MP calls for bus services regulation

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Graham Stringer MP calls for regulation of bus services, so that the commercial competition is off road at the tendering stage.

Since the 1985 Transport Act deregulated bus services outside of London there has been a dramatic decline in passenger's numbers and a real increase in fares, this has been in stark contrast to the bus system in London which has remained regulated.

Here the passenger numbers have increased. The long term decline in passenger numbers outside London is likely to be exacerbated in the immediate future as bus services come under more pressure because of:

• Cut in BSOG fuel subsidy of 20 per cent next year

• Abolition of rural bus grant

• Reduction by 50 per cent since election of funding for small to medium size public transport schemes (Integrated Transport Block) which funds measures like bus priority schemes

• Reductions in CLG funding for local government which in turn puts local authority budgets for supported services under pressure

• Demand for concessionary travel increasing while government funding is being reduced

The passenger transport executive group PTEG have forecast that given these factors the aggregate impact on the Met areas will be that between 2009 and 2014

• Fares will increase by 24 per cent
in real terms

• Service levels will decline by 19 per cent

• Patronage will decline by 20 per cent

This is in line with the most recent DfT estimates of decline which is that between 09/10 and 10/11 bus patronage will decline by 2.9 per cent.

Significant cuts to supported bus services have already been made in non metropolitan areas where a recent House of Commons Transport Select Committee report found 70 per cent of local authorities had already made cuts.

The Competition Commission (CC) currently investigating the local bus market interim finding includes:

• Profits are higher than they would be if the market was competitive

• Too many operators face little or no competition in their areas
On remedies it found that:

• Short term bus wars on the streets were not the way forward

• More should be done to facilitate multi-operator ticketing

• Franchising ('quality contracts') is a legitimate response in major urban areas

Graham Stringer MP calls for regulation of bus services, so that the commercial competition is off road at the tendering stage.

The bus industry is currently engaged in a major campaign to undermine the CC's interim findings in defence of the highly profitable status quo. For example Stagecoach profits from its UK Bus division were £153m in 2011 representing a profit margin of 17.1 per cent (up from £126.1m and a 14.4 per cent margin in 2010).

I would like to see both the CC and the government build on Transport Act 2008 which made it easier for PTE's and Local Transport Authorities elsewhere to re regulate the bus services via quality contacts the franchising system which means that the commercial competition is off road at the tendering stage.

Graham Stringer has been Labour MP for Blackley and Broughton since 1997. He currently sits on the House of Commons transport, and science and technology committees.