Bus regulation: The debate rolls on...

Bus regulation: The debate rolls on... Merseytravel's Mark Dowd: "Bus operators laugh all the way to the bank."

The regulatory debate rolls on. And as it does "bus operators laugh all the way to the bank". Well, that’s one view.

Do the PTEs remember some mythical world where every back street in every city had a bus running down it, with some cheery conductor hanging off the platform shouting "Hold on tight!" as he dinged the bell?

It never existed. Buses – and trams before them – were essentially about volume movement down busy corridors, even in the days when the operation was run by some benevolent municipal transport department, not an evil profit-making multinational.

And that basic rule of bus service provision hasn’t changed – but there’s still a feeling in some areas that it should, and that this mythical world, where every citizen has access to a bus and all the buses run on time, can be created under a new regulatory environment. And while the government has so far resisted calls for re-regulation, that’s no reason for complacency.

PTEG – the Passenger Transport Executives Group – was quick to seize on a statement last week by transport minister Gillian Merron promising a decision on the future of buses this autumn, although she still stressed the government’s commitment to quality partnerships as the way forward.

Merron was addressing the Commons transport committee, under the chairmanship of the redoubtable Gwyneth Dunwoody. And despite clear reports of passenger numbers rising through partnership in places such as Brighton and Cambridge, the feeling in the metropolitan areas is that control, not co-operation, is the way forward if the decline in bus patronage is to be halted.

The complaints are many.

Take this one from Mark Dowd, chairman of Merseytravel: "On Merseyside we have a 75 per cent change of commercial buses every year. That is one of the reasons why people will not travel on buses. In St Helens next month there will be a massive change in the bus services there."

Dowd went on to complain that operators "are in a position where they can change the routes every 56 days. Obviously if we look at what they will do in St Helens, which is next month, they will change the services wholesale and that is the law of the land as it stands, and that is why we are sitting here today".

Or how about this, again from Dowd, pointing out that the amount being spent on subsidised services has risen from around £8million or £9million to £23million in seven or eight years: "Added to that, we pay the bus operators £20million for concessionary travel for the elderly, £7.5million for disabled people and £4.5million for half fare for children which costs £32million. We spend a huge amount of money.

"The thing about the £32million is we have no say on when the buses begin, when they end, the routes, the frequencies or the fares and that is a great problem. Of course the bus operators laugh all the way to the bank and no wonder that they do. They really do not need to change the system because the system suits them as it stands at present."

From Greater Manchester, PTE deputy director general Geoff Inskip says: "We do need more powers. We need more powers for network stability, to co-ordinate services. We need to organise the buses through the city centres, the town centres and the region, and we need simplified fare systems throughout the conurbations as well. The only way to do that is by having greater powers over the bus services."

Or Inskip again, on quality contracts: "Operator resistance to quality contracts should not be overstated. They will resist quality contracts all the way through, if necessary taking this to court." He went on to argue that this was because operators were making a return of 25 or 30 per cent on commercial services and that this would be reduced to 7 or 8 per cent if quality contracts were introduced."

Pro-regulation Greater Manchester MP Graham Stringer, who was serving on the committee, tried, unsuccessfully, to get someone to accuse bus operators of running a cartel, asking provocatively: "You are putting more and more money in as passenger transport executives and you are getting a worse service out. Are you completely incompetent or are you victims of cartels?"

But no one rose to the bait. South Yorkshire PTE director general Roy Wicks described the PTEs as victims of limited competition.

Stringer tried again: "Do you believe that it is limited competition by accident or do you believe that bus companies are organising themselves in an anti-competitive way?"

This drew a response from Dowd who said that when contracts came up for renewal after two or three years, prices could rise by 30 or 40 per cent, adding: "In many instances we only get one or two applications for sometimes huge contracts; as far as I am concerned I find that strange."

And despite the money which most big operators spend on customer care training, Wicks suggested: "Very few of the bus companies, even the major bus companies, see bus service provision as a customer service and actually treat their passengers as customers; they still see them as operational products."

Translink's Keith Moffatt: "Experience shows that you do need
to provide a well-planned system."

Bus services in Northern Ireland remain regulated, and Keith Moffatt, Translink managing director, suggested that this was one reason his organisation could offer an attractive network. But he noted: "How it is delivered, whether it is a public operator or a franchise system, is a slightly separate issue. I have worked in private and public, regulated and deregulated [environments], and it is not a question of ideology. But I do think ultimately experience shows that you do need to provide a well-planned system."

Moffatt continued: "I suppose the real value is in an integrated approach to meeting all the different network needs. I get quite concerned when I hear these distinctions made between commercial and social. We know precisely the cost and the revenue on all of our routes but we look at them on a much wider basis than whether any one particular route makes a profit or a loss. In fact, our network has a lot of cross-subsidy. Cross-subsidy used to be a bit of a dirty word. I think the important thing about cross-subsidy is to know where it is, to have transparency. I do not think there is anything wrong in having a network that is concentrating on commercial routes to make them grow, which is what we have done with our Belfast Metro system, if you can create more profit which you can use to cross-subsidise [other] services."

The metropolitan counties are making the running in this argument, but they should not be allowed to drown out the voices of those who demonstrate that partnerships formed under the current regulatory regime do bring benefits.

Brighton and Hove: 97 per cent of services are provided at
no extra cost to the public purse.

Over to Paul Crowther, public transport manager of Brighton and Hove city council, where bus use is on the up. "The basis of partnership is that each partner sticks at what it is good at," Crowther said. "The city council is a highway authority and the bus company knows about running buses. Between us we work together to solve our problems."

He was supported by Brian Smith, deputy chief executive of Cambridgeshire county council: "I would very much echo those comments in the context of Cambridgeshire. In the last four years we have seen growth county wide of about 21 per cent and indeed in the Cambridge area itself something over 40 per cent. That very much reflects working together where we have had a bus operator investing in the area and we have invested as the local authority."

The applicability of London-style tendering to other areas brought a reply from Crowther which hits the nail on the head: "I think it is a very expensive model. In the circumstances that I have, where 97 per cent of the bus services in our city are provided at no cost to the public purse, if we were to take over the London model where everything is franchised to the city council, we would in effect be paying for something that we are getting at the moment commercially."

It’s an argument the industry ought to be promoting.