Reports:
The bus industry - encouraging local delivery
Chapter Three: Future Projections of the Bus Industry
Projected Trends
1. Transport demand has doubled over the last century, with the private vehicle, van and taxi achieving 624 billion kilometres against the buses and coaches 46 billion vkms[28].
2. Government projections of transport demand show a continued rise in vehicle ownership over the next 25 years, with a consequent rise in traffic levels of 1% per year - an increase of traffic vkms of 57% by 2031[29]. Assisting the growth in car ownership is the fact that current forecasts predict a reduction in motoring costs of 20% by 2010[30].
National Road Traffic Forecasts (1997 - 2031)
| Index |
All traffic vehicle kms |
% change |
Car ownership |
% change |
| 1997 |
100 |
|
100 |
|
| 2001 |
107 |
7.00% |
107 |
7.00% |
| 2006 |
116 |
8.41% |
116 |
8.41% |
| 2011 |
126 |
8.62% |
123 |
6.03% |
| 2016 |
135 |
7.14% |
130 |
5.69% |
| 2021 |
143 |
5.93% |
135 |
3.85% |
| 2026 |
150 |
4.90% |
139 |
2.96% |
| 2031 |
157 |
4.67% |
143 |
2.88% |
3. TAS estimate that, in the face of existing trends, there will be a continuing annual decline in patronage nationally of 1.5 to 2.0% between 1997 and 2031. This equates to a decline in people travelling of 12.5% by 2005, and 20% by 2010[31].
4. Recently, TAS revised The National Bus Model[32] and looked at patronage and revenue to 2010 across four scenarios (assumptions used in determining the base case are summarised in Annex One and Two):
- base case scenario;
- fares policy scenario;
- quality improvements scenario; and
- increased investment scenario.
Base Case Scenario
5. Under the Base Case scenario, where existing trends are projected from 2001/02 actual figures to 2009/10, London will experience a 15% increase in passenger journeys (millions), while PTE Areas will show a 10% decline. English shires decline in passenger journeys by 9.6%. London will experience a 44% increase in bus passenger revenue. Within PTE areas revenue will show a 21.8% increase, and within English shires a 19.5% increase.
6. Under a 'Base Case' scenario, TAS estimate that additional local authority spending on supported services of £6.7m for PTEs, and £15m for Shires.
Projections on Spending for Supported Services (£m - 2002 prices)
| Area |
Year |
% change |
| 02/03 |
03/04 |
04/05 |
05/06 |
06/07 |
07/08 |
08/09 |
09/10 |
| PTE |
57.1 |
58.6 |
59.3 |
60.3 |
61.3 |
61.6 |
62.7 |
63.8 |
11.60% |
| Shires |
101.9 |
104.6 |
106.8 |
109.0 |
111.3 |
112.2 |
114.5 |
117.0 |
17.28% |
| Scotland |
33.0 |
33.8 |
34.3 |
34.9 |
35.6 |
35.7 |
36.4 |
37.1 |
10.98% |
| Wales |
12.0 |
12.3 |
12.6 |
12.9 |
13.2 |
13.3 |
13.6 |
13.9 |
18.25% |
| All excl. London |
204.0 |
209.3 |
213.0 |
217.1 |
221.3 |
222.8 |
227.2 |
231.8 |
14.68% |
Fare Policy Scenario
7. The 'Fare Policy' scenario may more accurately reflect future trends as it assumes operators will raise fares in order to maintain revenue levels as patronage levels decline. Under this model PTE areas will experience a 19% reduction in patronage; whereas English shires will have a 32% loss in patronage. However, in keeping with the rising fare levels, revenue within the industry will be higher than the 'Base Case' (eg. 30% increase in PTE areas, 20% increase in the shires). Under this scenario, without continuing strong growth in London (at around 5% pa), the Government target of 12% patronage growth would not be achieved by 2010.
Quality Improvements
8. TAS then use the model to examine the possible change in demand where planned improvements in quality, priority and marketing are maintained. Under this scenario PTE areas experience a 6.7% increase in patronage, English shires a 7.5% increase. This produces higher levels of revenue for the operators than the fare policy scenario outlined above (42.5% increase in PTE areas, 40% in Shire areas).
Enhanced Quality Improvements
9. Additional measures over and above the improvements identified in option three above (improved delivery by local authorities of priority proposals or additional investment of money in schemes), would deliver market growth of 15.4% in the Shires and 13.1% in PTE areas. Revenue within the bus industry is also at its highest with a 49% increase in PTE areas and a 48.8% increase in Shire areas. (The total percentage change in patronage and revenue from 2001/02 until 2009/10 across all four scenarios is included in Annex Two).
10. The TAS analysis proposes that quality, reliability, priority and marketing improvements in the 1990s resulted in 1.8% of demand per annum in London, and 2.2% in other parts of the country. Their modelling suggests an even greater impact on patronage could be achieved from significant enhancement in implementation of such schemes (15.4% growth in the Shires and 13.1% in PTE areas).
11. The question we need to consider is - how can we stimulate the industry outside London to achieve the patronage growth figures presented in the 'quality improvements' and 'enhanced quality enhancements' scenarios outlined above?
28: TAS. (2003). Bus Industry Monitor 2003: The Market Public Spending and Support Investment & Fleet Analysis Industry Performance, TAS.
29: TAS. (2003). Bus Industry Monitor 2003: The Market Public Spending and Support Investment & Fleet Analysis Industry Performance, TAS.
30: DETR (2000). Transport 2010: The Background Analysis, DETR.
31: TAS. (2003). Bus Industry Monitor 2003: The Market Public Spending and Support Investment & Fleet Analysis Industry Performance, TAS. Refers to Great Britain including London.
32: This paper was provided as a draft final report and is therefore 'work in progress'. Refer to Annex One for labour cost assumptions.
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