UK Government

Department for Transport : £20M for smart ticketing in our cities within five years

Press Release   •   Dec 15, 2009 10:56 GMT

Within the next five years passengers on public transport in England's major urban areas will be able to travel without a paper ticket, Transport Secretary Andrew Adonis announced today.

England's nine largest urban areas will receive £20m to bring smart and integrated ticketing to the greatest number of people most quickly through the Smart and Integrated Ticketing Strategy launched today. The strategy also sets out the Government's goal for every area of England to have access to smart ticketing by 2020 and contains nearly 30 Government commitments to help make this happen.

Smart tickets - a system where a ticket is stored on a microchip, on a smartcard (like Oyster) or even on a phone or bank card - can give improved journey times and faster, hassle-free purchasing and use of tickets, with associated benefits for local government and operators. The Government estimates that the benefits of 'integrated smart' ticketing, that allows travel across operators and across modes, could be worth over £1 billion per year.

To incentivise bus operators to install smart ticketing systems, the Government has also announced an 8% increase in the Bus Service Operator Grant (BSOG) if they have ITSO smartcard infrastructure on their buses.

Transport Secretary Andrew Adonis said:

"The benefits of smart ticketing to passengers are clear - quicker, easier and potentially better value journeys on trains, buses and trams, whichever company runs the service. We could even see the death of the paper ticket as direct payment and mobile phone technology picks up pace.

"If passengers had smart tickets they'd almost certainly use public transport more. That's why I'm incentivising bus operators to make our vision of universal coverage of smart ticketing in England a reality and why we'll continue to require ITSO smart ticketing in rail franchises.

"Getting this technology on-board will help reduce congestion and pollution, improve the local environment, and help us, operators and local authorities provide the 21st century public transport network that we know people want."

The £20m smart ticketing fund will be available in the 9 largest urban areas in England outside London - Greater Manchester, West Midlands, Tyne and Wear, Merseyside, South Yorkshire, and West Yorkshire, Nottingham, Leicester and Bristol. The funding will go towards implementing ITSO smart ticketing schemes in each region.

Bus operators will also receive a further 2% increase in their BSOG rate if they have installed their buses with GPS technology - which allows the operator to track the position of their bus. Together these incentives could be worth around an additional £1,000 in grant per bus each year. Encouraging the take up and use of GPS systems will help realise the potential for passengers to receive real-time information about bus services and bus performance.

A recent survey commissioned by the Department indicated that integrated smart tickets have the potential to attract as many as 25% of current non-public transport users onto the system and that a pre-pay smartcard with a daily 'cap' could increase some individuals' trip rates by over 14%.

Notes to editors

1.  The 'Smart and Integrated Ticketing strategy' can be found here: http://www.dft.gov.uk/pgr/regional/smart-integrated-ticketing/

2.  Further details on the Bus Service Operator Grant (BSOG) can be found here: http://www.dft.gov.uk/pgr/regional/buses/busgrants/bsog/

3.  The £20m smart ticketing fund will make up to £2.2m total funding available to each of the 9 largest urban areas in England: the 6 Passenger Transport Executive areas - Greater Manchester, West Midlands (Centro), Tyne and Wear (Nexus), Merseytravel, South Yorkshire, and West Yorkshire, as well as Nottingham, Leicester and Bristol. Each area will be required to submit spending plans for the funding in early 2010, which will need to be approved by the Department before funding is paid out. The funding must go towards implementing ITSO smart ticketing schemes in each region.

4.  Government wants our buses to be as green and clean as possible. That is why BSOG is being reformed to ensure it contributes to the Government’s strategic objectives, particularly in relation to tackling climate change. Drawing on the results of the public consultation in 2008 on options for longer term reform, and from discussions with stakeholders, the Government wishes to move away from paying support on the basis of how much fuel is consumed through moving towards new arrangements for support on the basis of passenger numbers. This will act to make public transport more attractive thereby delivering environmental benefits through reduced congestion and improved air quality.

5.  These new arrangements will mean that operators will face the full cost of the fuel they use. This will strengthen the commercial incentives for operators to find ways to reduce their fuel consumption and improve the business case for investment in driver training and low carbon buses. It also builds on the fuel efficiency target and the distance-based payment for use of low carbon buses that are now part of the current BSOG system.

6.  Greater use of GPS and smart ticketing technologies can also play a role in meeting the Government objectives regarding better use of data, as set out in the Putting the Front Line First: smarter government publication. http://www.hmg.gov.uk/frontlinefirst.aspx

7.  The Government also commissioned market research by Ipsos MORI into passenger perceptions of ticketing and how the offer to the passenger can be improved through smart and integrated tickets. The final report will published shortly.

8.  Central to the Government's vision is the implementation of smart ticketing infrastructure using the Government backed ITSO specification to allow seamless travel between, and within, cities and regions; and different modes of transport.

9.  The key benefits of smart ticketing include:

-  Allowing passengers to load tickets or credit in advance of travel, speeding up boarding times and reducing queuing;

-  Fraud and security. Smart tickets are far harder to replicate and can be electronically 'killed' the moment they are reported lost or stolen with any remaining balance refunded.

-  Sophisticated rules can be applied to 'cap' an individual's cost of travelling at a certain level so that they will always pay the best ticket price possible for the journeys they actually make.

-  Operators will be able to run their own loyalty schemes and offer ticket types to suit individual customers' needs.

-  Joining up services through using smartcards for other products such as library membership, leisure centre entry, benefit entitlement, parking, bike and car hire, and even lift share arrangements.

10.  Today's publication builds on measures already put in place by the Government to support the implementation of smart and integrated ticketing. For example 'ITSO', which is both an organisation and specification for interoperable smart ticketing, has been created and sponsored by DfT to create a single specification for smart ticketing. All recently let rail franchises include a requirement to implement smartcard schemes and new England-wide concessionary bus passes must be ITSO-compatible.

11.  Integrated ticketing can refer to a variety of different concepts, such as integration between different transport operators, integration between different modes of transport or even integration between transport and other types of goods or services.

12.  Smart ticketing is the name given to the system where an entitlement to travel (or ticket) is stored electronically on a microchip rather than being printed on a paper ticket. In most smart ticketing schemes, the microchip on which a ticket is stored is embedded in a smartcard. For this reason, smart ticketing schemes are often known as smartcard schemes, although there is much more to the scheme than just the smart card.

13.  The organisation, ITSO Ltd, is an independent, not-for-profit company that was established by stakeholders with support from the Department in order to develop and maintain an open specification which would facilitate interoperable smart ticketing in the UK and potentially beyond.

14.  The London Travelcard was introduced in 1983.  Between 1982 and 1984 passenger kilometres on the underground grew by 44%.

15.  Research commissioned by the Department suggests that some bus 'dwell times' could reduce by 50% if there was full take up of smart ticketing technology.

16.  TfL found with the introduction of Oyster 35 passengers per minute could go through the ticket gates compared to 15 passengers per minute previously.

17.  Experience in London from the introduction of Oyster in 2003 to the end of 2007 is a reduction of 59% from the 50 million paper tickets a month sold at the start of the period.

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