Pwyllgor yr Economi, Seilwaith a Sgiliau - Y Bumed Senedd
Economy, Infrastructure and Skills Committee - Fifth Senedd18/06/2020
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|Hefin David MS|
|Helen Mary Jones MS|
|Joyce Watson MS|
|Russell George MS||Cadeirydd y Pwyllgor|
|Vikki Howells MS|
Y rhai eraill a oedd yn bresennol
Others in Attendance
|Deb Bowen Rees||Prif Weithredwr, Maes Awyr Caerdydd|
|Chief Executive Officer, Cardiff Airport|
|Mick Lynch||Ysgrifennydd Cyffredinol Cynorthwyol, Undeb Cenedlaethol y Gweithwyr Rheilffordd, Morwrol a Thrafnidiaeth|
|Assistant General Secretary, National Union of Rail, Maritime and Transport Workers|
|Nigel Winter||Rheolwr Gyfarwyddwr, Stagecoach De Cymru|
|Managing Director, Stagecoach South Wales|
|Peter Hughes||Ysgrifennydd Rhanbarthol, Unite Cymru|
|Regional Secretary, Unite Wales|
|Scott Pearson||Rheolwr Gyfarwyddwr, Trafnidiaeth Casnewydd|
|Managing Director, Newport Transport|
|Spencer Birns||Prif Swyddog Masnachol, Maes Awyr Caerdydd|
|Chief Commercial Officer, Cardiff Airport|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|Lara Date||Ail Glerc|
|Robert Lloyd-Williams||Dirprwy Glerc|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Cyfarfu'r pwyllgor drwy gynhadledd fideo.
Dechreuodd y cyfarfod am 13:37.
The committee met by video-conference.
The meeting began at 13:37.
Prynhawn da. Croeso, pawb. Before we move into our formal agenda today, I think it would be correct that we pause and we think about Mohammad Asghar who, sadly, passed away this week. Oscar, as he was known to many of us, was a member of this committee. In fact, he left and even came back to this committee. He was very passionate about a number of subject areas; one of them Cardiff Airport, actually, which we will be taking evidence from today. But Oscar will be sorely missed by all Members of the Senedd, but also by this committee.
I was copied into an e-mail this morning from Natasha, Oscar's daughter, and Natasha said that she and her mother took real comfort in the words that were spoken in tribute to Oscar during the Plenary session yesterday. Natasha, in her e-mail, said this:
'He loved his work at the Assembly, Parliament, and as an accountant dearly, and always used to say, "The day I stop is the day I won't be with you all any more." True to his word, he did just that.'
I wonder if we could just now take a moment to think and reflect on Oscar.
Cynhaliwyd ennyd o dawelwch.
A moment’s silence was held.
Diolch yn fawr. Thank you. And as Oscar would have wanted, we will proceed with our meeting today.
Item 1, we have no apologies or substitutions. Please declare any declarations of interest now. Joyce Watson.
Just to declare that I'm a member of Unite.
Thank you. That's probably—. If there are any other Members that want to make any other further declarations of interest. No. Thank you, Joyce.
And in accordance with Standing Order 34.19, I've also determined that the public are excluded from the committee meeting in order to protect public health, but this meeting will be broadcast live on Senedd.tv. If there are any technical issues with the meeting today and my signal somehow stops, then Joyce Watson, it has previously been agreed, will be the temporary Chair until issues are resolved.
In that case, I move to item 2. We have a number of papers, all to note, no action particularly needed on them. The first, 2.1, is a letter from the Chair of the Public Accounts Committee; 2.2 is a letter from the Chair of the Finance Committee; 2.3 is a letter from the Minister for the Economy, Transport and North Wales in regard to our meeting on 11 May where he comes back to us with some further information; and 2.4 is a letter from the economy Minister to the Chancellor of the Exchequer, on which we're just being copied in for information. Are Members content to note those items? Thank you.
In that case, I move to item 3. This is in regards to our work in regard to COVID-19, the current pandemic, and the impact on various sectors. Today, we're looking at transport in particular. We've got a number of panels today, and the first of which is a half an hour session with two of our friends from the trade unions. Perhaps if I could ask you to introduce yourselves. Mick, your microphone is off. Would you like to introduce yourself first, please?
Yes. I'm Mick Lynch, I'm the assistant general secretary for the RMT trade union, based in London, and I have responsibility for rail infrastructure and Network Rail in particular, the private infrastructure companies and the bus industry and pensions, which is joyful, of course. Pensions are always exciting things, very important. But today I'll be concentrating on rail and ferry because we don't organise bus workers in Wales; Unite cover that almost entirely. We do organise bus workers, but mainly in England.
Thank you, Mick. Peter.
Hello, Russ. Thanks. I'm Peter Hughes, the Welsh secretary for Unite here in Wales. We cover every sector and transport is one of our key sectors, like Mick said there, the bus industry and the taxi industry, which I'll be talking about today.
Thank you, both. I wonder if perhaps I could just ask you for a very general overview to give us an initial view that will perhaps feed into some of the Members' questions later on. I ask you to give an overview of the situation and how the pandemic has particularly affected each of your respective areas. Mick.
Well, concentrating on rail first, we've got a forum that is GB based and it covers all three jurisdictions—the rail industry coronavirus forum—which was put together in the first few days coming into lockdown. So, on that are the train operating companies, and that now includes Transport for Wales who've signed up, along with all the other UK TOCs and Scot Rail, where there's a similar devolved authority. That's allowed us for the first time since privatisation to have an industry-wide focus. Network Rail sit on that as well. So, we've got general secretary level, national directors—fairly important people from the industry—looking at the broad sweep of measures that needed to be put in.
That was the lockdown: how we take the railway down to a level where we weren't doing unnecessary work, so it was concentrating on key workers and vital services and all the rest of it. So, that went into a period of lockdown, how we could strip out non-essential work, as you can imagine, and we lobbied Welsh Government and talked to people over here, talked to all the TOCs and all the rest of it. And I think that was fairly successful, to be fair. Certainly the level of mortality rate on the railway, the national railway, the end of which is, obviously, in London, but similarly a very intense service, has been much lower than the bus industry, and I'm sure Peter might want to speak about that, particularly in London where it was very unfortunate.
So, we've had good engagement at that level. We do support the 2m social distancing. As a general point, nobody's convinced us or brought evidence that that can be removed at this time, and I know Welsh Government has got a slightly different view to UK Government.
We do support mandatory face masks as a general position for the public, which again, there's a slight variance on the Welsh side of the border, and we will continue to engage. The engagement has been good. And I think one of the COVID by-products, if you like, has been that there needs to be engagement at national level for these infrastructure—and regional level, all levels of national engagement, not just UK, but in the Welsh Assembly and with the Scottish Government too. For infrastructure, you need co-ordinated approaches where all stakeholders, in the modern parlance, are fully engaged with each other, especially where they have very common interests, such as protecting our communities and the public, in the infrastructure itself, when you've got degraded running like we've had now. So, that's been very good.
We've got key workers all over the industry, obviously, but problems still go on. We've got problems at the moment with Transport for Wales with Axis cleaners. We do want to engage with Welsh Government on the coming out of the lockdown—the ramping up, as it's been called. Some of that's been successful as well at UK level. And we've got problems in particular—I just want to give a little mention to the docks and the ferries up at Holyhead, where Stena are giving us really major problems. And it's true all over the UK, but, in your jurisdiction, Stena's attitude at the moment of cutting hundreds of jobs out of the system, threatening the very future of ferry services to Ireland, is a real problem for us and it just shows that, where the market is unregulated and disconnected from local or UK authority, people can really take advantage. And you've got—[Inaudible.]—going forward, workers coming from the far east to work, Filipino workers being engaged to replace Welsh and British seafarers on those routes, on very low wages and terms and conditions, so these things are being done under the cover of COVID to take advantage of certain things. You've heard about it on British Airways and I think there will be a tidal wave of that coming forward. [Inaudible.]—I'll stop there, Chair.
Thanks for that. I'm not going to respond to a lot of what you said, because other Members want to come in and I know we've only got 20 minutes or so left. But can I just ask you, Mick, in terms of engagement between the unions with the operators and staff—I'm particularly thinking about engagement between operators and you and staff, really—how have you seen that?
