Free travel penalty for poor performance in Devon

Stagecoach Devon is to provide four days of free travel in Exeter as compensation for poor service and significant lost mileage as a result of staff shortages

Following on from an earlier hearing held in Exeter on 22 June, and which continued in Bristol on 27 October, Traffic Commissioner (TC) for the Western Traffic Area Kevin Rooney issued a written decision on 7 November in a case involving Stagecoach Devon Ltd t/a Stagecoach South West.

Stagecoach Devon is the holder of a standard national public service vehicle operator’s licence authorising the use of 475 vehicles. Statutory directors are Bruce Dingwall, Carla Stockton-Jones and Michael Watson, and the current transport managers are Anthony James Vincent, appointed in May 2020, Katy Wagstaff, appointed in August 2021 and Simon Ford, appointed in June of this year.

The inquiry was called to deal with two separate matters, the first of which was an incident which occurred on 5 October 2019 and which was dealt with in a decision issued on 3 August, and published in CBW issue 1540. The second issue at hand was the reliability of registered bus services and associated applications to change services at short notice.

The primary evidence for the latter had been the report of DVSA Traffic Examiner (TE) Christopher Eggins. On 20 June 2022, two days before the initial hearing, the TC was also contacted by Cllr Andrea Davis of Devon County Council who raised fresh concerns in relation to the operator’s service reliability. On 14 July, a further letter was received from Cllr Davis which alleged that claims of improvement made by the operator’s Managing Director at public inquiry had not been evidenced. The letter made further complaints in relation to the detrimental effect on local services caused by Stagecoach providing drivers for large events. The TC felt that the contents of the letter needed to be put to the operator for fairness, and reconvened the hearing.

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Hearing

Michael Watson, Anthony Vincent, Katy Wagstaff, Simon Ford and Rupert Cox attended both hearings for Stagecoach Devon, represented by James Backhouse, solicitor. Traffic Examiner Christopher Eggins attended the June hearing for DVSA and provided an updated report for the later hearing. Damien Jones attended in October as a witness for Devon County Council accompanied by Rachel Phillips and Councillor Andrea Davis.

Although in his decision after the earlier hearing, the TC had made a negative comment in relation to the cooperation of Stagecoach, he noted that that comment related only to the circumstance surrounding the crash under examination at that inquiry. Traffic Examiner Eggins stated: “I would like to say at the outset that Stagecoach Devon have been open and transparent with me. I do not feel that they have avoided or tried to conceal any matters surrounding the reliability and punctuality of their service routes.”

Bridge strike

The hearing also dealt with a bridge strike by one of the operator’s vehicles as a preliminary matter. The operator had reported on 10 June this year that one of its double-deck vehicles had been involved in a collision with a railway bridge on 29 April. The circumstances were that the driver had a period of time available during his shift and had been asked to undertake a positioning journey. The vehicle was not in service. It had been correctly routed. It appeared that the driver had encountered traffic and had taken another route. That was a bus-only lane allocated to single-deck vehicles on a park & ride service. The railway bridge was controlled by traffic lights which would only go green when triggered to do so by a specific transponder in a single-deck bus and when there was no traffic coming the other way.

It appeared that the driver had stopped at the red light. He had then assumed that there was an error with the transponder and made a radio-call to check that no bus was coming the other way. Having done so, he drove through the red light and hit the bridge. In interview, he had said that he had forgotten he was driving a double-deck vehicle.

Michael Watson stated that the company was at a very advanced stage of fitting all vehicles with a geo-fencing system. The vehicle in question was due to be fitted in July this year. This is a case where, the TC said, without prejudice to any decision that may be made in relation to the driver, and on the evidence available, he could not find fault with the operator’s approach and deemed no further action necessary. He also noted that the driver has turned 70 years old and that he has not sought to renew his PCV entitlement, and decided that the matter will lie there unless the driver makes an application to renew in the future.

BODS

The TC noted that this was the first case in which the Bus Open Data Service, or BODS, which was created by the Bus Services Act 2017 and open data legislation, had been used at a public inquiry (PI). All bus operators who run local services in England outside London are now required to publish their timetable, fare and location data to a central system operated by the Department for Transport, and DVSA has access to the data as a means of monitoring bus operator service reliability. The TC said he was concerned to note in June that the BODS data indicated that around 40% of this operator’s services were not operating at all; however, neither the investigating DVSA officer nor the operator considered that figure to be correct.

