directly from constituents, linking with local authorities via the CJCs. I do genuinely feel really positively about it. I think it has an enormous amount of potential to improve from where we are now.

Okay.

Okay. Thank you. The last one from me, I think. Transport for Wales's written evidence says it's working with the CTA and local authorities to hold engagement sessions with CT operators in south-west Wales, because that's where it's going to start first, isn't it, the roll-out. So, how effective has Transport for Wales engagement been up to now with you?

I think, from a CTA point of view, they've made a real clear effort to engage with us as an organisation and to take our feedback on board in trying to shape where the opportunities are. We co-hosted a number of sessions before Christmas where we gave operators the opportunity to hear from them directly, and we've got an in-person session now in Carmarthen in three weeks' time, which is going to be focused on operators that are within that south-west zone. So, there is a real drive to hear from CT operators and to involve us as a sector. So, I think we want to ensure that that is consistently applied across the whole of the country, as we develop through this process. 

Are you an umbrella organisation for all of them across Wales?

Yes. We're the membership body for the community transport sector.

Thank you.

Thank you very much. Janet, on to you.

Thank you. The explanatory memorandum says the Bill sets out a definition of local bus services similar to the existing definition under section 2 of the Transport Act 1985. Is the definition set out in section 1 appropriate, or is there an opportunity to update this definition especially for Wales? The example is the 15-mile limit on the distance between stops reasonable in deep rural areas of Wales. Personally, I don't think it's appropriate.

It's a good question. Yes. Caroline.

Yes, you're right—the 15 miles isn't far enough, to be honest, because if you think about the centre of Pembrokeshire, you've got more than 15 miles to get to any major—. Even living in the middle—and I think Llys-y-frân is the middle of Pembrokeshire—it's more than 15 miles to get to any centre where there's a decent shop or medical facilities, et cetera, et cetera. So, it's not good.

One of the things that we heard from the previous evidence session was that there's so much changing, that maybe just sticking with what we have at the minute is better, because people at least know what that is. Is there an element of changing too much at one time, or do you feel that it's sufficiently justified, actually, to amend it?

I think you've got to do it, particularly in rural areas, as a slower—. Yes, don't go too fast, and implement things slowly, and make sure you talk to the people on the ground, because what you need to do is talk to the people that are there doing the services, and making sure they all engage. Some of the engagement things that TfW have done have all been in the south of the county, particularly in Pembrokeshire. There's nothing above Narberth, heading north. I think there was something in St David's, but nothing in Fishguard, Maenclochog, Crymych, where you've still got people living, there are still bus services, or not, as the case might be.

It's all south of the Landsker, is it?

Yes.

Yes, the down-belows.

Yes.

Okay. Diolch.

Then nothing in Ceredigion.

Nothing in Ceredigion. Well, yes, quite.

Because I operate in Ceredigion as well.

Of course, in both, yes.

I work across counties. I think Ceredigion is one of the last ones that's going to be brought in.

Mid Wales is, yes.

So, it's like I'm going to be in this quandry.

Of course, yes, you cover both. I mean, there's something there, actually, about where your organisations cover more than one proposed region. That's going to be an added complication for you, I would imagine, isn't it?

Well, luckily, years ago, we pointed out the complications because you had to apply to the different local authorities for your concessionary fares to come back, and we said, 'This is absolutely ridiculous', because we were getting a different fare from Ceredigion than we were from Pembrokeshire. So, we talked to Pembrokeshire, and they spoke to the people in Ceredigion, and we now do it all under Pembrokeshire and everybody's happy—it works, it's fine. You know, something that actually works cross-border—fantastic. So, we hope that that will stay because we don't want that changing.

But there's a risk that some of that might be unpicked, then, under the new regime.

Yes, potentially.

And that's not clear at the moment.

No. I mean, even if there's an intention to carry on, the staggered timeline of introducing this might disrupt things as well. Okay. That's an interesting point. Thank you. Janet.

Your paper says it appreciates the clear delineation and welcome clarity resulting from the definition of flexible and standard local bus services. That's in section 3. Can you elaborate on this and outline how the Bill represents an improvement on the current approach? 

I think there's always been, for me anyway, a lack of clarity in terms of how people perceive flexible bus services, and we've seen a significant growth in demand-responsive flexible services in Wales over the recent couple of years. What we've found really interesting, because community transport is DRT—it is demand-responsive transport—and has been delivering that model for decades, is we've seen, since Bwcabus was introduced, before my time with CTA, and then more recently since the Fflecsi buses were introduced across Wales, that shift towards the digital demand-responsive model, and I think it's really positive that we will have a legislative framework that underpins that. We'd like to see more of a recognition both in the guidance that comes alongside this Bill and the regional transport plans that community transport is demand-responsive transport, and we don't need to have a separation between those two things. But we think it's going to be really helpful to have that clarity that we know that bus operators know, 'This is our timetabled route, this is our scheduled set of services, and this is our flexible model that we're able to create the opportunities to go outside of our standard A-to-B to go and pick people up.' And whether that is directly door-to-door, which is what most of these operators will do, or whether it's a kind of many-to-many kind of situation, I think having a legal framework for that in Wales that is Welsh led is a really positive step.

And what happens is, when we apply to the traffic commissioner for our permits and our routes, they then let the local bus companies know what we're doing. So, quite often you have those bus company managers coming to you and saying, 'What is it exactly you're doing?' Because I always had Martin Richards from Richards Brothers on my back, saying, 'You're pinching our—', and I'd say to him, 'No, we're not pinching any of your custom because you cannot physically do this, can you?' And we sat down, and we discussed it, and he said, 'No, we can't.' So, I said, 'Well, that's what we want to do—pick up those people. If they want to go on your services then to go elsewhere, they can, but we're the facilitator from the door to whatever.' And he was great then. I mean, when I had my torch through Cardigan, he was waving at me, so it must have worked. [Laughter.]

