Hackney Community Transport aims to build partnerships

Former London bus driver Dai Powell OBE began volunteering with Hackney Community Transport a quarter of a century ago. Now he’s its CEO, with some forthright opinions and ideas, both on the CT sector and social inclusion.

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Hackney Community Transport (HCT) is arguably the leading light of the CT sector. It operates on a for-profit basis in areas as diverse as Hull, Bristol and the Channel Islands besides its London heartland, and re-invests much of the money this work generates into socially-beneficial enterprises.

At its head is effervescent Welshman Dai Powell OBE. Dai, whose CV prior to joining HCT also included spells as a steelworker in his native land, a miner in Derbyshire and a fisherman in Scotland, came to the organisation when it was in its infancy, with only five employees.

Left: LibertyBus transition was not an easy one for HC. Right: Dai Powell
Left: LibertyBus transition was not an easy one for HCT. Right: Dai Powell OBE

“I was contacted by HCT to see if I had any spare time to volunteer. I did, and spent it driving community groups and individuals with disabilities around Hackney in a minibus,” he explains.

Through his period with London Buses, Dai had gained the necessary PCV entitlement. “I didn’t start with a love of buses; I was just there at the time. I didn’t make the conscious decision to join the industry.

“When I started volunteering with HCT, I soon realised it was a great organisation that was doing so much good. I wanted to be part of that.” It now employs 1,000 people in the UK and Channel Islands.

Community benefit

Community transport has become a hot potato. David Cameron, with his plans to empower communities via the Big Society, expressed a wish to see more third sector organisations come to the fore in a variety of areas, including transport. Many coach and bus operators, on the other hand, view CT groups less favourably.

It’s important to state HCT’s position on where CT fits in to the wider industry. “We do commercial work to pay for some of our socially beneficial schemes. That’s how the model works,” says Dai. And whether others like it or not, innovation in design and delivery will become increasingly necessary if some services are to continue to be provided.

All HCT’s for-gain services are operated on a standard O-Licence. “We absolutely and categorically never go in on Section 19 for commercial work,” says HCT Communications Director Frank Villeneuve-Smith. “If a private sector operator is competing with a CT organisation which is bending the rules, we have sympathy with that member of the private sector. The law is clear.”

HCT is one of over 60,000 social enterprises in the country, which collectively employ around 3.5% of the UK’s workforce. They don’t trade to create shareholder value, instead existing to generate benefits for society.

In London, HCT’s profits are largely generated by ‘red bus’ work, which it undertakes from the former London Transport Ash Grove depot in Hackney. TfL owns Ash Grove, and leases part of it to HCT; Arriva London occupies the remainder on a similar basis.

Getting into TfL tendered work was, says Dai, “about making the business sustainable.” The Hackney of 20 years ago was politically unstable, and financial support from the Borough at that time could not be guaranteed.

“It wasn’t just one year to the next, it was one month to the next,” he adds. “We knew when we were providing our socially beneficial services that they were vital for the people using them.

“We needed to work out how we could continue to provide them with a local authority which may not always be there.

“That’s why we started looking at more commercial ways of supporting the organisation.”

It began ‘red bus’ work for TfL in 2001 and now runs 105 buses on 10 routes from Ash Grove.

TfL work supports a variety of HCT’s other services. Training, community minibus provision and mobility scooter hire are all among the socially-beneficial aspects of its business, but also partially funded by revenues brought in by commercial contracts is route 812.

Route 812 in Islington is largely paid for by 'red bus' work
Route 812 in Islington is largely paid for by ‘red bus’ work

Operated with a number of accessible minibuses, the 812 has been entirely designed through community engagement. A joint venture with TfL and the London Borough of Islington, half its operating costs are met by profits generated by red bus work.

It charges a flat fare of 1 to those not eligible for free travel and operates half-hourly. Both Dai and Frank stress that, if the 812 did not run, many of Islington’s less mobile residents would be unable to go where they want or need to.

“We’re a large organisation now, so things are a lot more fluid than they used to be. But the basic model is that we do our commercial work to fund the socially-beneficial [arm of the business]. Commercial doesn’t pay for anywhere near all that, though,” Dai says.

HCT’s desire to benefit the wider community via its for-profit work has expanded to other parts of the UK and the Channel Islands. A key aspect is reinvestment of profits in areas where they are generated.

“The obvious market to use as an example of that is Bristol, where we merged with Bristol Community Transport (BCT). We operate park-and-ride, and BCT runs the community transport. It’s all the same organisation, so we support BCT from the park-and-ride work.”

The idea of HCT merging with provincial community transport operators is often attractive to both parties. “We get three or four CT groups per year who want to merge with us. We also get two or three commercial operators annually who do, too.

