notes from JK

Subsidised buses – services all running, money saved

The work continues on subsidised bus routes for Brighton & Hove. You can read the story so far in my previous posts. We made some important decisions at yesterday’s Policy & Resources Committee.

In summary: To cope with government cuts the council budget, agreed by all parties, included the need to find a saving from the bus subsidy budget. Combined with the pressure of increasing fuel costs and a government cut to bus operator subsidy this made for a challenging, pressured issue.

Strictly speaking the law requires bus companies to not run any routes or parts of routes which are unprofitable. This was probably intended to prevent anti-competitive ‘loss-leader’ services by one company to undercut another. The result however is that some routes don’t operate without a council subsidy.

Two key issues at hand were school bus routes, some of which were costing the council over £1,000 per child per year (plus the £240/year parents pay for a pass) while child numbers are declining and also some non-school routes which were costly to keep going.

As we have long said, we are working on alternative approaches to school transport. So yesterday Greens proposed, and the committee agreed, that we procure one year contracts for services on the 74 and 96 school routes. These will be for smaller vehicles under more flexible terms which we estimate will be half the cost of the services as they were currently run. These will be funded from one-off funds.

For the other services, as I have said many times, only by proceeding with the procurement as we did last month could we flush out which services could continue commercially, without subsidies. It was a strong approach which has shown that a number of evening services will now continue without council taxpayer support.

The one change to the services previously run is the 52 route which will now terminate at the Marina. There was also a very unfortunate administrative error which resulted in one route being given to the incorrect operator – that is being corrected, and everything has been reviewed by senior officers to ensure it’s all now proper and correct.

Still now with the information we have from the commercial bus companies, which was only possible by the approach we took, we are in a position to keep services going on all routes that were previously subsidised but with a saving of £230,000 per year.

The opposition, particularly the Labour group, have been continuing to claim that they did ‘deals’ with the largest bus company to ‘save’ routes and also that their ‘campaign’ including a petition had pressured us into changes. This continues to be complete nonsense. We said we’d do what we have, and we have. No deals have been done with the bus companies – Roger French has made absolutely clear that there hasn’t been a deal. Indeed it wouldn’t be legal, the bus companies have to make their own commercial decisions on which routes they run. The remainder have been procured through EU rules.

Both opposition parties have been in administration and know the way you have to negotiate procurements with bus companies, as we have successfully done. Their comments and campaigning indicate that they are either naive over these processes or being intentionally misleading about how they work. Either way it’s not good for them. They’ve been completely wrong-footed by our actions.

So let’s remember, we’ve delivered on what we said we do and all the services keep running with a significant saving for council tax payers.

notes from JK

Labour dishonesty on buses serves nobody

There has been, understandably, some controversy since the council proceeded with a reduction in bus subsidies. This was a reduction agreed at budget council which we have now had to implement at a recent Policy & Resources Committee meeting. The impact was exacerbated by a government cut in the bus operator subsidy as well as increasing fuel costs. Still we have proceed with the smallest reduction in subsidies we’ve been able to identify compared to any other council, affecting less than 0.33% of bus passenger journeys in the city. You can read much more on this in my previous posts.

Two points to re-iterate from my earlier posts are that:

  1. We have been saying since January that we will be looking to provide school transport in different, and lower cost ways. Some school bus routes were costing over £1,000 per child per year (in addition to the £240 their parents were paying for a bus pass each year).
  2. We have always said during this bus subsidy procurement process that it was likely we would see some services being continued by the bus operators on a commercial basis, even after the subsidies were withdrawn.

Despite the decision on the procurement having been properly agreed by a committee of the council, the opposition have been threatening to suspend the rules at the next full council meeting, ignore administrative law and revert the committee’s decision to save the services at risk.

This would be a very foolhardy approach by the opposition, for reasons I am likely to need to go into in another post soon. However, as I also did before the Policy & Resources Committee meeting, I have been speaking to the opposition group leaders to see if there was another way through all this. Now, as is usual, these are private discussions and negotiations. Regardless of whether they succeed or not, they are not for public consumption. Those private conversations are key to successfully finding productive compromises and seeking out agreement. Sadly that privacy was breached today.