Engagement has been good, I've got to say, we are quite—. We don't always agree, obviously, but it has been good. There have been proper robust exchanges, and changes to plans following our representations on rail and that's been good. Bus, UK-wide, has not been so good because the operators are very jealous of their powers, but we have managed to get—Peter can speak to us later—the bus Minister engaged a couple of times. But in general, all levels, from national level, general secretary level, through to local reps from health and safety and with local managers, it's been mainly good on all companies, and there has been real change to plans and amendments to plans and creative thinking, I've got to say, on rail in particular, to protect people and to keep services running, so it's a two-headed—. It's to keep the service going when people are dropping out sick, but also to protect people as well.
Thank you, Mick. And I do apologise; I know we've only got a short time slot, and I think we're nearly a third of the way through our meeting; it's not your fault, Mick, at all. But Peter, if you give a brief overview and I'll come back to you for more detailed questions later.
Okay. Obviously, we've seen a 90 per cent decline in footfall within the bus industry and obviously, that's been a devastating blow to a lot of our members. I think the taxi and private hire, there's been little or no work at all. Hackney cabs, really, has probably dropped right off the cliff. I think when then you talk about engagement, Russ, there has been really good engagement with Welsh Government, but I was really, really disappointed with the face-covering scenario, to be honest with you. It beggars belief that us here in Wales have a completely different rule to what's happened in England and what's going to happen in Scotland, especially what happens when we think with UK Government where they're going to reduce the 2m rule to maybe a 1m rule. It's not purely about the medical reason; it's purely about giving confidence to people to get on the buses again. That's the biggie: confidence to get people to get back in a taxi. It might not cut out completely face coverings, but it is a massive engagement that we need to undertake. Bus companies are engaged with that. Arriva here in north Wales have made it mandatory to travel on any of their buses, which is surprising when Welsh Government is saying that it's recommended. So, there is a bit of disparity there.
The engagement has been really good at times. The engagement with some of the smaller bus companies that are on non-essential routes hasn't been the best, to be honest with you—I've got to be brutally honest with you. But the bigger companies have engaged with Unite and have engaged with other unions as well, making sure that that is—. Because our main priority of Unite and other transport unions is keeping the public safe, but keeping our members and our workers safe as well, Russ.
Thank you, Peter. Helen Mary Jones.
Thank you, Chair, and I'm sure we're all thinking of Oscar today and wishing he was with us.
Can I ask you a bit more, both of you, about safety issues—and I suppose this is quite a broad question—from the perspective of your members, how safe is it to work and travel on the Welsh bus and rail transport networks at the moment, and can you tell us just a little bit about some of the steps that operators are taking to ensure safety?
Do you want me to go with buses first, Mick, and then you come in with rail later, is that okay? When we're going back to work—we've been engaged with the Welsh Government about the return back to work, Helen, and I think it's really encouraging that they've done that. But I think confidence and safety is paramount in this, and when we're talking about face coverings and the number of people on buses, it's going to be paramount to that. The bus companies are doing all they can, and like I've said, Arriva have automatically made it mandatory, so it takes all the responsibility off the drivers.
What we don't want is people getting on buses with face masks or face coverings on, and then people getting on buses without face coverings on. That's going to cause conflict on a bus. Who's going to deal with that conflict? The driver. So, we're putting drivers in harm's way of that, so we've got to be very careful, as the Welsh Government, that that is taken into account. Likewise, the safety of the passengers is also paramount as well, and that includes safe travelling distance. When they're saying it's only going to be 50 per cent on a bus, that should only be sitting areas only, not standing, because I don't know how you can actually do standing on 50 per cent of a bus. So, realistically, it's got to be really—. And also, as well, I think when we're looking for people to come back to work, it should only be people who can't work from home. Those buses and trains should be for key workers and people who need to be in work, and people who can work from home should continue to work from home, and I think that's the message Welsh Government should present.
Thank you. Mick, do you want to add anything to that?
Yes. I think in general on rail services, if I stick to that, it is reasonably safe. We've got social distancing because the usage is so low, and we've agreed with the operators and the industry to increase the number of services, so the timetable is up to 80 or 85 per cent, and it could be increased to 100, if necessary. And if you do that, you can achieve more social distancing; you've got more carriages, more timetable in place. The question will be when people come back to work; when it's decided for a mixture of the carrot and the stick, I think, that you have to go back to work and the office is reopened, the retail is fully functioning, pubs, the clubs, the restaurants—that will be a real testing point. And I think the UK Government is going to say 1m is acceptable fairly soon, and we'll have to see, then, how safe it is. Because it will be essential in Wales I think—[Inaudible.]—and we'll have to see how safe members feel about that, because they'll have interaction for eight, 10, 12-hour shifts in amongst the public, and see how they feel about it.
[Inaudible.]—on the PPE, not just face coverings for workers, will come back into play and that's at a much higher level because it's meant to protect the worker. So, if you've got vast crowds at Cardiff or any of the other stations, like you do on a rush hour, that's a completely different picture to what we've got now, which is a very light footfall. And that's probably a good thing, but we know the economy can't go on like that forever.
So, we've got to manage the return, and there's got to be a consensus amongst all stakeholders, and that includes the trade unions and yourselves as politicians and the Government and the companies. So, we're hoping for coherency, which we don't always get from our friends in Westminster, which I'm sure sometimes you share, because it affects us all. The cross-border traffic—you've got Avanti up in north Wales, you've got Great Western down in the south—you've got those discrepancies and if one authority or jurisdiction moves differently to the other, it's going to be very hard for the staff and the public to make up their minds about what it is they should be doing. I think most people want to conform and go along with the advice, but if the advice is confusing and ambiguous, that's where we've got real problems. So, at the moment, the direct answer is that it's fairly safe and it's fairly controlled. It's moving forward and keeping that in place while we change the magnitude that's going to be important.
Thank you. I know that Joyce wants to come in on this as well, so I'll just ask one more question if that's all right, Chair, and then hand back over to Joyce. What's your perception of how well the social distancing at work regulations—the Welsh Government regulations—have been working, and how well has that been enforced to date across the transport network? I suppose, picking up on what you just said, Mick, it's all right—not wishing to put words in your mouth—it's all right at the moment, but the key thing will come as we get more sections of the economy opening up.
Mick, if you could just be ever so brief on that. I know we are pushed for time.
Yes, I will be very brief. My understanding is that it doesn't apply on vehicles. So, when you are on a train or a bus or a ferry, it's not in force; please forgive me if I'm wrong. At the moment, it is working. So, in other areas—concourses, ticket halls and, of course, in engineering depots and places like that—it is working, and I think that it's easier to control those in those facilities. So, I'm not hearing that it's been necessary to enforce it through your regulation. I think that people have conformed, and most companies are enforcing along with that.
Joyce, do you want to come in? Then, I'll come to Peter.
Yes. I particularly want to ask Peter about taxi drivers and the vulnerability that we are hearing about. Large numbers of taxi drivers—and this is the case in Wales and in the cities—come from the BAME community, and we are hearing about that particular vulnerability. The Minister has got a report coming out very soon on that. So, I want to link the vulnerability of taxi and bus drivers particularly, and, as you say, your dissatisfaction—I'll put it that way—about the mandatory wearing of face coverings, although I do note that there was a note sent around today from the Minister for health, saying that if the evidence changes, the policy will change. I just want your opinion on that.
Okay. Thanks Joyce. It is very clear in the evidence of the taxi drivers that, even though it's a massive drop-off in work for them, the fact is that it's mainly BAME members, especially around Cardiff, that have been detrimentally affected. We know full well that screens, we believe, should be put in place to encourage people to travel in them. That would give confidence to a driver. I note that that's happened in taxi cab companies in London. The black cabs all automatically have the screens. They need to be put in place in Cardiff and in areas like that.
It is a massive concern that our members in the taxi companies in Cardiff have lost probably 100 per cent of their money. The fact now that they need to go to the Department for Work and Pensions to get that money back has been a massive obstacle. Many of them are self-employed. We know full well what has happened with National Car Parks trying to still charge them their renewal fee. I know that Cardiff has done really well in doing away with the licence fees for the moment.
But, the taxi drivers in Cardiff are doing a fantastic job. Many of them are taking NHS workers to work, mainly free of charge, and delivering supplies to them as well. They are doing a fantastic job for the community of Cardiff, but we've got to protect them more. It should be mandatory that the screens are put up, and it shouldn't be at their cost either. Ultimately, these people have lost more money than most people during this pandemic.