“They are the kind of operators who are providing a community transport-type of service in that they are providing a service for their community.”

Outside conurbations

The task of providing services – bus and socially beneficial alike – in areas of low population density is a conundrum which will require attention sooner rather than later if network contraction is not to continue.

“As a society, we have to make up our mind,” says Dai. “Do we want a level of mobility for the elderly and disabled, and other isolated members of the community, or do we not? The state wants older people to be able to go out more, because if they can live in their own home it saves the government money.

'Do we want mobility for the elderly and disabled, or do we not?' Says Powell
‘Do we want mobility for the elderly and disabled, or do we not?’ Says Powell

“So society wants to run a lot more transport for the elderly, but no politician is going to put 10p on tax to fund it.

“So we have a greater demand and in many areas a shrinking private sector. How do we support that? Do we do it differently, or do we just ignore it?”

He is clear in his views that, outside the major conurbations, it is becoming almost impossible to operate a decent level of service without reliance on public money.

“So we pump public funds into it – except we can’t, because where will that money come from? It has to be done differently.

“You have to change the source of funding, or the business model and work with more volunteers, in areas where services aren’t commercially viable,” he continues, suggesting that wholesale changes to how transport is provided in rural areas would bring multiple benefits.

“There is no point operators telling local authorities ‘it’s not our problem’. Because it’s a problem for all of us. My problem, society’s problem. We have to address that.”

Jersey boys

In Jersey, HCT is trying to address these issues by moulding the island’s public transport network into an entity which meets societal need. There, says Dai, it is “looking at how you can do local transport slightly differently.” It has a seven-year contract to provide Jersey’s bus service, with a possible three-year extension.

“We fought very hard to win the Jersey tender. Over the course of the contract, the idea is for us to build up a network of public and community-benefit services that totally inter-link. From the customer’s perspective, there will be no difference between any of the services we provide.”

HCT’s initial period of operating the LibertyBus network was a troubled one, with one party responsible for a particular period of strife: the drivers’ union. Dai refers to staff as one of four stakeholders in LibertyBus, the others being HCT itself, passengers, and the States of Jersey.

“The big idea for us was how we aligned all those stakeholders,” he explains. Current and future passenger involvement was secured by an on-going series of surgeries around the island, and the States’ involvement was tied up by a novel profit sharing scheme.

“If you want to drive passenger numbers up, things aren’t always within the operator’s control. Some of it’s down to the local authority, and if it puts in better shelters and priority measures, we benefit.

“But it costs to do that. So we give the States a very good chunk of our profit every year,” he continues. “We’ve got a baseline profit, and after that the States get a share. That encourages them to do more to support bus services. Then we’ve got a virtuous circle.”

Agreement and alignment among all stakeholders was difficult to come by. “There was a hard core of union people who were in it for nobody other than themselves,” Dai explains. “There were an awful lot of good people, but we simply couldn’t work with some of the practices that were in place at the time. It wasn’t possible.

“It had come to a point where it wasn’t healthy for anybody,” says Frank Villeneuve-Smith. “If you want to run an operation in the best interests of just one group of stakeholders – the staff – you can, but we’ve many other stakeholders’ needs to meet.”

Things at LibertyBus are settling down, and patronage – driven by frequency and service enhancements, profit-funded infrastructure improvements and a new fleet – increased by more than 5% in the first year of HCT’s stewardship. Both men are confident that it’s just the start of a revolution for Jersey’s bus services.

Spreading the wings

The model applied to Jersey by HCT is, it believes, suitable for use in the UK, and would deliver most of its benefits outside major conurbations. “The real societal gain would be in the market towns and rural counties,” says Dai.

“In those areas there are separate subsidies for community transport, for buses, for school trips, and for social services.” In Jersey, HCT has made a small start on integrating things by including volunteer-driven services in the network.

“As long as it’s obvious that we’re not replicating something which passengers should be paying fares for, we’ll be able to paint the vehicles like regular service buses. That’s proven very successful in Holland with the Buurtbus concept, where such services are integrated into those provided by commercial operators,” says Frank.

There is a sense that much more is still to come from both the community transport sector and HCT. It attracts top-level graduates who have a desire to use their skills for socially-beneficial schemes, bringing fresh ideas and the intellectual means to realise them.

“What we need to do as a transport industry is work on a united, not divided, basis,” says Dai. “It’s about how we can work in partnership and make things right for society. Because public transport is just that: it’s for the people.

“We need to work with stakeholders and make them aware that we are the ones who are going to have the solutions as an industry, not the authorities. They’ve got the problem and we can deliver the solution. Together.”