I rang Cllr Gill Mitchell, leader of the Labour & Co-operative Group, to discuss an offer in reply to her opening pitch. She asked me to explain my reasoning, and I did so. She then said that she would “get back to me” on the offer. She didn’t. But Labour then put out some tweets and a press release partially quoting what I said in that call.

This was a clear breach of trust. I am left with the need to explain what has happened. The confidence has been broken so I will expand on discussions I would ordinarily not have explored publicly.

In seeking to negotiate the opposition haven’t budged their positions one inch and were looking to commit the council to almost £200k more of spending each year for the next 4 years (the Tory request was marginally cheaper than the Labour one, but the same order of magnitude). I couldn’t commit to spend that much extra money as we don’t have that amount of spare cash in the budget as recurring income. One-off spend from last year’s underspend or capital investment could not be used to support such a four year commitment.

The offer I made this morning was just over £55k a year being used to procure more cost effective school transport for the 96 and 74 routes. (I seek to treat each opposition leader equally. However I had not been able to speak to Cllr Geoffrey Theobald for the Conservatives, but managed to speak to Cllr Mitchell, who I was told was at work.)

It seems to me that Labour had no desire to find an agreement nor common ground, otherwise they could have responded to me with a counter-offer or some kind of comment. But they didn’t, they went straight to the press.

Not only did they partially report our conversation, Labour also claimed that they had negotiated a ‘deal’ with Brighton & Hove Bus Company to save a number of routes at no cost the council. Yet this was completely untrue. As I confirmed this afternoon with Roger French, who heads the bus company, no deal was done with anyone. He was going to make a commercial decision, on his own, to keeping running some of the services after the subsidy went. Just as I have been saying was likely for some time, and indeed happened before in the past when subsidies were withdrawn.

For Labour to suggest they had made this happen was simply untrue, and not in their gift. There was and is no deal there, and the bus company have confirmed this to the media. The council ran a procurement, companies won different subsidised routes to operate out of that, then they make commercial decisions on what else they run. This is the proper and legal way in which buses have to operate outside of London in this country.

It’s sad that Labour are seeking to make short term political points out of the bus issue, even more disappointing that they’ve done so by attempting to mislead.

These are difficult times for the council and our local economy, all parties should be putting the city before politics. But there is good news… so far since the new parking charges came in Roger French reports a 4 to 5% increase in bus journeys on an average week, and visitor numbers continue to go up.

notes from JK

Why our city’s political culture needs to change or how Labour and Tories are misleading residents

The Labour Party via twitter are suggesting that Greens are ‘diverting’ money from buses to support One Planet Living.

Other than the fact that this continues to show that they don’t understand, support nor appreciate the benefits of One Planet Living for improving this city and saving the council money, it’s an outright lie.

The buses budget is a recurring budget – that is money that we spend each year on contracts with bus companies. For this financial year it’s about £1m funded from parking income.

The One Planet Living (1PL) money they refer to is how we have chosen to allocate £250k of the council’s £4 million underspend generated in the last financial year.

So you can see they are very different beasts – buses is recurring money, 1PL one-off money left over from the last year.

You cannot run a 4 year contract for buses with a sliver of one-off money. But you can save recurring money we spend each year on our water and energy bills with the input of a one-off funded spend to save project. Is that so hard for Labour to understand?

Misleading statements

It is downright untrue and misleading to the people of the city to suggest money has been ‘diverted’ from any budget to 1PL and Labour should be ashamed of making such a suggestion.

Just to run down the full history of the issue in addition to my previous post and one from my party. Back in 2004 I’m told the then Labour administration tried to make cuts to bus subsidies, including the 96 bus when times were good for councils.

Now we’re facing harsh austerity measures and yet we’ve managed to affect less than 0.33% of passenger journeys in the face of cuts and fuel inflation. And both opposition parties Tories and Labour had lots of time to engage with this issue.

