Stealing the show

If the bus has long been the Cinderella of London's transport, Ken Livingstone is the fairy godmothe

Labour election strategists and London MPs searching for examples of things that have "got better" should get on one of the capital's many buses. A form of transport once used disproportionately by women, poorer people and ethnic minorities has expanded mightily, thanks to large public subsidies that have made it possible to freeze or even cut fares. New Labour can trumpet a "public-private partnership" that has generated none of the controversy that has dogged the London Underground. Private bus companies, working to public contracts, have significantly boosted transport capacity with around 2,000 more vehicles, many of them brand-new and technically superior. And those contractors have enjoyed handsome profits.

When a Daily Telegraph columnist writes of "a virtuous circle of rapidly increasing use leading to rapidly improving levels of service", it sounds like unalloyed good news. A financial reality check will be in order after the government's spending review, as there is a yawning gap between London bus revenues and costs, even before the expansion plans of the Mayor, Ken Livingstone, are factored in. But for the time being, even passengers might join in the celebration. Satisfaction ratings have gone up, and there is evidence that a significant proportion of people now using London's buses are "modal shifters" from cars.

Although buses have long been identified as vital to both economic effectiveness and social inclusion, especially in cities, they are barely noticed by newspaper editors or ministers and attract about the same subsidy as rail despite carrying five times as many people. But as Mayor of London, Livingstone has made surface transport a high priority - after the government imposed its version of the PPP on the Tube, it has been one of the few areas where he has had a relatively free rein. Especially since the arrival of Bob Kiley as chief executive of Transport for London (TfL), Livingstone has cleverly mixed the practical and social case for the centrality of buses in the city's transport system. "London buses," he says, "are the most improved public service in Britain. [They have] not been this good since before the Beatles split."

Such mayoral rhetoric is well founded. The capital's buses are at their most reliable since performance data was first collated 27 years ago. As David Begg, chairman of the Commission for Integrated Transport (a Department for Transport advisory body), has said: "At last, the bus has the opportunity to come into its own, put its Cinderella past behind it and to make the car less of an inevitable choice for most journeys."

Judging by recent trends, Livingstone's target of a 40 per cent rise in bus passenger journeys in the first decade of the 21st century is not unrealistic. In the 12 months to April 2003, there was growth of more than 7 per cent - an extra 104 million trips - and 12 per cent in the year to last October. Half the extra journeys are made by people who say they did not use buses three years ago.

Such growth has come at a price. The average revenue per passenger journey is about 45p, lower than in the mid-1980s. Bus costs have been increasing dramatically and will go up by £300m in 2004-05, proportionately a much greater rise than spending on the Tube. Yet Livingstone's experiment has proved that more people will use buses if services improve, fares are moderated and journey times cut. The buses are winning the war of anecdotes: for every horror story about the Tube, there is a tale of buses arriving with astounding frequency. Media attention has focused on how the congestion charge has speeded up buses by reducing car traffic in the centre of the capital. Just as dramatic has been the increase in the number of buses on the roads, up by more than a third in four years.

The improved frequency of buses has reduced the impact of new technology providing passengers with arrival times. Other evidence of modernisation is the introduction of 18-metre-long single-deck "bendy" buses with a capacity of 140 passengers (60 more than on a double-decker), and the BusPlus programme, which has produced better routing for buses along reserved lanes. This has depended on close co-operation between TfL and the London boroughs, which is not always in great supply.

London Buses, a subsidiary of TfL, manages an infrastructure of 10,000 shelters, 17,000 bus stops and 40 bus stations, while the 700-odd bus routes are contracted to around 26 franchisees. Half a dozen companies own the bulk of the London bus business. The largest is Arriva, with between 18 and 20 per cent of the market, 4,000 staff and 1,400 buses. Other major players include Go-Ahead, First, Stagecoach, Metroline and London United.

Tony Blair's government has shown no interest in varying the privatisation model on which London's bus contracts are based, but nor has the Mayor or TfL. Outside London, the Thatcher government insisted on competition on routes between private bus companies, leading first to over-supply and then to decline in both routes and passengers. In London, privatisation has been used to turn the bus service around. Here, private operators have a monopoly on their routes. Unlike the regional train franchisees, they do not answer to regulators as well as a contracting authority, which has allowed both sides to focus. TfL, and behind it the Mayor, is the single source of judgement on the performance of the contractors. TfL specifies where buses should run, sets fares and makes good any revenue shortfall. The contract price (fixed for 12 months and then adjusted annually for inflation) is translated into a price per monthly accounting period. Bus companies get three-quarters up front, with the balance held until after performance has been assessed.

