Five Reasons the National Bus Strategy will FAIL to deliver… and what we can do about it

Grant Shapps finally unveiled the National Bus Strategy this week – and what a disappointment. Its call for action may sound good, but the National Bus Strategy is in fact laying out the red carpet for bus companies, through ‘Enhanced Partnerships’ with local authorities. After 30 years of failure, it’s shocking to see the government continue with the broken policy of bus deregulation, which will only hold back our progress towards an integrated and affordable transport system.

The National Bus Strategy is not just unambitious, it’s deeply flawed and illogical – here’s why:

  1. It’s based on failed legislation.

The Bus Services Act 2017 has preserved a huge imbalance of power between local government and private bus operators, resulting in just one Enhanced Partnership in the last four years. The process of bus franchising is even harder and has so far only been attempted in Greater Manchester – a lengthy and difficult process that Stagecoach is now challenging in court.

As the National Audit Office reported last year, the Bus Services Act has ‘made little difference’. In 2019, an extensive, UK-wide study by the Transport Select Committee concluded that franchising powers should be provided to all local authorities, as well as the option of setting up their own municipal bus company. However, this advice has been ignored, and the new National Bus Strategy will now go forward based on failed legislation.

2. It continues the failed policy of bus deregulation

The National Bus Strategy itself warns of the difficulties of the current legislation, noting that franchising could ‘take years’. Instead it points local authorities clearly in the direction of ‘Enhanced Partnerships’, which maintain the deregulated model and make it more difficult to introduce bus franchising at a later stage.

Enhanced Partnerships are a trade-off. In return for a small say in services, local authorities will give the private companies what they’re really looking for: bus priority measures. This is nothing but a continuation of the deregulated system, promising even bigger streams of profit for bus companies as they benefit from increased road space.

3. It keeps local government under-resourced and in a weak negotiating position

The decimation of local authority funding for bus services has been a major cause of the UK bus crisis; a 40% drop in council funding has led to over 3,000 routes being cut in the last ten years. There’s still no reliable ring-fenced funding to plug the gap, and transport planning departments are weak and under-resourced.

The crisis in rural buses is particularly bad, and bus deregulation in rural areas has even been called out by the UN as being ‘incompatible with human rights requirements’. However, the National Bus Strategy’s weak offer of more on-demand bus services shows little to no vision about fixing this. If a city with the powers and resources of Greater Manchester can’t franchise its buses without a major legal challenge, what chance do smaller local authorities have?

4. It fails taxpayers and local democracy by preventing public ownership

Failed legislation on buses has made the process of franchising difficult enough, despite the fact that it would return an estimated £340 million per year. Public ownership would return even more – an estimated £506 million – yet the Bus Services Act bans councils from setting up their own municipals.

The UK’s few municipally owned bus companies have been incredibly successful. Lothian Buses in Edinburgh returns £6 million in dividends to the city, Reading Buses £3 million and Nottingham City Transport £2 million per year. The National Bus Strategy acknowledges these examples and even says it will consult on the issue. Yet it is still going ahead without this option: depriving local authorities of a huge opportunity for wealth creation, and entrenching the £1.5 billion per decade in dividends currently paid to bus company shareholders.

5. It will fail to reduce fares and restore services

Bus fares have rocketed even faster than rail fares – an increase of 403% since 1987. It’s a huge cause of transport poverty, but the National Bus Strategy will do little to solve it because Enhanced Partnerships are defined by competition law. This means that local authorities will have no power to set fares; and though multi-operator ticketing schemes can be agreed among companies, single-operator tickets must remain competitive.

Enhanced Partnerships also fail to give the local authority any control over fare income, preventing the cross-subsidy so badly needed to restore lost services. Nor is the local authority allowed to lower bus fares through a direct subsidy. Competition and duplication on key routes and with other forms of transport are sure to remain, preventing an integrated transport system.

Let’s be under no illusions – public control is the only way to create a London-style transport system.

What can we do about it?

The race is on for public control. Local transport authorities must commit to a course of action by the end of June 2021, and it’s clear that the DfT expects the majority to opt for Enhanced Partnerships. Campaigners and passengers need to make their voices heard ASAP and push for public control (franchising) in their local area.

The National Bus Strategy includes a few opportunities for more significant change:

  • It recognises the strong examples of municipal bus companies and says it will consult on the issue.
  • It points out a loophole in the Bus Services Act, whereby councils can create a municipal by purchasing a pre-existing bus company.
  • It promises to expand the definition of socially necessary services to include economically necessary services, and says it may consider making these a statutory requirement.
  • It commits to reform and devolve the Bus Services Operators Grant.

Local transport authorities must commit to a course of action by the end of June, and publish a local Bus Service Improvement Plan by the end of October 2021, detailing how they propose to use their powers. Actual delivery of the ‘Enhanced Partnerships’ is expected by April 2022.

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