Shake-up to increase competition in bus industry

“Twenty-five years after bus services were deregulated in the UK (excluding London and Northern Ireland), the [commission’s] proposals to open up the market will represent the biggest change in the industry since that time,” the commission said in a statement.

The watchdog found that in many areas operators face little or no competition and that while there are 1,245 bus companies in England, Scotland and Wales carrying 2.9 billion passengers a year, Arriva, FirstGroup, Go-Ahead, National Express and Stagecoach carried 70 per cent of those passengers. The best way to tackle the problem was to encourage increased competition, the commission said.

The commission’s remedies included introducing restrictions on bus operators making changes to service frequency, to discourage ‘over-bussing’ and other short-term actions to destabilise competitors, and increasing the number of effective multi-operator ticketing schemes, by giving local transport authorities additional powers to introduce and reform schemes on terms that make them effective and attractive to passengers.

The commission also said that it must be ensured that new entrants and competing operators can get access to bus stations managed by other operators on fair, reasonable and non-discriminatory terms.

Jeremy Peat, chairman of the local bus market investigation group at the Competition Commission, said: “Competition and potential competition can drive standards up for passengers – that was the intention behind deregulation. We have seen evidence how competition can, for example, increase service frequencies but the reality is that in too many areas of the country, competition has stagnated and the incumbent providers know that they face little in the way of serious challenge. As such, the incentive to increase services, innovate and even lower fares is absent.”

Mr Peat said the commission wants to open up these markets to sustained competition and remove the factors that prevent and inhibit companies taking on the existing provider.