And just one final quick one: there is a trial going on to put some screens around in buses. I don't know if you've been party to that. The Welsh Local Government Association, I think, are moving forward with a pilot.
Yes, they are, and I think that we welcome that, to be honest with you, Joyce. It's about confidence. It's about getting people to want to actually get back on to public transport. It comes down to a number of things: the screens, the face coverings. It's about the public concept of the Welsh Government doing more and going above and beyond what any other country has done so far. They did that with the 2m legislation, and they should be doing it with public transport and making sure that the drivers, the ticket collectors and the public are safe and feel confident to go on public transport, Joyce—and taxis as well.
Thank you, Chair. Some of my questions have already been covered, so that's good. It should speed things up. Just thinking about the situation once the current restrictions start to be lifted and how the sector is preparing for that, I'd like to ask, firstly, whether our witnesses feel that there are sufficient resources—for example, buses and rolling stock—to ensure that public transport passengers and staff are safe as that demand begins to rise? And if there is a shortage, how, practically, do you think that could be addressed?
There will be a shortage of capacity if there is a big return. So, if there is a step change in return, people will struggle. The analysis that's been done, not just in Britain but across the world, is that train services can keep to the social distancing at 15 per cent usage, and we're around about that now on some services. A lot of the time, it's way below at the moment. So, the answer to that is either more carriages or more trains. But once you've got to full timetable, you cannot obviously keep the distancing on train services. So, something will have to give. I imagine the bus industry has got a similar issue. You can't just keep providing more and more services so that you can get more and more social distancing.
So, what we fear is that there will be a big return to car travel, and that's certainly the experience in some of the bigger cities at the moment, and that will be a disaster. I don't think anybody wants to see that, from whatever your viewpoint is. But there is some spare capacity still—there is still some spare capacity on what's being offered, and there is more to offer as well on a controlled basis. But, eventually, you will get to your ceiling of 2m social distancing, and any answer to that is to restrict travel or to change the social distancing.
So, all politicians, at some stage, face a choice about that. Whether that's evidence-led or a finger in the air, I don't know yet, but we'll see what people come up with. It's not funny, but it's a question that needs to be addressed. Somebody's got to take the lead on that, and it's a big decision. But capacity is not a problem right now.
Peter, you're just—.
It would help if I unmuted myself, Russ, wouldn't it? Vikki—
No comment. [Laughter.]
Be careful. [Laughter.] It's a valid question. And let's be honest, it goes back to what I said before, it's about the Welsh Government message being loud and clear: if you can work from home, you should continue working from home. That is the message we should be driving home, loud and clear, because what we don't want to do is employers, like Mick said, to get people back to work, being productive—. We are being productive working from home. It is working in certain areas. But, for instance, when Mick says there that people have got no confidence in buses—we can see that with what's just happened on Anglesey with 2 Sisters. People travel by public transport to the abattoir up in Anglesey, but they hadn't been on public transport, they'd been travelling in cars together. So, that's why the outbreak of COVID-19 has happened there, mainly. And that's because people haven't got the confidence to go on the buses.
So, it's a catch-22 situation. We need to be more proactive. There need to be more routes to rural communities, and we need to be in touch more. Maybe we should be using more of the taxi services to maybe do more like park and ride with taxi services, rather than getting people on the park and ride and crowding people onto the buses. Why not put the screens up and get the taxis to do the park and ride and let them take two passengers in at a time? Maybe that will generate an income from local authorities and local governments to make sure that taxi drivers are employed as well. It's just something that it might be worth looking at, especially when the numbers ramp up.
Okay, thank you, both. My final question is around the guidance for operators and passengers on the use of public transport. I'm just wondering what your thoughts are on how effective that Welsh Government guidance is and how it might need to change and develop as circumstances change.
I think it's—sorry, Mick. I think it's good. It hasn't gone far enough. I've mentioned face coverings, I'll mention them again. I know Joyce said this might be a different conversation. I think what they have done is they have listened to the unions. I think Ken Stakes's committee and yourselves have listened to the union side of it, they are listening to the employer side, and the guidance is good. It hasn't gone far enough on behalf of Unite. I think face coverings and other things should be put in place. Mainly, there should be screens for taxi drivers, there should be screens for bus drivers, but also—we bang on about it, and I'll bang on about it again—there should be face coverings as well.
Thank you, Peter. Sorry, Mick, did you want to come in? Sorry.
I think the Welsh Government's messaging has been good. Our officers have been engaged in Wales on all these issues. It's been of a good standard. The challenge is what we message going forward about the changes to stepping up to business as usual, if you want to call it that. And I think the public, our people, have got to believe in what they're being told. The unfortunate thing—I don't want to go on too much about the Cummings issue—is people stop believing. That's the thing. So, we've got to get their belief back. If there is to be a change in whatever the regulations are, they've got to believe they're being told the truth, they've got to believe that everyone's doing it, we're all doing it together, and we're all going to make the step changes together. It's not going to be partiality—different groups doing different things. So, I think, in general, the communication has been very good through the crisis, but we've got to make sure we keep that up as we come out the other side, if that's where we're heading.
Okay. Thank you.
Thank you, Mick. Hefin David.
Hello. Can you hear me? Yes. Do you think that there's been a long-term fundamental change in people's attitudes to public transport, and is that to the positive or the negative?
Well, I'm very fearful that car usage will come back with a vengeance because the psychological message is that you're better off in your own bubble, and I understand that—it's a natural response. But we really have got to get people confident that bus services and rail services and ferry services are going to be there, they're going to be supported, they're going to reach through to the areas that need them in all the rural and smaller towns and villages. And I'm really fearful that the change will be that the car comes back. I'm told that the sale of wrecks is going up all over the UK, that people are buying the £500 car en masse, and that is a real problem for us. We've got to get this message about an integrated transport system, green transport, transport for people rather than transport for profit, from our point of view, as a step change. That's what we want to see. But I'm really fearful that people will go back into an isolationist view, and that's really dangerous for everyone—for the economy, for moving stuff around logistically, for the environment, and just for the general health of people.
It's evident—. To be honest with you, it's all about people's confidence. If you make them feel safe, if you make them feel secure, that is the way we can do it. And, like I said, there are a number of ways we can do that, but it's having the trust and confidence of public transport for them to feel safe to go back on it, and that's paramount.
I can't hear anything now at all. I'm just hearing a dialling tone.
Okay. Can you hear now, Hefin? We'll just check for a moment. Perhaps if you unplug your headset from your screen, Hefin, you might hear it differently.
Hello. Can you hear me now?
I can hear you now.
I just heard a tone in my ear, so I completely missed everything. And it's happening again; I can't hear anything. Sorry. [Interruption.] No, I'm not doing that.
Okay. Hefin, I'll just see if you can—. Let's just try again and persist with your headphones. Can you hear us now? No. You're muted at the moment, Hefin. Do you want to try and unmute yourself? Okay. Can you hear me now, Hefin? Can you hear me? No, you can't hear. No. Okay. We'll try and come back. We'll have a break in a few moments and we'll try and sort out the issue with Hefin's headset.
Hello. Can you hear me now?
Yes, I can hear you. Let's try and make some progress. I can hear you. Can you hear us, Hefin? Can you hear me? No. Okay.
I think, Peter, following your answer to Hefin, what do you think needs to happen in terms of long-term changes into the future going forward? What are the long-term issues that need to be addressed?
I think, also, we need a greener bus environment, we need people to have more services so they feel safer on it, we need investment. I think what's come across loud and clear is the investment we've got, and maybe I'll let Mick talk about the old rolling stock we have here in Wales, and investment in the infrastructure, which is needed. To be honest, the long-term longevity of public transport in Wales is key, mainly to the rural areas—what that looks like and how are we going to improve that. I think the main key in that is investment and making sure that the people feel confident and safe to get back on a bus or get back on a train or get back in a taxi, and I think that won't happen until Welsh Government and the companies take a big lead on that. Because we've been calling for that for years.
Mick, perhaps before you come in—I'm just noting what the Deputy Minister for the Economy and Transport has said. He has said,
'We have a chance to do things differently, helping more people to walk, cycle and travel in sustainable ways.'
Do you think that in any way there's a potential positive outcome to what's happened? Clearly there's not, but if there's anything that can be positive, what could that be, Mick?
I guess—[Inaudible.]—transport system in our towns and villages. When I go over there, I always marvel about the connectivity of cycling at train stations, and the buses outside there are almost timetabled with—[Inaudible.]
