[2002] EWLands ACQ_191_2000 (08 November 2002)
	ACQ/191/2000

	LANDS TRIBUNAL ACT 1949
	
COMPENSATION –compulsory acquisition of bus station – value – method of valuation – use of RICS Red Book – disturbance – relocation of offices and canteen – claim for additional rent – value for money – works and change of control following acquisition – loss of revenue – proof – method of calculation – advertising – compensation awarded £782,776

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN	YORKSHIRE TRACTION COMPANY LIMITED	Claimants
	and
	SOUTH YORKSHIRE PASSENGER	Acquiring
	TRANSPORT EXECUTIVE	Authority

	Re: Former Yorkshire Traction Bus Station and 2-4 Midland Street, Barnsley, South Yorkshire

	Before: P H Clarke FRICS

	Sitting at Sitting at York on 15-18 and 22-25 January and in London on 30 April, 1-3 and 17 May and 22 July 2002

The following cases are referred to in this decision:
Washington Development Corporation v Bamlings (Washington) Limited (1984) 52 P&CR 267
Shevlin v Trafford Park Development Corporation [1998] 08 EG 161
Batchelor v Kent County Council (1990) 59 P&CR 357
Horn v Sunderland Corporation [1941] 2 KB 26
Inland Revenue Commissioners v Clay [1914] 3 KB 466
Wards Construction (Medway) Limited v Barclays Bank plc [1994] RVR 199
Dawkins (VO) v Royal Leamington Spa Corporation (1961) 8 RRC 241
J Bibby & Sons Limited v Merseyside County Council (1979) 39 P&CR 53

Rought (W) Limited v West Suffolk County Council (1955) 4 P&CR 347
Service Welding Limited v Tyne & Wear County Council (1979) 38 P&CR 352
Director of Buildings & Lands v Shun Fung Ironworks Limited [1995) 2 AC 111
The Ikarian Reefer [1993] 2 Lloyd’s LR 68
Bede Distributors Limited v Newcastle upon Tyne Corporation (1973) 26 P&CR 298
Re Tynemouth Corporation & Duke of Northumberland  (1903) 89 LT 557
Re Clarke & Wandsworth District Board of Works (1868) 17 LT 549
Re Kilworth Rifle Range [1899] 2 IrR 305

Mr Robin Purchas QC and Mr Hereward Phillpot instructed by Oxley and Coward, solicitors, for the claimants
Mr David Holgate QC instructed by Walker Morris, solicitors, for the acquiring authority

DECISION OF THE LANDS TRIBUNAL
1.	This is a reference to determine the compensation payable for the compulsory acquisition of a bus station in Barnsley, formerly owned and operated by the claimants, Yorkshire Traction Company Limited (“YTC”), and acquired by the South Yorkshire Passenger Transport Executive (“the PTE”) for the construction of Barnsley Interchange.
2.	Mr Robin Purchas QC and Mr Hereward Phillpot appeared for the claimants and called:-
(i)	Mr Frank Albert Carter, a member of the Institute of Logistics and Transport and an Associate Member of the Society of Operational Engineers, Chairman and Managing Director of YTC, Chairman of Traction Group Limited (the parent company of YTC) and Chairman of other subsidiaries companies.
(ii)	Mr Mark Andrew Adamson BSc FCA, Group Finance Director of YTC.
(iii)	Mr Colin Paul Buchanan BA MIHT, an Associate Director with Colin Buchanan and Partners of London W11.
(iv)	Mr Arthur Peter Nunweek FRICS, in practice in Sheffield as Peter Nunweek Chartered Surveyor.
(v)	Mrs Susan Hayes, Area Manager for the Western Division of YTC, responsible for the depots at Barnsley, Huddersfield and Shafton.
(vi)	Mr Alexander John Millar, a bus driver employed by YTC based at Barnsley Interchange.
(vii)	Mr Roger Horner, an inspector employed by YTC based at Barnsley Interchange.
Witness statements were lodged for the following employees of YTC who did not give oral evidence: Mr Colin Barraclough, Area Supervisor for the Western Division; Mr Raymond Nithsdale, a bus driver; Mr Paul Sylvestor, a supervisor; Mr John Toplis, a Time Office Supervisor; and Mr Stuart Winder, a supervisor.
3.	Mr David Holgate QC appeared for the acquiring authority and called:-
(i)	Mr Bernard Arthur Hall, an Incorporated Mechanical Engineer and Associate Member of the Chartered Institute of Building Services Engineers, a project manager with the PTE. 
(ii)	Mr Mark Gerard McCann MBA, Operational Services Manager of the PTE.
(iii)	Mr Roy Malcolm Wicks CEng MIT, Director General of the PTE.  
(iv)	Mr Richard John Crossley CEng FIHT MICE, Regional Director, Northern England and Wales, MVA Limited, Manchester.  
(v)	Mr Martin James Hartley BSc FRICS IRRV of Lambert Smith Hampton of Sheffield (a member of the WS Atkins Group of Companies).
4.	I made an unaccompanied inspection of the Barnsley bus stations and the town centre on 5 August 2002 and an accompanied inspection the next day of the bus stations and the Leeds Bus Station and Sheffield Interchange.
FACTS
5.	The parties have prepared several brief statements of agreed facts.  From these statements and the evidence I find the following facts.
6.	Barnsley railway station and the three adjoining bus stations, known as the North, South and East Bus Stations, are situated on the eastern edge of the town centre of Barnsley.
7.	The South Bus Station (also known as Platform A or the YTC Bus Station) is the subject of this reference.  It is the largest and the nearest to the town centre.  It is plot 1 in the compulsory purchaser order.  It is bounded by the railway station on the east, buildings fronting Midland Street on the west, Kendray Street on the south and formerly a short length of road leading to the railway station on the north.  It is roughly oblong in shape, narrowing towards Kendray Street.  The site area is 1.23 acres (0.498 hectare).  
8.	At the time of acquisition the South Bus Station was laid out and operated by YTC as follows.  Buses entered from Kendray Street and left on to Eldon Street in the north.  Along the western edge of the bus station, at the rear of the buildings in Midland Street, were 18 departure stands and a passenger queuing area protected by a canopy, the buses parking at an angle to the canopy (drive in/reverse out).  There were approximately 108 departures an hour.  The method of queuing for passengers under the canopy was in railed--off “pens” for each stand with bench seats.  Adjoining the canopy, to the rear of 2-4 Midland Street, were coach stands and bus parking.  The remainder of the bus station was a concrete apron.  The part adjoining the railway station was used as layover bays, parking for buses not in operational use.  
9.	Three buildings were owned and occupied by YTC in conjunction with the South Bus Station.  At the northern end, close to the railway station, there was a part single-storey and part two-storey building containing offices, canteen, kitchen, messroom and storage accommodation with a floor area of 2,349 sq ft (218.22 sq m).  The site area was 0.111 acre (0.045 hectare).  This is plot 2 in the compulsory purchase order.  It has now been demolished.  The other buildings are 2-4 Midland Street, contiguous single-storey buildings built under a former railway viaduct.  These are plot 3 (2 Midland Street) and plot 4 (4 Midland Street) in the compulsory purchase order.  They were occupied by YTC at the date of my inspection: no.2 Midland Street as a travel shop and no.4 as a coach office (Infolink shop) and now used for window advertising and occasional lost property sales.  The floor areas are: no.2 Midland Street, 545 sq ft (50.68 sq m) and no.4, 531 sq ft (49.33 sq m).  The parties have agreed that the total rental value of the buildings comprising plots 3, 4 and 5 was £27,500 per annum.  
10.	Between 1990 and 1992 the PTE commenced the development of Barnsley Interchange (comprising the North, South and East Bus Stations and the railway station) by carrying out works to the East and North Bus Stations and the railway station.  After acquisition of the South Bus Station from YTC in 1998 and 1999 the PTE carried out works to remodel the South Bus Station.  These works are described in paragraphs 19 and 20 below.
11.	The East Bus Station is immediately to the east of the railway station, linked to the North and South Bus Stations by a covered footbridge and lifts which form part of the railway station.  Access for buses (entry and exit) is from Pontefract Road (Kendray Street) in the south, close to a level crossing known as Jumble Lane Crossing.  This bus station comprises a new road, Interchange Way, which leaves the site to the north; an enclosed waiting area immediately adjoining the railway station (four bus bays); a further enclosed waiting area across the road (five bays), four open bus bays to the south towards Kendray Street; and car parking for the railway station.  The East Bus Station was the first to be constructed and is on land leased by the PTE from Railtrack and Yorkshire Electricity.  As part of the works a two-storey building was built on the railway station with lift and staircase access to the station and to the North and South Bus Stations.  
12.	The North Bus Station is immediately to the north of the South Bus Station.  It is triangular in shape, bounded by the South Bus Station, the railway station and Eldon Street North which is the sole access and exit.  It comprises a horseshoe shaped, enclosed passenger waiting area with five stands, layover bays, a park and ride car park and taxi rank and drop off point.  Included in the North Bus Station works were the completion of the two-storey bridge link in the railway station, the provision of a paved pedestrian area linking the railway station to the junction of Regent Street and Eldon Street, temporary toilets and staff accommodation and the highway junction and traffic lights at Eldon Street and Regent Street.  The North Bus Station was built on land leased to the PTE by Railtrack.  
13.	YTC owned the freehold interest in the South Bus Station (plot 1), their former office and canteen building (plot 2) and 2 and 4 Midland Street (plots 3 and 4).  The South Bus Station was subject to pedestrian rights of way over an L-shaped strip of land immediately to the north and to the rear of 10-36 Midland Street.
14.	YTC have relocated the uses previously in the former building (now demolished) at the northern end of the bus station (plot 2) to 16-20 Midland Street which is immediately adjoining the South Bus Station.  16-20 Midland Street is a two-storey building, three units in the parade which forms the western boundary of the bus station.  The total agreed floor area is 4,141 sq ft (354.71 sq m) comprising 2,103 sq ft (195.37 sq m) on the ground floor and 2,038 sq ft (159.34 sq m) on the first floor.  It is further agreed that the accommodation in 16-20 Midland Street is of better marketable quality than that in the building on the bus station previously occupied by YTC.  On my inspection in August 2002 I found that the ground floor was fully occupied and used, as operational offices, locker rooms, clocking on, cash machines and safes, canteen, kitchen and messroom, and that the first floor was partly used, as toilets, locker rooms, offices and a conference room and kitchen.
15.	Under an agreement for lease dated 12 May 1999 and a lease dated 15 March 2000 YTC have taken from the PTE a lease of 16-20 Midland Street for a term of 10 years from 16 July 1999 at a rent of £63,000 per annum with a rent review to the current market rental at the end of the fifth year of the term.  YTC are responsible for all repairs and decorations and to reimburse the insurance premiums to the PTE.  The agreement for lease provides that the PTE shall carry out at its own cost fitting-out works as shown on specified drawings.  The permitted use is for offices and canteen in connection with the tenants’ business or other use with the landlords’ consent.  Security of tenure under the Landlord and Tenant Act 1954 has been excluded.  The PTE may determine the lease on 12 months notice at any time after the expiration of the third year of the term.  If the PTE exercise this option to determine then they agree to use reasonable endeavours to provide YTC with alternative accommodation of a reasonably similar standard within the Barnsley Interchange.  Subject to the PTE being able to provide such alternative accommodation, they agree to pay a specified percentage (according to the year of possession) of the reasonable removal costs and expenses reasonably and properly incurred by YTC in moving to the alternative accommodation.  If the PTE are unable to provide reasonably similar alternative accommodation on determination of the lease, then they agree to pay to YTC the specified percentage of the total compensation that would have been payable if the PTE had obtained possession of 16-20 Midland Street under a compulsory purchase order, assuming that the remaining term of the lease was 10 years at the date of possession and with a proviso for maximum compensation.
16.	In October 1992 the PTE made the South Yorkshire Passenger Transport Executive (Barnsley Interchange) Compulsory Purchase Order No. 2 1992 under section 10(3) of the Transport Act 1968 for the purposes of integrating the bus stations and railway station into a single site under unified operational control, redeveloping the YTC Bus Station, closing access from Kendray Street and providing new access from Eldon Street and providing a new two-storey concourse building.  This compulsory purchase order provided for the acquisition of the South Bus Station (plot 1), the YTC offices and canteen building (plot 2) and 2 and 4 Midland Street (plots 3 and 4).  YTC objected to the making of the order.  Following a public local inquiry in March and April 1993 the order was confirmed on 4 November 1994.  YTC unsuccessfully challenged the confirmation of the order in the High Court (30 January 1996) and Court of Appeal (22 January 1997).  
17.	Notice to treat was served on 14 April 1997 and notices of entry on 20 October 1998 and 2 December 1999.  The PTE took possession of the South Bus Station (plot 1) on 6 December 1998 and the YTC office and canteen building (plot 2) on 23 July 1999.  These are the agreed dates of valuation for these properties.  Possession has not yet been taken of 2 and 4 Midland Street (plots 3 and 4).  The date of valuation for these properties is therefore the last day of the hearing, 22 July 2002 (Washington Development Corporation v Bamlings (Washington) Limited (1984) 52 P&CR 267).  On 9 August 2000 YTC referred the determination of compensation to this Tribunal.
18.	Following acquisition the PTE carried out works to remodel the South Bus Station.  These works are known as the Phase 1 works and are divided into stages 1 and 2.  The works to be carried out to complete the construction of Barnsley Interchange are referred to as the Phase 2 works.  
19.	On 6 December 1998 the PTE took control of the South Bus Station.  YTC continue to operate buses from this bus station.  During either December 1998 (as contended by the PTE) or during January and the beginning of February 1999 (as contended by YTC) the PTE carried out remedial works, to improve the appearance and operation of the bus station (as contended by the PTE) or with the intention of improving the appearance and operation of the bus station (as contended by YTC).  These works were carried out at night.  Between January 1999 (or the beginning of February, as contended by YTC) and August 1999 no further works were undertaken and there were only limited changes in stand allocation.  These works are the Phase 1 stage 1 works and included: general tidying up, painting, removal of the queuing pens, installation of new seating and provision of passenger information.  
20.	The works described as Phase 1 stage 2 were carried out between September 1999 and June 2000.  These works involved the reallocation of stands and it is agreed that the first six new stands became operational on 11 February 2000.  These works were as follows:-
(i)	6 - 20 September 1999 - removal of the 18 YTC stands and their replacement with six temporary stands (A1-A6) adjoining the existing canopy and passenger waiting area (double parking at each stand).  Buses still entered the bus station from Kendray Street with an exit to Eldon Street.
(ii)	20 September 1999 to 11 February 2000 - groundworks carried out (including excavation of shallow coal seams and contaminated land) and five new stands constructed (A6-A10) adjoining the railway station.  Area fenced off during the works.  Buses continued to use temporary stands A1-A6.  When the new stands were completed buses relocated to these stands.  Kendray Street entrance closed; buses entered from Eldon Street and turned round in the bus station.  
(iii)	11 February to 29 April 2000 - this was the most intensive period of works and included the construction of new stands (A1-A5), the refurbishment of the existing canopy (including enclosure with glass and provision of seating).  Pedestrian access to stands A5-A10 from Kendray Street and Eldon Street.  On 29 April 2000 services were allocated to stands A1-A10.  
(iv)	May and June 2000 - minor finishing works.
21.	Following completion of the Phase 1 works the position is as follows.  There is now unified operational control by the PTE, new signs and additional passenger information and a new travel information centre (10 Midland Street).  The predominant user of the South Bus Station is still YTC.  There are now 10 stands, with side loading at 9 stands and one stand for alighting only.  There are seven layover bays in the centre.  The former vehicular entrance from Kendray Street has been closed and all buses enter and leave from the light controlled junction at Regent Street and Eldon Street.  Buses set down their passengers at stand A10, close to the entrance to the railway station, and then drive to a pick-up stand and leave the bus station using a turning circle close to the now closed Kendray Street entrance.  The canopy has been refurbished with new signs, information boards and revised queuing arrangements, now serving stands A2-A5.  Stands A1 and A2 are glass-walled covered shelters close to the exit to Eldon Street and there are similar shelters for stands A6-A10 on the eastern side of the bus station adjoining the railway station.  There are now temporary toilets in this area.  Three marked pedestrian ways link Midland Street and the adjoining covered waiting area to the stands on the east side.  YTC continue to occupy 2 and 4 Midland Street and now occupy on lease 16-20 Midland Street to replace the accommodation lost due to the demolition of their previous offices, canteen, etc (plot 2).  It is agreed that at least 50% of all passengers have increased walking distances due to the Phase 1 works.  
22.	On 9 January 1992 Barnsley Metropolitan Borough Council granted conditional planning permission for the “erection of concourse and South Bus Station”.  On 13 December 2001 the PTE and Barnsley Metropolitan Borough Council received funding approval from the Government Office for Yorkshire and The Humber to provide a single integrated interchange on the site of the existing bus and railway stations.  These future works are referred to in this decision as Phase 2.  These works will require the demolition of 2-40 Midland Street and the closure and redevelopment of the South Bus Station.  The parties have agreed that the impact of the Phase 2 works upon the public and bus operators will be at least equal in magnitude to the impact of Phase 1.
23.	The Phase 2 works (the Barnsley Interchange) will provide the following: 24 drive in and reverse out stands accessed by passengers from a central enclosed concourse and climate controlled waiting area built across the North and South Bus Stations with support accommodation at the junction of Regent Street and Eldon Street and escalators to an enclosed bridge link with the railway station; separation of passengers and buses with vehicle activated doors between bus and stand; raised kerbs for level boarding; seating at all stands; electronic information systems; improved retail and passenger facilities; a car park with 90-100 spaces; a new link road to avoid the Jumble Lane level crossing.  Access to the Interchange will be further to the north along Eldon Street (entrance and exit).  A project manager for Phase 2 was appointed in March 2002.  It is anticipated that construction will start in 2003 and take two years.  It is likely that the new link road will be built in two stages, to maintain access from Eldon Street or Kendray Street to the East Bus Station.  Additional temporary stands will be built on the East Bus Station or on an alternative site.  Then the North and South Bus Stations will be progressively demolished and the new structures built.  On completion the PTE will work with bus operators to promote the new Interchange.  
24.	YTC is the dominant operator in the Barnsley area; a significant (not a dominant) operator in the Doncaster and Rotherham areas; and a minor operator in the Huddersfield area.  
25.	In November and December 1999 industrial action was proposed or taken by YTC staff as follows: 19 November, proposed but subsequently cancelled; 27 November, taken, skeleton service operated; 3 and 10 December, taken, no services; 17 December, proposed, subsequently cancelled.  
26.	The scheme underlying the acquisition is the construction of the Barnsley Interchange, including the Phase 1 and Phase 2 works.  As stated in the inspector’s report dated 20 October 1993 into the compulsory purchase order and in the confirmation letter dated 4 November 1994, the acquisition of the South Bus Station under the compulsory purchase order would enable the PTE to:-
(i)	construct the main concourse building for the Interchange; 
(ii)	lay out new vehicular and pedestrian accesses to Eldon Street; 
(iii)	close the existing vehicular access from Kendray Street;
(iv)	redevelop bus facilities in the South Bus Station to modern standards uniform with the Interchange as a whole;
(v)	achieve unified operational control over the Interchange to ensure efficient and safe operation in the public interest.
27.	On 23 July 1992 conditional planning permission was granted to YTC for the “improvement of passenger facilities” including new shelters and toilets and operational traffic flow, at the South Bus Station.  This permission was not implemented.  
ISSUES
28.	By the close of the hearing the following items of compensation had been agreed:-
Temporary payments to staff (also referred to as temporary loss of profits)	
£2,319	
Cost of moving	£7,990	
Cost of additional mileage	£43,068	
Loss of layover bays and additional mileage	£28,964	
Professional fees	£13,935	
YTC costs	   £14,500	
	£110,776	
		
29.	The following heads of claim are still in issue:-
	YTC	PTE	
Value of land	£1,860,000	£671,873	
Burden of additional rent (total)	£500,500
or
£610,500	Nil

Nil	
YP in calculation of burden of additional rent 	
11	
3.24	
Loss of revenue	£5,961,518	Nil	
Cost of advertising	£45,000	Nil	
			
30.	I now deal with each of the disputed heads of claim.  
VALUE OF LAND
YTC’s case
31.	Mr Nunweek’s valuation is £1,860,000 calculated as follows:-
Annual departures:-		           £	
	YTC 353,756 @ 40p		£141,502	
	Other operators 18,876 @ 40p		7,550	
	YTC coaches 785 @ £3.50		2,747	
         Other operator’s coaches		250	
Rental value of plots 2,3 & 4		  27,500	
Gross income		£179,549	
Less: annual costs:-			
	Rates	£22,372		
	Gas	7,776		
	Electricity	4,749		
	Wages	15,000	   £49,897	
	Net income	£129,652	
	YP perp @ 7%	      14.29	
		£1,852,727	
	say	£1,860,000
	
32.	I refer to this valuation as an income and expenditure valuation.  Mr Nunweek said that no comparable evidence of bus stations sold on an existing use basis has been found.  He has therefore assessed what a purchaser would have paid for the South Bus Station by reference to the capitalised net annual return.  This is underpinned by development value, which Mr Nunweek assessed at £812,000.  An investor would bear in mind the fall-back value for redevelopment should the investment falter.  In the absence of direct comparables as to development value in Barnsley, Mr Nunweek prepared a residual valuation having regard to bus station comparables sold for redevelopment in Scunthorpe, Huddersfield and Lincoln.  Development might have been for retail use in the absence of acquisition.  
33.	The PTE  have taken over the property and the existing business of running the bus station.  The existing use value is to a purchaser who is letting off portions of the bus station to operators who would be responsible for their own repairs and running costs.  Only part-time supervision would be required.  The purchasers may or may not require the offices, canteen and shops.  The property is an investment and must be viewed as part of the investment market as a whole.  Although bus stations generally do not come onto the market, there is a ready demand from operators nationwide.  The value for existing use is readily ascertainable.  There is a general market for bus stations as investments.  
34.	Mr Nunweek’s valuation assumes that for the foreseeable future the existing use only will be applicable.  It also assumes that the claimants would give vacant possession.  The purchaser would then be able to let the vacant bus station to the claimants or to other operators.  The amount which the purchaser could recoup is based on the claimants’ own operating profits.  At least three possible purchasers can be identified: the claimants, the PTE and a local competitor eg Headlight.  Other potential entrepreneurs or investors would have been bidders.  They may not necessarily be bus operators. 
35.	In Mr Nunweek’s valuation the figures for the departures, coach departure charges and annual costs have been provided by Mr Adamson.  The departures at 6 December 1998 are taken from the timetable operated by YTC and Barnsley and District using the South Bus Station (353,756).  Other operators also use the South Bus Station (18,876 departures a year).  YTC has used the bus station for many years as a departure point for tours, excursions, etc.  Other coach operators would provide income by way of parking charges.  The estimated charges in respect of rates, gas and electricity have been taken from the appropriate invoices.  The owner may operate the bus station or he may let it, with the tenant responsible for outgoings.  The owner would pass on the cost of repairs to the operator, perhaps by an increase in the 40p departure charge.  This was the rate used by the PTE for other bus stations in South Yorkshire and is not believed to be in dispute.  This charge is for the use of the bus station.  YTC charged for other company departures at 38p or 45p.  The valuation assumes that an investor operating the bus station on a commercial basis would charge 40p per departure to all operators.  The coach departure charges and parking revenue are not in dispute.  The PTE levied coach charges at £3.50 per departure.  
36.	Mr Nunweek considered the yields on equities, shares and property and said that an investor would require a yield of between 4% and 10%.  4% would be a prime retail yield, 10% would be a speculative yield.  7% is a realistic figure.  The bus station has proved to be profitable; Mr Nunweek saw it as a good, if not prime, investment and certainly not a speculative investment.
37.	It is incorrect to value the reference land on a depreciated replacement cost (DRC) basis (Mr Hartley’s approach).  The parties agree that open market value is to be assessed under rule (2) of section 5 of the Land Compensation Act 1961.  Market value under this rule does not include the definition of open market value in the RICS Red Book, which is solely for guidance.  Notwithstanding the lack of comparables there is a market for bus stations and it is possible to value the reference land for its existing use within the Land Compensation Act and the guidance in the Red Book.  It is wrong to revert to DRC, which is subject to many assumptions.  It is contrary to the rules of natural justice to use a DRC valuation.  If Mr Nunweek had prepared such a valuation it would have been £745,000, using a site value of £215.000 per acre and 50% depreciation.  
38.	Mr Purchas QC said that it is not in dispute that the value of the land taken is to be found under rule (2) of section 5 of the 1961 Act and not rule (5).  The approach set out in the RICS Red Book is not incorporated in rule (2).  The use of DRC is inappropriate having regard to the statutory framework, the guidance in the Red Book and the practicalities of its application.  The approach underlying DRC does not accord with the requirements of rule (2) in that it makes no allowance for the value of the property as a bus station.  Mr Hartley has valued the land on the basis of potential use as a car park.  DRC is essentially value to the occupier and not to a purchaser.  Mr Hartley has used DRC due to the absence of comparables.  This is the wrong approach.  The absence of comparables does not mean that there is no market, justifying the DRC method of valuation.  In the light of the unchallenged evidence as to a market for the South Bus Station for its existing use, the DRC approach should be rejected as being demonstrably inappropriate.  The decision in Shevlin v Trafford Park Development Corporation [1998] 08 EG 161, relied upon by Mr Holgate to support Mr Hartley’s use of the Red Book in compensation valuations, related to the loss on forced sale of stock and not the value of land.  
39.	The property must be valued as a bus station under rule (2).  This is Mr Nunweek’s approach, a capitalised annual return.  There are three reasons for the adoption of this approach.  First, Mr Nunweek has identified a market for the South Bus Station as a bus station and then assessed what the market would pay.  The potential market would have included bus operators, the PTE, speculators and investors.  YTC would have bid for the property, as confirmed by Mr Carter.  Second, having identified the market, Mr Nunweek has adopted a sensible and robust methodology to find out what the market would have paid, having regard to income and the yield required.  Third, the majority of Mr Nunweek’s figures are matters of fact.  
40.	The factors relevant to value include: purchase for occupation or investment; location, condition and nearby facilities; the policies underpinning bus operation in 1998; alternatives to bus use and the level of dependence; long-term prospects for redevelopment; and the economic state of Barnsley.  
41.	In Mr Nunweek’s valuation much has been agreed, e.g. the 40p departure charge and the rental value of the offices, etc, at £27,500 per annum.  Disagreements still exist as to cost of repairs and supervision, the division of the net income between entrepreneur and property and the yield.  Mr Nunweek’s yield of 7% projects the factors set out above.  Mr Hartley’s comparables for yield are all retail premises (mainly secondary).  It is illogical to conclude that the South Bus Station is significantly worse than secondary retail premises.
42.	As to the possible purchasers of the bus station, it would be an error of law to exclude the PTE due to the scheme rule.  The PTE would have wished to acquire the South Bus Station in its existing condition in order to gain overall control.  Mr Purchas referred to Batchelor v Kent County Council (1990) 59 P&CR 357.  
PTE’s case
43.	Mr Hartley’s valuation is £671,873 calculated as follows:-
Plot 1
Land value:-
     Unrestricted 1.019 ac @ £215,000
     Subject to rights of way
                         0.211 ac @ £215,000 @ 80%

