Tuesday, 26 August 2014

Report rues deregulation

The IPPR has issued a report that calls bus deregulation outside of London a failure. What was promoted as a way to bring better services and lower fares has in many cases brought fewer services and fares that are so high, many people find it cheaper to drive or use taxis. BBC News and the Guardian report on the report, while the Independent has an editorial on the issue.

London's regulated, but still privatised, system comes in for praise. Its success is backed up by a 99% rise in passenger numbers since 1986. Over the same period, passengers numbers across the UK excluding London have dropped by around a third.

The big difference in London of course is the level of subsidy the bus network receives, which is per capita far in excess of that granted to any other region of the UK.

As an illustration of the parallel universe that passengers outside London have to contend with, MPs in Warrington are lining up to criticise fare rises at Warrington Borough Transport of up to 65%, which were implemented in August. Full story in the Warrington Guardian.

Which other industry could get away with a 65% price rise overnight? There is a lot of innovation in the bus industry, but it is often far too patchy and companies have frequently lost sight of how things appear from the point of view of the existing or prospective customer, not to mention the wider economic and social impact of service changes.


  1. London's network isn't privatised; not by a long mile. TfL determine the scope of the contracts for each route (the times of buses; the frequency; the size of bus) and private companies (ie non-state) bid for the contracts. The operators have no say in revising the services or frequencies on offer at all.

    As someone who has been in the industry for 40 years, this report makes me seethe! We've been fighting decline for decades, with varying amounts of interference from Government. Deregulation did stem the decline, but continued calls for profits to be ploughed back into the industry instead of going to shareholders (which, don't forget, was the result of the structure set up by Thatcher's cronies) have been followed by misguided reports like this, which do no good to our efforts at all.

    Perhaps this report should have looked at the facts - the expanding and improved networks in Oxford; Brighton; Exeter; Bournemouth; Cambridge and others.

    I was in Newcastle on Tyne recently; loads of privatised buses carrying plenty of passengers; good quality operator-produced publicity; decent buses, ranging from 15 years old to brand new (as any fleet will be); not a lot of subsidy (except for the round the houses routes that really don't serve many people but infill the "network holes"); rubbish network publicity from Nexus, who is looking to impose their ideals on the services, but without any London-style subsidy.

    Yes . . . . rural bus services are declining, because the user base is declining - Mrs Scroggins is now either too old to use the bus or dead, and her children are of the car-owning generation. If the bus doesn't carry any passengers, maybe it's just because there are no passengers there to carry!! Similarly with evening services - entertainment is now much more home based (and has been heading that way since the 1950's), so why run buses that carry 1 or 2 passengers . . . . . that's what taxis are for!!

    If bus companies restrict themselves to running 0600-2000, that's because there aren't significant numbers of passengers outside those hours . . . . . remember, we're a business like any other, that responds to the wants of its customers. If LTA's want to buy in services outwith those hours, then let them. Just at the moment, of course, LTA's have no money, so they're looking hard at contract prices and usage (and about time too - there are too many evening and Sunday services that run around empty (or nearly so - see my comments above).

    The industry is re-balancing itself again, away from subsidy and more towards providing buses when passengers want to travel (WANT, mind you, not MIGHT want to travel). We'll survive, despite reports such as this, and interference from both local government and Whitehall - we always have.

  2. There are a number of industries in retail sectors that put in some pretty big price rises at times. The irony with Warrington of course is that WBT isn't a private bus company but owned by the local council, it did however come very close to collapse last year and needed to be bailed out by its council owners (& then the staff went on strike for a pay rise leaving all logic miles in the rear view mirror). To an outsider it looks like WBT, for political reasons of its owners whether explicitly or subconsciously, were holding down fares & running marginal services which left them with no space if costs or income changed & with cuts in BSOG rates & concessionary fares you will very quickly find yourself in trouble if you don't react quickly.

    It depends on whether you are looking at all the factors on whether deregulation (or so called, the industry is still heavily effected by government interference) has worked. Yes, passenger numbers have fallen since 1986 but they were falling faster before. Yes, London has seen growth where the provinces have seen falling but only after they started throwing huge subsidies at the network when they were trying to run it for minimal subsidy it was experiencing falling/static numbers just like elsewhere. The biggest issue with loss of service in the deregulated market at the moment is with the tendered bus networks where council funding cuts have seen heavy service withdrawals whilst the commercial market is starting to strengthen. Car costs are increasing whilst the more successful bus operators have worked hard to hold their prices and the cost competition between bus & car is now much closer with many switching as their simply isn't the basis for using a car over public transport in many places anymore.

  3. Well said, Greenline727, couldn't agree more. Buses are a form of mass transit. That's mass transit - moving lots of people efficiently. Taking control of service planning away from the bus companies and introducing networks of services running where councils or whoever thinks they should run would be a hugely expensive disaster, buses running all round the houses and probably not carrying carrying anybody for the reasons Greenline727 has described above and heaven knows what sort of granidiose nonensical pet projects would also be introduced to suck up cash (actually, I do - look at Cardiff Airport).