Sorry, Mick. We're having some difficulty there. Do you want to carry on, Mick? We'll try it.
We've got this complex interplay between privatisation and Government support, and it's happening again in the core Valleys lines, where effectively you're subsidising the French railway through Keolis, given that—[Inaudible.]—service and then they use that to run the services in France. So, I think you need to push Westminster to get more power and get yourself some more public ownership so you run the transport system for the Welsh people rather than profiteers. I think that applies across the transport sector.
So, I do think people will expect more from transport. If they're committed to riding bikes and lowering car usage—which, hopefully, they will be, because we hear bike sales are on the up—they expect the connectivity. If they're cycling 5 miles to their local railway station, they'll want a decent service and a decent bus service at the other end. I don't think that's too much to demand. So, we hope that public ownership becomes a part of the argument, but not just for the sake of it. It's not just nationalisation—it's so that it's in the service of the people, so that you run the trains and buses and taxis on behalf of the people, rather than the people just wanting to strip the subsidy and the profit out. The franchise system, which you've been forced to take part in, in some ways, to get autonomy over those rail lines, has got to be challenged. We would love the Welsh Government and the Welsh politicians to take their part in challenging Westminster about that broken model going forward.
Thank you. Mick, I've had a note from our support team to say that Hefin is now able to hear us again. So, I was just saying, Hefin, I've had a note from our support team to say that you're now fixed up again. Is there anything further you want to ask, Hefin? You're currently muted.
Sorry, that was IT on the phone. I missed all of that. It's pointless me picking up, because I don't know what was said. So, over to you, Russ.
Okay. I think that answers the question I wanted to address. Peter, did you want to add anything further yourself?
No, that's fine. I think we covered most points. I think it's just making sure the infrastructure's there going forward.
Can I say, the only thing I was going to raise is this concept of active travel—I don't know whether you did talk about that, and whether the Welsh Government's active travel policy is fit for a longer term future.
Yes, we touched on that, but not specifically, actually. So, Mick, did you want to come back in on that?
Well, I don't claim to be an expert on the policy itself, but I think some of the things I said about connecting up would cover that. We want to see the system flourish, and that's got to take into account all modes, if that's what the policy is. We'd love to see the Welsh Government's support the Stena ferry line up there in Holyhead, so that that isn't abandoned, because that's key to supporting connections to Ireland, but also keeping those northern coastal towns going with those services down to London via the west coast. So, yes, if active travel is an integrated transport policy, that's what we want to see.
And when we talk about active travel, I think that's encouraging more spaces on buses for maybe the bikes, making sure the facilities at stations are there, making sure facilities at bus stations are there, and making sure that the Welsh Government go a bit further. If they're going to do park and walk or park and ride, a lot of employers do the Bike2Work scheme. Why aren't the Welsh Government doing something facilitating that themselves for the people who aren't actually in companies where they do Bike2Work schemes? Why don't the Welsh Government take that on board and—[Inaudible.]—it's cost-neutral? So, let's try to do something around that way, Hefin.
Okay. Thank you.
Thank you, both. Thanks, both, for your time this afternoon. We really appreciate it, actually. What you've said is extremely helpful to us as we seek to make some recommendations to the Government ourselves. So, thank you both ever so much for your time; It's very much appreciated.
Okay. Thank you very much.
We'll take a short, two-minute break whilst we arrange for the other witnesses to come into our session. So, a two-minute break.
Gohiriwyd y cyfarfod rhwng 14:15 a 14:18.
The meeting adjourned between 14:15 and 14:18.
Welcome back. I move to item 4 on our agenda today, in regard to COVID-19, looking at some of the implications for transport. I'm very pleased that we have Deb Bowen, the chief exec of Cardiff Airport, and Spencer Birns, who is the chief commercial officer of Cardiff Airport. So, welcome, both, to committee today, and apologies for the short delay in starting this session.
Perhaps if I could ask if you could perhaps just give a very general overview of the impact of the virus on the airport. That's a huge question, but perhaps, if you could give a very brief overview, that will help us to go into further questions. Deb.
I will, Chair, but could I start by just saying how very sad we were to hear the news of Mohammad Asghar? We've had a lot of dealings with him over the years. He's had a huge interest, as a pilot, in the airport, and all of our thoughts are with his family and friends at the Senedd. So, I'd just like to say that to begin with.
So, to put it into context, since the end of March, the entire aviation industry has reduced or stopped operations globally, with very little commercial passenger flying, and I think the stark reality of that is that, in April, passenger numbers were down by 97 per cent, compared to April last year. We've kept the airfield open throughout the pandemic crisis so far, as we felt it's vital as a national asset that we are there to support critical flying and any other emergency stuff that has cropped up, and also, of course, to ensure that we can maintain regulatory compliance and to ensure that the airfield site stays safe and secure. We have closed the terminal, though, as we currently have no commercial flying, but we are seeing signs now of the restart, and we are obviously in regular dialogue with airlines as to when services will start flying again.
During the last three months, we have had three very large freight aircraft from Cambodia and China bringing over 3 million pieces of personal protective equipment directly into Wales for the front-line NHS and care home teams, and we are expecting a few more flights over the next few weeks. We've also supported essential business flying, medical flights for the NHS, and also training flights. So, we are expecting now limited services to begin again in July, but this could change based on the UK Government's quarantine measure that's currently in place, and also Foreign and Commonwealth Office advice against non-essential travel.
In terms of the airport team, because of the reduced flying, we've reduced our presence at the airport to the absolute minimum needed, as I say, with the terminal closing and the airfield opening. We have taken advantage of the UK Government's job retention scheme, and we've had just over half of the airport team in and out of furlough as we've gone through. But also what we've been really pleased to see is that we've been able throughout the period to have our team members support the wider activity that goes on around the crisis, and one of the particular highlights is that 32 of our firefighters have made up part of a team of 55 firefighters at the Dragon's Heart Hospital in Cardiff. So, they've been providing cover there, and we've also had a significant number of our staff taking part in community volunteering and raising funds for charity.
Well, thank you, Deb, and that's so good to hear, really, how the assets have been used and the staff have been used in such a positive way during this crisis. Perhaps if I can ask Spencer if you could comment on the profitability of the airport in terms of what estimates have been that you could perhaps outline that the pandemic has had in terms of possibility of profitability and future profitability of the airport.
Thanks, Russ. The impact on the sector as a whole globally has been massive—it's catastrophic, really. The global situation is such that aircraft, thousands of them, have been grounded. So, when you've got a very, very limited set of activities happening, it's very, very hard to generate revenue, which, ultimately, is what we need to maintain the business and keep it open. So, from a direct profitability perspective at this stage, it's very, very hard to determine. What we can say to you is that, at this time of the year, we'd be typically generating about £2 million-a-month's worth of revenue. If you take that into account for the period March to June, that's probably lost £8 million-worth of revenue from not having activity. So, that, for us, is a significant factor there.
And then, when we're talking to the airlines about flying again, there are the limitations on the airlines in terms of what they can and can't do at this stage because of the lockdown process. We'll talk a little bit further on later on, when you want to talk about quarantine and things like that, about the impacts and the implications of that. Because, in reality, when the airlines are flying—it's similar to the discussion you had before with the unions about the trains and the buses—they're effectively providing a public service to consumers to get to places. Without that service available, then—(a) there's no consumer demand demanding that service at the moment, but, without that service available, we're not generating any income for the business.
And do you expect to lose any operators, or perhaps—
At the beginning of the crisis, we were very unfortunate that Flybe went out of business. There were a lot of requests to the British Government about helping Flybe stay alive as a business, and we know Helen was very vocal as well for our Flybe colleagues that had lost their jobs. Flybe went out of business primarily as a result of a number of factors, but the major catastrophic factor for them was the drop in demand due to the COVID crisis. So, that, for example, took out 27 per cent of our business overnight, and then getting other airlines to replace that business is particularly hard, particularly now, when there's so much uncertainty. And the routes that Flybe were doing—Edinburgh, Glasgow, Paris, Dublin, Jersey—those are quite important routes for Wales, and, for us, it's about making sure we get on to the next stepping stone so that we can get those routes back on again.
Thank you, Spencer. And, Deb, in terms of the change of chair, does that present any challenges for the airport?