Development of bus station:-

     Costs incurred by PTE
     Less: abnormal costs
   
    Add: funding 7.5% for 2 mos
 
    Depreciation:-

    Remaining life, 20%

£219,085

           36,292

£1,097,493
         148,254
£949,239
           11,865
£961,104

               0.20	

£255,377

£192,221

£447,598	
Plot 2
   Rental value
   YP perp @ 15%	
£7,500 pa
           7.69__

£57,675	
Plots 3 & 4
   Rental value
   YP perp @ 12%	
   £20,000 pa
        8.33___	

     £166,600

     £671,873	

This is a DRC valuation for the South Bus Station (plot 1) and an investment valuation for plots 2, 3 and 4.  Mr Hartley also prepared a development appraisal producing a much lower value of £310,507.  
44.	Mr Hartley said that the open market value under section 5(2) of the 1961 Act must be ascertained.  The statutory definition accords with the IVSC definition (see the RICS Red Book PS 4.1.1 and the definition in PS 4.2.1(1)).  In this reference it is necessary to estimate open market value and, because disturbance is claimed, this must be for the existing use.  The concept of existing use value is net current replacement cost.  No evidence has been found of bus stations sold for the existing use.  Mr Hartley concluded therefore that the South Bus Station must be treated as a specialised property for which there is no general market.  It falls to be valued on the basis of DRC.  Plots 2, 3 and 4 can be valued on an investment basis.
45.	Mr Hartley referred to the definition of DRC in the Red Book (PS 4.8.1 and 4.8.3).  He said that he considered adopting a rule (5) equivalent reinstatement valuation but concluded that this would not be appropriate because reinstatement elsewhere is not intended. 
46.	DRC comprises the value of the land for existing use, or a notional replacement site in the same locality, plus the gross replacement cost of buildings and site works reduced to allow for age, condition, economic or functional obsolescence.  Mr Hartley prepared his DRC valuation as follows. The value of the land is taken to be the value of the reference land or a notional replacement site with planning permission for development for a use or range of uses prevailing in the locality.  Mr Hartley considered uses and values for retail, leisure, offices, residential and education.  He concluded that lack of significant recent development in the town centre suggests that few forms of development are viable (certainly not on a speculative basis) without grant aid.  The highest current use value is probably parking. Having regard to comparables at Old Mill Lane and the West Gate car park (£210,000 per acre), Mr Hartley valued the site of the South Bus Station at £215,000 per acre with a 20% reduction for the part  subject to rights of way.  For the canopy and site works (referred to as the cost of developing the bus station) Mr Hartley took the actual cost to the PTE of redeveloping plot 1 as part of the Interchange (£1,9700,493) less abnormal costs relating to contamination and the removal of coal (£148,254), giving a net cost of £949,239 to which he added finance for two months at 7.5%.  Only 20% of the life of the works remained, giving a total value for plot 1 of £447,598.
47.	 Mr Hartley valued plots 2, 3 and 4 on an investment basis, taking the agreed rental value of £27,500 per annum (£7,500 for plot 2 and £20,000 for plots 3 and 4) capitalised at 15% for plot 2 and 12% for plots 3 and 4.  In support of his yields he referred to the sales of the Alhambra Centre (9.2%), 9 Market Hill (9.24%), 1-5 Midland Street and 31-33 Eldon Arcade (14.28%) and 8-40 Midland Street (9.13%, 11.5% and 13%).  
48.	Mr Hartley said that the basis of valuation used by Mr Nunweek is inappropriate for a bus station.  He has valued the property as an operational entity having regard to trading potential, a basis of valuation used for properties sold as fully operational business units.  Mr Hartley’s valuation on Mr Nunweek’s basis is £529,000.  He accepted the departure charges totalling £152,000 and the deductions for rates, gas and electricity but also deducted £30,000 for staff costs and £15,205 for repairs.  He treated his reduced net income as a divisible amount (not rent) and apportioned 50% to rent (£36,000).  He added the agreed rental value of plots, 2, 3 and 4 and capitalised the total annual value of £63,000 at a yield of 12%.  
49.	Mr Holgate QC referred to the changes in Mr Nunweek’s valuation during the proceedings.  It was not until April 2001 that the present method of valuation appeared.  He urged caution in accepting a valuation which has changed so much. The value is affected by the poor quality of the bus station (with little investment between 1974 and 1998 and the need for improvement and better facilities), the decline in bus patronage in Barnsley and South Yorkshire, the economic decline of Barnsley and the low value for redevelopment.  
50.	Mr Nunweek suggested four potential bidders for the reference land; an investor, YTC, the PTE and another bus company.  As an investment the property had few attractions: it would be sold as an empty bus station with the investor collecting revenues from the operators.  Mr Nunweek admitted that he had never heard of a bus station being bought as an investment.  As to a purchase by the PTE, the issue is whether in the no scheme world the PTE would have been interested in buying the South Bus Station in its existing condition.  There is no reason to think that the PTE would have wanted to buy this property unless it was for the purpose of their full interchange scheme.  Although Mr Nunweek suggested that other bus companies would have been interested he was not aware of any requirement for, or interest in, bus stations from operators.  There is no evidence to support possible interest by Headlight and the Pride of the Road Company.  There is no evidence of freehold transfers or leases of bus stations for existing use.  Transactions involving these properties all relate to redevelopment.
51.	It is common ground that the agreed rental value of plots 2, 3 and 4 should be capitalised but the yield should be for a property let to bus operators.  There is no justification for assuming a single yield for plots 1-4.  There is no market evidence to support a yield as low as 7%.  
52.	As to the basis of valuation of plot 1, YTC have argued that the DRC method cannot be used because rule (5) does not apply.  Rule (5) applies where two requirements are met: no general demand or market and reinstatement.  In the present case there is no intention to reinstate and therefore rule (5) is inapplicable in any event.  It does not follow that, because there is no market evidence to enable a valuation of plot 1 as a bus station, then the DRC method cannot be used to determine value under rule (2).  The Red Book may be used if it is consistent with the statutory compensation code (see e.g. Shevlin v Trafford Park Development Corporation).  The DRC method provides an estimate of open market value where no market evidence is available.  It equates to the fundamental requirement of the compensation code that the claimant should be paid the value of the land to him (see e.g. Horn v Sunderland Corporation [1941] 2 KB 26).  The Red Book distinguishes between specialised and non-specialised properties.  The South Bus Station falls within the category of specialised properties for which DRC is the appropriate method of valuation.  It is not appropriate to value the property as a fully equipped operational entity on the basis of trading potential.
53.	Mr Holgate said that Mr Nunweek accepted that there is no evidence that his method of valuation is used in practice to value bus stations and that it is not supported by the Red Book.  His 40p departure charge represents in total over 80% of the gross income.  Departure charges imply that the freeholder is in possession and is responsible for repairs, maintenance, energy costs, insurance, rates and staffing.  The bus operators would not provide station staff.  The payment of departure charges gives no security of tenure.  These charges are not equivalent to rent.  It follows that the owner of the bus station does not have a contract with the bus operators entitling him to a legally enforceable income, factors which affect risk and yield.  Mr Nunweek’s deductions for costs are wholly inadequate.  
54.	As to yield, a number of factors should be taken into account including the decline in bus passengers, demographic characteristics, competition, the physical condition of the bus station, comparison with other investments and liquidity of capital.  There is no logic or evidence to support retail development value as a fall-back or support for bus station value.  Mr Nunweek has not given consideration to property yields in Barnsley, whereas Mr Hartley has and his 15% and 12% yields are well-supported.  Mr Nunweek’s figure of 7% is divorced from reality.  
55.	The value of the reference land was £671,873 whether assessed by reference to DRC or as a capitalised net annual return or by both methods.  
Decision
56.	Mr Nunweek’s valuation is £1,860,000 using an income and expenditure method; Mr Hartley’s figure is £671,873 using a DRC valuation for the South Bus Station (plot 1) and an investment valuation for the former YTC office and canteen building (plot 2) and 2 and 4 Midland Street (plots 3 and 4).  The valuation dates are 6 December 1998 for the bus station, 23 July 1999 for the office and canteen building and 22 July 2002 for 2 and 4 Midland Street.  Neither valuer has made any distinction in his valuation for different dates.
57.	I consider first the relevant statutory provisions, rules (2) and (5) of section 5 of the Land Compensation Act 1961.  Rule (2) defines the value of the land:-
“The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise:”
Rule (5) is, in effect, an exception to rule (2) to be applied where the two conditions in the rule are satisfied:-
“Where land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the Land Tribunal is satisfied that reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement:”
It is common ground that compensation for the land taken is to be assessed under rule (2), open market value.
58.	This case is unusual in that different methods of valuation have been used to arrive at open market value.  There are three issues.  First, are the methods of valuation used by Mr Nunweek and Mr Hartley respectively consistent with the assessment of open market value under rule (2)?  Second, which method is likely to produce the more accurate value?  Third, what is the value using the preferred method of valuation?
59.	I look first at the methods of valuation and their relationship to open market value under rule (2).  It has not been suggested by the PTE that Mr Nunweek’s income and expenditure valuation is inconsistent with rule (2).  I think that is right.  This method of valuation, although not likely to be as accurate as the use of comparable transactions, is a method for finding value by an indirect route.  It is, however, contended on behalf of YTC that Mr Hartley’s DRC method of valuation is inconsistent with rule (2) and should not be used.  It is based on valuation guidance in the RICS Appraisal and Valuation Manual (the Red Book) and it is to that guidance that I now turn.
60.	The application of the practice statements in the Red Book is set out in general terms in PS1.1.1:-
“Subject to the substantial exceptions in PS1.3 below, these Practice Statements apply to the provision by Valuers of appraisals, valuations, revaluations, valuation reviews and calculations of worth in respect of property in all countries for all purposes, save that the Valuer may depart from them to the extent indicated in PS1.2 below, and to comply with any statutory or regulatory requirements which apply in the particular case.”
The exceptions in PS1.3 include the assessment of compensation.  PS1.2 refers to property outside the UK and/or valuations provided in accordance with European or International standards.
61.	Mr Holgate referred to my decision in Shevlin v Trafford Park Development Corporation to support his submission that the Red Book may be used in the Tribunal provided it is consistent with the statutory compensation code.  In Shevlin the relevant issue concerned the use of “value to the business” in para 4.13.2(a) of the Red Book as the basis of valuation when calculating loss on the forced sale of plant and machinery on the extinguishment of a business.  It was not concerned with land value.  I said (at 164):-
“I do not accept that this approach is fundamentally wrong and invalidates his valuation.  The use of the Red Book is mandatory for some purposes, mainly valuations which are to be relied upon by third parties and optional for other purposes.  It is not mandatory for:
(a)	valuations in anticipation of evidence …. in connection with legal …. proceedings and those of tribunals… for the settlement of property-related disputes; …

(d)	valuations for … assessment of compensation.

	PS1.3

I can see no reason why the Red Book should not be used for an optional purpose provided the practice and guidance in it are consistent with that purpose.”
I found that “value to the business” as defined in para 4.13.2 (a) of the Red Book is consistent with value to the owner for disturbance compensation purposes.  I could see no objection therefore to its use as guidance to the assessment of value to the owner.  I do not now depart from that view.  The important question is, however, whether the assessment of land value using the DRC method of valuation in the Red Book is consistent with the assessment of market value under section 5 rule (2) of the 1961 Act?
62.	The parts of the Red Book relied upon by Mr Hartley are as follows.  Open market value is defined in PS 4.2.1(4).  This definition includes assumptions which have not found their way into market value under rule (2) as explained in case law (e.g. the assumption in the Red Book that the state of the market, level of values and other circumstances were, on any earlier assumed date of exchange of contracts, the same as on the date of valuation).  One Red Book assumption is inconsistent with market value under the compensation code, namely “that no account is taken of any additional bid by a prospective purchaser with a special interest” (see e.g. Inland Revenue Commissioners v Clay [1914] 3 KB 466 (now restored by section 70 and Schedule 15 para 1 to the Planning and Compensation Act 1991) and Wards Construction (Medway) Limited v Barclays Bank plc [1994] RVR 1999).  Mr Hartley then referred to the definition of existing use value in PS 4.3.1 as the basis of valuation in this reference due to the claim for disturbance compensation.  Mr Hartley said that the concept of existing use value is net current replacement cost, and for properties for which there is no market evidence (specialised properties) as in this reference, then the South Bus Station falls to be valued on the basis of DRC.  PS 4.8.3 states:-
	“The Depreciated Replacement Cost (DRC) basis of valuation is used for the valuation of specialised properties.  It is a method using net current replacement costs to arrive at the value to the undertaking in occupation of the property as existing at the evaluation date, where it is not practicable to ascertain Existing Use Value.”
DRC is defined in PS 4.8.1(1) as:-
	“The aggregate amount of the value of the land for the existing use or a notional replacement site in the same locality, and the gross replacement cost of the buildings and other site works, from which appropriate deductions may then be made to allow for the age, condition, economic or functional obsolescence, environmental and other relevant factors; all of these might result in the existing property being worth less to the undertaking in occupation than would a new replacement.”
63.	Mr Hartley said that he considered adopting a rule (5) equivalent reinstatement basis of valuation but concluded that this would not be appropriate, as reinstatement in some other place is not intended.  In answer to a question from me, Mr Hartley agreed that an equivalent reinstatement valuation under rule (5) is essentially the same as a DRC valuation.  
64.	Mr Holgate submitted that the DRC method of valuation equates to the fundamental requirement of the compensation code that the claimant should be paid the value of the land to him (Horn v Sunderland Corporation).  I disagree.  While it is true that a dispossessed owner must be compensated to the full extent of his loss, the measure of compensation for the value of the land taken is now open market value (compared to value to the owner under the Lands Clauses Act 1845) and other loss in excess of that measure must form part of disturbance or other compensation under rule (6).  In short, the principle of equivalence in relation to land value under rule (2) is met by the payment of open market value.  In PS 4.8.3 the reference to “the value to the undertaking in occupation of the property” seems to me to refer to the value to the owner and not value in the open market.  In my judgment the DRC method of valuation in the Red Book is inconsistent with the assessment of market value under rule (2) of section 5 of the 1961 Act for two reasons.  
65.	First, it is essentially the same as an equivalent reinstatement valuation under rule (5).  The parties agree that rule (5) does not apply to the assessment of compensation in this reference.  Rules (2) and (5) are, in my view, mutually exclusive, different measures of compensation for land taken, rule (5) being an exception to rule (2) where the conditions in the rule apply.  If rule (5) does not apply it must follow, in my view, that an equivalent reinstatement or DRC valuation cannot be used to find market value under rule (2).  Although the position before 1919 was flexible and equivalent reinstatement was used for a range of properties, the law became more rigid with the introduction of the present rule (5) as section 2(5) of the Acquisition of Land (Assessment of Compensation) Act 1919, leading to the current position that the application of the rule (5) basis of valuation is restricted by the conditions in the rule.
66.	Second, the DRC method is based on net current replacement cost (see PS 4.8.3) and open market value for existing use (PS 4.3.1) which is developed from the definition of open market value (PS 4.2.1(4)).  Open market value under the Red Book does not correspond with open market value under rule (2) (see in particular the exclusion of special purchaser value) and the DRC method as explained in PS 4.8.3 appears to produce “the value to the undertaking in occupation” (i.e. value to the owner) and not open market value.
67.	For these reasons I find that the DRC method of valuation is inconsistent with the assessment of open market value under rule (2) of section 5 of the 1961 Act.  I would add that as a general rule I think it unlikely that the Red Book has any part to play in the valuation of land acquired on compulsory purchase.  The definition of open market value in the Red Book is not the same as open market value in rule (2) as explained by the courts and in this Tribunal.  I would urge valuers engaged in the assessment of compensation to look first at the statutory compensation provisions and the substantial body of case law and only to have recourse to the Red Book to fill any gaps in compensation law and practice (as in Shevlin).  Even then great caution should be exercised when applying the Red Book to compensation, a subject which it is not intended to cover.
68.	I turn now to the second question, which method of valuation is likely to be the most reliable in assessing the open market value of the reference land?  Comparable transactions are clearly the most direct and best guides to the value of a property.  Mr Nunweek’s income and expenditure method and Mr Hartley’s DRC method are both indirect methods of valuation.  The position is analogous to rating, where Mr Nunweek’s method is called the profits or receipts and expenditure basis and Mr Hartley’s method is known as the contractor’s test, sometimes referred to as a method of last resort (see Dawkins (VO) v Royal Leamington Spa Corporation (1961) 8 RRC 241 at 251).
69.	In my judgment, in a comparison between the income and expenditure and DRC methods, the former is likely to produce the more reliable value for the following reasons.  It is inherently reliable and soundly based.  It is an attempt to find from the net income derivable from the property a sum which would be available as rent and then to capitalise that figure by reference to the yield required.  I do not agree with Mr Hartley that it produces the value of an operational entity having regard to trading potential.  It is an attempt to find rent from income and expenditure and then to capitalise that rent.  The DRC method, on the other hand, is inherently unreliable.  The land value element is found by reference to values for other uses, in this case a car park some distance from the reference land.  The value of the works calculated by Mr Hartley suffers from two disadvantages.  First, it is a truism of valuation that cost does not equal value and therefore the value element for the works is likely to be wrong however accurately calculated.  Second, Mr Hartley has taken the cost of the PTE works less abnormal costs (Phase 1) as the basis for his value of the works, works which do not correspond exactly with the layout of the South Bus Station at the time of acquisition.  The correct method, in my view, would have been to establish the cost of replacing the South Bus Station – the canopy and the waiting area, concrete apron, etc, - and then to reduce it for age, condition, obsolescence, etc.  Mr Hartley conceded that perhaps this was the approach he should have used.  
70.	My conclusion is therefore that I should reject Mr Hartley’s DRC valuation for two reasons: it is inconsistent with the assessment of market value under section 5(2) of the 1961 Act and it is inherently unreliable.  The income and expenditure method, although not ideal and greatly inferior to the use of comparables, is likely to produce a more reliable value.  I do not, however, reject Mr Hartley’s criticisms of the detail in Mr Nunweek’s valuation, which I now consider under my third question, what is the value using an income and expenditure valuation?
71.	I look first at the likely purchaser of the South Bus Station on an assumed hypothetical sale.  Various buyers were suggested: an investor, a speculator, YTC or another bus company, the PTE.  I exclude from consideration at the outset an investor and a speculator.  A vacant bus station, which is the assumption of the hypothetical sale, would not have been of interest to an investor.  Mr Nunweek said that he has never known a bus station to be sold as an investment.  That is also my experience.  I also exclude a speculator.  I cannot see any reason why a speculator would have wished to buy the South Bus Station and I received no evidence on this matter.  Mr Carter, in his evidence for YTC, said that they would have been willing to buy at Mr Nunweek’s valuation and had the resources to do so.  He knew of a number of bus companies (including Headlight) with the resources and wish to buy the South Bus Station.  I accept that the PTE are not necessarily excluded as possible purchasers, although any effect on value of the scheme underlying the acquisition (the Barnsley Interchange) is to be disregarded.  
72.	In my judgment, in the hypothetical sale on compulsory purchase of the South Bus Station, the office and canteen building and 2-4 Midland Street, the purchaser would have been a bus company wishing to operate from the bus station and ancillary accommodation in the no scheme world.
73.	I look now at Mr Nunweek’s valuation and Mr Hartley’s criticisms of it.  Mr Nunweek’s figures for departure charges totalling £152,049 are not in issue.  The deductions for rates (£22,372), gas (£7,776) and electricity (£4,749), totalling £34,897 are agreed.  
74.	Mr Nunweek has included in his valuation wages of £15,000, a figure given by Mr Adamson as representing the annual wages of an administrator to supervise the operation of the bus station.  Mr Hartley criticised this figure as being too low.  He referred to the evidence of Mr Wicks which was that, after taking over the bus station in December 1998, the PTE provided significant additional cleaning staff and customer services officers, 200 hours a week at an average cost per hour of £5, giving a total of £52,000 per annum.  Mr Hartley suggested an increase in the cost of supervision, etc, to £30,000.  I agree with his criticism.  In my view, £15,000 for the cost of cleaning, supervision and the provision of customer services is much too low.  I believe that Mr Nunweek has based this figure on the assumption that the purchaser would let out the bus station to operators who would be responsible for their own running costs, repairs, maintenance, staffing, etc, and that only part-time supervision would be required.  This appears to be on the assumption of an investment purchase, which I have excluded.  A bus operator purchaser would have to bear the full cost of operating the bus station.  I accept Mr Hartley’s deduction for staff costs of £30,000.  
75.	Mr Nunweek has made no deduction for maintenance and repairs for the reason given in the previous paragraph.  Mr Hartley makes an allowance of 10% of the gross income (£15,205) for repairs, maintenance and insurance.  I agree that, the purchaser being a bus operator and not an investor letting on full repairing and insuring terms, a deduction should be made for annual repairs, maintenance and insurance.  I have little evidence and will have to take a robust approach to this deduction.  I think that Mr Hartley’s figure is too high (10% of income can only be a very approximate rule of thumb) and I reduce it to £10,000.
76.	The total deductions are £74,897, producing a net figure of £77,152.  Mr Nunweek treats the whole of this amount as rent; Mr Hartley treats it as a divisible balance to be split equally between a return to the entrepreneur and the amount available for property costs (e.g. rent or interest on capital), that is to say what the operator can afford to pay in rent.  On Mr Hartley’s figures the amount for rent or interest on capital is £36,000 to show a return to the investor and reflect risk.  Mr Hartley doubted whether this amount would be sufficient to cover risk alone and provide a realistic return.  Mr Nunweek saw risk as included in the capitalisation yield.  He could not see the logic of splitting the net income.
77.	I agree with the approach adopted by Mr Hartley, which is analogous to that used in rating using the profits basis, where a tenant’s share is deducted from the net income (or divisible balance) to find the rent which the tenant could afford to pay.  In this case we do not have a tenant but a bus operator calculating what he could afford to pay in notional rent as a step in the calculation of his purchase price for the South Bus Station and ancillary properties.  In my judgment he would not treat the whole of the notional net income as rent in his bid for the land.  He would require interest on the capital he puts up for the business, an allowance for risk and a return or profit for his time and trouble in running the bus station.  In short, he would want his tenant’s or, in this case, more accurately his operator’s share.  Even if the purchaser is an investor, as envisaged by Mr Nunweek, the bus operator would not pay the whole of his net income as rent to the owner-investor.  
78.	This tenant’s or operator’s share is usually calculated in one of four different ways:  as interest on tenant’s capital, as a percentage of the gross receipts, as a proportion of the divisible balance, as a spot figure.  The only evidence I have for this share relates to a proportion of the divisible balance (or net income): Mr Nunweek, nil; Mr Hartley, 50%.  In the absence of other evidence, I agree with Mr Hartley.  In my experience, the divisible balance is invariably apportioned equally between landlord and tenant to find the rent.  This equal division produces a notional rent of £38,576 for the bus station (plot 1) which I note is 25.4% of the gross income and therefore not an excessive figure where a tenant’s share is frequently around 30% to one third of the gross income.  This sum added to the agreed rental value of £27,500 for plots 2, 3 and 4 gives a rent of £66,076 for the whole of the YTC land- holding.
79.	The final step in the valuation is the capitalisation yield, Mr Nunweek 7%, Mr Hartley 12%.  Mr Nunweek’s figure of 7% is unsupported except by a general reference to equities (2.15% for very safe shares), shares (at least 3.5%, 10% very speculative) and property (4% good prime retail, 10% speculative).  Mr Nunweek said that an investor purchasing the YTC property would want at least 4% but certainly no more than 10%, 7% would be a realistic yield underpinned by redevelopment value.  I reject Mr Nunweek’s yield of 7% as unrealistic and unsupported.  No purchaser of the South Bus Station and the associated buildings, a vacant property in need of refurbishment and improvement, whether investor, bus operator or the PTE, would have bid for the property using a yield as low as 7%.  In his redevelopment appraisal, producing a fall-back value of £812,000, Mr Nunweek used a yield of 8% for a new retail building which, in my view, is inconsistent with a lower yield of 7% for an old and vacant bus station.  
80.	I am left with Mr Hartley’s yield of 12%, supported by the sale of retail investments in Barnsley.  No direct comparison can, of course, be made between a let retail investment and a vacant bus station, but this is the only evidence I have on yield.  I find it of some assistance, certainly to show that Mr Nunweek’s 7% yield is much too low.  
81.	The first comparable referred to by Mr Hartley is the Alhambra Centre, a modern two-storey enclosed shopping centre close to the best retail location in Barnsley.  It was sold as part of a portfolio in the spring of 1997 for £17.3 million reflecting an initial yield of 9.2%.  I have inspected this property and found it to be a well-located attractive shopping centre.  Clearly the yield for the South Bus Station must be well above 9.2%.  The next comparable is 9 Market Hill, Barnsley.  This is situated in the retail area but in a secondary position.  It was sold in the summer of 1997 for £140,000, an initial yield of 9.25%.  Very close to the bus station at 1-5 Midland Street and 31-33 Eldon Street a block of retail property in a poor retail location was sold by auction in May 1998 for £350,000, an initial yield of 14.28%.  Finally, 8-40 Midland Street, immediately adjoining the bus station and needed for the Barnsley Interchange, was purchased by the PTE in October 1998 at a price of £2.6 million, reflecting an initial yield of 9.13%, a yield of 11.5% when three vacant units are let and a reversionary yield on rental value of 13%.  
82.	I have inspected these properties.  None are ideal for valuing a vacant bus station but they are the only evidence I have as to yield.  They indicate to me that Mr Nunweek’s yield of 7% is clearly much too low but that Mr Hartley’s yield of 12% in his re-working of Mr Nunweek’s valuation is about right.  In the absence of other and better yield evidence I accept this figure.  Applied to the total rental value of £66,076 per annum this produces a capital value of £550,413.  My valuation is as follows:-
Gross income		£152,049	
                          Less                              			
Rates	£22,372		
Electricity	4,749		
Gas	7,776		
Wages	30,000		
Repairs, maintenance and insurance	10,000	£74,897	
          Net income (divisible amount)		£77,152	
Less: operator’s share, 50%		38,576	
         Available for rent (plot1)		£38,576	
Add:  rental value (plots 2, 3 and 4)		£27,500	
		£66,076	
         YP perp @ 12%		              8.33	