So, you also say the objectives set out in the Bill are welcome and clearly link back to the policy intention set out in the Wales transport strategy. I think you've already said this—because it says, 'Are you clear on how these will be interpreted, and do you believe the reporting requirements set out in section 20 are appropriate?' I think there's a lot of concern about the implementation out there.

There really is, yes. And I think, especially, there are some questions—I think it's in that section—about data and supplying data back to the Welsh Government, and one of the things, from just speaking to officials about it in preparation for this session, is understanding what the expectations are going to be from these organisations, because whether you've got paid staff or volunteers, we're talking about organisations that are extremely stretched. They have very limited capacity. They don't have the money to be able to bring in an additional administrator to gather data and supply it back. And our funding from the Welsh Government at the Community Transport Association has been significantly reduced in recent years. We don't have the capacity to do that for them, either. So, that implementation question question is the really key one, because the objectives are absolutely what we were hoping to see. And it’s about how we make that work in practice, collaboratively across the sector. We’ve got the vision; we need to actually think about the collaboration that’s going to deliver it.

Thank you.

Okay, diolch yn fawr. Did you want to pick up on anything else, or have we covered the—

No, we've covered that section. 

You're happy. Okay. Well, we'll come back to you then, Janet, if that's okay. 

Okay. Your paper also raises concerns about the quality of regional transport plans, which the Welsh Ministers must have regard to in developing the Welsh bus network plan, and calls for a statutory—

I think—. Yes, we've covered that one earlier. 

Oh, sorry. 

We've covered that one earlier. What about services for older people, disabled people, those with protected characteristics? Is there enough in the Bill for you, to give you an assurance that they will be catered for?

I’ve just got some stats of what we at VEST have done, a service we’ve done for the past 12 months. We’ve got six buses that cover all of Cardiff, for the elderly and disabled who cannot use public transport. We carried out over 16,000 trips last year, just in Cardiff itself, and that's equivalent to just over 1,700 people who would not be attending medical appointments, rehabilitation, because they can’t physically use public transport. That’s just with six buses to cover just the city of Cardiff. So, we are stretched.

We’ve got a registration system with us, and, at the moment, we’ve got over 30,000 people registered with us, and we’ve got six vehicles to cover all that. So, you can just imagine our phone calls a day; we’re averaging about 600 to 700 calls a day, just two people, trying to manage to get to all these people. And, yes, it’s very frustrating when we’ve—. Sometimes, by 11 o’clock, people are phoning up, ‘I’ve got a medical appointment’, and I’m saying, ‘Sorry, I can’t help.’ And that’s not going to the hospitals; that’s just going to GP surgeries, dentists and rehab. So, we don’t even take people to out-patients.

So, is there anything in the Bill that's going to make that better, or—?

I don’t think there’s anything specific in there, personally. And, I think, the one thing that we identified in our paper that is a significant gap is the lack of focus on training for drivers across the public transport network, which we have seen in the English Bill, that there is going to be a statutory expectation that all drivers will have disability awareness training. We don’t see that in this Bill, and we’d like to see that included.

I think the focus seems to be more on just generally creating a legal framework that is going to improve the network for everybody, which, absolutely, we want to see. And I think what’s going to be really important, again, is focusing on the kinds of services that are going to be part of these franchise contracts, and how community transport, community-led organisations—. It’s not just community transport organisations; I think the small bus operators, the SME market, are incredibly important in Wales as well, because there’s not a huge amount of difference between them and the operators that you see alongside me today. We have people who are in the communities that they’re serving, who are delivering incredibly important services. They’re good employers. They create positive opportunities. They do an awful lot for their communities, in the same way that CT operators do.

In order to ensure that more disabled people’s needs are being met, I think that is likely to come through more in the secondary legislation and the guidance that needs to come alongside it, in order to ensure that those additional needs—. If we make a transport network that meets the needs of the most disabled, and the most vulnerable people in our community, it’s going to work for all of us.

Sure. I'm just interested as well in the role of local authorities, because the explanatory memorandum says that local authorities have the best understanding of local bus travel requirements in their area. You may dispute that, you may have a better one, but let's just take that for what it is. But, at the same time then, responsibility for planning and securing bus services are moving away from local authorities to Welsh Ministers. So, how do you think the role of local authorities looks in the Bill as it's drafted? Should they have a stronger role? Is what's being proposed appropriate, do you think?

It’s really interesting, and I think we’re still to see some of the detail emerge on that, in terms of the work alongside TfW as well, because TfW are going to be taking on a lot of this responsibility as delivery partners of the Welsh Government, in practice. We’ve already seen a significant number of transport professionals leave local authorities to go to work for TfW. So, that shift has been noticeable, and we’ve had a significant loss of expertise, also through austerity, I have to admit, where we've seen a lot of people who have retired or taken voluntary redundancy as a result of the impacts on local authority spend.

That means we've lost knowledge and expertise in the local authority transport team, at a time that we can't really afford to, and now I think there will be a real focus, and there needs to be a real focus, in terms of implementation, on TfW's colleagues, but the pool of transport professionals in Wales is not large. So, local authorities are very connected to their communities, and they work incredibly hard to make sure that they feed the expertise through and the demands that they get from residents, but they've always had their hands tied, in that they've only been able to commission those socially necessary routes that commercial operators are not going to be delivering. So, they'll be in a very different legislative position as a result of this Bill, and they'll be able to shape and determine a lot more what services will run where.

