16/10/2002

• Policy paper to be delivered to Secretary of State for Transport
• New dedicated fund to pump prime specific improvement projects
• Concept successfully operating in New Zealand

Stagecoach Group, one of the UK’s biggest public transport companies, today (16 October 2002) sets out a proposal for a new partnership to reinvigorate the UK bus network.

Stagecoach believes that its proposal, Kick Start, will deliver better bus services for provincial areas, better value for taxpayers and attract more people out of their cars and on to public transport.

Kick Start involves:

• the introduction of a dedicated Government fund, administered by the Department for Transport, to deliver efficient “one off” short-term public investment in bus projects that are currently not commercially sustainable.



• funding to bridge the critical gap between services being launched and achieving commercial sustainability, a process that can take up to three years.



• bus operators having a contractual agreement with Government to operate a specific level of service over a three-year period. The Government would sign up to a public investment profile based on passenger growth projections. If passenger volumes did not rise as expected or costs increased beyond forecasts, the bus operator would be contractually bound to absorb the loss.

The concept already has a proven track record in New Zealand where it has generated significant passenger growth and Stagecoach has also carried out a successful trial of the system in Perth, Scotland, where the company has its headquarters.

Brian Souter, Stagecoach Group Chief Executive, said: “This radical new partnership approach can deliver a much needed kick start to Britain’s buses. It is a practical, quick-win initiative that can make a real difference to the provincial UK bus network and peripheral communities outside London by attracting people out of their cars and onto buses.

“Buses are the people’s transport – don’t forget that seven out of ten journeys on public transport are on the bus. That’s a massive 4.9 billion passengers a year. But there are many borderline services - not many people use them, but those that do really need them. With Kick Start, we can protect these routes from fading away - and make them better.

“We’ve done it in New Zealand, where Kick Start has the backing of the government. And we’ve tested it in our home town of Perth, where passenger numbers have shot up by 56%. Now we think it’s time to Kick Start bus services up and down the country.”

Stagecoach calculates that a £140m fund, spread over three year years, could produce passenger growth of 2% per year across the whole UK bus network, delivering the Government’s bus growth targets ahead of schedule. Hundreds of new services would be created across the UK that could be run as commercial operations without the need for perpetual Government subsidy.

The Kick Start pilot in Perth found that generating each new passenger cost 18.5p compared to some existing Government schemes that are costing the taxpayer more than £5 per passenger.

Mr Souter said that there would always be a role for Government in supporting socially-necessary bus services. However, he said Kick Start meant bus operators carried the business risk and had the incentive to use their entrepreneurial expertise to grow passenger volumes, rather than the Government being faced with paying perpetual subsidy to schemes that often delivered little growth.

He added: “Kick Start can deliver better value for taxpayers, produce better bus services for our communities, boost social inclusion, cut congestion and emissions, and help the Government achieve its growth targets on the UK’s bus network. We believe Kick Start has a number of attractions to Government and we look forward to opening a dialogue with Ministers on the proposal.”

Stagecoach will shortly be delivering a policy paper, Kick Start - Better value, better bus services, to Rt Hon Alistair Darling MP, The Secretary of State for Transport.

The initiative comes only weeks after the Transport Select Committee published a report calling on the bus industry to put forward innovative ideas to develop bus services, particularly in peripheral areas.

ENDS

Enquiries to:

Robert Ballantyne/ Steve Stewart, Stagecoach Group – 01738 442 111
John Kiely, Smithfield Financial – 020 7360 4900

NOTES TO EDITORS

• Stagecoach is one of the biggest bus operators in the UK, running around 7,000 vehicles in nearly 100 towns and cities across the UK.
• Stagecoach has invested £120 million in the last three years in new state-of-the-art buses, which meet tough Euro III standards.
• View the full Kick Start document.