Open market value of plots 1 – 4		
£550,413	

83.	I have now arrived at an unusual situation.  I have rejected Mr Hartley’s DRC method of valuation as inappropriate and have based my determination of value on Mr Nunweek’s income and expenditure valuation having regard to Mr Hartley’s criticisms which I have generally accepted.  My determination of £550,413 is close to Mr Hartley’s re-working of Mr Nunweek’s valuation (£529,000).  I am not surprised that an income and expenditure valuation has produced a figure below a DRC valuation.  In my experience, a DRC or equivalent reinstatement valuation, being largely based on cost which is often higher than value, nearly always produces a higher value than other methods and is one of the reasons for doubting its accuracy.  Mr Holgate in his closing submissions asked me to determine that the value of plots 1 - 4 is £671,873, whether by reference to DRC or as a capitalised net annual return or by both methods.  Accordingly, I determine that the value of the land acquired is £671,873, which I round up to £672,000. 
BURDEN OF ADDITIONAL RENT

YTC’S case

84.	This claim relates to the rent payable by YTC for 16-20 Midland Street.  It was originally £500,500 calculated as follows:-
Rent of  16-20 Midland Street	£63,000	
Rental value of 2 Midland Street	£10,000
£73,000	
Less: rental value of plots 2, 3 and 4
Additional rent	£27,500
£45,500	
                                                 YP	                       11
£500,500	

On the penultimate day of the hearing Mr Purchas sought leave to increase this figure to £610,500 calculated as follows:-
		
Rent of 16-20 Midland Street
Less: rental value of plot 2
Additional rent
                                                  YP	£63,000
                £7,500
£55,500
                       11

£610,500	

I refused leave for this late amendment but the increased figure was referred to by counsel in their closing submissions.  

85.	This item of claim changed during the proceedings.  Furthermore, the explanations for the different claims in the evidence were sometimes lacking in clarity and consistency.  In Mr Nunweek’s first expert report the claim was £59,072 additional rent capitalised at 11 YP.  The explanation given was that YTC had agreed to rent 16-20 and 24 Midland Street from the PTE to replace the accommodation lost in plots 2, 3 and 4.  The total  rent was £86,572 compared to the existing rental value of £27,500, an additional rent burden of £59,072 for which YTC obtained no added advantage.  The new premises were larger and better.  16-20 and 24 Midland Street were the only properties available to rent to mitigate YTC’s costs.  
86.	On 7 January 2002 the claim was revised to £500,500 (as above) and the evidence given related to this figure.  (I should add that when an attempt was made to revise the claim again to £610,500 there was no supporting evidence; the revised claim rested on submissions from counsel).  Mr Nunweek accepted that the decision in the Bibby case was applicable. If YTC had not taken the Midland Street accommodation they would have had to move their operations to their depot at Upper Sheffield Road or find other premises in the town centre.  If neither alternative had been taken costs in excess of the Midland Street costs would have been incurred and YTC would not have mitigated their loss.  The new premises are larger and better.  YTC have increased their operating costs but have received no benefit.  These losses are a result of the compulsory purchase order.
87.	Later YTC decided not to take 24 Midland Street but to remain in 2 Midland Street (plot 3) and vacate no. 4 (plot 4).  This would mean a total rental of £73,000 for 2 and 16-20 Midland Street less the rental value of plots 2, 3 and 4 (£27,500) giving an additional rent burden of £45,500 per annum.  The YP should be 11 (see Mr Adamson’s evidence).  Although 2-5 YP is the normal multiplier for the valuation of goodwill sold in the market, this is not the basis for disturbance to a continuing business.
88.	Mr Nunweek said that he expected the break clause in the tenancy of 16-20 Midland Street to be exercised at about the fourth year of the term.  It is unlikely that the rent of any alternative accommodation provided by the  PTE would be below the current rent for 16-20 Midland Street and therefore the rental loss will continue.  Mr Nunweek however accepted that the alternative premises may not be larger than required and could be rejected by YTC if too large.  
89.	Mr Adamson said that replacement facilities had to be secured due to the loss of the office and canteen building.  These had to be adjacent to the bus station.  A review of available properties was made by Mr Nunweek.  The PTE offered 16-20 Midland Street.  YTC decided this was their only option to mitigate their losses.  During negotiations the PTE were informed that the units offered were larger than required but no alternatives were available.  YTC have no use for, or benefit from, the surplus space.  It would not be realistic to split the occupation of the premises.  
90.	The acquisition of the South Bus Station has not extinguished the business of YTC but it has damaged the profitability.  The multiplier for capitalising losses should not be based on the value of a business but should reflect the underlying profitability so that appropriate reinstatement can be made to restore that profitability to its previous level.  The performance measure known as Return on Capital Employed (ROCE) is often used as the key financial ratio.  It shows how much profit has been made in relation to capital invested.  This is the appropriate measure of profitability to use in determining the multiplier for loss of profits in the assessment of compensation.  The ROCE for YTC for 1997, 1998 and 1999 was 9.1%, 9.6% and 9.2% respectively, an average of 9.3%.  The multiplier for loss of profits should therefore be 11.  In cross examination Mr Adamson conceded that, if the burden of additional rent continued from 1999 to 2003, then capitalisation at 11 YP would not be justified.  If however the excess rental payments continued in new accommodation then the loss would continue.
91.	Mr Adamson said that YTC originally assumed that the Travel Shop would move into 24 Midland Street but now that funding has been obtained for the Interchange, with consequent demolition of no. 24, it was agreed that YTC would remain in 2 Midland Street.  I note that this position might have changed by the close of the hearing, although this was not clarified.
92.	Mr Carter said that the uses in plot 2 were relocated in 16-20 Midland Street.  These are larger premises but YTC do not use the surplus accommodation on the first floor and derive no benefit from it.  It is not possible to split the occupation of the property thereby obtaining some benefit from the surplus space.  
93.	Mr Purchas submitted that this claim is an exception to the normal rule in J Bibby and Sons Ltd v Merseyside County Council (1979) 39 P&CR 53, because YTC are paying increased rent for excess space that is of no use to them.  The comparison is between plot 2 and 16-20 Midland Street where much of the first floor is surplus to the requirements of YTC.  This is a loss directly flowing from the acquisition of plot 2.  
94.	There is now no basis for claiming as an additional cost the rent of 2 Midland Street (£10,450) because there is no agreement to take a lease of this property.  The PTE can terminate YTC’s occupation under their existing powers.  Mr Hartley’s approach to this claim is false and involves double-counting.
95.	With regard to the duration of this loss, the use of ROCE is a helpful indicator of the strength of the business.  It provides powerful support as to the likely future operation of YTC for the purpose of assessing continuing loss.  This should be seen in the context of the agreement for lease of 16-20 Midland Street.  The alternative accommodation to be provided by the PTE on termination must relate to 16-20 Midland Street and not to plot 2.  The PTE would seek a market rent for the new accommodation and there is no basis for assuming that the level of rent would not continue to be incurred by YTC notwithstanding their second dislocation and the redevelopment.
96.	Mr Nunweek’s approach is consistent with the decision of the Lands Tribunal in Rought (W) Ltd v West Suffolk County Council (1955) 4 P&CR 347, where the Tribunal applied 7 YP for continuing loss.  
97.	The above submissions are based on the evidence before the Tribunal.  It would be wrong for a deduction of £10,000 per annum for 2 Midland Street to be made where none is now justified.  YTC will have to continue incurring the costs of those or other premises.  The duty on the Tribunal is to determine the appropriate figure for disturbance on all the evidence before it.
PTE’s  case
98.	Mr Hartley said that YTC are not entitled to any compensation in respect of increased running costs under the decision in Bibby.  YTC will continue to occupy 2 Midland Street as tenants of the PTE.  16-20 Midland Street provides more extensive accommodation of higher standards than plot 2.  In consequence YTC pay a higher rent and rates but enjoy considerable savings in that they no longer pay rates in respect of plots 1, 2 and 4 and will not bear any of the running costs of, or have any financial investment in, the bus station.  Before the acquisition of the bus station and plots 2, 3 and 4 YTC incurred an annual cost of £126,211; the position after acquisition is a cost of £107,397, a saving of £18,814.  Consequently, YTC now enjoy better facilities at a reduced cost (including all outgoings).  
99.	There is no loss and therefore no necessity to apply a multiplier.  In any event, 11 YP is too high because 9% is too low a yield for loss of profit.  It is not permissible to claim for the period after the Phase 2 works.  The YP should be restricted to 3½ to 4 years following which period possession of 16-20 Midland Street will be taken to enable Phase 2 to proceed.  YTC are the main operators in Barnsley and it is likely that Phase 2 will include a purpose-built building to YTC’s specific requirements and for which YTC will pay rent and obtain value for money.  If a YP is required the appropriate yield should be 10-12.5% for a maximum of 3½ to 4 years (3.1 YP, 4 years at 11%).  Even adopting the claimant’s yield of 9%, the YP would only be 3.24.  
100.	Mr Holgate referred to Bibby, Service Welding Limited v Tyne & Wear County Council  (1979) 38 P&CR 352 and Director of Buildings and Lands v Shun Fung Ironworks Limited [1995] 2 AC 111 at 125-6, and said that the questions in this reference are whether the claimants have shown that the additional rent is a loss caused by the compulsory acquisition and whether the presumption of value for money has been displaced?
101.	Mr Holgate referred to Mr Nunweek’s evidence and Mr Hartley’s reply and made the following submissions.  The quality of the claimants’ evidence on this point is no better than that which was rejected in Bibby.  This decision should be followed.  The burden of proof is on the claimants; the authorities show that cogent evidence is required to rebut the resumption of value for money.  YTC have asserted that the use of Upper Sheffield Road would have resulted in higher costs but no figures have been introduced to prove this point.  YTC have produced no evidence of attempts to find alternative premises to 16-20 Midland Street.  It is agreed that the accommodation in 16-20 Midland Street is better than the previous bus station premises: this is consistent with the view that the new premises represent value for money.  The onus is on YTC to demonstrate:(a) the areas within the new floor space which are claimed to be of no use or benefit; and/or (b) that an improvement in the quality of the occupied areas (being an improvement which is shown to make a significant contribution to the difference in value between the old and new premises) is of no benefit to YTC.  Neither point has been addressed by the claimants.  Mr Nunweek’s calculations assume that the whole of the difference in rental value is attributable to an explanation which rebuts the value for money presumption, without dealing with factors (a) and (b) above.  No authority can be found after Bibby and Service Welding where the Tribunal has accepted a claim for additional rent on such inadequate material.
102.	The evidence given by Mr Adamson, that YTC decided not to relocate to 24 Midland Street but to remain in 2 Midland Street, has not been withdrawn or contradicted.  It has been agreed between the parties that YTC have relocated from plot 2 to 16-20 Midland Street.  Entry has not been taken of plots 3 and 4 but this will occur during Phase 2, when the PTE will also require possession of 16-20 Midland Street.  The PTE can enter 2 Midland Street on 14 days notice and can then charge rent.  This would be consistent with the claim.  In the meantime, YTC can remain in occupation of 2 and 4 Midland Street and do not need to take a tenancy of no. 24 to relocate from no. 2.  Mr Nunweek’s claim before the purported amendment at the close of the hearing is consistent with the above position.  The Scott Schedule lodged close to the end of the hearing gives no explanation as to why plots 3 and 4 should now be treated differently from the evidence led by YTC last January.  No evidential basis has been put forward for the change of approach.
103.	Mr Hartley has explained that it is necessary to consider any additional rent burden in the context of all related costs.  Costs savings must be taken into account.  Mr Hartley’s calculations show that there has been no loss.  Staff costs and interests on capital should be considered.  Before and after the acquisition of plots 1 and 2 the South Bus Station remained the main hub of YTC’s operations: it now operates services through the bus station to the same extent as when it was the freeholder.  The use of plot 2 was an integral part of YTC’s occupation of the bus station.  No evidence has been given to suggest that 2 and 4 Midland Street were occupied for purposes unrelated to plots 1 and 2.  Accordingly, the benefits of not having to pay for the costs of ownership and running costs should be taken into account.
104.	Mr Holgate referred to the agreement for lease and lease of 16-20 Midland Street, particularly the break, relocation and compensation provisions.  The excess rent (if any) will cease on determination; there is no reason to assume that any new premises provided for YTC in the Interchange will be larger than required.  On this basis a multiplier of 11 is not justified.  No more than four years additional rent could be justified.  This head of claim should be wholly rejected.  If it is accepted the multiplier should be 3.24.  
Decision
105.	First I set out briefly the facts underlying this head of claim.  The South Bus Station acquired by the PTE comprises four plots.  Plot 1 is the bus station.  The PTE took possession on 6 December 1998 but YTC have continued to operate buses from this property.  Plot 2 was a canteen and office building with a floor area of 2,349 sq ft.  The agreed rental value is £7,500 per annum.  The PTE took possession on 23 July 1999.  The building has now been demolished.  YTC have relocated the uses previously carried on in plot 2 at 16-20 Midland Street which they have taken under an agreement for lease and lease for 10 years from 16 July 1999 at an initial rent of £63,000 per annum with provisions for determination, relocation and compensation.  The floor area is 4,141 sq ft.  The accommodation is of better quality than plot 2.  At the time of the hearing and my inspection YTC still occupied plots 3 and 4 (2 and 4 Midland Street).  Notices of entry have been served but possession had not been taken by the PTE by the close of the hearing and the date of my inspection.  The agreed rental value of these two properties is £20,000 per annum.  Negotiations were in progress for YTC to take a tenancy of 2 Midland Street but had not been concluded by the close of the hearing.  2 Midland Street has a floor area of 545 sq ft and 4 Midland Street, 531 sq ft.
106.	I turn now to the legal principles underlying this head of claim.  In Director of Buildings and Lands v Shun Fung Ironworks Limited Lord Nicholls reviewed the statutory provisions and said (at 125 C):-
“The purpose of these provisions, in Hong Kong and England, is to provide fair compensation for a claimant whose land has been compulsorily taken from him.  This is sometimes described as the principle of equivalence.  No allowance is to be made because the resumption or acquisition was compulsory; and land is to be valued at the price it might be expected to realise if sold by a willing seller, not an unwilling seller.  But subject of these qualifications, a claimant is entitled to be compensated fairly and fully for his loss.  Conversely, and built into the concept of fair compensation, is the corollary that a claimant is not entitled to receive more than fair compensation: a person is entitled to compensation for losses fairly attributable to the taking of his land, but not to any greater amount.  It is ultimately by this touchstone, with its two facets, that all claims for compensation succeed or fail.”

He then referred to compensation for business disturbance and said (at 126A):-

“The application of the general principle of fair and adequate compensation bristles with problems.  As useful guidelines there are three conditions which must be satisfied.  First, it goes without saying that a prerequisite to an award of compensation is that there must be a causal connection between the resumption or acquisition and the loss in question…. 

The adverse consequences to a claimant whose land is taken may extend outwards and onwards a very long way, but fairness does not require that the acquiring authority shall be responsible ad infinitum.  There is a need to distinguish between adverse consequences which trigger a claim for compensation and those which do not.  A similar problem exists with claims for damages in other fields.  The law describes losses which are irrecoverable for this reason as too remote….

The familiar and perennial difficulty lies in attempting to formulate clear practical guidance on the criteria by which remoteness is to be judged in the infinitely different sets of circumstances which arise.  The overriding principle of fairness is comprehensive, but it suffers from the drawback of being imprecise, even vague, in practical terms.  The tools used by lawyers are concepts of chains of causation and intervening events and the like.  Reasonably foreseeable, not unlikely, probable, natural are among the descriptions which may or have been used in particular contexts.  Even the much maligned epithet ‘direct’ may still have its uses as a limiting factor in some situations.  

…. Suffice to say as a matter of general principle, to qualify for compensation the loss must not be too remote.  That is the second condition.

Fairness requires that claims for compensation should satisfy a further condition in all cases.  The law expects those who claim compensation to behave reasonably. …. Expressed in other words, losses or expenditure occurred unreasonably cannot sensibly be said to be caused by, or be the consequence of, or be due to the resumption.”

107.	In Service Welding Limited v Tyne & Wear County Council the claimants sold their factory to the acquiring authority on terms of a notional compulsory purchase.  They were unable to purchase another factory ready for occupation but found a site and had a new factory built into which they moved their business.  Compensation for the land acquired and for many items of disturbance was agreed.  In issue was a sum equal to the cost of financing the capital laid out on the new site and factory (bank interest and charges).  The Lands Tribunal awarded compensation for some of the cost of purchasing the new site and for erecting and equipping the factory.  On appeal two of the questions for the decision of the Court of Appeal were whether there is in law a presumption that the claimants had received value for money in respect of the bank interest and charges and whether that presumption was rebuttable or irrebuttable?   Bridge LJ said (at 357):-
“What the authorities (to which I need not refer in detail) very clearly establish, however, is that when an occupier, whether residential or business, does, in consequence of disturbance, rehouse himself in alternative accommodation, prima facie he is not entitled to recover, by way of compensation for disturbance or otherwise, any part of the purchase price that he pays for the alternative accommodation to which he removes, whether that accommodation is better or worse than, or equivalent to, the property from which he is being evicted.  The reason for that is that there is a presumption in law – albeit a rebuttable presumption – that the purchase price paid for the new premises is something for which the claimant has received value for money.  If he has made a good bargain and acquired premises that have a value in excess of what he has paid for them, that is not something for which the acquiring authority is entitled to any credit.  If the claimant has made a bad bargain and has paid a great deal more for the new premises to which he is moving than they are really worth, that is not something for which the acquiring authority can properly be charged.”

Templeman LJ considered the issue as a matter of double counting (at 359):-

“Under rule (2) of section 5 of the Land Compensation Act 1961, the claimants became entitled to the amount that the Newcastle factory, if sold in the open market by a willing seller, might have been expected to realise.  Of course, they cannot have it both ways.  If they are compensated by being paid the value of the Newcastle factory, they cannot be compensated in addition by being paid part of the price of the new factory.  What they are entitled to, in addition to the value of the land under rule (2), is the assessment of compensation for disturbance under rule (6), the compensation, as I understand it, being the costs and losses caused by their having to get out of the Newcastle factory and get into the new factory.”

108.	In J Bibby & Sons Limited v Merseyside County Council the claimants’ offices were compulsorily acquired.  They took a lease of the whole of another building with five floors and moved in, eventually sub-letting the accommodation not required.  In their old offices Bibby had 47,000 sq ft; two floors of the new building were 51,000 sq ft.  Bibby claimed compensation in respect of increased operating costs at the new offices, including rent (the losses on sub-letting in early years and profit in later years being taken into account).  The Lands Tribunal found that the move to the new offices was reasonable but only if two floors of the building had been taken; for Bibby to take a lease of the whole building was not a reasonable, direct and natural consequence of the acquisition.  The new offices were a substantial asset, the claimants were in a better position than they had been previously and therefore no compensation was payable for increased operating costs.  The claimants appealed; the Court of Appeal dismissed the appeal.
109.	Brandon LJ said that the first question on the case stated, whether the tribunal was right to disallow altogether the claim for increased operating costs, involved a consideration of three points.  He then said (at 59-60):-
“The first point is whether, as a matter of law, it can ever be right to award compensation to a claimant in respect of increased operating costs.  The second question is: if so, in what circumstances would it be right to do so?  The third question is: do those circumstances exist in the present case?”