Well, I think it's fair to say that Wayne Harvey joins us at an exceptionally challenging time—he joined us on 1 June—but we're really looking forward to working with him. He brings with him an incredible amount of business and economic experience, which is going to be particularly useful for us as we navigate our way through the current crisis, but also, as we plan and prepare the business for restart and recovery, I think Wayne's skillset will be enormously beneficial for us.
But I'd also, at this stage, just like to pay tribute to Roger Lewis, our previous chairman, who was with us for the past five years and brought a huge amount of passion to the airport, and, as I say, I think we all learned a huge amount from him in the five years that he was with us.
Yes. We look forward to meeting Wayne in due course as well. Thank you, Deb. Helen Mary Jones.
Thank you, Chair, and good afternoon to you both. I just want to ask a bit about the reprofiling of the loan from Welsh Government. So, can you begin by giving us an overview of what has changed?
Yes, thanks. Thank you, Helen. The key point here is there's been very little change in the overall loan. It's actually part of a bigger loan agreement, and it's just basically making sure that the loan is available to be drawn down within this financial year. So, that's up to the end of next March, but, for us, it's basically making sure we can use that loan now to help with the response to the COVID crisis, because there's a heck of a lot of things that we need to now do to resecure the business and make sure we're standing as a business in eight to 10 months' time.
Thank you. So, does that mean then that some of the improvements that the existing loan was originally supposed to fund will have to be put on hold, and can you tell us a bit about what those are?
Yes, I'll pick up that, Helen, if I can. I think Spencer has highlighted the huge hit that we've had in revenue over the past two months. And the rescheduling of the loan will, effectively, enable us to manage our cash flow through this period to ensure that we are ready to bounce back when the airlines restart, and also, as I say, it gives us the ability to weather this storm as we come through it. But, like any prudent business, we've put all of our capital expenditure on hold at the moment, and we're working to preserve cash as much as we can.
In terms of particular projects, I'd think I'd highlight a couple that we had planned to make progress on over the coming 12 months, and those, actually, were two projects that we're required to do by our regulators. And one of them was a programme called 'next generation security checkpoint', which is, effectively, to completely introduce new equipment into our security area, move it all around and things. And that was a hugely expensive project—it would have been about £6 million of capital investment. The Department for Transport have actually put that one on hold, so they've put that on a 12-month delay, because of the impact for airports, but I would just stress that the fact that we're not doing that project now in no way has any impact on the security at the airport. It was generally more around customer experience and how things are done, rather than an overall change in security.
The other project, major project—there's a huge masterplan for national air space at the moment, and the airports are required, as part of that huge masterplan, to look after the air space below 7,000 ft immediately around their airport. That, again, is part of the Government's user-pays principle, and the airports, even there's no direct business benefit to us for doing that, we were required to do it as part of the national infrastructure project, and that, again, would have borne us a bill of about £1 million, and we have paused that one, along, I think, with all the other airports, in saying that we just cannot contemplate doing that project at the moment.
Thank you. That sounds very sensible. Is it likely that there'll be any further short-term or emergency funding needed to keep you viable as the months go by?
Yes, as it's such a challenging time for the industry, the circumstances are so unpredictable at the moment, and the impacts are immediate as well as long term. The aviation sector was one of the first ones to feel the real pinch and will probably be the last one to come out of the pinch as well, and it's not only aviation, it's the whole of the aerospace industry in Wales as well as globally.
So, we do see that, actually, there are likely to be requirements further down the line, but at this stage, what that quantum looks like, we don't know. But what we've been making sure we do is, we're basically making sure that we make as best use as we can of the job retention scheme; basically making sure that we can generate whatever income we can through the airport facility being open as an airfield, and we've done that through facilitating British Airways in a meaningful way with their maintenance, repair and overhaul activities.
We've also been focusing on how we bring more training flying in; we actually facilitated NHS training flying for a company based in Bournemouth. We've also been focusing on military training. That is all about generating extra cash for the business in the interim, until the flying starts next month. But really, the straight answer to your question, Helen, is: it's too early to tell. We do expect that there will probably be something, but what the quantum looks like at this stage, we don't know.
Thank you, that's helpful. So, you have an additional loan facility of £6.8 million, which the airport initially requested from Welsh Government in 2019. What's the status of that request now, and do you think that that's likely to be approved?
Okay, so we can't speak for the Welsh Government in terms of what they're planning to approve or not approve at this stage. Obviously, there's a heavy focus on health, and quite rightly so. From our perspective, we're not aware of any particular changes. We've not been told anything yet by the officials or Ministers, but it is our immediate priority for the short-term future to keep the business open and focusing on that.
In terms of that particular amount, it is part of the overall loan itself; it's not a separate additional loan—it's part of the overall extension of our facility, which we did last year to £71 million. And of that £71 million, we've drawn down £59.4 million to date and then we've also got a further £2.5 million of interest that was on debt as well. So, at the moment, the balance on the loans is £61.9 million.
Joyce Watson. Joyce, you've got your speaker on mute still.
I'd like to ask about Next Generation Security and the six-month delay and whether that's—
Joyce, can you just put your microphone down to your mouth?
Okay, I'll get there in the end—sorry about that.
Next Generation Security and the six-month delay and what impact that's having.
It's actually delayed for 12 months now. As I say, it will have no material impact on security or the way that we handle things at the airport. The key difference would have been that it would have brought in some enhancements to the customer experience, basically. So, at the moment, you have to take all your laptops out of your bag, and liquids and things like that; it's a different thing that would have enabled us to handle it differently. I can't go into, obviously, too many details about it, but, as I say, from a security perspective, it will have no impact, it just means that the customer enhancements that we were hoping to introduce will be delayed slightly.
Did you want to come back in, Joyce? No. Thank you. Vikki Howells.
Thank you, Chair. Discussing the recovery from the virus and the longer term impacts, just thinking about whether the airport will be ready to resume operations once travel restrictions are lifted and how prepared the staff and airlines are to resume operations with the additional safety measures in place.
Yes, obviously, this has been the focus of our minds for the last month, month and a half: getting the airport ready for when operations resume. There are two aspects to that. The first is, obviously, ensuring—. It's a bit like Peter and Nick mentioned in the previous session—it's all about generating confidence in our passengers that they are safe to come to the airport. But also, of course, our key focus is to make sure that our team also feel confident to come back to work and that we’re doing absolutely everything that we can to ensure their safety. So, we've been working really closely with Public Health Wales. Our operations director has been speaking with them on an almost daily basis now. We've also been working very closely with the Department for Transport and industry colleagues. I sit on the expert steering group that was set up by DfT to develop a set of internationally agreed standards that are science and health based, that would enable us, as I say, to open our airport safely. So, we've been working on that, as I say, for about the last six weeks.
People coming to the airport will notice some big changes when they come in. We're obviously applying the 2m separation absolutely wherever we can in the airport, but you'll appreciate, obviously, that there are some areas where that's going to be very difficult. But where we can't apply the 2m separation, then we've got a whole host of additional measures in place that will mitigate that risk, and that includes a massively enhanced cleaning programme, sanitisation, and the use of hand sanitisers. We're also looking at, obviously, face covering for passengers coming into the terminal, but also PPE for our staff, particularly those who are customer facing.
So, it's a huge amount of work. We've also conducted the requisite risk assessment, which covers the whole operation for both the terminal and, as I say, for our team working area. So, we're looking now to open the terminal around the beginning of July, and we're just finishing off the process now. But I'm very confident that we will be absolutely ready to provide a safe environment for both passengers and staff when we resume operations next month.
Thank you. And what about the 14-day quarantine period that's been introduced by the UK Government? What assessment have you made about the impact that that could have on the airport?
I think we, along with all of our sector—airports, airlines and also the tourism industry—have been really disappointed that the Government has decided to go ahead with this blanket approach of quarantining all arrivals. We can't understand why it's being introduced now, and why it wasn’t introduced at the start of the pandemic. It does threaten to have really serious economic and social consequences, not just in aviation, but I think on all sectors that rely on aviational connectivity, and we don't really understand what the health benefits will be. And also, from our perspective, it's been compounded by the Foreign and Commonwealth Office travel advice, which we absolutely understand—the health-first requirement for the FCO. But to have blanket advice against all travel for the foreseeable future, again is really making it difficult.