I think what we need to see is that direct connection back to those communities, so that the flow of information is really strong, because they shouldn't have to do it all on their own. We have this network of incredible experts that are delivering services daily. We need to see that commitment to having that information fed through into network planning, and that direct engagement with providers, so that we can ensure—. We're thinking about a contract package for Denbighshire, for example, and what that might need to look like. What we've seen in practice is Fflecsi routes being commissioned with commercial providers from outside of Denbighshire coming in and running buses with nobody on them, or being sat in a car park because they haven't got any calls, and the community transport provider is turning people away because they don't have enough capacity to be able to meet the need. So, if there was a better connection there, and we had more of an opportunity for CT operators to get involved with running more of those services, or, as the Bill specifies, relying on community bus services that already exist so as to not disrupt the network that is already meeting people's needs, hopefully this legislation will support that in a way that we don't have at the moment.

And you'd have thought that some of the lessons that happened should have been learnt when Bwcabus failed, and how many millions were spent on that. With some of the Fflecsi things that are happening now, the lessons should have been learnt.

Okay. Diolch yn fawr. Heledd, do you want to come in?

So, how do we ensure that? Because, you've said 'hopefully'. It doesn't inspire confidence when you're saying 'hopefully'. How do we ensure that that is the case, because as you say, with expertise being lost, local authorities may not have that knowledge at present? How do you ensure that really community-focused solutions, which are needed, really come through here?

I think the guidance is going to be really important, and that's where I suppose that question around whether it's advisory guidance or statutory guidance is going to be key. Not having any guidance at all is a real worry, because they will default to the easiest possible path. They will default to copying and pasting what currently exists, because they don't have the time and the capacity to do it otherwise.

So, we saw that with the implementation of the well-being of future generations Act. I was in a local authority at that time, and until there was a kind of push, with consequences that you have to do this, this is a statutory responsibility, it was seen as a tick-box exercise and a nice to have. This cannot be 'nice to have', if we want it to work in the way that it is intended. I think it's a very positively drafted piece of legislation that has a clear intention to improve the bus network. If we want to see that happen in practice, I think we need to see very clear expectations set out from the Welsh Government, from yourselves, that this is how we need to see it implemented, that we need that direct pathway back to communities, and how those voices are going to be recognised and heard in shaping what that network plan looks like.

Thank you. So, looking at the Bill, it simply refers to local bus service contracts. It's not specific in terms of type of contract. Much of the narrative is around franchise, but actually there's nothing specifically in the Bill about that. The Cabinet Secretary told us that that was because he wished to have as much flexibility as possible. Is that welcome, in your view, or would that worry you?

I mean, we've been quite positive throughout the process at CTA, from a Community Transport Association point of view, that franchising seems like a positive approach. We've got no real positive or negative feelings. I know that the Confederation of Passenger Transport have pushed for a different model of franchising and a different kind of contract, because they think that's more effective. We don't particularly have a position one way or another. For us it's been much more about creating the legislative framework that's going to support more community-led development, and we think that this has got the potential to do that.

I think there is still—. Because of that greater flexibility, it does create a bit of uncertainty for us as a sector, that we don't know—does that apply to the contracts that are currently being delivered by community transport organisations? How is that going to affect services that are running in communities that are not part of a contracted package? How will the franchising packages be implemented in order to ensure that SME and community-led organisations will be able to bid meaningfully and be part of those competitive exercises?

And what about capacity to do that?

Capacity is an enormous challenge. Our sector is so incredibly stretched. When you compare the commercial bus operators, they're still in some places 60 per cent, 70 per cent of pre-COVID passenger levels. There is nobody in the community transport network that would tell you the same. Most of my members are at least at 100 per cent capacity—100 per cent of pre-COVID levels—and a lot of them are significantly higher.

That's interesting.

The demand has grown hugely.

We're aware that, for the global figure, we're not back to pre-COVID levels, although other parts of the UK seemingly have returned.

Yes.

But you're saying that you certainly have as a sector.

It's huge. Huge.

A 25 per cent increase.

Do you think that it's because of confidence? I've heard that a friendly bus driver is really important. So, confidence in knowing that you can get from A to B, that if you turn up, the bus will turn up. Do you think that that's a big thing?

Briefly.

Sixty per cent is medical appointments, you said, so—. What do you think it is? Why are the community—

Necessity, maybe. It's the only way to get there.

Yes, I think that necessity is a big part of it; confidence is a huge part of it; reliability. Some of the quotes we've had: 'It's a lifesaver', 'It's just a relief.' We had one passenger, who has recently started travelling on one of our buses in the Valleys, and she said, having to rely on the public transport network, she'd decided that she would rather die of cancer than try to make that journey any more. That's the kind of story that we hear from passengers. That's not universal. There are lots of fantastic bus drivers on commercial services and there are lots of services that work incredibly well, but there are lots of places where we don't have bus or community transport. In south Gwynedd there's a huge gap, and in the places where community transport does exist, the capacity is constrained and therefore the ability to get involved with contract packages in the future is going to be a big piece of work for us in supporting the sector to get to where they need to be to be able to bid for those contracts. 

So, you've said that there's not enough clarity around how contracts will be operated from your perspective. So, what do you want to see from Government then, or what could there be in the Bill that provides that? Is it guidance or some sort of associated document?

Definitely guidance to local authorities, so we can then work with them more. And it's all about the clarity, so that we know, when we go to them, that they know exactly what we're talking about and for us to liaise more with them. There seems to be a bit of a disconnect at times, because they are busy doing the main bus routes, et cetera. And they're just like, ‘Yes, community transport is just a small niche on the side’, not realising actually the number of people we are helping.

So, has the Government responded to that request? Are you feeling that they're hearing your plea and that they're looking at addressing that?

