Total road traffic is forecast to increase by 9% by 2001 and 60% by 2031. However the capacity of the road network is not planned to rise in line with the forecast increases in traffic. "Predict and Provide" is no longer fashionable, and is in any case unsustainable, unfundable and ineffective as a solution. Transport emissions are the fastest growing contributor to global warming, and it is now a legal requirement on Local Authorities following the 1995 Environment Act and the 1997 Road Traffic Reduction Act to explain how they intend to reduce traffic volumes, where appropriate.

We must make car travel less attractive at times of high traffic congestion. To some extent this is happening anyway as traffic levels increase. We have all seen some of the effects - journey times become unpredictable, so people leave earlier, so the peak extends and on it goes. But even in severe congestion, it will take a great deal to move people out of their cars. You can choose your company, your radio programme, whether you smoke or not, and how warm you would like to be. The cost seems less and in many cases the alternative public transport is stuck in the same traffic jam, so there is no perceived advantage in moving.

Improved public transport will not be able to achieve this modal shift in isolation. We need a change in the balance of perceived advantage in favour of public transport, and the improvements I will go on to describe are our contribution to this.

Public transport development however is only part of the solution. Even if we double the number of people travelling by public transport in the UK it will only account for around 5 years growth in car traffic. In Paris last autumn they still had to ban half the cars coming into the city because pollution levels were exceeding legal limits - and that is in a city with one of the best transport systems in Europe.

We pride ourselves on being a customer-led Group, so the obvious place to start is by asking our customers what features in a public transport network are most valued, and how we need to improve in order to maintain and increase regular bus use. To help answer this question we must have a clear understanding of our customers’ needs and expectations. FirstGroup’s latest initiative is CustomerFirst - a continuous nation-wide survey of customer satisfaction. CustomerFirst is the most extensive research project undertaken in the UK bus industry, and the results are providing us with greater understanding of key customer expectations.

Meeting these expectations is fundamental to achieve modal shift (ie car to public transport) and the three most important requirements are reliability, reliability, reliability. Quality of service is therefore measured within this requirement in terms of service dependability where punctuality, journey speed and frequency are vital elements. Add to this better quality of information, modern, comfortable vehicles and courteous drivers, and we have the essential ingredients to achieve a value for money product which will see real modal transfer.

Park & Ride schemes feature a success throughout the industry and within FirstGroup companies one of the most successful is in Aberdeen, where passenger numbers have been rising 25 per cent a year, to around 110,000 cars in 1997.

In terms of investment in vehicles FirstGroup alone have invested £85m this year in new high specification, low emission buses for our customers. Since before it became a legal require-ment we have been purchasing only low emission buses to the most rigorous EU standards. We operate the largest fleet of Compressed Natural Gas buses in Britain at Southampton and in Northampton, and we run a LPG powered bus in Chester. First Glasgow is trialling Ultralow Sulphur Diesel. The trial covers about 150 buses operating from Parkhead depot in Glasgow and early results show that smoke emissions are significantly reduced using this fuel.

It is notable that even buses with conventional engines are cleaner than the cleanest car. A survey carried out in Central Edinburgh in 1994 showed that diesel cars generated twice as much carbon monoxide, three times the hydrocarbons and carbon dioxide and four times the particulates as a large bus. Petrol engined cars with catalytic converters were worse on all counts except for particulate emissions.

The interior of our new vehicles were designed with one aim in mind - to provide a high quality, comfortable travelling environment for customers. Features such as extra leg room, high quality seating, double glazing, kneeling suspension and a welcoming environment all help create a more enjoyable journey. And for the first time all new single deck buses feature low floor access, enabling parents with prams or buggies as well as disabled users to enjoy "no step" entry.

A standard livery has been designed for these new generation buses, meaning that wherever you are in the UK these new high quality vehicles will look the same both on the outside and inside, making the new generation of buses recognisable to customers.

Buses like these have helped to increase passenger numbers in urban centres on routes which they are dedicated to. For example in Aberdeen premium service routes show passengers growing by a steady 3 per cent across the premium bus service network, after spectacular increases in the first year of operation. The principle of the premium route is simple. We convert a complete route or group of routes to new vehicles, give our staff enhanced training in customer awareness, redesign the information literature to be as easy to use as possible, and work hard at improving the reliability, backed by a money-back guarantee and it works.

In Glasgow the "Bus Time" project on the Maryhill corridor brings real time information to 57 bus stops with high quality shelters, traffic 20 management measures and new low floor buses -all to benefit the customer. Investment in the scheme was £900k, 75 per cent from around Strathclyde PTE and 25 per cent from the European Development Fund. Passenger growth is around 4 per cent. The "Greenways" bus priority scheme in Edinburgh has generated public transport growth of 250,000 journeys in its first six months of operation.

FirstGroup is actively looking at developing partnerships with local and national government, so that public transport can play a part in halting and reducing traffic congestion. I announced our TwinTrack initiative in February in Glasgow, and the principles of this are that FirstGroup would be prepared to fund up to 50% of the total costs of the infrastructure packages - including new buses and infrastructure improvements - in return for ring-fenced government support for identified schemes. In practical terms this means that in Aberdeen we are prepared to commit ourselves to the provision of 56 extra new buses and 150 new jobs - a total estimated resource commitment of £7.5m. together with £7.5m from the local authority, this means we can do in three years what would of otherwise have taken five to achieve. A similar scheme is being developed for Glasgow.

FirstGroup wholeheartedly welcome the announcement by the Chancellor of the Exchequer that bus services would be exempted from the rise in diesel tax at the budget. This is a clear acceptance of the role that public transport has to play in dealing with the traffic problem. We responded by freezing FirstGroup fares for a period of three months in order to feed the benefit back to our customers.

We need to make our towns and cities more accessible, for leisure and working journeys and the key is to improve the flow of people not vehicles. But this is not solely the responsibility of National and Local Government, or the Bus Operators. Employers have a role to play in responding to taxation of private parking spaces by suggesting that subsidy of their employees’ public transport travel could be offset against this tax, and we all have individual responsibility for examining our travel habits and needs.

Buses offer the sustainable solution, the economic regeneration opportunity and are the best value for money.

I believe that the future for public transport has never been brighter. The threat of traffic congestion and pollution in our cities at the same time presents us with a tremendous opportunity to get it right, to cater for people not traffic, and to put a higher quality public transport network at the centre of urban movement in the next century.

Moir Lockhead is Chief Executive of FirstGroup.

FirstGroup was formed in June 1995 from a merger of the GRT and Badgerline Groups. It is the largest UK bus operator ( with nearly a quarter share of the bus market) and has 27 bus operating companies spread throughout the UK, 3 rail companies and a controlling interest in Bristol International Airport. Projected full year turnover is now over £1.2 billion (£650m Bus, £500m rail), and it has 28,000 employees. FirstGroup were recently awarded the franchise to operate half of the bus services on Hong Kong island (700 buses), the Company’s first major move overseas.