At last, there’s hope for Bristol buses

After decades of damaging public transport deregulation, there’s a chink of light on the horizon for cities like Bristol.

City 27th April, 2016

Ian Taylor

Illustration: Gordy Wright

If Bristol was a city of similar size and stature in continental Europe it’s likely residents would have the benefit of a high-quality, modern tram system rather than having to rely for the most part on buses. Bristol will soon get some guided buses, but only as the fallback option many years after its aspirations for a tram system were abandoned.

Thirty years ago the Thatcher government took the catastrophic decision to deregulate Britain’s buses, putting them beyond the control of city councils such as Bristol. Without powers to regulate buses, local governments cannot prevent private bus companies running in competition against tram lines, sucking the profit out of the prime public transport corridors where trams are needed, and undermining their business case.

Unified networks

When local authorities had regulatory powers over buses, Newcastle designed its bus routes to feed into its Metro system; creating a unified and efficient network that worked for users as seamlessly as possible. That simple, crucial civic vision was destroyed by bus deregulation in 1985.

But it’s worse than that. Bus deregulation doesn’t even work for buses. Commercial operators cherry-pick the most profitable routes, paying out the profit as dividends to their shareholders. They can put on services and remove them at a whim, while local councils run along behind trying to fill the gaps by providing subsidy for socially important services that are missing (usually run by the same commercial operators, who then take further profit!).

The 1980s deregulators claimed a free-for-all bus services would solve all ills; that “without the dead hand of restrictive regulation fares could be reduced… and the operator would still make a profit. New and better services would be provided. More people would travel.” But fares rose, services worsened and bus use fell. The network we now have is fragmented and underfunded and it is impossible to provide travellers with simple economical ticketing valid across a whole bus network.

Bus deregulation has resulted in de facto local monopolies in places like Bristol, enabling commercial operators to extract large profits. Our research compared areas like Bristol, where buses are deregulated, with London. Transport for London kept its regulatory powers, and runs all its bus services under a system of franchises. It uses the fare revenue from profitable franchises to subsidise unprofitable franchises that provide buses at quieter times or to less busy destinations. First Bristol makes average profits of over 8% (over £3 million per year), more than double the average profit level of bus companies in London, which is below 4%.

We found that if all local councils in Britain had the power to regulate bus services, as in London, there would be financial gains worth £340 million per year. These would come from cutting out the ‘excess’ profits made by companies outside London, from efficiencies because the network could be planned as a whole, and because simple Oyster card-style tickets would become possible, attracting more passengers. The savings would more than restore all the cuts to bus funding since 2010.

Short of the best

Is this the best Bristol could have? If British laws were changed, it could go one step better, following best practice in continental Europe. In cities like Vienna and Munich, buses and trams are municipally owned. Munich’s transport authority works to the motto ‘One network, one timetable, one ticket’ – simple and sensible, yet presently unachievable in places like Bristol. Many places in France, of varied political persuasions, have taken buses into local public ownership during the last decade because they see it as more cost-efficient to remove profit taking altogether.

But there’s now a glimmer of hope. Ironically, it’s another Conservative government that’s proposing to publish a ‘Buses Bill’, giving powers to local authorities outside London to franchise their bus services. Why? Because the Chancellor George Osborne has told the Department for Transport to do it. The Treasury has realised deregulation is a huge waste of money.

Is there a catch? Perhaps. It looks as if to get franchising powers, cities like Bristol may need to combine authorities with surrounding councils and agree to directly elected metro mayors covering the whole area. This remains a live discussion for the Bristol city region. Nevertheless, I look forward to seeing Bristol secure a devolution deal that will enable it to achieve a transport vision on a par with cities of similar scale in other parts of Europe. Maybe one day it will even get the tram system it has so long deserved.

Dr Ian Taylor is a director of sustainable transport consultancy and think-tank Transport for Quality of Life and author of Building a World-class Bus System for Britain, available here.