I think, yes, the bus and community transport team in the Welsh Government have shown a real drive to try and take that feedback on board. I worry about their capacity, personally, the size of that team in delivering such an ambitious programme of change. I don't think they have enough capacity in the team to be able to do everything that we're expecting them to do as a country. So, I would welcome more focus from them and more of an awareness. And what I will say, with recent changes, is that we've got much more of an interest from officials now who are working in that team to get involved with community transport. We're organising some visits for them to come out and meet some of our members. And we're looking at how we can sync that across the zones, which is really positive. And we need to see that backed up by the guidance then that comes through.

Is there a question to be asked about why it has taken until now for that to happen?

I think that that would be a very good question, yes. 

Okay, one that we as a committee may ask. 

Yes.

Okay. Diolch yn fawr. Carolyn, we'll come to you next. 

Just regarding the information and data you touched on earlier, providers with section 19 community transport permits may be required to provide information both to the Welsh Ministers and the general public under sections 25 and 27 respectively. And CTA have said that's unreasonable. I think they're saying that they will be used to help develop the Welsh bus network plan. That's the idea, so that they can gather that information when building the network. So, again, can you just let me know your concerns, if that's okay?

Yes, absolutely. I think my question around that is the proportionality, and especially when we think about section 19 services. They are largely completely independent of the Welsh Government and local authorities. The permits that they operate under, a lot of them apply for those through the CTA—they don't even engage with the traffic commissioner in order to secure those permits. So, the data that operators hold around delivering those services is generally only held locally, and we're talking about, in a lot of places, hyperlocal, small organisations that rely on a small number of paid staff, if they have any paid staff at all. So, it's understanding the level of expectation and the level of support that will be put on offer in order to make sure that it is reasonable and proportionate. Because we can't do that for them. We don't have the capacity to do that, unless the Welsh Government wants to resource us to do that in partnership, which we'd be very happy to explore.

It's making sure that we're not putting an undue burden on our operators to supply data that, actually, meaningfully, the Welsh Government is going to have very limited use for, because section 19 services are not available to members of the general public; they are only available to members of those schemes. That's part of the legislation that applies to running those services.

So, for section 22, we think it would be much more reasonable—. Those are bus services in another name; it's another format for it. So, supplying data, operators already supply data to their local authorities as part of those services, and it would be reasonable and not unexpected to supply data under those circumstances. 

Thank you.

There we are. Okay, thank you. Janet.

Yes. Section 34 establishes a local authority power to provide

'financial assistance in connection with the provision of local bus services'.

Are you clear on its purpose and effect from the CT sector's perspective, given that the Bill more generally transfers the planning and funding of bus services to the Welsh Ministers?

That's a really good question, Janet. I think the wording in the Bill is that local authorities have the ability to provide funding, and that is unclear to me, how that's going to work in practice. At the moment, local authorities—. I've already mentioned that the BSSG is a very small amount of funding that comes via local authorities to the CT network, and it's not done in a way that's consistent or transparent across the country. So, we see quite big disparities in terms of how that's applied and how much funding is available. It's also a very small amount of funding, which doesn't remotely cover the cost of delivering CT at the moment.

We don't know how that then is going to work in practice as these zones are rolled out and contracts are developed. So, we're anticipating that these franchise contracts, if they go down the franchising route, will be at least five-year contracts to deliver bus services. That will create a lot of stability and a lot of certainty for the operators that are running those services, and that's a really, really good thing. We think that's fantastic.

However, if then the Welsh Government is simultaneously relying on bus services that are not part of those contracts, and the only funding that's going to be available will be via the local authorities, what funding is that going to be? How is it going to be delivered? Is it going to be annual? Is it going to be in line with the updated funding code of practice? We don't know any of that at the moment. So, a multi-year funding agreement for services that are outside of contracts would be essential, in my opinion, to ensure that we don't unintentionally create a two-tier system for the bus services across the country.

Okay. And how does your not-for-profit model play out in terms of some of this funding stuff? Because you wanted to be put, finally, on a similar level, if you like, or an equitable level, with other models.

I think it's really important for us to note, especially—. I went to a learner travel summit that the Cabinet Secretary attended on Friday, along with Lynne Neagle MS, and we were talking there about the challenge that the Welsh Government and local authorities have in commissioning services. Bus services are expensive, and commercial organisations have a profit motivation. Community transport does not. So, we're legally prevented from making a profit on any of the services that we provide. We can only ever charge a full-cost recovery model. And very often, full-cost recovery is constrained because, if you are receiving BSSG, for example, and then you bid for a contract, you might have to subtract amounts from the contract bid that you put together to reflect the fact that you're already receiving some form of support from the Welsh Government, even if that doesn't then mean that you end up covering all the costs of delivering that service.

So, there are a lot of unseen shenanigans that happen in order to make sure that operators are able to deliver services. And very often, these are children with additional learning needs having the ability to get to school, people being able to make their health appointments and not being stuck, communities in rural parts of the country not being left behind. So, finding that mechanism, I think, is going to be really important, and finding that equitable point where—. Not-for-profit organisations have had to scrabble in order to continuously provide this level of service, and they do it incredibly well, but we are on a funding treadmill, and it does take a huge amount of time and capacity and expertise. We provide as much support as we can, but these guys have had to develop a set of expertise which commercial organisations don't have to worry about. Obviously, they have other things that they have to be concerned with; keeping shareholders happy is not a problem that we have. But whether it's about the contracts, whether it's about the funding mechanisms, creating an equitable framework for community transport organisations to be part of delivering services, in the way we know they have the ability to, would make a huge, huge difference.

