Urban Transport Group warns against new franchising hurdles


Transport bosses have rejected calls from the competition watchdog for ‘additional hurdles’ to be introduced for franchising proposals under the Bus Services Bill.


Earlier this week Douglas Cooper, inquiry director at the Competition and Markets Authority (CMA), revealed that the CMA had written to transport minister Andrew Jones, recommending that local transport authorities should be obliged to take a number of steps ‘before taking action that puts at risk the benefits of competition for bus passengers’.

In response, Dr Jon Lamonte, chair of the Urban Transport Group, which represents transport authorities in large urban areas, said current powers to co-ordinate and improve bus services fall 'far short of what cities outside London need'.

He said: ‘We are pleased therefore that the Competition and Markets Authority (CMA) recognises the need for the Bus Services Bill to provide Local Transport Authorities with a wider and fuller range of powers to improve local bus services, including the franchising of networks of bus services.

'However, we do not share the CMA's view that a new set of hurdles and criteria needs to be introduced before cities can be allowed to co-ordinate bus services through franchising. The CMA view appears to rest on the assumption that on-street competition is inherently preferable to competition for a contract to provide a network of services.'

Dr Lamonte added: ‘We believe that there can be wider benefits to bus passengers, and for our cities' wider aspirations on transport, of having a straight-forward method of replacing on-street competition with for-the-market franchising competition.’

The additional steps recommended by the CMA are:

  • in the first instance, consider how best to make the deregulated market work so the benefits of competition for passengers can be retained
  • carefully assess the impact of their proposed action – be it a partnership scheme or franchising – including the impact on local competition
  • demonstrate that any distortion to competition created by the proposed arrangements would be justified by the contribution to achieving other policy aims
  • consult openly, including with the CMA

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