The Government begins to take notice of the bus industry

The penny has begun to drop over buses. The recent statistics on public transport reported in the last issue of Transport Times show that the long term decline in bus use outside London shows no signs of slowing down. During eight years of Labour government ministers have watched this decline from the sidelines seemingly with no appetite for intervention but from soundings I took at last month’s Labour party conference, this may be about to change. There is undoubtedly a growing feeling among senior party figures that something has to be down to arrest this trend.

The raw figures are simply awful. In Passenger Transport Executive areas bus usage has declined by nearly a fifth over the past decade. Outside the PTE areas, the decline has been less marked – 8 per cent during the same period.

In London , of course, there has been a sharp rise in bus use since the creation of Transport for London – an amazing 30 per cent increase in the past three years, with passenger journeys now reaching 6 million daily, twice as many as the Tube.

We all know that London is a special case. First, it is the only area where bus routes are regulated and Transport for London , rather than bus companies, determine location and frequency of services. Secondly, TfL has used its powers – and large amounts of cash – to encourage people back onto buses through increased provision of services, new stock, and greater frequencies. And thirdly, as well as the carrot of better services, there has been the stick of the congestion charge pushing people onto public transport

However, despite those last two factors, there is a growing recognition that there are lessons to be learnt from London ‘s successful in getting more people to hop on a bus and that regulation may not quite be total anathema.

It is not only the decline in bus patronage that has angered ministers. Something has rattled their virtually dormant socialist credentials – the sight of what they perceive as monopoly profits being made by bus companies who increasingly dispense with parts of the network, only to get them back as tendered services. The big headline increases in profitability and share prices of the large bus companies, coupled with the decline in usage has finally got their goat.

There is no chance of a full scale Bill on bus reregulation as sought by some PTE politicians. This runs so counter to the Blairite agenda that it is as likely as Al-Qaeda winning the next election. Moreover, there is scepticism among ministers about whether the PTEs want merely to regain control of the bus networks, or actually provide a much better service through innovation and negotiation with the operators, with perhaps more quality contracts and more bus lanes.

However, while a small u-turn may sound sensible, the problem cannot be solved by merely trying to knock the heads together of operators and local authorities. Bus services need to be integrated and provided as a coherent network. The present situation is simply not viable, as even the Senior Traffic Commissioner for Great Britain , Philip Brown, expressed recently.

The only real answer seems to be Quality Contracts and the PTEs are preparing to announce their intention to create some next year. The problem they face is that the legislation in the Transport Act 2000 is restrictive as it only allows the creation of a Quality Contract if that is the only way that the local authorities can improve local bus services, a very onerous burden of proof.

A Quality Contract allows local councils to specify what services it wants and run a competition for companies to bid to run them – a system that is widespread on the continent. Privately, the PTEs expect legal challenges from the bus companies and that is where the issue will get very interesting: will ministers agree to support the move towards Quality Contracts or will they work behind the scenes to try to prevent the PTEs from forcing the issue?

The bus companies would like some sort of ‘ Third Way ‘. They dislike Quality Contracts since they limit their profits and provide real competition at the bidding stage, rather like rail franchises, rather than on the roads – where, in any case, the notion of competition has been pretty mythical once a major company is established in a local area.

However, there is no real Third Way , and I reckon that while the bus companies may whinge at first, they will work within any framework that is set for them. Threats of boycotts and protests to ministers will simply be quietly dropped once it comes to the crunch as has been the case with rail franchises.

Once the principle of Quality Contracts has been established, watch for the floodgates opening. They may be more difficult to establish outside PTE areas because the client – the specifier – may be a number of squabbling local councils. That, in turn, is leading to thinking within the Labour party that local government will have to be reorganised in areas such as Bristol and Southampton around city regions. It seems that, 2006 will see some interesting, if belated, action on the bus front.

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