Wednesday, 26 October 2016

30 years of Bus Deregulation in Britain

On 26th October 1989, bus services around Britain were deregulated under the Transport Act 1985. In this article I will give you bit of history on how it all started and then progressed.

In short, deregulation means the government gives more powers to private bus companies to set up their own bus routes and fares - and compete against other bus companies for profits.

Before bus services were deregulated, in 1969 the National Bus Company was formed by the UK government to operate bus services in Britain. Most of the PTE’s (Passenger transport executive) and council owned bus companies retained their bus services. Then in 1970 the National Bus Company acquired the London Country Bus Services from London Transport.

Bus services during the 1970’s and early 1980’s were in public ownership, most of them by National Bus Company or municipal bus companies (council/PTE owned bus services). Bus services were regulated and not subjected to competition.

Then during the 1980’s when Britain was ruled by the notorious Conservative government, there were debates on whether to deregulate bus services in Britain in order to increase the number of services.

Bus deregulation advocated by Julian Peddle of Stevenson’s buses

We have already taken important steps to improve the standards of public transport. We have lifted restrictions on long-distance coach services. As a result, about one hundred new express coach services have been started, fares have been substantially reduced and comfort improved. We shall further relax bus licensing to permit a wider variety of services. We shall encourage the creation of smaller units in place of the monolithic public transport organisations which we have inherited from the Socialist past, and encourage more flexible forms of public transport. City buses and underground railways will still need reasonable levels of subsidy. But greater efficiency and more private enterprise will help keep costs down.

In the country, we shall ensure better use of school and special buses for local communities. Restrictions on minibuses will be cut. So will the red tape which makes it so difficult for small firms and voluntary bodies to provide better ways to get around for those without cars, particularly the very old and the disabled.

In October 1985, the Transport Act 1985 was passed which enabled the deregulation of bus services. This started on 26th October 1986 and the privatisation of National Bus Company began during 1987 and 1988.

As the bus deregulation process progressed, it caused most of the local authorities to sell their municipal bus companies - and PTEs had to split and sell off their bus operations.

An example of this is the sell-off of West Midlands Travel in 1991.

One bus operator, Clydeside Scottish, produced a video explaining all about bus deregulation which you can see below.

Commercial Motor magazine has reported that Strathclyde Passenger Transport Executive (SPTE) have cut subsidies to passenger services which has caused a reduction of bus services in the area.

In its last financial year before deregulation, Strathclyde Passenger Transport Executive has managed to reduce the net level of operational support grant required by its direct bus operation by 37%.
During 1985/86, it also achieved a high measure of service reliability according to the latest SPTE annual report and accounts.

The original estimated support requirement for SPTE's bus operation in 1985/86 was agreed at 212.8 million — based on an estimated income of 244.9 million and costs of 257.7 million, including net revenue account charges of 25.4 million.

However, during the year SPTE's actual income was 245.6 million, while costs were 254 million. This resulted in a lower support requirement of 28.4 million. The net support requirement consisted of a shortfall of 23.8 million in terms of operational deficit and 24.6 million in nonrecurring expenditure.

There were a lot of different concerns regarding bus deregulation.

One of the first was about fares:

Fare fixing deals between bus operators and agreements not to compete on each other's routes could be outlawed following changes brought about by the 1985 Transport Act.

The Act ends various exemptions from competition legislation which the bus industry has enjoyed up until now. Competition law now applies to the bus industry in the same way that it applies to other industries in Great Britain.

A guidance note published by the Department of Transport explains the two main areas of competition law involved. One is the law on restrictive agreements, which may affect many bus operators. Agreements between bus operators under which two or more parties accept restrictions on their commercial freedom now have to be registered with the Office of Fair Trading.

The second change covers the law on monopolies. These can now be referred by the Director General of Fair Trading to the Monopolies and Mergers Commission for investigation. Until now only the Secretary of State for Trade and Industry could make such references. However, this change is only likely to affect larger bus operators.