Okay. The other thing you tell us in your paper is that you're concerned that your sector will still need to register with the traffic commissioner, that you're concerned about that, unless—. You need to register unless you're delivering a service under a local bus service contract, so how in practice would that affect your ability to deliver services in a timely, responsive way, and how can that be addressed?

Yes, that's not particularly clear at the moment, because we don't know how many of these services are going to be outside of the contract system and, when the Bill talks about relying on community bus services, what that's going to look like in practice, and understanding that, I think, is going to be really important. Section 22 permits are only issued by a very small team in the traffic commissioner's office in Leeds, so that is not going to be devolved to Wales under the current expectations; that's our understanding. We do have the traffic commissioner's team in Wales and the Traffic Commissioner for Wales, so there is this potential where we will have decisions being made about what services and what areas we can run services in being made in Leeds, and yet if a commercial operator decided to throw one of our operators under the bus and we got called up in front of a public inquiry, that would be done in Wales.

So, I think there's a lot to unpick there, and one of the things that we're already seeing as we start shifting towards the pre-franchising model is the focus naturally is going to be on contracted services and ensuring that we have the network that works, but then you might have pushback—as we've seen in some places already—'Well, if you run this service, it's going to take passengers away from the T network', or, 'If you put this on, it means people aren't going to use the mainstream bus', or an expectation that they would only be able to run a demand-responsive service that integrates with the mainstream bus network. We have real concerns from disabled people, particularly, about that, where a door-to-door journey is the only kind of journey they can make because of their mobility support needs, and there is a real fear that you'll be dropped off by the CT operator at the bus stop and the next two buses that come already have someone in the wheelchair space. What do you do then? How do you make your journey?

So, it's creating, again, that equitable framework so community transport organisations can continue to meet people's needs while still ensuring that the bus network as a whole is more effective and more efficient. I don't know—do you want to add anything on that? 

I was just going to say about your two buses come along and they're full. Well, that would be like three or four hours later in my neck of the woods. [Laughter.] 

Well, listen, can I thank you so much for being with us today? It's been really valuable for us as a committee not only to hear on a policy level, but also on a ground level delivery level as well, how the Bill might or might not play out. There's a lot of unknown, as you've highlighted, but we're very grateful for your evidence and it's greatly appreciated. Diolch yn fawr iawn. Thank you.

So, whilst you leave us, we'll carry on with our meeting.

So, there are papers to note, so can I invite the committee to consider the papers, 5.1 and 5.2? Are you happy to note those two formally? Yes. Diolch yn fawr iawn.

Thank you. So, the WLGA's paper says it's supportive of the Bill proposals in general, but believes councils must continue to have a central role in their development and implementation, and witnesses have also said that as well. How should this be delivered, both through amendments to the Bill and wider implementation arrangements for the Bill, and can you be specific? We've also heard about CJCs' involvement as well in delivering the Bill, but we've also heard some concerns from witnesses regarding CJCs actually being able to deliver what's expected of them. So, I was wondering if you could comment on that question. Thank you.

Who would like to go first? There we are; Dave Bithell.

Good afternoon. Thank you for allowing me to attend the meeting this afternoon. Thank you for the opportunity to give this evidence, and, obviously, Andrew Morgan can't be here today, so I'm representing the WLGA response. I'm therefore happy to support and present the WLGA's written response on behalf of the WLGA. I'm sure you would have had the chance to read it and consider the detail of the response. I was not intending to go through the detail in the paper. The main points and principles of the WLGA response highlighted—. There are some key, critical points in their response and I'm just going to take a little bit of time to go through it, and I'm sure that we'll all be happy to take some questions, really.

We believe that, as local authorities, we must continue to have a central role in the development and implementation of the bus services in areas and regions. Work on bus services in Wales must be holistic. All councils invest considerable sums of money in bus services, providing home-to-school transport services, and the work should take full account of the links with local bus services and how the new Bus Services (Wales) Bill will impact on transport users across Wales, in particular those small and medium-sized enterprises that exist in many of our council areas, especially in the rural communities. Finally, that difficult challenge that everyone is involved in in public services these days is that there is significant funding to move us to a franchising model. There is considerably more detail in the written response, namely 12 specific points that are included, and I'm sure that, together with the officers present here, we'll happily field any questions you may have to the best of our ability.

In addition to the above, I think it's worth me capturing and feeding back some of the feelings expressed across the regions in Wales. I'm a member of the north Wales corporate joint committee transport sub-committee and we've had a number of discussions, both formally and informally, on the bus services Bill. The main themes and concerns that elected members on the sub-committee raise in north Wales, and I'm sure these are similar across the WLGA and the response across the whole of Wales, are service standards with the franchising model—are we likely to see improvements over existing services—network enhancements and involvement of councils on options and any network changes; will local authorities have the opportunity to present local solutions and changes, or will the network just be presented to us as a region—so, I'll use north Wales as an example for that—transport providers, there will be an impact on SME local transport operators, especially in local areas; certainty of funding—we are aware and we are expecting that the franchising Bill will take all available current Welsh Government investment in bus services. Members would like some confirmation and clarification on funding gaps and the steps to understand how these gaps in funding will be addressed.

Again, I'm happy to field any questions and my own views on the Bill. I think, generally, the WLGA and north Wales councils are supportive of these changes, to enhance public transport across the whole of Wales. The main concern is how the funding and the mechanism is going to be applied across Wales. I'll give you an example. Just in Wrexham, a few years ago, we didn't have any money to—. We didn't invest any money in the bus services, and over the last three years we've invested £600,000. Together with the bus services support grant, that equates to £1 million. We as a council would not support—and I know that's replicated across many, many councils—that money being removed, because that is part of our annual budget process. So, we'd like to know what mechanism the CJC and the Bill will take on board to take north Wales councils and the rest of the councils with us, really. Because there does appear, in the Bill, to be a little bit of uncertainty about funding and uncertainty about the mechanism.