Back in September & October 2011 they participated in the ‘star chambers’ for budget proposals including saving money from the bus subsidies budget was mentioned. The draft budget was then published in December 2011 and a scrutiny panel did examine buses as well as school transport. The Green administration made clear then, as we have now, that we were reviewing school transport to ensure it was as cost effective and sustainable as possible in the face of cuts.

No objections from Tories or Labour in October or February

Furthermore in October 2011 a public Cabinet Member Meeting discussed the criteria through which the bus subsidies would be reviewed and re-procured. For the first time this created a systematic process for ranking services open to public scrutiny and thereby not vulnerable to ‘pork barrel’ politics of councillors being tempted into saving services to their wards even if they were not financially justifiable (see especially appendix 2 of the reports for that meeting). The minutes show that opposition councillors present at that meeting raised no objections to the criteria which has produced the decisions we have now had to make.

Come budget council in February 2012 the opposition councillors presented a number of amendments, but none of them sought to remove the reduction in the bus subsidy. They voted for the budget including this reduction. It’s a basic concept of administrative law that you only vote for something if you support it, otherwise you abstain or vote against. Bizarre claims in recent days that the opposition “didn’t really support this” don’t wash.

As I’ve mentioned previously, both opposition leaders had two briefings at which they could have further raised issue with any aspect of the bus procurement process, but they didn’t. Then they both chose to present last minute amendments on the day of the committee meeting where we had to decide.

The Labour one failed to recognise that we did a 4 year procurement to get better prices – the £226k they wanted to raid wouldn’t even get them a year’s worth of the bus services they wanted, and we would have needed to spend months on a new 1 year procurement process. As this would take 3-4 months we would then be in a situation of having less than a year until having to do the procurement again. All costly, expensive and un-costed by Labour.

The Tory amendment was calculated by finance officers to cost at least £508k which they had not found whatsoever, and also they hit the issue of needing to do a new 1 year procurement which would result in much higher prices.

Playing around with the council’s democratic decision making

Now Labour have in a press release said that they will seek to overturn this decision somehow at a Full Council meeting. Legal advice confirms my own view that committee decisions are final (other than the call-in procedure which at most can only force a decision to be taken again). This was explicitly discussed with Labour’s deputy leader as part of the constitutional reforms: committee decisions have to be final otherwise the system won’t work, and basic principles of administrative law.

Ultimately a four year procurement was the best way to get value for money, trying to push one-off money into one year services is not going to go very far in resolving these issues which all parties long knew were coming. I’m saddened that the Coalition Government has forced councils in to this situation where services are reduced . But in times of limited cash, we cannot justify the cost of over £1,000 per pupil per year on one of the school routes that wont be subsidised any longer. We can now look at other options such as smaller, cheaper school transport options and bus companies seeking to run services on a commercial basis on the routes where subsidies have been withdrawn.

Opposition councillors haven’t found the money to ‘save’ services over the 4 years of the procurement we’ve undertaken, and none of us know how much more expensive the prices would be for 1 year contracts – but we know it will take months to complete that procurement which seems hardly worthwhile for just a year. Rather than creating more uncertainty for contractors and all those people affected, as Labour have done with their latest statements, we should be spending that time and resources on finding solutions.

Short-term media ‘wins’ at any cost

Just as at the budget-setting this February, we see the opposition parties going for a short term media ‘win’ at the long term expense of residents and council services. In February it was the £3.66m hole they added to next year’s finances so that they could force the council tax freeze into the budget. Of course they failed to identify how that £3.66m would be paid for nor which services would have to be cut to do so. Now with the buses there will be at least a £0.5m if not more cost over the 4 years of this bus contract if the opposition have their way. Once again there is no mention of which council services they will cut in the coming years to pay for this.

It’s a shameful way of behaving, it does a disservice to local politics in this city and all those who depend on us to make the difficult judgements necessary to balance competing needs for services in times of ever decreasing budgets.

I recognise that most people will never read this level of detail, but those interested I do think it’s important that there is an awareness of what is truly going on. We need to change the political culture in this city and I’m doing what I can about it. Thanks for reading.

notes from JK

The June 2012 Policy & Resources meeting or how Labour & Tories connived to campaign against bus cuts they voted for

This week saw the first full meeting of Policy & Resources committee under the new system of decision making on Brighton & Hove City Council.