So, we've seen how that has impacted on airlines restart programmes. We were expecting a number of our airlines to restart operations in June, and we're now looking, as I say, into July before we're going to see any real activity. So, when Spencer talks about the amount of revenue we're losing each month, you can understand the impact that's had. So, as I say, we're very disappointed that it's come in, and we're working with colleagues to look at how we could present to Government alternative means instead of quarantine.
Obviously, I think people will have seen in the media about the concept of air bridges where you set up reciprocal agreements with countries where the risk is lower. We're also looking at suggestions that possibly people can undertake testing rather than going into quarantine if they prove to be negative. So, as I say, this is huge, huge issue for us, and we're working really closely with colleagues in the industry to press for an earlier review and to see if there are ways, with Government, to look at alternative measures.
Hefin. Sorry, Vikki?
Hefin can't access his audio, so I was going to ask the rest of the questions for him. Is that okay, Chair?
I know you were aware of what Hefin wanted to raise, so you go ahead, Vikki.
I can't hear anything at all.
We can hear you, Hefin. Can you—? No. Okay. He can't hear us. Vikki, you go ahead.
Okay. So, the long-term success of any small airport—well, any airport, really—relies on attracting more operators and operating more routes, and I'm thinking about that particularly in the context of the loss of Flybe. How has the pandemic impacted on your potential to try and attract operators to fill that void?
Thank you for the question, Vikki and Hefin. It's had a huge impact. We're always talking to airlines about flying. In a normal environment, we're talking to airlines about filling the market gaps and servicing the community. Ultimately, they're servicing our market; they're looking at the ways to actually service them in a viable way so that they're providing that service. And bearing in mind that this isn't public transport, it's ultimately a commercial business, from their perspective, they need to be able to assume that it's viable and sustainable.
So, when we're in a normal situation, we're having those kinds of discussions and we talk to airlines and they actually fundamentally are direct investors in the community; they put their service on and they invest in that and they return their investment. So, now we're in a position where it's even more difficult because we've got a marketplace that we know traditionally likes to travel and wants to travel and we know the demand, but at the moment the demand is completely restrained because there's no capability of travel, and, in addition to that, the airlines themselves have had to ground all their fleets and furlough all their staff across the world. That's— [Inaudible.]—which ultimately then puts them into a real risk scenario when they come back out: what are they going to do next and where are they going to go first? So, it really does slow the whole process down, and in reality, they're going to go to places like Heathrow first because that's going to be where they see the market gaps being biggest, then they're going to go to the much bigger city conurbations where they realise the profitability is going to be.
So, I think, in short, to the question, our focus is on securing stability with the incumbents that are still here. We've got some very good partners that are still here: KLM, TUI, Quatar Airways, Ryanair, Vueling, Eastern Airways. They're all still at Cardiff Airport. For us, it's about getting their services back off the ground, making sure that we're working with them to indicate what the demand looks like and helping them sell their seats, and then building from there.
Very sensible. Thank you. The final question is about the long-term plans for the airport because we know that your targets are always being scrutinised. So, how will those targets be affected and is the airport's 2040 master plan still achievable?
Thank you for that question, it's really, really important for us because, without the understanding of what the achievable targets are, it really restricts what we can aim for as we're going forward and helps us drive our business plans. So, at the moment, from our business planning perspective, we've had to put everything on hold; we've had to say, 'Right, let's take a real restock of what's likely to be able to be achieved, what's likely to be viable for the carriers, what's likely to be viable for the other partners that are working with us as businesses', and then looking at, 'What is the—[Inaudible.]—going to look like when it actually starts up again?'.
We did some survey work recently with our consumer database—some of you will have seen that, and if any of you did and took part, thank you for that. But basically, we've seen in there that consumers do want to travel again and there is quite a strong pent-up demand for people wanting to go away, but there's also a nervousness amongst the consumers for what is safe and what does safety look like. So, from that perspective, it is too early to predict where we're going to be and how it's going to go. Our long-term ambition is absolutely what we published in our master plan. We want to be aiming towards that, but we may well have to be resetting that over the next couple of years. The industry across the world is going to be two to three years before there is proper recovery, and from our perspective, I think we're pretty much in the same boat there.
Spencer, perhaps I could also pick up on—. We've talked previously about the extra security that's needed. In terms of the security project that you've outlined, in terms of if that's required by legislation—or regulation, rather—how is that going to be funded? How does that change the situation with the current climate? Deb, perhaps—it looks like you wanted to come in there.
Yes. I think this is a really interesting question, because one of the areas that we're talking about with the Welsh Government is the state-aid legislation that is in place, which determines how funding is provided to airports. The security one is a particularly important one, because there are provisions within state-aid legislation for public funding to be utilised to cover the cost of safety and security operations at an airport, and, indeed, this is the case across the whole of Europe. If you go to Germany, all of the aviation security costs are covered by the state. And it's an argument that we've had for a very long time that the UK appears to interpret European state-aid rules in a very different way to the rest of Europe, and it's something that this crisis has really shone a light on, and the fact that it is something that needs to be reviewed, and, for the smaller airports in particular, all of that cost is disproportionate in its impact, because we've got—. It's generally fixed cost, and the cost of us covering those is really not that different to airports that have five, 10 times more passengers a year to spread that cost over. And also, because of the competitive environment that we operate in, we're not in a position to pass those costs on to airlines. So, that's one of the immediate areas that we think the UK Government should be looking at, which will enable, then, the Welsh Government to review how they support the funding of mandatory cost at the airport.
If the UK Government doesn't change its interpretation, how are you then going to fund that security project?
Well, that's something that we're going to have to discuss as we go forward. We've made it really clear to the UK Government that at the moment we're not in a position to cover that cost, and we'll need to review that as the business recovers, as we start getting into revenue generation again. But that will be a discussion that we will need to have going forward, and it ties into the discussion around the existing loan facility and everything associated with it.
So, was that your position before the crisis as well, in terms of not, effectively, being able to fund the security measures? Was that the position before the crisis, or was that—?
No. That is absolutely as a result of the crisis. That was all absolutely factored into our projections going forward.
Okay. So, have I got this right: before the crisis you had your security project, and, as much as you had wanted the UK Government to have funded that, as you've outlined, the airport could have funded those security measures, but, as a result of the pandemic and the current crisis, you no longer have the resource to fund that, and you would need to, effectively, renegotiate the loan arrangements in order to fund that project?
Okay. Okay, thank you. That's good to understand. Thank you. If there are no other questions from Members—. No. In that case, can I—Spencer, Deb, can I thank you both for being with us today? We'll send you a transcript of the proceedings. And thank you also for your comprehensive briefing to us ahead of the committee session today, which was very useful, and also thank you, Deb, for your kind words about our colleague, Oscar, at the beginning of the meeting as well.
We'll take a five-minute break.
Gohiriwyd y cyfarfod rhwng 14:48 a 15:07.
The meeting adjourned between 14:48 and 15:07.
Can I welcome you back to the Economy, Infrastructure and Skills Committee? We move to item 5, and this is in regard to our session on COVID-19 in regard to public transport. And I'm pleased we have witnesses before us today—we have Nigel Winter, managing director of Stagecoach in south Wales, and we have Scott Pearson, who is the managing director of Newport Transport. I'd like to welcome you both to committee today, and James Price will be also joining us shortly as well. Perhaps if I could ask one of you, perhaps Scott, to give us just a general overview of how the pandemic has affected the bus industry.
A real challenge, Chair: 90 per cent passenger decline virtually overnight; messaging from UK Government of 'avoid public transport' wasn't that greatly helpful—understandable, but not greatly helpful. The confidence in services has declined massively, as you've heard earlier, Chair. Service has been withdrawn to match the demand of that decline—that 10 per cent that's left—but also a quick ability to meet the needs of key workers, and especially, in the first instance, NHS workers, to get them to where they want to be. Clearly, it was imperative for us as an industry to react very quickly for that. So, a combination, Chair, of big challenges, but also big response as well in certain areas.
And, Nigel, how concerned are you about perhaps fundamental change of public behaviour as a result of this current crisis in a negative way towards public transport?
I think there is some uncertainty at the present time insofar as the safety of passenger transport, as you're aware, so we need to think about the things that we can do, and we've been doing things in Stagecoach to give people some confidence to travel. Clearly, we've had our channels of communication open to people to tell us what they're looking for in terms of journeys and times, because we've emergency timetables running. We're sanitising our vehicles on a much more frequent basis, all the touch-point services, and letting customers know about this. And, of course, we've removed pretty much a lot of cash from our vehicles; we're taking contactless payment as a preference, but, otherwise, an exact fare policy is in place at the moment. I think, going forward, we need to work with Welsh Government and the local authorities to give people that confidence back to travel, and learn from the research that Transport Focus are undertaking to pick up on the points that customers see as being pivotal in perhaps making a decision to travel, because we need those customers to come back to us.
