Franchises offer best hope for buses – PTEG

18 October 2006

Making it easier for local transport authorities to set up franchise agreements with bus operators would secure more reliable and integrated services, without spending more, it was claimed this week.
The Passenger Transport Executive Group, in a submission to the Government’s bus policy review, has denied that franchising is dependent on increases in subsidy. This follows indications from the Treasury that public spending would not increase in next July’s Comprehensive Spending Review.
The Commission for Integrated Transport had advised ministers that regulation alone would ‘not necessarily drive up patronage’, and that London-style improvements would require London-sized subsidies (Surveyor, 8 July 2004).
But soft market testing of proposals for new quality contracts in South Yorkshire and Tyne & Wear with 13 prospective operators indicates that improvements would be secured under current expenditure, according to the PTEG.
These discussions indicate that ‘significant quality improvements’ could be delivered. The over-provision of buses on some main routes – either down to an excess of competition or one operator trying to ward off competition – would be ended, while more lightly-used services could be cross-subsidised by the profits of more popular routes. The report stresses that the improvements would not have to entail ‘restrained fares and high vehicle replacement’ as in London – potentially disappointing residents. But reductions in fares could be secured by using the increased fare income from increased patronage to lower fares.
The current situation is wasteful of resources, the PTEG stressed, with subsidy to the bus industry having risen from £1bn in 1999/2000 to more than £1.8bn in 2004/05 – while patronage has plummeted, fares have risen and service quality ‘continues to be patchy’. But the Confederation of Passenger Transport has also been making representations to the Department for Transport.
A spokesman said: ‘We’ve been highlighting the views of operators who believe that replicating the London model could lead to a very large increase in costs. ‘Go North East estimates that in Tyne & Wear, this would require a 20-fold increase in funding, adding £200 to every council tax bill.’
A report from the CPT published this week that the decline in bus use outside London is slowing.

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Franchises offer best hope for buses – PTEG

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