So, thank you for the opportunity to give evidence this afternoon; happy to take questions.

Thank you, Councillor Bithell. I'm sure lack of detail is going to be a regular theme, I think, throughout this, such is the nature of these kinds of framework Bills. But I don't know if anybody else wants to add anything before we come back to Carolyn. Richard.

Just on the first question, obviously, to get a sustained role within the partnership area, I think there needs to be something in the Bill to have a duty on local authorities to work in partnership with WG and TfW, and make sure that this is done, at the very least, at a regional level, where regional officers or local authority officers get the impact of working with TfW on network planning, make sure that their procurement is right and that everything else can be worked together, because local knowledge on bus services is paramount. Because, I think, if we're going to have a sustained role within this, then, I think, possibly putting a duty on local authorities to do that would help with moving this forward.

Just to echo, I think there's always going to be concerns over future funding. Running buses is revenue hungry. In Powys, we've just finished retendering our entire local bus service and home-to-school transport network, and it's an eye-watering amount of money. But we try and keep a lid on that money through making the best use of local bus services first by putting entitled scholars on. So, it's the devil in the detail of the Bill and how it works practically. If I may, probably at a later stage, I'll come back and reflect on the experience we've had.

Yes, this is a general opening shot, really. I can see that Katie wants to come in as well. 

Thank you, and thank you for inviting me to the meeting as well. I think it's quite clear that local members, particularly county councillors, want more local input into the decision making as well. Certainly, I know in my case in Flintshire, they've certainly had a role in terms of determining what the core bus network looks like in our county, and we've recently reviewed that, actually, with some minor amendments. So, I think that local accountability still needs to exist. And I echo what Richard has said about some duty on local authorities to work in partnership to co-design the network with TfW and the Welsh Government. That would be certainly welcomed from a local authority perspective. 

We've got a significant amount of expertise, knowledge and experience in designing the network as it is currently. We work very closely with the operators within our counties. We understand their limitations and capacity as well. If you're doing that on a national basis, you won't know those local nuances that happen on a day-to-day basis, or the history as to why certain routes operate a certain way. So, you would lose that ability. And I think the other thing is that the local residents in particular and service users currently hold—no disrespect to Councillor David Bithell—members to account. Will that still exist under a national approach? How would that work? I think that's a concern as well.

Katie, with what you're saying, corporate joint committees just have representatives—the leader from each authority—so they wouldn't have that local input. And accountability going forward, I think, has been a bit of a concern, and also the expertise that you might have in each local authority. Would you agree with that?

Yes, that's correct. At the moment, they hold their ward members accountable for decisions and where services operate within their village, their town, their neighbourhood. So, you would lose some of that local accountability.

Thank you, Katie. Moving on, Transport for Wales's written evidence says engagement with local government has been integral to its bus reform engagement framework, with meetings taking place over the last two years, and it's also engaged with corporate joint committees. How effective do you think it's been? David is saying that he's missing a lot of detail here and he's concerned about funding, and you put in quite a lot of subsidies now as a local authority, so you're worried about how that will be used going forward. So, on one hand, TfW said there's been engagement, but you say you're missing detail. So, can you give me a response to that, please?

Thanks, Carolyn. What I would say is there has been engagement—we have had workshops from Transport for Wales and it has been discussed at the CJC meetings. When I say 'lack of detail', I think, truthfully, it's been quite high level. I think where we need to go is what input local authorities are going to have, how does it impact local authority budgets and decision-making processes. I'm not sure we've discussed that. Certainly, across north Wales, that hasn't been discussed. 

The concern that I've got is that, as I explained, we put £600,000 in of Wrexham council money, for example, and the Welsh Government put BSSG funding of, say, £400,000, so that's a £1 million. If we're going to work in partnership—and I've got no objection with working in partnership—we've got to see some outcomes for our £600,000. It does need to be a true partnership, and I'm not sure we've seen any process in the Bill that I can see that, as Katie says, gives us any democratic autonomy. And if you take the autonomy from local government, i.e. the councils, I'm not sure the support or the buy-in is going to be forthcoming in the Bill, really. That's the main concern.

And the other thing is, if we're going to just maintain the status quo for bus services across Wales, then, to be fair to most local authorities, they're doing a good job with the limited resources that they've had, but, clearly, I don't see what funding the Welsh Government are going to put into this. It seems to me they're going to pool all our resources into working with Transport for Wales to deliver bus services, and they've got real good aspirations for increased services, but the question is where does the money come from. So, that's the concern, I think, if I'm honest, replicated across Wales, and certainly in north Wales.

I echo some of those comments as well. There was engagement from quite an early stage. There were officer meetings with the Welsh Government, to just work through some of the proposals at that time. I think, though, there's a feeling that there's still only a single option really being presented in terms of franchising. We proposed alternatives, where we could use franchising where the existing network isn't functioning in the right way, but it does still seem to be this one-size-fits-all approach at the moment, which I think we've raised concerns about previously.

I think there's still some lack of detail around how the permitting will work as well. We're still unsure about cross-border services. In Flintshire, in particular, and Wrexham, we operate cross-border services into England, and we're still unclear about how those would operate under the franchise mechanism. I think there's still, again, a lack of detail around the concessionary fares as well, going forward, and how that will be administered going forward, plus a range of other functions that we will still maintain as a local authority in terms of road space co-ordination, when there are roadworks causing congestion on the network, maintenance of bus stop infrastructure, improvement of bus-stop infrastructure, bus priority measures. All of those things are still not clear, and those functions will still remain with the local authority as well.