A third area of competition legislation concerns anti-competitive practices. This already applies to the bus industry and is outlined in the guide. It may become more relevant after deregulation.
David Mitchell, Minister for Public Transport says: "The Transport Act 1985 brings competition into local bus services. Competition should broadly be fair. That is why we have made sure that the general law on competition applies to the bus industry in just the same way as it does to other industries in Great Britain."

This shows that the fares have to be competitive between the different bus companies providing their services.

Before deregulation, South Yorkshire PTE had the lowest fares in the UK, the lowest being 2p per mile which made their services very popular. Unfortunately, deregulation has caused the fares to rise and passenger usage has declined at a similar rate.

Today, thankfully, there are schemes like the multi-operator ticket which is agreed upon by bus operators, whilst some of the schemes are provided by the councils/PTE’s.

Here are several examples of this: Essex Saver Ticket, Travelwest rider ticket, System One Daysaver, Network Day Tripper, Merseytravel Solo ticket, various North East tickets, Strathclyde Public Transport, Edinburgh One-Ticket and many more. Also, there are many multi-operator smartcard schemes which are provided by PTE’s and councils.

Another important issue is with air quality and congestion:

Back in 1995, ITN did a news report on the concerns over congestion and air quality in Oxford due to the overwhelming amount of buses serving the town centre.

The video can be viewed here.

Luckily there are ‘Green Bus Funds’ now and local authorities win funding from the UK government so they can enable bus companies to buy hybrids and/or zero emission buses for their services.

Brighton and Hove City Council have imposed a Low Emission Zone which requires bus operators to use Euro 5 buses; the Low Emission Zone in Brighton covers Castle Square, North Street and Western Road - as far as Palmeira Square.

The next issue is regarding the so-called bus wars:

Bus deregulation has caused tension between certain bus companies as they have to collect the most passengers to bring in increased revenue.

This required Local Authorities to intervene in order to stamp out unscrupulous and unsafe practices.

Back in 1987, Television South produced a documentary about the Bus Wars in the South of England. You can view the video below.

One of the notable bus wars was in Darlington, another in Preston and another in Hull in 1991.

During the late 1980’s, London Buses faced some competition in the Docklands. Their competitor was Transit Holdings’ Docklands Transit (brand name Docklands Minibus) which was owned by Harry Blundred. Harry denied his minibus services were part of a ‘bus war’ against London Buses. Docklands Transit initially operated local commercial routes using 60 Ford Transit minibuses.

Thames News reported on the Docklands Minibus service, way back in March 1989.

Then during the early 1990’s, London Transport won the battle because Harry Blundred of Docklands Transit refused to join the London Bus Agreement which would have given him a share from the London Travelcard scheme. In 1989 he slammed LRT for banning Docklands Transit from the Capital's senior citizen concessionary fare scheme and Travelcard system. After this, Docklands Transit switched to tendered London Regional Transport bus services.

In May 1991, a company named Earthline formed their own luxury minibus service which was aimed at shuttling city executives to and from work within Central London. The owner, Gregory Lee, insisted that Earthline was not directly competing with London Transport.

Presently, the UK government is legislating the Bus Services Bill which will enable councils and PTE’s to franchise bus services in a similar fashion to Transport for London.

The issue is though that this new legislation will forbid local authorities from forming their own municipal bus companies. Currently there are 12 municipal bus companies in Britain.

Local authorities and PTE’s tend to subsidise existing bus services to increase evening and Sunday services as bus operators can’t make a profit on those services.

There’s so much to say about bus deregulation, but when the Bus Services Bill passes and becomes law, bus operators should retain the right to operate their own bus services.

I’ll leave you with a few videos showing the early years of deregulated bus services.

And here are some present day videos.

This article is related to an earlier one that I wrote called ‘London Buses were on the verge of being deregulated’ which you can read here.

If you think I’ve missed anything regarding bus deregulation, then please let me know in the comments section below.

As always, I invite you to follow me on Twitter and Google Plus which is @CLondoner92

Image Attributions
Manhattan Research Inc
Clive A Brown

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