Better Bus Area Workshop DfT, Local Transport March 2013 Session delivered by Sarah Wooller, James Padden, Shafiq Pandor, Rishi Mandavia, Richards Yates, Tim Harper
Introductions • Housekeeping • Who we are • Aims for today – Focus on key areas in the guidance – Answer your questions
Introduction – Who we are Rishi Mandavia Economic advice, BBAs Sarah Wooller James Padden Better Bus Area Better Bus Area Policy Policy Tim Harper Economic advice, Concessionary Travel Shafiq Pandor Richard Yates Economic support, BBAs BBA and BSOG payments
Aims for the day •Value for money •The economy •Carbon reductions •Partnership •Legality
The workshop’s structure Funding What is a BBA Value for money and evidence Partnership Monitoring, governance, risk and deliverability Types of interventions, state aid and legality The Sheffield experience
Have set out an indicative model for stepped- approach - but this could be varied. 0.8 0.7 Fully devolved by 2017 0.6 top-up 0.5 remaining BSOG 0.4 rate devolved to LA 0.3 First payment is just top 0.2 up (based on 20% of 1 yrs BSOG). 0.1 0 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17
Dealing with the finances Table 4.1 20 yxwvutsrponmlkihgfedcbaWVTSRQPONMLKIHGFEDCBA Remaining Top up as % of Total Grant to local commercial commercial authorit y as % These years go into the next 2013 and 2014 are in this spending BSOG as % of BSOG at Oct of commercial spending period. The Government period. BBA budgets are fixable for National Rate 2013 BSOG at Oct is committed in principle to prevailing 2013 this period. providing sufficient funding for BBA Oct-13 100 20 during this time but can’t commit to specific numbers. Apr-14 75 20 45 Apr-15 50 20 70 No commitment to BSOG in this period. A further review of residual Apr-16 25 20 95 BSOG will take place in 2014/15. Apr-17 0 20 120 Total Grant as % of Commercial BSOG 350
What is a BBA? • A BBA must deliver good VfM & and encourage economic growth. How? Likely to be through combination of: – Attracting new passengers (previously car users) – Reducing waiting time – Reducing travel time • BBA likely to be: – An area with higher population density – An area with a real congestion issue – An appropriate size – Built around partnership – Built around capital interventions
What a BBA probably isn’t • A BBA less likely to be: – Area with lower population density – Lacking a congestion issue to resolve • Bids from rural areas unlikely to achieve the necessary VfM • However mixed urban/rural environment might work
The timeline
Value for Money assessment of Better Bus Area schemes Rishi Mandavia, Shafiq Pandor Local Economics, DfT 19 th March, 2013
What we will cover… • What should be your DM/DS scenarios; • What type of information must be provided; • Treatment of Optimism Bias; • CO 2 impact of your BBA schemes; • What type of schemes are likely to be good vfm; • Assessment of non-monetised benefits; • What type of evidence you should provide
How important is value for money? • It will be a key consideration in the assessment process of the BBA bids; • Better Bus Areas must offer better value for money than the value for money offered by BSOG in the local area; • Bids must demonstrate how schemes will contribute towards economic growth and reduction in CO 2 emissions ;
What should your ‘Do Minimum’ and ‘Do Something’ be? • DM scenario - How things would be if BSOG in its current form continues to go to the operators; • This does not necessarily reflect status quo – any other funding (e.g. LSTF) being used should be captured in the DM; • DS scenario - Reflects both the impact on operators, fares and service levels of removing commercial BSOG and the benefits of the total proposed package of measures.
What you should be aware of… • Analysis should only take into account devolved commercial BSOG , top-up fund and any other 3 rd party investment; • Do not include assessment of tendered BSOG; • VfM assessment’s will look at a 10 year appraisal period ;
What Information you should provide… You must provide the following: • Baseline data (DM) and changes (DS) in absolute terms; • The number of bus passenger journeys; • Impact on bus mileage; • Impact on car trips and car mileage; • Changes in average journey times/walk times/waiting times; • Average adult cash fare; • Average operating costs (pence/km); • Impact on net carbon emissions (car and buses); • The BCR of BSOG as currently administered.