That is my next question, Katie. While responsibility for planning and securing bus services will move from local authorities to Welsh Ministers as part of the Bill, key areas such as learner travel, active travel, and all that infrastructure that takes up road space—. We heard earlier from representatives of bus operators about congestion being a huge issue, and wanting more bus lanes. Bus stops, bus lanes, bus priority measures will remain the responsibility of local authorities. So, is this likely to be effective, if responsibility for this goes to Ministers?

Shall we hear from Richard?

Thanks, Chair. If I go back to the TfW engagement, I think what David and Katie have said is right, across Wales. I think it's been patchy. I think there's been some good engagement, but there's also been a lot of, perhaps, more questions than answers, where local authority officers have asked questions and we haven't had the answers. We're still waiting for the answers, because I don't even know if they actually know what the answers are currently. So I think that's something that we do need to improve on as we move forward with this.

Around local authority responsibilities, we have a real concern about school transport, because there are large numbers of pupils who travel on public transport to school, especially in south-east Wales, in Powys and other areas. We need to have local accountability on that, because it's a statutory duty on the local authorities, and to centrally plan all this is going to be very difficult. It has to be dynamic, because there are changes to school transport. It's not just September, it's all throughout the year, because you get more pupils coming in, you get pupils leaving, you get pupils moving schools and other things. So there has to be a lot of work done on that to ensure that we don't lose those routes and they are carried forward into franchising so that we've got continuity for those pupils as well. It's not only season-ticketed pupils, it's fare-paying pupils who travel to school who don't meet the distance criteria.

Another thing is that we pay, at the moment, bus operators for season tickets on those vehicles. What happens when it becomes a gross-cost contract? Who do we pay? Do we have to go to TfW? That means 22 local authorities bringing money into TfW. Basically, who sets the fares? Because that's another point. Are TfW going to set the fares, or the bus operator? But the bus operator is applying for a franchise. It's TfW who are taking the risk. So who's going to actually set those fares? Are they going to be done with local authorities? That's something that we do need to work on, I think.

I think there’s a disconnect as well between funding with infrastructure, because infrastructure is important. Congestion, as probably the bus operators have told you, is a real problem. Bus priority schemes and everything else need to be funded, and obviously they'll be funded through the regional transport plans, but I think we do need to make sure that the funding streams for these carry on. On upgrading infrastructure, we've also got the bus stations, which are not all owned by local authorities. Some are owned by developers. There are departure charges to think about in those bus stations. How do they get worked through?

And highway functions as well. Obviously, they need to be considered. It’s the little things: a burst water main happens, or a tree falls down, or there are trees that need cutting down. All those functions are still going to be with local authorities, and who do we liaise with—TfW, bus operators, et cetera? So it's answering these questions, I think. The devil's more in the detail, but I think we have got real concerns around how that's going to work with centralised planning.

Thank you. Heledd wants to pick up on something, then we'll come to Katie, and then we'll come back.

I just want to check in terms of the centralisation of learner travel, because obviously I think there's a bit of a blurring here, because the Learner Travel (Wales) Measure 2008 is still very much in place, isn't it? But there's been some blurring in what Ministers have said, that this could replace the need for changing the three to two, and so on. I just wanted clarity there. Do you have any fears that that blurring is perhaps making things more difficult in terms of how you plan? 

It is difficult, because we have to plan the best way for those pupils to get to school. Obviously, the most cost-effective way and the best way for the pupils to start using public transport at an early age is to get them on public transport early, and get them to school—if there are public transport routes available. If there are not, then we have to decide on whether it's a coach, taxi, minibus or whatever, depending on the number of pupils that are going to each school. So they become closed school contracts. They wouldn't change under this Bill, but the public transport certainly is part of the Bill—or can they be put outside? I don't think you can actually put them outside of it, because they are public bus services. They're registered as public bus services, so there’s not going to be a way of just pushing them outside. They need to be integrated properly into the franchise. 

Thank you. Katie now, and we'll come back to Carolyn.

Thank you very much. My point was around the school transport element as well and the impact that could have on local authority budgets. It's a statutory function that we provide, and I'm concerned about the widening of the policy for the learner travel Measure and potentially the impact that could have, but also the fact that we use the funding that we have for subsidies. We try and cross-subsidise that with what we have for school transport. We always try and integrate public transport with school transport journeys where feasible, to get the most for our money. Under the buses Bill, we'll lose that ability to a certain extent, which will mean that we will have to procure separate, potentially, school coaches under closed school contracts, which are likely to cost more. 

Currently, we have a number of services where we are able to place eligible pupils on public transport routes and cross-subsidise those routes, so they both help each other to a certain extent. So, I am concerned about that. I think we also need to be mindful, if routes are going to be planned on a national basis, that you don't impact admissions and school catchment areas, because you could potentially facilitate journeys for pupils who are travelling outside of their catchment and actually affect pupil numbers at certain schools as well. We have seen that happen previously with commercial operators, where commercial operators have provided journeys themselves and it has impacted those pupil numbers at certain schools. So, there are risks, as well, associated with it.

Okay. Thank you. John briefly then, and we will come to Carolyn.

Just one final point in support of everything that Katie and Richard said around school transport. The point I am going to make, from a local authority point of view is that, at the moment—. Well, the Bill says that Welsh Ministers will be responsible for securing bus services, then a bus operator goes and operates those services and the local authority or the CJC, or whoever, is responsible for the infrastructure. Currently, the traffic commissioner has the ability to bring a transport operator and the local authority into a public inquiry for failing to adhere to standards. Will that now include the Ministers appearing at a public inquiry as well in the future?

That's a good point. 

Yes, an interesting question. 