TE Eggins had visited the company again, and several potential causes of the discrepancy were identified, including that some timetable changes had not been uploaded to BODS, which it was noted may have arisen from a discontinuity within the wider Stagecoach group; BODS means that operators now have to provide the information to three separate organisations. The TC heard that the information was now better but still not right. “I do not understand how the BODS data can differ from the operator’s own real-time information which both derive from the same source. If an operator with the resources and motivation of this business cannot resolve the inconsistency, it would seem that BODS is some way off being able to be relied upon as a means of monitoring bus service reliability,” he said, noting that the second hearing was attended by senior Department for Transport officials who he hoped would get to the bottom of the data inconsistency.

Service reliability

There was little argument about the level of non-compliance between DVSA and the operator, and 21 to 22% was accepted by all parties. The issues were said to not be journey specific, and the accepted root cause was that the operator simply did not have enough drivers to drive its buses. The question before the TC was therefore whether the operator has taken sufficient action to have enough drivers or, alternatively or in addition, to de-register services to the level that it can support. It was accepted that although many of those who have complained to the operator, to the Council or to the TC would not like the latter course of action, it is a proper course to take if there is not sufficient resource to operate at pre-existing levels.

The TC noted reference to matters having deteriorated since privatisation and deregulation as a result of the Transport Acts of 1980 and 1985, which saw the Devon General Omnibus and Touring Company became part of Western National in 1971. In 1983 it became Devon General Limited and was the first operating company of the National Bus Company to be privatised in 1986. It was later sold to Stagecoach in 1996.

The 1985 Act removed an obligation on local authorities to co-ordinate public passenger transport and introduced a power to subsidise services via open tender, and the role the TCs was reduced to becoming a registration service with powers to take action where an operator did not comply with the timetable. The operation of bus services became a commercial matter for operators, and competition legislation constrains an operator’s ability to use more profitable services to subsidise those that may in themselves operate at a loss, such as longer, more rural routes which make the least money. “When an operator reduces those services, it is doing what parliament intended to happen forty years ago. I set out the history to provide context to my decision,” the TC said.

Damien Jones produced a schedule of complaints received, restricted solely to those relating to services supported by the Council. Complainants concerned with commercial services were referred to the operator. Two hundred and seventeen complaints were exhibited relating to supported services over the past 12 months. Mr Jones said he was struck by the volume, tone and sincerity of the complaints and said that, despite service reductions from July 2022, the situation had not improved. Further reductions were planned to take effect at the end of October but the Council remained concerned, and the situation had been exacerbated by vehicles and drivers being reallocated to local and national events including the Commonwealth Games.

Mr Jones added that the company had centralised its complaints handling to a single contact centre based in Perth, and that the team had no local knowledge and frequently gave out wrong information. Calls and emails to the centre were frequently not followed up, he said. The Council had raised this and been promised that a local resource would be made available, which did not happen. The Council said it was working on an Enhanced Partnership with all bus service providers but was concerned that such a partnership may be negated by the ongoing poor performance by Stagecoach. It had bid for £34m in funding from DfT to support its Bus Services Improvement Plan and had been allocated £14m, some of which would be used to improve information at bus stops.

Michael Watson spoke of the various Government schemes that were put in place to keep buses operating through the pandemic; many of the changes to those arrangements had been introduced at short notice. Pre-pandemic, 99.6% of service miles were operated and complaints from the local authority largely unheard of, but in 2021, drivers started to leave, and pay negotiations were made difficult because of the dependency on grant funding. Some central European drivers were no longer available post-Brexit, while many staff who had been furloughed decided that they did not want to return to work to shift-working.

The company had started to remove commercial mileage in 2021 and 2022 as a response, but staff turnover remained high. Pay rates had increased significantly and, along with a new contract offering additional benefits, the firm’s advertised rates rose from £10.76 per hour to £11.80.

It was expected that the changes in late 2021 would reduce lost mileage from 9% to 3% but that hadn’t happened, and further steps had been taken with another 10% pay rise in three stages, which settled matters in Exeter. At the same time, forty new drivers were being trained, a marked increase on previous levels.

The company also targeted schools and colleges, and female drivers, to improve recruitment, and it had three times the national average number of female drivers. Some 60 drivers had been allocated to the Commonwealth Games for a three-week period as a result of a contract signed at Group level a year ago, and it was felt that it needed to be honoured. The impact was mitigated by buying holidays from drivers. The company had previously supported other events but those commercial activities were currently not being undertaken. Agency drivers were seen as unsuitable for its requirements, and exit interviews had identified that the vast majority of drivers who left did so due to roster patterns.

Issues of punctuality were not related to driver shortages but down to different travel patterns post-pandemic. Timetables were being amended as travel patterns settled but holiday traffic would always be problematic in the area, the company said.

