Regulator set to release First Bus from decades-old pledge

 

The Competition and Markets Authority (CMA) is set to release a bus operator from undertakings dating back more than a quarter of a century after finding that they no longer serve any purpose.

The regulator said it has provisionally decided that there is no longer any need for undertakings put in place following the 1989 merger of two local bus companies, which was investigated by the Monopolies and Mergers Commission (MMC).

”Local
A First Bus vehicle on the Bristol quayside

The MMC said the merger would remove competition for subsidised bus services contracted by the former Avon County Council.

When the company was renamed FirstGroup Holdings Ltd (a subsidiary of FirstGroup plc), that company became subject to the restrictions, including a cap on the amount it could receive from the local authority for running a tendered service and a requirement to return any excess profit from such services.

A First Bus spokesperson said: ‘First Bristol welcomes the publication of a provisional decision by the Competition and Markets Authority to release the company from undertakings relating to a merger dating back more than 25 years ago.’

‘Neither the original undertakings themselves nor the consequences of this decision impact the way we continue to invest in bus services in Bristol and the wider West of England region. Following more than £25m investment in a low-carbon fleet over the past two years, we are committed to investing in a bus fleet that benefits our customers and local air quality. We are only bus operator in Bristol to do so.’

The CMA found that FirstGroup’s share of tendered bus services in the region has reduced significantly since the undertakings were given.

It said it engaged with local stakeholders and no party it spoke to argued that the undertakings were having a beneficial effect and should be retained. It is now consulting on its provisional decision.

 

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