There were many important issues on the agenda including revising the corporate plan for the next year and agreeing a letter to government in support of equal marriage proposals. You can read the full agenda here.

However the vast majority of the meeting and the interest was focussed on two reports. The first was the final budget update on the last financial year which ended this April. This showed that in its first year the Green administration had, despite biting government funding cuts, been able to carefully manage the council to a £4.37m underspend. This was good news as it gives us a bit of flexibility in dealing with the unexpected. But context is important as this amounts to being just 2% off a fully balanced budget (one that was neither under nor overspent), so not much in the grand scheme of a large council like ours.

Much of the report was on the detailed management and accounting logistics needed when projects run over two financial years with grants needing to be carried forward. It also noted that we achieved £7.53m in savings from the Value for Money Programme in the last year. Which rather took the wind out of the sails of the opposition who had been focussed on attacking Greens for being reckless, idealistic and unable to manage things.

So of course rather than acknowledging the the first year’s finances had gone well (and I should admit a personal interest here having been the Cabinet Member for Finance in that year!) they took a new tack by attacking the underspend.

Now most of that underspend, £3.187m to be precise, was already spent in the February budget-setting meeting to help with the budget year we are now in. The opposition were more than happy to raid it for their amendments back then. This left £1.183m to be allocated at the committee this week.

It is important to note that this underspend is one-off money, it’s not a recurring amount we can count on each year like income from rents or council tax. So when it’s spent, that’s it. Our report proposed leaving £521k to cover costs relating to Saltdean Lido and to help with unexpected pressures in the 2013/14 budget-setting.

Then we sought to put £662k into a number of areas (full details are at the bottom of this document) including one year cover for a childcare service associated with Brighton Womens’ Centre until a new government funding stream comes through and funding to support the huge number of events we will be seeing in the city this summer. Vitally we allocated £150k to fund a bid for £5m in government grants to get ultrafast broadband in the city. We hope to tie this in with free wifi in the city and continuing to support the high growth digital sector we are lucky to have. Unfortunately there are some very complex legalities associated with the bidding process, which is why need to put money aside for it, but it will deliver huge benefits for the city’s economic future.

Our long term thinking vs opposition’s short termism

We also allocated £250k for projects including automatic water metering and energy audits of key council buildings. These projects will be led by the sustainability team and help us meet our One Planet Council targets, but ultimately they save us money. With pilot work in the Brighton Centre we’ve already saved the council tens of thousands by changing how energy and water are used.

Regardless of the good sense of these plans, unfortunately the opposition decided these were ‘pet’ or ‘vanity’ projects and sought to attack them suggesting saving money and resources, and the economic development of our city, were unnecessary distractions. Personally I want to see a vibrant, digital city and I would rather be spending council funds on positive things than wasted water and heat!

Labour councillors proposed an amendment to take all the money from the sustainability projects and spend it on buses apart from £24k on the Mobile Library. This related to their amendment to the budget in February which only partially funded a new Mobile Library back then. They’ve been hoping someone else will step in to fund the gap in their amendment, but so far we’ve had no offers. The one-off £24k they sought in the amendment was still not enough (it’s recurring annual budget we’re short of) and we cannot buy a new mobile vehicle if there’s no annual budget to run it – that would be utterly irresponsible.

The sum for the bus budget was also unable to make much of a difference because we were about to be debating a 4 year contract which a one-off sum of £226k Labour wanted to throw in didn’t make much sense, but more on that in a moment.

The Labour amendment, despite Tory support fell. But rather than vote for the positive items in this budget report such as on ultrafast broadband, childcare, summer events and so on all the Tory and Labour councillors voted against the report so I used my casting vote as chair to ensure it passed.

The bus issue

So, as colleagues have explained on this blog post, we had to review subsidised bus contracts. The government has cut its support to bus operators by 20%, fuel prices have increased and councils have had their budgets cut substantially by government.