110.	As to the first question it was conceded by the acquiring authority that there could be cases in which it would be right in principle to award compensation for increased operating costs.  This concession was rightly made.  Brandon LJ then said (at 60):-
“I pass, therefore, to the second question, viz in what circumstances would it be right to award compensation in respect of such items?  It seems to me that it would be right to award compensation in respect of such items if it was shown, first, that the claimant, as a result of the compulsory purchase, had had no alternative but to incur the increased operating costs concerned, and, secondly, that he had had no benefit as a result of the extra operating costs that would have made the occurring of them worthwhile.”
111.	He then dealt with the third question, do these circumstances exist in the present case?  He accepted that the incurring of the extra costs by Bibby was a consequence of the need to move and that they had had no alternative but to incur whatever extra operating costs would have been involved in the leasing and occupation of two floors of the building.  He then said (at 60-61):-
“That, however, is not enough.  They also need a finding that they had had no worthwhile benefit from the extra operating costs so incurred.  
It seems to me that it is at that point, on the findings of the tribunal, that Bibby run into difficulty.  I read earlier the finding of fact on page 10 of the decision.  It seems to me that what the member was there saying was this: ‘Certainly Bibby have had to pay out more in respect of various operating costs in dispute….. but as a result of laying out that expenditure they are in a better position than they were before: they have had the benefit of that expenditure, and, therefore, they have suffered no loss.’
…. The essential thing for Bibby to show is, first of all, that they have suffered a loss, and then, if they can show that, that the loss was consequential on the compulsory acquisition.  If they do not succeed in the first stage, however, they never get to the second stage.  It seems to me that there is here a finding of fact against them made by the tribunal that is charged with determining the facts in cases of this kind that they did not, in the upshot, suffer any loss in respect of those items.  They paid them out; they got value for them; they have, therefore, suffered no loss.”
112.	Those are the principles of law governing this head of claim.  I propose to follow the approach used by Brandon LJ in Bibby, namely to consider whether YTC had no alternative but to incur the increased rent for 16-20 Midland Street and then to consider whether they receive no benefit as a result of the extra expenditure on rent.
113.	As to the first test, I can accept that YTC acted reasonably to mitigate their loss by relocating their office, canteen, messrooms, etc, previously in plot 2, to 16-20 Midland Street by taking a lease of that property from the PTE.  I accept that there is a causal connection between the acquisition of, and dispossession from, plot 2 and the payment of an increased rent for 16-20 Midland Street.  That rent is the direct and reasonable consequence of the claimants’ dispossession from plot 2 and (subject to the point I make below regarding the period after the likely exercise of the break clause) not too remote.  
114.	I can therefore move to the second test.  It must then be shown by YTC that they receive no benefit as a result of the extra rent.  This is the value for money test.  The burden of proof is on the claimants who must rebut the presumption that they receive value for money for this rental expenditure.  It is, I think, helpful to refer again to the statement of Bridge LJ in Service Welding (at 357):-
“… when an occupier … in consequence of disturbance, rehouses himself in alternative accommodation, prima facie he is not entitled to recover, by way of compensation for disturbance or otherwise, any part of the purchase price that he pays for the alternative accommodation to which he removes, whether that accommodation is better or worse than, or equivalent to, the property from which he is being evicted.”
In this current reference the word “rent” may be substituted for “purchase price”.  
115.	It appears to be YTC’s case (as amended on the penultimate day of the hearing) that they had no alternative but to take 16-20 Midland Street, larger premises than plot 2 (4,141 sq ft compared to 2,349 sq ft) at a rent of £63,000 compared to the rental value of plot 2 of £7,500.  The whole or part of the first floor of 16-20 is surplus to their needs.  They should therefore recover compensation equal to the capitalised excess rent (£610,500).
116.	I am not persuaded by this argument; in particular, I am not persuaded that YTC have been able to rebut the presumption of value for money.  The position which I found on my inspection was that the whole of the ground floor of 16-20 Midland Street was used extensively by YTC and at least part of the first floor.  No part of this floor can be said to be unused in the sense of physical separation with clear evidence of lack of use.  I accept that this floor cannot be sub-let.  There are on the first floor partitioned offices and a conference room, clearly labelled as to use by YTC, extensive toilet accommodation, lockers and a fully fitted kitchen and store used in conjunction with the ground floor canteen.  
117.	It is relevant to note the provisions in the agreement for lease of 16-20 Midland Street regarding works which have been carried out by the PTE, clearly to adapt the premises to the proposed uses of YTC.  This was not referred to at the hearing but the agreement for lease was put in evidence.  Clause 4.1 of the agreement provides that the PTE “shall at its own cost procure that the Landlord’s works are carried out and completed.”  Landlord’s works are defined in clause 1.1 as “the fitting out works as detailed in Drawing Nos. 02, 04 and 05”.  A comparison of Drawing 02 (accommodation as existing) and Drawing 04 (accommodation as proposed general arrangement) shows that works were carried out on the first floor, which by their nature were clearly intended to adapt the premises to YTC’s use.  These works included: new and extended toilets, at least four partitioned offices, partitioning of the kitchen and removal of the staircase.  The layout on Drawing 04 (as proposed) is essentially the layout I saw on my inspection.
118.	In my judgment the test of value for money involves the question whether YTC receive in return for the rent payable a tangible and more than transient benefit which is of worth or utility to them.  The matter can be considered in general terms (see Bibby at 63).  The position is as follows.  YTC have taken a lease of larger and better premises, adapted to their use, at the market rent.  YTC claim that part of the accommodation is surplus to their requirements.  The extent of this accommodation has not been identified.  The reason why this accommodation is surplus has not been identified.  The lack of benefit has not been identified.  The whole of the accommodation leased is available for their use and has been adapted for that use.  The burden of proof is on YTC.  They have failed to show that they do not derive a benefit from the leased accommodation commensurate with the increase in rent.  I am not persuaded that the presumption of value for money has been rebutted.  To follow the words of Brandon LJ in Bibby (at 61): YTC pay the rent; they get value for this payment; they therefore suffer no loss.
119.	On the revised claim introduced at the end of the hearing, YTC are paying £55,500 per annum more in rent than the rental value of plot 2 but are occupying, and have the benefit of, accommodation of an annual value equivalent to that excess rent.  They have suffered no loss.  It is not, in my judgment, sufficient merely to show that the new rent is great than the rental value of the old premises.  On the second version of this claim, which prevailed throughout the hearing until the penultimate day (£45,500 excess rent), the claim was wider and included plots 3 and 4.  This version added the rental value of 2 Midland Street (plot 3), still occupied by YTC but with negotiations in progress for it to be let by the PTE to them, to the rent of 16-20 Midland Street (to produce the total rent payable) and then deducted the agreed rental value of plots 2, 3 and 4 to find the total additional rent.  Again, there is no evidence to show that the payment of this additional rent does not confer a benefit on YTC.  For 2 Midland Street it was intended that YTC would pay £10,000 for a property worth £10,000 and similarly for 16-20 Midland Street, £63,000 per annum is paid for a property worth that amount.  YTC pay the rent; they receive value for money in the form of property to the value of these payments; they suffer no loss.  
120.	This conclusion is reinforced by the question of double compensation.  It is a fundamental principle of compensation that the claimant shall be paid neither less nor more than his loss (see Horn at 49 and Shun Fung at 125 D).  This is the principle of equivalence on fair compensation.  It follows that an item of loss cannot be compensated for twice under different heads of claim.  YTC will receive compensation for the market value of plot 2.  To replace that accommodation they have taken on lease alternative premises at 16-20 Midland Street.  As Templeman LJ observed in Service Welding (at 359):-
“Under rule (2) of section 5 of the Land Compensation Act 1961, the claimants became entitled to the amount that the Newcastle factory, if sold in the open market by a willing seller, might have been expected to realise.  Of course, they cannot have it both ways.  If they are compensated by being paid the value of the Newcastle factory, they cannot be compensated in addition by being paid part of the price of the new factory.”
The last sentence becomes in the context of this reference: if YTC are compensated by being paid the value of plot 2 (and plots 3 and 4), they cannot be compensated in addition by being paid part of the rent of 16-20 Midland Street (and the whole of the rent of plot 3).  They can only get compensation for part of that rent if there has been additional loss by the payment of rent without benefit, i.e. no value for money.  I have found that this is not the position.  To modify the statement of principle by Bridge LJ in the same case (at 357): when an occupier rehouses himself by taking a lease of alternative premises, prima facie he is not entitled to recover by way of compensation  any part of the rent of the alternative premises, whether better or worse or equivalent, due to the presumption that the rent payable is something for which he has received value for money.  He can only recover compensation for the rent if he can prove that he does not receive value for money, proof which is lacking on the part of YTC in this case.

121.	The claim fails. I award no compensation for additional rent.  It rests on the false premiss that because YTC are paying more rent in the new property than the rental value of the old property, then compensation is payable for the additional rent.  I have found that YTC receive value for money for the increased rent.  They have been unable to rebut the presumption of value for money.  This is a finding of fact (see Bibby at 64).  I am not required to deal with the amount of the claim nor give an alternative award under rule 50(4) of the Lands Tribunal Rules 1996.  I would however add that it seems to me that, if the absence of value for money could be proved in respect of part of the rent of 16-20 Midland Street, the correct calculation of loss would be the capitalisation of that part of the rent for the period to the likely termination of the tenancy under the break clause.  Any loss beyond that date would be wholly speculative and too remote.  A multiplier of 11 for a lease with a maximum term of 10 years, but subject to a landlords’ option to break after three years, is clearly wrong.  It cannot realistically be assumed that YTC would suffer the same rental loss in any new premises. 
LOSS OF REVENUE
122.	I now consider the largest and most detailed head of claim, loss of revenue.  This claim is £5,961,518 representing loss for the period 1999 to 2005 due, it is said by YTC, to the way in which the South Bus Station has been operated by the PTE since entry in December 1998 and the effect of the Phase 1 works and the anticipated effect of the Phase 2 redevelopment.  The PTE contend that YTC have not proved their loss.  If there has been a loss of revenue this is due to other causes unconnected with the acquisition.  No compensation is payable for this head of claim.  
123.	The evidence relating to loss of revenue falls into two categories: evidence as to the physical effect of the change of control and the Phase 1 and Phase 2 works on the bus operations of YTC, and evidence as to the financial effect of the change of control and works. 
124.	The acquisition by the PTE has produced an unusual situation.  The South Bus Station was the hub of YTC’s operations in the Barnsley area and was owned and controlled by the company.  Following acquisition, YTC continued to operate from the South Bus Station (and also the North and East Bus Stations) but have lost ownership and control.  Relocation elsewhere was not possible.
YTC’S case
125.	The loss of revenue claim (£5,961,518) is summarised in the evidence of Mr Nunweek as follows:-

Year	Lost revenue

£	Present value
@ 9%	Net loss 
(claim)
£	

1999	
173,387	
1	
173,387	
2000	629,981	1	629,981	
2001	638,410	1	638,410	
2002	654,275	1	654,275	
2003	1,341,067	0.92	1,233,782	
2004	1,374,393	0.84	1,154,490	
2005	748,433	0.77	576,293	
  * 2005 	1,170,000	0.77	           900,000	

£6,729,946		
£5,961,518	

    *  Lost revenue due to half-price fare promotion	

The figures for lost revenue are in the evidence of Mr Buchanan; the 9% deferment rate is the ROCE referred to in the evidence of Mr Adamson in para – above.  Mr Nunweek calculated and applied the deferment factors.  
126.	Evidence as to the physical effect of the change of control and works was given by Mr Buchanan, Mr Carter, Mr Adamson, Mrs Hayes, Mr Millar, Mr Horner and in the witness statements of Messrs Barraclough, Nithsdale, Sylvester, Toplis and Winder.  This evidence is summarised as follows.  
127.	The Phase 1 works had an impact on the operation of YTC’s services from the South Bus Station.  Affected and unaffected services have shown different growth rates.  The works were noisy, dirty and open to public view with only a wire mesh fence between the working areas and the buses.  There was a risk of accidents between buses and contractor’s vehicles and plant.  The exit or entrance to the bus station was occasionally blocked by construction traffic.  Adjoining shops suffered loss of trade.  The effect was to make the South Bus Station less attractive to passengers.  The Phase 1 works required changes to the allocation of departure stands.  This caused confusion to passengers and bus drivers.  There were numerous complaints.  
128.	During and after the Phase 1 works bus services were located in the three bus stations requiring passengers to walk greater distances, particularly across the railway to the East Bus Station.  It is agreed that at least 50% of all passengers had increased walking distances due to the Phase 1 works.  A number of YTC services have been displaced from the South Bus Station to the North and East Stations.  Before the PTE took control of the South Bus Station the YTC operated a few services from the East Station and virtually none from the North Station.  
129.	The facilities in the South Bus Station before acquisition included 16 covered stands (beside the canopy and close to YTC offices and staff) with 12 layover bays.  The canopy had recently been repainted, there was new seating and timetables.  YTC staff were available to assist passengers.  The station was well-used but not overcrowded.  Particularly important were the adequate arrangements for queuing under the canopy (the pens) and the 12 layover bays, compared to only seven after the Phase 1 works.
130.	There is dissatisfaction with the layout and facilities following the Phase 1 works. The new bus stands were inadequate in size and their dispersal away from the canopy are the subject of criticism.  The replacement of the YTC timetables is purely visual and does not improve the quality of information.  The new seating has been described as a perch and is inferior to that which existed before.  The YTC queuing pens have been removed, causing confusion and ill-feeling among passengers as queue discipline breaks down.  Although brighter lighter has been installed by the PTE this has only had an inconsequential effect on revenue.  Lighting is only an issue for security purposes in the evening between 9 and 12 p.m. when few commercial services are running.  The YTC tannoy system has not been replaced and announcements cannot now be made regarding delays and cancellations.  The extra staff claimed to have been introduced by the PTE are from a security firm, not involved in the actual running of buses, and can give no information regarding the operation of services, as was the case when YTC operated the bus station.  Only three stands are under the canopy compared to 16 in the YTC Bus Station.  Passengers now have further to walk.  There is a lack of waiting room in the new bus shelters.  Pedestrians now have to walk across the areas over which buses are driven to reach the furthest departure stands. The punctuality of YTC services deteriorated due to the Phase 1 works and resultant congestion in the East Bus Station. Records show a marked decline in punctuality in September 1999 when the Phase 1 stage 2 works commenced.  Drivers experienced difficulties finding a parking space for logging on and this affected punctuality throughout the day.  Reliability of services is one of the three issues of most concern to passengers, the others being frequency of service and accessibility.  
131.	YTC now have no control over stand allocation and face an increased level of competition on less favourable terms than before.  Mr Crossley accepted that loss of control of the South Bus Station would have caused YTC to suffer some loss of revenue, particularly on route 101.  Corridoring was conceded to have been in place before the change of control.  It is the policy of the PTE to make sure that no advantage is given to any one operator.  Bus operators attach great importance to stand allocation.  The stands in the South Bus Station have a commercial advantage over those in the other bus stations.  There is also an advantage in having the best stand in that station.  Use of the right stand will increase passengers and revenue.  The placing of a competitor’s service on the same route on an adjoining stand can affect revenue, as happened with the Headlight service 101, formerly in the North Bus Station.  When competition occurs it is not the policy of YTC (as the dominant operator) to reduce its fares, but to rely on the quality of its vehicles and services.  In 1998 and 1999 the YTC were at capacity during peak periods.  If there was a loss of passengers at that time, the rest of the day would be affected.  When YTC operated the South Bus Station competitors were only allowed in outside peak periods and would have been charged by YTC.  Between the deregulation of buses in October 1986 and entry by the PTE, 16 other operators had used or were using the South Bus Station by agreement with YTC and often in direct competition.  This is not the position under the control of the PTE which has a duty to treat all operators alike.  The reduction in YTC services at the South Bus Station is not something YTC would have wanted: it is against their commercial interests.
132.	Detailed evidence regarding loss of revenue was given by Mr Buchanan, using data supplied by Mr Adamson.  Mr Buchanan said in cross examination that his opinions rely substantially on information given to him by YTC and on the reasoning put forward by YTC, without investigation by him.  His instructions were to base his evidence on facts given by YTC without probing or investigation. 
133.	The basis of this claim is that: (i) the disruption to YTC services and passengers during the reconstruction of the South Bus Station resulted in loss of revenue; (ii) the losses during the works were not eliminated following the completion of Phase 1; (iii) the Phase 2 works will have at least as great an impact; (iv) following Phase 2 a major promotional campaign will be required to win back lost passengers.  The claim comprises: (i) the actual losses in 1999 and 2000; (ii) a continuation of those losses for the period from the completion of the Phase 1 works to the start of Phase 2 (2003); (iii) a doubling of the loss during Phase 2; (iv) loss due to half-price fares promotion; (v) zero loss after the opening of the Interchanchange.  The calculation of lost revenue is based on a comparison between: (a) all YTC routes which originally operated from the South Bus Station, approximately two thirds of which were forced to operate from other locations (“affected services”); and (b) those YTC routes which originally operated from the North and East Bus Stations (“unaffected services”).  The dataset has been ‘cleaned’ to remove certain routes which were affected by significant changes to frequencies, routes and/or competition. 
134.	The affected services were affected by the Phase 1 works in many ways, e.g. confusion to passengers; noise, dust, etc; reduction in reliability; loss of YTC control over stand allocation.  The effect of the works is found by comparing the changes in revenue for the affected and unaffected services respectively.  YTC know of no reason why there should be a difference other than the impact of the works.  The analysis has been undertaken using periods 1 to 9 and 1 to 12 of a 13 period year.  The more periods included in the analysis the more accurate the comparison.  
135.	Agreed tables of revenue for affected and unaffected services indexed to 1996 (100) show that the growth of unaffected services diverged from, and was greater than, affected services from 1999, e.g. the difference in growth rates between the two groups was 2.4% in 1999 and a further 6.4% in 2000.  The differences represent the lost revenues on affected services.  The claim is on the assumption that, without the Phase 1 works, revenues for the two groups (after cleaning) would have grown at the same rate.  The losses have been calculated by applying the percentage differences to total cleaned revenues on the affected services.  For 2000 the losses are the cumulative effect of the differences in 1999 and 2000.  
136.	In 2001 there were no works.  The difference in growth rate would be expected to reduce to zero.  However, although the difference in growth is reduced, there is still a difference of 3.6% for periods 1 to 9.  There are two reasons for this: the continuing impact of the works and loss of control; data cleaning/compatibility for 2001, i.e. some routes ceased to operate in this year and there are likely to have been changes in competition.
137.	YTC are not claiming for any increase in losses between the Phase 1 and Phase 2 works.  The claim is based on the continuation of the losses in 2000 until the start of Phase 2.  There was no material recovery of revenues between Phase 1 and Phase 2.  For the claim for loss following the completion of Phase 1, Mr Buchanan has assumed no return of passengers.  For periods 5 to 9 in 2000 there was no material change in revenues for both affected and unaffected services.  There was then a significant increase for both groups.  This was due to a fares increase and the September 2000 fuel shortage.  When faced with a change in public transport, passengers can respond in several ways, e.g. travel as before and suffer inconvenience or change their travel patterns by choosing to shop elsewhere, reduce journey frequencies, change their mode of transport, etc. Once passengers are lost it is difficult to bring them back.  The restoration of services to their former level will not be enough.  The losses are therefore continuing and there is little YTC can do about it. 
138.	In addition to losses caused by the Phase 1 works, the new layout of the South Bus Station has many features that make it unattractive to passengers and thereby reduce the future earning potential of YTC, e.g. reduction in the number of the layover bays from 12 to 7, insufficient bus shelters, increased walking distances, etc.  
139.	A claim calculated on the above basis produces the figures set out in the table in paragraph 125 above under the heading “Lost revenue”, totalling £6,729,946 before deferment.  Unfortunately, although Mr Buchanan has given explanations of earlier and now superseded figures of loss, he has not given details of his calculations producing the above figures, introduced during the hearing in his evidence dated 18 March 2002.  
140.	Mr Buchanan’s replies to the criticisms by Mr Crossley of his approach are as follows. The main validation of the assumption that the unaffected services provide a proper comparator in the claim is that revenue growth on affected and unaffected services was broadly the same before 1999 and then diverged.  During the Phase 1 works the two groups increased their revenues by different amounts.  Revenues on the unaffected services have not grown too fast to be used as a comparator.  Revenues have grown on unaffected services but affected revenues grew significantly slower than before, despite fares increases. Unaffected services in Barnsley are a better comparator than all YTC services operated in any location (as suggested by Mr Crossley) for three reasons.  First, YTC is the dominant operator in Barnsley but a minority operator elsewhere.  Second, both affected and unaffected services serve the town centre of Barnsley as their main market and are both affected by the growth or fall of that market.  Third, the affected and unaffected routes in Barnsley have been cleaned.  This has not been done for all YTC or all YTC non-Barnsley services.  
141.	Mr Crossley said that the analysis fails to take account of the fact that whole route revenues are used and not revenues relating solely to journeys to and from the interchange.  Mr Buchanan responded that this criticism is only valid if there are significant differences between specific markets outside Barnsley served by the affected and unaffected services.  All routes operate from the interchange.  Although a proportion of trips did not use the interchange, the majority started or finished there and were affected by the Phase 1 works.  It is the view of YTC that the majority of passengers either board or alight at the interchange.
142.	Mr Buchanan commented on the other factors which Mr Crossley said might have contributed to the differential growth of the affected and unaffected services.  As to competition, Mr Buchanan gave further figures regarding routes 101, 116 and 211.  On the former route, YTC invested in low-floor buses which were expected to generate significant additional revenue.  The revenue growth was lower than expected due to increased competition which resulted from loss of operational control by YTC of the South Bus Station under the Phase 1 works.  If routes 116 and 211 are excluded from the data the loss of revenue calculation is reduced from £5.6 million to £2.1 million (excluding 116 and 211) and £2.8 million (excluding 211).  These calculations are similar to those produced by Mr Crossley.  On route 116 Mr Buchanan could see no evidence of any impact from a change in competition in March 1999.  Service 211 showed a rise in revenue of 29% in December 1999: the change in competition therefore did not have an effect.  There was a change in revenue corresponding to a change in competition but there was also significant growth throughout 2000 unrelated to any change in competition.  The effect was a one-off change, the competing Mainline service operated from the same stand five minutes before the YTC bus and therefore passengers transferred to YTC when the Mainline service was withdrawn.  Changes on routes 211 from competition are not significant and the claim is conservative in many respects.  It would be inappropriate to remove 211 from the data because the change in competition accounted for only a proportion of overall growth on that route.  Mr Buchanan prepared alternative figures showing that a loss of £5.6 million is reduced to £2.8 million without 211 and 3.7 million pounds with an adjusted 211.
143.	As to changes in land use and demographics, Mr Buchanan said that the Strategic Economic Zones were set up in July 2000 and the Integrated Development Plan only approved in July 2001.  These therefore, and other strategic initiatives suggested by Mr Crossley, would have had no effect on the period under consideration.  More generally, it is not realistic to suggest that land use and demographic changes would have had an effect over such a short period.  YTC are unaware of any significant changes to the distribution of their bus passenger market over the period in question.
144.	There was no significant difference between the percentage of services cancelled due to staff shortages and industrial action on the affected and unaffected routes.  Passengers would not have perceived a decrease in reliability due to the small number of cancellations.
145.	As to concessionary fares, the PTE’s scheme operates on the basis that participating operators should be no better or worse off than if they did not participate.  It should have no material effect on the claim.
146.	Mr Crossley has said that the claim fails to take account of the different impacts of the works on the various categories of affected services.  Mr Buchanan said that the impact will vary between groups of affected services but there has proved to be little difference between the various sub-groups of affected services.  The claim does not rely on the different groups of affected services being affected to the same extent.  By increasing the affected group as a single entity the impact of these variations is reduced and the overall picture and calculation of lost revenues is not changed.
147.	A similar response can be made to the criticism that the analysis fails to take account of any differences between the Phase 1 stage 1 and Stage 2 works.  The greater number of periods included in the dataset the less the impact of other extraneous variations on the output.
148.	In cross examination Mr Buchanan confirmed that his calculation of loss is on the assumption that it is entirely due to the works and that any effect on the growth rates of affected and unaffected services due to other factors would be minimal, although he had not identified those effects in his evidence.  He cannot think of any other factors causing loss and YTC have advised him that there are no other reasons for the differences in growth rates after the commencement of the works.  The claim is based on the assumption that all factors are constant in their effect on revenues (up to 2005) and therefore loss of revenue must be caused by the works and the change of control.  
149.	Mr Purchas submitted that there has been a lack of investigation by the PTE as to how YTC operated the South Bus Station.  It was anticipated that a similar form of operation would  continue.  No direct evidence has been given by the PTE regarding the operation of the bus station during the relevant periods.  None of their witnesses was able to give evidence on this critical issue.  For example, allowing the Headlight 101 service to move to the South Bus Station from the North Bus Station allowed it to compete more effectively with YTC’s 101 service.  An increase in competition in the South Bus Station was one of the principles underlying the compulsory purchase.  YTC’s alternative proposals were deemed unacceptable because they would operate the bus station to their commercial advantage.  The PTE as a public body are under an obligation to treat all operators alike whereas YTC were under a duty to operate the bus station to its commercial advantage.  
150.	The key question is: on the balance of probability, is it more likely than not that YTC suffered loss of revenue as a result of the disturbance caused by the PTE’s works?  The answer must be ‘yes’.  Any other conclusion would be surprising in the light of the works and the importance of stand allocation.  It is necessary to take into account the obvious fact that all lost passengers cannot be expected to return on the day after the disturbance ceases.  How is the loss to be calculated?  The tests of causation in Shun Fung should be applied, with a broad approach to include all elements of loss.  It is not necessary to isolate separate losses.  As to competition law and the operation by YTC of its former bus station, there has been no objection to the way in which YTC formerly operated the South Bus Station (no action was taken on a complaint in 1990).  In the absence of the compulsory purchase YTC would have continued to operate in the same manner.  The onus is on the PTE to show that this would not have been allowed to continue to 2005.  
151.	There are many variables in the assessment of loss.  Mr Buchanan’s calculations remove extraneous factors by cleaning the data by taking out certain services.  Losses tend to be underestimated.  The approach of the PTE is to remove as many services as possible.  Disputes remain regarding services 116 and 211.  Cleaning is a matter of judgment.  Considerations to be borne in mind include the maintenance of a wide spread of services.  Until near the end of the hearing both sides agreed that during 1999 and 2000 there was a relative decline in affected services.  Trends should be looked at on a broad basis: a small sample risks distortion.  Services run along busy routes with inevitable interchange of custom.  There was a change in competition with the reduction of intervals on the Headlight 116 service.  Several points arise including the lack of indication in the revenue figures of any detectable change in the broad pattern of revenue associated with that change.  Moreover, significant revenue appears to have been missed for periods 10 and 11 of 1999.  The typical overall pattern of this service is shown by a comparison with route 325.  The case of 211 is a one-off transfer of custom by the withdrawal of the Mainline 211 bus, leaving five minutes before the YTC service from the same platform, at period 12 of 1999.  This resulted in a rise in revenue of 29 %.  
152.	The disproportionate effect of removing the whole of service 211 is seen by comparing the effect of removing service 247 or both services from the agreed data.  The determination of loss should be on broad principles.  Thus, in considering whether some discount should be made for the effect of the withdrawal of the 211 competition the following matters should be taken into consideration.  No allowance has been made for losses on services cleaned from the data.  No account has been taken of the expected increase in revenue there would have been from the introduction of low-floor buses on route 101 in 1999.  During the works there was congestion and disruption to services using the East Bus Station.  No allowance has been made for the benefits to revenue to services using the Dearne Valley from public investment in the area.  Mr Buchanan’s approach is fair and balanced in retaining service 211 in his analysis.  If, however, the Tribunal has reservations, there can be no logical case for discounting the whole of the evidence from this service.  The alternative approach should be that advanced by Mr Buchanan, namely the discounting of the effect of the withdrawal by reducing the whole of the subsequent revenue proportionately.  
153.	Three additional points to be borne in mind are as follows.  First, the use of shorter periods for the purposes of comparison (periods 1-6 and 1-9) is inherently unsound because of different holiday and other factors influencing demand in the short-term.  Second, Mr Crossley referred to unexplained growth between affected and unaffected services in 1997 and 1998 but nothing in the reports had been directed to that consideration and it does not affect the comparison during the period of the works.  It would be unwise to place any weight on this point, first raised by Mr Crossley without prior notice at the end of the hearing.  Third, there is no inconsistency of approach by YTC in the cleaning exercise which could be said to deprive YTC of claimable compensation.
154.	The approach of Mr Crossley was directed to the question whether YTC have proved their loss, not to the assessment of actual loss.  Mr Crossley’s reports were prepared without prior discussion with YTC.  His approach is essentially a scattergun approach.  The absence of any proper prior investigation by Mr Crossley can be seen in the alternative explanations of loss which have been abandoned.  The evidence of Mr Crossley is negative and should be given little weight.  However, it is on the basis of Mr Crossley’s evidence that the PTE invite the Tribunal to conclude that there has been no loss.  Having regard to past and future works and the change of control, this is implausible.  Furthermore, Mr Crossley’s information regarding the effects on bus operations was not provided by bus operators but by others who are not the best source of information.  
155.	Alternative explanations have been put forward as to the loss of revenue.  It is important to keep in mind what is more probable than not.  The allegation that losses can be ascribed to YTC’s own poor performance does not stand up to scrutiny.  The PTE did not question the experience of YTC but sought to rely on recorded complaints.  These were not investigated; the figures are meaningless.  The PTE’s own graph showing the performance of YTC relative to other operators shows that they were equal to or better in terms of punctuality.  Non-operational services were minimal.  An investigation of the complaints shows that many were not complaints at all but reports from the PTE’s own staff concerning information from YTC as to services.  Many were complaints about the PTE’s own staff or about action taken by the PTE, eg. stand allocation.  It is impossible to draw reliable conclusions from this evidence.  It shows that YTC were performing better than other operators but there was then an increased incidence of late running and non-operational buses due to the Phase 1 stage 2 works.
156.	It is now accepted by the PTE that no discounts have been offered.  Mr Crossley put this forward without checking to see whether it was correct.  This should cause the Tribunal to treat Mr Crossley’s evidence with caution.  
157.	Mr Crossley said that only a small proportion of the total revenue will be taken from journeys involving the interchange (whole route revenues).  He formed that view without supporting information.  Later he attempted to support this opinion by passenger surveys but the result confounded his prediction: most journeys involved the bus station.  Mr Crossley accepted that it was necessary to bear in mind how this might affect the affected and unaffected services in different ways but could not assist further.  The use of whole route data cannot reasonably be said either to explain the differential growth of affected and unaffected services or otherwise call into question Mr Buchanan’s approach.  
158.	Vacancies for bus drivers are standard throughout the industry.  Mr Buchanan’s evidence showed that Barnsley depot lies in the middle of the range of cancelled services due to driver shortages.  The differences between depots was very small.  The evidence of Mrs Hayes showed that there was no reason to think that cancellations due to staff shortages fell on any particular services.  
159.	Over the period in question industrial action took place on only three days.  The effect was minimal.  There is no evidence to show that strike action could be a contributory factor to the differential growth between affected and unaffected services.  
160.	YTC’s services were already arranged in accordance with the corridoring principle before the PTE took over the South Bus Station.  
161.	Mr Crossley said that demographic differences between areas served by the two sets of services might offer an explanation for differential growth.  He concluded that no consistent pattern can be observed; a thorough analysis would be a complex task.  He gave an example of a ‘major strategic initiative’ to illustrate his alternative explanation, the employment opportunities at the M1 and Dearne Valley Strategic Economic Zones, but accepted in cross examination that in so far as those affected routes were benefiting from the influence of the SEZ in 1999, that would tend to have off-set lost growth and thereby reduced the amount claimed.
162.	Mr Crossley accepted that concessionnary fares only provide an alternative explanation and the effect can only be small.  The objective of the PTE’s concessionary fares scheme is that operators should be no worse off than if they had charged a commercial fare.  This factor cannot therefore provide any reliable explanation for the differential performance of the affected services.
163.	Disruption due to the YTC scheme was raised as an issue a few days before the start of the hearing.  It is without merit for three reasons.  First, in the absence of the compulsory acquisition the works would have been completed before the relevant period.  Second, the works were minor compared to the PTE’s works.  Third, YTC would have retained control over the works to ensure that there was no material interference with bus operations.  Mr Crossley said that he did not recall Mr Carter’s evidence on this point and had not referred to it when preparing his evidence.  It would have been open to YTC to claim additional loss on the grounds that the works were not carried out due to the compulsory purchase order, and that, had they been completed, profits would have been higher.  No attempt has been made to increase the claim on this ground.
164.	Full information on passenger numbers was provided to the PTE before the hearing.  Information was not available to enable segregation on a route OD basis.  For this reason both parties have prepared their evidence on a revenue basis.  
165.	It is accepted that there was no indication of a recovery in revenue following the completion of Phase 1 in May 2000, up to the September fuel crisis and fares increase.  These later caused distortion of the pattern of revenues.  There is no reason to anticipate any further material recovery in revenues beyond what might have occurred in the first five months period.  It is not surprising that no material recovery has occurred having regard to the continuing adverse effects of the PTE works, including reduced capacity for YTC buses on the South Bus Station, increased competition, the deficiencies of the new layout and the lack of action by the PTE to encourage a return of passengers.  The picture which has emerged is of a difference which is growing and not reducing.  It is suggested that the figures show a constant picture up to the end of 2000 (fares increase).  There is however increased growth on the uncleaned unaffected services in 2001, a matter which has not been investigated by either side.  The best evidence therefore remains the cleaned data for the period following completion of the Phase 1 works, which bears out the evidence of YTC that there was no recovery but a continuing loss.  This is likely to continue until the start of Phase 2.  
166.	When Phase 2 commences the disruption to YTC services will be enormous.  In addition to the effect of the works, all services will be relocated to the narrow East Bus Station on the far side of the railway, remote from the town centre.  Mr Crossley conceded in cross examination that he cannot say there will not be a loss.  It is agreed that the impact of Phase 2 will be at least as great as Phase 1, although it is likely to be much worse.  Thus the double loss approach by Mr Buchanan provides a reasonable basis for assessing the loss from the Phase 2 works which underpin the acquisition proposals.
167.	As to the possibility of departure charges being levied against YTC in the future, the letter dated 28 October 1999 from the PTE to YTC explained that no departure charges are being levied on the South Bus Station during the reconstruction works.  This is however no guarantee that such charges will not be levied in the future.  It cannot be suggested that YTC will be in any more commercially advantageous position in the future than in the absence of the scheme.  Although it is accepted that, following Phase 2 and assuming a promotion, YTC are not able to demonstrate a continuing revenue loss.  
PTE’s case