Unlike on the railways, there has been little disagreement between contractors and TfL over deductions for non- performance - which is graded according to miles run, reliability (checked by roadside recorders), cleanliness of vehicles, complaints from the public, and the "attitude and appearance" of drivers and conductors. Industrial relations have also been much calmer than on the railways. Bus staff have experienced a rise in pay since 1998, ending a 12-year period during which drivers' earnings had fallen in real terms and relative to average London earnings.

By no means everything has been an unquestioned success. There have been complaints about the pay-before-you-board scheme now in place in central London, the aim of which is to speed up the time buses spend at stops. Some passengers have been unable to buy tickets from jammed or vandalised machines and have been left stranded by drivers more concerned about protocol and timetables than customer service.

Despite changes and additions to services, London is still criss-crossed by a pattern of routes that owes a lot to history. Some planners confess there is no particular logic to where buses run, except that many routes have not changed since the days of horses and omnibuses. The Livingstone regime has moved only slowly towards the goal of integrating all forms of public transport. Buses do not wait outside railway stations in suburban London, timed to meet trains, nor do they adequately cover the gaps in the Tube and surface rail networks. Much needs to be done to extend bus lanes (still only 3 per cent of the road space used by buses) and priority at junctions.

Peter Hendy, TfL's managing director of surface transport, says buses are the only short-term way of meeting London's growth and, besides, are less expensive than in other big cities. Yet proceeds from the congestion charge, less than projected, make up only a small portion of the growing gap between revenues from fares and costs. Buses needed £100m subsidy in 2000-01, but will need £1bn a year by 2008. TfL recognises that recent growth in bus subsidy "is not sustainable in the current funding environment". It all depends on where transport fits into the next funding environment. Over to Gordon Brown.

Interview with David Brown
Chief executive of London Central, London General and Metrobus, the London bus business of Go-Ahead

"Success breeds success," says David Brown, who joined London Transport as a graduate trainee and whose career since has been bound up with privatisation. "With higher wages comes less turnover of staff. We can train employees better as a result, therefore become more choosy about the quality of the people we take on, and we invest more in premises; it's an upwards path."

A phrase that Brown uses often is "long term". Before the privatisation of London's bus service in 1994-95, public sector companies had been contracted to London Buses. That history, he says, "has allowed things to evolve to a level of maturity and trust".

Brown managed garages in the 1980s and was part of the management buyout team that acquired CentreWest buses from London Transport in the mid-1990s. He worked for private bus operators before moving to Go-Ahead in 1998, and took over the chief executive's job at Go-Ahead's London bus operation last year.

He says he has asked himself why the model of a public authority contracting with profit-seeking firms for a public service has worked well, and to mutual advantage, with the capital's bus service. One reason is the depth and longevity of relationships between the bus companies and London Buses. "We each recognise our roles and can work through problems together." In other areas - rail, for example - he has "discovered that people have not always worked out what their respective roles are, leading to a conflict between process and outcomes". In London, the relationship is uncluttered. London Buses tells the operators what it wants, the requirements are set down in the contract, and there is no third-party regulator.

Brown also believes that London's bus service has benefited from the maintenance, within a profit-seeking environment, of a public service ethos. "That's what we have in the bus operating companies, which means we are not far distant from London Buses."

On the buses

Jackie, 40, postwoman
I don't drive and I start work early in the morning, so I find that the bus is the most efficient way for me to travel to work. Recently there have been a lot more buses in the morning, and they are more reliable than the train.

Karl, 33, construction estimator
I'd only use the bus if the train wasn't working, although in my leisure time the bus is my new preferred mode of transport.

Robert, 53, chartered quantity surveyor
My previous experience with buses was more than 40 years ago. The upper deck was smoking in those days. Regular visits to the lost property office to recover my gym kit left on the No 23 were all part of the fun. Getting me back on buses required some arm-twisting. But modern fleets with plenty of leg room and better provision of bus lanes mean that journeys can be quick and buses more regular. Smoking may have been banned, but Walkman-free zones?!

Gary, 36, civil servant
I've noticed a huge increase in the amount of buses on the roads in London, but they don't apply to me, as I can only catch the Tube and the train; I walk the rest of my journey.

Lara, 32, photographer and interior designer
I haven't noticed an improvement in the service: the buses take 45 minutes to get from Brockley to the Strand. But the trains are also a nightmare. Most days they're so overcrowded you can't get on, which makes me late for work. For years there's been talk of linking Brockley to Victoria by rail, but it's been put off until 2010.

Andreas, 25, advertising executive
I used to travel by train, but I find the bus a lot cheaper and more reliable, and in the summer it's a nicer way to travel.

Robert, 43, social worker
My hours are flexible and I travel all over London, and I find buses are the most cost-effective way of doing that. I used to catch the Tube, but the price, flexibility and greater choice of buses suit my professional needs.