Even if we had been able to keep our budget unchanged, the increased costs bus operators were experiencing meant we’d have only ever been able to afford to support fewer bus services. But sadly we had to reduce our budget. Why? Ultimately because the central government are cutting council funding harder and faster than for any other part of government.

In spite of the scale of the cuts, we sought to take a much smaller reduction from the bus subsidy budget than other areas of the council budget, because we know how important buses are. At the budget council meeting this February both Labour and Tory groups presented an array of amendments – none of which sought to change our proposals on the bus subsidy budget. Furthermore all the opposition councillors very unusually voted for the whole budget including the unamended bus subsidy section.

They absurdly claimed this week that this didn’t mean they supported everything they had voted for: if you don’t support something don’t vote for it! Opposition groups usually abstain on the council budget and they could have done again so this February.

So let us be absolutely clear that both Labour and Tory groups voted for these reductions in the bus subsidy budget. Then both leaders of the opposition groups more recently had the offer of one-on-one briefings with the officers on this topic. Additionally they attended a meeting that I chaired with officers to review the draft agenda for this week’s Policy & Resources committee.

They were even shown extra print-outs of all the bus route data and tendering process at that meeting. Did they ask a single question, raise any concerns or seek to amend any of the reports? No, they had absolutely nothing to say, they agreed that the papers should proceed to publication.

If they were genuinely concerned about the principle, the detail or the process they had been given many opportunities to do something about the bus subsidies, but they didn’t. However in the last few days suddenly they have decided to “save the buses” and continue now, such as with this Labour online post.

Let’s call their behaviour what it is – cynical positioning to seek political capital. Their amendments, as the copious notes from the Finance Director showed, were highly problematic and short-termist (see here and here). Robbing good spend-to-save plans such as on water usage to show that they wanted to be seen to save the buses, in ways they knew couldn’t and wouldn’t succeed. Major procurements are difficult and complex procedures which cannot be altered by amendments submitted on the morning of a meeting. Again, when they had so much notice of what was happening why did they not prepare amendments earlier?

We have sought to cause the minimum harm possible in the face of cuts and inflation. So while other authorities are slashing millions from supported bus routes, and some counties are seeing 47 schools lose services, we kept it to a minimum with less than 0.33% of passenger journeys affected. Overall less than 2% of all routes in the city are subsidised, but we ranked them all to ensure those we did stop supporting would cause these least harm possible.

School routes are particularly difficult to arrange. They are costly, the 96 which was the source of some controversy this week would be costing us each year about £1,000 per child plus the parents were paying £240 a year for a pass. Most big operators aren’t interested in running school buses which are just one way in the morning, once, and a single-homeward trip. But we have been saying for months, I note including at the Budget Scrutiny meetings this January, that we are reviewing all school transport options. I said it again at the meeting this week. Not all school transport has to be by a large bus with a route number associated. Only those big spending routes need to go through the procurement we discussed at committee this week.

There are other options for transport, which we will keep discussing with parents, children, schools and providers. But of course people were understandably very concerned and if the service that runs by your home is affected, that it is only one of 0.33% is small comfort. It is also worth keeping in mind that in the past commercial operators have sought to continue some services even when the subsidy ended, because they found a way to make it commercially viable. So the end of a subsidy does not always mean the end of a route.

It was a difficult meeting and I take no pride or pleasure in moving these challenging items forward. The government is intent of forcing communities into fighting over scant resources, which is so damaging to our resilience and sense of collective wellbeing. Even the Tory chair of the Local Government Association recently called some of the cuts to councils “impossible”.

I know that Greens are working hard to manage our city as sensitively and responsibly as possible in the face of the austerity agenda we oppose. But what pains me most is how Tory and Labour councillors cheapened the debate with their empty posturing. They had every chance to do something more about this if they really cared, and their respective governments too. Of course we’re not going to always agree, but the public deserve informed debate not last minute posturing. Transport is a difficult issue for our city, and the council is only one part of the picture. I intend to keep working with everyone to find the best, sustainable and affordable solutions possible in these tough times.