168.	Mr Hall gave evidence regarding the Phase 1 works.  He said that the Phase 1 stage 1 works were completed by 20 December 1998.  He produced the contract documents including a certificate stating that practical completion was achieved on 13 December 1998.  This related to the whole contract.  Works additional to the contract were completed after Christmas: additional electrical works commenced on 13 January 1999 for three days and works to Kendray Street ramps commenced on 22 January 1999 for four days.  In commenting on the evidence of Mr Hayes, Mr Millar and Mr Horner, Mr Hall refuted in detail the alleged seriousness of the problems said to have arisen during the Phase 1 works.  
169.	Mr McCann gave evidence regarding the operation of the South Bus Station during the Phase 1 works.  He particularly commented on the evidence of Mr Hayes, Mr Miller and Mr Horner and refuted in detail the seriousness of the problems said to have arisen in the use of the bus station by YTC after the change of control and during the works.  
170.	Mr Wicks referred to the white paper on transport, ‘New Deal for Everyone’ (July 1998), which highlighted the importance of transport interchanges; the consultation paper of March 1999, ‘From Workhorse to Thoroughbred’, and the Transport Act 2000, which requires the PTE to produce a bus strategy.  In November 1999 the PTE, bus operators and district councils signed a Countrywide Quality partnership agreement to “develop a high quality public transport agreement for South Yorkshire and accelerate the introduction of Quality Corridors”.  A specific agreement for the A61 to Barnsley town centre was signed in April 2001.  The target for improving bus patronage on Quality Corridors is 5%.  YTC and the PTE are therefore in agreement that developing the bus network, improving passenger facilities and working in partnership are key means of increasing the use of buses.  The current estimate of the potential increase in patronage from the full interchange is 4%.  
171.	The PTE recognised that the construction of a new bus station will have some impact on the operation of services.  Efforts have been made to minimise this disruption.  The loss of revenue claimed reflects changes in revenue caused by underlying trends in bus usage in South Yorkshire and the performance of YTC services in Barnsley.  The works carried out by the PTE are an improvement: the PTE’s involvement in the South Bus Station has not had the long-term negative effect claimed by YTC.  The PTE accept the YTC data as accurate (as facts) but dispute the interpretation.  
172.	Mr Wicks referred to Phase 1 and said that the PTE carried out the works to the South Bus Station with the minimum of impact on services.  These were reallocated at the beginning of the works in September 1999.  The majority of services continued to operate from the same part of the bus station throughout the works.  Any impact would have been seen during the last week of period 9 in 1999 and the first two weeks of period 10.  During these periods YTC might have experienced some minor impact.  In February 2000 services moved from one part of the South Bus Station to another but throughout the works YTC were able to operate all the services they required.  Good information was provided by the PTE and clear routes were provided for passengers.  
173.	Any loss of revenue should be based on changes in revenue during the works.  The background to the use of local bus services in South Yorkshire and the performance of YTC and its depots is necessary to an understanding of the claim.  Mr Wicks produced figures showing that bus patronage in South and West Yorkshire is declining faster than for metropolitan areas generally.  For the South Bus Station he produced several analyses of YTC data and concluded that there is no evidence that the decline in patronage between September 1999 and May 2001 was due to the PTE’s works.  For Phase 1 stage 1 the PTE did nothing to disrupt passenger or bus movements.  Loss of patronage by YTC during this period can therefore be attributed to underlying trends in bus usage in South Yorkshire, reflecting changes in car ownership, modal choice and economic activity.  During the stage 2 works (September 1999 to May 2000) bus departures were altered at the start of the works and remained the same until April 2000.  The works had limited impact on passengers.  Although YTC suffered a loss of patronage, to the extent that this exceeded the underlying trend, the performance of YTC, due to staff shortages and industrial action, were more significant causes of loss than the works.  Their loss has been calculated by comparing expected income with actual income and attributing the difference to the actions of the PTE.  Insufficient account has been taken of underlying trends, concessionary fares, fares resistance and poor performance, all of which had a material impact on revenue.  The redevelopment of the bus station will increase bus patronage in the future.  
174.	Mr Wicks produced further evidence to deal with the detailed criticisms made by YTC regarding the Phase 1 works and the operation of the South Bus Station by the PTE.  His overall conclusion is that the works and the change of control should not have led to any loss of passengers.  
175.	Mr Crossley referred to the four main revisions which Mr Buchanan has made to this claim and commented that he has stuck rigidly to a loss of revenue due to the works and control approach.  He has not investigated whether other factors might have influenced the differential growth in the revenues of affected and unaffected services.  He said that he accepted that the agreed dataset is consistent with Mr Buchanan’s basis, with the exception of services 101, 116 and 211 which have been subject to competition changes and should be excluded.  
176.	Mr Crossley said that affected services have been differently affected by the Phase 1 stage 2 works.  Some remained in the South Bus Station, others moved and then returned, others moved and did not return.  No attempt has been made by Mr Buchanan to investigate any differential effect on the affected services which were located in the South Bus Station before the stage 2 works and then remained or were relocated.  Also he has not taken into account the fact that, in the absence of the compulsory purchase, YTC had their own plans to redevelop the South Bus Station, works which would have had an impact on YTC’s services.  
177.	Mr Buchanan has based his claim on the alleged fact that affected and unaffected services grew at the same rate prior to the Phase 1 works.  However, these growth figures are all over the place.  For periods 1-12 revenues for affected services grew by 0.2% between 1996 and 1997 and then rose by 2.9% between 1997 and 1998, whereas unaffected services fell by 0.1% in 1996-1997 and then rose by 3% in 1997-98.
178.	As to the effect of Phase 1 works, Mr Crossley said that other factors, not considered by Mr Buchanan, had an influence on the differential growth of revenues for affected and unaffected services.  Mr Buchanan has not separately assessed the stage 1 and stage 2 works nor has he separately analysed the different groups within the affected services during stage 2.
179.	During stage 1 any disruption was minor and no affected services were relocated from the South Bus Station.  There was a 4.7% growth in unaffected services for periods 1-9 between 1998 and 1999 and a corresponding growth in affected services of 1.5%, a differential of 3.2%.  This is greater than that given by a comparison of periods 10 to 5 1998-9 and 1999-2000, the period of the stage 2 works (2.9%).  This is counter-intuitive and suggests the influence of other factors.  No evidence has been given by Mr Buchanan to justify the assumption that any difference between affected and unaffected services is due to the construction works.  Other factors have been ignored.  Revenues used are whole route revenues not revenues attributable to journeys to and from Barnsley.  The view that other factors may have been at work is reinforced by a comparison between unaffected revenues and all YTC revenues.  The latter are an appropriate comparator because they are subject to the same fares increases.  Using periods 1-12 for the years 1996-7 to 1999-2000, the growth in revenues from unaffected services has consistently exceeded the growth from all YTC services.  Other possible comparators are: YTC revenues on routes not serving Barnsley, all unaffected routes using Barnsley from all bus companies and all bus services in the South and West Yorkshire PTE areas.  Revenues for all YTC non-Barnsley services can be used as a comparator.  For the years 1996-97 to 1999-2000 the growth in revenue from unaffected services is higher for each year than for all non-Barnsley services.  Mr Crossley concluded that no proper pattern has been established to justify the use of revenue for unaffected services as a baseline against which to assess the claim.  Mr Buchanan should have validated this assumption before proceeding further.  One consequence of the movement of services during the works was a reallocation of passengers between services now operating at the same or adjoining stops.  This is another possible reason for the high growth of unaffected revenues.  Passengers were forced to use the previously less attractive North and East Bus Stations and a reallocation from moved affected services to unaffected services.  
180.	Mr Crossley considered other factors which could have influenced the differential growth of affected and unaffected revenues.  Changes in competition from other operators could be a factor.  YTC services 101, 116, 211 and 339 have seen changes in competition, the introduction and withdrawal of competing services.  Service 339 has been cleaned from the dataset but the others remain.  Service 101 is an affected service, nos.116 and 211 are unaffected.  Service 101 contributes less than £100,000 to the claim.  Services 116 and 211 should be removed as they are unaffected services which benefited from a withdrawal or reduction in competing services.  If the claim is reassessed by the removal of 116 and 211 from the dataset it falls from about £5.6 million to £2.1 million.  This shows the influence of competition.  This factor is quantifiable but the influence of other factors, though relevant, cannot be quantified in money terms.  
181.	No attempt has been made by Mr Buchanan to identify changes in land use and demographics which might affect revenues.  Although this would be a large and complex task, it should not be assumed that such changes affect all services uniformly.  Mr Crossley referred to new employment opportunities in the M1 Corridor, M18 Corridor and Dearne Valley Strategic Economic Zone.  These are generally to the south and east of Barnsley.  Not all areas surrounding Barnsley are affected uniformly by these initiatives.  Consequently it is likely that significant changes in land use and demographics have affected some areas, and bus services, and not others, particularly the proportion of the respective catchment population that are captive to bus travel.
182.	All depots providing buses were affected equally by industrial action and staff shortages.  The majority of affected services were provided by Barnsley depot and most unaffected services by Shafton and Barnsley District depots.  Before the stage 2 works the percentage of lost mileage at Barnsley depot was 0.15%.  This increased to 1.38% during the works (also the period of staff shortages) and then fell back to 0.51% for the remainder of 2000.  Corresponding figures for Shafton and Barnsley and District depots were 0.56% before stage 2, 1.25% during the works and 0.36% for the remainder of 2000.  It is not possible to correlate lost mileage to revenues but it is perceived by passengers in terms of reliability.  Between 1997 and 2000 departure unpunctuality on YTC services was consistently and significantly higher than the main competitor, First Mainline.  Passengers will have perceived a deterioration in reliability from the period before the works and this is likely to be an important factor in influencing them to change to other modes of travel.  For unaffected services unreliability due to staff shortages doubled between the period prior to the works, and during the works and then improved for the remainder of 2000.  Consequently, passengers’ perceptions of reliability on affected and unaffected services due to staff shortages and industrial action may well be significantly different.  This could have led to permanent loss of revenue of affected services, if this has actually occurred.
183.	Mr Crossley said that the superior facilities and corridoring at the East Bus Station will have continued to improve revenue growth for those services using these facilities.  
184.	A sizeable proportion of the total revenue will be from concessionary travel (about 40%) and pre-paid passengers.  In both cases there is a pot of revenue allocated between operators.  The effect of differential growth between YTC services will therefore not be the same as for cash fares.  In general, the affected services carry a higher proportion of concessionary passengers and therefore revenue on unaffected services would benefit more from fares increases.  
185.	For losses in the period between the Phase 1 and Phase 2 works, the basis of claim is that there is no return of passengers lost during Phase 1.  The losses continue.  Mr Buchanan arrived at this conclusion by examining trends between 2000 and 2001.  For this assumption to be valid, the differential in growth between these years should either be zero or the growth of affected services should be greater.  However, for periods 1-9 the growth of unaffected services continued to be greater than for affected services (7.4% compared to 3.8%).  A similar position is seen for periods 1-6.  This is further evidence that factors other than the works are influencing the differential growth in revenues.  Passenger numbers have not been used to prove this claim due to lack of data.  Mr Buchanan said that his conclusion is that there was never any loss of passengers and revenue due to the Phase 1 works and therefore no return after the completion of the works could be expected. 
186.	With regard for losses during Phase 2, Mr Crossley noted Mr Buchanan’s assumption of double the loss which occurred during Phase 1, based on the agreement that the loss would be as great.  He has put forward no proper basis for the substantial Phase 2 losses.  There is no evidence to justify the claim for the cost of a major promotional campaign.  In cross examination Mr Crossley said that the Phase 2 proposals were not yet definite and he could not say what implications they would have for revenue.  He could not say that there would be no loss but there will be an improvement due to the new interchange.  
187.	Mr Crossley’s conclusions were summarised as follows.  The shortcomings of Mr Buchanan’s approach to the calculation of revenue loss include failure to:-
(i)	validate the assumption that unaffected services provide a proper comparator; 
(ii)	take proper account of the use of whole route revenues;
(iii)	take account of other factors affecting revenue;
(iv)	take account of the differential impact of the works on the various categories of affected services; 
(v)	take account of any difference in impact between Phase 1, stage 1 and stage 2 works; 
(vi)	reduce the claim to take account of the impact of the YTC scheme.
Other factors can account for the differential growth in revenues for affected and unaffected services and therefore no impact of the Phase 1 works on YTC’s revenues can be shown.  On the basis that the Phase 1 works cannot be shown to have affected revenue, there is no basis for the claim for losses in Phase 2, between Phase 1 and Phase 2 and for a promotional campaign.
188.	Mr Crossley confirmed in cross examination and in answer to my questions, that he had not attempted to calculate any losses suffered by YTC.  His evidence takes the form of a check on the evidence put forward by YTC (particularly by Mr Buchanan) and, on that approach, he reached the conclusion that YTC have not proved loss of revenue due to the works.  His approach was a reactive one.  He has dealt mainly with the effect of the works and only very generally with the change of control.  
189.	Mr Holgate said that this head of claim has been subject to wide variations.  It is critically dependent for its accuracy on Mr Buchanan’s assumptions and method.  The burden of proof is on the claimants to show a causal connection between the acquisition and the loss.  The loss must be the natural and reasonable consequence of the acquisition.  It is not accepted that losses arising in the future from the Phase 2 works can be claimed.  
190.	It should be taken into account that major works would have been carried out by YTC, with resultant disturbance, in the absence of the compulsory purchase.  Losses should not be considered in isolation.  YTC have been provided with a new bus station and will be provided with an interchange at no cost, with the potential for increasing passengers and revenue.  No departure charges are levied.  It would be a breach of the principle of equivalence for losses to be assessed without taking into account the benefits.  
191.	Mr Buchanan’s method is dependent on the cleaning of data and its division into affected and unaffected services.  It is critical that the unaffected group should be a neutral benchmark against which to compare revenue changes in the affected services.  Mr Buchanan’s opinion is that the whole of the differential in revenue can be used as the sole measure of loss.  If the data has not been properly cleaned or the unaffected group is not a neutral benchmark, then Mr Buchanan’s method cannot be relied upon.  
192.	Mr Buchanan has assumed that the whole of the difference between the growth rates of affected and unaffected services is due to the PTE’s scheme.  He accepted in cross examination that this is a matter of judgment; he has not sought to identify other causes.  He has accepted explanations given to him by YTC without further investigations.  Mr Buchanan’s assessments are not objective and independent.  
193.	The revenue in the unaffected group is 25% of the total.  The affected revenue is therefore three times larger.  With cleaning the unaffected revenue is only 20% of the total.  Mr Buchanan’s analysis therefore depends on the use of a small part of the total revenue as a neutral benchmark.  
194.	The affected services comprise two groups, those which stayed in the South Bus Station and were directly affected by the works and those which moved to the North and East stations and were not so affected.  Mr Buchanan agreed that he has made the assumption that the decline in revenue of the latter was entirely caused by the works.  This assumption produces anomalies and should have been investigated further.  
195.	Although Mr Buchanan accepted that routes radiating from the bus stations go through different demographic and socio-economic areas, he assumed that these differences did not affect the differential growth rates.  He did not investigate further.  
196.	The data relates to whole routes.  Not all passengers travel the whole length of the route or to the bus station.  Mr Buchanan agreed that these matters have not been taken into account in his method.  It is also assumed that variations in performance, now or in the future, which are attributable to matters on the routes and unconnected with the PTE’s scheme, should be ignored.  Mr Buchanan has made no allowance for changes in the pattern of services through to 2005.  
197.	In order to assess whether the stage 1 or stage 2 works had any adverse effect, Mr Buchanan looked at periods 1-12 extrapolated to produce calendar year results for 1999 and 2000 to compare with 1998.  Mr Crossley examined the figures for the actual period of the works.  This is the preferable approach.  Mr Buchanan’s approach is arbitrary.  
198.	In carrying forward his losses beyond 2000 Mr Buchanan has assumed that there will be no recovery of passengers lost due to the works.  There is no evidence to support this assumption.  It is counter-intuitive.  It is illogical for YTC to argue that the stage 2 works had a direct effect on services stretching into the future, given that YTC were able to provide the same services before and after the works.  Only a small proportion of YTC’s services were directly affected by the stage 2 works.  Mr Buchanan has ignored these matters in his calculations.  For losses in 2003 and 2004 Mr Buchanan substantially changed this approach in his January 2002 report.  He now assumes double the loss incurred in 2002 for 2003, a change for which he was unable to give reasons.  He accepted that the estimated loss for the Phase 2 works is arbitrary.  It is also unreliable.  For losses beyond 2000 Mr Buchanan has ignored distinctions in the performance of the two sub-groups of affected services. This approach is flawed.  
199.	Mr Holgate said that Mr Buchanan first considered competition as a factor affecting losses on unaffected services in his March 2002 report.  He did this after it was mentioned by other YTC witnesses.  Service 101 is the prime example.  This was a Headlight service, registered in November 1998, which operated from January 1999.  Mr Buchanan stated that it had little observable effect on YTC’s service 101.  The Headlight service was introduced in the North Bus Station; YTC’s service remained in the South Bus Station; the Headlight 101 moved to the South Bus Station in September 1999.  Mr Buchanan agreed that the contribution to the total claim was only £87,000 in nominal terms, spread over 2000 – 2005, equal to only £10,000 per annum (allowing for the doubling of loss in 2003 and 2004).  Because service 101 stayed in the South Bus Station during the Phase 1 stage 2 works not all of the £10,000 could be attributable to increased competition due to the loss of YTC control.  The difference in revenue growth of only £10,000 a year is not a real indication that the service 101 suffered from competition.  This figure is small for what is said to be a prime example of loss of control.  It is impossible to tell whether the acquisition caused this differential, or whether it was due to other causes or was simply a random fluctuation.  Headlight service 101 was sited next to the YTC service 101 with benefit from corridoring.  
200.	Mr Buchanan sought to explain the small contribution of competition by reference to low-floor buses, where he said the earning potential was reduced due to design faults in the South Bus Station works, including incorrect kerb heights.  But he said that loss of revenue growth from low-floor buses does not form part of the YTC claim.  Kerb heights had not been raised along the whole route and therefore any failure to raise them in the South Bus Station did not give rise to loss.  In any event, a substantial part of the benefit of low-floor buses is gained simply by running those buses.  Mr Buchanan’s evidence therefore destroyed any criticism of the PTE kerb heights.  YTC have failed to produce evidence to show that loss of control has caused an increase in competition resulting in significant loss of revenue.  
201.	Mr Buchanan has accepted certain factors regarding the cleaning and validation of data.  An unaffected group of services must be found to act as a neutral comparator.  Unless it can be established that the creation of two groups, affected and unaffected services, such that the only significant difference between them is the impact of the Phase 1 works, then the calculation of loss revenue fails.  The dataset must be cleaned to enable a proper comparison to be made, using criteria applicable to all services.  The selection of the unaffected services as a proper comparator must be validated.  Mr Buchanan, however, relies on only one matter to satisfy validation, namely that the revenue growth on affected and unaffected services was broadly the same before 1999.  It is necessary that the dataset should have been properly cleaned before validation.  
202.	As to validation, the only exercise carried out relies on data including routes 211 and 116 which Mr Crossley said should be cleaned.  Mr Buchanan’s validation has been undertaken by amalgamating figures for the pre-works period, 1997 and 1998.  But different results are found if 1997 and 1998 are looked as separate years, e.g. using periods 1-12 in 1997 the affected services grew faster than unaffected services by 0.3% and in 1998 the unaffected grew faster than affected by 1.4%.  Mr Crossley commented that the figures were “all over the place” and Mr Buchanan prepared further figures.  Validation can only be achieved if the difference in growth rates is zero or close to zero.  Thus, the validation exercise is not satisfactory.  Validation is only a worthwhile exercise if the data has been properly cleaned.  This leads to the question whether services 211 and 116 ought to have been removed from the dataset.
203.	Mr Buchanan accepted that there has been an increase in bus patronage for what was originally treated as unaffected services and that this was against the trend for bus usage.  He therefore agreed that this was an indication that the increase in unaffected group revenues was attributable to causes other than the PTE scheme.  These causes have not been identified.  It follows therefore that the unaffected group is not a neutral benchmark.  No changes after the January 2002 hearing could have been made in bus patronage.  It follows that the current unaffected group is still not a neutral benchmark.  It is tainted by other factors which have not been investigated.  
204.	Mr Crossley showed that for the stage 1 works the differential in growth rates was plus 3.2% and stage 2 it was 2.9%, a greater differential for stage 1 than stage 2.  This is counter-intuitive.  Stage 2 was considerably more extensive than stage 1.  This is a further indication that Mr Buchanan’s unaffected group is not a neutral comparator.  Its performance was affected by factors other than the PTE’s scheme.  
205.	One of the best measures of loss would have been bus patronage.  This data was not available.  Although the compulsory purchase order was confirmed in 1994 no explanation has been given by YTC as to why it did not obtain this data and carry out passenger surveys.  This is surprising when the original claim was £25 million.  
206.	It is Mr Crossley’s opinion that services 211 and 116 should have been removed from the dataset due to changes in competition in March and November 1999 to the benefit of YTC.  If both services are removed the claim is considerably reduced.  Both services meet the criteria for cleaning and should be removed.  With their inclusion the neutral comparator is unreliable and has not been properly validated.  The figures show that the so-called unaffected group must have been subject to other influences.  
207.	The stage 1 works were minor; services were not changed.  It is implausible for YTC to suggest that loss of revenue was sustained during this period.  There should not be differential growth rates during this stage.  A significant differential indicates that the unaffected group is not a neutral comparator.  No reference was made to the PTE as to losses during the stage 1 works.  
208.	At the hearing in January 2002 Mr Buchanan conceded that, if the Tribunal accept that the differential between affected and unaffected services during stage 1 was not caused by the PTE’s works, then that should not be reflected in the assessment of the 2000 differential, reducing it from 15% to 10% and affecting all calculations for subsequent years.  Because of the significance of these points, YTC were anxious to retrieve the position after Mr Buchanan and Mr Adamson had given their evidence.  They therefore called Mrs Hayes to contradict the statement of agreed facts and Mr Buchanan’s evidence.  She claimed that the works were more substantial and had a greater effect than previously accepted.  This evidence is unreliable.  It is contradicted by contemporary documents.  
209.	As to the stage 2 works, Mr Buchanan accepted that they produced improvements to the environment for passengers.  After these improvements half of YTC’s buses operated from the South Bus Station.  Mr Buchanan attributed losses during stage 2 but disregarded other possible causes, e.g. staff shortages, industrial disputes.  He took no steps to verify the position.  He said that his instructions precluded further investigations – he was required to accept what he was told by YTC.  Subsequent lost mileage figures show that staff shortages had a greater effect on affected services.  The effect of random cancellations is greater than shown by lost mileage.  Given the flaws in Mr Buchanan’s analysis, the claimants have failed to discharge the burden of proof that the stage 2 works caused losses in 2000.  There are a number of reasons to explain differentials.  
210.	Mr Buchanan accepted that there is an inelastic demand for bus services in Barnsley.  Consequently the majority of passenger would continue to use buses after the stage 2 works. The new bus station is an improvement on the old YTC Bus Station.  This would have led to an increase in bus patronage.  Mr Buchanan however asserts that the post-2000 figures do not indicate any recovery in the revenue for the affected services relative to the unaffected group.  The flaws in his method make this an impossible conclusion.  There must be other factors at work.  
211.	For Phase 2 Mr Crossley has shown that the alleged loss of revenue for 2000 cannot be used to derive a future loss for this phase.  If a loss for the stage 2 works cannot be established then there is no figure to double for the assumed Phase 2 losses.  A doubling of loss is, in any event, an arbitrary assumption.  
212.	Mr Buchanan has suggested that a 50% reduction in fares would be needed in 2005 to win back passengers.  This is in conflict with his acceptance of the dependency on bus services in Barnsley.  Such a large discount would not be required, having regard to the attractions of the new interchange.  Mr Buchanan accepted that he has never heard of such a price reduction following the building of a new interchange.  
213.	The Tribunal is asked to conclude that the claim for loss of revenue is unsubstantiated and that no loss has been sustained.  
Decision
214.	This claim represents lost revenue for the years 1999 to 2005 plus losses under a reduced fares scheme in the last year (totalling £6,729,946), discounted back to 2002 at 9%, producing a net claim figure of £5,961,518.  
215.	Mr Nunweek has discounted the annual losses back to 2002.  No explanation has been given for the use of this date.  Presumably he has discounted back to the date of the hearing.  In my judgment this is wrong.  Any future losses should be discounted to the date of entry for the South Bus Station, 6 December 1998, the agreed date of valuation, the date when any losses can be said to have arisen. Statutory interest is payable on compensation at the prescribed rate from the date of possession to the date of payment to compensate the claimant for receipt of compensation after the date of entry (section 11(1) of the Compulsory Purchase Act 1965).  If YTC calculate their loss of revenue by discounting back to 2002, resulting in a higher claim than if discounted to 6 December 1998, and receive interest on that figure from the date of entry to the date of payment, as provided for in section 11(1) of the 1965 Act, then they would receive compensation greater than their loss.  If any loss of revenue has arisen after 6 December 1998 it must be calculated as at that date by discounting the actual and estimated future losses back to the date of entry and valuation.  
216.	This is a head of claim where the burden of proof is important.  The onus of proving loss is on the claimants (see Bede Distributors Limited v Newcastle Upon Tyne Corporation (1973) 26 P & CR 298 at 319).  I do not understand the burden of proof to be in dispute.  
217.	Mr Purchas said that the key question is: on the balance of probability, is it more likely than not that YTC suffered loss of revenue as a result of the disturbance caused by the PTE works?  I prefer to rephrase this question as follows.  Have YTC proved on the balance of probabilities that the compulsory acquisition of the South Bus Station and adjoining land, coupled with the execution of the Phase 1 and Phase 2 works and the exercise of control by the PTE after acquisition, caused or will cause the losses of revenue claimed?  Before looking at the claim in detail I consider four general matters which form the background to this head of claim.  
218.	The first is the wide variations and frequent changes of claim to which Mr Holgate drew attention.  On 6 June 1997, after confirmation of the compulsory purchase order but before entry, this head of claim was put at £25 million.  Approximately three years later, on 9 August 2000, it had been reduced to just under £11.3 million.  In July 2001 it had been further reduced to about £7.1 million.  This was the figure supported by Mr Buchanan and Mr Nunweek in their initial reports.  On 7 and 10 January 2002, a few days before the start of the hearing, the claim was reduced further to about £5.8 million and then to about £5.15 million.  This latter figure was the claim at the start of the hearing on 13 January 2002.  Soon after the start of the hearing, however, it was revised upwards to about £7.2 million on 15 January.  The final revision was on 16 April 2002 (during an adjournment of the hearing) to £5,961,518.  
219.	Can any inference be drawn from these frequent changes of claim?  It cannot, of course, be said that YTC have always revised their claim upwards, it has mainly been reduced.  These frequent changes, however, suggest that this claim has been particularly difficult to establish, even by YTC who have the necessary data.  The loss, if loss there has been, has been difficult to assess.  It is not an obvious loss which can be readily be seen and calculated but one which has to be sought in a detailed consideration of the revenue data and with the adoption of several assumptions, which I examine below.  In short, the frequent changes of claim cast a shadow of doubt over the existence and calculation of this revenue loss.  
220.	The second general matter relates to the expert evidence, given by Mr Buchanan for the claimants and by Mr Crossley for the PTE.  They used different approaches to this head of claim.  Mr Buchanan calculated annual losses for the years 1999 to 2005 using data supplied by Mr Adamson.  He can be said to have adopted a positive or proactive approach.  Mr Crossley, on the other hand, did not produce any calculations showing a nil or any other amount of loss but checked and criticised Mr Buchanan’s figures, suggested possible reasons for loss of revenue and concluded that YTC could not support their claim.  He used a negative or reactive approach.  Both approaches are valid in the circumstances of this case.  I do not think that I should give any less weight to Mr Crossley’s evidence because he did not attempt to calculate a loss.  He had the easier task but I do not accept the submission of Mr Purchas that I should give his evidence little weight due to his negative approach.  
221.	I have, however, reservations as to the evidence of Mr Buchanan.  I do not question his competence nor his honesty but I do question whether he had the essential independence and objectivity for an expert witness (see The Ikarian Reefer [1993] 2 Lloyds LR 68 at 81).  He relied wholly on information given to him by YTC, including reasons as to the possible causes of any loss.  He did not investigate further but relied on what he was told.  He said that he was constrained by his instructions as to the extent of his investigations.  From my reading of his expert reports and more so from my observation of him giving evidence at the hearing, I agree with Mr Holgate’s submission that Mr Buchanan could not be described as an objective and truly independent witness.  In short, I think that he has given his evidence in support of the YTC claim as put to him rather than as an independent expert producing his own figures of loss and opinions as to causes of that loss.  For these reasons I treat his evidence with caution.  
222.	My third general matter is the nature of demand for buses.  I discern two trends: falling demand in the long-term; inelastic demand in the short-term.  Both are, in general terms, relevant to this claim.  
223.	It is common ground that bus patronage has declined in the long-term.  In the ‘South Yorkshire Bus Strategy’ (September 2001) it is noted that bus usage countrywide decreased from 25% to 16% of journeys between 1991 and 2000.  Since 1994 bus numbers and passengers have reduced by 5% compared to an increase of 1.5% per annum in car traffic and 110% in the use of trams.  ‘The Keeping South Yorkshire Moving Joint Local Transport Plan’, volume 3 revised 30 November 2000, states that since 1987 the total number of journeys into and through the town centre of Barnsley remained static; although car journeys increased by an average of 2.2% a year (1.6% since 1996), bus trips declined by 5.5% a year.  Public transport journeys into the centre fell from 32% to 20%.  In his evidence to the compulsory purchase inquiry in March 1993, Dr A Chymera, a principal planning officer of Barnsley Metropolitan Borough Council, said that over the previous few years bus usage in Barnsley suffered badly in competition with car travel.  Increasingly bus trips were made by people without access to cars: 76% of bus journeys in 1991 were made by non-drivers and 56% by people in households without cars (paragraph 14.10).  Mr Wicks gave evidence before me that the decline in the use of buses in South Yorkshire has been greater than in Great Britain as a whole and in other metropolitan areas.  The decline between 1994-95 and 1998-99 was -4% in Great Britain, -11% in Metropolitan areas and -17% in South Yorkshire.  The YTC claim, based on declining revenues, must be seen against this background of falling demand in the long-term.  
224.	Existing alongside this overall, long-term decline in bus usage is, however, an inelastic demand in the short-term.  I received little evidence on this matter in general terms but I am satisfied that in the short-term demand is relatively inelastic.  In a talk given at the University of Westminster on 23 May 2001, under the title ‘Bus Fare Elasticitics’ by Joyce M Dergary and Mark Hanley, one of their conclusions was that long-run elasticities are two to three times short-run elaticities when related to fares, income and services.  In ‘A Review of New Demand Elasticities with Special Reference to Short and Long Run Effects of Price Changes’ by P B Goodwin (Transport Studies Unit, Oxford.  December 1991) he observed that “… it makes sense that the range of responses open to people is greater in the longer run than they can make immediately.”
225.	These two conflicting trends both work to the disadvantage of YTC.  Their claim for loss of revenue must be considered against a background of falling demand in the long-term, both nationally and even more so locally, while at the same time there is a short-term inelasticity in demand due to the difficulty in responding quickly to events affecting bus travel, whether they are fares increases or disruptions at the bus station.  
226.	Mr Buchanan said that faced with a change to the public transport service passengers have a number of possible responses.  They could continue to travel as before and suffer the additional inconvenience or they could change their pattern or mode of travel.  I think it is important to remember that “the change to the public transport service” which is relevant to this head of claim comprises the works and the change of control of the South Bus Station.  Changes in travel patterns for other reasons cannot be the subject of compensation.  
227.	With regard to changes in the pattern or mode of travel, Mr Buchanan said that passengers could change their journey destination, e.g. choose to shop elsewhere, but he did not say where the different destinations might be nor whether the passengers will be using a different mode of travel or buses run by a competitor (having regard to the dominance of YTC in the Barnsley area).  If passengers choose a different journey it is likely that it would still be on a YTC bus.  Next, Mr Buchanan said that passengers might change the frequency of journeys, e.g. shopping once and not twice a week.  This is a possibility but it seems unlikely that, if shopping trips are required twice a week, a person would reduce this to once a week with attendant inconvenience, solely due to temporary inconvenience when using the bus station in Barnsley.  Furthermore, many journeys are essential and cannot be reduced in frequency, such as travelling to and from work and school.  Mr Buchanan then suggested that passengers could change their mode of transport, e.g. buy a car or motorcycle, share a car, switch to walking, car, taxi or cycle.  In my judgment, these are largely implausible responses to the works and change of control at the South Bus Station.  It is unrealistic to suggest that a person would buy a car or motorcycle and drive into the centre of Barnsley solely in consequence of the Phase 1 works and change of control.  Many people would be unable to do this even if they wished to do so due to their financial position or inability to drive.  School children, for example, would be too young to drive and would be unable financially to buy a car or motorcycle.  Sharing a car is a possible response but could only be taken if there is a car to share and could only have an insignificant effect on passenger numbers.  Walking instead of bus travel depends on journey distance and is only likely to have an insignificant effect, if at all.  The use of taxis in place of buses would be expensive; I find it hard to believe that a bus user would switch to considerably more expensive taxis due to the works at the South Bus Station. Lastly, Mr Buchanan suggested a change of journey origin by moving to a more accessible location.  If he is suggesting that bus passengers will move house in consequence of the works and change of control then I find this even more implausible than his suggestion that the works and changes would lead to the purchase of a car or motorcycle.  
228.	Overall, Mr Buchanan’s suggested responses to the works and change of control lack credibility. Mr Buchanan accepted in cross examination, that bus passengers are generally a captive market because they have little or no choice as to other means of transport.  In Barnsley there is a high dependency on buses.  Mr Buchanan conceded that, even if dissatisfied with travelling conditions, the majority would continue to travel by bus. In my view any responses must be credible to explain a loss of revenue.  They underly the figures in the claim.  The lack of credibility shows that the detailed claim rests on a shaky foundation.  The claim must be considered against a background of long-term falling demand, in Barnsley and elsewhere, short-term elasticity in demand and a lack of credible responses to the works and change of control.  
229.	The last general matter to be considered comprises the nature and effect of the Phase 1 works and change of control consequent on the acquisition.  It is fundamental to this head of claim that YTC must prove that the effects of the works and change of control were, and are, so extensive that they have caused, and will cause, bus passengers to change their mode of travel in the ways I have already examined. 
230.	I heard much detailed evidence on works and control which is summarised earlier in this decision.  From YTC’s evidence alone I am left with this impression of the situation.  The YTC Bus Station before the works and change of control, although old, was well-used but not overcrowded.  It was liked by passengers.  The canopy had recently been repainted, new seats installed.  All passengers could wait under the canopy using a popular queuing system (the pens) which imposed order and prevented queue jumping.  Passengers could sit on comfortable bench seats.  There was a tannoy system, full timetable information and YTC’s experienced staff to assist.  YTC controlled the stand allocation and had sole, or virtually sole, use of the bus station, which is nearer to the town centre.  This gave them a competitive edge.  
231.	After entry by the PTE in December 1998 the Phase 1 works caused considerable annoyance, inconvenience, dirt, noise and disruption of services.  Buses and construction traffic were in conflict with at least one accident.  Even the minor stage 1 works caused disruption.  YTC services were dispersed and spread over the three bus stations.  Many passengers had further to walk.  Stand allocation was constantly changing: elderly passengers wandered the bus station in the rain in search of their bus.  The PTE staff could not help: they were recruited from a security firm and had to refer inquiries to YTC staff.  The tannoy system was not replaced.  Only a few stands are now under cover; most are outside the canopy and had inadequate shelter so that young mothers with pushchairs and children had to wait outside in the rain.  The pens were removed resulting in a lack of orderly queuing with queue jumping and much ill-feeling.  Passengers have to perch on uncomfortable seats comprising two bars instead of the comfortable bench seats in the old YTC Bus Station.  Passengers have to walk across the roadways to reach many of the stands and are in danger from moving buses.  The number of layover bays has been reduced causing inconvenience to bus drivers and delays.  YTC have lost control of stand allocation and have found competitors using adjoining stands.  
232.	In my view the reality did not match this evidence.  As to the South Bus Station before December 1998, I have to rely mainly on photographs and secondary evidence to give a picture of conditions under YTC and before the Phase 1 works.  The photographs show an old-style bus station, unattractive in appearance, clearly in need of redevelopment or refurbishment.  The secondary evidence supports this view.  Dr A Chymera, giving evidence on behalf of Barnsley Metropolitan Borough Council at the compulsory purchase order inquiry, said:
“2.10  Criticism of the existing Bus station has grown steadily since the 1950s, particularly as the mid 1970s alterations coincided with increasing use of the Bus station stimulated by the SYCC’s ‘cheap fares policy’ and changes in traffic management in the Town Centre.  Criticism has focused on the inadequacies of the passenger facilities and the danger and congestion faced by passengers, particularly in the ‘Concourse’ and boarding areas.  By 1985 the Bus Station was being condemned as the ‘worst in Europe’ or as a ‘National joke’.  A view still strongly held by many Council members.  Surveys of the attitude of members of the public to the Bus Station/Interchange reinforced these criticisms.  The Traffic Commissioner for the North East at a public inquiry in March, 1992 described the YTC Bus Station as ‘a rather cold, smelly and inhospitable place with no toilet facilities’.”
“14.2	Conditions within the YTC Bus Station are generally poor for all passengers and particularly difficult for the elderly.  Many are discomforted by:
overcrowding of the passageway and bus stands;
the competition for space (physical, but especially personal) with the able bodied, especially the young; 
poor lighting; 
lack of colour co-ordination;
lack of information; and 
difficulty in locating staff when help is needed.”
“15.4 Without SYPTE’s operational control of the Interchange YTC can be expected to continue to operate its bus station to its own commercial advantage.  This suggests perpetuation of:
(a)	Inadequate facilities for passengers.  
(b)	Indifferent standards of supervision and security.  
(c)	Indifferent and unequal standards of operational control. 
………………………………
(g)	Operation within the bus station exceeding the quality margin.
………………………………
(i)	Existing poor quality appearance and townscape value of the YTC Bus Station.
233.	The queuing arrangements, so popular on the YTC evidence, drew the following comment from the inspector in his report on the compulsory purchase order inquiry:-
“8.8 …. As far as design is concerned a particularly unfortunate feature is the way in which facilities have been provided for queuing at each stand: the perpetuation of a system of a series of ‘pens’ does nothing to improve either passenger comfort or attract potential customers to use the Bus station.”
234.	In June 1997 The Harris Research Centre prepared for the PTE the ‘Barnsley Interchange Attitude Survey Research Report’.  This was based on surveys of users in November 1991 and 1993 and May 1997.  A comparison was made between the PTE Bus Station (i.e. the North and East Bus Stations) and the old YTC Bus Station (the South Bus Station).  Table 1 is an overall assessment of the two bus stations grading them on a weighted base from extremely poor (1) to extremely good (10) with overall mean scores.  For the YTC Bus Station the extremely poor figures are high (21% in 1991, 20% in 1993 and 22% in 1997) compared to the PTE station’s low figures of 2%, 1% and nil (less than five mentions).  Conversely, the extremely good figures are low for the YTC Bus Station (3% in 1991, 1% in 1993 and 2% in 1997) compared to the much higher figures of 11%, 20% and 18% for the PTE station.  The mean scores (out of 10) are 7.24, 7.97 and 7.82 for the PTE station compared to the much lower figures of 3.68, 3.26 and 3.63 for the YTC Bus Station.
235.	I recognise that this secondary evidence was not subject to cross examination at the hearing and relates to various dates before the change of control but, in my judgment, it throws doubt on the picture painted by YTC of high passenger satisfaction with the YTC Bus Station and dissatisfaction with the more modern bus station now operated by the PTE.
236.	The Phase 1 stage 1 works were minor; they were carried out at night during December 1998 and January 1999.  In my judgment these works would not have affected the operations of YTC and are extremely unlikely to have produced any fall in revenue.  The stage 2 works were more extensive and were carried out between September 1999 and June 2000, the most intensive period being February to April 2000.  I can accept that these works were unpleasant to experience and caused disruption, for bus drivers and passengers, and caused problems to YTC in the operation of their buses and to the PTE in running the bus station.  Whether these problems caused any significant loss of revenue, however, is another matter.  The claim by YTC is based on loss during the Phase 1 works, carried forward into the future and doubled during the Phase 2 works.  I am sceptical whether passengers would have been so affected by the works (which were only of short duration) that they decided to change their mode or frequency of travel.  I have already considered the inelastic character of bus travel in the short-term and the lack of practical alternatives.  I make no decision at this stage on the question of loss during Phase 1 and consider it further when I deal with the detailed claim, but generally I have considerable doubts whether these works caused any significant loss.
237.	It is YTC’s case that it was not solely the works which produced a loss but also the inept control of the bus station exercised by the PTE and the unsatisfactory new layout and facilities.  
238.	As to the allegations of inept control by the PTE, I cannot find any convincing evidence to persuade me that there is any substance in this point.  I note from the agreed statement in the Appendix to this decision that the PTE were awarded Chartermark status for Barnsley in 1998 and 2001. The truth of the matter seems to be that the PTE run the bus station differently but certainly no less efficiently than YTC.  Similarly, with the new layout, it differs considerably from the old YTC layout, but it cannot be said that it is worse.  In my view it is a considerable improvement.  It is not ideal but it is only an interim layout pending the more extensive Phase 2 works to produce an integrated interchange.
239.	I have no doubt that the change of control coupled with the stage 2 works produced problems which had to be resolved.  I am sure that they had been resolved (or at least most of them) by the time of my inspection.  I spent just over two hours at the South Bus Station during the afternoon of 5 August 2002 and then made a much shorter inspection with the parties the next morning.  My impression was of a well-run bus station with a layout which is a considerable improvement on the old YTC layout.  I accept that my visit was made at a quiet time, with the schools on holiday and in a popular holiday month, but the bus station was busy.  I saw no congestion of buses; there appears to be adequate layover space. The bus shelters were adequate in size with clear displays of information.  I saw no queuing problems.  The two-bar perch seats are not particularly comfortable but most people wait for only short periods.  I saw several staff assisting passengers and the PTE have an inquiry office in Midland Street with access from the bus station.  There are three pedestrian ways from Midland Street to the railway station and the adjoining stands which I walked across many times without fear of being run down by buses.  There are toilets close to the railway station where none existed before.  As a bus passenger I would greatly prefer to use the remodelled South Bus Station than the old YTC Station.  I find it inconceivable that the new layout would deter passengers who were content to use the old YTC layout.  
240.	I heard much about the adverse effect on YTC due to competition in consequence of the change of control but this concerned only the decision by the PTE to allow the Headlight 101 service to move from the North Bus Station to a stand next to the YTC 101 departure stand.  The reality of the situation is that, notwithstanding the acquisition and change of control, the South Bus Station is still almost wholly used by YTC and Barnsley and District (in the same group).  On my inspection I saw only infrequent appearances by two competitor’s buses on the South Bus Station, Arriva and a Clarksons’ coach, and this was confirmed by the parties.  
241.	It is common ground that for this head of claim to succeed there must be a causal connection between the acquisition by the PTE and the loss.  The loss must be the direct result of the acquisition, which has been taken to include the works and change of control in addition to the actual entry onto the land by the PTE.  The loss cannot be due to some other cause, e.g. the decline in bus usage.  Also the loss must not be too remote.  The claimants must prove that the works and the new control so inconvenienced passengers and that the new layout was so unsatisfactory to them that some passengers not only stopped travelling by bus or travelling so frequently during the Phase 1 works, but have not been persuaded to return to the new bus station.  When the Phase 2 works start it is said that even more passengers will desert the YTC buses.  For the reasons given above, particularly under the third and fourth matters, I am doubtful whether these fundamental requirements exist and whether the claim can be proved.  I have, however, only dealt with the matter in general terms.  I now turn to a consideration of the figures.  A considerable body of data has been agreed as figures: the issues are concerned with the interpretation of this data.
242.	Mr Buchanan calculated his loss of revenue claim (before deferment by Mr Nunweek) as follows.  First, he divided the YTC services into affected and unaffected categories and used the latter as a neutral benchmark or comparator to calculate the loss in respect of the affected services.  The data has been cleaned to remove services affected by other causes and also validated by comparing the growth of revenue for affected and unaffected services before the Phase 1 works and the change of control.  Next, the loss during the Phase 1 works was calculated.  This was then assumed to continue during the period between the completion of Phase 1 and the start of Phase 2.  Losses during Phase 2 were assumed to be double the losses during Phase 1.  After the completion of Phase 2 there would need to be a fares promotion exercise to bring back lost passengers.  The cost of this promotion forms part of the claim.  Losses would then return to zero after the completion of Phase 2 in 2005 due to the new interchange and the fares promotion.  I look now at each stage in this calculation of loss.  
243.	First, the establishment of a neutral benchmark or comparator.  Mr Buchanan divided the revenue between affected services, those YTC services which originally operated from the South Bus Station and which were directly affected by Phase 1 works and change of control (73%) and unaffected services, the YTC services which originally operated from the North and East Bus Stations (3% and 24% respectively) and were not directly affected by the works and change of control.  The affected services can be sub-divided into those which remained in the South Bus Station (28%), those which moved to the North Bus Station (13% making a total of 16% in this station during the works) and those which moved to the East Bus Station (31% making a total of 55% in this bus station during the works).  On completion of Phase 1 the distribution of YTC’s services was 49% in the South Bus Station, 7% in the North Bus Station and 45% in the East Bus Station.
244.	This comparison between affected and unaffected services relies for its accuracy on proper cleaning, to remove from the dataset services affected by other causes, and also validation, to show that before the works affected and unaffected services had a revenue growth which was the same or substantially the same.  
245.	Mr Buchanan’s criteria for the cleaning of the data were changes of frequencies; changes due to competition (on a YTC route); and changes to routes.  Mr Crossley had misgivings about the accuracy of the cleaning process used by Mr Buchanan.  He said that not all YTC services subject to significant changes in competition have been removed from the dataset, e.g. services 101 (an affected service), 116 and 211 (both unaffected services).  Service 101 makes an immaterial impact on the figures but this is not the position with 116 and 211.  These unaffected services benefited from the reduction and withdrawal of competition and a reassessment of the claim removing these services reduces it from about £5.6 million to £2.1million. 
246.	Mr Buchanan included in his criteria for cleaning, significant changes to services run by other operators in competition to YTC.  The cleaning of services 116 and 211 is disputed.  In March 1999 the Headlight service 116 was reduced in frequency to the benefit of YTC’s service 116.  In November 1999 the Mainline 211 service was withdrawn to the benefit of YTC’s 211 service.  In my judgment, these services should have been removed from the dataset.  I find the various reasons put forward on behalf of YTC for not doing so unconvincing.  The changes to these routes due to the reduction or withdrawal of competition are within the cleaning criteria and should have been taken into account.  Mr Crossley has demonstrated the material effect this failure to remove these services has on the claim.  My conclusion is that the dataset has not been properly cleaned.  Doubt is therefore thrown on the accuracy of the comparison between affected and unaffected services due to inconsistencies in the cleaning of the data.  
247.	The accuracy of comparison also depends upon validation, that is to say it must be shown that affected and unaffected revenues grew at substantially the same rate before the Phase 1 works.  
248.	Mr Buchanan prepared tables comparing the growth of revenues for periods 1-9 and 1-12 respectively for the years 1996 to 2001 for affected and unaffected services.  These showed that the growth rate of revenue for 1999 and 2000 (and 2001 for periods 1-9) were different for affected and unaffected services, e.g. in 1999 affected services grew by 1.1% and unaffected by 3.5% and in 2000 affected services grew by 0.2% compared to 6.6% for unaffected.  Mr Buchanan said that these differences in revenue growth represented the lost revenues on the affected services, on the assumption that, without the Phase 1 works, revenues on affected and unaffected services (after cleaning) would have grown at the same rate.  In 1997 and 1998 there were no significant differences in the growth rates for the two categories of service.  The significant gap occurred in 1999 and 2000.  Starting from the 1st period of 1996 to the 12th period of 1998 revenues from the two groups followed a very similar pattern.  From the 1st period of 1999 there is a time when the unaffected group is slightly higher than the affected group.  This is during the Phase 1 stage 1 works.  From the end of 1999 the revenue figures diverge significantly, caused by the drop in affected revenues.  This corresponds to the stage 2 works.  
249.	In reply to Mr Crossley’s criticism that unaffected revenues grew too fast to be used as a comparator, Mr Buchanan said that this greater growth was due to fares increases in 1999, 2000 and 2001.   When these increases are taken into account the implied demand change is  –0.2% for 1999, –3.8% for 2000 and –4% for 2001.  Mr Buchanan rejected Mr Crossley’s opinion that all YTC services would be a better comparator than the unaffected services in Barnsley.  He gave three reasons.  First, YTC is the dominant operator in Barnsley but a minority operator in other areas.  Second, both the affected and the unaffected services serve Barnsley town centre as their main market and both are affected by the growth or fall in that market.  Third, the affected and unaffected routes have been cleaned but this has not been done for all YTC services or YTC services outside Barnsley.  
250.	In 2000 and 2001, after the conclusion of the Phase 1 works, the affected and unaffected services did not revert to the same level of growth due to the continuing impact of the works and the loss of operational control and the issue of data cleaning and compatibility for 2001 (cleaning has only been carried out up to 2000).  This failure to revert to the same growth pattern is not a reason why the unaffected group is an inappropriate comparator.  
251.	Mr Crossley said that Mr Buchanan’s basis of assessment can only be valid if the growth figures for affected and unaffected revenues before the works were substantially the same.  But that is not the position: the growth figures are all over the place.  No proper pattern can be established.  For example, in periods 1-12 affected revenues grew by 0.2% in 1996-97 and then by 2.9%  in 1997-98, compared to corresponding figures for unaffected services of    –0.1% and +4.3%.  Other factors were clearly influencing the differential growth figures.  All YTC services would be a more appropriate base comparator.  Using agreed data, revenues for all YTC non-Barnsley services can be deduced and used as a comparator, free from fares increases and the effect of the works.  The figures show that the growth in revenues from unaffected services exceeded the growth in revenues from comparator services.  Other factors therefore must have been influencing revenue growth for unaffected services, e.g. changes to competition, changes in land use and demographics, staff shortages and industrial disputes.  
252.	In my judgment, Mr Buchanan’s comparison between affected and unaffected services can only be valid as the basis for this head of claim, even if the data has been properly cleaned, if the growth in revenue of affected and unaffected services was substantially the same before the works and change of control, i.e. before 6 December 1998.  Using periods 1-12 (in a 13 period year) the figures for 1998 are not affected by the change of control and stage 1 works.  From the agreed data (pages 8 and 9) the figures are as follows:-
Affected	Unaffected	
Year	Revenue	Index	Change	Revenue	Index 	Change	
1996	525127	100	-	134724	100	-	
1997	526031	100.2	+0.2%	134557	99.9	–0.1%	
1998	541403	103.1	+2.9%	140389	104.2	+4.3%	