Can I just ask one question on school transport? It was suggested earlier you could bring school transport together with public bus transport, but just remove the ALN element of it. That the suggestion. No—shaking of heads. Okay. Thank you. I won't take that any further.

Richard. 

To explain, basically, you've got probably more taxis and minibuses than you have coaches on school transport. You can have 150, 200 taxi contracts in different areas where there are only small numbers of pupils. 

Okay. Thank you. Do you believe the Bill as drafted and associated implementation arrangements have sufficient regard to both the SME bus operators and the community transport sector? Are any specific amendments or wider actions required? 

John. 

The SME bit is a really good point. I suppose I can speak from the experience of Powys. We've been operating almost a franchise model for quite some time now. It's everything in franchise, all bar the legalities of it, but we set the times, the fares, the vehicle type. We do not have a particular problem with SMEs competing against multinational companies. We have, through Welsh Government grant funding, been able to make that easier by providing vehicles. So, effectively, all the SMEs are doing are providing staff, fuel, maintenance. That kind of levels the playing field and that seems to have worked quite well. That, again, as I said, appears to have been reflected in the latest round of tenders as well.

That's a good point. 

Because we've been told that SMEs are petrified—that was the word that was used—with this Bill. So, obviously, any experience that you can bring to the table would—.

There's an SME in Flintshire that, you know—. You have to do the same thing, I think, don't you, Katie? Katie has got her hand up.

Yes, that's okay, and then we'll come back to Richard. 

Yes, I do have concerns about the SMEs, particularly in north Wales. We have a high number of SMEs across the whole region who do provide an essential service, particularly in the more rural areas. They tend to pick up those socially necessary journeys that wouldn't otherwise operate commercially. So, they tend to operate under contract to local authorities. It's those operators and their ability to compete with the larger multinational operators that is our concern. I think we're worried that they will be squeezed out of the market. Obviously, they also provide most of our home-to-school transport services. So, there is a knock-on effect if we do see operators fold or decide to throw in the towel. We might see some operators disappear as they just feel it's too bureaucratic and not worth their while, because they just can't compete with those larger operators that have the capacity to win tenders, throw resources at things. So, that is a huge concern. We also have one operator in north Wales who doesn't benefit from the SSG, who has never applied for the grant, and is running wholly commercially. So, that is a concern from us as well.

Okay. Thank you. Richard.

Thanks. I think SMEs are a real concern for us, especially in rural areas, because, basically, they provide a lot of our home-to-school transport. Corporate operators don't tend to supply school transport—maybe some on public bus, but they don't have coaches and other other vehicles that SMEs do. Obviously, if they're not protected within the Bill, then corporates would look at it as an opportunity to take over as many routes as they can, and push opposition out and then up the price as it gets later in the franchise. So, that's something that we've got to be really aware of with SMEs, and there needs to be a way of how we do that.

Of course, the other concern for us in Newport and Cardiff is municipally owned companies, because we've got municipally owned bus companies who, again, could be pushed out by larger operators, and we do get really good service from those operators. They also provide home-to-school transport for us in a large way, and we would be really concerned if they were pushed out from bus routes in that way.

Around CT operators, I think there needs to be a bit more clarity in the Bill around CT, because it talks around section 19 or section 22 operators, but they're different sorts of areas. With section 22, they're providing local bus services—they could be DRT, they could be direct services. Section 19 is more of a dial-a-ride-type service, where they do specific journeys. They provide a very valuable service to our citizens, and we don't want those to be pushed out of franchising or brought into the area around franchising, because I think they need to sit outside and be able to carry on doing the work that they're doing.  In rural areas, a lot of local authorities have also got section 22 services running in-house. So, there are quite a number of things there that we need to be aware of. If we're in a situation with local authorities, there's a problem with operator licensing against permits, because you're not allowed to hold a permit and an operator's licence under the same entity. So, if it was a municipal, they'd have to form an arm's-length company to be outside of the actual authority, otherwise they can't have an operator's licence and a permit.

Okay. I'm just conscious we're not a quarter of the way through the areas we want to cover and we're nearly halfway through the time. So, very briefly, John, and then very, very briefly, Katie, before I come back to Carolyn for the last question.

Thanks. With regard to community transport, I think perhaps the Bill is the opportunity—. I have a slightly different view than Richard, I think. This might be the opportunity to review what community transport is, and the definition of community transport. I think most people would think it's a traditional dial-a-ride service. Perhaps so, and perhaps the individual schemes might be comfortable remaining like that, but I see this as the opportunity to actually integrate them as part of the transport offer. So, instead of community transport, it's transport for communities. And a really quick, simple way of doing that is if section 19 permits could accept bus passes. That would help a lot of CT schemes.

Okay. Good idea.

Okay. Well, we'd probably have to test that with them, but, yes, that's a suggestion, certainly. Katie, did you just want to very briefly say something?

Yes. John did steal my thunder a little bit. He said some of the things I thought. Concessionary passes was one thing I was going to raise, but funding in particular for community transport is a massive issue. I know, in north Wales, a lot of the community transport operators are struggling. We've seen a reduction in funding this year, and it has been year on year, to be honest, and it doesn't go far enough. So, I think they are underfunded. I agree with Richard that they need some sort of protection. I wouldn't want to see the loss of those operators; they provide a vital service in our communities, particularly in terms of ring-and-ride-type services and taking people on non-urgent patient transport-type services.

I'm sure we all agree. Yes. Thank you. Is there anything else that you want to ask, Carolyn?

There is. We've covered funding a little already, so—

Yes, I think we have.

—implications for the transition of new arrangements if additional funding is not required. I think you've touched on that already. If there's anything else you want to add, that's—