And is there anything further that you can say in terms of how passenger numbers have changed in terms of the pandemic?
Well, as Scott says, passenger numbers and commercial revenue declined 90 per cent pretty much overnight from after 23 March. From 1 April through to the last two weeks, we've found that concessionary travellers have increased by approximately a third, but cash customers, if you like—paying customers—have maintained reasonably the same number of passengers travelling.
The major concern, of course, is the relationship between lockdown, social distancing and network capacity, and the ability to operate services sustainably in those circumstances. It's simply not feasible to operate commercial bus services where we are running at 20 to 25 per cent of vehicle capacities. So, a double-decker, for example, that would normally 70 passengers can carry now 20 customers.
And, to either of you, in terms of increasing service level, is this something that's being led by the Welsh Government or operators such as yourselves?
Increase in demand is being led by Welsh Government on the capacity issues that we face and Nigel suggested there. So, we are also led by demand of business going back to work, and people going back to shopping and leisure again. So, we are, very much at this stage, demand-led.
Okay. Can I just welcome James Price, the chief exec of Transport for Wales, to the meeting as well? Can you hear me okay, James? He's gone. I've obviously deeply offended James. We'll try and get him back. Okay, in that case, then, I'm going to go on to a Member to ask some specific questions. Hefin David. Hefin—yes, Hefin David.
Can I ask about the effectiveness of Welsh Government support, financial support, during the crisis, and how the funding is being allocated and on what basis?
If I can answer that, Chair, I think, first of all, to say that, when the pandemic first hit at the end of March/beginning of April, I thought that the reaction by the Minister to support the industry was very much appreciated, very timely, very quick. I think that his decisive action helped to sustain operators, which would otherwise, I think, have been in some serious financial difficulty.
So, the arrangement in terms of what's being paid out is: in broad terms, what the Government budgeted to pay out in public funding for concessionary fares, mytravelpass, scholars ticket arrangements, school contracts and bus services support grant, has been paid out regardless of the mileage operated or the customers carried. So, it's broadly the same level of funding that the Government would have spent anyway, and, in conjunction with the coronavirus job retention scheme, and the service cuts that operators have introduced to reduce mileage to something like 40 per cent of normal levels, has been sufficient to sustain the industry.
Okay. There was a little bit of interference there, but I think that I got most of that. How does that compare, say, with Scotland and England? Is that comparable?
It's a different arrangement, partly because the degree of commercial revenue in England is greater. So, the emphasis, really, upon additional support in the lockdown period was probably more of an English problem than a Welsh problem. So, we've actually—the industry—so far not called upon any extra funding from Government than that it would not have spent already; it may actually be slightly less than last year, in actual fact. This means that, per operator, it's proportioned out the same as they would have largely been paid at the same time last year. That's how it basically worked in Wales.
And, Nigel, what has your experience been in liaison with local government?
Most of our liaison has been with Welsh Government and Transport for Wales. I think that local government have been busy with their own significant issues. We have consulted them on emergency network, but, in all honesty, we have had to do things so quickly, it wouldn't be fair to say that the responses that they have given us are up to normal standard. It has simply been an emergency, and we've had to get on with it, and we've tried to accommodate requests where we've received them.
Is there a concern that, as we move out of the first wave, and if we didn't see a second wave, those relationships would be difficult to re-establish now?
I think the relationships with local authorities are very strong and they're well established, and I think the senior officers there know the people in the bus operators. I don't think there are any barriers to communication there. I think it's quite open. I think it's the uniqueness of this pandemic and how it basically came upon us in a week that's been the issue for us.
Okay. So, the break is easily repaired, because it was because of the crisis. Okay. And what discussions has the bus industry had with the Welsh Government about further support through the pandemic?
That's a concern at the moment, because there are two phases. We're seeing the lockdown phase at present time, and we seem to be gradually coming towards an end of that. England is going through this and Scotland also, and Wales presumably as well, but we have nothing ready in place to go to the next phase, which we're going to call the recovery phase, where services need to ramp up to take account of non-essential shops opening, partly the schools going back on 29 June, and, of course, the relaxation of the social distancing with the 5-mile limit. They have all created demands on travel, but there's nothing there for us to take us forward into the next stage, and that is a great concern for us.
We've got no clarity on that other than from Welsh Government officials, some high-level caveats that they wish to add as conditions to any continued funding on a take-it-or-leave-it basis. The industry is greatly concerned that, with less than two weeks to go, we do not have a funding arrangement that's credible, and there are operators out there that are simply not going to be able to sustain that for very long. We do need to know where we're going and some clarity pretty quickly.
So, what I'm trying to understand is those discussions—is it the fact you've had discussions that haven't gone anywhere, or are you not involved in discussions about a recovery plan?
We've formed, through the Confederation of Passenger Transport, a recovery group, working with Transport for Wales, Welsh Government, the Association of Transport Co-ordinating Officer—the local authorities. We've provided, at our suggestion, information as to how much it would cost to ramp up services to 100 per cent, bearing in mind social distancing, over a six-month period from June to December for all operators in Wales. We've gathered that in detail for them and we've also put together a bus economic stimulus package. That was four weeks ago, and we are yet to receive a formal response on that.
And have you pushed for that? Have you pushed for the response?
We have regular meetings with them, but we have nothing formal to document at present time.
What do they say to you in those meetings? Do they say it's on its way and then it doesn't turn up, or do they say—?
We've been waiting for two weeks for details of the caveats. We can't say the caveats are unreasonable or not until we've seen them. We haven't seen them in any detail.
Okay. I think it could be something for the committee to follow up there, Chair.
Absolutely, yes. Vikki Howells—bearing in mind that your questions will obviously have to be addressed to James separately. Vikki Howells.
Thank you, Chair. Looking at the safety of public transport, Office for National Statistics data suggested that male road transport drivers have some of the highest death rates involving COVID-19 among the working-age population. How safe is it to work and travel on Welsh bus transport at the moment, Mr Winter, and what steps are operators taking to ensure safety?
Okay. Well, if I deal with staff first and then customers. So, when the outbreak came about, we revised our cleaning regimes for our vehicles. So, the what we call 'touch surfaces' on buses are sanitised at least daily. We improved the area of the driver's cab, so the safety screen, the speech holes, for example, were all filled up, and any gaps around the cab were filled. We've moved to an exact fare system to remove the risk of contamination being passed on by change, so the drivers aren't handling change anymore. And we, of course, have introduced social distancing in all of our workplaces and one-way systems, again to keep our drivers 2m apart.
And we're seeking to reassure customers of the things that we're doing to keep the vehicles clean every day when we're running services. Of course, we're issuing PPE to our staff, face coverings, hand sanitisers, disinfectant wipes for the cabs—so, if they wish to wipe the cab down, they can do so through the daytime. We're conveying all of these messages through to our customers to say that our vehicles are clean, we're cleaning them all the time. We've introduced social distancing as well across the fleet, so that's reduced the capacity to 20 to 25 per cent and means that customers are broadly 2m separated in terms of on the vehicle.
Thank you very much. In contrast to the advice in England, the Minister has told this committee that he didn't want to see people discouraged from using public transport. Is this the right approach to ensure safe services?
I think that there are, of course, issues with demand and capacity at the moment, and I think we're all aware of that because of social distancing. And so we're saying to customers, 'If you don't need to travel in the morning peak, if you're not travelling to work or are a key worker, please don't travel; travel at another time of day.' Or perhaps there are two journeys that customers are making in the week—they can make one journey to the shops instead. It's really to have some thought for customers who need to travel to get to work, to leave the capacity there for them.
We've also introduced an app—the 'busy bus' app—so when you look on the live bus times, there's now a red, amber, green colouring of the bus, and that tells you whether or not it's likely to be a busy or to be a quiet bus, based upon previous journey experience, to give people an idea of the busier vehicles.
Okay, thank you. If I can just go back to the line of questioning that Hefin David pursued and your response there about waiting for further information from Welsh Government—just how big of a financial gap would it be for buses to return to their pre-lockdown timetables? Because, speaking with all due respect, when I see buses rattling around the Cynon Valley, they don't ever appear to have more than 25 per cent capacity in normal times. So, I'm just wondering, you know, what sort of distance are we looking at to try and plug that financial gap?