It is clear from these figures that the revenue from affected and unaffected services did not change each year in exactly the same way.  In 1997 the affected revenue rose by 0.2% but the unaffected revenue fell by 0.1%, in 1998 the difference between the two categories was greater: affected revenue rose by 2.9%, unaffected revenue rose by 4.3%.  The index change over the two years 1996-98 was from 100 to 103.1 for affected services and from 100 to 104.2 for unaffected services.  Whichever periods of comparison are taken the growth rates differ each year.  For periods 1-6 affected revenue fell by 1.2% in 1996-97 compared to a rise of 1.7% for unaffected services; and for 1997-98 affected services rose by 7.0% compared to a much smaller rise of 2.8% for unaffected services.  For periods 1-9 the revenue from affected services fell by 1.4% compared to a small increase of 0.5% for unaffected services in 1996-97; and in 1997-98 affected revenue rose by 5.5% compared to a smaller rise of 3.7% for unaffected revenue.  If services 116 and 211 are removed from the dataset the differences between affected and unaffected services are greater.  These routes are both unaffected services.  The figures for affected services remain unchanged but the unaffected services change considerably. In 1997 the unaffected growth was +3.2% (compared to the previous figure of –0.1% and the affected figure of +0.2%) and in 1998 the unaffected growth was +7.5% (compared to the previous figure of +4.3% and the affected figure of +2.9%).  The indices in the table above change: the affected growth remains unchanged (100 to 103.1) but the unaffected growth was from 100 to 111 compared to the figure in the table of 104.2.  There is a lack of consistency between the movements of the two categories which makes the use of unaffected services as a comparator or neutral benchmark an inaccurate basis for the calculation of this head of claim.  I agree with Mr Crossley that “the figures are all over the place.”
253.	A further flaw in the use of unaffected revenue as a comparator is the imbalance between the figures of affected and unaffected revenue as percentages of the whole.  For the three years 1996, 1997 and 1998 the unaffected revenue was 20.4%, 20.7% and 20.6% respectively of the total revenue but it is used as a benchmark for the much greater figures of affected revenue of 79.6%, 79.3% and 79.4%.  Errors of comparison are likely to occur when comparing 80% of the total revenue with 20% of that figure.  If services 116 and 211 are removed from the dataset the imbalance becomes greater.  
254.	Mr Buchanan’s calculations of loss rely on there being an accurate comparison between affected and unaffected services and the establishment of unaffected services as a neutral benchmark for this comparison.  In my judgment this necessary accuracy of comparison has not been established for three reasons: lack of proper cleaning of the data; lack of validation of the unaffected services as a neutral benchmark due to variations in growth rates of affected and unaffected services before acquisition; and the imbalance between the amounts of affected and unaffected revenue.  The fundamental basis of Mr Buchanan’s calculation of loss of revenue is flawed at the outset and the claim must fail for lack of proof for that reason.  I will, however, consider the further stages in the assessment of loss, where further flaws and anomalies are to be found.  
255.	The Phase 1 works were carried out in two stages.  Stage 1 was executed and substantially completed in December 1998.  I accept Mr Hall’s evidence that practical completion took place on 13 December and that further minor works were carried out and completed by 26 January 1999.  The Stage 1 works were minor, carried out at night and with only limited changes in stand allocation.  For the reasons given earlier, I cannot accept that these works caused any loss of revenue. 
256.	The stage 2 works were more extensive.  They were carried out between September 1999 and June 2000 with the most intensive operations between 11 February and 29 April 2000.  Any losses during the stage 2 works would appear in the revenue figures for 1999 and 2000.  The claim figures are £173,387 for 1999 and £629,981 for 2000.  Mr Buchanan used the agreed differentials in growth rates in affected and unaffected revenues (2.4% in 1999 and 6.4% in 2000 for periods 1-12 with similar differentials of 4% and 5.5% for periods 1-6 and 3.2% and 5.4% for periods 1-9) to calculate his losses.  He applied the percentage differentials to the total cleaned revenues for the affected services.  For the year 2000 the losses are the cumulative effect of the differences in 1999 and 2000.  Unfortunately, as noted earlier in this decision, Mr Buchanan did not include in his revised evidence any calculations showing the figures of loss in his revised claim.  Even if the basis of claim is correct I cannot check his figures or be entirely sure how they have been calculated.  Applying the brief explanation set out above does not produce the figures of claim for 1999 and 2000 without further explanation.  
257.	Looking at the agreed data for 1999 and 2000, and even on the assumption that it has been properly cleaned and validated, anomalies are thrown up by the figures.  In 1999 very minor works as part of stage 1 were carried out in January but in my view none of the stage 1 works have caused any loss of passengers and revenue.  For periods 1-9 of 1999 both categories of services were unaffected by works and could only be affected by the change of control.  Affected revenue rose by 1.5% during this period compared to unaffected revenue which rose by 4.7%.  In my view it is unlikely that the change of control would have caused a differential of 3.2% in the growth figures for these categories.  If services 116 and 211 are removed then the difference is greater at 4.1%.  From September 1999 some stage 2 works were carried out.  Looking at the data for periods 1-12 compared to 1-9 I find that affected revenue rose from 544443 to 547306 (+ 0.52%) in the periods 10-12 compared to unaffected revenue which rose from 145145 to 145357 (+ 0.15%).  It is illogical that during the works, which would have had a greater effect on the affected services, the growth was greater for the affected than the unaffected services (0.52% compared to 0.15%).  If services 116 and 211 are removed then the growth rate is the same for both categories, 0.52%.
258.	There are also anomalies in the year 2000, although to a lesser extent.  The stage 2 works were carried out in the first six months and the possible effect can be seen in the figures: affected revenue fell by 1.7%, unaffected revenue rose by 3.8%.  No works were carried out after June and the affected revenue then rose by 2.1% (from 536810 to 548427) compared to unaffected revenue which increased by 3.19% (from 150212 to 155000).  I have no comparable figures for revenue without services 116 and 211.  Two points can be made regarding these figures.  First, it is Mr Buchanan’s assumption that passengers lost during the Phase 1 works would not return, but on the completion of the works the affected revenue increased by 2.16% compared to a fall in the previous six months which may be an indication of a return of passengers to the improved bus station.  Second, the unaffected revenue, which would have been to a limited extent affected by Phase 1 and the change of control, rose less after the completion of the works than during the works (3.19% compared to 3.8%).  These are anomalies which throw doubt on Mr Buchanan’s figures and show the difficulties experienced in interpreting the data.  
259.	I would add that none of the figures are adjusted for fares increases which would have had the effect of raising revenue but possibly reducing use of the buses, although fares increases would affect both affected and unaffected services and it is impossible to accurately gauge the effect of these increases on revenue. 
260.	The claim for losses during Phase 1 (1999 and 2000) is at best subject to considerable doubt due to the flaws in the comparison between affected and unaffected services, the lack of calculations and a full explanation showing how the losses have been calculated and due to the anomalies referred to above, which all throw doubt on the figures claimed.  The remainder of the claim is based on proof of loss during Phase 1, by continuing that loss to the start of Phase 2, on the assumption that there will be no return of passengers, and then doubling the loss for Phase 2.  It follows that if Phase 1 losses cannot be proved (as I have found to be the case) then the claim for succeeding years fails.  
261.	The Phase 1 works were completed in June 2000 and it is assumed that Phase 2 will commence in 2003.  Revenue has been, and will be, unaffected by any works during 2001 and 2002.  The claims for these years are £638,410 and £654,275 respectively.  It is assumed that passenger loss during Phase 1 will not return during the succeeding period.  
262.	Mr Buchanan said that the revenues for affected and unaffected services were static between the 5th and 9th periods of 2000.  Then there was a significant increase for both services due to fares increases and a fuel shortage.  If there had been a return of passengers following the completion of Phase 1 stage 2 in June 2000 this would have been seen in the first four periods.  These figures show that there was no material recovery of revenue between Phase 1 and Phase 2.
263.	Mr Crossley believed that the differential growth after Phase 1 for affected and unaffected services was due to other factors.  But, as there were no revenue losses during Phase 1, then any revenue losses between Phase 1 and 2 must also be zero.  The claim relies on revenue data not on passenger numbers for proof of a lack of return of passengers.
264.	In my judgment, this part of the claim also fails due to the fundamental flaws in the comparison between affected and unaffected services and the lack of proof of what has occurred during Phase 1 (then to be carried forward).  It rests on the assumption that passengers lost during Phase 1 did not return after the completion of the works.  The South Bus Station following the completion of the Phase 1 works is a considerable improvement on the old YTC Bus Station.  I am not therefore persuaded that, even if passengers were lost during Phase 1, they stayed away after the completion of the works.  The agreed figures are inconclusive but do not show that passengers using the affected services continued to stay away compared to the unaffected services.  There is a rise and fall in revenue for both affected and unaffected services, which follows the same pattern with a slightly higher increase in the unaffected revenues.  There is, however, no widening gap as would be expected if affected revenue remained relatively static compared to a normal growth in unaffected revenue.
265.	The agreed figures are as follows:-
Period	Affected	Unaffected
	
