The biggest issues for public transport companies over the next three to five years will be to provide customers with value-for-money services, increase safety and address environmental concerns.

Value for money involves providing passengers with the right information at the right time so they can make informed decisions about their travel arrangements, while also making pricing structures more simple.

Concentration on safety requires improving the management of infrastructure, such as signals and traffic lights, and boosting surveillance measures by deploying technology, including CCTV cameras to read vehicle number plates in specific danger spots.

The green agenda, meanwhile, is focused on encouraging customers to leave their cars at home and make more use of trains and buses to reduce their carbon footprint. At the same time, toll and congestion charging systems are tackling demand management on roads.

The Department for Transport set up a Transport Innovation Fund in 2004, with the aim of making a £200m yearly pot available to local councils for anti-congestion projects. So far, nine authorities have agreed to introduce pilots by 2009.

Simon MacWhirter, transport account director at consultant Capgemini, says after a long time, people are starting to understand that if they want good quality services, they have to pay for them.

‘Another key consideration is safety, which is a very emotive subject in transport,’ he says. ‘New technologies such as CCTV, GPS and Bluetooth are starting to change agendas, however, and allow organisations to do things that weren’t possible in the past.’

And it is in the area of more specialised IT systems that the bulk of transport expenditure appears to be going.

According to Philippe Martin, senior analyst at public sector research company Kable, the public transportation sector was worth about £878m in fiscal year 2006/07, but will grow at an annual compound rate of about 10 per cent to £1.17bn by 2009/10.

Martin says transport is the one area that is growing compared with other government sectors, even though it is a small market. While spend on IT in other areas will increase yearly by about four per cent, investment in transport market systems will jump by 16 per cent by 2010.

‘Transport believes in IT, but the growth isn’t coming from traditional back-end systems – it is in technical specialisms such as traffic and asset management,’ says Martin.

A key challenge in enhancing traffic management is that the UK’s transport infrastructure has suffered from under-investment, and capacity is unlikely to increase much in the future.

The country is too small to continue building new roads and airport runways indefinitely, and it is expensive to lay new railway track when margins are tight.

Jamie Houghton, an executive at IBM Global Services, says it is a general theme that supply of transport infrastructure can’t keep up with demand. ‘IT will play a more significant role in the overall management of transportation because demand will have to be handled more effectively,’ he says.

Houghton says there are two key ways to improve capacity planning. The first is to make pricing more simple through the use of electronic tickets, such as smartcards on public services and GPS to collect congestion charges. The second is electronic technologies that provide passengers with incentives to travel outside of peak hours or travel discounts.