A better deal for bus users
I was involved in a cycling accident in the summer and wound up with a broken right shoulder. It has been painful and restricted me a lot, including no cycling or driving for six weeks. One positive, apart from being able to enjoy the summer sunshine in the garden, has been taking buses much more regularly. It has also given me time to read up about them and the report ‘Bus 2020; a manifesto for the next Parliament’ published on 10 September has some thought provoking data and ideas.
Buses are so ubiquitous that we can forget just how significant they are in supporting and sustaining a greener economy. More people access Britain’s high streets by bus than by any other mode of transport – 40 % of trips to the high street are made by bus, while only 30% are made by car. Just 5% of domestic transport CO2 emissions come from buses compared to almost 67% from passenger cars and taxis. Currently bus users make 1.4 billion shopping trips a year spending £27 billion on retail goods. If a further billion journeys were switched from car to bus this would, amongst other things, result in an annual saving of 2 million tonnes of CO2 emissions.
More people in Britain commute by bus than by all other forms of public transport combined and according to Greener Journeys, the publishers of the manifesto, produce more than £64 billion of economic output a year. The report estimates that at least 400,000 people are either in work or have better jobs than they would otherwise have as a result of the bus network. This is particularly true in the case of people on low incomes who get opportunities to take up better paid jobs. And nearly one third of those who depend on bus services to access their education and training courses live in the top 10% of the most deprived areas in the country.
One of the effects of the reductions in revenue spending on transport in recent years has been higher fares, but buses are clearly a low carbon flexible means of commuting to work. ‘Buses 2020’ makes a specific recommendation to promote commuting to work by bus, a new tax incentive designed to promote modal shift called ‘Bus Bonus’. This would provide a tax benefit to people in work, offering a 34% tax and NI saving on season tickets to employees in workplaces with 10 or more staff. Employees would buy a season ticket for bus travel before tax and NI were deducted from their salary. The employer would administer the scheme. Greener Journeys estimate that the Government would take a loss in Income Tax and National Insurance revenue of £48m per annum by 2020/21 with the value transferred to individual season ticket holders. But he net benefits would be worth £72 m and the extra jobs created, a further £25m.
The Bus Bonus idea has perhaps surprisingly, been modelled on a series of successful initiatives in the USA and Canada – not famous for their commitment to public transport – where over a dozen of the major metropolitan areas have adopted such schemes (the tax discounts being at state, not federal level) with hundreds of major employers signed up and millions of users. Initiated and managed by a company called CommuterCheck (now part of Accor) it has proved highly popular with a significant impact on ridership and the economic viability of US public transport systems, to the benefit of all users. No wonder the Greener Journeys manifesto authors consider it such a good model for the UK as well. If adopted the Bus Bonus wouldn’t operate in London to make sure that the additional Government support to keep fares low is used where it is most needed, the ‘deadweight’ argument, and Greener Journeys anticipate that it would be rolled out initially on a pilot basis in urban areas such as Bristol, Manchester Liverpool and Leeds, possibly as part of the ‘City Deal’ process.
While this may be a pragmatic proposal for the UK context, this approach could have difficulties if US experience is anything to go by, because it may put off large employers who operate in several UK cities. CommuterCheck founder Richard Oram, commenting on the ‘Bus Bonus’ proposal argues that pilots ‘look temporary and are hard to sell as they [employers] are loathe to adopt a benefit that might go away.’ He also expressed concerns about multi-site employers being put off by what he refers to as ‘equity issues’ ie that some employees get the benefit while others don’t simply because of where they work in a context of patchy take-up. The UK is a single tax jurisdiction, unlike the USA, so national roll out would be the only way to satisfactorily address this point. Nonetheless US experience is that small employers are the most enthusiastic ‘early adopters’, so the scheme pilots might be successful enough quickly enough to ensure national coverage before large employers start to worry about this. The moves to regional pay rates and other more regionalised benefits may also be a help in this context.
The idea has some way to go in terms of adoption by one or more of the major political parties but it has been fleshed out and costed and the economic and environmental benefits are clear, and North American experience shows that it works. Perhaps this is one new trend that crosses the Atlantic that we can adopt with enthusiasm. Broken shoulder or not, I would certainly like to try it.
This article was first published in the November 2013 edition of Town and Country Planning.