2000
			
 Period            	5
6
7
8
9
10
11
12		100
100.1
103.0
  99.0
  99.7
111.1
110.3
113.7		100
105.2
103.9
100.3
100.4
112.9
110.7
118.1	

2001
			
Period            	1
2
3
4
5
6
7
8
9		101.9
107.7
106.0
103.0
106.2
104.8
107.9
103.7
105.5		104.2
110.0
108.3
105.0
113.2
110.3
110.3
109.4
108.8

266.	The figures for 2001 have not been cleaned and therefore are of limited assistance, but the absence of uncleaned data for 2001 does not, in my view, assist YTC in the proof of their claim.  It is important to note that for periods 5-9 in 2000 (until the fares increase in period 10) both affected and unaffected revenue was almost static (100 to 99.7 for affected services and 100 to 100.4 for unaffected services).  This does not indicate to me any particular effect on affected services due to the Phase 1 works compared to the unaffected services.  If the works were artificially affecting the affected services I would expect to see the unaffected services growing much faster.  That was not the case.  It is clear that other factors were at work influencing the revenue of affected and unaffected services.  At the end of the dataset in period 9 of 2001 there is relatively little difference in the index figures for affected and unaffected services (105.5 compared to 108.8), certainly no clear indication that the affected services continued to suffer a continuing loss of passengers lost during Phase 1.  There is no proof of loss of revenue between the Phase 1 and Phase 2 works.
267.	Phase 2 comprises the completion of a single, integrated interchange on the site of the existing bus stations and railway station.  It is anticipated that these works will commence in 2003 and take two years.  This part of the claim (before discount) comprises losses of £1,341,067 in 2003, £1,374,393 in 2004, £748,433 in 2005 and £1,170,000 for lost revenue due to a half-price fares promotion.
268.	Mr Buchanan has based his figures on double the Phase 1 loss due to the greater disruption from the Phase 2 works and the closure of the South Bus Station.  This doubling of the Phase 1 loss was said to be based on the agreement that the Phase 2 works will have at least as great an impact on YTC services as the Phase 1 works.  Passengers lost will then be unwilling to return without significant efforts by YTC and the PTE to win them back.  It will be necessary for YTC to run a fares promotion to bring back lost passengers and make them aware of the improvements at Barnsley Interchange.  There will then be a reduction of losses to zero as a result of the new interchange and the fares promotion.
269.	This part of the loss of revenue claim, like the claim for the interim period between the works, rests on the establishment of loss during Phase 1. As I have indicated this loss cannot be proved.  It follows therefore that a Phase 2 loss cannot be established. Furthermore, even if a Phase 1 loss could be proved, there is no evidence to show that the Phase 2 loss would be double the Phase 1 loss.  This is an arbitrary multiplier, said to be an underestimate, and Mr Buchanan appeared to justify it by reference to the agreement that the impact of the Phase 2 works would be at least equal to that of Phase 1.  I think that this is a reasonable agreement.  But it rests on the assumption that there is a Phase 1 loss and it cannot be inferred that the agreement of at least as great an impact means that the Phase 2 loss would be double Phase 1.  If a Phase 1 loss had been proved then the Phase 2 loss might be less than double that loss or more than double.  It does not have to be double the Phase 1 loss.  But the extent of the loss cannot be proved.  The works have not been carried out; the scheme proposals are at an early stage.  It cannot be calculated what losses there might be (if any).  This is a claim for future loss where that loss is too speculative, remote or incapable of assessment with reasonable accuracy to be the subject of compensation (see e.g. Re Tynemouth Corporation and the Duke of Northumberland (1903) 89 LT 557; Re Clarke and Wandsworth District Board of Works (1868) 17 LT 549; Re Kilworth Rifle Range [1899] 2 IrR 305).
270.	This part of the loss of revenue claim therefore fails for three reasons: it is based on the doubling of a loss caused by Phase 1, which has not been proved; even if a Phase 1 loss had been proved there is no evidence to support a doubling of that loss in respect of Phase 2;  and this is future loss which is too speculative, remote or incapable of assessment with reasonable accuracy.  Revenue losses in respect of Phase 2 not having been proved or any losses having been proved, it follows that a fares promotion exercise will not be necessary and no compensation can be payable for this item of loss.
271.	To summarise the overall position with regard to loss of revenue, this head of claim has not been proved and no compensation is payable.  This claim rests on two fundamental matters.  First, that the unaffected services provide a neutral benchmark to measure losses on the affected services.  Second, that this comparison establishes losses due to the Phase 1 works which can then be assumed to continue during the interim period between Phases 1 and 2 and then double during Phase 2.  As to the first matter, the neutral benchmark, this is flawed on grounds of inadequate cleaning of the database, lack of validation and an imbalance between the amounts of affected and unaffected revenues.  These flaws are fatal to the proof of the whole claim.  Furthermore, passenger demand for buses is inelastic in the short-term.  The suggested responses to the Phase 1 works put forward by Mr Buchanan are unrealistic.  Even if the comparison between affected and unaffected revenues was not flawed it cannot be proved that the Phase 1 works caused a loss of revenue.  The loss between Phase 1 and Phase 2 rests on the assumption that passengers lost during Phase 1 will not return upon completion of the works.  This is an implausible assumption which has not been proved.  The loss in respect of the Phase 2 works is based on a doubling of the Phase 1 loss, a loss which cannot be proved and the doubling of the loss is arbitrary and also cannot be proved.  This part of the claim is for a future loss which is too speculative, remote or incapable of reasonably accurate assessment to be the subject of compensation.  This head of claim is unsupported by calculations showing how the various amounts claimed have been calculated.  The discounting of the annual losses back to the valuation date has been incorrectly carried out.
272.	This head of claim, in my judgment, has been calculated on the wrong basis.  Compensation has been agreed for losses caused by the remodelling of the South Bus Station under Phase 1 (loss of layover of bays and additional mileage).  Any additional losses should have been claimed as loss of profit.  This is an unusual case.  Normally, the acquisition of business premises results in relocation in new premises or the total extinguishment of the business.  Neither of these events has happened in this case.  YTC have lost ownership and control of the South Bus Station but continue to use it, almost to the exclusion of other bus companies.  The operation of the privatised bus industry is summarised in an Appendix to this decision.  I agree with the submissions on this matter made by Mr Holgate.  Losses must not be considered in isolation, separate from the benefits to YTC in consequence of the acquisition.  YTC now operate from a bus station which has been significantly improved at public expense and will be further improved by the construction of the full interchange in Phase 2.  YTC use the South Bus Station free of charge.  They use the bus station without capital investment in the land and incur no property running costs.  The improved facilities, now and in the future, will enable YTC to increase passenger numbers and revenue without incurring capital costs.  It would be in breach of the fundamental principle of equivalence or fair compensation if YTC could recover compensation for loss of revenue (even if it could be proved) without taking into account the benefits received.  A loss of profits basis of claim would reflect the benefits by showing the net loss (if any) due to the acquisition and consequent change of control and improvement works.  For the reasons given above I award no compensation for loss of revenue.
COST OF ADVERTISING
273.	This claim is for £45,000, comprising posters (£5,000), newspaper and radio advertising (£20,000) and a leaflet drop (£20,000).  The purpose is to bring back lost passengers.  It is associated with the reduced fares scheme following the Phase 2 works.  I have found that the claim in respect of lost passengers and revenue has not been proved.  I have awarded no compensation for that head of claim.  It follows that no compensation can be awarded for cost of advertising.
DETERMINATION
274.	Compensation has been agreed in the total sum of £110,776.  I have determined that the value of the land taken is £672,000.  I have awarded no compensation for the burden of additional rent, loss of revenue and cost of advertising.  The total compensation is £782,776.
275.	I determine that the compensation payable for the compulsory acquisition of the freehold interest in the South Bus Station (plot 1), the YTC offices and canteen building (plot 2) and 2-4 Midland Street (plots 3 and 4) under the South Yorkshire Passenger Transport Executive (Barnsley Interchange) Compulsory Purchase Order No. 2 1992 is the sum of £782,776 (seven hundred and eighty two thousand seven hundred and seventy six pounds).
276.	This decision concludes my determination of the substantive issues in this case.  It will take effect as a decision when the question of costs has been decided and at that point, but not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and order 61 rule (1) of the Civil Procedure Rules will come into operation.  The parties are invited to make submissions as to the costs of this reference and a letter accompanying this decision sets out the procedure for submissions in writing.
DATED:  8 November 2002