Without having made a decision, the TC remarked to the operator that this appeared not to be a case where a formal warning would suffice and some form of penalty would be likely. He did not favour straight financial penalties as they did nothing to help those directly affected, since the money goes to the Consolidated Fund, the Government’s general account at the Bank of England.

After a break, the operator proposed some form of free services, possibly in Exeter over weekends, but needed to work out the financial impact and to confirm that no competitor operator would be adversely affected. The TC also asked that Stagecoach considered action to improve information to passengers, but accepted that IT projects were not always responsive to unexpected cash injections and the relevant project had been scoped within BSIP funding.

Findings

The non-compliance rate was accepted to be 21%, which put the case in scope of regulatory action with a starting point of a financial penalty between £400 and £550 per authorised vehicle, which for Stagecoach Devon equates to between £170,800 and £234,850. The TC noted aggravating features: “This is largely not a case of buses running more than one minute early or five minutes late. It is a case of buses not running at all. I was told that between 9% and 6% of mileage was lost. The bus industry typically tracks lost mileage rather than lost services and that latter figure is not available, but it will clearly be considerable. The second aggravating feature is the information available to the travelling public at bus stops and through the contact centre in Perth,” he said.

Whereas in normal cases, reasonable excuse for punctuality would require a discussion about roadworks or the lack of bus priority, the facts of this matter were different. “The reasonable excuse requires that I balance macro-economic and largely external events with the response to them,” the TC said. “The impact of the pandemic on the bus industry is, in part, obvious. As people worked from home and a significant proportion continue to do so, patronage, and so income, has dropped. It costs the same to run a bus with 40 passengers as it does with 50. Cost pressures are significant and it is within my own knowledge that bus operators were given limited notice of changes to Central Government support over the past two and a half years. In addition, access to drivers from central Europe has been impacted by Covid-19 and some bus drivers have transferred to freight where the driver shortages were first in prominence, pay is higher and there isn’t the need to interact with passengers. It is a difficult time to be a bus operator and we are seeing companies go under. In the west, that includes Yellow Buses in Bournemouth and the HCT Group in Bristol.”

Pay increase

Stagecoach’s response in 2021 involved changes to pay and reduction of services. The TC noted that tha pay increase at Plymouth appeared to have been a genuine 18%, from £10 per hour to £11.80. Elsewhere, the pay change appeared to be more presentational, rising from £10.76 with paid meal breaks to £11.80 with unpaid breaks, giving an actual increase of around 4.4%, was broadly in line with inflation at the time. The pay increase was offset by other factors, and it took until summer 2022 for a significant increase to be implemented; the TC accepted that external funding has made budgeting difficult but said progress had been unacceptably slow.

Stagecoach had promised service improvements; in a letter dated 28 January from the operator to TE Eggins, Mr Watson said that Torbay and Plymouth depots were fully staffed and should be able to cover the shortfalls in Barnstaple and Exeter, something which proved not to be the case leading to more withdrawals.

Devon County Council told of workers being disciplined by their employers for being late for work, rent money being spent on taxis to work and important appointments being missed, as well as passengers with medical conditions complaining of not being able to travel at all as they cannot trust a bus to arrive and cannot stand for long periods. A lack of information, even on the app, was cited by many.

Further pay increases and targeting female drivers are now helping the situation, it was said, and the operator was given credit in this regard.

“I find that the operator has been slower to act than it should have been and that the impact has been worsened by a lack of reliable information even on the app. 21% non-compliance is high, as is the 6 to 9% of lost mileage. This has been a bad service offering. Against that is the range of Covid-19 and EU-exit pressures described earlier that I know to be causing significant challenges to the bus industry across the country. Having conducted the balancing exercise, a penalty in the order of 50% of the starting point is appropriate,” TC Rooney found.

Decision

Mr Watson estimated that the cost of offering free travel for all customers within the Exeter Plus travel zone for two weekends in December would be around £120,000. He also offered that the company will employ a dedicated member of staff to maintain the displays and provide assistance at Exeter bus station at a cost of £70,000 per year for two years. Taken together, the two measures would exceed the level of financial penalty deemed appropriate by the TC, who, having made advers findings under the relevant Acts, delivered a decision that the operator provides free travel for all passengers within the Exeter Plus travel zone for the weekends of 10/11 and 17/18 December, to the value of £120,000. He also recorded a statement of intent that the operator will provide, at peak times and for two years, a dedicated member of staff at Exeter bus station to maintain displays and to provide advice to passengers, at an estimated cost of £70,000 per year.

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