Options for bus reform
7 June, 2007

James MacGregor, Senior Researcher
The Transport Times

The coming Local Transport Bill could bring a conclusion to the long-running debate about how to provide bus services. Despite the present government’s reforms, the controversial privatisation and deregulation of buses in the 1980s continues to shape the landscape. The effects of this legislation have been mixed. Private ownership has lowered costs and created more room for innovation. But deregulation has virtually eliminated the local authority role in planning bus networks. What is clear is that neither the 1980s legislation, nor action since, have seen the improvements in bus services that twenty-first century challenges demand.

London is the exception to this trend. By historical accident, the system in the capital successfully merges private ownership with strong regulatory control. Bus patronage, fleet quality and passenger satisfaction have all risen markedly in recent years. Buses now provide a realistic alternative to the car. London is the benchmark against which all bus services are tested. Bus services in the rest of England are falling well short.

Central government has been thinking long and hard about how to marry the advantages of private ownership with the benefits of stronger regulation. Douglas Alexander is playing matchmaker. The draft Bill lays-out reforms to franchising and partnerships that together are supposed to strengthen the local authority role and deliver on national economic, social and environmental aspirations.

Central government wants to see more franchises tendered by local authorities. Lower barriers to adoption are intended to give more local authority control. No longer will councils have to prove to the Secretary of State that their plans are the ‘only practicable way’. Instead, they will have to show that they are in the public interest. On the surface, this looks devolutionary. But there are a couple of catches. All contracts would still be subject to approval by a centrally appointed board headed by a Traffic Commissioner. Also, what is in the public interest would be defined in Whitehall rather than in each locality.

So in effect, these plans would replace one kind of central control with another. But, this is not the way to persuade local authorities to construct bus plans that will work in their local areas. Rather, it reinforces the need for local authorities to look upwards to Whitehall rather than outwards to local people.

But, it is still important that central government wields its influence to ensure that local bus plans contribute to national priorities. So, what is needed is a system that strengthens the power of local authorities to deliver buses tailored to the needs of local citizens alongside greater influence for central government over the political priorities expressed in bus plans. Such a set of reforms is outlined in the recent NLGN White Paper Local Buses Delivering National Policies.

Local consultations on contracts and partnerships should replace national approval. All bus plans should be exposed to public consultation through the Local Strategic Partnership as described in the recent Local Government White Paper. The process would require a demonstration of full funding. This approach challenges local authorities to assume full responsibility for their decisions.

This approach would remove the need for the independent approval of Quality Contracts by an Approvals Board and give greater assurance to operators. Greater local discretion would encourage local authorities to react rapidly to changing circumstances. An annual, public review of bus plans would play a similar role to the national appeals process it would replace.

Weaker central government control over the details of bus plans would have to be matched by stronger influence over their strategic direction. Reformed subsidies could be a route to this. They could be devolved in such a way as to reinforce the importance of national political priorities at the local level. Government should require that local authorities implement locally tailored policies that contribute to national outcomes on environmental sustainability, economic competitiveness and social cohesion before receiving funding.

Subsidies reformed in this way could also be used to encourage other policies to improve bus transport in England outside London. Commitments to integrate ticketing between operators and across boundaries could be included, as well as a requirement to invest in strategic priorities. Adopting Multi-Area Agreements across Travel to Work Areas would be a step towards better transport governance. They would also bring coherence to bus services across local authority boundaries.

Such a package of reforms aims to empower both national government and local authorities. National government can construct a framework that places national political priorities at the heart of local plans. Local authorities would be rewarded for building their own plans for improving local bus services and contributing to national priorities. In this way, the whole of the state can work together to create bus services that will help to face-up to the challenges of the twenty-first century. Without this partnership, we seem fated to continue the debate.