(Signed) P H Clarke
ADDENDUM
277.	I have received written representations on costs.  Unconditional offers of compensation were made by the PTE on 8 August and 21 December 2001,  both in excess of my award.  YTC accept that they should pay the PTE’s costs after the date of the first offer but seek an order that the PTE pay YTC’s costs up to that date and bear their own costs and pay YTC’s costs insofar as they relate to the contention by the PTE that DRC was the appropriate basis of valuation.  The PTE require YTC to bear their own costs and pay the Executive’s costs from the date of the first offer and pay the PTE’s costs before that date or, at least, that no award of costs should be made against the PTE before the first offer.  
278.	This is a case where an unconditional offer by the acquiring authority is in excess of my award and therefore falls within section 4(1)(a) of the Land Compensation Act 1961.  This provides that, where the acquiring authority have made an unconditional offer of compensation and the sum awarded by the Lands Tribunal does not exceed that sum, then the Tribunal shall, unless for special reasons it thinks proper not to do so, order the claimant to bear his own costs and the costs of the authority so far as they were incurred after the date of the offer.  The usual order is that the acquiring authority pay the claimant’s costs up to the offer and receive their own costs from that date.  Two questions arise in this reference in the light of the parties’ representations.  First, are there any special reasons why I should order the PTE to bear any part of their own costs or pay any part of YTC’s costs after the date of the first offer?  Second, with regard to the period before the offer, are there any reasons why I should depart from the usual order and require YTC to bear their own costs and pay all or part of the PTE’s costs?
279.	The first question relates to costs incurred after the date of the first offer (8 August 2001).  Are there any special reasons why the PTE should bear any part of their own costs and be required to pay any part of YTC’s costs?  YTC have gained nothing by refusing the offer and continuing with the reference.  The costs from the date of the offer cannot be said to be part of the reasonable and necessary expenses of determining the amount of disputed compensation.  YTC, however, seek relief from payment of part of the PTE’s costs and recovery of their own costs insofar as they were incurred in respect of the DRC basis of valuation, an issue (I should perhaps say the only issue) where YTC were successful.  I rejected the DRC method of valuation, put forward by Mr Hartley, and accepted Mr Nunweek’s income and expenditure method of valuation.  The PTE say that this is not a special reason for departing from the usual award of costs.  Although I rejected the DRC method, I had regard to Mr Hartley’s criticisms of Mr Nunweek’s valuation and arrived at a value of £550,413 before accepting Mr Holgate’s closing submission that I should determine the value of the land acquired at £671,873 (Mr Hartley’s valuation), which I rounded up to £672,000.
280.	I agree with the PTE that my rejection of the DRC method of valuation is not a special reason why I should depart from the usual order.  Although I rejected Mr Hartley’s DRC valuation, I accepted his criticisms of Mr Nunweek’s valuation and, taking them into account, I arrived at a land value close to Mr Hartley’s reworking of Mr Nunweek’s valuation (£529,000), well below Mr Nunweek’s figure of £1,860,000.  Mr Holgate, in his closing submissions, asked me to determine the value at £671,873 (Mr Hartley’s figure), whether by reference to DRC or as a capitalised net annual return or by both methods.  Accordingly, that was my award, rounded up to £672,000.  The overall position is that the PTE were successful on this head of claim, albeit they suffered a minor setback on the way.  In my judgment it would be wrong to penalise the PTE in costs when they were successful in the overall result.  There are no special reasons why the PTE should be deprived of any part of their costs for the period after 8 August 2001, or at all, in respect of the basis of valuation.  
281.	I turn now to my second question which relates to costs before the first offer.  The general rule is that a claimant who receives an award of compensation recovers his costs for the period before the offer.  I now consider whether there are any reasons why I should depart from this general rule and require YTC to bear their own costs and pay all or part of the PTE’s costs incurred before the offer.
282.	YTC ask for their costs to the date of the first sealed offer.  They refer to paragraph 19.3 of the Lands Tribunal Practice Directions.  A claimant who has received an award of compensation would normally be awarded his costs.  Reference is made to section 4 of the 1961 Act and the general presumption that YTC, having received an award of compensation, are entitled to their costs up to the date of the offer unless the PTE can demonstrate that there are exceptional reasons why the Tribunal should order otherwise.  The starting point is that the PTE should pay the pre-offer costs of YTC.  Special or exceptional circumstances would be needed to rebut this presumption (see Emslie and Simpson Limited v Aberdeen District Council [1995] RVR 159 at 164 and Purfleet Farms Limited v Secretary of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430; [2002] 43 EG 204 (CS) at para 42).
283.	The PTE say there should be no award of costs against them before the first offer and that an award of costs should be made in their favour.  They refer to the frequent changes of claim, the Tribunal’s acceptance of the PTE’s land value and complete rejection of the claims for additional rent, loss of revenue and advertising.  Having regard to Purfleet Farms the Tribunal is encouraged to take the view that the frequent variations of claim were due to YTC’s unreasonable exaggeration of their claim compounded by reliance on expert evidence which was found to be unreliable and tendentious.  The decision by YTC to rely on this evidence led to a substantial waste of time and expense throughout the proceedings.  
284.	I turn to the guidance given in the recent decision of the Court of Appeal in Purfleet Farms.  This was an appeal on the question of costs from a decision of this Tribunal (President and P H Clarke) in a reference to determine the compensation payable for the acquisition of development land near Purfleet in Essex.  The claimants sought £12,260,000; the Secretary of States’ figure was £3,750,000; the Tribunal awarded £6,660,000, a figure above the Secretary of State’s sealed offer.  The Tribunal however awarded the claimants only 75% of their costs on the grounds that their valuation was significantly higher than could be supported by reliable evidence, particularly the price per acre which was based on comparables south of the Thames, wholly dissimilar to the reference land and unreliable in other respects.  The Tribunal’s decision was upheld.  
285.	Potter LJ said (para 29):-
“Leaving aside the impact or influence (if any) of the CPR upon awards of costs in the Lands Tribunal it is my view that the proper approach of the Tribunal for the costs of a successful claimant (i.e. a claimant who is awarded more than the amount of an unconditional offer by the respondent) should be that he is entitled to his costs incurred in the proceedings in the absence of some ‘special reason’ to the contrary.  Whether such special reason exists in any given case is a matter for the judgment of the Lands Tribunal.  Plainly it may exist where wasted or unnecessary costs have been incurred for procedural reasons as a result of the conduct of the claimant (e.g. abandoned issues, unnecessary adjournments, or failure to comply with directions of the Tribunal).  However, so far the nature and substance of the case advanced by the claimant is concerned, special reasons should only be regarded as established where the Tribunal considers that an item of costs incurred or an issue raised was such that it could not on any sensible basis be regarded as part of the reasonable and necessary expenses of determining the amount of the disputed compensation.  This would apply not only to a claim advanced without statutory basis but to other examples of manifestly unreasonable conduct which may give rise to unnecessary expense in the course of the proceedings.  It means, in my view, that, following the hearing of a compensation reference in the Lands Tribunal in which the claimant has been successful, a special reason for departing from the usual order for costs should only be found to exist in circumstances where the Tribunal can readily identify a situation in which the claimant’s conduct of, or in relation to, the proceedings has led to an obvious and substantial escalation in the costs over and above those costs which it was reasonable for the claimant to incur in vindication of his right to compensation.”

He then gave further guidance on exaggerated claims (para 36):-
“…. I equally consider that, in exercising its wide discretion under section 3(5) of the 1949 Act and rule 52(1) of the 1996 rules, and in considering the question of whether or not special reason exists to depart from the usual order, It may usefully ‘have regard’ to the matters set out in paragraph 19.2 of the Lands Tribunal Practice Directions including whether or not the claimant has exaggerated his claim.  In considering that last question, however, exaggeration alone is not enough in the event of a large disparity between the sum claimed and the sum awarded.  The matters to which the Tribunal should have regard are (a) the reasons for that disparity and (b) their effect upon the conduct of the claim.  As to (a), if the reasons are defensible, in the sense that there was a legitimate, albeit unsuccessful, argument put forward in support of the figure concerned, there can be no good reason to regard the claim as exaggerated in the pejorative sense necessary to justify a sanction in costs.  As to (b), if, in any event, the effect on the proceedings in terms of the time spent and the costs incurred in disposing of the issue or argument concerned is relatively insignificant, then again an adverse order is unlikely to be appropriate.”
Paragraph 19.2 of the Practice Directions is as follows:-
“Costs are at the discretion of the Tribunal and this discretion will usually be exercised in accordance with the principles applied in the High Court and county courts.  Accordingly, the Tribunal will have regard to all the circumstances, including the conduct of the parties; whether a party has succeeded on part of his case, even if he has not been wholly successful; and admissible offers to settle (see paragraph 19.3 and 19.4 below).  The conduct of a party will include conduct during and before the proceedings; whether a party has acted reasonably in pursuing or contesting an issue; the manner in which a party has conducted his case; and whether or not he has exaggerated his claim.”
Both Potter and Chadwick  LJJ, however, said that paragraph 19.2 of the Practice Directions should be read with the principle of equivalence in mind otherwise there is a danger that the Tribunal will be led into error when exercising its discretion to award costs in compensation cases.
286.	Chadwick LJ said (para 43):-
“It follows that the fact the claimant has not been awarded as much as he was seeking by way of compensation – or that the award is nearer (even much nearer) to the amount that the acquiring authority had offered than to the amount sought – cannot, of itself, be a reason for depriving the claimant of his costs of the reference.  But that does not lead to the conclusion that the claimant’s conduct in exaggerating his claim can be of no relevance.  The Tribunal may be satisfied, in the particular case before it, that the fact that the claimant had exaggerated his claim has led to costs which were not reasonable for the claimant to incur in pursuit of the compensation to which he was entitled; or that it has been the pursuit of issues which it was not reasonable for the claimant to pursue that has led to the exaggeration of the claim.  Where the Tribunal makes an award of compensation which is well below the amount claimed, it is appropriate for it to consider, in the context of an award of costs, both whether the fact that the claim was exaggerated has led the claimant to incur costs which (given a more realistic evaluation of his claim) he would not have incurred and whether the explanation for the difference between the award and the amount claimed is that issues were pursued on which the claimant had no real chance of success.”  
287.	From Purfleet Farms and the cases referred to therein it is possible to find the following guidance on costs.  Where an acquiring authority is liable to pay compensation to the owner of the land taken, the costs of determining the disputed compensation are part of the reasonable and necessary expense attributable to the compulsory acquisition.  The costs of determining compensation should usually fall on the acquiring authority without whose resort to compulsory powers there would have been no need for compensation.  That is the proper starting point for an examination of costs in these cases.  The claimant has had both the procedure and the need to vindicate his right to compensation thrust upon him by the use of compulsory powers (Emslie & Simpson at 164; Purfleet Farms at paras 28 and 30).
288.	There may, however, be a departure from this general approach where a claimant advances a claim which has no statutory basis and is therefore misconceived (English Property Corporation v Royal Borough of Kingston upon Thames (1998) 77 P & CR 1 at 12; Purfleet Farms para 28) or there is a special reason for such a departure (Purfleet Farms para 29).  Whether a special reason exists is a matter for the judgment of the Lands Tribunal (Purfleet Farms para 29).  Having regard to the nature and substance of the claimant’s case, special reasons should only be regarded as established where the Tribunal considers that costs have been incurred or an issue has been raised which could not properly be regarded as part of the reasonable and necessary expense of determining the compensation.  A special reason exists where wasted or unnecessary costs have been incurred for procedural reasons as a result of the manifestly unreasonable conduct of the claimant.  To depart from the usual order for costs the Tribunal must be able to identify a situation in which the claimant’s conduct has led to an obvious and substantial escalation of costs over and above those costs which were reasonable in vindication of the claimant’s right to compensation (Purfleet Farms para 29).  When considering whether or not special reasons exist the Tribunal may usefully have regard to the matters set out in paragraph 19.2 of the Lands Tribunal Practice Directions, i.e. the conduct of the parties, success in part of a case (even if not wholly successful), offers to settle and the exaggeration of claims.  
289.	Exaggeration alone is not enough to merit a departure from the general rule.  The Tribunal should have regard to the reasons for the disparity between claim and award and their effect on the conduct of the claim.  If the effect is relatively insignificant then an adverse costs order is unlikely to be appropriate.  Conversely, the exaggeration of a claim which leads to wasted time and costs may be a reason to penalise the claimant in costs (Purfleet Farms paras 36 and 43).  (Particular guidance was given regarding the use of comparables in relation to costs which is not relevant to this reference (Purfleet Farms para 38)).
290.	I look now at the contentions of the parties in respect of costs before 8 August 2001 in the light of the above guidance and my decisions on the heads of claim.  The PTE say that I should depart from the general rule that the claimants should receive their costs before the offer due to the frequent changes of claim before and during the hearing and YTC’s lack of success on all heads of claim.  YTC say that I should follow the general rule and award them their costs up to the date of the first offer.  
291.	I look first at the frequent changes of claim.  The PTE say that the claimants amended their claim 11 times between June 1997 and April 2002.  It varied from £42.2m to £8.5m.  YTC reply that the changes were caused in part by changes in the position of the PTE, particularly before the offer.  When the initial claim was made there was no guarantee that YTC would be able to continue in business from the South Bus Station.  The claim was then on the basis of total extinguishment.  In August 2000 it was reduced when it became clear that YTC would be able to continue to use the bus station.  On 14 April and 4 June 2001 meetings were held at which details of Phase 2 were given, resulting in the need to make further changes to the claim.  The essential basis has however remained constant: many of the amendments were in response to changes in the PTE’s position.  Revisions of claim are not unusual.  It would be inequitable and contrary to the overriding objective set out in paragraph 2 of the Lands Tribunal Practice Directions for claimants to be penalised in costs when seeking to resolve and refine issues, thus discouraging negotiation and adjustment as new evidence emerged.  
292.	I have only limited information about the negotiations before the hearing.  Following the start of the hearing there continued to be changes to the YTC case, the submission of new evidence and documents and, in particular, substantial revisions to the claim for loss of revenue.  The changes were greater than I would have expected if YTC had established their loss and adequately prepared their case before the hearing.  The changes were, I believe, prompted more by their wish to maximise their compensation than to assess their true loss. They are part of the exaggeration of their claim but I cannot say that, in itself, the many changes of claim  caused wasted time and costs which I can identify.  
293.	I look now at each of the disputed heads of claim.  First, land value.  Mr Nunweek’s figure was £1,860,000 based on an income and expenditure valuation; Mr Hartley’s figure using a DRC valuation was £671,873.  He made numerous criticisms of the figures in Mr Nunweek’s valuation and reworked it to produce the much lower figure of £529,000.  I accepted Mr Nunweek’s method of valuation but rejected the disputed figures in his valuation.  I arrived at a value of £550,413 but determined the land value to be £672,000, Mr Hartley’s figure, having regard Mr Holgate’s closing submissions.  The evidence of Mr Nunweek and Mr Hartley occupied two days of the hearing.  
294.	The PTE refer to pre-hearing changes to this head of claim and draw attention to my acceptance of Mr Hartley’s valuation, notwithstanding my rejection of his DRC method.  YTC refer to the lack of any adverse findings as to the reliability of Mr Nunweek’s evidence.  Valuation is an inexact science.  Exaggeration is no reason for a costs penalty, particularly where the amount is based on expert evidence (see Purfleet Farms paras 36, 37 and 43 and Lands Tribunal Practice Directions para 19.2).  It would be inappropriate to award costs to the PTE for the period before the first offer.  There is no evidence to show that the PTE incurred costs which it would not otherwise have incurred or that the explanation for the difference between award and claim was due to issues which had no real prospect of success.  Evidence was necessary to deal with the disputed basis of claim.  
295.	The valuation of a vacant bus station for its existing use is a difficult exercise.  No direct comparables could be found.  I rejected Mr Hartley’s DRC method as inappropriate but decided that this should not lead to any penalty on the PTE as to costs.  There is a considerable discrepancy between Mr Nunweek’s valuation and my award.  This can be explained partly by the inherent difficulties of valuation in this case but, in my view, it is mainly due to the exaggeration of this head of claim.  Although I made no express criticisms of Mr Nunweek in my decision it is clearly implicit in my rejection of the bulk of his evidence, other than the method of valuation.  In my judgment, Mr Nunweek unreasonably exaggerated his valuation and I am doubtful whether it represented his objective opinion of value.  I cannot say, however, that this exaggeration led to identifiable wasted time and costs.  The evidence on land value only occupied two days.  There was scope for legitimate and objective differences of opinion on the method of valuation and the components of the valuation.  I am doubtful whether, even if Mr Nunweek had adopted a more objective and realistic approach, the time spent in the preparation and hearing of evidence would have been greatly reduced.  A more realistic figure by Mr Nunweek would, however, have increased the possibilities of a settlement, a matter I return to later.
296.	I look now at the burden of additional rent (£500,500 or £610,500).  I made no award for this head of claim.  It rested mainly on submissions.  I heard little evidence on this issue.  The PTE refer to the frequent changes of claim and to my findings that explanations for the different claims put forward were sometimes lacking in clarity and consistency (para 85) and that it rested on the false premiss that the payment of an increased rent could be the subject of compensation without any rebuttal of the presumption of value for money (para 121).  YTC repeat their submissions regarding land value summarised above.  
297.	This claim failed because it was based on a false premiss, it lacked supporting evidence and YTC were unable to rebut the presumption of value for money.  As a head of claim it was reasonable in principle and some compensation might have been awarded if it had been more realistic and supported by evidence.  It was an exaggerated claim but I cannot say that it led to wasted time and costs, although it inevitably reduced the chances of a settlement. 
298.	I deal now with the claim for loss of revenue (£5,961,518) and the related claim for advertising (£45,000).  I awarded no compensation for either head of claim.  The greater part of the hearing was concerned with evidence relating to loss of revenue and allied matters – 10 days out of a total of 12 days of evidence.  
299.	The PTE refer to the frequent changes of claim, my nil award, the lack of independence of Mr Buchanan, his flawed assessment of loss and my conclusion that the claim was calculated on the wrong basis (para 293).  YTC say that it is not enough for the PTE to say that I had reservations as to Mr Buchanan’s evidence and that no award was made.  The PTE must show that it was unreasonable for the claimants to pursue this claim, i.e. that they had no real chance of success.  That was not the position.  It depended on a finding of fact, as to likelihood on the balance of probabilities.  The evidence of YTC was capable of acceptance and had a realistic prospect of success.  Mr Crossley’s evidence for the PTE was that the loss had not been proved: he accepted that there might be a loss.  There is no reason why YTC should have recognised before the hearing that their expert evidence would be treated with caution by the Tribunal.  There is nothing to suggest that costs were incurred by the PTE, unnecessarily or otherwise, in responding to Mr Buchanan’s first report.  The Tribunal’s reservations as to Mr Buchanan’s evidence do not justify an order requiring YTC to pay the PTE’s costs prior to the first offer. 
300.	Loss of revenue was the largest claim and occupied almost the whole of the hearing.  It was, in my view, the least meritorious of the claims, it was greatly exaggerated, it was calculated on the wrong basis (para 272), and lacked credible evidence.  It was an exaggerated claim on which a great deal of time and cost was expended. It merits an award of costs against YTC.  The size of the claim greatly diminished any chances of a settlement..
301.	My overall conclusions on the costs of this reference are as follows.  The starting point is that claimants whose land has been compulsorily acquired should receive their costs unless the acquiring authority have made an unconditional offer which has not been exceeded, or a claim has no statutory basis or there is a special reason for departing from the general rule, e.g. an unreasonably exaggerated claim which caused wasted time and costs.  In this reference the PTE made two unconditional offers to settle, both in excess of my award, and should therefore receive their costs from the date of the first offer under section 4(1)(a) of the 1961 Act.  My rejection of the method of valuation adopted by Mr Hartley on behalf of the PTE is not a reason for depriving them of any part of their costs.  The claims put forward by YTC for land value and loss of rent were greatly exaggerated but did not increase costs over and above those reasonably necessary for determinations in respect of those heads of claim.  The claim for loss of revenue (with the related advertising claim) was, however, greatly exaggerated, calculated on the wrong basis and unsupported by credible evidence.  It was the largest and least meritorious head of claim.  It occupied the greater part of the hearing.  It goes further than exaggeration: it is exaggeration which resulted in a waste of time and costs, at the hearing and in preparation, and therefore should result in a costs penalty on YTC.  Furthermore, were it not for Purfleet Farms, I would have taken the view that the exaggeration of all heads of claim greatly hindered any possibility of a settlement, and was in itself an additional reason for departing from the general rule.  However, leaving that matter out of account, I have still concluded that I should depart from the general rule and deprive YTC of their costs for the period before the first offer.  I do not, however, consider that I should go further and require them to pay any part of the PTE’s costs for this period.
302.	Accordingly, I make no order as to costs for the period before 8 August 2001 and I order YTC to bear their own costs and pay the costs of the PTE from that date, such costs, if not agreed, to be the subject of a detailed assessment on the standard basis by the Registrar of the Lands Tribunal.
					DATED: 16 December 2002

					(Signed) P H Clarke
APPENDIX
A STATEMENT AGREED BY THEPARTIES REGARDING BUS OPERATIONS
Operator licensing
(1)	Any person can apply to become a bus operator since the deregulation of bus services under the Transport Act of 1985.  In accordance with the Public Passenger Vehicles Act 1981 section 14 the person is required to apply to the Traffic Commissioner and satisfy the Commissioner that they are of good repute, that they have sufficient financial standing (a specific sum of money per vehicle they wish to operate), they are professionally competent, have maintenance facilities or a contract to maintain their vehicles and that there are adequate arrangements for securing compliance with the law relating to driving and operation of those vehicles.  Schedule 3 to that Act gives supplementary provisions to be considered when deciding on the fitness of the person to hold an Operator’s Licence.  If the applicant satisfies the Traffic Commissioner then he shall issue an Operator’s Licence.
Operation
(2)	After receiving the Operator’s Licence, and subject to having vehicles to operate, the Operator will submit an application to run a service, giving 42 days notice of the intended starting date, to the Traffic Commissioner.  The application will show route, days of operations, a timetable, but not fares.  Fares are entirely within the control of the Operator.  In a Metropolitan County, at the same time as sending the application to the Traffic Commissioner, a copy must be submitted to the Passenger Transport Executive.  In all other areas, it should be submitted to the relevant county or other authority who has responsibility for securing tendered services.
Concessionary revenue
(3)	Under sections 93 – 105 of the Transport Act 1985 and the Travel Concession Scheme Regulations 1986 Passenger Transport Authorities in Metropolitan Counties and Transportation Departments in Shire Counties, can establish concessionary fares schemes for the carriage of senior citizens, school children, students aged 16-18, blind persons and disabled people.  All Operators have a right to be admitted to any scheme established.  Operators can be required to participate but in South Yorkshire there is a purely voluntary scheme and no participation notices have been issued.  An Operator could leave the scheme on notice.  Operators are reimbursed by the Transport Executive for participating in the scheme.  The basis of reimbursement is that Operators would be no better or worse off than they would have been had they charged a commercial fare.  Regulations define the basis for reimbursement and make allowance for factors such as the extent to which the level of the concessionary fare generates travel.
Tendered services

(4)	Under sections 89 - 92 of the Transport Act and the Service Subsidiary Agreement (Tendering) Regulations 1985 both Passenger Transport Executives and Transportation Departments of Shire Counties have the right to seek tenders to operate services that they wish to secure and are not provided commercially-tendered services.  Most Operators bid for these, however a great many of the small Operators choose not to do so as the vast majority of these services are in unsociable hours, late at night, etc.  Approximately 10% of the total bus mileage operated in South Yorkshire is tendered.

Bus operators

(5)	The vast majority of Bus Operators are now in the private sector, as the 1985 Transport Act also provided for Government and local authorities to privatise their bus operations.  Deregulation encouraged a great many more small companies, although these have now dwindled.  A good many of the larger companies have now moved into groups and some of the very large ones are Stock Exchange quoted.  Yorkshire Traction is a company that started 100 years ago as a private company, moved into the public sector, and has since become private again.

Operation of bus stations:  private operators compared with Passenger Transport Executives

(6)	The privately operated bus stations, i.e. those owned by the bus operators, can be operated in a commercial manner to ensure that the bus company itself achieves the best operation for its customers and, at the same time, generates its own best commercial position, subject to competition and fair trading legislation applied under the Transport Act 1985.

(7)	South Yorkshire Passenger Transport Executive (SYPTE) operates bus stations and interchanges at Barnsley, Doncaster, Rotherham, Meadowhall and Sheffield.  Each one is operated in the same way.  Its power to operate bus stations derives from section 81 of the Transport Act 1985 (RW rebuttal 2.2, November 2000).  SYPTE is required not to discriminate between Operators in its allocation of stands, charges and other facilities (section 82 of the Transport Act 1985).

(8)	SYPTE, therefore, has a process for stand allocation.  SYPTE aims to group services together in the most effective way for passengers (‘corridoring’).  When an Operator changes services or introduces a new service that could cause a reallocation, an agreed procedure is followed.  This does have an appeal mechanism but no one has found it necessary to use it to date.

(9)	SYPTE operates an open access policy in its stations to encourage their use.  Operators request permission to use the station and agree to abide by the conditions of use.  There is no formal agreement between an Operator and SYPTE for the use of a stand and an Operator can vacate a stand at any time subject to the requirements of the Traffic Commissioner and the Transport Act with regard to service registration.

(10)	Between April 1999 and March 2001 the SYPTE phased out its departure charges at all bus stations.  The charge was progressively reduced from 20p (1999-2000) to 10p (2999-2001).  From April 2001 no charges were levied.  At Barnsley Interchange no charges were ever levied by the SYPTE on the Platform A (YTC) area from when it took over in December 1998.  During the construction period, departure charges were also waived on the North and East Bus Stations.

(11)	At its bus stations, SYPTE provides a range of passenger facilities and services.  It provides information on Operator services, security and cleaning.  All main bus stations have toilets, CCTV and staffing.  SYPTE has been awarded Chartermark status for all of its interchanges.  Barnsley’s Chartermark was first awarded in 1998 and subsequently in 2001 (it is held for three years).

[This statement omits the General Conditions Relating to all of the Executive’s interchanges and bus stations which form part of the agreed statement]