- Competition Commission report: Local bus services market investigation
- The Transport Committee
The Transport Committee is to undertake an inquiry into the Competition Commission’s report on the local bus services market.
The Competition Commission has reported on its lengthy investigation into the local bus services market in the UK, excluding London and Northern Ireland. It concluded that sustained head-to-head competition between bus operators was uncommon and that bus operators avoided competing in another operator’s core territories.
As a consequence there were “adverse effects on competition”. These led to a detriment to consumers – less frequent, poorer quality services and possibly higher fares – valued at £110m-£295m a year. In addition, lack of competition may be costing local authorities £5m-£10m a year through higher contract prices for tendered services.
The Competition Commission recommended a series of measures intended to increase head-to-head competition. These include more multi-operator ticketing, longer notice periods for service changes, closer monitoring by the OFT of bus company mergers and incentives through revisions to BSOG. It considered whether bus services should be awarded under franchises (as in London) but concluded that enhanced competition was generally the better solution.
The Competition Commission’s findings have been criticised by the bus industry as unrealistic. The passenger transport executives have expressed disappointment that the Competition Commission did not recommend franchising (Quality Contracts).
The Committee invites evidence, particularly in relation to the following:
Has the Competition Commission addressed the issues of most importance to the bus passenger?
How effective are the remedies proposed by the Competition Commission likely to prove?
Is sustained head-to head competition feasible or desirable?
What role should Quality Partnerships play?
Has the Competition Commission adequately considered the franchising option?
What action should local government and central government now take?
We would be grateful to receive written submissions by Friday 17 February.