    Yes, I admit that reports like this and posturings from the likes of Nexus sound great in theory but the question of where all the extra money is going to come from is never answered properly. Look also at all the time and effort (and cost) of TfL putting every potential route change out to 'consultation' whereas anywhere else in the country, it's just subject to 56 days notice (or less if short notice is applicable) and bus companies just get on with it. Brighton was mentioned above, a great example where bus usage is booming and services are changed (actually 'tweaked' would be a far better word) just twice a year with full details of all changes and the reasons behind them being posted on their website. In fact, this also shows that many of the changes are actually suggested by drivers and passengers - real people on the ground, who know what's actually going on.

  4. Most of the public and politicians still regard public transport as a form of public service and want it on demand at cheap fares. They don't understand the need for profits or even I often think the need to 'break even'!! Make any change that is deemed to be 'negative' and you are accused of profiteering!!

    Local councillors often used to tell me that bus services were the one subject they were most asked about when canvassing before an election (and in between!!).

    A senior local government officer once suggested to me that in some localities it had been very difficult and sometimes impossible to withdraw bus services in the NBC era when industries/collieries etc closed or change attendant 'working practices'.

    The expectation (or hope) had then been been that the redundant workers would now set up low cost alternative bus companies to help bring down the costs within the industry.

    I find the problem to be the 'smaller town/urban areas' where there isn't enough business to provide more than an off peak (between schools) operation on a commercial basis. There seems to be a growing view that s106 payments are the answer which may fund peak operations in the short term, but when this runs out .............................

    1. To suggest that fares outside of London are cheap is laughable. In many case they get close to the cost of a taxi so something is very wrong with their operations. If there are two people a taxi is far cheaper

    2. Bus fares cheap? You have to be joking for a very basis unreliable service you pay almost as much as it would cost to go by taxi.

  5. I do struggle sometimes with this 'low-cost' concept which is so often touted as the answer to so many of the industry's problems. In reality, all it means is running old buses which can't generate a sufficient return for their eventual replacement and paying low wages to drivers, which is fine in times of high unemployment but falls apart in more prosperous times and doesn't allow the retention of the better, higher-quality members of staff. None of this is particularly 'good' for anyone, least of all the industry trying to steer people away from their cars.

    As I've mentioned before on the Omnibuses blog, the public's (and many politicians') belief that bus services are organised by the local councils is a real problem but one that no-one (politicians or bus industry) is interested in addressing. One the one hand, politicians and councils are more than happy to take credit on the back of commercial bus operators' many successes and on the other hand, too many operators (to their shame) are quite content to let the flack from any cuts and route withdrawals be attributed to 'council cuts' and 'local authority funding withdrawals' irrespective of the services in question being tendered or commercial. It's hardly surprising that the public has so little understanding of how their bus services are provided and unfortunately, all this confusion really helps nobody in the longer term.

  6. Surely a better comparison between the London centrally planned network and the provincial deregulated one would be to compare the provincial system with Northern Ireland - because NI has a mixture of rural and urban services, but is nationalised, with all that that implies in terms of centralised planning, employment conditions and so on. How does NI's bus scene look in terms of service coverage, fare-levels, fleet renewal and trends in passenger numbers?

    Although outside the scope of this blog, it is interesting that the nationalised Northern Ireland Railways is performing better than any company on the mainland in terms of both financial terms and passenger satisfaction.

  7. "Most of the public and politicians still regard public transport as a form of public service"

    I think the core question here is "Should public transport be a public service, which includes sufficient financing/subsidy from public taxes?"
    In most European countries it actually is a public transport. Have you ever experienced public transport in Switzerland? This shows what quality and passenger numbers can be reached, when public transport is provided by public entities that are proud of providing it. (The fares are not low though. Like the few successful companies in the UK, they win passengers by quality not by cheap fares.)

    The other question is: Why are school, hospitals, the street network, garbage disposal and so on public services, but public transport is not?
    Of course all these are not questions that can be answered by the industry itself, but must be answered by the society as a whole...

  8. The whole attitude to 'public services' in this country seems to be wrong.

    Unfortunately, historically, such services were often badly run, and tended to have inefficient working practices and high costs. Public expectations (demands) grew and costs with it. The blame culture has also created an industry within in each service to try and ensure there is no blame and that systems (galore) are in place to monitor, record and check everything that was done, in case their is a 'claim'. The back office costs that the service departments have to carry are staggering. That's why many services have and are being 'hived off' and can be operated cheaper by other entities.

    You then come on to political involvement (interference) both nationally and locally. Where there is blame (real or potential, right or wrong) there is a councillor trying to get some kudos and votes (there are some good ones) whether its blameworthy or not! Public transport (operators) need to be able to get on with the day job and not find themselves in the treacle of such political machinations.

    I would like public transport to be more of a service - a comprehensive and reliable one but how do we get away from the above issues and interference.

  9. The deregulation of b uses has been an unmitigated failure . Services have declined dramatically and fares have rocketed so high that in most cases it is cheaper for two people to get a taxi. Services are infrequent and change at the drop of a hat

    They should set up regional transport authorities to control the bus services on a TFL bases ie the Regional transport authority controls the network and sets service levels and fares

    What we currently have is local monopolies with the bus services with one dominate operator controlling an area and with gentleman's agreements not to compete in each areas patch. Maybe even these Regional Transport bodies should control the garages as that would allow for increased competition


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