Bus operators should face more competition, says commission

10 May 11
Local transport authorities should subject bus companies to greater competition, the Competition Commission says

By Helen Mooney

11 May 2011

Local transport authorities should subject bus companies to greater competition, the Competition Commission says.

Its report on the local busmarket found that because of the high degree of concentration on a number of bus routes, the largest operator often faces little or no competition.

As a result many passengers dependent on bus services, especially in rural areas, face less frequent services and in some cases higher fares than in areas where there is more competition.

The commission is also critical of the way local authorities tender for supported bus services –those deemed necessary but that cannot be provided without public subsidy.  It found that the limited number of potential bidders restricted competition and increased the cost of supporting these services.

Jeremy Peat, chair of the commission’s Local Buses Inquiry Group, said: ‘There are a large number of towns and cities where bus operators face limited competition and little prospect of significant change. In a market that was deregulated in anticipation of widespread competition that is clearly a problem and there are evident risks of disadvantages for passengers when there is little to keep local operators on their toes.’

Responding to the findings, Peter Box, chair of the Local Government Association’s economy and transport board, said: ‘The Competition Commission’s findings vindicate what councils have long been saying.

 ‘We need to break up the markets and introduce more competition in the bus industry to stop a small number of multinational companies dominating our towns, cities and villages.  This report recognises that councils are best placed to commission services, which would increase competition locally and deliver better value for money for passengers and taxpayers.’

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