Well, we gave information to Government officials, going back some time, about four weeks, and this was for all of Wales. So, we gathered the data for the six principal operators, the main operators, who account for 85 per cent of the mileage, and the other 15 per cent we aggregated up. We estimated that the cost to Government, per calendar month, would be in the region of £5.7 million to bring services back up to 100 per cent, making various revenue assumptions but assuming that the level of public funding for concessions, the bus services support grant and MyTravelPass, remained the same. In other words, that they spent the budgeting level of funding, and the £5.7 million would be extra funding on top to get services back to 100 per cent. And that's because of social distancing, largely, because it reduces vehicle capacity to 20 to 25 per cent.
Thank you. That's really useful. And would you say there's sufficient capacity in terms of staff and buses to provide that effective socially distanced bus service that we will need as lockdown lifts?
There won't be enough capacity in drivers, because we have a number of—about 20 per cent, we reckon—that will not be able to go back to work because of shielding, themselves or family. There is a definite fleet capacity issue. If you're only carrying 25 per cent of your vehicles, at some point, very quickly, you're going to get to capacity of a fleet in Wales, and beyond that, what happens then? Do we leave customers at bus stops, then, which is quite a big concern for us, not only for bad public relations, but safeguarding issues also. So, that's a big, big, big question to ask and a big, big answer, really.
Thank you. And the final question I've got is about school transport: so, what are the operational and safety implications for transport operators of the decision to reopen Welsh schools? And can you give us any detail about how what appears to be a very complex process will actually be managed?
We're still working with Welsh Government on that aspect, and more so local authorities in each area. Because you're right, the answer's different, depending on the amount of schools in each area and the amount of children going to school. The unknown quantity for us is: how many are going, and where are they going from? And it's become a very challenging aspect. We didn't expect the announcement to go like that for 29 June; we were kind of hoping for September to give us time to try and plan something in.
So, the two-phased approach being taken now—29 June initially—what is the demand, what is the capacity we can provide, and how do we solve the problems? And then, really, the big question is September, because September will come across very quickly, is: how do we deal with that increased amount of children travelling to school? That is a big challenge for us.
Thank you very much.
Thank you, Vikki. Helen Mary Jones.
Thank you, Chair. Good afternoon, both. Can you tell us your view of the effectiveness of the guidance that Welsh Government has provided for operators of transport and passengers in using public transport? How do you see that guidance needing to change as circumstances change?
The guidance was exceptionally helpful for us, but we'd like to see it go a stage further. The face coverings being mandatory in England and Scotland now leaves Wales on a recommendation, and with cross-border services, that gives a bit of dubiety about 'When do I put a mask on? Have I got to put a mask or a covering on?' So, we'd like to see face coverings being made mandatory in Wales just to give consistency across the whole of the UK, and to take away that dubiety for customers. Moving forward, I think it's exceptionally important that we keep those communications going from Welsh Government and industry on what we expect customers to do, because that will build confidence. If we can build confidence then we can then build passengers back up again.
Thank you. Would you agree with that, Nigel Winter?
Yes, I think that's exactly right. I think having two systems for cross-border journeys is really quite difficult to enforce, particularly in the north of Wales, where I think there's much greater cross-over between the two areas, but I think there is to an extent in the south as well. The guidance, to a great extent, was the DfT guidance, with some tweaking for Welsh circumstances. Yes, I agree with Scott.
So, other than the issue of the face coverings, are there any other substantial differences in the English and Welsh guidance? I think, if I've understood you right, Nigel Winter, there aren't, really, and that's the major—. Is there anything else you'd point us to?
No, I think that's the main difference from my recollection between the two sets of guidance, yes.
I'm sorry, Chair—I'm trying to sort myself out between the questions we would have asked Transport for Wales as well. I think you've highlighted, then, that the issue in terms of cross-border issues is the face masks—depending which side of the road you're on, whether you have to wear one or not. Are there any other issues that you see—cross-border issues—in terms of the differences?
It's just any difference in social distancing as well, that's the key thing—that if England decided to change social distancing in respect of transport, it would be difficult for cross-border services to be compliant. So, we would want to see the same approach if possible.
Thank you, that's helpful.
Joyce Watson, your questions that are related to the bus industry. Joyce, I can't hear you—you're muted still.
[Inaudible.]—most of them weren't, but I will put one to you. Quite clearly, there was going to be legislation on transport, particularly on buses. We don't know whether that Bill is going to come forward, or whether it isn't going to come forward, because it's currently paused. But nonetheless, moving forward, if that Bill is going to go forward, there are real opportunities for change. Are there any changes in legislation that you think should come forward regardless?
I think that we're asking Government for capital investment in bus priority measures and we have already, through CPT, given Government officials a comprehensive list of where we see these places, not just across the south of Wales, but the whole of Wales. We want to work with Government on its integration agenda. We think that's a positive agenda in terms of getting more people to use passenger transport on buses, fewer cars on the road, less congestion, and less air pollution. I think anything that supports that agenda for buses right now is a positive. We do think it's an opportunity right now as well, because traffic levels are lower than they have been for quite a long time, so we should be looking to implement, as far as we're concerned, bus priority measures pretty quickly, whilst the traffic levels remain low, and encourage people to use the bus. We're giving them confidence to travel during the pandemic, but also with other initiatives as well, which include quicker journey times and more predictable journey times, which are the two things that customers say they want the most when they're surveyed.
Do you have any further questions, Joyce?
Not really, because they mostly were for Transport for Wales, but, just to ask Scott if he's got anything to add, really.
I would suggest that we don't forget about where we were pre COVID, and ensure that we stick to the climate emergency and environmental projects we had. That's one of the casualties of this pandemic for businesses such as ours in Newport. We are pushing the zero-emission electric bus agenda strongly, and it's proving difficult to continue with that just now. But I think that once COVID goes away, we're still left with a load of problems about climate and environmental issues that we're trying to address in Newport, in three or four poor-air-quality zones in Newport. I think we shouldn't forget about that, and I think the buses Bill, regardless of where that goes to, that was going to address, partly, these problems as well. So I would ask that the Assembly doesn't forget about that. Clearly there are problems here and now to face, but we still have got to face that at some point in the future, and there are a few projects out there that are critical to that.
Okay. Thank you.
And can I ask either of you, in terms of our committee, when it comes to us making recommendations to Government to support the industry at this particular time, is there anything that you think that we should be recommending that perhaps has not already been drawn out through the questions and discussion today?
I think that right now, in the position we're in today, it's to separate the current emergency from what are the longer term objectives in terms of the caveats we've talked about for recovery. We need to deal with them as two separate issues. We need to survive and then we need to move on to work together—in partnership, we would prefer—to increase passenger numbers, reduce congestion and air pollution and, as Scott said, basically enhance all the green initiatives that the Government is working towards and which we share.
Thank you. Scott.
I think that Nigel's absolutely spot on there. I think, from a business point of view, I'm in quite a precarious situation just now. I'm 12 days from the end of the quarter 1 funding, and it's about survival. I understand completely the challenges the Assembly faces as far as cash is concerned and cash flow and funding, et cetera, but we need to ensure that we save this industry. It's very, very important, I think, for everybody's agenda, moving forward, and there are opportunities. But I think we're here, we're resilient and we're ready to face those challenges with Government.
Thank you, both. Well, it does look like we're having some difficulty bringing James Price from Transport for Wales into this meeting this afternoon, so what I propose is that the questions that I know that we did have for him, we'll write to him and put them in paper form, and those responses we'll make public as well. If we also feel it appropriate as a committee, we can ask James Price to come to a further meeting as well, if that's necessary.
From my notes that are coming through, I think we're going to struggle to get James into the meeting this afternoon, so we'll take it forward on that basis. Can I thank Scott Pearson and Nigel Winter ever so much for your time this afternoon? We apologise for keeping you waiting at the start of the meeting, but your evidence to us this afternoon has been extremely helpful, so thank you very much. Thank you, both.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(ix).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(ix).
Cynigiwyd y cynnig.
Therefore I move to item 6 and, under Standing Order 17.42, we'll resolve to exclude the public from the remainder of the meeting.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 15:34.
The public part of the meeting ended at 15:34.