Why do we need to know what the BCR of BSOG is now? DM (No BSOG) DM (No BSOG) You provide this figure BCR must be BCR 2.0 higher that existing BSOG BCR 2.4 DM (BSOG) You work out this BCR 3.0 (BCR of BBA proposals) DS (BBA) DS (BBA) Enables DfT to assess overall vfm of BBA against counterfactual of No BSOG
Optimism Bias • You must apply an optimism bias to your capital costs; • Ensure the it is clear what level of optimism bias is used and why; • Hence, detailed breakdown of capital cost spending by type of scheme is required; • Explain any deviations from WebTAG guidance; • Refer to TAG Unit 3.5.9, Chapter 3 Refer to TAG Unit 3.5.9, Chapter 3 •
CO 2 impact of your BBA bid… • The assessment must capture net CO 2 emissions; • Is Car CO 2 emissions saved ><= Bus CO 2 emissions cost?? • Only 16% of the 2012 bids had a net CO 2 savings • Use the current bus network more efficiently; • Encourage mode shift from cars; • Improve fuel efficiency;
What type of schemes are likely to be good value for money?
BBA 2012 round… Proportion of bids by vfm category High 24% Medium 12% Low 16% Poor 48% • The larger urban areas had a significantly higher proportion of decongestion benefits than smaller urban areas; • Where there is a congestion problem, there is greater potential to encourage mode shift
What type of schemes generate benefits? • Bus Priority lanes; • Road traffic signalling; • Real Time Information; • Road demand management • Congestion relief • Time savings & reliability improvements • Patronage growth • Mode shift is key • Labour market impacts • Schemes must be cost-effective
Kick-starts • Sustainability • Provide a convincing argument for its viability; • Have you analysed similar case studies? • Is there a plan of action/strategy put in place? • PTEG PTEG’ ’s s ‘ ‘case for urban buses case for urban buses’ ’ report suggests tendered report suggests tendered • services can have BCRs BCRs > 3 > 3 if if load factors > 7. load factors > 7. services can have
Concessions • e.g. Youth concessions • Unlikely to be good value for money • One-to-one transfer from government to passengers • Additional benefit from mode shift and long-term behavioural changes hard to prove
Non-Monetised Benefits/Costs • Detailed assessment of non-monetised benefits can influence the final vfm assessment; • BBA 2012 round – 46% of bids claimed significant non-monetised benefits; • 35% of these bids had the vfm category changed as a result! • Provide a robust assessment of any claimed non-monetised costs/benefits; • You should decide and tell us what other impacts we should consider and why; • If you claim large labour impact benefits – tell us why?
Evidence • You should include evidence supporting key assumptions made in your analysis, for example: • Assumptions around mode shift & sources; • Average bus occupancy; • Assumptions underlying carbon estimates (fuel efficiencies); • Evidence supporting your patronage forecast; • Evidence supporting time savings benefits. • Demonstrate relevance of the evidence to your bid!
Impacts of Better Bus Areas on Concessionary Travel Reimbursement Tim Harper, Local Economics, DfT 19 th March 2013
Impact of a BBA on Elements of CT Reimbursement • BBA will definitely affect – Marginal Operating Costs – Marginal Capacity Costs • BBA could possibly affect – Average Fare Foregone – Number of Concessionary Journeys • No additional funding will be provided for increased CT reimbursement, so BBA bids must reduce the amount of spending they plan to undertake to account for increased CT reimbursement
Marginal Operating Costs
Marginal Capacity Costs
Impact of BBA on CT Reimbursement • If no changes to fares and the number of concessionary journeys, it has been calculated that on average, reimbursement will increase by 7%. • If average fare, concessionary journeys or both are to increase, reimbursement would be expected to increase by more than 7% • If average fares, concessionary journeys or both are expected to decrease, reimbursement would be expected to increase by less than 7% or may decrease
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